EXHIBIT 10.32
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement"), by and among XXXXXXX X. XXXXXXXX,
("Employee"), HEARTLAND EMPLOYMENT SERVICES, LLC, an Ohio limited liability
company (the "Company"), and MANOR CARE, INC., a Delaware corporation ("Manor
Care") is entered into May 16, 2005.
RECITALS
A. The Company is a subsidiary of Manor Care and is the employer
corporation for employees providing services for or on behalf of Manor Care and
its direct and indirect subsidiaries ("Manor Care Subsidiaries").
B. Manor Care and the Company have agreed that Employee will be employed
by Company in the position and at the base rate of pay set forth on Schedule I
in accordance with the provisions hereof; Manor Care has agreed that Employee
will be elected an officer of Manor Care as set forth on Schedule I.
C. The Company has further agreed to provide either directly or through a
Manor Care Subsidiary severance benefits to Employee upon a termination of
Employee's employment resulting from certain specified events.
D. The Company has further agreed to provide certain employee benefits to
Employee as specified herein.
E. The Employee has agreed to be employed by Company in accordance with
the provisions hereof including certain non-competition/non-solicitation
obligations which apply during Employee's employment and for a specified period
thereafter.
EVENTS
In consideration of the foregoing, and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged,
Employee, Manor Care and the Company hereby agree as follows:
1. SALARY AND POSITION. Effective June 1, 2005, Company shall employ
Employee in the job and at the base rate of pay shown on Schedule I. Employee
shall be entitled to participate in the benefit programs referenced on Schedule
II hereof as determined by the Chief Executive Officer of the Company and, to
the extent required, approved by the Manor Care Board of Directors.
2. AT-WILL EMPLOYMENT. Employee's employment with the Company is not
for any specified term and may be terminated by Employee or by the Company at
any time for any reason, with or without cause.
3. ENTIRE AGREEMENT. This Agreement and the agreements and
understandings which have been or may be entered into pursuant to the benefit
plans and commitments referenced in Schedule II hereto constitute the complete
agreement between and among Employee, Manor Care and the Company regarding any
and all aspects of Employee's employment and supersede any and all prior written
or oral agreements, understandings or commitments.
4. PROHIBITION AGAINST AMENDMENT. Employee's base salary may be
increased by the Company at any time in its sole discretion. The benefit plans
set forth on Schedule II may be improved, reduced or terminated by the Company
at any time in its sole discretion to the extent that such actions apply to all
officer-participants in such plans; provided, however, that no vested or accrued
benefit shall be adversely affected. All other terms set forth in this Agreement
may not be modified in any way except by a written agreement signed by Employee
and by an authorized representative of the Company which expressly states the
intention of the parties to modify the terms of this Agreement.
5. EMPLOYEE REPRESENTATION REGARDING OTHER AGREEMENTS. Employee
represents and warrants to Company and Manor Care that his employment by Company
and the fulfillment of his obligations hereunder do not violate any other
agreement under which Employee is currently obligated, or the parties to any
such other agreements have entered into binding undertakings to waive or not
enforce any such provisions. In the event this representation and warranty is
not accurate, the provisions of Paragraphs 6 and 7 hereof shall be null and
void.
6. SEVERANCE PAYMENT WITHOUT CHANGE IN CONTROL. Except as provided
in Paragraph 7:
(a) Upon the termination of Employee's employment as a result of
Employee's electing to resign his employment or to retire without the consent of
the Company, no payments shall be required or made pursuant to this Paragraph 6
except as provided in Paragraph 6(f).
(b) Upon the termination of Employee's employment by the Company for
"Cause", no payments shall be required or made pursuant to this Paragraph 6.
"Cause" shall mean Employee's financial dishonesty, fraud in the performance of
his duties, willful failure to perform assigned duties hereunder (following
written notice and a reasonable opportunity to cure) or the commission of a
felony.
(c) Upon the termination of Employee's employment by the Company for
any reason other than for Cause or disability, the Company shall continue
payment of Employee's annual base salary, at the rate then in effect on the date
of such termination, for a period of two (2) years after such date of
termination. The Company shall give thirty (30) days written notice of any such
termination which notice shall specify the date of termination.
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(d) Upon the termination of Employee's employment as a result of the
death of Employee, the Company shall continue payment of Employee's annual base
salary, at the rate then in effect on the date of such termination, for a period
of two years after such date of termination; provided, however, that such
payments shall be offset by any survivor benefits, excluding life insurance
proceeds, received by Employee's spouse or other designated beneficiary under
the Company's plans, programs and policies.
(e) Upon the termination of Employee's employment as a result of his
becoming unable to perform his duties due to a disability as established by the
award of long-term disability benefits under the Company's long-term disability
plan, the Company may terminate Employee's employment by giving Employee thirty
(30) days written notice of its intention to terminate. In such event, Company
shall continue payment of Employee's annual base salary, at the rate then in
effect on the date of such termination, for a period of two (2) years after such
date of termination; provided, however, that such payments shall be offset by
any disability benefits received by Employee, or his legal guardian, under the
Company's plans, programs and policies.
(f) Upon termination of Employee's employment for any reason,
voluntarily or involuntarily, with or without Cause, Employee shall be entitled
to such rights as he otherwise has under the benefit programs listed on Schedule
II, as amended from time to time, in the circumstances of his particular
termination.
7. SEVERANCE PAYMENTS FOLLOWING A CHANGE IN CONTROL.
(a) In the event Employee's employment is terminated within two
years following a Change in Control of Manor Care (as defined below) under
circumstances which would otherwise entitle Employee to receive a severance
payment under Paragraph 6, Employee's severance payment shall be paid in a lump
sum within five (5) business days of such termination and shall be equal to two
times the sum of Employee's annual base salary at the rate then in effect plus
(i) the target amount of his award under the Annual Incentive Plan for the year
in which he is terminated; and (ii) the target amount of his award under the
Performance Award Plan, for the award period ending with the year in which the
termination occurs or with the year nearest to the year in which termination
occurs. In addition, the Company will arrange to provide Employee with group
medical, dental and vision benefits substantially similar to those which
Employee was receiving or entitled to receive immediately prior to the Change In
Control for a period of two years.
(b) For the purposes of this Paragraph 7, "Change in Control" shall
mean a transaction or other event in which (i) Manor Care is merged,
consolidated or reorganized into or with another corporation or other legal
person, and as a result of such merger, consolidation or reorganization less
than sixty-five percent of the combined voting power of the then outstanding
securities of such resulting corporation or person immediately after such
transaction are held in the aggregate by the holders of Voting Stock of Manor
Care immediately prior to such transaction; or (ii) Manor Care sells or
otherwise transfers all or substantially all of its assets to another
corporation or other legal person, and as a result of such sale or transfer less
than sixty-five percent of the combined voting power of the then outstanding
Voting Stock of such corporation or person immediately after such sale or
transfer is held in the aggregate by the holders of Voting Stock of Manor Care
immediately prior to such sale or transfer.
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8. NON-COMPETITION/NON-SOLICITATION.
(a) Covenant Not to Compete. Employee covenants and agrees that
during the period of Employee's employment hereunder and for a period of two (2)
years following the termination of Employee's employment, including without
limitation termination by the Company for cause or without cause, Employee shall
not, in the United States of America, engage, directly or indirectly, whether as
principal or as agent, officer, director, employee, consultant, shareholder or
otherwise, alone or in association with any other person, corporation or other
entity, in any Competing Business. For purposes of this Agreement, the term
"Competing Business" shall mean any person, corporation or other entity engaged
in providing skilled nursing, assisted living, home health, hospice or
rehabilitation services or providing or attempting to provide any other product
or service which is the same as or similar to products or services sold or
provided by the Company or any Manor Care Subsidiary within the two (2) years
prior to termination of Employee's employment hereunder; provided, however, that
Employee's continuing equity interest in Harborside Healthcare Corporation, to
the extent of such interest on the day prior to the effective date of this
Agreement, shall not constitute a violation of this Agreement.
(b) Non-Solicitation of Customers. Employee agrees that during his
employment with the Company he shall not, directly or indirectly, solicit the
business of, or do business with, any customer or prospective customer of the
Company or any Manor Care Subsidiary for any business purpose other than for the
benefit of the Company or a Manor Care Subsidiary. Employee further agrees that
for two (2) years following termination of his employment with the Company,
including without limitation termination by the Company for cause or without
cause, Employee shall not, directly or indirectly, solicit the business of, or
do business with, any customers or prospective customers of the Company or any
Manor Care Subsidiary; provided, however, that this provision shall not apply to
soliciting to provide or providing any services which the Company or any Manor
Care subsidiary does not provide, or has not traditionally sought to provide.
(c) Non-Solicitation of Employees. Employee agrees that, during his
employment with the Company and for two (2) years following termination of
Employee's employment with the Company, including without limitation termination
by the Company for cause or without cause, Employee shall not, directly or
indirectly, solicit or induce, or attempt to solicit or induce, any employee of
the Company to leave the employment of the Company for any reason whatsoever, or
hire any employee of the Company except into the employment of the Company;
provided, that the foregoing shall not apply to any employee hired through a
general hiring process without any direct or indirect involvement by Employee in
recruiting such person for hire.
9. HEADINGS. Section headings are provided herein for convenience
only and are not to serve as a basis for interpretation or construction of the
Plan.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
The Company: Employee:
HEARTLAND EMPLOYMENT SERVICES, LLC _____________________________
Xxxxxxx X. Xxxxxxxx
By: _____________________________
Its: _____________________________
MANOR CARE, INC.
By: _____________________________
Its: _____________________________
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SCHEDULE I
Employee: Xxxxxxx X. Xxxxxxxx
Current Base Rate: $______________
Job Title: Executive Vice President
SCHEDULE II
1. Annual Incentive Plan
2. Performance Award Plan
3. Equity Incentive Plan
4. Senior Management Savings Plan for Corporate Officers
5. Senior Executive Life Insurance Plan
6. Relocation assistance pursuant to Company policy as modified and approved by the Senior Executive
Vice President of the Company.
7. Such other benefit plans and arrangements as the Company provides, from time to time, to salaried
employees generally participation in which is approved by the CEO
