Exhibit 10.36
EXECUTIVE SEVERANCE AGREEMENT
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Executive
▇▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Regent Assisted Living, Inc. Company
An Oregon corporation
▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Date: September 19, 2001.
The Company considers the establishment and maintenance of a sound and
vital management to be essential to protecting and enhancing the best interests
of Company and its stakeholders. In this connection, Company recognizes that, as
is the case with many publicly held corporations, the possibility of a change of
control may exist and that such possibility, and the uncertainty and questions
which it may raise among management, may result in the departure or distraction
of management personnel to the detriment of Company and its shareholders. In
order to induce Executive to remain employed by Company in the face of
uncertainties about the long-term strategies of Company and a possible change of
control of Company and their potential impact on Executive's position with
Company, this Executive Severance Agreement ("Agreement"), which has been
approved by the Board of Directors of Company, sets forth the severance benefits
that Company will provide to Executive in the event Executive's employment by
Company is terminated under the circumstances described in this Agreement.
1. Employment Relationship. Executive is currently employed by Company
as Senior Vice President of Finance and Development. Executive and Company
acknowledge that either party may terminate this employment relationship at any
time and for any or no reason, subject to the obligation of Company to provide
the severance benefits specified in this Agreement in accordance with the terms
hereof.
2. Release of Claims. In consideration for and as a condition precedent
to receiving the severance benefits outlined in this Agreement, Executive agrees
to execute a Release of Claims in the appropriate form attached as Exhibit A
("Release of Claims"). Executive promises to execute and deliver the Release of
Claims to Company within the later of (a) 45 days from the date Executive
receives the Release of Claims or (b) the last day of Executive's active
employment.
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3. Compensation Upon Termination. In the event of a Termination of
Executive's Employment (as defined in Section 6.1) at any time other than for
Cause (as defined in Section 6.2 of this Agreement), death or Disability (as
defined in Section 6.4 of this Agreement), or within 12 months following a
Change of Control or prior to a Change of Control at the direction of a person
who has entered into an agreement with Company, the consummation of which will
constitute a Change of Control, and contingent upon Executive's execution of the
Release of Claims and compliance with Section 9, Executive shall be entitled to
the following benefits:
3.1 Base Amount. As severance pay and in lieu of any other
compensation for periods subsequent to the date of termination, Company shall
pay Executive, in a single payment after employment has terminated and eight
days have passed following execution of the Release of Claims without
revocation, an amount in cash equal to one year of Executive's annual base pay
at the rate in effect immediately prior to the date of termination.
3.2 Health Insurance. Executive is entitled to extend coverage
under any group health plan in which Executive and Executive's dependents are
enrolled at the time of termination of employment for an 18-month period.
Company will pay Executive a lump sum payment in an amount equivalent to the
cost to extend such coverage for a period of 18 months, based on the then
current rates for COBRA employee only group health and dental coverage under the
Company's group health plan in effect at the time of termination. Executive may
use this payment, as well as any payment made under Section 3.1, for such
continuation coverage or for any other purpose.
3.3 Stock Options and Stock Awards. All outstanding stock
options, restricted stock, stock bonuses or other stock awards shall be governed
by the terms of the applicable agreement or plan.
4. Tax Withholding; Subsequent Employment.
4.1 All payments provided for in this Agreement are subject to
applicable tax withholding obligations imposed by federal, state and local laws
and regulations.
4.2 The amount of any payment provided for in this Agreement
shall not be reduced, offset or subject to recovery by Company by reason of any
compensation earned by Executive as the result of employment by another employer
after termination.
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5. Other Agreements. In the event that severance benefits are payable
to Executive under any other agreement with Company in effect at the time of
termination (including but not limited to any employment agreement, but
excluding for this purpose any stock option agreement or stock bonus agreement
that may provide for accelerated vesting or related benefits upon the occurrence
of a change in control), the benefits provided in this Agreement shall not be
payable to Executive. Executive may, however, elect to receive all of the
benefits provided for in this Agreement in lieu of all of the benefits provided
in all such other agreements. Any such election shall be made with respect to
the agreements as a whole, and Executive cannot select some benefits from one
agreement and other benefits from this Agreement.
6. Definitions.
6.1 Termination of Executive's Employment. Termination of
Executive's Employment means that Company has terminated Executive's employment
with Company (including any subsidiary of Company). For purposes of Section 3,
if Executive is assigned additional or different titles, tasks or
responsibilities from those currently held or assigned, consistent with
Executive's areas of professional expertise and with no decrease in annual base
compensation, whether at Company or any subsidiary of Company, such
circumstances shall not constitute a Termination of Executive's Employment. For
purposes of ▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇▇▇ of Executive's Employment shall include
termination by Executive, within 12 months of a Change of Control, by written
notice to Company referring to the applicable paragraph of Section 6.1, for
"Good Reason" based on:
(A) the assignment to Executive of a different title,
job or responsibilities that results in a decrease in the
level of responsibility of Executive with respect to the
surviving company after the Change of Control when compared to
Executive's level of responsibility for Company' operations
prior to the Change of Control; provided that Good Reason
shall not exist if Executive continues to have the same or a
greater general level of responsibility for the former Company
operations after the Change of Control as Executive had prior
to the Change of Control even if the former Company operations
are a subsidiary or division of the surviving company;
(B) a reduction by Company or the surviving company
in Executive's base pay as in effect immediately prior to the
Change of Control;
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(C) a significant reduction by Company or the
surviving company in total benefits available to Executive
under cash incentive, stock incentive and other employee
benefit plans after the Change of Control compared to the
total package of such benefits as in effect prior to the
Change of Control;
(D) Company or the surviving company requires
Executive to be based more than 20 miles from where
Executive's office is located immediately prior to the Change
of Control except for required travel on company business to
an extent substantially consistent with the business travel
obligations which Executive undertook on behalf of Company
prior to the Change of Control; or
(E) the failure by Company to obtain from any
successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the
business and/or assets of Company ("Successor") the assent to
this Agreement contemplated by Section 7 hereof.
6.2 Cause. Termination of Executive's Employment for
"Cause" shall mean termination upon (a) the willful and continued
failure by Executive to perform substantially Executive's reasonably
assigned duties with Company (other than any such failure resulting
from Executive's incapacity due to physical or mental illness) after a
demand for substantial performance is delivered to Executive by the
Board, the Chief Executive Officer or the President of Company which
specifically identifies the manner in which the Board or Company
believes that Executive has not substantially performed Executive's
duties, (b) any misappropriation of funds or property of the Company by
Executive, (c) the conviction of or plea of guilty or nolo contendere
by Executive of a felony or of any crime involving moral turpitude, (d)
Executive's engagement in illegal or immoral conduct tending to place
Executive or the Company, by association with Executive, in disrepute,
(e) indulgence in alcohol or drugs to an extent that renders Executive
generally unable or unfit to perform his duties hereunder, (f)
Executive's gross dereliction of duty, or (g) any act or omission that
constitutes a material breach by Executive of his obligations under
this Agreement.
No act, or failure to act, on Executive's part shall be
considered "willful" unless done, or omitted to be done, by Executive
without reasonable belief that Executive's action or omission was in,
or not opposed to, the best interests of Company. Any act, or failure
to act, based upon authority given pursuant to a
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resolution duly adopted by the Board or based upon the advice of
counsel for Company shall be conclusively presumed to be done, or omitted to be
done, by Executive in the best interests of Company.
6.3 Change of Control. A Change of Control shall mean that one
of the following events has taken place:
(A) The shareholders of Company approve one of the
following ("Approved Transactions"):
(i) Any merger or statutory plan of exchange
involving Company ("Merger") in which Company is not the
continuing or surviving corporation or pursuant to which
Common Stock would be converted into cash, securities or other
property, other than a Merger involving Company in which the
holders of Common Stock immediately prior to the Merger have
the same proportionate ownership of Common Stock of the
surviving corporation after the Merger; or
(ii) Any sale, lease, exchange, or other
transfer (in one transaction or a series of related
transactions) of all or substantially all of the assets of
Company or the adoption of any plan or proposal for the
liquidation or dissolution;
(B) A tender or exchange offer, other than one made
by Company, is made for Common Stock (or securities
convertible into Common Stock) and such offer results in a
portion of those securities being purchased and the offeror
after the consummation of the offer is the beneficial owner
(as determined pursuant to Section 13(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")),
directly or indirectly, of securities representing at least 20
percent of the voting power of outstanding securities of
Company;
(C) Company receives a report on Schedule 13D of the
Exchange Act reporting the beneficial ownership by any person
(other than ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ or any of his affiliates) of
securities representing 20 percent or more of the voting power
of outstanding securities of Company, except that if such
receipt shall occur during a tender offer or exchange offer
described in
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(B) above, a Change of Control shall not take
place until the conclusion of such offer;
(D) During any period of 6 months or less, any
transaction or series of transactions that results in the
holders of a majority of the outstanding securities of the
Company prior to such transaction or transactions holding less
than a majority of the outstanding securities of the Company
after such transaction or transactions;
(E) During any period of 12 months or less,
individuals who at the beginning of such period constituted a
majority of the Board of Directors cease for any reason to
constitute a majority thereof unless the nomination or
election of such new directors was approved by a vote of at
least two-thirds of the directors then still in office who
were directors at the beginning of such period;
(F) The entry of an order for relief under Title 11
of the United States Code as to the Company or the
determination of the Company as insolvent or bankrupt pursuant
to the provisions of any state insolvency or bankruptcy laws;
the commencement by the Company of any case, proceeding or
other action seeking any reorganization, arrangement,
composition, adjustment, liquidation, dissolution or similar
relief for itself under any present or future statute, law or
regulation relating to bankruptcy, insolvency, reorganization
or other relief for debtors; the Company's consent to,
acquiescence in or attempt to secure the appointment of any
receiver of all or any part of its properties and such
receivership or trusteeship shall continue undischarged for a
period of sixty (60) days or more; the Company shall generally
not pay its debts as they become due or shall admit in writing
its inability to pay its debts or shall make a general
assignment for the benefit of creditors; or the Company
(including the shareholders of the Company) shall take any
action to authorize any of the acts set forth above in this
paragraph; or
(G) Any case, proceeding or other action against the
Company shall be commenced seeking to have an order for relief
entered against it as a debtor or seeking any reorganization,
arrangement, composition, adjustment, liquidation, dissolution
or similar relief under any present or future statute, law or
regulation relating to bankruptcy, insolvency, reorganization
or other relief for debtors, or seeking appointment of any
receiver for the Company or for all or any substantial part of
its property, and such case, proceeding or other action is not
dismissed or stayed within sixty (60) days after it is filed.
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Notwithstanding anything in the foregoing to the contrary, no Change of Control
shall be deemed to have occurred for purposes of this Agreement by virtue of any
transaction which results in Executive, or a group of persons which includes
Executive, acquiring, directly or indirectly, securities representing 20 percent
or more of the voting power of outstanding securities of Company.
6.4 Disability. Termination of Executive's Employment based on
"Disability" shall mean termination without further compensation under this
Agreement, due to Executive's absence from Executive's full-time duties with
Company for 180 consecutive days as a result of Executive's incapacity due to
physical or mental illness, unless within 30 days after notice of termination by
Company following such absence Executive shall have returned to the full-time
performance of Executive's duties.
7. Successors; Binding Agreement.
7.1 This Agreement shall be binding on and inure to the
benefit of Company and its Successors and assigns. Upon Executive's written
request, Company will seek to have any Successor by agreement, assent to the
fulfillment by Company of its obligations under this Agreement. If such a
request is made, failure of Company to obtain such assent prior to or at the
time a company becomes a Successor shall constitute Good Reason for termination
by Executive of his or her employment and, if a Change of Control of the Company
has occurred, shall entitle Executive to the benefits pursuant to Section 3.
7.2 This Agreement shall inure to the benefit of and be
enforceable by Executive and Executive's legal representatives, executors,
administrators and heirs.
8. Resignation of Corporate Offices. Executive will resign Executive's
office, if any, as a director, officer or trustee of Company, its subsidiaries
or affiliates and of any other corporation or trust of which Executive serves as
such at the request of Company, effective as of the date of termination of
employment. Executive agrees to provide Company such written resignation(s) upon
request and that no severance will be paid until after such resignation(s) are
provided.
9. Governing Law, Arbitration. This Agreement shall be construed in
accordance with and governed by the laws of the State of Oregon. Executive and
Company agree that should the issue arise of whether either party to this
Agreement has failed to satisfy or has breached the terms of this Agreement, any
dispute regarding the issue, shall be, upon the demand of Employee or the
Company, conclusively arbitrated in Portland, Oregon, pursuant to the rules of
the Arbitration Service of Portland, Inc. In the event that any arbitration or
action is filed in relation to this Agreement, the unsuccessful party shall pay
to the successful party, in addition to all sums that either party may be called
upon to pay, a reasonable sum for the successful party's reasonable attorney
fees and costs.
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10. Amendment. No provision of this Agreement may be modified unless
such modification is agreed to in a writing signed by Executive and Company.
11. Severability. If any of the provisions or terms of this Agreement
shall for any reason be held invalid or unenforceable, such invalidity or
unenforceability shall not affect any other terms of this Agreement, and this
Agreement shall be construed as if such unenforceable term had never been
contained in this Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the foregoing Agreement is hereby executed as of
the date first above written.
Regent Assisted Living, Inc.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------- --------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Executive
Chief Executive Officer
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EXHIBIT A
RELEASE OF CLAIMS
1. PARTIES.
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The parties to Release of Claims (hereinafter "Release") are __________
_______ and Regent Assisted Living, Inc., an Oregon corporation, as hereinafter
defined.
1.1 EXECUTIVE.
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For the purposes of this Release, "Executive" means _________
____________, and his or her attorneys, heirs, executors, administrators,
assigns, and spouse.
1.2 THE COMPANY.
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For purposes of this Release the "Company" means Regent
Assisted Living, Inc., an Oregon corporation, its predecessors and successors,
corporate affiliates, and all of each corporation's officers, directors,
employees, insurers, agents, or assigns, in their individual and representative
capacities.
2. BACKGROUND AND PURPOSE.
----------------------
Executive was employed by Company. Executive's employment is
ending effective __________ pursuant to Section 3 of the Executive Severance
Agreement dated ________ between Executive and the Company ("Agreement").
The purpose of this Release is to settle, and the parties
hereby settle, fully and finally, any and all claims Executive may have against
Company, whether asserted or not, known or unknown, including, but not limited
to, claims arising out of or related to Executive's employment, any claim for
reemployment, or any other claims whether asserted or not, known or unknown,
past or future, that relate to Executive's employment, reemployment, or
application for reemployment.
3. RELEASE.
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Except as reserved in paragraphs 3 or 3.1, Executive waives,
acquits and forever discharges Company from any obligations Company has and all
claims Executive may have including but not limited to obligations and/or claims
arising from the Agreement or any other document or oral agreement relating to
employment compensation, benefits severance or post-employment issues. Except as
reserved in Paragraph 3.1, Executive hereby releases Company from any and all
claims, demands, actions, or causes of action, whether known or unknown, arising
from or related in any way to any employment of or past or future failure or
refusal to employ Executive by Company, or any other past or future claim
(except as reserved by this Release or where expressly prohibited by law) that
relates in any way to Executive's employment, compensation, benefits,
reemployment, or application for employment, with the
exception of any claim Executive may have against Company for enforcement of
this Release. This release includes any and all claims, direct or indirect,
which might otherwise be made under any applicable local, state or federal
authority, including but not limited to any claim arising under the Oregon
statutes dealing with employment, discrimination in employment, Title VII of the
Civil Rights Act of 1964, the Civil Rights Act of 1991, the Americans With
Disabilities Act, the Family and Medical Leave Act of 1993, the Equal Pay Act of
1963, Executive Order 11246, the Rehabilitation Act of 1973, the Uniformed
Services Employment and Reemployment Rights Act of 1994, the Age Discrimination
in Employment Act, the Fair Labor Standards Act, Oregon wage and hour statutes,
all as amended, any regulations under such authorities, and any applicable
contract, tort, or common law theories.
3.1 Reservations of Rights.
----------------------
This Release shall not affect any rights which Executive may
have under any medical insurance, disability plan, workers' compensation,
unemployment compensation, applicable company stock incentive plan(s),
indemnifications, or the 401(k) plan maintained by the Company.
3.2 No Admission of Liability.
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It is understood and agreed that the acts done and evidenced
hereby and the release granted hereunder is not an admission of liability on the
part of Executive or Company, by whom liability has been and is expressly
denied.
4. CONSIDERATION TO EXECUTIVE.
--------------------------
After receipt of this Release fully endorsed by Executive, and
the expiration of the seven- (7) day revocation period provided by the Older
Workers Benefit Protection Act without Executive's revocation, Company shall pay
the lump sum of ___________ DOLLARS ($__________ ) to Executive (less proper
withholding) for severance and the reasonable estimate of COBRA continuation
coverage as provided in Section[s] 3.1 and 3.2 of the Agreement.
5. NO DISPARAGEMENT.
----------------
Executive agrees that henceforth Executive will not disparage
or make false or adverse statements about Company. The Company should report to
Executive any actions or statements that are attributed to Executive that the
Company believes are disparaging. The Company may take actions consistent with
breach of this Release should it determine that Executive has disparaged or made
false or adverse statements about Company. The Company agrees to follow the
applicable policy(ies) regarding release of employment reference information.
6. CONFIDENTIALITY, PROPRIETARY, TRADE SECRET AND RELATED INFORMATION.
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Executive acknowledges the duty and agrees not to make
unauthorized use or disclosure of any confidential, proprietary or trade secret
information learned as an employee about Company, its products, customers and
suppliers, and covenants not to breach that duty. Moreover, Executive
acknowledges that, subject to the enforcement limitations of applicable law, the
Company reserves the right to enforce the terms of Executive's Employment
Agreement with Company and any paragraph(s) therein. Should Executive,
Executive's attorney or agents be requested in any judicial, administrative, or
other proceeding to disclose confidential, proprietary or trade secret
information Executive learned as an employee of Company, Executive shall
promptly notify the Company of such request by the most expeditious means in
order to enable the Company to take any reasonable and appropriate action to
limit such disclosure.
7. ARBITRATION OF CERTAIN DISPUTES.
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Executive and Company agree that should the issue arise of
whether either party to this Agreement has failed to satisfy or has breached the
terms of this Agreement, any dispute regarding the issue, shall be, upon the
demand of Employee or the Company, conclusively arbitrated in Portland, Oregon,
pursuant to the rules of the Arbitration Service of Portland, Inc. In the event
that any arbitration or action is filed in relation to this Agreement, the
unsuccessful party shall pay to the successful party, in addition to all sums
that either party may be called upon to pay, a reasonable sum for the successful
party's reasonable attorney fees and costs.
8. SCOPE OF RELEASE.
----------------
The provisions of this Release shall be deemed to obligate,
extend to, and inure to the benefit of the parties; Company's parents,
subsidiaries, affiliates, successors, predecessors, assigns, directors,
officers, and employees; and each parties insurers, transferees, grantees,
legatees, agents and heirs, including those who may assume any and all of the
above-described capacities subsequent to the execution and effective date of
this Release.
9. OPPORTUNITY FOR ADVICE OF COUNSEL.
---------------------------------
Executive acknowledges that Executive has been encouraged to
seek advice of counsel with respect to this Release and has had the opportunity
to do so.
10. ENTIRE RELEASE.
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This Release and the Agreement signed by Executive contain the
entire agreement and understanding between the parties and, except as reserved
in paragraph 3 and 3.1, supersede and replace all prior agreements written or
oral including but not limited to the Agreement, prior negotiations and proposed
agreements, written or oral. Executive and Company acknowledge that no other
party, nor agent nor attorney of any other party, has made any promise,
representation, or warranty, express or implied, not contained in this Release
concerning the subject matter of this Release to induce this Release, and
Executive and Company acknowledge that they have not executed this Release in
reliance upon any such promise, representation, or warranty not contained in
this Release.
11. SEVERABILITY.
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Every provision of this Release is intended to be severable.
In the event any term or provision of this Release is declared to be illegal or
invalid for any reason whatsoever by a court of competent jurisdiction or by
final and unappealed order of an administrative agency of competent
jurisdiction, such illegality or invalidity should not affect the balance of the
terms and provisions of this Release, which terms and provisions shall remain
binding and enforceable.
12. PARTIES MAY ENFORCE RELEASE.
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Nothing in this Release shall operate to release or discharge
any parties to this Release or their successors, assigns, legatees, heirs, or
personal representatives from any rights, claims, or causes of action arising
out of, relating to, or connected with a breach of any obligation of any party
contained in this Release.
13. COSTS AND ATTORNEY'S FEES.
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The parties each agree to bear their own costs and attorneys'
fees which have been or may be incurred in connection with any matters released
herein or in connection with the negotiation and consummation of this Release.
In the event of any administrative or civil action to enforce the provisions of
this Release, the prevailing party shall be entitled to attorney fees and costs
through trial and/or on appeal.
14. ACKNOWLEDGMENTS.
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Executive acknowledges that the Release provides severance pay
and benefits which the Company would otherwise have no obligation to provide.
Executive acknowledges that Company has provided the following
information: (a) the class or group of employees offered the opportunity to
obtain severance benefits similar to those in the Release, (b) the eligibility
factors required to obtain severance benefits similar to those in the Release,
(c) the time limits required to obtain severance benefits similar to those in
the Release, (d) the job titles and ages of employees eligible or selected for
severance benefits similar to those in the Release, and (e) the ages of
employees in the same classification either not eligible or not selected.
15. REVOCATION.
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As provided by the Older Workers Benefit Protection Act,
Executive's is entitled to have forty-five (45) days to consider this Release.
For a period of seven (7) days from execution of this Release, Executive may
revoke this Release. Upon receipt of Executive's signed Release and the end of
the revocation period, payment by Company as described in paragraph 4 above will
be forwarded by mail in a timely manner as provided herein.
Dated: __________ __, 2001
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[Name of Executive]
STATE OF ________ )
) ss.
County of _________ )
Personally appeared the above named _________________________and
acknowledged the foregoing instrument to be his or her voluntary act and deed.
Before me:
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Notary Public for
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My commission expires:
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Regent Assisted Living, Inc.
By: Dated:
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Its:
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