Exhibit 10.34
REGENT ASSISTED LIVING, INC.
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made effective the
1st day of November, 1999, by and between REGENT ASSISTED LIVING, INC., an
Oregon corporation (the "Company"), and DALE J. ZULAUF ("Executive").
RECITALS:
A. The Company is engaged in the business of developing and operating
assisted living residences for senior citizens (the "Business").
B. Executive possesses certain skills, expertise and contacts related
to the Business.
C. Because of those skills, expertise and contacts, the Company
desires to employ Executive, and Executive desires to accept employment with the
Company, on the terms and conditions set forth herein.
AGREEMENT:
NOW, THEREFORE, in consideration of the covenants and mutual
agreements set forth herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. Employment; Term. The Company hereby employs Executive to perform the
duties described herein, and Executive hereby accepts employment with the
Company, for a term commencing on the date hereof and expiring at the close of
business on October 31, 2004, unless earlier terminated in accordance with
Section 6 below.
2. Position and Duties.
2.1 Position. During the term of his employment Executive shall
serve as Chief Operating Officer of the Company. Executive shall make available
all of his business time, attention, skill, and efforts for performing services
for the Company, and shall devote as much of his business time, attention, skill
and efforts to the performance of such services as is required by the Company's
Board of Directors (the "Board of Directors"). Executive shall, at all times, be
subject to the authority of the Board of Directors.
2.2 General Terms of Employment. Executive shall be subject to the
general terms and conditions of employment applicable to employees of the
Company, as established by the Board of Directors from time to time, including,
without limitation, all conditions relating to compliance with federal and/or
state laws and other governmental rules and regulations issued thereunder as the
same may be in effect from time to time.
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3. Compensation.
3.1 Base Salary. As compensation for Executive's services under
this Agreement, the Company shall pay to Executive during the term of employment
an annual salary (the "Base Salary") of Two Hundred Thousand Dollars ($200,000),
subject to all applicable income tax withholding and other payroll taxes. The
Base Salary shall be payable in accordance with the Company's normal payroll
practices or on such other basis mutually agreed upon by the parties. The Board
of Directors (or the Compensation Committee of the board of Directors) may
adjust the Base Salary upwards, but not downwards, on an annual basis.
3.2 Annual Bonus. Executive shall be eligible to receive an annual
bonus to be determined and paid at the time and in the manner established
annually by the Board of Directors. Company will work in good faith with
Executive to determine a quantitative model for determining the amount of such
bonus to which Executive will be entitled.
3.3 Stock Options. Company shall grant Executive options to
purchase up to 78,000 shares of the Company's common stock. The options shall be
in accordance with the Company's standard plan in effect for other executive
officers of the Company. Walter C. Bowen, in his individual capacity, agrees to
recommend to the Board of Directors, and to vote in favor of, a resolution to
increase the number of shares subject to the Company's stock option plan.
Executive understands that the ability of the Company to increase the number of
shares subject to the plan is dependent upon the approval of Prudential Private
Equity Investors III, L.P. and a vote of the Company's shareholders. If the size
of the Company's Stock Option Plan is increased in this manner, the Company will
issue an additional option to purchase 22,000 more shares of the Company's
common stock and for purposes of vesting, the Company will give the options a
grant date of November 1, 1999.
3.4 Relocation Expenses. Company will reimburse Executive for all
reasonable costs associated with moving Executive, his family, and their
personal property to Portland, Oregon.
3.5 Housing Allowance. Company will reimburse Executive for his
housing expenses incurred to live in Portland for up to six months, at a monthly
rate not to exceed $1,500.
3.6 Agreement to Relocate. As a material inducement to Company,
Executive agrees to utilize his best efforts to relocate his primary residence
to Portland, Oregon by September 30, 2000. Company agrees that Executive may use
his current home in Franktown, Colorado as a base of operations for the interim
period to that date, provided that Executive will travel to Portland as directed
by the President or Chairman to attend to Company matters. Company will pay
Executive's long distance charges and reasonable incidental office supply
charges incurred to perform his duties from his home office in Franktown.
4. Benefits. During the term of his employment, Executive shall be
entitled to and shall receive three weeks paid vacation in addition to all other
benefits that are customarily provided by the Company to it employees generally,
subject to any eligibility requirements.
5. Reimbursement of Expenses. The Company shall pay or reimburse Executive
for all reasonable travel and other expenses incurred by Executive in performing
his obligations under this Agreement, provided that:
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5.1 Each such expenditure is incurred by Executive in accordance
with such policy guidelines as may be established by the Board of Directors from
time to time; and
5.2 Executive furnishes to the Company adequate records and other
documentary evidence required by federal and state statutes and regulations
issued by the appropriate taxing authorities for the substantiation of each such
expenditure.
6. Termination of Employment.
6.1 Termination of the Company for Cause. The Company may
terminate this Agreement and Executive's employment with the Company hereunder,
effective upon delivery of written notice of termination to Executive setting
forth the basis of such termination, for Cause, which shall be defined as any of
the following:
(a) Any misappropriation of funds or property of the Company
by Executive;
(b) The conviction of or plea of guilty or nolo contendere by
Executive of a felony or of any crime involving moral turpitude;
(c) Executive's engagement in illegal or immoral conduct
tending to place Executive or the Company, by association with
Executive, in disrepute;
(d) Indulgence in alcohol or drugs to an extent that renders
Executive generally unable or unfit to perform his duties
hereunder;
(e) Executive's gross dereliction of duty; or
(f) Any act or omission that constitutes a material breach by
Executive of his obligations under this Agreement.
On the effective date of termination, the Company shall pay to
Executive his Base Salary accrued through the date of termination. No annual
bonus for the fiscal year in which termination is effective or for any
subsequent year will be paid.
6.2 Termination by the Company without Cause. The Company may
terminate this Agreement and Executive's employment with the Company hereunder,
effective upon delivery of written notice of termination to Executive, at any
time without Cause, as defined above. Upon any such termination without Cause,
Executive shall be entitled to a cash payment from the Company equal to the
Executive's one year's Base Salary at the rate in effect on the date of
termination. The Company and Executive agree that Executive shall have the
responsibilities, duties and authority as are reasonably consistent with
Executive's position as the Chief Operating Officer of the Company, and that the
reduction of Executive's responsibilities, duties and authority materially below
such level, a transfer of Executive from the Company's principal executive
office, the physical move of the principal executive office to a location more
than 45 miles from its current location, or a material breach by the Company of
this Agreement or any stock option agreement with Executive, shall be deemed a
termination of Executive without Cause.
6.3 Termination for Death or Disability. Executive's obligations
and employment hereunder shall terminate immediately, without further notice or
action, upon either of the following events:
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(a) The death of Executive. In such event, the Company shall
pay to Executive's estate his Base Salary and any other rights
(including the annual bonus, if any) accrued to the date of death.
(b) Executive shall be unable to perform the normal duties of
his employment for a period of 90 days as a result of illness or
injury. In such event, the Company shall pay to Executive has Base
Salary for the 90-day period following the date active services
cease and any other rights (including the annual bonus, if any)
accrued to that date. Thereafter, Executive shall receive from the
Company only such disability income as may be received by the
Company from policies covering Executive, if any, and vested
benefits under any employee benefit plan in accordance with the
terms of that plan.
6.4 Termination by Executive. Executive may terminate his
employment with the Company hereunder at any time by providing 60 days' prior
written notice to the Company. On the effective date of termination, the Company
shall pay to Executive his Base Salary and any rights accrued through the date
of termination.
7. Restrictive Covenants.
Executive shall not, except on behalf of the Company, either
directly or indirectly, on his own account, or as an employee, consultant,
agent, partner, joint venturer, owner, officer, director or stockholder of any
other person, firm, partnership, corporation or other entity, or in any other
capacity, in any way:
7.1 During the term of his employment, within the United States of
America, including its possessions and territories, conduct, engage in or aid or
assist anyone in the conduct of a business which is substantially similar to or
directly competitive the Business, provided Executive may own an interest in any
congregate care or assisted living property approved by the Company's Board of
Directors (which approval shall not be unreasonably withheld), provided that
Executive shall hold any such interest for investment purposes only and shall
not take an active role in the management of any such properties and, further,
that such properties do not directly compete with the business of the Company;
7.2 During the term of his employment, solicit, divert, take away
or accept orders from, or attempt to solicit, divert, take away or accept orders
from, any person, firm, partnership, corporation or other entity, wherever
located, for whom the Company performed any services or to whom the Company sold
any product within the immediately preceding 12-month period.
7.3 During the term of his employment, solicit, attempt to
solicit, hire for employment or engage any person who was an employee,
independent contractor or agent employed by or engaged by the Company within the
immediately preceding 12-month period.
7.4 Use for himself or for any other person, firm, corporation,
partnership, association or other entity, or divulge or disclose in any manner
to any person, firm, corporation, partnership, association or other entity, the
identity of the Company's residents or other customers, methods of operation,
financial data, sources of supply, know-how, pricing information, records,
books, agreements, techniques, forms, procedures, systems, financial information
or other trade secrets or confidential or proprietary information used in or
relating to the Business (hereinafter referred to as the "Confidential
Information"). Notwithstanding anything to the contrary contained in this
Agreement, the restrictions on Executive's
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disclosure and use of the Confidential Information shall not apply to (i)
information, or techniques which are or become generally known to the public,
other than through disclosure (whether deliberate or inadvertent) by Executive
or (ii) disclosure of Confidential Information in judicial or administrative
proceedings to the extent Executive is legally compelled to disclose such
information, provided Executive shall have used his best efforts, and shall have
afforded the Company the opportunity, to obtain an appropriate protective order
or other assurance satisfactory to the Company or confidential treatment for the
information required to be so disclosed.
7.5 Executive hereby agrees that the periods of time, geographical
scope and other limitations provided for in this Section 7 above are the minimum
such terms necessary to protect the Company and its successors and assigns in
the use and employment of the goodwill respecting the Business and the Company.
Executive further agrees that damages cannot adequately compensate the Company
in the event of Executive's breach of any of the covenants contained in this
Section 7. Accordingly, Executive agrees that in the event of a breach of any of
such covenants, the Company shall be entitled to obtain injunctive relief
against Executive, without bond but upon due notice, in addition to such other
relief as may appertain at law or in equity. Obtainment of any such injunction
by the Company shall not be deemed an election of remedies or a waiver of any
right to assert any other remedies the Company may have at law or in equity. The
existence of any claim or cause of action of Executive against the Company, of
whatever nature, shall not constitute a defense to the Company's enforcement of
such restrictive covenants. To the extent any of such restrictive covenants are
deemed unenforceable by virtue of their scope in terms of geographical area,
length of time or otherwise, but may be made enforceable by limitations hereon,
Executive agrees that the same shall be enforceable to the fullest extent
permissible under the laws and public policies of the jurisdiction in which
enforcement is sought. The parties hereto hereby authorize any court of
competent jurisdiction to modify or reduce the scope of the restrictive
covenants to the extent necessary to make such restrictive covenants
enforceable.
7.6 Executive and the Company agree to indemnify, defend, and hold
the other harmless from and against any and all loss, cost, damages, liability
and expense (including, without limitation, reasonable attorneys' fees, court
costs and reasonable litigation expenses) which the other shall suffer, sustain
or incur as a result of, arising from or in connection with any breach of the
terms of this Agreement by the indemnifying party hereunder.
8. Miscellaneous Provisions.
8.1 Severability. If any provision of this Agreement is deemed by
any court of competent jurisdiction to be invalid or unenforceable for any
reason, the remaining terms and provisions hereof shall remain binding upon the
parties.
8.2 Notices. All notices and other communications required or
permitted hereunder shall be in writing; shall be delivered personally,
including by means of telecopy, or mailed by registered or certified mail,
postage prepaid and return receipt requested; shall be deemed given on the date
of personal delivery or on the date set forth on the return receipt; and shall
be delivered or mailed to the addresses or telecopy numbers set forth below or
to such other address as any party may from time to time direct:
If to the Regent Assisted Living, Inc.
Company, to: 121 S.W. Morrison Street, Suite 1000
Portland, OR 97204
Telecopy: (503) 274-4685
Attention: President
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Copy to: Regent Assisted Living, Inc.
121 S.W. Morrison Street, Suite 1000
Portland, OR 97204
Telecopy: (503) 274-4685
Attention: Chief Legal Officer
If to Dale J. Zulauf
Executive,
to: --------------------
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8.3 Benefit and Assignment. This Agreement shall be binding upon
and inure to the benefit of the Company and its successors and assigns. The
rights and obligations of Executive hereunder are personal to him and are not
subject to voluntary or involuntary alienation or transfer by him.
8.4 Waiver; Amendment. The provisions of this Agreement may be
waived or amended only by an instrument in writing signed by the party against
which enforcement of the amendment or waiver is sought. Any waiver of any term
or condition of this Agreement or any breach hereof shall not operate as a
waiver of any other such term, condition or breach, and no failure to enforce
any provision hereof shall operate as a waiver of such provision or of any other
provision hereof.
8.5 Attorneys' Fees. If suit or action is filed by either party to
enforce this Agreement or otherwise with respect to the subject matter of this
Agreement, the prevailing party shall be entitled to recover reasonable
attorneys' fees as fixed by the trial court and, if any appeal is taken from the
decision of the trial court, reasonable attorneys' fees as fixed by the
appellate court.
8.6 Headings. The section headings in this Agreement are for
convenience only and shall not control or affect the meaning or construction of
the provisions of this Agreement.
8.7 Entire Agreement. This Agreement sets for the entire
understanding of the parties with respect to the subject matter hereof and
supersedes all prior discussions, negotiations, understandings or written
agreements among the parties hereto relating to the subject matter contained
herein, and merges all prior and contemporaneous discussions among them. Without
limiting the foregoing, the parties agree that all prior written or oral
agreements between Executive and the Company, or any predecessor or affiliate of
the Company, regarding the terms of Executive's employment are terminated and
superseded by this Agreement.
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8.8 Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Oregon
(except for its choice-of-law provisions).
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first set forth above.
THE COMPANY: REGENT ASSISTED LIVING, INC.
By: /s/ Walter C. Bowen
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Walter C. Bowen, President
EXECUTIVE: /s/ Dale J. Zulauf
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Dale J. Zulauf
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