EXHIBIT 10.19
VENCOR, INCORPORATED
NON-EMPLOYEE DIRECTORS DEFERRED
COMPENSATION PLAN
ARTICLE 1
PURPOSES
1.1 PURPOSES. The purposes of this Non-Employee Directors Deferred
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Compensation Plan ("Plan") of Vencor, Incorporated, a Delaware corporation
("Company"), are to encourage the Company's non-employee directors to invest in
the future of the Company through ownership of an interest in the Company and to
provide flexibility to the Company in attracting and retaining directors.
ARTICLE 2
ELIGIBILITY AND PARTICIPATION
2.1 ELIGIBILITY. Any director of the Company who is not an employee of the
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Company or a subsidiary of the Company ("Director") is eligible to participate
in the Plan.
2.2 PARTICIPATION. A Director shall become a participant in the Plan
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("Participant") by filing an Election Form in accordance with the provisions of
Section 5.1.a. A Participant shall remain a Participant until such time as the
Participant has received all payments to which the Participant is entitled under
the terms of the Plan.
ARTICLE 3
SHARES SUBJECT TO PLAN
3.1 NUMBER OF SHARES. Subject to adjustment as provided in Section 3.2,
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the number of shares of the Company's common stock, par value $0.25 per share
("Common Stock"), reserved for issuance under the Plan is 30,000 shares. Any
Common Stock issued under the Plan may consist, in whole or in part, of
authorized and unissued shares or treasury shares.
3.2 ADJUSTMENTS. In the event of a merger, reorganization, consolidation,
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recapitalization, reclassification, split-up, spin-off, separation, liquidation,
stock dividend, stock split, reverse stock split, share combination, share
exchange or other change in the corporate structure of the Company affecting the
Common Stock, the Committee (as hereinafter defined) shall substitute or adjust
the total number and class of stock or securities which may be issued under the
Plan and which are credited to a Participant's
Deferred Stock Account as it determines to be appropriate and equitable to
prevent dilution or enlargement of the rights of Participants.
ARTICLE 4
ADMINISTRATION
4.1 THE COMMITTEE. The Plan shall be administered by the Executive
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Compensation Committee of the Board of Directors of the Company ("Board"), or by
any other committee ("Committee") appointed by the Board consisting of two or
more directors of the Company who are "disinterested persons" within the meaning
of Rule 16b-3 (or any successor provision) promulgated under the Securities
Exchange Act of 1934, as amended ("Exchange Act").
4.2 AUTHORITY OF THE COMMITTEE. The Committee shall have sole discretion
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to make all determinations which may be necessary or advisable for the
administration of the Plan. To the extent permitted by law and Rule 16b-3
promulgated under the Exchange Act, the Committee may delegate its authority as
identified hereunder. All determinations and decisions made by the Committee
pursuant to the provisions of the Plan, and all related orders or resolutions of
the Board, shall be final, conclusive and binding upon all persons, including
the Company, Participants and their estates and beneficiaries.
4.3 SECTION 16 COMPLIANCE. It is the intention of the Company that the
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Plan and the administration of the Plan comply in all respects with Section
16(b) of the Exchange Act and the rules and regulations promulgated thereunder.
If any Plan provision, or any aspect of the administration of the Plan, is found
not to be in compliance with Section 16(b) of the Exchange Act, the provision or
administration shall be deemed null and void, and in all events the Plan shall
be construed in favor of its meeting the requirements of Rule 16b-3 promulgated
under the Exchange Act.
ARTICLE 5
DEFERRAL ELECTION
5.1 MAKING OF ELECTION.
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a. Each Director may elect in writing, in the manner and on the form
("Election Form") prescribed by the Committee, to defer payment of all, but not
less than all, of the fees which would otherwise be paid to such Director by the
Company for services on the Board and committees thereof. An election shall be
effective with respect to amounts which would otherwise be paid to the
Participant beginning on or after the first day of the calendar quarter
following the making of the election; provided, however, that in the case of
those persons who are Directors on the date hereof, the initial election shall
become
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effective as of July 1, 1993. Once an election has been made, it shall remain in
effect with respect to all future amounts which would otherwise be paid to the
Participant as a Director until changed by the filing of a new election in the
manner provided in Section 5.1.b.
b. In the case of those persons who are Directors on the date hereof,
the initial election, if any, to participate in the Plan shall be made by April
30, 1993. In the case of Directors elected or reelected at an annual meeting of
the Company, an election or change in an existing election may only be made
within 30 days following the annual meeting. In the case of a Director elected
At other than an annual meeting, the initial election to participate in the Plan
may only be made within 30 days following the Director's election to the Board.
At the time of making any such election or change in an existing election, the
Participant shall further elect, in accordance with procedures adopted by the
Committee, (i) to have either 100% or 50% of the amount of such deferred fees be
deemed invested in Common Stock ("Share Election"), or (ii) to have either 100%
or 50% of such deferred fees deemed invested with interest ("Cash Election");
provided, however, that in no event shall a Share Election be effective until
six months after the date of the Share Election, with the result that during
such six-month period, the Participant shall be deemed to have made a Cash
Election .
5.2 PARTICIPANT ACCOUNT. A Participant Account shall be established for
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each Participant. Deferred compensation will be credited to the Participant's
Participant Account as of the date such compensation would otherwise be payable
to the Participant. A Participant Account shall include a Deferred Cash
Account, if a Cash Election has been made, and/or a Deferred Stock Account, if a
Share Election has been made.
5.3 DEFERRED CASH ACCOUNT. Each Deferred Cash Account shall be credited
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with the amounts deferred on behalf of a Participant plus annual interest
thereon as provided in Section 7.1.
5.4 DEFERRED STOCK ACCOUNT. Each Deferred Stock Account shall be credited
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with 110% of the amounts deferred to the Deferred Stock Account on behalf of a
Participant. Deferred Stock Accounts shall also be credited as of the payment
date for dividends on Common Stock in an amount equal to the dividends
attributable to the number of shares of Common Stock credited to the
Participant's Deferred Stock Account as of the record date set by the Board for
the payment of dividends (the amounts referred to in the first two sentences of
this Section 5.4 are hereinafter referred to as the "Cash Credits"). As of the
last day of March, June, September and December of each year, there shall be
credited to a Participant's Deferred Stock Account a number of shares of Common
Stock equal to that whole number obtained by dividing (i) the amount of Cash
Credits in the Deferred Stock Account as of such date, by (ii) the fair market
value of the Common Stock (determined as provided in Section 6.1) on such date.
Any amount of the Deferred Stock Account in excess of the number of shares of
Common Stock credited to the Deferred Stock Account shall be treated as a Cash
Credit and held in the Deferred Stock Account until the end of the following
quarterly crediting date.
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ARTICLE 6
FAIR MARKET VALUE
6.1 FAIR MARKET VALUE. For purposes of this Plan, the fair market value
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of the Common Stock on any date shall be (i) if the Common Stock is listed on a
national or regional exchange, or on the NASDAQ National Market System or a
comparable market, the closing price of the Common Stock on such date, or (ii)
if (i) above does not apply, the value determined by the Committee .
ARTICLE 7
INTEREST
7.1 INTEREST ON DEFERRED CASH ACCOUNT. Interest will be credited to each
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Deferred Cash Account at the announced prime rate of First National Bank of
Louisville as the same shall exist from time to time, changing with each change
in such announced prime rate. This assumed interest shall be compounded annually
and treated as earned from the date deferred compensation is credited to the
Deferred Cash Account to the date of withdrawal.
ARTICLE 8
PAYMENT OF DEFERRED AMOUNTS
8.1 LIMITATION ON PAYMENT OF DEFERRED AMOUNTS. No payment may be made from
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any Participant Account except as provided in this Article 8.
8.2 TIME FOR PAYMENT OF DEFERRED AMOUNTS.
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a. Payment of the amount in a Participant Account shall be made upon
the earlier to occur of (i) 60 days following the date the Participant ceases
to be a Director, (ii) the date selected by the Participant at the time of
making a Cash Election or Share Election (which date may be different for the
Cash Election and the Stock Election) or (iii) 60 days following a Change in
Control (as defined in Section 8.2.b). Payment shall be made in the form of a
lump sum, with payment from a Deferred Cash Account made in cash, and payment
from a Deferred Stock Account made in Common Stock (except for any Cash Credits
remaining in the Participant's Deferred Stock Account, which shall be paid in
cash).
b. For purposes of the Plan, a Change in Control shall occur upon (i)
the acquisition by any person after the date hereof of beneficial ownership of
50% or more of the voting power of the Company's outstanding voting stock, (ii)
five or more of the current members of the Board ceasing to be members of the
Board unless any replacement director was elected by a vote of either at least
75% of the remaining directors, or of at least 75 %
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of the shares entitled to vote on such replacement, or (iii) approval by the
stockholders of the Company of (a) a merger or consolidation of the Company with
another corporation if the stockholders of the Company immediately before such
vote will not, as a result of such merger or consolidation, own more than 50% of
the voting stock of the corporation resulting from such merger or consolidation,
or (b) a complete liquidation of the Company or sale of all, or substantially
all, of the assets of the Company. Notwithstanding the foregoing, a Change in
Control shall not occur solely because 50% or more of the voting stock of the
Company is acquired by (i) a trust which is part of an employee benefit plan
maintained by the Company or its subsidiaries, or (ii) a corporation which,
immediately following such acquisition, is owned directly or indirectly by the
stockholders of the Company in the same proportion as their ownership of stock
in the Company immediately prior to such acquisition.
ARTICLE 9
MISCELLANEOUS
9.1 ASSIGNABILITY. No right to receive payments hereunder shall be
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transferable or assignable by a Participant except by will or by the laws of
descent and distribution.
9.2 AMENDMENT OR TERMINATION. The Plan may be amended, modified or
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terminated by the Board at any time or from time to time. Notwithstanding the
foregoing, without the approval of stockholders of the Company (as may be
required by Section 16 of the Exchange Act and the rules promulgated thereunder,
any national securities exchange or system on which the Common Stock is then
listed or reported or a regulatory body having jurisdiction with respect
hereto), no such amendment, modification or termination may (i) materially
increase the benefits accruing to Participants under the Plan, (ii) materially
increase the total number of shares of Common Stock which may be issued under
the Plan, except as provided in Section 3.2 or (iii) materially modify the
eligibility requirements for participation in the Plan. No amendment,
modification or termination shall, without the consent of a Participant,
adversely affect such Participant's existing rights under the Plan.
9.3 FUTURE DIRECTOR TERMS. Nothing in the Plan, nor any action taken under
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the Plan, shall be construed as giving any Participant a right to continue as a
Director or require the Company to nominate or cause the nomination of a
Participant for a future term as a Director .
9.4 PARTICIPANT'S RIGHTS UNSECURED. The right of any Participant to
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receive payment of deferred amounts under the provisions of the Plan shall be an
unsecured claim against the general assets of the Company. The maintenance of
individual Participant Accounts is for bookkeeping purposes only. The Company is
not obligated to acquire or set aside any particular assets for the discharge of
its obligations, nor shall any Participant have any property rights in any
particular assets held by the Company, whether or not held for the purpose of
funding the Company's obligations hereunder.
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9.5 GOVERNING LAW. To the extent not preempted by Federal law, this Plan
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shall be governed by, and construed in accordance with, the laws of the State of
Delaware without regard to its conflict of laws rules.
IN WITNESS WHEREOF, the Company has caused the Plan to be executed by the
Board this 16th day of March, 1993.
VENCOR, INCORPORATED
/s/ W. Bruce Lunsford
By ------------------------------------
W. Bruce Lunsford, Chairman of the
Board
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