Exhibit 99.2
EMPLOYMENT
AGREEMENT
This EMPLOYMENT AGREEMENT is made as
of the 1st day of August, 2005 (the “Effective Date”),
by and between Kindred Healthcare Operating, Inc., a Delaware
corporation (the “Company”), and Benjamin A. Breier
(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 President-People first
Rehabilitation, 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 $250,000 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) In addition to Base Salary,
Executive will be eligible to participate in the Company’s
short-term and long-term incentive plans on a pro-rated basis for
2005 based on the Effective Date. 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. The Executive’s full-year target
under the short-term incentive plan is 60% up to a maximum of 75%
of Base Salary. The Executive’s full-year target under the
long-term incentive plan is 45% up to a maximum of 90% of Base
Salary.
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. Until the time of eligibility,
the Company will reimburse Executive for the difference between the
cost of maintaining COBRA coverage under Executive’s present
medical insurance plan and the cost of coverage under the medical
plan selected by Executive as an employee of the
Company.
(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. At the next regularly
scheduled meeting of the Board of Directors of the Parent, the
Chief Executive Officer will recommend that Executive be granted
10,000 shares of restricted stock that will vest in equal annual
installments over four years and 12,500 employee stock options that
will vest over four years from the grant date and have a seven year
life. These equity grants would be subject to the terms and
conditions of the Kindred Healthcare, Inc. 2001 Stock Incentive
Plan, Amended and Restated.
(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.
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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.
(e) The Company shall reimburse all
reasonable travel and relocation expenses incurred by Executive in
accordance with the Company’s Executive Committee Relocation
Policy. As an exception to this policy, the Company will pay
Executives’ monthly mortgage payment, up to a maximum of
$3,500 per month, during the first three months of the term of this
Agreement for any month during such period in which Executive
maintains two residences. In the event Executive voluntarily
terminates his employment with the Company without Good Reason
within one year from Executive’s move date, Executive will
reimburse the Company for a pro rata amount of Executive’s
relocation expenses.
(f) With the Executive’s first
regular paycheck, Executive will receive a one-time, sign-on bonus
of $100,000. In the event Executive voluntarily terminates his
employment with the Company without Good Reason within one year of
the Effective Date, Executive will reimburse the Company the full
amount of this bonus.
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 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
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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);
(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
