EXHIBIT 10
SEPARATION AND CONSULTING AGREEMENT
THIS SEPARATION AND CONSULTING AGREEMENT (the "Agreement") is entered into
as of March 3, 2000 (the "Commencement Date"), by and between James W.
Cruckshank ("Executive") and Assisted Living Concepts, Inc., a Nevada
corporation ("ALC"), on behalf of itself and its Affiliated Companies
(collectively, the "Company"). For purposes of this Agreement, "Affiliated
Companies" shall mean an entity controlling, controlled by, or under common
control with ALC, and shall include a corporation which acquires the stock of
ALC, should a merger occur.
RECITALS
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A. Executive and the Company have previously entered into an Employment
Agreement, dated as of March 15, 1999 (the "Employment Agreement").
B. Executive and the Company each have determined that it would be to the
advantage and best interest of Executive and the Company to enter into this
Agreement, pursuant to which Executive agrees to resign as an executive and
employee of the Company and the Company agrees to engage Executive as a
consultant so as to retain his experience and abilities for the benefit of the
Company.
AGREEMENT
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NOW, THEREFORE, in consideration of the mutual covenants herein contained
and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereto agree as follows:
1. Termination of Employment Agreement.
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1.1 Resignation. Effective on the Commencement Date, Executive
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resigns as an executive officer and employee of the Company.
1.2 Release of Claims. In return for the benefits conferred by this
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Agreement, which Executive acknowledges Company has no legal obligation to
provide if Executive does not enter into this Agreement, Executive, on behalf of
himself and his heirs, executors, administrators, successors and assigns, hereby
releases and forever discharges Company and its past, present and future
affiliates, subsidiaries, predecessors, successors and assigns, and each of
their past, present and future shareholders, officers, directors, executives,
agents and insurers, from any and all claims,
actions, causes of action, disputes, liabilities or damages, of any kind, which
may now exist or hereafter may be discovered, specifically including, but not
limited to, any and all claims, disputes, actions, causes of action, liabilities
or damages, arising from or relating to Executive's employment with Company or
the termination of such employment (except for any claim for payment or
performance pursuant to the terms of this Agreement). This release includes, but
is not limited to, any claims that Executive might have for a bonus under the
Company's incentive bonus plan or the Severance Amount provided for under the
Employment Agreement being terminated hereunder, and any additional compensation
or benefits and applies to claims that he might have under either federal, state
or local law dealing with employment, contract, tort, wage and hour, or civil
rights matters, including, but not limited to, Title VII of the Civil Rights Act
of 1964, the Americans with Disabilities Act, the Age Discrimination in
Employment Act, the Family and Medical Leave Act, similar state laws, and any
regulations under such laws. This release shall not affect any accrued rights
Executive may have under any medical insurance, workers' compensation or
retirement plan because of his employment with Company. EXECUTIVE ACKNOWLEDGES
AND AGREES THAT THROUGH THIS RELEASE HE IS GIVING UP ALL RIGHTS AND CLAIMS OF
EVERY KIND AND NATURE WHATSOEVER, KNOWN OR UNKNOWN, CONTINGENT OR LIQUIDATED,
THAT HE MAY HAVE AGAINST COMPANY AND THE OTHER PERSONS NAMED ABOVE, EXCEPT FOR
THE RIGHTS SPECIFICALLY EXCLUDED ABOVE. This Agreement shall not be construed as
an admission of liability or wrongdoing by Company. Neither this Agreement nor
any of its terms, provisions, or conditions constitute an admission of liability
or wrongdoing or may be offered or received in evidence in any action or
proceeding as evidence of an admission of liability or wrongdoing.
1.3. Termination of Employment Agreement. Effective upon the
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Commencement Date, the parties hereby agree that the Employment Agreement and
all other agreements and understandings between Executive and the Company shall
terminate and be of no further force or effect, except that Executive's
covenants as provided in Sections 3 and 5 of the Employment Agreement shall not
be superseded by this Agreement and shall remain enforceable by the Company as
provided in the Employment Agreement for all periods prior to the Commencement
Date.
1.4 Bonus. Executive acknowledges receipt from the Company of a
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bonus in the amount of $50,000.
1.5 Executive Given 21 Days to Consider Agreement. Executive
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acknowledges that Company advised him in writing to consult with an attorney
before signing this Agreement and that he has had at least 21 days to consider
whether to execute this Agreement.
1.6 Revocation. Executive may revoke this Agreement by written
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notice delivered to the President or Chief Executive Officer of the Company
within seven days following the date he signed the Agreement, in which event
Executive shall immediately return to the Company the $50,000 bonus paid to
Executive pursuant to Section 1.4 hereof.
1.7 Cell Phone; Computer. Executive shall be entitled to retain as
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his personal property, his Company assigned cell telephone (with the same
telephone number, if possible, and
with future charges to be at his sole expense) and laptop computer (provided
that Executive agrees to permanently delete all Company confidential
information), with Executive to have the benefit of any warranty, if possible.
2. Stock Options. On April 9, 1999, the Company granted Executive the
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option to purchase 30,000 shares of Company common stock (the "Option") with an
exercise price of $3.813 per share, which vest as follows: 10,000 on March 15,
2000; 10,000 on March 15, 2001; and 10,000 on March 15, 2002. Executive hereby
agrees that the Option with respect to 20,000 shares of Company common stock
which were to vest on March 15, 2001 and March 15, 2002 shall not vest on such
dates and shall expire on the Commencement Date. As to the Option with respect
to 10,000 shares of Company common stock which vests on March 15, 2000,
Executive shall have ninety (90) days from the expiration of the Consulting
Period (as defined below) or from the effective date of Executive's termination
without Cause, as applicable, to exercise the then vested Option. In the event
Executive breaches this Agreement, is terminated with Cause (as defined below)
or voluntarily resigns, Executive shall forfeit such Option unless Executive has
exercised the Option.
3. Consulting Arrangement.
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3.1. Term. Executive is hereby engaged by the Company as a
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consultant, commencing on the Commencement Date and continuing through December
31, 2000 (the "Consulting Period").
3.2. NATURE OF CONSULTING AND OTHER SERVICES. IN HIS RENDERING OF
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CONSULTING SERVICES FOR THE BENEFIT OF THE COMPANY HEREUNDER, EXECUTIVE SHALL
FROM TIME TO TIME PROVIDE THE COMPANY AND ITS CHIEF EXECUTIVE OFFICER WITH SUCH
ADVICE AS ANY OF THEM MAY REASONABLY REQUEST IN CONNECTION WITH THE BUSINESS AND
OPERATIONS OF THE COMPANY AND ITS SUBSIDIARIES AND AFFILIATES. EXECUTIVE SHALL
HOLD HIMSELF AVAILABLE AT REASONABLE TIMES AND ON REASONABLE NOTICE TO RENDER
SUCH CONSULTING AND ADVISORY SERVICES AS MAY BE SO ASSIGNED TO HIM BY THE
COMPANY OR ITS CHIEF EXECUTIVE OFFICER DURING THE CONSULTING PERIOD. WITHOUT
LIMITING THE FOREGOING, EXECUTIVE SHALL, UPON THE REASONABLE REQUEST OF THE
PERSONS SPECIFIED ABOVE, (A) CONSULT WITH THE COMPANY WITH RESPECT TO ALL
MATTERS CONCERNING THE COMPANY IN WHICH EXECUTIVE HAD PERSONAL INVOLVEMENT
DURING HIS PERIOD OF EMPLOYMENT WITH THE COMPANY, (B) ASSIST THE COMPANY IN THE
NEGOTIATION AND CONSUMMATION OF BUSINESS MATTERS AND PROJECTS PENDING AT THE
TIME OF HIS RESIGNATION AND THEREAFTER, INCLUDING THE HIRING OF A NEW CHIEF
FINANCIAL OFFICER AND EFFECTING AN ORDERLY TRANSITION OF HIS DUTIES TO HIS
SUCCESSOR, AND (C) COOPERATE WITH AND ASSIST THE COMPANY IN UNDERTAKING AND
PREPARING FOR LEGAL AND OTHER PROCEEDINGS RELATING TO THE AFFAIRS OF THE COMPANY
AND ITS SUBSIDIARIES. IN CONNECTION WITH THE CONSULTING SERVICES RENDERED BY
HIM HEREUNDER, EXECUTIVE SHALL
(I) UNDERTAKE SUCH TRAVEL ON THE COMPANY'S BEHALF (AND AT ITS EXPENSE) AS THE
COMPANY MAY REASONABLY REQUEST AND (II) NEGOTIATE AS THE COMPANY'S
REPRESENTATIVE WHEN AND AS REASONABLY REQUESTED TO DO SO BY THE COMPANY'S CHIEF
EXECUTIVE OFFICER.
3.3. Consulting Fees. During the Consulting Period, so long as
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Executive is not in breach of this Agreement, as payment for Executive's
services as a consultant to the Company, the Company shall pay Executive a bi-
weekly amount equal to $3,000.00 (the "Consulting Fees"). Except as set forth in
this Section 3.3, Executive shall not be entitled to any other cash compensation
from the Company following the Commencement Date of this Agreement.
Furthermore, Executive shall not be eligible to participate in the Company's
bonus plan or any other form of incentive compensation during the Consulting
Period.
3.4. Medical Benefits. During the Consulting Period, so long as
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Executive makes an election and is otherwise eligible, Executive shall be
entitled to continued participation, at his sole expense, in the Company's
medical insurance plans and/or programs as provided under the Consolidated
Omnibus Budget Reconciliation Act at a level; provided, however, if Executive
becomes eligible to receive medical benefits under another medical plan, other
than the Company's medical plans, the Company's obligations under this Section
3.4 shall terminate.
3.5. Expenses. During the Consulting Period, Executive shall be
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reimbursed for Executive's reasonable travel expenses incurred with the prior
approval of the Chief Executive Officer and in connection with Executive's
services as a consultant with the Company according to the policies and
procedures in effect when incurred.
3.6. Independent Contractor. It is understood that Executive is to
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act as a consultant and advisor to the Company during the Consulting Period, and
is not an employee or agent of, or co-venturer with, the Company in any respect.
Executive shall have no right, authority, or power to act for or on the
Company's behalf. The relationship between the Company and Executive hereunder
shall be that of independent contractor. Consistent with Executive being an
independent contractor, Executive shall be solely responsible for his own
overhead expenses, including without limitation, office space, support staff and
other assistance, equipment and supplies. Furthermore, Executive shall be
solely responsible for all tax returns and payments required to be filed with or
made to any federal, state or local tax authority with respect to Executive's
performance of services and receipt of Consulting Fees under this Agreement.
The Company shall regularly report amounts paid to Executive by filing the
appropriate form with the Internal Revenue Service, as required by law. Because
Executive shall be an independent contractor during the Consulting Period, the
Company shall not withhold or make payments for social security, make
unemployment insurance or disability insurance contributions or obtain worker's
compensation insurance on Executive's behalf. Executive agrees to accept
exclusive liability for complying with all applicable state and federal laws
governing self-employed individuals, including obligations such as payment of
taxes, social security, disability and other contributions based on Consulting
Fees paid to Executive under this
Agreement. Executive hereby agrees to indemnify and defend the Company against
any and all such taxes or contributions, including penalties and interest.
4. Confidential Information.
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4.1. Access to Information. Executive acknowledges that in the
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course of Executive's employment and Executive's services as a consultant,
Executive has had and shall continue to have access to proprietary information,
trade secrets, and other confidential information, that such information is a
valuable asset of the Company, and that its disclosure or unauthorized use shall
cause the Company substantial harm. As used in this Agreement, the term
"Confidential Information" shall mean: (a) proprietary information and trade
secrets of the Company and (b) information designated by the Company as
confidential or which Executive knows or should know is confidential.
4.2. Ownership. Executive acknowledges that all Confidential
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Information shall continue to be the exclusive property of the Company, whether
or not prepared in whole or in part by Executive and whether or not disclosed to
Executive or entrusted to Executive's custody in connection with Executive's
employment by the Company or Executive's consulting arrangement with the
Company.
4.3. Nondisclosure and Nonuse. Unless authorized or instructed in
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writing by the Company, or required by legally constituted authority, Executive
shall not, except as required in the course of the Company's business, during or
after Executive's employment, disclose to others or use any Confidential
Information, unless and until, and then only to the extent that, such items
become available to the public other than by Executive's act or failure to
prevent accidental or negligent loss or release to any unauthorized person of
the Confidential Information.
4.4. Return of Confidential Information. Upon expiration or earlier
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termination of Executive's services as a consultant pursuant to this Agreement,
Executive shall deliver immediately to the Company all Confidential Information
of the Company; Executive shall retain no excerpts, notes, or copies thereof,
whether on disk for computer use or in any other form.
4.5. Duration. The obligations set forth in this Section 4 shall
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survive the expiration or earlier termination of this Agreement and shall
terminate at such time as Executive no longer possesses Confidential
Information.
5. Work Made for Hire. Executive agrees that all creative work,
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including without limitation, techniques, models, and processes, prepared or
originated by Executive for the Company, or during or within the scope of
Executive's employment or Executive's services as a consultant with the Company,
whether or not subject to protection under applicable law, constitutes work made
for hire, all rights to which are owned by the Company, Executive assigns to the
Company all rights, title, and interest, whether by way of copyright, trade
secret, or otherwise, in all such work, whether or not subject to protection by
copyright or other law. EXECUTIVE ACKNOWLEDGES AND AGREES THAT ANY ONE OR MORE
ENTITIES
CONSTITUTING "COMPANY" UNDER THIS AGREEMENT SHALL BE ENTITLED TO THE BENEFIT OF
THE PROVISIONS OF THIS SECTION 5.
6. Covenants.
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6.1. Noncompetition. Executive covenants that Executive shall not,
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during the term of Executive's services as a consultant and for one year
thereafter (the "Restricted Period"), (a) accept employment with or render
service to any person, firm or corporation that is engaged in the Assisted
Living Business (as defined below) in any region in which the Company is then
operating or has firm plans to operate; or (b) own, manage, operate, construct,
develop, lease or control, or participate in the ownership, management,
operation, construction, development, lease or control of, or be connected as a
principal, agent, representative, consultant, advisor, investor, owner, partner,
financier, developer, contractor, manager or joint venturer with, or permit his
name to be used by or in connection or association with, any facility, business
or enterprise that is engaged in the Assisted Living Business in any region in
which the Company is then operating or has firm plans to operate; provided,
however, that Executive may invest as an investor in the voting securities of
any person that is a reporting company under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), so long as (1) the aggregate amount of
the securities Executive owns directly or indirectly is less than one percent
(1%) of the total outstanding voting securities of that person and (2) Executive
has no other affiliation with that person. For purposes of this Agreement, the
term "Assisted Living Business" shall mean any business or activity that,
directly or indirectly, provides (i) any of the following services, programs or
facilities to frail, elderly residents (whether by itself or through a joint
effort with another party or parties): long-term living, nursing home,
retirement home or assisted living; (ii) assisted living, supportive care living
or personal care services, programs or facilities, as described or defined by
any state licensing authority; and (iii) businesses or activities substantially
similar to any of those described in the foregoing items.
6.2. Nonsolicitation. Executive covenants that he shall not, either
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individually or as a director, officer, partner, employee, agent, representative
or consultant with any business, directly or indirectly during the Restricted
Period, other than on behalf of the Company: (a) solicit or attempt to solicit
away from the Company any of its officers or employees or offer employment to
any person who, on or during the six (6) months immediately preceding the date
of such solicitation or offer, is or was an officer or employee of the Company,
(b) induce or attempt to induce any person who is a tenant or potential tenant
(whether on a waiting list or simply a person who has contacted Executive or
another agent of the Company in a marketing effort or who contacted the Company
regarding tenancy or whose family member or agent contacted the Company) to
leave the tenancy of a facility or to select different residency, not under
Company management, or (c) solicit, divert, or accept orders from any customer
of the Company for products or services that are substantially competitive with
the products or services, if any, sold by the Company.
6.3. Standstill. Executive hereby agrees that from the Commencement
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Date and for a period of three years following the expiration or earlier
termination of this Agreement, Executive shall not in any manner, directly or
indirectly,
(a) Effect or seek, offer or propose (whether publicly or
otherwise) to effect, or cause or participate in or in any way assist any
other person to effect or seek, offer or propose (whether publicly or
otherwise) to effect or participate in, (i) any acquisition of any
securities (or beneficial ownership thereof) or assets of the Company or
any of its subsidiaries; (ii) any tender or exchange offer or merger or
other business combination involving the Company or any of its
subsidiaries; (iii) any recapitalization, restructuring, liquidation,
dissolution or other extraordinary transaction with respect to the Company
or any of its subsidiaries; or (iv) any "solicitation" of "proxies" (as
such terms are used in the proxy rules of the Securities and Exchange
Commission) or consents to vote any voting securities of the Company,
(b) Form, join or in any way participate in a "group" (as
defined under the Exchange Act),
(c) Otherwise act, alone or in concert with others, to seek to
control or influence the management, Board of Directors or policies of the
Company,
(d) Take any action which might force the Company to make a
public announcement regarding any of the types of matters set forth in
subsection (a) above, or
(e) Enter into any discussions or arrangements with any third
party with respect to any of the foregoing.
Executive also agrees during any such period not to request the
Company (or its directors, officers, employees or agents), directly or
indirectly, to amend or waive any provision of this Section 6.3 (including
this sentence).
6.4. Public Disclosure. Executive understands that the Company
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intends to publicly disclose the terms of this Agreement and any related
agreements.
6.5. Non-Disparagement. Executive shall not make any disparaging or
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derogatory remarks of any nature whatsoever about the Company, its officers,
directors or Executives, or its services and/or products (if any), either
publicly or privately, unless required by law.
6.6. Enforcement.
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(a) Executive acknowledges and agrees that the time, scope, and
other provisions of this Section 6 have been specifically negotiated by
sophisticated parties having been advised to seek legal counsel and
Executive agrees that such time, scope, and other provisions are reasonable
under the circumstances. Executive further agrees that if, at any time,
despite the express agreement of the parties hereto, a court of competent
jurisdiction holds that any portion of this Section 6 is unenforceable for
any reason, the maximum restrictions reasonable under the circumstances, as
determined by such court, shall be substituted for any such restrictions
held unenforceable.
(b) EXECUTIVE ACKNOWLEDGES AND AGREES THAT ANY ONE OR MORE
ENTITIES CONSTITUTING "COMPANY" UNDER THIS AGREEMENT SHALL BE ENTITLED TO
THE BENEFIT OF THE PROVISIONS OF THIS SECTION 6.
7. Termination.
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7.1. Voluntary Resignation. Executive may terminate Executive's
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services as a consultant with the Company under this Agreement by 30 days
written notice to the Company. In the event of such voluntary resignation, this
Agreement shall terminate as of the effective date of resignation, and Executive
shall be entitled only to the portion of the Consulting Fees, earned but not
paid through the date of termination. The Company shall have no obligation
whatsoever to pay any Severance Amount or any other amounts.
7.2. Termination by the Company.
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(a) With Cause. The Company may terminate Executive's services
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as a consultant under this Agreement immediately with cause by notice to
Executive. In the event Executive is terminated pursuant to the provisions
of this Section 7.2(a), Executive shall be entitled only to the portion of
the Consulting Fees earned but not paid through the date of termination and
the Company shall have no obligation whatsoever to pay any Severance Amount
or any other amounts. Specific examples of events that warrant termination
for cause include, but are not limited to the Company's good faith
determination that one or more of the following occurred: (i) Executive
failed to perform Executive's duties; (ii) Executive failed to act in a
professional manner if such failure causes material damage to the Company;
(iii) Executive otherwise breached this Agreement; or (iv) Executive
engaged in fraud, breach of fiduciary duty, or any other act of similar
willful misconduct or gross negligence in the performance of Executive's
duties on behalf of the Company.
(b) Without Cause. In the event of the termination of the
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consulting services of Executive by the Company without cause and so long
as Executive is not in breach of this Agreement, Executive shall be
entitled only to (i) the portion of the Consulting Fees earned but not paid
through the date of termination and (ii) the balance of the Consulting Fees
which he would have received had Executive's services under this Agreement
continued through the Consulting Period (the "Severance Amount"), subject
to the condition set forth in Section 7.4 below. Such Severance Amount
shall be paid in a lump sum within 60 days after the effective date of the
termination of this Agreement.
7.3. Death or Disability. This Agreement shall terminate
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immediately upon Executive's death or in the event Executive suffers a
disability, due to illness or injury, which limits him from performing each of
the material and substantial duties of his job for a period in excess of ninety
(90) days. Upon such event, Executive shall be entitled only to the portion of
the Consulting Fees earned but not paid through the date of termination, and the
Company shall have no obligation to pay the Severance Amount or any other
amounts.
7.4. Condition to Severance Payments.
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(a) The Company's obligation to pay the Severance Amount shall
terminate if Executive is in violation of the provisions of Sections 4 or 6
of this Agreement.
(b) EXECUTIVE ACKNOWLEDGES AND AGREES THAT ANY ONE OR MORE
ENTITIES CONSTITUTING "COMPANY" UNDER THIS AGREEMENT SHALL BE ENTITLED TO
THE BENEFIT OF THE RELEASE CONTEMPLATED IN SECTION 7.4(a).
7.5. Survivability. The provisions of Sections 1.2, 1.3, 4, 6, 8, 9,
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11 and 12 shall survive expiration or earlier termination of this Agreement.
8. Remedies. The respective rights and duties of the parties under this
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Agreement are in addition to, and not in lieu of, those rights and duties
afforded to and imposed upon them by law or at equity. Executive acknowledges
that breach of Sections 4 and 6 of this Agreement shall cause irreparable harm
to the Company and agrees to the entry of a temporary restraining order and
permanent injunction by any court of competent jurisdiction to prevent breach or
further breach of this Agreement. Such remedy shall be in addition to any other
remedy available to Company at law or in equity.
9. Severability of Provisions.
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9.1. Except as provided in this Section 9, the provisions of this
Agreement are severable, and if any provision hereof is held invalid or
unenforceable, it shall be enforced to the maximum extent permissible, and the
remaining provisions of the Agreement shall continue in full force and effect,
except as provided below.
9.2. Notwithstanding Section 9.1, in the event a court or agency of
competent jurisdiction determines that any of the provisions comprising Sections
1.2, 1.3, 4 or 6 of the Agreement are held to be illegal, invalid or
unenforceable, the Agreement as a whole shall fail for lack of consideration and
is not severable, unless the aggrieved party ratifies the Agreement.
10. Nonwaiver. Failure of the Company at any time to require performance
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of any provision of this Agreement shall not limit the right of the Company to
enforce the provision. No provision of this Agreement or breach thereof may be
waived by either party except by a writing signed by that party. A waiver of
any breach of a provision of this Agreement shall be construed narrowly and
shall not be deemed to be a waiver of any succeeding breach of that provision or
a waiver of that provision itself or of any other provision.
11. Arbitration.
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11.1. Claims Covered. All claims or controversies ("Claim" or
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"Claims"), (except for those expressly excluded by Section 11.2, whether or not
arising out of Executive's employment or its termination) that Company may have
against the Executive or that Executive
may have against the Company or against its officers, directors, employees or
agent, in their capacity as such or otherwise, shall be resolved by arbitration,
as provided in this Section 11. Claims covered by this Agreement to arbitration
shall include, without limitation, claims for wages or other compensation due;
any claim arising out of or related to this Agreement including any related
agreements; claims for breach of any contract or covenant (express or implied);
tort claims; claims for discrimination (including, but not limited to, race,
sex, sexual orientation, religion, national origin, age, marital status, or
medical condition, handicap or disability); claims for benefits (except where an
employee benefit or pension plan specifies that its claims procedure shall
culminate in an arbitration procedure different from this one); and, claims for
violation of any federal, state, or other governmental law, statute, regulation,
or ordinance, except as otherwise provided in Section 11.2.
11.2 Non-covered Claims. Claims arising out of Sections 4 and 6 of
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this Agreement and workers compensation or unemployment compensation benefits
are not covered by the parties' agreement to arbitrate. Non-covered claims
include, without limitation, claims by the Company for injunctive and/or other
equitable relief for unfair competition and/or the use and/or unauthorized
disclosure of trade secrets or confidential information, about which Executive
understands and agrees that the Company may seek and obtain relief from a court
of competent jurisdiction. In the event a suit or action is filed to enforce
Sections 4 and 6 of this Agreement, the prevailing party shall be reimbursed by
the other party for all costs and expenses incurred in connection with the suit
or action including, without limitation, reasonable attorneys fees at trial, on
appeal and otherwise.
11.3. Required Notice of All Claims and Statute of Limitations.
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Company and Executive agree that the aggrieved party must give written notice of
any Claim to the other party within one year of the date the aggrieved party
first has knowledge of the event giving rise to the Claim. Failure to provide
such notice shall result in the Claim being void and deemed waived, even if
there is a federal or state statute of limitations which would have given more
time to pursue the Claim. The written notice shall identify and describe the
nature of all Claims asserted and the facts upon which such Claims are based.
11.4. Hearing or Mediation. Prior to any arbitration proceeding
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taking place pursuant to this Section, Company or Executive may elect to submit
the Claim to non-binding mediation before a mutually agreeable mediation
tribunal or mediator, in which event both parties and the mediator shall execute
a reasonable confidentiality agreement and abide by the procedures specified by
the mediation tribunal or mediator.
11.5. Arbitration Procedures. Any arbitration shall be conducted in
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accordance with the then-current Model Employment Arbitration Procedures of the
American Arbitration Association ("Model Rules"), through the United States
Arbitration and Mediation Service ("USA&MS"), before an arbitrator who is
licensed to practice law in the State of Oregon (the "Arbitrator"). Because
USA&MS shall be the arbitration service, where the Model Rules reference the
"American Arbitration Association," "USA&MS" shall be inserted instead. The
arbitration shall take place in or near Portland, Oregon.
(a) Selection of Arbitrator. The USA&MS shall give each party a
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list of 11 arbitrators drawn from its panel of labor-management dispute
arbitrators. Each party may strike all names on the list it deems
unacceptable. If only one common name remains on the lists of all parties,
that individual shall be designated as the Arbitrator. If more than one
common name remains on the lists of all parties, the parties shall strike
names alternately until only one remains. The party who did not initiate
the claim shall strike first. If no common name remains on the lists of
all parties, the USA&MS shall furnish an additional list or lists until an
Arbitrator is selected.
(b) Applicable Law. The Arbitrator shall apply the substantive
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law (and the law of remedies, if applicable) specified in this Agreement or
federal law, or both, as applicable to the Claim(s) asserted. The Oregon
Rules of Evidence shall apply. The Arbitrator, and not any federal, state,
or local court or agency, shall have exclusive authority to resolve any
dispute relating to the interpretation, applicability, enforceability or
formation of this Agreement, including but not limited to any assertion
that all or any part of this Agreement is void or voidable. The
arbitration shall be final and binding upon the parties, except as provided
in this Agreement.
(c) Authority. The Arbitrator shall have jurisdiction to hear
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and rule on pre-hearing disputes and is authorized to hold pre-hearing
conferences by telephone or in person as the Arbitrator deems necessary.
The Arbitrator shall have the authority to entertain a motion to dismiss
and/or a motion for summary judgment by any party and shall apply the
standards governing such motions under the Federal Rules of Civil
Procedure. The Arbitrator shall render an award and opinion in the form
typically rendered in labor arbitrations.
(d) Representation. Each party may be represented by an
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attorney or other representative selected by that party.
(e) Discovery. Each party shall have the right to take the
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deposition of one individual and any expert witness designated by the other
party. Each party also shall have the right to make requests for production
of documents to the other party. The subpoena right specified below shall
be applicable to discovery pursuant to this subsection (e). Additional
discovery may be had only where the Arbitrator selected pursuant to this
Agreement so orders, upon a showing of substantial needs. At least 30 days
before the arbitration proceeding, the parties shall exchange lists of
witnesses, including naming experts, and provide copies of all exhibits
intended to be used at the arbitration proceeding. Each party shall have
the right to subpoena witnesses and documents for such proceeding.
(f) Reporter. Either party, at its expense, may arrange for and
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pay the cost of a court reporter to provide a stenographic record of the
proceeding.
(g) Post-Proceeding Briefs. Either party, upon request at the
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close of hearing, shall be given leave to file a post-hearing brief. The
time for filing such a brief shall be set by the Arbitrator.
11.6. Enforcement. Either party may bring an action in any court of
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competent jurisdiction to compel arbitration under this Agreement and to enforce
an arbitration award. Except as otherwise provided in this Agreement, both the
Company and Executive agree that neither shall initiate or prosecute any lawsuit
or administrative action (other than for a non-covered claim) in any way related
to any Claim covered by the parties' agreement to arbitrate. A party opposing
enforcement of an award may not do so in an enforcement proceeding, but must
bring a separate action in any court of competent jurisdiction to set aside the
award, where the standard of review shall be the same as that applied by an
appellate court reviewing a decision of a trial court sitting without a jury.
11.7. Arbitration Fees and Costs. Company and Executive shall
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equally share the fees and costs of the Arbitrator. Each party shall deposit
funds or post other appropriate security for its share of the Arbitrator's fee,
in an amount and manner determined by the Arbitrator, at least ten (10) days
prior to the first day of the proceeding. Each party shall pay for its own
costs and attorneys fees, if any; provided, however, that the Arbitrator, in
that person's sole discretion, may award reasonable fees to the prevailing party
in the proceeding.
11.8. Waiver of Jury Trial. BY AGREEING TO SUBMIT A DISPUTE TO
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ARBITRATION, THE PARTIES HERETO UNDERSTAND THAT THEY WILL NOT ENJOY THE BENEFITS
OF A JURY TRIAL. ACCORDINGLY, THE PARTIES HERETO EXPRESSLY AGREE TO WAIVE THE
RIGHT TO A JURY TRIAL.
11.9. Benefit. EXECUTIVE ACKNOWLEDGES AND AGREES THAT ANY ONE OR
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MORE ENTITIES CONSTITUTING "COMPANY" UNDER THIS AGREEMENT SHALL BE ENTITLED TO
THE BENEFIT OF THE PROVISIONS OF THIS SECTION.
12. General Terms and Conditions. The parties acknowledge that the
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Company is engaged in transactions involving interstate commerce and that
Executive's consulting services involve such commerce. This Agreement shall
constitute the final and entire understanding of the parties relating to the
Executive's services as a consultant with the Company, and supersedes and
replaces all written and oral agreements heretofore made or existing by and
between the parties relating thereto, except as provided in Section 1.3 of this
Agreement. This Agreement shall be governed by and construed in accordance with
the laws of the State of Oregon, without regard to the conflicts of laws rules
thereof, and all disputes relating to this Agreement (which are not subject to
arbitration under Section 11) shall be tried before a state or federal court
sitting in Multnomah County, to the exclusion of all courts which might have
jurisdiction apart from this provision. This Agreement shall inure to the
benefit of any successors or assigns of the Company.
IN WITNESS HEREOF, the parties have executed this Separation and Consulting
Agreement as of the date below written to be effective on the Commencement Date
hereof.
EXECUTIVE ASSISTED LIVING CONCEPTS, INC., on
behalf of itself and its Affiliated Companies
/s/ James W. Cruckshank /s/ Keren Brown Wilson
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James W. Cruckshank Keren Brown Wilson
President Chief Executive Officer and
Date: March 3, 2000 Date: March 3, 2000