**Exhibit 10.1****EMPLOYMENT AGREEMENT**     This **EMPLOYMENT AGREEMENT**(“Agreement”), by and among **Steven M. Cavanaugh**, (“Employee”),**Heartland Employment Services, LLC**, an Ohio limited liability company (the “Company”), and **ManorCare, Inc.**, a Delaware corporation (“Manor Care”) is entered into as of May 6, 2006.**RECITALS**     A. The Company is a subsidiary of Manor Care and is the employer corporation for employeesproviding services for or on behalf of Manor Care and its direct and indirect subsidiaries (“ManorCare Subsidiaries”).     B. Manor Care and the Company have agreed that Employee will be employed by Company in theposition and at the base rate of pay set forth on Schedule I in accordance with the provisionshereof; Manor Care has agreed that Employee will be elected an officer of Manor Care as set forthon Schedule I.     C. The Company has further agreed to provide either directly or through a Manor CareSubsidiary severance benefits to Employee upon a termination of Employee’s employment resultingfrom certain specified events.     D. The Company has further agreed to provide certain employee benefits to Employee asspecified herein.     E. The Employee has agreed to be employed by Company in accordance with the provisions hereofincluding certain non-competition/non-solicitation obligations which apply during Employee’semployment and for a specified period thereafter.**EVENTS**     In consideration of the foregoing, and for other good and valuable consideration, the receiptand adequacy of which is hereby acknowledged, Employee, Manor Care and the Company hereby agree asfollows:          1. **Salary and Position**. Effective May 6, 2006, Company shall employ Employee in thejob and at the base rate of pay shown on Schedule I. Employee shall be entitled to participate inthe benefit programs referenced on Schedule II hereof as determined by the Chief Executive Officerof 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 anyspecified term and may be terminated by Employee or by the Company at any time for any reason, withor without cause.
 

 
          3. **Entire Agreement**. This Agreement and the agreements and understandings which havebeen or may be entered into pursuant to the benefit plans and commitments referenced in Schedule IIhereto constitute the complete agreement between and among Employee, Manor Care and the Companyregarding any and all aspects of Employee’s employment and supersede any and all prior written ororal agreements, understandings or commitments.          4. **Prohibition Against Amendment**. Employee’s base salary may be increased by theCompany at any time in its sole discretion. The benefit plans set forth on Schedule II may beimproved, reduced or terminated by the Company at any time in its sole discretion to the extentthat such actions apply to all officer-participants in such plans; provided, however, that novested or accrued benefit shall be adversely affected. All other terms set forth in this Agreementmay not be modified in any way except by a written agreement signed by Employee and by anauthorized representative of the Company which expressly states the intention of the parties tomodify the terms of this Agreement.          5. **Employee Representation Regarding Other Agreements**. Employee represents andwarrants to Company and Manor Care that his employment by Company and the fulfillment of hisobligations hereunder do not violate any other agreement under which Employee is currentlyobligated, or the parties to any such other agreements have entered into binding undertakings towaive or not enforce any such provisions. In the event this representation is not accurate, theprovisions 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 resignhis employment or to retire without the consent of the Company, no payments shall be required ormade 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 paymentsshall be required or made pursuant to this Paragraph 6. “Cause” shall mean Employee’s financialdishonesty, fraud in the performance of his duties, willful failure to perform assigned duties orthe commission of a felony.          (c) Upon the termination of Employee’s employment by the Company for any reason other thanCause or disability, the Company shall continue payment of Employee’s annual base salary, at therate then in effect on the date of such termination, for a period of two (2) years after such dateof termination. The Company shall give thirty (30) days written notice of any such terminationwhich notice shall specify the date of termination.          (d) Upon the termination of Employee’s employment as a result of the death of Employee, theCompany shall continue payment of Employee’s annual base salary, at the rate then in effect on thedate of such termination, for a period of two years after such date of termination;provided, however, that such payments shall be offset by any survivor benefits,excluding life
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insurance proceeds, received by Employee’s spouse or other designated beneficiaryunder the Company’s plans, programs and policies.          (e) Upon the termination of Employee’s employment as a result of his becoming unable toperform his duties due to a disability as established by the award of long-term disability benefitsunder the Company’s long-term disability plan, the Company may terminate Employee’s employment bygiving 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 thedate 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 benefitsreceived 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 thebenefit programs listed on Schedule II, as amended from time to time, in the circumstances of hisparticular termination.          7. **Non-Competition/Non-Solicitation**.          (a) Covenant Not to Compete. Employee covenants and agrees that during the period ofEmployee’s employment hereunder and for a period of two (2) years following the termination ofEmployee’s employment, including without limitation termination by the Company for cause or withoutcause, Employee shall not, in the United States of America, engage, directly or indirectly, whetheras principal or as agent, officer, director, employee, consultant, shareholder or otherwise, aloneor 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 orother entity engaged in providing skilled nursing, assisted living, home health, hospice orrehabilitation services or providing or attempting to provide any other product or service which isthe same as or similar to products or services sold or provided by the Company or any Manor CareSubsidiary within the two (2) years prior to termination of Employee’s employment hereunder.          (b) Non-Solicitation of Customers. Employee agrees that during his employment withthe Company he shall not, directly or indirectly, solicit the business of, or do business with, anycustomer or prospective customer of the Company or any Manor Care Subsidiary for any businesspurpose other than for the benefit of the Company or a Manor Care Subsidiary. Employee furtheragrees that for two (2) years following termination of his employment with the Company, includingwithout 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 prospectivecustomers of the Company or any Manor Care Subsidiary; provided, however, that this provision shallnot apply to soliciting to provide or providing any services which the Company or any Manor Caresubsidiary does not provide, or has not traditionally sought to provide.          (c) Non-Solicitation of Employees. Employee agrees that, during his employment withthe Company and for two (2) years following termination of Employee’s
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employment with the Company,including without limitation termination by the Company for cause or without cause, Employee shallnot, directly or indirectly, solicit or induce, or attempt to solicit orinduce, any employee of the Company to leave the employment of the Company for any reasonwhatsoever, 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 processwithout 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 toserve 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 abovewritten.       The Company:   Employee:       **Heartland Employment Services, LLC**                 Steven M. Cavanaugh       By:                    Its:                    **Manor Care, Inc.**           By:                    Its:             
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**SCHEDULE I**   Employee: Steven M. Cavanaugh Current Base Rate: $220,000 Job Title: Vice President and Chief Financial Officer
 

 
**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. Such other benefit plans and arrangements as the Company provides, from time to time, tosalaried employees generally participation in which is approved by the CEO