Exhibit 10.1
EMPLOYMENT AGREEMENT
     This EMPLOYMENT AGREEMENT (“Agreement”), by and among Richard A. Parr II,
(“Employee”), Heartland Employment Services, LLC, an Ohio limited liability
company (the “Company”), and Manor Care, Inc., a Delaware corporation (“Manor
Care”) is entered into as of May 1, 2006.
RECITALS
     A. The Company is a subsidiary of Manor Care and is the employer
corporation for employees providing services for or on behalf of Manor Care and
its direct and indirect subsidiaries (“Manor Care Subsidiaries”).
     B. Manor Care and the Company have agreed that Employee will be employed by
Company in the position and at the base rate of pay set forth on Schedule I in
accordance with the provisions hereof; Manor Care has agreed that Employee will
be elected an officer of Manor Care as set forth on Schedule I.
     C. The Company has further agreed to provide either directly or through a
Manor Care Subsidiary severance benefits to Employee upon a termination of
Employee’s employment resulting from certain specified events.
     D. The Company has further agreed to provide certain employee benefits to
Employee as specified herein.
     E. The Employee has agreed to be employed by Company in accordance with the
provisions hereof including certain non-competition/non-solicitation obligations
which apply during Employee’s employment and for a specified period thereafter.
EVENTS
     In consideration of the foregoing, and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged,
Employee, Manor Care and the Company hereby agree as follows:
          1. Salary and Position. Effective May 1, 2006, Company shall employ
Employee in the job and at the base rate of pay shown on Schedule I. Employee
shall be entitled to participate in the benefit programs referenced on
Schedule II hereof as determined by the Chief Executive Officer of the Company
and, to the extent required, approved by the Manor Care Board of Directors.
          2. At-Will Employment. Employee’s employment with the Company is not
for any specified term and may be terminated by Employee or by the Company at
any time for any reason, with or without cause.

 

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          3. Entire Agreement. This Agreement and the agreements and
understandings which have been or may be entered into pursuant to the benefit
plans and commitments referenced in Schedule II hereto constitute the complete
agreement between and among Employee, Manor Care and the Company regarding any
and all aspects of Employee’s employment and supersede any and all prior written
or oral agreements, understandings or commitments.
          4. Prohibition Against Amendment. Employee’s base salary may be
increased by the Company at any time in its sole discretion. The benefit plans
set forth on Schedule II may be improved, reduced or terminated by the Company
at any time in its sole discretion to the extent that such actions apply to all
officer-participants in such plans; provided, however, that no vested or accrued
benefit shall be adversely affected. All other terms set forth in this Agreement
may not be modified in any way except by a written agreement signed by Employee
and by an authorized representative of the Company which expressly states the
intention of the parties to modify the terms of this Agreement.
          5. Employee Representation Regarding Other Agreements. Employee
represents and warrants to Company and Manor Care that his employment by Company
and the fulfillment of his obligations hereunder do not violate any other
agreement under which Employee is currently obligated, or the parties to any
such other agreements have entered into binding undertakings to waive or not
enforce any such provisions. In the event this representation is not accurate,
the provisions of Paragraph 6 hereof shall be null and void.
          6. Severance Payment.
          (a) Upon the termination of Employee’s employment as a result of
Employee’s electing to resign his employment or to retire without the consent of
the Company, no payments shall be required or made pursuant to this Paragraph 6
except as provided in Paragraph 6(f).
          (b) Upon the termination of Employee’s employment by the Company for
“Cause”, no payments shall be required or made pursuant to this Paragraph 6.
“Cause” shall mean Employee’s financial dishonesty, fraud in the performance of
his duties, willful failure to perform assigned duties or the commission of a
felony.
          (c) Upon the termination of Employee’s employment by the Company for
any reason other than Cause or disability, the Company shall continue payment of
Employee’s annual base salary, at the rate then in effect on the date of such
termination, for a period of two (2) years after such date of termination. The
Company shall give thirty (30) days written notice of any such termination which
notice shall specify the date of termination.
          (d) Upon the termination of Employee’s employment as a result of the
death of Employee, the Company shall continue payment of Employee’s annual base
salary, at the rate then in effect on the date of such termination, for a period
of two years after such date of termination;

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provided, however, that such payments shall be offset by any survivor benefits,
excluding life insurance proceeds, received by Employee’s spouse or other
designated beneficiary under the Company’s plans, programs and policies.
          (e) Upon the termination of Employee’s employment as a result of his
becoming unable to perform his duties due to a disability as established by the
award of long-term disability benefits under the Company’s long-term disability
plan, the Company may terminate Employee’s employment by giving Employee thirty
(30) days written notice of its intention to terminate. In such event, Company
shall continue payment of Employee’s annual base salary, at the rate then in
effect on the date of such termination, for a period of two (2) years after such
date of termination; provided, however, that such payments shall be offset by
any disability benefits received by Employee, or his legal guardian, under the
Company’s plans, programs and policies.
          (f) Upon termination of Employee’s employment for any reason,
voluntarily or involuntarily, with or without Cause, Employee shall be entitled
to such rights as he otherwise has under the benefit programs listed on
Schedule II, as amended from time to time, in the circumstances of his
particular termination.
          7. Non-Competition/Non-Solicitation.
          (a) Covenant Not to Compete. Employee covenants and agrees that during
the period of Employee’s employment hereunder and for a period of two (2) years
following the termination of Employee’s employment, including without limitation
termination by the Company for cause or without cause, Employee shall not, in
the United States of America, engage, directly or indirectly, whether as
principal or as agent, officer, director, employee, consultant, shareholder or
otherwise, alone or in association with any other person, corporation or other
entity, in any Competing Business. For purposes of this Agreement, the term
“Competing Business” shall mean any person, corporation or other entity engaged
in providing skilled nursing, assisted living, home health, hospice or
rehabilitation services or providing or attempting to provide any other product
or service which is the same as or similar to products or services sold or
provided by the Company or any Manor Care Subsidiary within the two (2) years
prior to termination of Employee’s employment hereunder.
          (b) Non-Solicitation of Customers. Employee agrees that during his
employment with the Company he shall not, directly or indirectly, solicit the
business of, or do business with, any customer or prospective customer of the
Company or any Manor Care Subsidiary for any business purpose other than for the
benefit of the Company or a Manor Care Subsidiary. Employee further agrees that
for two (2) years following termination of his employment with the Company,
including without limitation termination by the Company for cause or without
cause, Employee shall not, directly or indirectly, solicit the business of, or
do business with, any customers or prospective customers of the Company or any
Manor Care Subsidiary; provided, however, that this provision shall not apply to
soliciting to provide or providing any services which the Company or any Manor
Care subsidiary does not provide, or has not traditionally sought to provide.

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          (c) Non-Solicitation of Employees. Employee agrees that, during his
employment with the Company and for two (2) years following termination of
Employee’s employment with the Company, including without limitation termination
by the Company for cause or without cause, Employee shall not, directly or
indirectly, solicit or induce, or attempt to solicit or induce, any employee of
the Company to leave the employment of the Company for any reason whatsoever, or
hire any employee of the Company except into the employment of the Company;
provided, that the foregoing shall not apply to any employee hired through a
general hiring process without any direct or indirect involvement by Employee in
recruiting such person for hire.
          8. Headings. Section headings are provided herein for convenience only
and are not to serve as a basis for interpretation or construction of the Plan.
     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.

              The Company:       Employee:
 
            Heartland Employment Services, LLC       /s/ Richard A. Parr II
 
           
 
          Richard A. Parr II
 
           
By:
  /s/ Paul A. Ormond        
 
             
Its:
  President        
 
            Manor Care, Inc.        
 
           
By:
  /s/ Paul A. Ormond        
 
             
Its:
  President        

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SCHEDULE I

     
Employee:
  Richard A. Parr II
 
   
Current Base Rate:
  $300,000
 
   
Job Title:
  Vice President, General Counsel and Secretary

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SCHEDULE II

1.   Annual Incentive Plan   2.   Equity Incentive Plan   3.   Senior Management
Savings Plan for Corporate Officers   4.   Senior Executive Life Insurance Plan
  5.   Relocation assistance pursuant to Company policy as modified and approved
by the Chief Executive Officer (CEO) of the Company.   6.   Such other benefit
plans and arrangements as the Company provides, from time to time, to salaried
employees generally participation in which is approved by the CEO