AMENDMENT TO CHANGE-IN-CONTROL SEVERANCE AGREEMENT
Exhibit 10.4
AMENDMENT TO CHANGE-IN-CONTROL SEVERANCE AGREEMENT
This Amendment to the Change-in-Control Severance Agreement (the “Severance Agreement”), dated as of May 1, 1998 and amended as of September 30, 1999 between Ventas, Inc., a Delaware corporation (the “Company”), and T. Xxxxxxx Xxxxx (the “Employee”) is made as of March 19, 2007.
WHEREAS, the Employee and the Company entered into the Severance Agreement;
WHEREAS, the Executive Compensation Committee of the Board of Directors of the Company has determined that it is in the best interests of the Company to enter into this Amendment to the Severance Agreement.
NOW, THEREFORE, the Company and Employee agree as follows:
1. Section 3 of the Severance Agreement is amended and restated in its entirety as follows:
a. Cash Payment. The Employee shall be paid cash equal to two times the greater of:
(i) the sum of (x) the Employee’s Base Salary and Target Bonus as of the Termination of Employment, and (y) the fair market value (determined as of the Termination of Employment) of any targeted number of restricted shares authorized to be issued to the Employee in respect of the year in which such Termination of Employment occurs (without regard to any acceleration of the award for such year), assuming for such purpose that all performance criteria applicable to such award with respect to the year in which such Termination of Employment occurs were deemed to be satisfied, or
(ii) the sum of (x) the Employee’s Base Salary and Target Bonus as of the Change-in-Control Date, and (y) the fair market value (determined as of the Change-in-Control Date) of any targeted number of restricted shares authorized to be issued to the Employee in respect of the year in which such Change-in-Control Date occurs (without regard to any acceleration of the award for such year), assuming for such purpose that all performance criteria applicable to such award with respect to the year in which such Change-in-Control Date occurs were deemed to be satisfied.
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Notwithstanding the foregoing, in no event shall the Employee receive more than the Maximum Amount pursuant to this Section 3(a). The term Maximum Amount, for purposes of this Agreement, shall mean $3,000,000, provided, however, that for any termination that occurs in calendar years subsequent to 2007, the Maximum Amount will be adjusted to reflect increases, if any, in the Consumer Price Index that have occurred in the period between December 31, 2006 and the end of the calendar year immediately preceding the date of termination. As an example, if the termination occurs in 2008, the Maximum Amount shall be adjusted for increases in the Consumer Price Index that occur between December 31, 2006-December 31, 2007 and if the termination occurs in 2009, the Maximum Amount shall be adjusted for increases in the Consumer Price Index that occur between December 31, 2006-December 31, 2008. For purposes of this Agreement, Consumer Price Index means the CPI for All Urban Consumers (All Items; Base Year 1982 ), compiled and published by the Bureau of Labor Statistics of the United States Department of Labor
For purposes of this Agreement, “fair market value” shall have the meaning ascribed to such term under the Company’s Incentive Compensation Plan. Payment shall be made in a single lump sum upon the Employee’s effective date of termination.
(i) For a period of two years following the Termination of Employment, the Company, at its sole cost and expense, shall provide health insurance benefits to Employee (and his family) equivalent to the coverage that the Employee would have had had he remained a participant under the health insurance plans applicable to Employee on the date of Termination of Employment, or, at the Employee’s election, the plans applicable to Employee as of the Change-in-Control Date. Such health insurance benefits shall not have any waiting period for coverage and shall provide coverage for any pre-existing condition. Following this continuation period, the Employee shall be entitled to receive continuation coverage under Part 6 of Title I of ERISA (“COBRA Benefits”) treating the end of this period as a termination of the Employee’s employment if allowed by law.
(ii) For a period of two years following the Termination of Employment, the Company shall maintain in force, at its expense, the Employee’s life insurance benefits in effect as of the Change-in-Control Date or as of the date of Termination of Employment, whichever coverage limits are greater.
(iii) For a period of two years following the Employee’s Termination of Employment, the Company shall provide short-term and long-term disability insurance benefits to Employee equivalent to the coverage that the Employee would have had had he remained employed or a participant under the disability insurance plans applicable to Employee on the date of Termination of Employment, or, at the Employee’s election, the plans applicable to Employee as of the Change-in-Control Date. Should Employee become disabled during such period, Employee shall be entitled to receive such benefits, and for such duration, as the applicable plan provides.
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c. Retirement Savings Plan. To the extent not already vested pursuant to the terms of such plan, the Employee’s interests under the Retirement Savings Plan shall be automatically fully (i.e., 100%) vested, without regard to otherwise applicable percentages for the vesting of employer-matching contributions based upon the Employee’s years of service with the Company.
2. A new Section 21 to the Agreement shall be added as follows:
3. In all other respects, the Severance Agreement shall continue in full force and effect.
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VENTAS, INC. | ||
By: | /s/ Xxxxx X. Xxxxxx | |
Xxxxx X. Xxxxxx, | ||
President and Chief Executive Officer | ||
EMPLOYEE | ||
By: | /s/ T. Xxxxxxx Xxxxx | |
T. Xxxxxxx Xxxxx |
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