Exhibit 10.88
EMPLOYMENT CONTRACT
AGREEMENT
made as of December 4, 2003 between BEVERLY ENTERPRISES, INC.,
a Delaware corporation (the “Company”), and CINDY
SUSIENKA (the “Executive”).
WHEREAS,
Executive is employed by the Company or by one of its wholly-owned
consolidated subsidiaries; and
WHEREAS,
the Company desires to assure itself of the management services of
the Executive by directly engaging the Executive as the Executive
Vice President of the Company; and
WHEREAS,
the Company wishes to encourage the Executive to remain with and
devote full time and attention to the business affairs of the
Company and wishes to provide income protection to the Executive
for a period of time in the event of an involuntary Termination of
Employment not for Cause or a voluntary Termination of Employment
for Good Reason within the Term of this Agreement;
NOW,
THEREFORE, in consideration of the mutual agreements and
understandings set forth herein and for other good and valuable
consideration, the receipt and adequacy of which is hereby
acknowledged, the Company and the Executive hereby agree as
follows:
1.
Definitions .
(a)
“ Base Salary ” shall mean the Executive’s
regular annual rate of base pay, as set forth in
Paragraph 4(a), as of the date in question.
(b)
The “ Benefit Multiplier ” shall be equal to 2.0
except that if Executive’s Termination of Employment is
pursuant to Paragraphs 6(b) or 6(c) it shall be equal to
3.0.
(c)
The Benefit Period ” shall be the period of years
equal to the Benefit Multiplier which follows the Executive’s
Termination of Employment.
(d)
“ Cause ” shall mean the Executive’s
(i) conviction of a crime involving moral turpitude or theft
or embezzlement of property from the Company or (ii) willful
misconduct or willful failure substantially to perform the duties
of his position, but only if such has continued after receipt of
notice from the Company’s Board of Directors and such
reasonable cure period as is set forth in such notice.
(e)
A “ Change in Control ” shall be deemed to have
taken place if: (i) any person, corporation, or other entity
or group, including any “group” as defined in Section
l3(d)(3) of the Securities Exchange Act of 1934, other than any
employee benefit plan then maintained by the Company, becomes the
beneficial owner of shares of the Company having 30 percent or more
of the total number of votes that may be cast for the election of
Directors of the Company; (ii) as the result of, or in
connection with, any contested election for the Board of Directors
of the Company, or any tender or exchange offer, merger or other
business combination or sale of assets, or any combination of the
foregoing (a “Transaction”), the persons who were
Directors of the Company before the Transaction shall cease to
constitute a majority of the Board of Directors of the Company or
any successor to the Company or its assets, or (iii) at any
time (a) the Company shall consolidate with, or merge with,
any other Person and the Company shall not be the continuing or
surviving corporation, (b) any Person shall consolidate with,
or merge with the
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Company, and the Company shall be the continuing
or surviving corporation and in connection therewith, all or part
of the outstanding Company stock shall be changed into or exchanged
for stock or other securities of any other Person or cash or any
other property, (c) the Company shall be a party to a
statutory share exchange with any other Person after which the
Company is a subsidiary of any other Person, or (d) the
Company shall sell or otherwise transfer 50% or more of the assets
or earning power of the Company and its subsidiaries (taken as a
whole) to any Person or Persons; provided, however, that
notwithstanding anything to the contrary herein, a Change in
Control shall not include either any transfer to a
consolidated subsidiary, reorganization, spin-off, split-up,
distribution, or other similar or related transaction(s) or any
combination of the foregoing in which the core business and assets
of the Company and its subsidiaries (taken as a whole) are
transferred to another entity (“Controlled”) with
respect to which (1) the majority of the Board of Directors of
the Company (as constituted immediately prior to such
transaction(s)) also serve as directors of Controlled and
immediately after such transaction(s) constitute a majority of
Controlled’s board of directors, and (2) more than 70%
of the shareholders of the Company (immediately prior to such
transaction(s)) become shareholders or other owners of Controlled
and immediately after the transaction(s) control more than 70% of
the ownership and voting rights of Controlled.
(f)
The “ Change in Control Date ” shall mean the
date immediately prior to the effectiveness of the Change in
Control.
(g)
The “ Committee ” shall mean the Compensation
Committee of the Company’s Board of Directors.
(h)
The “ Competitive Businesses ” shall mean any of
the health care businesses in which the Company is engaged on the
Effective Date.
(i)
The Executive shall have “ Good Reason ” to
terminate employment if: (i) the Executive is not elected,
reelected, or otherwise continued in the office of the Company or
any of its subsidiaries which he held immediately prior to the
Change in Control Date, or he is removed as a member of the Board
of Directors of the Company or any of its subsidiaries if the
Executive was a director immediately prior to the Change in Control
Date; (ii) the Executive’s duties, responsibilities or
authority as an employee are materially reduced or diminished from
those in effect on the Change in Control Date without the
Executive’s consent; (iii) the Executive’s duties,
responsibilities, or authority as an employee are materially
reduced or diminished from those in effect on the Effective Date
without the Executive’s consent; (iv) the
Executive’s compensation or benefits are reduced without the
Executive’s consent, unless all Executive-level officers have
their compensation or benefits reduced in the same percentage
amount; (v) the Company reduces the potential earnings of the
Executive under any performance-based bonus or incentive plan of
the Company in effect immediately prior to the Change in Control
Date; (vi) the Company requires that the Executive’s
employment be based other than at its location on the Effective
Date without his consent; (vii) any purchaser, assign,
surviving corporation, or successor of the Company or its business
or assets (whether by acquisition, merger, liquidation,
consolidation, reorganization, sale or transfer of assets or
business, or otherwise) fails or refuses to expressly assume in
writing this Agreement and all of the duties and obligations of the
Company hereunder pursuant to Section 16 hereof; or (viii) the
Company breaches any of the provisions of this
Agreement.
(j)
“ Person ” shall have the meaning ascribed to
such term in Section 3(a)(9) of the Securities Exchange Act of
1934 and used in Sections 13(d) and 14(d) thereof, including a
“group” as defined in Section 13(d).
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(k) “
Target Bonus ” shall mean the target bonus (100%
level) established for the Executive for the year in question under
the Company’s “Annual Incentive Plan.”
(l) “
Termination of Employment ” shall mean the termination
of the Executive’s employment by the Company other than such
a termination in connection with an offer of immediate reemployment
by a successor or assign of the Company or purchaser of the Company
or its assets under terms and conditions which would not permit the
Executive to terminate his employment for Good Reason.
2.
Term . The initial term of this Agreement shall be for the
period commencing on the Effective Date and ending on the third
anniversary thereof. The Term shall be automatically extended by
one additional day for each day beyond the Effective Date of this
Agreement 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 to the Executive. (In such event, the
Agreement shall thus terminate on the third anniversary of the
effective date of such notice).
3.
Position and Duties . During the Term, the Executive shall
serve, as an employee, as the Executive Vice President of the
Company and shall have such duties, functions, responsibilities and
authority as are consistent with the Executive’s
position.
4.
Compensation and Related Matters .
(a)
Annual Base Salary . The Executive shall receive a Base
Salary at a rate of $385,000 per annum and thereafter at any such
greater rate as is determined by the Committee.
(b)
Benefits . During the Term, the Executive shall be entitled
to all of the following and any other benefits and prerequisites
offered by the Company to executives generally:
(i)
Participate in the Company’s present and future stock option,
restricted stock, phantom stock and other similar equity-based
incentive plans, pursuant to their terms.
(ii)
Participate in the Company’s Employee Stock Purchase Plan,
pursuant to its terms;
(iii)
Participate in the Company’s Executive Deferred Compensation
Plan, pursuant to its terms;
(iv)
Participate in the Company’s Executive Savings Plus Plan,
pursuant to its terms;
(vi)
Participate in the group term life insurance coverage as provided
by the Company;
(vii)
Participate in the business travel accident insurance coverage when
traveling on Company business;
(viii)
Participate in the Company’s Medical Plan, and Dental Plan,
pursuant to their terms, except that the premium cost for such
shall be treated as a benefit under the Company’s Executive
Medical Reimbursement Plan, described below, (and therefore at the
present time, there shall be no payroll deduction as a condition of
coverage in the Medical Plan and Dental Plan);
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(ix)
Participate in the Company’s Executive Medical Reimbursement
Plan pursuant to its terms;
(x)
Participate in the Company’s group Long-Term Disability Plan,
at the maximum benefit level, pursuant to its terms, and
participate in the Company’s Supplemental Long-Term
Disability Plan, according to its terms;
(xi)
4 weeks of paid vacation;
(xii)
Participate in or receive benefits under any other employee benefit
plan or other arrangement made available by the Company to any of
its employees, subject to and on a basis consistent with the terms,
conditions and overall administration of such plan or
arrangement.
(c)
Annual Bonus . As additional compensation for services
rendered, the Executive shall be eligible to receive an annual
bonus in cash pursuant to the Company’s Annual Incentive
Plan.
(d)
Expenses . The Company shall promptly reimburse the
Executive for all reasonable travel and other business expenses
incurred by the Executive in the performance of his duties to the
Company hereunder.
(e)
Reporting . The Executive shall report directly to the
Chairman and Chief Executive Officer of the Company.
5.
Non-Solicitation .
(a)
Executive shall not at any time during the period of his employment
with the Company, or during the one (1) year period
immediately following his Termination of Employment with the
Company (“Non-Solicitation Period”), without the prior
written consent of the Company, on behalf of himself or any other
person, solicit for employment or employ any of the current
officers or employees of the Company; provided, however, that
nothing contained herein shall prohibit Executive from hiring
employees of the Company when such employment results from general
solicitations for employment.
(b)
Executive shall not at any time during the period of his employment
with the Company, or during the Non-Solicitation Period, without
the prior written consent of the Company, solicit for his own use,
or for the use of any company or person by whom he is employed, or
for whom he may be acting, any of the current customers of the
Company, nor shall he divulge to any other person any information
or fact relating to the management, business (including prospective
business), finances, its customers or the terms of any of the
contracts of the Company which has heretofore or which may
hereafter come to the knowledge of Executive which is not freely
available to the public.
(c)
Executive shall not, during the Non-Solicitation Period, in any way
defame the Company or disparage its business capabilities,
products, plans or management to any customer, potential customer,
vendor, supplier, contractor, subcontractor of the Company so as to
affect adversely the goodwill or business of the
Company.
(d)
Executive covenants and agrees that a breach of these subparagraphs
(a), (b) or (c) would immediately and irreparably harm
the Company and that a remedy at law would be inadequate to
compensate the Company for its losses by reason of such breach and
therefore that the Company shall, in addition to any rights and
remedies available under this Agreement, at
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law
or otherwise, be entitled to any injunction to be issued by any
court of competent jurisdiction enjoining and restraining Executive
from committing any violation of these subparagraphs (a),
(b) or (c), and Executive hereby consent to the issuance of
such injunction.
(e)
For purposes of this Section 5 and in consideration of this
Agreement, this non-solicitation agreement has been separately
negotiated and bargained for, and constitutes a substantial portion
of the consideration for this Agreement.
6.
Eligibility for Severance Benefits . The Executive shall be
eligible for the benefits described in Paragraph 7 (the
“Severance Benefits”) if:
(a)
during the Term, the Executive has a Termination of Employment
initiated (i) by the Company without Cause, or (ii) by
the Executive for Good Reason, and, in either case, subsections
(b) or (c) do not apply,
(b)
during the Term there has been a Change in Control and during the
31 day period commencing on the first day of the 13th calendar
month following the Change in Control Date ( e.g. the period
April 1, 1999 — May 1, 1999, inclusive, for a
Change in Control which is effective in the month of March, 1998),
the Executive has a Termination of Employment initiated by the
Executive without Good Reason, or
(c)
during the Term either (i) there has been a Change in Control
and during the two year period commencing on the Change in Control
Date the Executive has a Termination of Employment which is
initiated by the Company without Cause or by the Executive for Good
Reason, or (ii) the Executive has a Termination of Employment
initiated by the Company without Cause or by the Executive for Good
Reason following the commencement of any discussion with a third
person that ultimately results in a Change in Control with such
third person within 12 months of the commencement of such
discussions (in which case, the date of such discussion shall be
substituted for the Change in Control Date wherever appropriate,
including in the definition of “Good Reason” and in
Paragraph 7 hereof).
7.
Severance Benefit . Upon satisfaction of the requirements
set forth in Paragraph 6, and subject to Paragraphs 8 and 11,
the Executive shall
