Exhibit 10.37
EMPLOYMENT
AGREEMENT
This EMPLOYMENT
AGREEMENT (the “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 Gregory C. Miller (the
“Executive”).
W I T N E S
S E T H :
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”) specifying the effective date of
such notice. 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 Senior Vice President of Development and
Financial Planning, reporting directly to Paul J. Diaz, President
and Chief Executive Officer.
3. Extent of Services .
Executive, subject to the direction and control of the Board of
Directors of the Parent (the “Board”) and the Company,
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 (whether tax qualified
or non-qualified), 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
earn paid time off each year up to a maximum of 208 hours per year,
subject to 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
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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 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;
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(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.
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.
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7. Obligations of the Company
Upon Termination . Following the termination of
Executive’s employment hereunder for any reason, 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:
(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 short-term incentive bonus that would be payable to
the Executive, assuming the targeted performance criteria on which
such annual short-term 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 Termination occurs, the Company shall pay to Executive
an amount equal to the product of (i) the annual bonus, if
any, to which the Executive would have been entitled for the year
in which the Date of Termination occurs had Executive’s
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