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Exhibit 10.9
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT is made as of the 18 th day of December, 2008 (the
"Effective Date"), by and between Kindred Healthcare Operating,
Inc., a Delaware corporation (the "Company"), and Lane M. Bowen
(the "Executive").
WITNESSETH :
WHEREAS, the Executive is employed by the Company, a
wholly-owned subsidiary of Kindred Healthcare, Inc. ("Parent"), and
the parties hereto desire to provide for the terms of
Executive’s employment by the Company; and
WHEREAS, the Executive Compensation Committee of the Board of
Directors of the Parent has determined that it is in the best
interests of the Company and Parent to enter into this
Agreement.
NOW, THEREFORE, in consideration of the premises and the
respective covenants and agreements contained herein, and intending
to be legally bound hereby, the Company and Executive agree as
follows:
1. Employment . The Company hereby agrees to employ
Executive and Executive hereby agrees to be employed by the Company
on the terms and conditions herein set forth. The initial term of
this Agreement shall be for a one-year period commencing on the
Effective Date. The term shall be automatically extended by one
additional day for each day beyond the Effective Date that the
Executive remains employed by the Company until such time as the
Company elects to cease such extension by giving written notice of
such election to the Executive (the "Term"). In such event, the
Agreement shall terminate on the first anniversary of the effective
date of such election notice.
2. Duties . Executive is engaged by the Company as
Executive Vice President and President, Health Services
Division.
3. Extent of Services . Executive, subject to the
direction and control of the Board of Directors (the "Board"),
shall have the power and authority commensurate with his executive
status and necessary to perform his duties hereunder. During the
Term, Executive shall devote his entire working time, attention,
labor, skill and energies to the business of the Company, and shall
not, without the consent of the Company, be actively engaged in any
other business activity, whether or not such business activity is
pursued for gain, profit or other pecuniary advantage.
4. Compensation . As compensation for
services hereunder rendered, Executive shall receive during the
Term:
(a) A base salary ("Base Salary") of not less than his current
base salary per year payable in equal installments in accordance
with the Company’s normal payroll procedures. Executive may
receive increases in his Base Salary from time to time, as approved
by the Board.
(b) In addition to Base Salary, Executive will be eligible to
receive bonuses and other incentive compensation as the Board may
approve from time to time, including participation in the
Company’s annual short-term incentive compensation plan and
its long-term incentive compensation plan, in accordance with the
terms and conditions of such plans as may be in effect from time to
time.
5. Benefits .
(a) Executive shall be entitled to participate in any and all
pension benefit, welfare benefit (including, without limitation,
medical, dental, disability and group life insurance coverages) and
fringe benefit plans from time to time in effect for officers of
the Company and its affiliates .
(b) Executive shall be entitled to participate in such bonus,
stock option, or other incentive compensation plans of the Company
and its affiliates in effect from time to time for officers of the
Company.
(c) Executive shall be entitled to paid time off each year
consistent with the Company’s policies. The Executive shall
schedule the timing of such paid time off in a reasonable manner.
The Executive also may be entitled to such other leave, with or
without compensation, as shall be mutually agreed by the Company
and Executive.
(d) Executive may incur reasonable expenses for promoting the
Company’s business, including expenses for entertainment,
travel and similar items. The Company shall reimburse Executive for
all such reasonable expenses in accordance with the Company’s
reimbursement policies and procedures, as may be in effect from
time to time.
6. Termination of Employment .
(a) Death or Disability . Executive’s employment
shall terminate automatically upon Executive’s death during
the Term. If the Company determines in good faith that the
Disability of Executive has occurred during the Term (pursuant to
the definition of Disability set forth below) it may give to
Executive written notice of its intention to terminate
Executive’s employment. In such event, Executive’s
employment
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with the Company shall terminate effective on the
30th day after receipt of such notice by Executive (the "Disability
Effective Date"), provided that, within the 30 days after such
receipt, Executive shall not have returned to full-time performance
of Executive’s duties. For purposes of this Agreement,
"Disability" shall mean Executive’s absence from his
full-time duties hereunder for a period of 90 days due to
disability as defined in the long-term disability plan provided to
Executive by the Company.
(b) Cause . The Company may terminate Executive’s
employment during the Term for Cause. For purposes of this
Agreement, "Cause" shall mean the Executive’s
(i) conviction of or plea of nolo contendere to
a crime involving moral turpitude; or (ii) willful and
material breach by Executive 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 Executive and his attorney an opportunity
to be heard by the Board and a reasonable opportunity of not less
than 30 days to remedy or correct the purported breaching conduct.
Any act, or failure to act, based upon authority given pursuant to
a resolution duly adopted by the Board or based upon advice of
counsel for the Company shall be conclusively presumed to be done,
or omitted to be done, by Executive in good faith and in the best
interests of the Company.
(c) Good Reason . Executive’s employment may be
terminated during the Term by Executive for Good Reason. "Good
Reason" shall exist upon the occurrence, without Executive’s
express written consent, of any of the following events:
(i) a material adverse change in Executive’s authority,
duties or responsibilities (including, without limitation the
Company assigning to Executive duties of a substantially
nonexecutive or nonmanagerial nature) (other than any such change
directly attributable to the fact that the Company is no longer
publicly owned);
(ii) the Company shall materially reduce the Base Salary or
annual bonus opportunity of Executive;
(iii) the Company shall require Executive to relocate
Executive’s principal business office more than 30 miles,
provided that the Executive and the Company acknowledge that
Executive’s principal business office is 680 South Fourth
Street, Louisville, Kentucky 40202; or
(iv) a material breach by the Company of Section 5(a) or
Section 9(c) of this Agreement.
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For purposes of this Agreement, "Good Reason"
shall not exist until after Executive has given the Company notice
of the applicable event within 90 days of the initial occurrence of
such event and which is not remedied within 30 days after receipt
of written notice from Executive specifically delineating such
claimed event and setting forth Executive’s intention to
terminate employment if not remedied; provided , that if the
specified event cannot reasonably be remedied within such 30-day
period and the Company commences reasonable steps within such
30-day period to remedy such event and diligently continues such
steps thereafter until a remedy is effected, such event shall not
constitute "Good Reason" provided that such event is remedied
within 60 days after receipt of such written notice.
(d) Notice of Termination . Any termination by the
Company for Cause, or by Executive for Good Reason, shall be
communicated by Notice of Termination given in accordance with this
Agreement. For purposes of this Agreement, a "Notice of
Termination" means a written notice which (i) indicates the
specific termination provision in this Agreement relied upon,
(ii) sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of
Executive’s employment under the provision so indicated and
(iii) specifies the intended termination date (which date, in
the case of a termination for Good Reason, shall be not more than
thirty days after the giving of such notice). The failure by
Executive or the Company to set forth in the Notice of Termination
any fact or circumstance which contributes to a showing of Good
Reason or Cause shall not waive any right of Executive or the
Company, respectively, hereunder or preclude Executive or the
Company, respectively, from asserting such fact or circumstance in
enforcing Executive’s or the Company’s rights
hereunder.
(e) Date of Termination . "Date of Termination" means
(i) if Executive’s employment is terminated by the
Company for Cause, or by Executive for Good Reason, the later of
the date specified in the Notice of Termination or the date that is
one day after the last day of any applicable cure period,
(ii) if Executive’s employment is terminated by the
Company other than for Cause or Disability, or Executive resigns
without Good Reason, the Date of Termination shall be the date on
which the Company or Executive notified Executive or the Company,
respectively, of such termination and (iii) if
Executive’s employment is terminated by reason of death or
Disability, the Date of Termination shall be the date of death of
Executive or the Disability Effective Date, as the case may be.
7. Obligations of the Company Upon Termination .
Following any termination of Executive’s employment
hereunder, the Company shall pay Executive his Base Salary through
the Date of Termination and any amounts owed to Executive pursuant
to the terms and conditions of the benefit plans and programs of
the Company at the time such payments are due. In addition, subject
to Section 7(e) hereof and the conditions set forth below,
Executive shall be entitled to the following additional
payments:
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(a) Death or Disability . If, during the
Term, Executive’s employment shall terminate by reason of
Executive’s death or Disability, the Company shall pay to
Executive (or his designated beneficiary or estate, as the case may
be) the prorated portion of any Target Bonus (as defined below)
Executive would have received for the year of termination of
employment. Such amount shall be paid on the date when such amounts
would otherwise have been payable to the Executive if
Executive’s employment with the Company had not terminated as
determined in accordance with the terms and conditions of the
applicable short-term incentive plan of the Company.
For purposes of this Agreement: "Target Bonus" shall mean the
full amount of the targeted annual incentive bonus that would be
payable to the Executive, assuming the targeted performance
criteria on which such annual incentive bonus is based were deemed
to be satisfied, in respect of services for the calendar year in
which the date in question occurs.
(b) Good Reason; Other than for Cause . If, during the
Term, the Company shall terminate Executive’s employment
other than for Cause (but not for Disability), or the Executive
shall terminate his employment for Good Reason:
(1) in satisfaction of the annual bonus Executive would
otherwise be eligible to receive under the short-term incentive
plan in respect of the calendar year in which the Date of
Termin
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