1
EXHIBIT 10
INCENTIVE STOCK AWARD AGREEMENT
THIS INCENTIVE STOCK AWARD AGREEMENT (this "Agreement") is made as of
this 28th day of September, 1995 by and among The Hillhaven Corporation, a
Nevada corporation (the "Company"), Vencor, Inc., a Delaware corporation
("Vencor"), and Bruce L. Busby (the "Employee").
WHEREAS, under the Company's 1990 Stock Incentive Plan (the "Plan")
and the Incentive Stock Award Agreement entered into by and between the Company
and the Employee on December 6, 1994 (the "Incentive Award Agreement"), the
Company has agreed, subject to the terms and conditions of the Incentive Award
Agreement, to issue to the Employee up to 350,000 shares of the common stock of
the Company (the "Company Common Stock"), par value $.75 per share (the
"Performance Shares").
WHEREAS, pursuant to the Incentive Award Agreement and the Plan, the
Performance Shares become vested pursuant to a performance schedule set forth
in the Incentive Award Agreement;
WHEREAS, the Company and Vencor have entered into an Amended and
Restated Agreement and Plan of Merger, dated as of April 23, 1995 and as
amended and restated as of July 31, 1995
2
(the "Merger Agreement"), providing for the merger of the Company with and into
Vencor (the "Merger");
WHEREAS, the Merger Agreement provides that each Performance Share
awarded under the Plan will, upon the effective time of the Merger as defined
in the Merger Agreement (the "Effective Time"), be converted into a performance
share award (the "Vencor Common Stock Award") with respect to the number of
full shares of Vencor common stock, par value $.25 per share ("Vencor Common
Stock"), equal to the product of (i) .75 times the "Conversion Number" (as
defined in the Merger Agreement), and (ii) the number of shares of Company
Common Stock subject to such Performance Share; and
WHEREAS, the Compensation Committee of Vencor (the "Vencor Committee")
has determined that each holder of a Performance Share outstanding immediately
prior to the Effective Time that is converted pursuant to the Merger Agreement
into a Vencor Common Stock Award shall be offered an election to have his or
her Vencor Common Stock Award vest immediately following the Effective Time, in
lieu of being subject to continuing performance criteria, subject to the terms
and conditions set forth herein.
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NOW, THEREFORE, in consideration of the foregoing and the mutual
promises, covenants and conditions contained herein, the parties hereto agree
as follows:
1. Conversion of Performance Shares. At the Effective Time,
Employee's Performance Shares shall be converted into a Vencor Common Stock
Award for the number of full shares of Vencor Common Stock equal to the product
of (i) .75 times the Conversion Number and (ii) the number of Performance
Shares.
2. Vesting of Vencor Common Stock Award. The parties hereby
agree, pursuant to the election of the Employee as evidenced by his execution
of this Agreement, that immediately following the Effective Time, each Vencor
Common Stock Award shall, subject to the terms and conditions of this
Agreement, vest and shall no longer be subject to any performance criteria or
the risk of forfeiture.
3. Delivery of Vencor Common Stock. Within five (5) days
following the Effective Time (the Scheduled Time"), subject to Section 4 below,
the shares of Vencor Common Stock subject to the Vencor Common Stock Award
shall be delivered by Vencor to the Employee.
4. Deferral of Delivery of Vencor Common Stock.
(a) Deferral. Except as otherwise provided in
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paragraphs 4(b), (c) or (d) below and Section 7(b), if and to the extent that
as of January 2 of each year following the Scheduled Time Vencor reasonably
anticipates, based on Employee's compensation and status as an executive
officer of Vencor, that any amount of compensation which would be recognized by
the Employee by reason of the delivery of Vencor Common Stock to the Employee
pursuant to Section 3:
(i) would not be deductible by Vencor if the shares of Vencor
Common Stock are delivered at the Scheduled Time by reason of the deduction
disallowance rules of Section 162(m) of the Internal Revenue Code of 1986,
as amended ("Section 162(m)"), and
(ii) would be deductible by Vencor if such delivery of shares is
deferred until a later time, the delivery of such shares of Vencor Common
Stock to the Employee shall be deferred until the earliest time at which it
is determined by Vencor that the shares of Vencor Common Stock can be
delivered without disallowance of the deduction for payment of the
compensation by reason of Section 162(m). If Vencor reasonably determines
that in any year following the year of the Scheduled Time a portion of, but
not all of, the deferred shares of Vencor Common Stock can be delivered
without disallowance of the
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deduction as a result of Section 162(m), that portion that can be so
delivered shall be delivered by Vencor during that year (as soon as
practicable (but not more than five days) following its determination) and
the remainder of the shares of Vencor Common Stock, except as otherwise
provided in paragraphs (b), (c) or (d) below (or pursuant to Section 7
(b)), shall continue to be deferred until a later year. Vencor agrees to
review the ability to deliver shares hereunder at any time reasonably
requested by the Employee.
(b) Early Payout of Deferred Vencor Common Stock if Deferral is
Determined to be Ineffective. If the delivery of any shares of Vencor Common
Stock is deferred under paragraph (a) above with the expectation that the
compensation with respect to such shares will be deductible by Vencor if the
shares are delivered in a later year and Vencor later determines that the
compensation will not be deductible by Vencor even if the delivery thereof is
deferred until a later year, then the deferral with respect to such shares of
Vencor Common Stock shall terminate and Vencor shall deliver such shares of
Vencor Common Stock to the Employee.
(c) Payout Following Termination of Employment in All Events. As
soon as practicable (but not more than five
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days) following the Employee's termination of employment from Vencor and its
subsidiaries for any reason, including, without limitation, death, disability,
termination by Vencor or termination by the Employee for any reason, Vencor
shall deliver to the Employee (or his estate) all shares of Vencor Common Stock
the delivery of which has been deferred pursuant to this Section 4 and that
have not previously been delivered.
(d) Change in Control. Upon a Change in Control of Vencor, all
shares of Vencor Common Stock subject to Vencor Common Stock Awards shall be
issued and delivered to the Employee. As used herein, "Change in Control"
shall have the meaning set forth in subsections (A)-(D) of Section 9(d) of the
Plan (with Vencor substituted for the Company in such subsections).
5. Taxes. The Employee agrees to pay promptly after delivery of
any shares of Vencor stock pursuant to this Agreement the amount of Federal and
state withholding taxes which become due as a result of the delivery of Vencor
Common Stock to the Employee. If Vencor agrees to make a loan to Employee to
pay such taxes, any amount borrowed from Vencor to pay taxes shall be secured
by a pledge of such number of shares of Vencor Common Stock as may be
determined by Vencor in accordance with applicable laws, and shall be repaid
on the
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date of any sale of the pledged shares, but in no event later than the April 15
following the calendar year with respect to which the taxes have accrued.
6. No Shareholder Rights. (a) Until shares of Vencor Common Stock
are issued to the Employee (or, upon the Employee's death, to the Employee's
estate), pursuant to the terms of this Agreement, the Employee shall have no
rights with respect to shares of Vencor Common Stock, including the right to
vote, or the right to transfer, assign, alienate, pledge, hypothecate or
otherwise dispose of, such shares of Vencor Common Stock.
(b) Notwithstanding the foregoing, in the event Vencor declares
and pays any dividend or other distribution in cash or that does not otherwise
result in an adjustment pursuant to Section 7(a) below, Employee shall be
entitled to receive the amount of cash or other property he would have been
entitled to receive had he been a record holder of all deferred shares of
Vencor Common Stock under this Agreement on the record date of such dividend or
other distribution.
7. Adjustments.
(a) Subject to Section 7(b) hereof, if the outstanding shares of
Common Stock of Vencor are increased,
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decreased or exchanged for a different number or kind of shares or other
securities, or if additional shares or new or different shares or other
securities or property (other than cash) are distributed with respect to such
shares of Vencor Common Stock or other securities, through merger,
consolidation, sale of all or substantially all the property of Vencor,
reorganization, recapitalization, reclassification, stock dividend, stock
split, reverse stock split or other distribution with respect to such shares of
Vencor Common Stock or other securities, an appropriate and proportionate
adjustment shall be made in the number and kind of shares or other securities
subject to this Agreement.
(b) Notwithstanding the provisions of Sections 4 and 7(a) hereof,
upon dissolution or liquidation of Vencor or upon a reorganization, merger or
consolidation of Vencor with one or more corporations as a result of which
Vencor is not the surviving corporation, or upon the sale of all or
substantially all the property of Vencor, all shares of Vencor Common Stock
subject to the Vencor Common Stock Award shall be issued to the Employee,
unless provision is made with the approval of Employee in connection with such
transaction for the continuance of this Agreement and the assumption or the
substitution of stock or securities of a successor employer
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corporation, or a parent or subsidiary thereof, with appropriate adjustments as
to the number and kind of shares and prices.
8. Confidentiality. The Employee acknowledges that this
Agreement and the award of Vencor Common Stock Awards to the Employee is
confidential, and the Employee agrees not to disclose any of the terms of this
Agreement except to duly authorized representatives of Vencor acting in the
course of their employment, as may otherwise be required by law, including any
applicable filings under the federal securities laws, and to the Employee's
personal tax and financial advisors.
9. Tax Free Pooling. If the actions contemplated by this
Agreement, either alone or in conjunction with the actions contemplated in
similar agreements among the Company, Vencor and other similarly situated
employees of the Company (the "Employee Group"), would prevent the Merger or
the acquisition of Nationwide, Care Inc. by the Company from being treated for
financial accounting purposes as a "pooling of interests" in accordance with
generally accepted accounting principals and the rules, regulations and
interpretations of the Securities and Exchange Commission, then this Agreement
and each agreement with the other members of the Employee
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Group shall be deemed void and of no further force or effect. In such event the
parties shall cooperate to restructure the actions taken pursuant to this
Agreement, provided, that the parties will endeavor to ensure that such
restructuring shall have no less favorable economic effect to the Employee as
this Agreement would have to the Employee.
10. Conditions. This Agreement shall be subject to the condition
subsequent that the Effective Time (as defined in the Merger Agreement) shall
have occurred. In the event that the Merger Agreement is terminated or such
condition subsequent is not satisfied, this Agreement shall be deemed void and
of no further force or effect.
11. Assignment. This Agreement and all the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, but neither this Agreement nor any of the
rights, interests, or obligations hereunder or the Vencor Common Stock Awards
shall be assigned by any of the parties hereto without the prior written
consent of the other parties hereto.
12. Employment. In the event the Employee's employment with the
Company terminates prior to the Effective Time, this Agreement shall be void
and of no further force or effect, and the terms and conditions of the
Performance Shares
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shall be governed by the Plan and the Incentive Award Agreement. The grant of
Vencor Common Stock Awards to the Employee neither confers on the Employee the
right to continue to perform services in any particular position and/or remain
employed by Vencor or any of its subsidiaries, nor affects the right of Vencor
or any of its subsidiaries to remove the Employee from his position or to
terminate Employee's employment with Vencor or a subsidiary thereof, for any
reason with or without cause.
13. Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with the laws of the State of Delaware,
without regard to its conflict of laws rules.
14. Entire Understanding and Waiver. This Agreement embodies the
entire understanding and agreement of the parties in relation to the subject
matter hereof and expressly supersedes the Incentive Award Agreement which
shall be of no further effect, and no promise, condition, representation or
warranty, expressed or implied, not herein stated, shall bind either party
hereto. None of the terms and conditions of this Agreement may be changed,
modified, waived or cancelled except by a writing, signed by the parties hereto
specifying such change, modification, waiver or cancellation.
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A waiver by either party, at any time, of compliance with any of the terms and
conditions of this Agreement shall not be considered a modification,
cancellation or consent to a future waiver of such terms and conditions or of
any preceding or succeeding breach hereof, unless expressly so stated.
15. Counterparts. This Agreement may be executed in one or more
counterparts each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
16. Registration of Shares. Vencor shall take all steps necessary
to ensure that all shares of Vencor Common Stock (and any other securities)
delivered pursuant to this Agreement are covered by an effective registration
statement filed with the Securities Exchange Commission on Form S-8 or
otherwise.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed on the day and year first above written.
THE HILLHAVEN CORPORATION
By: /s/ RICHARD P. ADCOCK
---------------------------------
Name: Richard P. Adcock
Title: Senior Vice President
VENCOR, INC.
By /s/ W. EARL REED, III
---------------------------------
Name: W. Earl Reed, III
Title: Vice President of
Finance and Development
EMPLOYEE
[SIGNATURE]
---------------------------------
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INCENTIVE STOCK AWARD AGREEMENT
THIS INCENTIVE STOCK AWARD AGREEMENT (this "Agreement") is made as of
this 28th day of September, 1995 by and among The Hillhaven Corporation, a
Nevada Corporation (the "Company"), Vencor, Inc., a Delaware corporation
("Vencor"), and Chris Marker (the "Employee").
WHEREAS, under the Company's 1990 Stock Incentive Plan (the "Plan")
and the Incentive Stock Award Agreement entered into by and between the Company
and the Employee on December 6, 1994 (the "Incentive Award Agreement"), the
Company has agreed, subject to the terms and conditions of the Incentive Award
Agreement, to issue to the Employee up to 200,000 shares of the common stock of
the Company (the "Company Common Stock"), par value $.75 per share (the
"Performance Shares").
WHEREAS, pursuant to the Incentive Award Agreement and the Plan, the
Performance Shares become vested pursuant to a performance schedule set forth
in the Incentive Award Agreement;
WHEREAS, the Company and Vencor have entered into an Amended and
Restated Agreement and Plan of Merger, dated as of April 23, 1995 and as
amended and restated as of July 31, 1995
15
(the "Merger Agreement") , providing for the merger of the Company with and
into Vencor (the "Merger");
WHEREAS, the Merger Agreement provides that each Performance Share
awarded under the Plan will, upon the effective time of the Merger as defined
in the Merger Agreement (the "Effective Time"), be converted into a performance
share award (the "Vencor Common Stock Award") with respect to the number of
full shares of Vencor common stock, par value $.25 per share ("Vencor Common
Stock"), equal to the product of (i) .75 times the "Conversion Number" (as
defined in the Merger Agreement), and (ii) the number of shares of Company
Common Stock subject to such Performance Share; and
WHEREAS, the Compensation Committee of Vencor (the "Vencor Committee")
has determined that each holder of a Performance Share outstanding immediately
prior to the Effective Time that is converted pursuant to the Merger Agreement
into a Vencor Common Stock Award shall be offered an election to have his or
her Vencor Common Stock Award vest immediately following the Effective Time, in
lieu of being subject to continuing performance criteria, subject to the terms
and conditions set forth herein.
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NOW, THEREFORE, in consideration of the foregoing and the mutual
promises, covenants and conditions contained herein, the parties hereto agree
as follows:
1. Conversion of Performance Shares. At the Effective Time,
Employee's Performance Shares shall be converted into a Vencor Common Stock
Award for the number of full shares of Vencor Common Stock equal to the product
of (i) .75 times the Conversion Number and (ii) the number of Performance
Shares.
2. Vesting of Vencor Common Stock Award. The parties hereby
agree, pursuant to the election of the Employee as evidenced by his execution
of this Agreement, that immediately following the Effective Time, each Vencor
Common Stock Award shall, subject to the terms and conditions of this
Agreement, vest and shall no longer be subject to any performance criteria or
the risk of forfeiture.
3. Delivery of Vencor Common Stock. Within five (5) days
following the Effective Time (the "Scheduled Time"), subject to Section 4
below, the shares of Vencor Common Stock subject to the Vencor Common Stock
Award shall be delivered by Vencor to the Employee.
4. Deferral of Delivery of Common Stock.
(a) Deferral. Except as otherwise provided in
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paragraphs 4(b), (c) or (d) below and Section 7(b), if and to the extent that
as of January 2 of each year following the Scheduled Time Vencor reasonably
anticipates, based on Employee's compensation and status as an executive
officer of Vencor, that any amount of compensation which would be recognized by
the Employee by reason of the delivery of Vencor Common Stock to the Employee
pursuant to Section 3:
(i) would not be deductible by Vencor if the shares of Vencor
Common Stock are delivered at the Scheduled Time by reason of the deduction
disallowance rules of Section 162(m) of the Internal Revenue Code of 1986,
as amended ("Section 162(m)"), and
(ii) would be deductible by Vencor if such delivery of shares is
deferred until a later time, the delivery of such shares of Vencor Common
Stock to the Employee shall be deferred until the earliest time at which it
is determined by Vencor that the shares of Vencor Common Stock can be
delivered without disallowance of the deduction for payment of the
compensation by reason of Section 162(m). If Vencor reasonably determines
that in any year following the year of the Scheduled Time a portion of, but
not all of, the deferred shares of Vencor Common Stock can be delivered
without disallowance of the
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deduction as a result of Section 162(m), that portion that can be so
delivered shall be delivered by Vencor during that year (as soon as
practicable (but not more than five days) following its determination) and
the remainder of the shares of Vencor Common Stock, except as otherwise
provided in paragraphs (b), (c) or (d) below (or pursuant to Section 7(b)),
shall continue to be deferred until a later year. Vencor agrees to review
the ability to deliver shares hereunder at any time reasonably
requested by the Employee.
(b) Early Payout of deferred Vencor Common Stock if Deferral is
Determined to be Ineffective. If the delivery of any shares of Vencor Common
Stock is deferred under paragraph (a) above with the expectation that the
compensation with respect to such shares will be deductible by Vencor if the
shares are delivered in a later year and Vencor later determines that the
compensation will not be deductible by Vencor even if the delivery thereof is
deferred until a later year, then the deferral with respect to such shares of
Vencor Common Stock shall terminate and Vencor shall deliver such shares of
Vencor Common Stock to the Employee.
(c) Payout Following Termination of Employment in All Events. As
soon as practicable (but not more than five
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days) following the Employee's termination of employment from Vencor and its
subsidiaries for any reason, including, without limitation, death, disability,
termination by Vencor or termination by the Employee for any reason, Vencor
shall deliver to the Employee (or his estate) all shares of Vencor Common Stock
the delivery of which has been deferred pursuant to this Section 4 and that
have not previously been delivered.
(d) Change in Control. Upon a Change in Control of Vencor, all
shares of Vencor Common Stock subject to Vencor Common Stock Awards shall be
issued and delivered to the Employee. As used herein, "Change in Control"
shall have the meaning set forth in subsections (A) - (D) of Section 9(d) of the
Plan (with Vencor substituted for the Company in such subsections).
5. Taxes. The Employee agrees to pay promptly after delivery of
any shares of Vencor stock pursuant to this Agreement the amount of Federal and
state withholding taxes which become due as a result of the delivery of Vencor
Common Stock to the Employee. If Vencor agrees to make a loan to Employee to
pay such taxes, any amount borrowed from Vencor to pay taxes shall be secured
by a pledge of such number of shares of Vencor Common Stock as may be
determined by Vencor in accordance with applicable laws, and shall be repaid on
the
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date of any sale of the pledged shares, but in no event later than the April 15
following the calendar year with respect to which the taxes have accrued.
6. No Shareholder Rights. (a) Until shares of Vencor Common Stock
are issued to the Employee (or, upon the Employee's death, to the Employee's
estate), pursuant to the terms of this Agreement, the Employee shall have no
rights with respect to shares of Vencor Common Stock, including the right to
vote, or the right to transfer, assign, alienate, pledge, hypothecate or
otherwise dispose of, such shares of Vencor Common Stock.
(b) Notwithstanding the foregoing, in the event Vencor declares
and pays any dividend or other distribution in cash or that does not otherwise
result in an adjustment pursuant to Section 7(a) below, Employee shall be
entitled to receive the amount of cash or other property he would have been
entitled to receive had he been a record holder of all deferred shares of
Vencor Common Stock under this Agreement on the record date of such dividend or
other distribution.
7. Adjustments.
(a) Subject to Section 7(b) hereof, if the outstanding shares of
Common Stock of Vencor are increased,
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21
decreased or exchanged for a different number or kind of shares or other
securities, or if additional shares or new or different shares or other
securities or property (other than cash) are distributed with respect to such
shares of Vencor Common Stock or other securities, through merger,
consolidation, sale of all or substantially all the property of Vencor,
reorganization, recapitalization, reclassification, stock dividend, stock
split, reverse stock split or other distribution with respect to such shares of
Vencor Common Stock or other securities, an appropriate and proportionate
adjustment shall be made in the number and kind of shares or other securities
subject to this Agreement.
(b) Notwithstanding the provisions of Sections 4 and 7(a) hereof,
upon dissolution or liquidation of Vencor or upon a reorganization, merger or
consolidation of Vencor with one or more corporations as a result of which
Vencor is not the surviving corporation, or upon the sale of all or
substantially all the property of Vencor, all shares of Vencor Common Stock
subject to the Vencor Common Stock Award shall be issued to the Employee,
unless provision is made with the approval of Employee in connection with such
transaction for the continuance of this Agreement and the assumption or the
substitution of stock or securities of a successor employer
-8-
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corporation, or a parent or subsidiary thereof, with appropriate adjustments as
to the number and kind of shares and prices.
8. Confidentiality. The Employee acknowledges that this
Agreement and the award of Vencor Common Stock Awards to the Employee is
confidential, and the Employee agrees not to disclose any of the terms of this
Agreement except to duly authorized representatives of Vencor acting in the
course of their employment, as may otherwise be required by law, including any
applicable filings under the federal securities laws, and to the Employee's
personal tax and financial advisors.
9. Tax Free Pooling. If the actions contemplated by this
Agreement, either alone or in conjunction with the actions contemplated in
similar agreements among the Company, Vencor and other similarly situated
employees of the Company (the "Employee Group"), would prevent the Merger or
the acquisition of Nationwide, Care Inc. by the Company from being treated for
financial accounting purposes as a "pooling of interests" in accordance with
generally accepted accounting principals and the rules, regulations and
interpretations of the Securities and Exchange Commission, then this Agreement
and each agreement with the other members of the Employee
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Group shall be deemed void and of no further force or effect. In such event
the parties shall cooperate to restructure the actions taken pursuant to this
Agreement, provided, that the parties will endeavor to ensure that such
restructuring shall have no less favorable economic effect to the Employee as
this Agreement would have to the Employee.
10. Conditions. This Agreement shall be subject to the condition
subsequent that the Effective Time (as defined in the Merger Agreement) shall
have occurred. In the event that the Merger Agreement is terminated or such
condition subsequent is not satisfied, this Agreement shall be deemed void and
of no further force or effect.
11. Assignment. This Agreement and all the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, but neither this Agreement nor any of the
rights, interests, or obligations hereunder or the Vencor Common Stock Awards
shall be assigned by any of the parties hereto without the prior written
consent of the other parties hereto.
12. Employment. In the event the Employee's employment with the
Company terminates prior to the Effective Time, this Agreement shall be void
and of no further force or effect, and the terms and conditions of the
Performance Shares
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shall be governed by the Plan and the Incentive Award Agreement. The grant of
Vencor Common Stock Awards to the Employee neither confers on the Employee the
right to continue to perform services in any particular position and/or remain
employed by Vencor or any of its subsidiaries, nor affects the right of Vencor
or any of its subsidiaries to remove the Employee from his position or to
terminate Employee's employment with Vencor or a subsidiary thereof, for any
reason with or without cause.
13. Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with the laws of the State of Delaware,
without regard to its conflict of laws rules.
14. Entire Understanding and Waiver. This Agreement embodies the
entire understanding and agreement of the parties in relation to the subject
matter hereof and expressly supersedes the Incentive Award Agreement which
shall be of no further effect, and no promise, condition, representation or
warranty, expressed or implied, not herein stated, shall bind either party
hereto. None of the terms and conditions of this Agreement may be changed,
modified, waived or cancelled except by a writing, signed by the parties hereto
specifying such change, modification, waiver or cancellation.
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A waiver by either party, at any time, of compliance with any of the terms and
conditions of this Agreement shall not be considered a modification,
cancellation or consent to a future waiver of such terms and conditions or of
any preceding or succeeding breach hereof, unless expressly so stated.
15. Counterparts. This Agreement may be executed in one or more
counterparts each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
16. Registration of Shares. Vencor shall take all steps necessary
to ensure that all shares of Vencor Common Stock (and any other securities)
delivered pursuant to this Agreement are covered by an effective registration
statement filed with the Securities Exchange Commission on Form S-8 or
otherwise.
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26
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed on the day and year first above written.
THE HILLHAVEN CORPORATION
By: /s/ RICHARD P. ADCOCK
---------------------------------
Name: Richard P. Adcock
Title: Senior Vice President
VENCOR, INC.
By: /s/ W. EARL REED, III
---------------------------------
Name: W. Earl Reed, III
Title: Vice President of
of Finance and Development
EMPLOYEE
[SIGNATURE]
---------------------------------
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INCENTIVE STOCK AWARD AGREEMENT
THIS INCENTIVE STOCK AWARD AGREEMENT (this "Agreement") is made as of
this 27th day of September, 1995 by and among The Hillhaven Corporation, a
Nevada corporation (the "Company"), Vencor, Inc., a Delaware corporation
("Vencor"), and Jeffrey M. McKain (the "Employee").
WHEREAS, under the Company's 1990 Stock Incentive Plan (the "Plan")
and the Incentive Stock Award Agreement entered into by and between the Company
and the Employee on December 6, 1994 (the "Incentive Award Agreement"), the
Company has agreed, subject to the terms and conditions of the Incentive Award
Agreement, to issue to the Employee up to 150,000 shares of the common stock of
the Company (the "Company Common Stock"), par value $.75 per share (the
"Performance Shares").
WHEREAS, pursuant to the Incentive Award Agreement and the Plan, the
Performance Shares become vested pursuant to a performance schedule set forth
in the Incentive Award Agreement;
WHEREAS, the Company and Vencor have entered into an Amended and
Restated Agreement and Plan of Merger, dated as of April 23, 1995 and as
amended and restated as of July 31, 1995
28
(the "Merger Agreement"), providing for the merger of the Company with and into
Vencor (the "Merger");
WHEREAS, the Merger Agreement provides that each Performance Share
awarded under the Plan will, upon the effective time of the Merger as defined
in the Merger Agreement (the "Effective Time"), be converted into a performance
share award (the "Vencor Common Stock Award") with respect to the number of
full shares of Vencor common stock, par value $.25 per share ("Vencor Common
Stock"), equal to the product of (i) .75 times the "Conversion Number" (as
defined in the Merger Agreement), and (ii) the number of shares of Company
Common Stock subject to such Performance Share; and
WHEREAS, the Compensation Committee of Vencor (the "Vencor Committee")
has determined that each holder of a Performance Share outstanding immediately
prior to the Effective Time that is converted pursuant to the Merger Agreement
into a Vencor Common Stock Award shall be offered an election to have his or
her Vencor Common Stock Award vest immediately following the Effective Time, in
lieu of being subject to continuing performance criteria, subject to the terms
and conditions set forth herein.
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NOW, THEREFORE, in consideration of the foregoing and the mutual
promises, covenants and conditions contained herein, the parties hereto agree
as follows:
1. Conversion of Performance Shares. At the Effective Time,
Employee's Performance Shares shall be converted into a Vencor Common Stock
Award for the number of full shares of Vencor Common Stock equal to the product
of (i) .75 times the Conversion Number and (ii) the number of Performance
Shares.
2. Vesting of Vencor Common Stock Award. The parties hereby
agree, pursuant to the election of the Employee as evidenced by his execution
of this Agreement, that immediately following the Effective Time, each Vencor
Common Stock Award shall, subject to the terms and conditions of this
Agreement, vest and shall no longer be subject to any performance criteria or
the risk of forfeiture.
3. Delivery of Vencor Common Stock. Within five (5) days
following the Effective Time (the "Scheduled Time"), subject to Section 4
below, the shares of Vencor Common Stock subject to the Vencor Common Stock
Award shall be delivered by Vencor to the Employee.
4. Deferral of Delivery of Vencor Common Stock.
(a) Deferral. Except as otherwise provided in
-3-
30
paragraphs 4(b), (c) or (d) below and Section 7(b), if and to the extent that
as of January 2 of each year following the Scheduled Time Vencor reasonably
anticipates, based on Employee's compensation and status as an executive
officer of Vencor, that any amount of compensation which would be recognized by
the Employee by reason of the delivery of Vencor Common Stock to the Employee
pursuant to Section 3:
(i) would not be deductible by Vencor if the shares of Vencor
Common Stock are delivered at the Scheduled Time by reason of the deduction
disallowance rules of Section 162(m) of the Internal Revenue Code of 1986,
as amended ("Section 162(m)"), and
(ii) would be deductible by Vencor if such delivery of shares is
deferred until a later time, the delivery of such shares of Vencor Common
Stock to the Employee shall be deferred until the earliest time at which it
is determined by Vencor that the shares of Vencor Common Stock can be
delivered without disallowance of the deduction for payment of the
compensation by reason of Section 162(m). If Vencor reasonably determines
that in any year following the year of the Scheduled Time a portion of, but
not all of, the deferred shares of Vencor Common Stock can be delivered
without disallowance of the
-4-
31
deduction as a result of Section 162(m), that portion that can be so
delivered shall be delivered by Vencor during that year (as soon as
practicable (but not more than five days) following its determination) and
the remainder of the shares of Vencor Common Stock, except as otherwise
provided in paragraphs (b), (c) or (d) below (or pursuant to Section 7(b)),
shall continue to be deferred until a later year. Vencor agrees to review
the ability to deliver shares hereunder at any time reasonably
requested by the Employee.
(b) Early Payout of Deferred Vencor Common Stock if Deferral is
Determined to be Ineffective. If the delivery of any shares of Vencor Common
Stock is deferred under paragraph (a) above with the expectation that the
compensation with respect to such shares will be deductible by Vencor if the
shares are delivered in a later year and Vencor later determines that the
compensation will not be deductible by Vencor even if the delivery thereof is
deferred until a later year, then the deferral with respect to such shares of
Vencor Common Stock shall terminate and Vencor shall deliver such shares of
Vencor Common Stock to the Employee.
(c) Payout Following Termination of Employment in All Events. As
soon as practicable (but not more than five
-5-
32
days) following the Employee's termination of employment from Vencor and its
subsidiaries for any reason, including, without limitation, death, disability,
termination by Vencor or termination by the Employee for any reason, Vencor
shall deliver to the Employee (or his estate) all shares of Vencor Common Stock
the delivery of which has been deferred pursuant to this Section 4 and that
have not previously been delivered.
(d) Change in Control. Upon a Change in Control of Vencor, all
shares of Vencor Common Stock subject to Vencor Common Stock Awards shall be
issued and delivered to the Employee. As used herein, "Change in Control"
shall have the meaning set forth in subsections (A)- (D) of section 9(d) of the
Plan (with Vencor substituted for the Company in such subsections).
5. Taxes. The Employee agrees to pay promptly after delivery of
any shares of Vencor stock pursuant to this Agreement the amount of Federal and
state withholding taxes which become due as a result of the delivery of Vencor
Common Stock to the Employee. If Vencor agrees to make a loan to Employee to
pay such taxes, any amount borrowed from Vencor to pay taxes shall be secured
by a pledge of such number of shares of Vencor Common Stock as may be
determined by Vencor in accordance with applicable laws, and shall be repaid on
the
-6-
33
date of any sale of the pledged shares, but in no event later than the April 15
following the calendar year with respect to which the taxes have accrued.
6. No Shareholder Rights. (a) Until shares of Vencor Common Stock
are issued to the Employee (or, upon the Employee's death, to the Employee's
estate), pursuant to the terms of this Agreement, the Employee shall have no
rights with respect to shares of Vencor Common Stock, including the right to
vote, or the right to transfer, assign, alienate, pledge, hypothecate or
otherwise dispose of, such shares of Vencor Common Stock.
(b) Notwithstanding the foregoing, in the event Vencor declares
and pays any dividend or other distribution in cash or that does not otherwise
result in an adjustment pursuant to Section 7(a) below, Employee shall be
entitled to receive the amount of cash or other property he would have been
entitled to receive had he been a record holder of all deferred shares of
Vencor Common Stock under this Agreement on the record date of such dividend or
other distribution.
7. Adjustments.
(a) Subject to Section 7(b) hereof, if the outstanding shares of
Common Stock of Vencor are increased,
-7-
34
decreased or exchanged for a different number or kind of shares or other
securities, or if additional shares or new or different shares or other
securities or property (other than cash) are distributed with respect to such
shares of Vencor Common Stock or other securities, through merger,
consolidation, sale of all or substantially all the property of Vencor,
reorganization, recapitalization, reclassification, stock dividend, stock
split, reverse stock split or other distribution with respect to such shares of
Vencor Common Stock or other securities, an appropriate and proportionate
adjustment shall be made in the number and kind of shares or other securities
subject to this Agreement.
(b) Notwithstanding the provisions of Sections 4 and 7(a) hereof,
upon dissolution or liquidation of Vencor or upon a reorganization, merger or
consolidation of Vencor with one or more corporations as a result of which
Vencor is not the surviving corporation, or upon the sale of all or
substantially all the property of Vencor, all shares of Vencor Common Stock
subject to the Vencor Common Stock Award shall be issued to the Employee,
unless provision is made with the approval of Employee in connection with such
transaction for the continuance of this Agreement and the assumption or the
substitution of stock or securities of a successor employer
-8-
35
corporation, or a parent or subsidiary thereof, with appropriate adjustments as
to the number and kind of shares and prices.
8. Confidentiality. The Employee acknowledges that this
Agreement and the award of Vencor Common Stock Awards to the Employee is
confidential, and the Employee agrees not to disclose any of the terms of this
Agreement except to duly authorized representatives of Vencor acting in the
course of their employment, as may otherwise be required by law, including any
applicable filings under the federal securities laws, and to the Employee's
personal tax and financial advisors.
9. Tax Free Pooling. If the actions contemplated by this
Agreement, either alone or in conjunction with the actions contemplated in
similar agreements among the Company, Vencor and other similarly situated
employees of the Company (the "Employee Group"), would prevent the Merger or
the acquisition of Nationwide, Care Inc. by the Company from being treated for
financial accounting purposes as a "pooling of interests" in accordance with
generally accepted accounting principals and the rules, regulations and
interpretations of the Securities and Exchange Commission, then this Agreement
and each agreement with the other members of the Employee
-9-
36
Group shall be deemed void and of no further force or effect. In such event
the parties shall cooperate to restructure the actions taken pursuant to this
Agreement, provided, that the parties will endeavor to ensure that such
restructuring shall have no less favorable economic effect to the Employee as
this Agreement would have to the Employee.
10. Conditions. This Agreement shall be subject to the condition
subsequent that the Effective Time (as defined in the Merger Agreement) shall
have occurred. In the event that the Merger Agreement is terminated or such
condition subsequent is not satisfied, this Agreement shall be deemed void and
of no further force or effect.
11. Assignment. This Agreement and all the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, but neither this Agreement nor any of the
rights, interests, or obligations hereunder or the Vencor Common Stock Awards
shall be assigned by any of the parties hereto without the prior written
consent of the other parties hereto.
12. Employment. In the event the Employee's employment with the
Company terminates prior to the Effective Time, this Agreement shall be void
and of no further force or effect, and the terms and conditions of the
Performance Shares
-10-
37
shall be governed by the Plan and the Incentive Award Agreement. The grant of
Vencor Common Stock Awards to the Employee neither confers on the Employee the
right to continue to perform services in any particular position and/or remain
employed by Vencor or any of its subsidiaries, nor affects the right of Vencor
or any of its subsidiaries to remove the Employee from his position or to
terminate Employee's employment with Vencor or a subsidiary thereof, for any
reason with or without cause.
13. Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with the laws of the State of Delaware,
without regard to its conflict of laws rules.
14. Entire Understanding and Waiver. This Agreement embodies the
entire understanding and agreement of the parties in relation to the subject
matter hereof and expressly supersedes the Incentive Award Agreement which
shall be of no further effect, and no promise, condition, representation or
warranty, expressed or implied, not herein stated, shall bind either party
hereto. None of the terms and conditions of this Agreement may be changed,
modified, waived or cancelled except by a writing, signed by the parties hereto
specifying such change, modification, waiver or cancellation.
-11-
38
A waiver by either party, at any time, of compliance with any of the terms and
conditions of this Agreement shall not be considered a modification,
cancellation or consent to a future waiver of such terms and conditions or of
any preceding or succeeding breach hereof, unless expressly so stated.
15. Counterparts. This Agreement may be executed in one or more
counterparts each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
16. Registration of Shares. Vencor shall take all steps necessary
to ensure that all shares of Vencor Common Stock (and any other securities)
delivered pursuant to this Agreement are covered by an effective registration
statement filed with the Securities Exchange Commission on Form S-8 or
otherwise.
-12-
39
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed on the day and year first above written.
THE HILLHAVEN CORPORATION
By: /s/ RICHARD P. ADCOCK
---------------------------------
Name: Richard P. Adcock
Title: Senior Vice President
VENCOR, INC.
By: /s/ W. EARL REED, III
---------------------------------
Name: W. Earl Reed, III
Title: Vice President of
Finance and Development
EMPLOYEE
[SIGNATURE]
-------------------------------------
-13-
40
INCENTIVE STOCK AWARD AGREEMENT
THIS INCENTIVE STOCK AWARD AGREEMENT (this "Agreement") is made as
of this 28th day of September, 1995 by and among The Hillhaven Corporation, a
Nevada corporation (the "Company"), Vencor, Inc., a Delaware corporation
("Vencor"), and Robert F. Pacquer (the "Employee").
WHEREAS, under the Company's 1990 Stock Incentive Plan (the "Plan")
and the Incentive Stock Award Agreement entered into by and between the Company
and the Employee on December 6, 1994 (the "Incentive Award Agreement"), the
Company has agreed, subject to the terms and conditions of the Incentive Award
Agreement, to issue to the Employee up to 150,000 shares of the common stock of
the Company (the "Company Common Stock"), par value $.75 per share (the
"Performance Shares").
WHEREAS, pursuant to the Incentive Award Agreement and the Plan, the
Performance Shares become vested pursuant to a performance schedule set forth
in the Incentive Award Agreement;
WHEREAS, the Company and Vencor have entered into an Amended and
Restated Agreement and Plan of Merger, dated as of April 23, 1995 and as
amended and restated as of July 31, 1995
41
(the "Merger Agreement"), providing for the merger of the Company with and into
Vencor (the "Merger");
WHEREAS, the Merger Agreement provides that each Performance Share
awarded under the Plan will, upon the effective time of the Merger as defined
in the Merger Agreement (the "Effective Time"), be converted into a performance
share award (the "Vencor Common Stock Award") with respect to the number of
full shares of Vencor common stock, par value $.25 per share ("Vencor Common
Stock"), equal to the product of (i) .75 times the "Conversion Number" (as
defined in the Merger Agreement) , and (ii) the number of shares of Company
Common Stock subject to such Performance Share; and
WHEREAS, the Compensation Committee of Vencor (the "Vencor Committee")
has determined that each holder of a Performance Share outstanding immediately
prior to the Effective Time that is converted pursuant to the Merger Agreement
into a Vencor Common Stock Award shall be offered an election to have his or
her Vencor Common Stock Award vest immediately following the Effective Time, in
lieu of being subject to continuing performance criteria, subject to the terms
and conditions set forth herein.
-2-
42
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises, covenants and conditions contained herein, the parties hereto agree
as follows:
1. Conversion of Performance Shares. At the Effective Time,
Employee's Performance Shares shall be converted into a Vencor Common Stock
Award for the number of full shares of Vencor Common Stock equal to the product
of (i) .75 times the Conversion Number and (ii) the number of Performance
Shares.
2. Vesting of Vencor Common Stock Award. The parties hereby
agree, pursuant to the election of the Employee as evidenced by his execution
of this Agreement, that immediately following the Effective Time, each Vencor
Common Stock Award shall, subject to the terms and conditions of this
Agreement, vest and shall no longer be subject to any performance criteria or
the risk of forfeiture.
3. Delivery of Vencor Common Stock. Within five (5) days
following the Effective Time (the "Scheduled Time"), subject to Section 4
below, the shares of Vencor Common Stock subject to the Vencor Common Stock
Award shall be delivered by Vencor to the Employee.
4. Deferral of Delivery of Common Stock.
(a) Deferral. Except as otherwise provided in
-3-
43
paragraphs 4(b), (c) or (d) below and Section 7(b), if and to the extent that
as of January 2 of each year following the Scheduled Time Vencor reasonably
anticipates, based on Employee's compensation and status as an executive
officer of Vencor, that any amount of compensation which would be recognized by
the Employee by reason of the delivery of Vencor Common Stock to the Employee
pursuant to Section 3:
(i) would not be deductible by Vencor if the shares of Vencor
Common Stock are delivered at the Scheduled Time by reason of the deduction
disallowance rules of Section 162(m) of the Internal Revenue Code of 1986,
as amended ("Section 162(m)"), and
(ii) would be deductible by Vencor if such delivery of shares is
deferred until a later time, the delivery of such shares of Vencor Common
Stock to the Employee shall be deferred until the earliest time at which it
is determined by Vencor that the shares of Vencor Common Stock can be
delivered without disallowance of the deduction for payment of the
compensation by reason of Section 162(m). If Vencor reasonably determines
that in any year following the year of the Scheduled Time a portion of, but
not all of, the deferred shares of Vencor Common Stock can be delivered
without disallowance of the
-4-
44
deduction as a result of Section 162 (m), that portion that can be so
delivered shall be delivered by Vencor during that year (as soon as
practicable (but not more than five days) following its determination) and
the remainder of the shares of Vencor Common Stock, except as otherwise
provided in paragraphs (b), (c) or (d) below (or pursuant to Section 7(b)),
shall continue to be deferred until a later year. Vencor agrees to review
the ability to deliver shares hereunder at any time reasonably
requested by the Employee.
(b) Early Payout of Deferred Vencor Common Stock if Deferral is
Determined to be Ineffective. If the delivery of any shares of Vencor Common
Stock is deferred under paragraph (a) above with the expectation that the
compensation with respect to such shares will be deductible by Vencor if the
shares are delivered in a later year and Vencor later determines that the
compensation will not be deductible by Vencor even if the delivery thereof is
deferred until a later year, then the deferral with respect to such shares of
Vencor Common Stock shall terminate and Vencor shall deliver such shares of
Vencor Common Stock to the Employee.
(c) Payout Following Termination of Employment in All Events. As
soon as practicable (but not more than five
-5-
45
days) following the Employee's termination of employment from Vencor and its
subsidiaries for any reason, including, without limitation, death, disability,
termination by Vencor or termination by the Employee for any reason, Vencor
shall deliver to the Employee (or his estate) all shares of Vencor Common Stock
the delivery of which has been deferred pursuant to this Section 4 and that
have not previously been delivered.
(d) Change in Control. Upon a Change in Control of Vencor, all
shares of Vencor Common Stock subject to Vencor Common Stock Awards shall be
issued and delivered to the Employee. As used herein, "Change in Control"
shall have the meaning set forth in subsections (A)-(D) of Section 9(d) of the
Plan (with Vencor substituted for the Company in such subsections).
5. Taxes. The Employee agrees to pay promptly after delivery of
any shares of Vencor stock pursuant to this Agreement the amount of Federal and
state withholding taxes which become due as a result of the delivery of Vencor
Common Stock to the Employee. If Vencor agrees to make a loan to Employee to
pay such taxes, any amount borrowed from Vencor to pay taxes shall be secured
by a pledge of such number of shares of Vencor Common Stock as may be
determined by Vencor in accordance with applicable laws, and shall be repaid on
the
-6-
46
date of any sale of the pledged shares, but in no event later than the April 15
following the calendar year with respect to which the taxes have accrued.
6. No Shareholder Rights. (a) Until shares of Vencor Common Stock
are issued to the Employee (or, upon the Employee's death, to the Employee's
estate), pursuant to the terms of this Agreement, the Employee shall have no
rights with respect to shares of Vencor Common Stock, including the right to
vote, or the right to transfer, assign, alienate, pledge, hypothecate or
otherwise dispose of, such shares of Vencor Common Stock.
(b) Notwithstanding the foregoing, in the event Vencor declares
and pays any dividend or other distribution in cash or that does not otherwise
result in an adjustment pursuant to Section 7(a) below, Employee shall be
entitled to receive the amount of cash or other property he would have been
entitled to receive had he been a record holder of all deferred shares of
Vencor Common Stock under this Agreement on the record date of such dividend or
other distribution.
7. Adjustments.
(a) Subject to Section 7(b) hereof, if the outstanding shares of
Common Stock of Vencor are increased,
-7-
47
decreased or exchanged for a different number or kind of shares or other
securities, or if additional shares or new or different shares or other
securities or property (other than cash) are distributed with respect to such
shares of Vencor Common Stock or other securities, through merger,
consolidation, sale of all or substantially all the property of Vencor,
reorganization, recapitalization, reclassification, stock dividend, stock
split, reverse stock split or other distribution with respect to such shares of
Vencor Common Stock or other securities, an appropriate and proportionate
adjustment shall be made in the number and kind of shares or other securities
subject to this Agreement.
(b) Notwithstanding the provisions of Sections 4 and 7(a) hereof,
upon dissolution or liquidation of Vencor or upon a reorganization, merger or
consolidation of Vencor with one or more corporations as a result of which
Vencor is not the surviving corporation, or upon the sale of all or
substantially all the property of Vencor, all shares of Vencor Common Stock
subject to the Vencor Common Stock Award shall be issued to the Employee,
unless provision is made with the approval of Employee in connection with such
transaction for the continuance of this Agreement and the assumption or the
substitution of stock or securities of a successor employer
-8-
48
corporation, or a parent or subsidiary thereof, with appropriate adjustments as
to the number and kind of shares and prices.
8. Confidentiality. The Employee acknowledges that this
Agreement and the award of Vencor Common Stock Awards to the Employee is
confidential, and the Employee agrees not to disclose any of the terms of this
Agreement except to duly authorized representatives of Vencor acting in the
course of their employment, as may otherwise be required by law, including any
applicable filings under the federal securities laws, and to the Employee's
personal tax and financial advisors.
9. Tax Free Pooling. If the actions contemplated by this
Agreement, either alone or in conjunction with the actions contemplated in
similar agreements among the Company, Vencor and other similarly situated
employees of the Company (the "Employee Group"), would prevent the Merger or
the acquisition of Nationwide, Care Inc. by the Company from being treated for
financial accounting purposes as a "pooling of interests in accordance with
generally accepted accounting principals and the rules, regulations and
interpretations of the Securities and Exchange Commission, then this Agreement
and each agreement with the other members of the Employee
-9-
49
Group shall be deemed void and of no further force or effect. In such event
the parties shall cooperate to restructure the actions taken pursuant to this
Agreement, provided, that the parties will endeavor to ensure that such
restructuring shall have no less favorable economic effect to the Employee as
this Agreement would have to the Employee.
10. Conditions. This Agreement shall be subject to the condition
subsequent that the Effective Time (as defined in the Merger Agreement) shall
have occurred. In the event that the Merger Agreement is terminated or such
condition subsequent is not satisfied, this Agreement shall be deemed void and
of no further force or effect.
11. Assignment. This Agreement and all the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, but neither this Agreement nor any of the
rights, interests, or obligations hereunder or the Vencor Common Stock Awards
shall be assigned by any of the parties hereto without the prior written
consent of the other parties hereto.
12. Employment. In the event the Employee's employment with the
Company terminates prior to the Effective Time, this Agreement shall be void
and of no further force or effect, and the terms and conditions of the
Performance Shares
-10-
50
shall be governed by the Plan and the Incentive Award Agreement. The grant of
Vencor Common Stock Awards to the Employee neither confers on the Employee the
right to continue to perform services in any particular position and/or remain
employed by Vencor or any of its subsidiaries, nor affects the right of Vencor
or any of its subsidiaries to remove the Employee from his position or to
terminate Employee's employment with Vencor or a subsidiary thereof, for any
reason with or without cause.
13. Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with the laws of the State of Delaware,
without regard to its conflict of laws rules.
14. Entire Understanding and Waiver. This Agreement embodies the
entire understanding and agreement of the parties in relation to the subject
matter hereof and expressly supersedes the Incentive Award Agreement which
shall be of no further effect, and no promise, condition, representation or
warranty, expressed or implied, not herein stated, shall bind either party
hereto. None of the terms and conditions of this Agreement may be changed,
modified, waived or cancelled except by a writing, signed by the parties hereto
specifying such change, modification, waiver or cancellation.
-11-
51
A waiver by either party, at any time, of compliance with any of the terms and
conditions of this Agreement shall not be considered a modification,
cancellation or consent to a future waiver of such terms and conditions or of
any preceding or succeeding breach hereof, unless expressly so stated.
15. Counterparts. This Agreement may be executed in one or more
counterparts each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
16. Registration of Shares. Vencor shall take all steps necessary
to ensure that all shares of Vencor Common Stock (and any other securities)
delivered pursuant to this Agreement are covered by an effective registration
statement filed with the Securities Exchange Commission on Form S-8 or
otherwise.
-12-
52
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed on the day and year first above written.
THE HILLHAVEN CORPORATION
By: /s/ RICHARD P. ADCOCK
-------------------------------------
Name: Richard P. Adcock
Title: Senior Vice President
VENCOR, INC.
By: /s/ W. EARL REED, III
-------------------------------------
Name: W. Earl Reed, III
Title: Vice President of
Finance and Development
EMPLOYEE
[SIGNATURE]
----------------------------------------
-13-
53
EXHIBIT 4(c)
AMENDMENT NO. 2 TO CREDIT AGREEMENT
AMENDMENT dated as of October 12, 1995 to the Credit Agreement dated as
of September 11, 1995 among Vencor, Inc., the other Borrowers referred to
therein and the Banks, Co-Agents, LC Issuing Banks and Agents referred to
therein, as heretofore amended (the "Credit Agreement").
WHEREAS, terms defined in the Credit Agreement have the same
respective meanings when used herein; and
WHEREAS, Vencor (i) desires to purchase shares of its common stock held
by a trustee under a trust originally created by The Hillhaven Corporation to
provide funding for various employee benefit plans and (ii) to permit such
purchase, desires to increase the amount of Restricted Payments permitted by
Section 5.1(d)(i) of the Credit Agreement from $10,000,000 to $20,000,000;
NOW, THEREFORE, the undersigned parties hereto agree as follows:
1. Amendment of Section 5.11. Section 5.11(d)(i) of the Credit
Agreement is hereby amended by changing the amount specified therein from
"$10,000,000" to "$20,000,000".
2. Rights Otherwise Unaffected. This Amendment is limited to the
matters expressly set forth herein. Except to the extent specifically amended
or waived hereby, all terms of the Credit Agreement shall remain in full force
and effect.
3. Governing Law. This Amendment shall be governed by and construed
in accordance with the laws of the State of New York.
4. Counterparts. This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if
the signature thereto and hereto were upon the same instrument.
5. Effectiveness. This Amendment shall become effective when the
Documentation Agent shall have received from each of the Required Banks and
each of the Borrowers either a counterpart hereof signed by such party or
telegraphic, telex or other written confirmation from such party that it has
signed a counterpart hereof.
54
IN WITNESS WHEREOF, the undersigned parties have caused this amendment
to be duly executed as of the date first above written.
BORROWERS
VENCOR, INC.
By: /s/ JILL L. FORCE
---------------------------------
Name: Jill L. Force
Title: Secretary and General Counsel
FIRST HEALTHCARE CORPORATION
By: /s/ ROBERT F. PACQUER
---------------------------------
Name: Robert F. Pacquer
Title: Sr. Vice President
NORTHWEST HEALTH CARE, INC.
By: /s/ ROBERT F. PACQUER
---------------------------------
Name: Robert F. Pacquer
Title: Sr. Vice President
MEDISAVE PHARMACIES, INC.
By: /s/ ROBERT F. PACQUER
---------------------------------
Name: Robert F. Pacquer
Title: Sr. Vice President
HILLHAVEN PROPERTIES, LTD.
By: /s/ ROBERT F. PACQUER
---------------------------------
Name: Robert F. Pacquer
Title: Sr. Vice President
55
HILLHAVEN OF CENTRAL FLORIDA, INC.
By: /s/ ROBERT F. PACQUER
---------------------------------
Name: Robert F. Pacquer
Title: Sr. Vice President
NATIONWIDE CARE, INC.
By: /s/ ROBERT F. PACQUER
---------------------------------
Name: Robert F. Pacquer
Title: Sr. Vice President
BANKS
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: /s/ RUTH EDWARDS
---------------------------------
Name: Ruth Edwards
Title: Vice President
THE BANK OF NEW YORK
By: /s/ DOUGLAS OBER
---------------------------------
Name: Douglas Ober
Title: Vice President
CHEMICAL BANK
By: /s/ WILLIAM J. CAGGIANO
---------------------------------
Name: William J. Caggiano
Title: Managing Director
56
CREDIT SUISSE
By: /s/ JAN KOFOL
---------------------------------
Name: Jan Kofol
Title: Member of Senior Management
By: /s/ KRISTINN R. KRISTINSSON
---------------------------------
Name: Kristinn R. Kristinsson
Title: Associate
MELLON BANK, N.A.
By: /s/ LINDA L. DASH
---------------------------------
Name: Linda L. Dash
Title: Asst. Vice President
PNC BANK, KENTUCKY, INC.
By: /s/ JEFFERSON M. GREEN
---------------------------------
Name: Jefferson M. Green
Title: Vice President
TORONTO-DOMINION (TEXAS), INC.
By: /s/ LISA ALLISON
---------------------------------
Name: Lisa Allison
Title: Vice President
WACHOVIA BANK OF NORTH CAROLINA, N.A.
By: /s/ ROBERT G. BROOKBY
---------------------------------
Name: Robert G. Brookby
Title: Executive Vice President
4
57
BANK OF LOUISVILLE AND TRUST
COMPANY
By: /s/ ROY L. JOHNSON, JR.
-----------------------------------
Name: Roy L. Johnson, Jr.
Title: Senior Vice President
BANK ONE, COLUMBUS, NA
By: /s/ JAMES ZOOK
-----------------------------------
Name: James Zook
Title: Vice President
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA
By: /s/ JOSEPH J. TOWELL
-----------------------------------
Name: Joseph H. Towell
Title: Senior Vice President
FLEET BANK OF MASSACHUSETTS
By: /s/ GINGER STOLZENTHALER
-----------------------------------
Name: Ginger Stolzenthaler
Title: Vice President
LTCS TRUST COMPANY
By: /s/ RENE LEBLANC
-----------------------------------
Name: Rene LeBlanc
Title: Senior Vice President
58
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By: /s/ DIANA H. IMHOF
-----------------------------------
Name: Diana H. Imhof
Title: Vice President
NATIONAL CITY BANK, KENTUCKY
By: /s/ CHARLES P. DENNY
-----------------------------------
Name: Charles P. Denny
Title: Senior Vice President
NATIONSBANK, N.A.
By: /s/ ASHLEY M. CRABTREE
-----------------------------------
Name: Ashley M. Crabtree
Title: Vice President
NBD BANK
By: /s/ RANDALL K. STEPHENS
-----------------------------------
Name: Randall K. Stephens
Title: Vice President
U.S. BANK OF WASHINGTON NATIONAL
ASSOCIATION
By: /s/ ARNOLD J. CONRAD
-----------------------------------
Name: Arnold J. Conrad
Title: Vice President
6