Exhibit 10.1
EMPLOYMENT
AGREEMENT
This EMPLOYMENT AGREEMENT (the
“Agreement”) is made as of the 1st day of January, 2006
(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 Company has determined
that it is in the best interests of the Company 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 of $240,000 per
year (“Base Salary”) 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) Executive will be eligible to
participate in the Company’s short-term incentive plan and
long-term incentive plan in 2006, and in each subsequent full or
partial year of employment.
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 following the Company’s
standard waiting periods, if any.
(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.
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 with the Company shall terminate
effective on the 30th
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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. 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 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) the Company shall assign to
Executive duties of a substantially nonexecutive or nonmanagerial
nature;
(ii) an adverse change in
Executive’s status or position as an executive officer of the
Company, including, without limitation, an adverse change in
Executive’s status or position as a result of a diminution in
Executive’s duties and responsibilities (other than any such
change directly attributable to the fact that the Company is no
longer publicly owned);
(iii) the Company shall
(A) materially reduce the Base Salary or bonus opportunity of
Executive, or (B) materially reduce his benefits and
perquisites (other than pursuant to a uniform reduction applicable
to all similarly situated executives of the Company);
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(iv) 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
(v) the failure of the Company to
obtain the assumption of this Agreement as contemplated by
Section 9(c).
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
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
