Exhibit 10.25
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 M. Suzanne Riedman (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 Executive’s continued employment by the Company;
and
WHEREAS, the Executive Compensation
Committee of the Board of Directors of Parent (the
“Board”) 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. 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 in an executive capacity as Senior Vice
President and General Counsel.
3. Extent of Services .
Executive, subject to the direction and control of the Board, shall
have the power and authority commensurate with her executive status
and necessary to perform her duties hereunder. During the term,
Executive shall devote her 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.
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4. Compensation . As
compensation for services hereunder rendered, Executive shall
receive during the Term:
(a) A base salary (“Base
Salary”) of not less than her current base salary per year
payable in equal installments in accordance with the
Company’s normal payroll procedures. Executive may receive
increases in her Base Salary from time to time, as approved by the
Board.
(b) In addition to Base Salary,
Executive shall be entitled to 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 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 Executive 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 Executives 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 executives of the Company.
(c) Executive shall be entitled to
four weeks of paid vacation each year. The Executive shall schedule
the timing of such vacations in a reasonable manner. The Executive
may also 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 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
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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 her 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 her 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
her 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;
or
(iii) 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 her Base Salary through the Date of Termination and any
amounts owed to Executive pursuant to the terms and conditions of
the Executive benefit plans and programs of the Company at the time
such payments are due. In addition,
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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 her 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 her 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
employment with the Company not been terminated, as determined in
accordance with the terms and conditions of the applicable
short-term incentive plan of the Company as provided in
Section 4(b) hereof, and (ii) a fraction, the numerator
of which is the number of days in the period beginning on the first
day of the
