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| 8-K - 8K JAN 2010 EMPLOYMENT AGREEMENT R BRANDSTROM - EMERITUS CORP\WA\ | esc8kemploymntagrmnt0110.htm |
EX-10.1
EMPLOYMENT
AGREEMENT
THIS
AGREEMENT made as of January 1, 2010.
BETWEEN:
Emeritus Corporation, a
corporation duly incorporated under the laws of the State of
Washington;
(“Emeritus")
AND:
Raymond R. Brandstrom, Jr., an
individual,
(the
"Executive")
WHEREAS:
Executive has been employed by Emeritus most recently as Executive Vice
President of Finance and Chief Financial Officer;
WHEREAS: Executive
will resign his current position;
WHEREAS: Executive
and Emeritus wish to formally record the terms and conditions upon which the
Executive will remain employed by Emeritus, and each of Emeritus and the
Executive have agreed to the terms and conditions set forth in this Agreement,
as evidenced by their execution hereof.
NOW
THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and the
mutual covenants and agreements herein contained, the parties hereto covenant
and agree as follows:
ARTICLE 1
CONTRACT
FOR SERVICES
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1.1
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Engagement of
Executive. Subject to earlier termination
of Employment as hereinafter provided, Emeritus hereby agrees
to employ the Executive as Vice Chairman of the Board and as a Director in
accordance with the terms and provisions hereof. The Executive shall
perform his duties hereunder in Seattle, Washington, at Emeritus’s
corporate headquarters. However, Executive acknowledges and agrees that
the performance of his duties hereunder may require significant domestic
and some international travel. Notwithstanding the foregoing,
Executive shall not serve as or be considered an Officer of Emeritus
during the term of this Agreement.
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1.2
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Term. Unless
terminated earlier in accordance with the provisions hereof, the term of
employment under this Agreement shall commence on January 1, 2010 (the
"Effective
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Date") and shall
continue until December 31, 2014, unless terminated by either party as
provided herein (the "Term").
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1.3
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Duties. During
the Term of this
agreement and unless and until otherwise agreed the Executive shall be
considered employed on a full time basis and shall devote as much time and
attention to the duties reasonably requested by Emeritus, as he and
Emeritus reasonably determine appropriate. The Executive agrees and
undertakes to inform the board of directors of Emeritus, (the “Board”) immediately
after becoming aware of any matter that may in any way raise a conflict of
interest between the Executive and Emeritus. The services
hereunder shall be provided on the basis of the following terms and
conditions and as set forth in Emeritus’s By-Laws, which are incorporated
here by reference:
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ARTICLE 2
COMPENSATION
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2.1
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Compensation.
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(a)
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As
compensation for services rendered by the Executive during the Term, the
Executive shall be paid an annualized salary (the "Salary") according to
the following schedule:
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From
January 1, 2010 through December 31, 2010, his Salary will be equal to his 2009
base salary of $295,750;
From
January 1, 2011 through December 31, 2011, his Salary will be 69% of his 2009
base salary, or $203,931;
From
January 1, 2012 through December 31, 2012, his Salary will be 51.7% of his 2009
base salary or $152,948.
From
January 1, 2013 through December 31, 2014, his Salary will be $100 per
year.
Executive
shall not be entitled to any additional pay for overtime hours. The Salary shall
be paid to the Executive in accordance with Emeritus’s general policies and
procedures, but no less than once per month. Except as specifically set forth
herein, the Salary includes any and all payments to which the Executive is
entitled from Emeritus hereunder and under any applicable law, regulation or
agreement.
Unless
modified by mutual agreement in the manner set forth herein, Executive will be
deemed to have resigned as of December 31, 2014, and will no longer be an
employee as of that date.
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(b)
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Emeritus
will deduct from Executive's Salary and any other amounts payable to
Executive under this Agreement all applicable taxes, charges or other
withholdings required by applicable law in any applicable territory, or
otherwise
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properly
authorized by Executive.
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(c)
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Executive
shall be paid the incentive compensation to which he is entitled under
applicable Emeritus Plans in respect of services performed in
2009.
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(d)
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If
Executive is compensated for his services as an employee, consultant,
and/or independent contractor by CPM Group, Inc. and/or affiliates prior
to December 31, 2012, Executive’s Salary shall be reduced by fifty
percent (50%) of the amount of that compensation but shall not be less
than zero. Executive acknowledges an affirmative obligation on
his part to notify Emeritus and the Board immediately upon receiving any
compensation that may be subject to this
paragraph.
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2.2
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Stock
Options.
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(a)
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As
long as Executive remains a Director, he shall receive Emeritus common
stock equivalent to the annual outside director grant under Emeritus’s
employee stock option plan.
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(b)
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At
such time as Executive is no longer an employee, all granted stock options
shall vest and Executive will have two years to exercise
options.
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(c)
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In
lieu of stock option awards that have been earned but have not been not
granted to Executive due to Executive's contemplated earlier retirement,
Executive shall be paid $139,000 in cash, which amount will be grossed up
for federal income taxes payable by Executive with respect to such
amount.
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2.3
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Expenses. The
Executive will be reimbursed by Emeritus for all reasonable business
expenses actually incurred by the Executive in connection with his duties,
within previously approved budgets, upon submission of a monthly statement
of expenses. The Executive shall bear any tax payments resulting from the
aforesaid, to the extent applicable. Notwithstanding the above, any
expense exceeding $5,000 shall require Emeritus's approval in
advance.
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2.4
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Benefits.
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(a)
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Executive
and his children shall be covered by the Emeritus Executive Benefit Plan
(“Plan”) from January 1, 2010 through December 31,
2013. This Plan provides full medical coverage for Executive
and his dependants, $250,000 of supplemental life insurance coverage paid
by Emeritus and the Top Hat/Non-Qualified deferred compensation plan with
a company match of an amount equal to the amount awarded other executives
under the Top Hat/Non-Qualified deferred compensation plan and ability to
defer up to 25% of compensation and bonuses. Should any improvements be
made to the Plan, Executive at his election is entitled to participate and
Emeritus shall adjust his compensation to cover any additional costs, if
any.
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(b)
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In
the event of Executive’s death during the Term of this Agreement, his
children will be entitled to coverage under COBRA for 36 months
thereafter.
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(c)
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During
the Term of this Agreement, Executive shall be entitled to: (1) the Plan
medical and dental insurance; (2) the Plan Life Insurance; (3) LTD
Insurance; (4) Emeritus-paid parking at company headquarters; and (5)
$500/month automobile allowance.
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(d)
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At
the expiration of the Term of this Agreement, if Executive elects
continued coverage under COBRA for himself and/or his family, Emeritus
shall pay the cost of such continued coverage for a period of eighteen
(18) months.
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2.5
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Deductions. The
Executive acknowledges that all payments by Emeritus in respect of the
services provided by the Executive shall be net of all amounts which
Emeritus as employer is required to deduct or withhold from Salary or
other payments to an executive in accordance with the statutory
requirements (including, without limitation, income tax, employee
contributions and unemployment insurance contributions) of any applicable
jurisdiction (including, without limitation, the law of the State of
Washington).
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ARTICLE 3
CONFIDENTIALITY
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3.1
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Maintenance of
Confidential Information. The Executive acknowledges
that in the course of employment hereunder the Executive will, either
directly or indirectly, have access to and be entrusted with information
(whether oral, written or by inspection) relating to Emeritus or its
subsidiaries, affiliates, associates or customers (the "Confidential
Information"). For the purposes of this Agreement, "Confidential Information" includes,
without limitation, any and all trade secrets, inventions, innovations,
techniques, processes, formulas, drawings, designs, products, systems,
creations, improvements, documentation, data, specifications, technical
reports, customer lists, supplier lists, distributor lists, distribution
channels and methods, retailer lists, reseller lists, employee
information, financial information, sales or marketing plans, competitive
analysis reports and any other thing or information whatsoever, whether
copyrightable or uncopyrightable or patentable or
unpatentable. The Executive acknowledges that the Confidential
Information constitutes a proprietary right, which Emeritus is entitled to
protect. Accordingly the Executive covenants and agrees that
during the Term and thereafter until such time as all the Confidential
Information becomes publicly known and made generally available through no
action or inaction of the Executive, the Executive will keep in strict
confidence the Confidential Information and shall not, without prior
written consent of Emeritus, disclose, use or otherwise disseminate the
Confidential Information, directly or indirectly, to any third
party.
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3.2
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Exceptions. The
general prohibition contained in Section 3.1 against the unauthorized disclosure, use
or dissemination of the Confidential Information shall not apply in
respect of any Confidential Information
that:
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(a)
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is
available to the public generally in the form
disclosed;
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(b)
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becomes
part of the public domain through no fault of the
Executive;
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(c)
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is
already in the lawful possession of the Executive at the time of receipt
of the Confidential Information; or
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(d)
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is
compelled by applicable law to be disclosed, provided that the Executive
gives Emeritus prompt written notice of such requirement prior to such
disclosure and provides assistance in obtaining an order protecting the
Confidential Information from public
disclosure.
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3.3
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Fiduciary
Obligation. The Executive declares that the Executive's
relationship to Emeritus is that of fiduciary, and the Executive agrees to
act towards Emeritus and otherwise behave as a fiduciary of
Emeritus.
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ARTICLE 4
NON-COMPETITION
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4.1
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Non
Competition. With the exception of Executive’s involvement with CPM
Group, Inc., and/or affiliates which is expressly allowed under this
Agreement, Executive will remain subject to the Noncompetition Agreement
dated as of September 29, 1995 between Executive and Emeritus, and
Executive agrees and undertakes that he will not, so long as he is
employed by Emeritus and for a period of 24 months following termination
of his employment for whatever reason, directly or indirectly, as owner,
partner, joint venture, stockholder, employee, broker, agent, principal,
corporate officer, director, licensor or in any other capacity whatever
engage in, become financially interested in, be employed by, or have any
connection with any business or venture that is active in any field in
which Emeritus operates or holds Proprietary Information, currently or at
any time until the termination of the Agreement, provided, however, that
Executive may own securities of any corporation which is engaged in such
business and is publicly owned and traded but in an amount not to exceed
at any one time five percent (5%) of any class of stock or securities of
such Association, so long as he has no active role in the publicly owned
and traded Association as director, employee, consultant or
otherwise.
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4.2
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Conflict of
Interest: Executive acknowledges that he maintains an affirmative
obligation to continue to notify Emeritus and the Board in each and every
case that it is apparent that activities or investments in which he is
engaged could pose a conflict of interest with Emeritus, whether or not
permitted under Section 4.1 above.
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4.3
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No
Solicitation. Executive agrees and undertakes that during the
period of his employment and for a period of 24 months following
termination, he will not, directly or indirectly, including personally or
in any business in which he is an officer, director or shareholder, for
any purpose or in any place, employ any person (as an employee
or consultant) employed by Emeritus at such time or during the preceding
twelve months, unless such person has been terminated by Emeritus,
provided however, that such person who is terminated by Emeritus may be
employed by Executive as described above only after the expiration of
twelve months after the effective date of such
termination.
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ARTICLE 5
TERMINATION
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5.1
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At
all times during the term of Executive’s employment under this Agreement,
Emeritus shall be entitled to terminate Executive’s employment for “cause”
upon written notification to Executive of the grounds for
termination. If Executive’s employment is terminated for
“cause," Executive will not be entitled to and shall not receive any
compensation or benefits of any type following the effective date of
termination. As used in this Agreement, the term "cause" shall
be limited to acts of embezzlement, fraud, conviction of a felony, plea of
guilty or nolo contendere to a felony charge. Emeritus shall
give Executive written notice prior to terminating Executive’s employment
based upon a breach of this Agreement, setting forth the exact nature of
any alleged breach and the conduct required to cure such
breach. Executive shall have fourteen (14) days from the giving
of such notice within which to
cure.
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ARTICLE 6
MUTUAL
REPRESENTATIONS
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6.1
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Executive
represents and warrants to Emeritus that the execution and delivery of
this Agreement and the fulfillment of the terms hereof (i) will not
constitute a default under or conflict with any agreement or other
instrument to which he is a party or by which he is bound, and (ii) do not
require the consent of any person or
entity.
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6.2
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Emeritus
represents and warrants to Executive that this Agreement has been duly
authorized, executed and delivered by Emeritus and that the fulfillment of
the terms hereof (i) will not constitute a default under or conflict with
any agreement of other instrument to which it is a party or by which it is
bound, and (ii) do not require the consent of any person of
entity.
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6.3
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Each
party hereto warrants and represents to the other that this Agreement
constitutes the valid and binding obligation of such party enforceable
against such party in accordance with its terms subject to applicable
bankruptcy, insolvency, moratorium and similar laws affecting creditors'
rights generally, and subject, as to enforceability, to general principles
of equity (regardless if enforcement is sought in proceeding in equity or
at law).
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ARTICLE 7
NOTICES
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7.1
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Notices. All
notices required or allowed to be given under this Agreement shall be made
either personally by delivery to or by facsimile transmission to the
address as hereinafter set forth or to such other address as may be
designated from time to time by such party in
writing:
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(a)
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in
the case of Emeritus, to:
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Attn:
Granger Cobb
President
& Co-CEO
Emeritus
Corporation
3131
Elliott Avenue, Suite 500
Seattle,
WA 98121
With a
copy to:
Daniel
Baty
Chairman
& Co-CEO
Emeritus
Corporation
3131
Elliott Avenue, Suite 500
Seattle,
WA 98121
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(b)
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in
the case of the Board, to:
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Rob
Marks, Compensation Committee Chair
Marks
Ventures, LLC
35 Mason
Street, 3rd
Floor
Greenwich,
CT 06830
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(c)
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and
in the case of the Executive, to the Executive's last residence address
known to Emeritus.
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7.2
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Change of
Address. Any party may, from time to time, change its
address for service hereunder by written notice to the other party in the
manner aforesaid.
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ARTICLE 8
GENERAL
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8.1
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Entire
Agreement. As of the date hereof, any and all previous
agreements, written or oral between the parties hereto or on their behalf
relating to the employment of the Executive by Emeritus are null and
void. The parties hereto agree that they have expressed herein
their entire understanding and agreement concerning the subject matter of
this Agreement and it is expressly agreed that no implied covenant,
condition, term or reservation or prior representation or warranty shall
be read into this Agreement relating to or concerning the subject matter
hereof or any matter or operation provided for
herein.
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8.2
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Further
Assurances. Each party hereto will promptly and duly
execute and deliver to the other party such further documents and
assurances and take such further action as such other party may from time
to time reasonably request in order to more effectively carry out the
intent and purpose of this Agreement and to establish and protect the
rights and remedies created or intended to be created
hereby.
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8.3
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Waiver. No
provision hereof shall be deemed waived and no breach excused, unless such
waiver or consent excusing the breach is made in writing and signed by the
party to be
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charged
with such waiver or consent. A waiver by a party of any provision of this
Agreement shall not be construed as a waiver of a further breach of the
same provision.
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8.4
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Amendments in
Writing. No amendment, modification or rescission of
this Agreement shall be effective unless set forth in writing and signed
by the parties hereto.
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8.5
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Assignment. Except
as herein expressly provided, the respective rights and obligations of the
Executive and Emeritus under this Agreement shall not be assignable by
either party without the written consent of the other party and shall,
subject to the foregoing, enure to the benefit of and be binding upon the
Executive and Emeritus and their permitted successors or
assigns. Nothing herein expressed or implied is intended to
confer on any person other than the parties hereto any rights, remedies,
obligations or liabilities under or by reason of this
Agreement.
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8.6
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Severability. In
the event that any provision contained in this Agreement shall be declared
invalid, illegal or unenforceable by a court or other lawful authority of
competent jurisdiction, such provision shall be deemed not to affect or
impair the validity or enforceability of any other provision of this
Agreement, which shall continue to have full force and
effect.
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8.7
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Headings. The
headings in this Agreement are inserted for convenience of reference only
and shall not affect the construction or interpretation of this
Agreement.
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8.8
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Number and
Gender. Wherever the singular or masculine or neuter is
used in this Agreement, the same shall be construed as meaning the plural
or feminine or a body politic or corporate and vice versa where the
context so requires.
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8.9
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Time. Time
shall be of the essence of this
Agreement.
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8.10
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Governing
Law. This Agreement shall be construed and interpreted
in accordance with the laws of the State of Washington applicable therein,
and each of the parties hereto expressly agrees to the jurisdiction of the
courts of the State of Washington.
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8.11
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Enurement. This
Agreement is intended to bind and enure to the benefit of Emeritus, its
successors and assigns, and the Executive and the personal legal
representatives of the Executive.
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8.12
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Attorneys
Fees. In the event of any litigated dispute between or
among any of the parties to this Agreement, the reasonable legal fees and
expenses of the party successful in such dispute (whether by way of a
decision by a court or other tribunal) will be paid promptly by the
unsuccessful party upon presentation by the successful party of an invoice
therefor.
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8.13
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Disputes
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(a)
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Except
as expressly set forth elsewhere in this Agreement, it is mutually agreed
between the parties that arbitration shall be the sole and exclusive
remedy to redress any dispute, claim or controversy (thereinafter referred
to as “dispute”)
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involving
the interpretation of this Agreement or the terms, conditions or
termination of this Agreement or the terms, conditions or termination of
Executive’s employment with Emeritus. It is the intention of the parties
that the arbitration award will be final and binding and that a judgment
on the award may be entered in any court of competent jurisdiction and
enforcement may be had according to its
terms.
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(b)
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The
arbitrator shall be chosen from a list provided by the American
Arbitration Association and the Arbitration shall be conducted before a
single arbitrator in Seattle, Washington, pursuant to the Employment
Dispute Resolution Rules of the American Arbitration Association then in
effect. Emeritus shall bear all expenses of the
arbitration. Each party shall be responsible for the costs of
their own attorneys and related costs (expert witnesses, exhibits, etc.),
except to the extent that the arbitrator awards attorneys’ fees as part of
the arbitration decision.
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(c)
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The
arbitrator shall not have jurisdiction or authority to change any
provision of this Agreement by alterations of, additions to or
subtractions from the terms hereof. The arbitrator’s sole authority shall
be to interpret or apply any provision(s) of this
Agreement.
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(d)
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The
parties agree that the provisions hereof, and the decision of the
arbitrator with respect to any dispute, shall be the sole and exclusive
remedy for any alleged breach of this Agreement or the employment
relationship. The parties hereby acknowledge that since arbitration is the
exclusive remedy, neither party has the right to resort to any federal,
state or local court or administrative agency concerning breaches of this
Agreement and that the decision of the arbitrator shall be a complete
defense of any suit, action or proceeding instituted in any federal, state
or local court before any administrative agency with respect to any
dispute which is subject to arbitration as herein set forth. The
arbitration provisions hereof shall, with respect to any dispute, survive
the termination or expiration of this
Agreement.
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IN
WITNESS WHEREOF the parties hereto have executed this Agreement effective as of
the date and year first above written.
EMERITUS
CORPORATION
By: /s/
Granger
Cobb
Granger
Cobb
Title: President
and Co-CEO
/s/ Raymond R.
Brandstrom __________
Raymond
R. Brandstrom (Executive)