Exhibit 10.1
SEPARATION
AGREEMENT
This Separation Agreement (this
“ Agreement ”) by and among Sunrise Senior
Living, Inc., a Delaware corporation (the " Company "), and
Richard J. Nadeau (the “ Executive ”) is dated
as of the 29th day of May, 2009.
WHEREAS, the Executive has served
the Company and its affiliates for many years, including as Chief
Financial Officer of the Company, and has considerable knowledge
and experience with respect to the Company’s operations;
and
WHEREAS, the Executive and the
Company have agreed that the Executive’s employment with the
Company and its affiliates will terminate on May 29, 2009 (the
“ Date of Termination ”); and
WHEREAS, the Company has determined
that it is in its best interests for the Executive to make
available his continued services and expertise to the Company
following the Date of Termination, for the consideration and on the
terms and conditions set forth below;
NOW, THEREFORE, it is hereby agreed
as follows:
1.
Termination from Employment; Prior Agreement; Release .
(a) The Executive
and the Company hereby agree that the Executive’s employment
with the Company shall terminate effective as of the close of
business on the Date of Termination, and the Executive shall
concurrently resign from all offices and directorships he holds
with the Company or any of its affiliates. In the event that the
Executive’s employment is terminated prior to the Date of
Termination (i) by the Executive other than for Good Reason (as
defined in the Employment Agreement, dated as of February 25, 2009,
by and between the Company and the Executive (the “ Prior
Agreement ”)) or (ii) by the Company for Cause (as
defined in the Prior Agreement), this Agreement shall be deemed
null and void ab initio and of no force and effect.
(b) Subject to the
Executive’s compliance with the terms of this Agreement, the
Company agrees to provide the Executive with the payments and
benefits pursuant to Section 4(a) of the Prior Agreement (subject
to the final sentence of this Section 1(b)) and such other benefits
as are provided in this Agreement, provided , that, not
earlier than the Date of Termination and not later than 22 days
after the Date of Termination, the Executive executes and, prior to
the Revocation Deadline does not revoke, a release substantially in
the form attached as Attachment A hereto (the “
Release ”). The “ Revocation Deadline
” shall be the date that is eight (8) days after the date on
which the Executive executes the Release. Notwithstanding anything
in this Agreement to the contrary, the Executive acknowledges and
agrees that, unless and until the Executive executes and, prior to
the Revocation Deadline does not revoke, the Release, he shall have
no right to any payments or benefits under the Prior Agreement in
respect of the termination of his employment or under this
Agreement. Notwithstanding anything in the Prior Agreement or in
this Agreement to the contrary, the Executive hereby expressly
waives any rights to receive payment from the Company pursuant
to
Section 4(a)(ii) of the Prior Agreement in
respect of COBRA coverage under Section 4980B of the Internal
Revenue Code of 1986, as amended.
2.
Consulting Services .
(a) During the
period from the Date of Termination through the date nine (9)
months following the Date of Termination, or such earlier date as
may be provided pursuant to Section 2(c) below (the “
Consulting Term ”), in consideration for the
compensation provided for below, the Executive shall make himself
available to the Company, at mutually convenient times and places,
for such consulting services as may be requested by the Chief
Executive Officer or Chief Financial Officer of the Company. The
Executive expressly agrees to render up to ten (10) hours of such
services per calendar month during the Consulting Term, if so
requested by such persons. The Executive shall be entitled to
reimbursement for all reasonable expenses incurred by him in the
performance of services hereunder, in accordance with the expense
reimbursement policies of the Company or its affiliates.
(b) In
consideration for the services to be provided to the Company during
the Consulting Term:
(i)
all stock options, restricted stock and other long-term equity
compensation awards previously granted by the Company to the
Executive under the Company’s 2008 Omnibus Incentive Plan or
any other equity compensation plan of the Company which are
unvested as of the Date of Termination (collectively, the “
Applicable Equity ”) shall fully vest and, in the case
of stock options, become exercisable as of the Revocation Deadline,
and the Executive shall have one year following the termination of
the Consulting Term to exercise any such stock options (provided
that such options shall in no event be exercisable beyond their
original scheduled term); and
(ii)
the Company shall pay to the Executive a lump sum cash payment
equal to twenty thousand dollars ($20,000.00), payable within 30
days after the Date of Termination.
(c) Either the
Company or the Executive may terminate this Agreement prior to the
expiration of the Consulting Term at any time for any reason. If
this Agreement is terminated by either the Company or the Executive
prior to the expiration of the Consulting Term, the Executive shall
not be required to render any further services; provided, however,
that if this Agreement is terminated prior to the expiration of the
Consulting Term (i) by the Company for “Cause” (as
defined below) or (ii) the Executive, any Applicable Equity not
theretofore exercised or settled shall be immediately forfeited
back to the Company without consideration, and the proceeds of any
sale of Applicable Equity (or the Company common stock related
thereto) prior to such termination shall be turned over to the
Company by the Executive. For purposes of this Section 2(c) of this
Agreement, “ Cause ” shall mean: (i) the failure
of the Executive to perform substantially the Executive’s
duties under this Agreement (other than any such failure resulting
from incapacity due to physical or mental illness), (ii) the
willful engagement by the Executive in illegal conduct or gross
misconduct which is materially
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injurious to the Company, or (iii) any
violation by the Executive of the terms of Section 8 (Restrictive
Covenants) of the Prior Agreement.
(d) The
Executive’s status during the Consulting Term shall be that
of an independent contractor and not, for any purpose, that of an
employee or agent with authority to bind the Company in any
respect. Except as provided in this Agreement, the Executive shall
not be eligible for any additional compensation or benefits from
the Company or its affiliates in connection with the termination of
Executive’s employment or in connection with the consulting
services contemplated by this Agreement. Any payments made or
benefits provided to the Executive hereunder shall not be taken
into account in computing the Executive’s salary or
compensation for the purposes of determining any benefits or
compensation under (a) any pension, retirement, life insurance or
other benefit plan of the Company or any of its affiliates or (b)
any other agreement between the Company or any of its affiliates
and the Executive.
(e) All payments
and other consideration made or provided to the Executive under
Section 2 of this Agreement shall be made or provided without
withholding or deduction of any kind, and the Executive shall
assume sole responsibility for discharging all tax or oth
