December 18, Ella Ferris, RN, MBA St. Michael s Hospital 30 Bond Street Toronto, Ontario. Dear Ella,
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- Cuthbert Walker
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1 December 18, 2012, RN, MBA St. Michael s Hospital 30 Bond Street Toronto, Ontario Dear Ella, I am pleased to offer you the position of Executive Vice President, Programs, Chief Nursing Executive and Chief Health Disciplines Executive effective November 5, 2012, reporting to me. Per our discussion, my decision to reorganize the Executive organizational structure has resulted in creating an Executive role taking on greater scope within Health Disciplines and our Pharmacy practice. The change in my approach to our organizational structure supports our focus on quality and operational efficiency. The annual salary for this role will be $322,500. In addition the Hospital will support Professional Activities and Consulting to a maximum of 15 working days per year. These will be subject to periodic review between you and the President. All other terms and conditions from your previous employment contract as Executive Vice President and Chief Nursing Executive dated December 21, 2011 will remain in place and will serve as an addendum to this offer of employment. Ella, I look forward to working with you on the many challenges and opportunities at St. Michael s together. Sincerely, (Signed copy on file) Robert Howard M.D. CEO and President St. Michael s Hospital Date
2 December 1, 2011 PERSONAL AND CONFIDENTIAL Ms. Helen (Ella) Ferris St. Michael s Hospital 30 Bond Street Toronto, Ontario M5B 1W8 Dear Ella: Re: Executive Vice-President, Programs and Chief Nursing Executive - Terms of Employment under Broader Public Sector Directive Guidelines I am pleased to revise your employment contract in your position as Executive Vice President, Programs and Chief Nursing Executive at St. Michael's Hospital under the guidelines of the Broader Public Service Directive. Please note that this contract replaces any previous contracts that will now cease to be of any further cause or effect. This change has been approved by the Board of Directors in accordance with the following terms: 1. Position Your position will be that of Executive Vice-President, Programs and Chief Nursing Executive at the Hospital. You will report directly to the President and Chief Executive Officer (the President ). Annual goals and objectives will be established by yourself and the President. There will be an annual performance review based upon the fiscal year. 2. Effective Date Your appointment will be effective as of March 27, 2011 and will be for a five-year term ending March 26, I agree that at least six (6) months prior to the end of the term of this Agreement, you and I will meet to discuss whether this Agreement will be extended. 3. Hours of Work It is anticipated that you will spend five days per week performing the duties of Executive Vice President, Programs and Chief Nursing Executive of the Hospital.
3 2 4. Compensation and Benefits (a) (b) (c) (d) Base Salary - As Executive Vice-President, Programs and Chief Nursing Executive at the Hospital your annual base salary will be Three Hundred and Five Thousand Dollars ($305,000.00) per annum ( Base Salary ). This amount will be reviewed annually and adjusted in accordance with overall executive compensation changes. On behalf of the Hospital, I agree that on or before February 1, 2012, I will meet with you for the purpose of discussing and reviewing your Base Salary and that any consequential adjustment to be made to your Base Salary will take effect as of April 1, Year-End Base Supplement In addition, you will receive an annual lump sum payment equal to fifteen percent (15%) of your Base Salary, payable at the end of June in each year of the Term as additional compensation for performing the duties and responsibilities of Executive Vice-President, Programs and Chief Nursing Executive. Variable Pay You will also be eligible to receive performance-oriented variable pay with a target payout rate of Five Percent (5%) of the Base Salary, on an annual basis, payable at or about the end of June in each year, following the completion of your annual performance review with the President ( Variable Pay ). The amount of Variable Pay will be based on your performance in the previous year. Please note that the Variable Pay is not an entitlement to additional compensation but is rather payable by the Hospital for high levels of performance and achievement of challenging objectives, based on measures of such success. Executive Benefits The Hospital will provide you with all executive benefits generally available to senior executives at the Hospital, which executive benefits are set out in the attached Schedule "A". In addition, you will participate in the SMH pension plan and the Supplemental Pension Plan, as described in Schedule "B". You will have access to one hospital parking space. On behalf of the Hospital, I agree that the Hospital will review executive benefits to determine if other options are available in lieu of the current benefits package and whether such options may be made available as of April 1, 2012 to be implemented by way of a letter of amendment to this Agreement. (e) Vacation You will be entitled to six (6) weeks vacation in each year of the Term of this Agreement, to be taken at times mutually convenient to you and the President of the Hospital.
4 3 (f) Educational Support The Hospital will pay the cost of your attendance on a reasonable basis at appropriate educational forums in order to advance your executive education, provided prior approval is obtained from the President. 5. Office Space The Hospital will provide you with suitable space for an office commensurate with the responsibilities of the Executive Vice-President, Programs and Chief Nursing Executive at the Hospital. In addition, annual operating costs for the office will be paid by the Hospital. The operating costs will be determined between you and the President. 6. Termination (a) (b) Voluntary Termination - If you wish to resign from your position as Executive Vice President, Programs and Chief Nursing Executive at the Hospital, you will provide three (3) months written notice to the President. Termination for Cause The Hospital may terminate your employment at any time for cause without payment of any compensation either by way of anticipated earnings or damages of any kind. (c) Termination without Cause The Hospital may terminate your employment at any time without cause and, in this event, would provide you with the following severance package: (i) (ii) You will receive all earned but unpaid Base Salary up to and including the date of the termination of your employment. You will receive payment for any unused vacation up to and including the date of termination of your employment, up to a maximum of one (1) year s vacation entitlement. You will be required to track and account for vacation taken during the term of this Agreement in order to give effect to this clause. (iii) In the event of termination, the Hospital will pay for outplacement counseling for you at a firm of your choosing up to the amount of Twenty- Five Thousand Dollars ($25,000.00). (iv) If the Hospital terminates your employment without cause, the Hospital will pay to you on your regular pay days an amount equivalent to your Base Salary plus Year-End Base Supplement and Variable Pay for a period of thirty (30) months following such termination or until you have obtained alternative employment or have otherwise been able to mitigate your losses arising from the termination of your employment, whichever is
5 4 soonest. These amounts shall all be prorated as necessary for the sixmonth period after the first twenty-four months of salary continuance. The Variable Pay under section 4(c) of this Agreement will be calculated based on the average above of Variable Pay received in the two years of service prior to termination, prorated as necessary for the six-month period after the first twenty-four months of salary continuance. For the purposes of this section, alternative employment shall include fulltime, part-time or self-employment (such as consulting). If you obtain alternative employment yielding income up to 74% of your Base Salary at termination, such income shall be deducted from any salary continuance payments made to you by the Hospital. The Hospital will consider you to have mitigated your losses if you obtain alternative employment that provides you with employment income that is equal to or greater than seventy-five percent (75%) of your Base Salary at the time of termination. (v) (vi) (vii) If you obtain alternative employment or otherwise mitigate any losses arising from the termination of your employment during the thirty months following termination, payments referred to in clause (iv) above shall cease and the Hospital will pay you a lump sum equivalent to fifty percent (50%) of the balance of the payments that would have been made to you pursuant to clause (iv) above. It is a condition of this severance package that you agree to advise the President if you do obtain alternative employment or otherwise mitigate any losses arising from your termination within the said period following your termination. In the alternative to clauses (iv) and (v) above, and at your discretion, the Hospital will pay you a lump sum amount equal to twenty-four (24) months of your Base Salary and Year-End Base Supplement, less regular statutory deductions. If the Hospital terminates your employment without cause, and if you choose to exercise the option outlined in clauses (iv) and (v) above, the Hospital will continue to provide the following benefits as permitted by the terms of the applicable benefit plan for a period of thirty (30) months from the date of termination or until you obtain alternative employment: i. Life Insurance ii. Accidental Death and Dismemberment iii. Extended Health Care iv. Dental Coverage v. Executive Top-Up vi. Association Membership
6 5 (viii) The amount of your employee contributions to the above-noted benefit plans will be deducted from any payments made to you as outlined above. (ix) (x) (xi) (xii) If you choose to exercise the option outlined under clause (vi) above, a lump sum payment in the amount of the value of the above-named benefits for a twenty-four (24) month period will be made to you, less all required statutory deductions. Your coverage under the Hospital s short-term and long-term disability plans will continue for the notice period set out in the Ontario Employment Standards Act following the termination of your employment and will cease thereafter. If the Hospital terminates your employment without cause, the Hospital will either continue to pay you an amount equivalent to your car allowance for the period(s) outlined in clauses (iv) and (v) above, or should you exercise the option outlined in clause (vi), will pay you a lump sum amount equivalent to your car allowance for twenty-four months. Any amounts paid will be subject to required statutory deductions and are deemed to include all statutory termination pay and severance pay owing to you under the Ontario Employment Standards Act. 6. Legal Advice The Hospital will pay for independent legal advice to review and advice on this Agreement, up to a maximum of $1,000 or actual costs if lower. 7. Interpretation In the event that any provisions of this Agreement shall be declared invalid, illegal or unenforceable by a court of competent jurisdiction, this Agreement with respect to enforceable provisions shall continue in force and all rights and remedies accrued under the enforceable provisions shall survive any such declaration, and any non-enforceable provision shall be replaced by a provision which, being valid, comes closest to the intention underlying the invalid provision. 8. Entire Agreement With respect to the subject matter of this Agreement, this Agreement (a) sets forth the entire agreement between us, (b) supersedes all prior understandings and communications between us, oral or written, and (c) constitutes the entire agreement between us hereto. We each acknowledge and represent that this Agreement is entered into after full investigation and that neither of us is relying upon any statement or representation made by another which is not embodied in this Agreement. Each of us acknowledges that he or it shall not have the right to rely upon any amendment, promise, modification, statement
7 6 or representation made or occurring subsequent to the execution of this Agreement unless the same is in writing or executed by each of us. Please indicate your approval with the above-noted terms by signing and returning one signed copy of this letter at your earliest convenience. Yours very truly, (signed copy on file) Robert J. Howard, M.D. President and Chief Executive Officer St. Michael s Hospital I have read, understand and agree to the above-noted terms. Date
8 7 SCHEDULE A EXECUTIVE BENEFITS SUMMARY Life Insurance 4 times salary to a maximum of $850,000 maximum increased to $1,000,000 with evidence of insurability Employer paid Optional Life 1, 2 or 3 times annual salary combined life maximum of $1,500,000 optional spousal life 25% or 50% of employee optional life Employee paid Accidental Death & Dismemberment 4 times salary to a maximum of $850,000 Maximum increased to $1,000,000 with evidence of insurability Employer paid Short Term Disability Long Term Disability St. Michael s Hospital Pension Plan Supplementary Pension Plan 100% of salary up to 15 weeks Commences after 15 weeks of disability 80% of monthly salary to a maximum of $15,000 per month Maximum increased to $20,000 per month with evidence of insurability Employer paid (taxable payments) Contributions: 6.1% to $47,200 (YMPE) and 8.7% above (to maximum level permitted by pension plan) Benefit: 1.4% to AYMPE, and 2% above to maximum level permitted by pension plan (formula % x earned service x best 5 years/aympe Contributions: 8.7% of earnings above maximum level permitted by pension plan Benefit: 2% pension on income above maximum level permitted by pension plan (formula % x earned service x best 5 years) Extended Health Care 100% semi-private and private room coverage 100% reimbursement for drugs
9 8 $ every 2 years for vision coverage $1,000,000 out-of-province coverage Employer paid Dental Executive Top-Up 100% reimbursement for basic expenses 50% of major services up to $5,000 per calendar year 50% of orthodontic services up to $2,000 lifetime maximum Employer paid $2,000 per calendar year for expenses not covered under Dental and Health Benefits Transportation Allowance Annual taxable allowance of $7, You will have access to one hospital parking space. Association Membership Two (2) professional association memberships
10 9 SCHEDULE B SUPPLEMENTAL PENSION PLAN ITEM Normal Retirement Lifetime Pension SUPPLEMENTAL The Supplemental Plan is designed to top up the pension payable from the Registered Pension Plan to the level that Plan would have paid had there been no Revenue Canada limit on the amount of annual pension. Normal Form: - Single - Married Life, 10 year guarantee Joint and survivor 60%, 5 year guarantee Early Retirement: - Unreduced Age + service = 85 Age 60 (5 years of service) - Reduced According to Registered Plan reduction and vesting percentage Indexing: Ad hoc indexing with 60% target May be applied to deferred pension Vesting: 0% < 5 years of service 50% after 5 years of service increasing by 10% each year to 100% after 10 years 100% at age 60 with 5 years of service
11 10 Termination Prior to Age 55: Refund of employee contributions to Supplementary Plan accumulated with interest (RCA rate) Plus: Employee contributions with interest (RCA rate) multiplied by vesting percentage Death Prior to Retirement: Single Person Refund of employee contributions with interest (RCA rate) Member with a Spouse Prior to age 55, refund of employee contributions with interest (RCA rate) Disability (not disability retirement): After age 55, spouse provided pension as if member retired Continued accrual Termination Cause: Employee Contributions: Refund of employee contributions with interest (RCA rate), no employer paid benefit Contributions: 8.7% of earnings above maximum level permitted by pension plan Benefit: 2% pension on income above maximum level permitted by pension plan (formula % x earned service x best 5 years) Pensionable Earnings: Basic earnings plus bonus Financing of Supplement: Member contributions to RCA Employer matches member contributions to RCA Balance of cost from general funds of Hospital
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