Vice President of Finance Employment Agreement

Exhibit 10.14


EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT ("Employment Agreement") is dated this 16th day of February, 2001, between RES-CARE, INC., a Kentucky corporation (the "Company"), and L. BRYAN SHAUL (the "Employee").


RECITALS:


WHEREAS, the Company has a need for an individual to provide services to the Company as Executive Vice President of Finance and Administration/Chief Financial Officer;


WHEREAS, the Employee has substantial experience in accounting and financial matters in the health care field and involving publicly-held companies; and


WHEREAS, the Company and the Employee have reached agreement on the terms and conditions under which Employee will perform services for the Company.


AGREEMENT:


NOW, THEREFORE, in consideration of the premises and the mutual agreements set forth herein, the parties agree as follows:


1. EMPLOYMENT AND TERM. The Company hereby employs the Employee, and the Employee accepts such employment, upon the terms and conditions herein set forth for an initial term commencing effective March 19, 2001 (the "Commencement Date"), and ending on December 31, 2003, subject to earlier termination only in accordance with the express provisions of this Employment Agreement ("Initial Term"). This Employment Agreement shall be automatically extended on a year-to-year basis (January 1 through December 31 of each successive year), unless sooner terminated in accordance with the express provisions of this Employment Agreement ("Additional Terms"), upon the expiration of the Initial Term or any Additional Term, unless prior to the commencement of a sixty (60) day period expiring at the end of such Initial Term or any Additional Term, the Company or the Employee shall have given written notice to the other stating that the term of this Employment Agreement shall not be extended. For purposes of this Employment Agreement, the term "Term" shall mean the Initial Term plus all Additional Terms.


2. DUTIES.


(a) EMPLOYMENT AS EXECUTIVE VICE PRESIDENT OF FINANCE AND
ADMINISTRATION/CHIEF FINANCIAL OFFICER. During the Term, the Employee
shall serve as the Executive Vice President of Finance and
Administration/Chief Financial Officer of the Company. The Employee
shall, subject to the supervision and control of the Chairman,
President and Chief Executive Officer of the Company ("Chairman") and
the Board of Directors of the Company (the "Board") have responsibility
for and oversight of the corporate financial functions of the Company
and its subsidiaries, including the following: (i) treasury and cash
management; (ii) fixed asset management; (iii) reimbursement; (iv) tax;
(v) audit; (vi) financial reporting to the Securities and Exchange
Commission;


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(vii) risk management; (viii) corporate payroll, accounts payable and
consolidation of financial statements; (ix) budgeting and strategic
planning; and (x) information technology. The Employee shall also
perform such other duties and exercise such powers over and with regard
to the business of the Company as may be prescribed from time to time
by the Chairman or the Board, including, without limitation, serving as
an officer or director of one or more subsidiaries or affiliates of the
Company, if elected to such positions, without any additional salary or
other compensation.


(b) TIME AND EFFORT. The Employee shall devote his best
efforts and all of his business time, energies and talents exclusively
to the business of the Company and to no other business during the Term
of this Employment Agreement; provided, however, that subject to the
restrictions in Section 7 hereof, the Employee may (i) invest his
personal assets in such form or manner as will not require his services
in the operation of the affairs of the entities in which such
investments are made and (ii) subject to satisfactory performance of
the duties described in Section 2(a) hereof, devote such time as may be
reasonably required for him to continue to maintain his current level
of participation in various civic and charitable activities.


(c) COMPLIANCE CERTIFICATE. Not less frequently than annually
and upon the termination of the Employee's employment hereunder for any
reason other than Employee's death, the Employee shall execute and
deliver to the Chairman and/or any other authorized officer designated
by the Company a certificate of the Employee's level of compliance with
applicable laws, regulations and Company policies regarding the
provision of services to clients and billings to its paying agencies (a
"Compliance Certificate"). Each such Compliance Certificate requested
by the Company shall be completed and delivered by the Employee to the
officer of the Company requesting the same within two (2) days after
the date of such request.


3. COMPENSATION AND BENEFITS.


(a) BASE SALARY. The Company shall pay to the Employee during
the Term an annual salary (the "Base Salary"), which initially shall be
equal to $200,000. The Base Salary shall be due and payable in
substantially equal bi-weekly installments or in such other
installments as may be necessary to comport with the Company's normal
pay periods for all employees.


Provided that this Employment Agreement or Employee's
employment hereunder shall not have been terminated for any reason, the
Base Salary shall be increased, effective as of January 1, 2002 by the
greater of (w) four and 167/1000 percent or (x) the percentage by which
the Consumer Price Index for all Urban Consumers (CPI-U), All-Items,
1982-1984=100, as published by the Bureau of Labor Statistics (the
"CPI"), established for the month of December 2001 exceeds the CPI
published for the month of February 2001, and shall be increased the
first day of each January, commencing January 1, 2003, by the greater
of (y) five percent (5%) or (z) the percentage by which the CPI
established for the month of December immediately preceding the date on
which the adjustment is to be made exceeds the CPI published for the
month of December of the immediately preceding year. If the Bureau of
Labor Statistics suspends or terminates its


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publication of the CPI, the parties agree that a reasonably comparable
price index shall be substituted for the CPI.


(b) INCENTIVE PROGRAM. During the Term, the Employee shall be
eligible for incentive compensation in accordance with a written
incentive program mutually established by the Chairman and the Employee
on an annual basis (the "Incentive Program"). The Incentive Program
shall provide that sixty-five percent (65%) of the maximum incentive
that may be earned by the Employee shall be based on compliance goals
mutually established by the Chairman and the Employee and thirty-five
percent (35%) of the maximum incentive that may be earned by the
Employee shall be based on the financial performance of the Company and
its subsidiaries as a whole. All incentive payments under the Incentive
Program shall be determined quarterly, and shall be calculated by
reference to the incentive percentage earned by the Employee multiplied
by the Base Salary actually paid to the Employee for the calendar
quarter for which the incentive is determined. The maximum percentage
of the Employee's Base Salary that the Employee may earn under the
Incentive Program shall be forty percent (40%) of the Base Salary
actually paid to the Employee for the calendar quarter for which the
incentive is determined. Any quarterly incentive earned by the Employee
for any calendar quarter shall be paid by the Company to the Employee
not later than sixty (60) days after the end of such calendar quarter.
Any amounts earned by the Employee under the Incentive Program shall be
hereinafter referred to as the "Performance Incentive."


(c) SPECIAL INCENTIVE BONUS. Provided that this Employment
Agreement or Employee's employment hereunder shall not have been
terminated for any reason during the period six (6) months after the
Commencement Date, Employee shall be eligible for a special incentive
bonus of up to $7,500 (the "Incentive Bonus"), based upon goals
mutually agreeable to the Chairman and Employee, which Incentive Bonus
shall be paid to Employee on the date that is six (6) months after the
Commencement Date.


(d) PARTICIPATION IN BENEFIT PLANS. During the Term, Employee
shall be entitled to participate in all employee benefit plans and
programs (including but not limited to vacation, sick and other time
off policies, retirement and profit sharing plans, health insurance,
etc.) provided by the Company under which the Employee is eligible in
accordance with the terms of such plans and programs, subject to any
applicable waiting and/or vesting periods, except that the Employee
shall be eligible to participate in the Company's group life insurance
program effective as of the Commencement Date, without regard to any
waiting period applicable thereto. The Company reserves the right to
amend, modify or terminate in their entirety any of such programs and
plans. The Company shall reimburse the Employee for the amount paid by
him for health insurance premiums for Cobra coverage under his former
employer's health insurance plan for the first three (3) months of the
Initial Term. The Employee shall submit requests for such reimbursement
monthly.


(e) STOCK OPTION GRANT. As an inducement for the execution of
this Employment Agreement by the Employee, on the Commencement Date,
the Employee shall be granted options to purchase 35,000 shares of
Company common stock. Such stock options shall be granted pursuant to
and, to the extent not expressly inconsistent herewith, governed by the
Company stock option plan that is applicable to its managerial


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employees (the "Stock Plan"). Twenty percent (20%) of such stock
options shall vest and be exercisable on the Commencement Date.
Provided the Employee shall continue to be employed hereunder, twenty
percent (20%) of such stock options shall vest and be exercisable on
each of the next four (4) anniversaries of the Commencement Date (with
such number of shares to be adjusted in accordance with the terms of
the Stock Plan for stock splits, stock dividends, recapitalizations and
the like). Any stock options that shall not be vested at the effective
date of termination of the Employee's employment hereunder shall expire
and any vested options shall expire in accordance with the terms of the
Stock Plan. Such options shall have an exercise price based upon the
closing sale price of Company common stock as reported on the Nasdaq
National Market on the Commencement Date.


(f) OUT-OF-POCKET EXPENSES. The Company shall promptly pay the
ordinary, necessary and reasonable expenses incurred by the Employee in
the performance of the Employee's duties hereunder (or if such expenses
are paid directly by the Employee shall promptly reimburse him for such
payment), consistent with the reimbursement policies adopted by the
Company from time to time and subject to the prior written approval by
the Chairman.


(g) WITHHOLDING OF TAXES; INCOME TAX TREATMENT. If, upon the
payment of any compensation or benefit to the Employee under this
Employment Agreement (including, without limitation, in connection with
the exercise of any option), the Company determines in its discretion
that it is required to withhold or provide for the payment in any
manner of taxes, including but not limited to, federal income or social
security taxes, state income taxes or local income taxes, the Employee
agrees that the Company may satisfy such requirement by:


(i) withholding an amount necessary to satisfy such
withholding requirement from the Employee's compensation or
benefit; or


(ii) conditioning the payment ...