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AGREEMENT AND GENERAL RELEASE
Emeritus Corporation, its successors and assigns
("Emeritus") and Frank Ruffo, his heirs, executors, administrators,
successors, and assigns (collectively referred to throughout this
Agreement as “Ruffo”), agree that:
1.
Resignation as
Officer . Ruffo
hereby resigns as an officer of Emeritus and Emeritus accepts
Ruffo's resignation effective December 31, 2006.
2.
Consideration . In consideration for signing this Agreement
and General Release ("Agreement") and compliance with the promises
made herein, Emeritus agrees, subject to the change of control
provisions in Paragraph 2(k):
(a) to pay
Ruffo's salary at its current rate ($170,000 per year) and to keep
Ruffo and his wife on the Executive benefit plan through June 30,
2007;
(b) beginning
on July 1, 2007 through December 31, 2012, to pay an annualized
salary of $117,500 (equal to 60% of base annual salary at time of
retirement; Medicare basic and supplemental plan premiums for Ruffo
at the annual rate in the year in which each payment is made
(currently $7,000 annual payment); 5% additional compensation to
cover medical premiums for Ruffo's wife between group COBRA and
reaching Medicare eligibility ($8,500)).
(c); beginning
July 1, 2007, assuming Ruffo's wife elects to continue insurance
coverage under COBRA, to pay the cost of providing said coverage
for 36 months;
(d) Beginning
on January 1, 2013, through December 31, 2022, to pay a stipend of
$2,000.00 per month to help defray the cost of health insurance for
Ruffo and/or his wife. In the event of Ruffo's death prior to
January 1, 2013, Emeritus will not make the $2,000 monthly payment,
but will pay Ruffo's wife $1,000 per month from January 1, 2013
through December 31, 2022.
(e) to payout
any bonus earned under the 2006 Executive Bonus plan; even if not
earned, if other senior executives receive bonuses on a
discretionary basis, Ruffo will be entitled to a discretionary
amount on the same basis and in a proportionate amount as he
received in the past relative to other officers.
(f) to make
matching contributions for the 2006 Top Hat Plan;
(g) on June 30,
2007, to vest 100% of Ruffo's outstanding stock options. As set
forth in the 2006 Equity Plan provisions, Ruffo shall have one (1)
year -- until June 30, 2008 -- to exercise said options;
(h) in the
event the Company offers a health insurance plan effective at any
point from July 1, 2007 through December 31, 2012 that would have
allowed the participation of Ruffo and/or his wife if it existed on
June 30, 2007, the Company will immediately notify him and/or her
in writing of the plan. Subject to the eligibility provisions
of
said plan,
Ruffo (or his wife, if he predeceases her) will have 60 days from
the date of receipt of notice to elect to participate in the plan
under its terms and conditions with premiums paid for by the
Company through December 31, 2012. If he/she so elects to
participate, the provisions of 2 (b) will be changed to provide for
an annualized salary of $102,000.00 and the remainder of 2 (b) is
no longer applicable;
(i) to allow
Ruffo to keep the 9400 Dell Computer and cell phone and
transferring cell phone to Ruffo’s personal account;
and
(j) that Ruffo
may maintain his long term care insurance policy with Ruffo
responsible for the premiums;
(k) in the
event of a change of control as defined in the Company’s 2006
Stock Option Plan or in the event of Ruffo’s death, Emeritus
will have the option of calculating an equivalent lump sum amount
to cover any remaining financial obligations set forth in
Paragraphs 2(a) - (j) and paying said lump sum to Ruffo or his
surviving spouse.
3.
No Consideration Absent
Execution of this Agreement . Ruffo understands and agrees that he would not
receive the monies and/or benefits specified in paragraph
“2” above, except for his execution of this Agreement
and the fulfillment of the promises contained herein.
4.
Revocation . Ruffo may revoke this Agreement for a period
of seven (7) calendar days following the day he executes this
Agreement. Any revocation within this period must be submitted, in
writing, to Dan Baty and state, "I hereby revoke my acceptance of
our Agreement." The revocation must be personally delivered to Dan
Baty or his designee, or mailed to Dan Baty and postmarked within
seven (7) calendar days of execution of this Agreement. This
Agreement shall not become effective or enforceable until the
revocation period has expired. If the last day of the revocation
period is a Saturday, Sunday, or legal holiday in the state in
which Ruffo was employed at the time of his last day of employment,
then the revocation period shall not expire until the next
following day which is not a Saturday, Sunday, or legal
holiday.
5.
General Release of
Claims .
