EXHIBIT 10.3
RETENTION AGREEMENT
-------------------
THIS RETENTION AGREEMENT ("Agreement") is made and entered into this 23/rd/
day of April 1999 by and between __________________ ("Employee") and VENCOR,
INC., a Delaware corporation ("Vencor" or "the Company").
RECITALS:
--------
A. Vencor recognizes the substantial contribution made by Employee to the
Company and desires to encourage Employee to remain employed by the Company for
a minimum period commencing on the date hereof and continuing through December
31, 1999 (the "Minimum Period").
B. Employee is willing to remain an employee of Vencor for the Minimum
Period in exchange for certain consideration, set forth below, the receipt and
sufficiency of which is hereby acknowledged.
NOW, THEREFORE, the parties hereby agree as follows:
AGREEMENT:
---------
1. Employment. Employee agrees to remain employed by the Company for the
----------
Minimum Period, subject to the provisions of Sections 5 and 6 below (the
"Employment Term").
2. Put Right. Vencor agrees that, effective the date hereof, Employee has
---------
the right to put the 6% Series A Non-Voting Convertible Preferred Stock (the
"Preferred Stock") owned by Employee back to the Company at par at any time
following the expiration of the fifth anniversary of the sale of the Preferred
Stock (the "Put Right").
3. Right of Offset. In the event that the Company is unable or unwilling
---------------
to discharge its obligation to purchase the Preferred Stock following Employee's
exercise of the Put Right, Vencor agrees that any amount due to Employee
pursuant to the Put Right shall be treated as an offset against any amounts owed
by Employee to the Company under his or her Promissory Note dated September 28,
1998 (the "Preferred Stock Loan").
4. Interest. Vencor further agrees that if the average closing price of
--------
the Company's common stock for the 90 days prior to any interest payment date
for interest due under the Preferred Stock Loan is less than $8.00, such
interest payment shall be forgiven. For purposes of this Section, the $8.00
stock price shall be equitably adjusted as required to reflect any changes in
the Company's capital structure on terms consistent with those adjustments
contemplated in the Company's Restated Certificate of Incorporation as of May 1,
1998.
5. Deemed Employment. Employee shall forfeit the Put Right if he or she
-----------------
leaves the employ of the Company prior to December 31, 1999; provided, however,
Employee shall be deemed to have satisfied the employment requirement of this
Agreement if prior to December 31, 1999, Employee's employment is terminated by
the Company for other than
"Cause." For purposes of this Agreement, "Cause" shall be defined as the
Employee's (i) conviction of or plea of nolo contendere to a crime involving
moral turpitude; or (ii) willful and material breach by Employee of his duties
and responsibilities, which is committed in bad faith or without reasonable
belief that such breaching conduct is in the best interests of the Company and
its affiliates, but with respect to (ii) only if the Board adopts a resolution
by a vote of at least 75% of its members so finding after giving the Employee
and his attorney an opportunity to be heard by the Board.
6. Window Period. If any "Window Period," as defined in Employee's
-------------
Change-in-Control Severance Agreement (the "Severance Agreement"), occurs during
the "Employment Term," such "Window Period" shall be deemed to have occurred
immediately following the Employment Term for purposes of the Severance
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
VENCOR, INC.
By:_________________________
_____________________________
Employee
