Exhibit 10.3
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT is made as of the 21st day of September,
1998 (the "Effective Date"), by and between Ventas, Inc., a Delaware corporation
(the "Company"), and XXXXXX X. XXXXXX (the "Executive").
W I T N E S S E T H:
WHEREAS, the Executive is employed by the Company and the parties
hereto desire to provide for Executive's continued employment by the Company;
and
WHEREAS, the Board of Directors of the Company (the "Board") have
determined that it is in the best interests of the Company to enter into this
Agreement.
NOW, THEREFORE, in consideration of the premises and the respective
covenants and agreements contained herein, and intending to be legally bound
hereby, the Company and Executive agree as follows:
1. EMPLOYMENT. The Company hereby agrees to employ Executive and
Executive hereby agrees to be employed by the Company on the terms and
conditions herein set forth. The initial term of this Agreement shall be for a
one-year period commencing on the Effective Date. The Term shall be
automatically extended by one additional day for each day beyond the Effective
Date that the Executive remains employed by the Company until such time as the
Company elects to cease such extension by giving written notice of such election
to the Executive. In such event, the Agreement shall terminate on the first
anniversary of the effective date of such election notice.
2. DUTIES. Executive is engaged by the Company in an executive
capacity.
3. EXTENT OF SERVICES. Executive, subject to the direction and
control of the Board, shall have the power and authority commensurate with his
executive status and necessary to perform his duties hereunder. During the
term, Executive shall devote his entire working time, attention, labor, skill
and energies to the business of the Company, and shall not, without the consent
of the Company, be actively engaged in any other business activity, whether or
not such business activity is pursued for gain, profit or other pecuniary
advantage.
4. COMPENSATION. As compensation for services hereunder rendered,
Executive shall receive during the Term:
(a) A base salary ("Base Salary") of not less than $200,000 per year
payable in equal installments in accordance with the Company's normal
payroll procedures. Executive may receive increases in his Base Salary
from time to time, as approved by the Board.
(b) In addition to Base Salary, Executive may be eligible to receive
such other incentive compensation as the Board may approve from time to
time.
5. BENEFITS.
(a) Executive shall be entitled to participate in any and all
Executive pension benefit, welfare benefit (including, without limitation,
medical, dental, disability and group life insurance coverages) and fringe
benefit plans from time to time in effect for Executives of the Company and
its affiliates.
(b) Executive shall be entitled to participate in such bonus, stock
option, or other incentive compensation plans of the Company and its
affiliates in effect from time to time for executives of the Company.
(c) Executive shall be entitled to four weeks of paid vacation each
year. The Executive shall schedule the timing of such vacation in a
reasonable manner. The Executive may also be entitled to such other leave,
with or without compensation, as shall be mutually agreed by the Company
and Executive.
(d) Executive may incur reasonable expenses for promoting the
Company's business, including expenses for entertainment, travel and
similar items. The Company shall reimburse Executive for all such
reasonable expenses in accordance with the Company's reimbursement policies
and procedures.
6. TERMINATION OF EMPLOYMENT.
(a) DEATH OR DISABILITY. Executive's employment shall terminate
automatically upon Executive's death during the Term. If the Company
determines in good faith that the Disability of Executive has occurred
during the Term (pursuant to the definition of Disability set forth below),
it may give to Executive written notice of its intention to terminate
Executive's employment. In such event, Executive's employment with the
Company shall terminate effective on the 30th day after receipt of such
notice by Executive (the "Disability Effective Date"), provided that,
within the 30 days after such receipt, Executive shall not have returned to
full-time performance of Executive's duties. For purposes of this
Agreement, "Disability" shall mean Executive's absence from his full-time
duties hereunder for a period of 90 days.
(b) CAUSE. The Company may terminate Executive's employment during
the Term for Cause. For purposes of this Agreement, "Cause" shall mean the
Executive's (i) conviction of or plea of nolo contendere to a crime
involving moral turpitude; or (ii) willful and material breach by Executive
of his duties and responsibilities, which is committed in bad faith or
without reasonable belief that such breaching conduct is in the best
interests of the Company and its affiliates, but with respect to (ii) only
if the Board adopts a resolution by a vote of at least 75% of its members
so finding after giving the Executive and his attorney an opportunity to be
heard by the Board. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board or based upon advice of
counsel for the Company shall be conclusively presumed to be done, or
omitted to be done, by Executive in good faith and in the best interests of
the Company.
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(c) GOOD REASON. Executive's employment may be terminated by Executive
for Good Reason. "Good Reason" shall exist upon the occurrence, without
Executive's express written consent, of any of the following events:
(i) the Company shall assign to Executive duties of a
substantially nonexecutive or nonmanagerial nature;
(ii) an adverse change in Executive's status or position as an
executive officer of the Company, including, without limitation, an
adverse change in Executive's status or position as a result of a
diminution in Executive's duties and responsibilities (other than any
such change directly attributable to the fact that the Company is no
longer publicly owned);
(iii) the Company shall (A) materially reduce the Base Salary or
bonus opportunity of Executive, or (B) materially reduce his benefits
and perquisites (other than pursuant to a uniform reduction applicable
to all similarly situated executives of the Company);
(iv) the Company shall require Executive to relocate Executive's
principal business office more than 30 miles from its location on the
Effective Date; or
(v) the failure of the Company to obtain the assumption of this
Agreement as contemplated by Section 11(c).
For purposes of this Agreement, "Good Reason" shall not exist until after
Executive has given the Company notice of the applicable event within 90
days of such event and which is not remedied within 30 days after receipt
of written notice from Executive specifically delineating such claimed
event and setting forth Executive's intention to terminate employment if
not remedied; provided that if the specified event cannot reasonably be
remedied within such 30-day period and the Company commences reasonable
steps within such 30-day period to remedy such event and diligently
continues such steps thereafter until a remedy is effected, such event
shall not constitute "Good Reason" provided that such event is remedied
within 60 days after receipt of such written notice.
(d) NOTICE OF TERMINATION. Any termination by the Company for Cause,
or by Executive for Good Reason, shall be communicated by Notice of
Termination given in accordance with this Agreement. For purposes of this
Agreement, a "Notice of Termination" means a written notice which (i)
indicates the specific termination provision in this Agreement relied upon,
(ii) sets forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment under the
provision so indicated and (iii) specifies the intended termination date
(which date, in the case of a termination for Good Reason, shall be not
more than thirty days after the giving of such notice). The failure by
Executive or the Company to set forth in the Notice of Termination any fact
or circumstance which contributes to a showing of Good Reason or Cause
shall not waive any right of Executive or the Company, respectively,
hereunder or preclude Executive or the Company, respectively, from
asserting such fact
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or circumstance in enforcing Executive's or the Company's rights hereunder.
(e) DATE OF TERMINATION. "Date of Termination" means (i) if
Executive's employment is terminated by the Company for Cause, or by
Executive for Good Reason, the later of the date specified in the Notice of
Termination or the date that is one day after the last day of any
applicable cure period, (ii) if Executive's employment is terminated by the
Company other than for Cause or Disability, or Executive resigns without
Good Reason, the Date of Termination shall be the date on which the Company
or Executive notified Executive or the Company, respectively, of such
termination, and (iii) if Executive's employment is terminated by reason of
death or Disability, the Date of Termination shall be the date of death of
Executive or the Disability Effective Date, as the case may be.
7. OBLIGATIONS OF THE COMPANY UPON TERMINATION. Following any
termination of Executive's employment hereunder, the Company shall pay Executive
his Base Salary through the Date of Termination and any amounts owed to
Executive pursuant to the terms and conditions of the Executive benefit plans
and programs of the Company at the time such payments are due. In addition,
subject to Executive's execution of a general release of claims in form
satisfactory to the Company, Executive shall be entitled to the following
additional payments:
(a) DEATH OR DISABILITY. If, during the Term, Executive's employment
shall terminate by reason of Executive's death or Disability, the Company
shall pay to Executive (or his designated beneficiary or estate, as the
case may be) the prorated portion of any Target Bonus (as defined below)
Executive would have received for the year of termination of employment.
Such amount shall be paid within 30 days of the date when such amounts
would otherwise have been payable to the Executive if Executive's
employment had not terminated.
(b) GOOD REASON; OTHER THAN FOR CAUSE. If, during the Term, the
Company shall terminate Executive's employment other than for Cause (but
not for Disability), or the Executive shall terminate his employment for
Good Reason:
(1) Within fourteen (14) days of Executive's Date of Termination,
the Company shall pay to Executive (i) the prorated portion of the
Target Bonus for Executive for the year in which the Date of
Termination occurs, plus (ii) an amount equal to the Executive's Base
Salary and Target Bonus as of the Date of Termination.
For purposes of this Agreement: "Target Bonus" shall mean the
full amount of bonuses and/or performance compensation (other than
Base Salary and awards under the Company's 1997 Incentive Compensation
Plan) that would be payable to the Executive, assuming all performance
criteria on which such bonus and/or performance compensation are based
were deemed to be satisfied, in respect of services for the calendar
year in which the date in question occurs.
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(2) For a period of one year following the Date of Termination,
the Executive shall be treated as if he or she had continued to be an
Executive for all purposes under the Company's Health Insurance Plan
and Dental Insurance Plan; or if the Company has not yet established
its own Health Insurance Plan and/or Dental Plan or the Executive is
prohibited from participating in such plan, the Company shall, at its
sole cost and expense, provide health and dental insurance coverage
for Executive which is equivalent to the coverage provided to
Executive as of the Date of Termination. Following this continuation
period, the Executive shall be entitled to receive continuation
coverage under Part 6 of Title I or ERISA ("COBRA Benefits") treating
the end of this period as a termination of the Executive's employment
if allowed by law.
(3) For a period of one year following the Date of Termination,
Company shall maintain in force, at its expense, the Executive's life
insurance being provided by the Company as of the Date of Termination.
(4) For a period of one year following the Executive's Date of
Termination, the Company shall provide short-term and long-term
disability insurance benefits to Executive equivalent to the coverage
that the Executive would have had he remained employed under the
disability insurance plans applicable to Executive on the Date of
Termination. Should Executive become disabled during such period,
Executive shall be entitled to receive such benefits, and for such
duration, as the applicable plan provides.
(5) To the extent not already vested pursuant to the terms of
such plan, the Executive's interests under the Retirement Savings Plan
and any Retirement Savings Plan of the Company shall be automatically
fully (i.e., 100%) vested, without regard to otherwise applicable
percentages for the vesting of employer matching contributions based
upon the Executive's years of service with the Company.
(6) The Company shall adopt such amendments to its Executive
benefit plans, if any, as are necessary to effectuate the provisions
of this Agreement.
(7) Executive shall be credited with an additional one year of
vesting for purposes of all restricted stock awards and Executive will
have an additional one year in which to exercise all outstanding stock
option awards.
(c) CAUSE; OTHER THAN FOR GOOD REASON. If Executive's employment
shall be terminated for Cause or Executive terminates employment without
Good Reason (and other than due to such Executive's death) during the Term,
this Agreement shall terminate without further additional obligations to
Executive under this Agreement.
(d) DEATH AFTER TERMINATION. In the event of the death of Executive
during the period Executive is receiving payments pursuant to this
Agreement, Executive's designated beneficiary shall be entitled to receive
the balance of the payments; or in the
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event of no designated beneficiary, the remaining payments shall be made to
Executive's estate.
8. DISPUTES. Any dispute or controversy arising under, out of, or in
connection with this Agreement shall, at the election and upon written demand of
either party, be finally determined and settled by binding arbitration in the
City of Louisville, Kentucky, in accordance with the Labor Arbitration rules and
procedures of the American Arbitration Association, and judgment upon the award
may be entered in any court having jurisdiction thereof. The Company shall pay
all costs of the arbitration and all reasonable attorneys' and accountants' fees
of the Executive in connection therewith, including any litigation to enforce
any arbitration award.
9. SUCCESSORS.
(a) This Agreement is personal to Executive and without the prior
written consent of the Company shall not be assignable by Executive
otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by Executive's
legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
(c) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, or any
business of the Company for which Executive's services are principally
performed, to assume expressly and agree to perform this Agreement in the
same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place. As used in this
Agreement, "Company" shall mean the Company as herein before defined and
any successor to its business and/or assets as aforesaid which assumes and
agrees to perform this Agreement by operation of law, or otherwise.
10. OTHER SEVERANCE BENEFITS. Executive hereby agrees that in
consideration for the payments to be received under this Agreement, Executive
waives any and all rights to any payments or benefits under any plans, programs,
contracts or arrangements of the Company or their respective affiliates that
provide for severance payments or benefits upon a termination of employment,
other than the Change in Control Severance Agreement between the Company and
Executive (the "Severance Agreement"); provided that any payments payable to
Executive hereunder shall be offset by any payments payable under the Severance
Agreement.
11. WITHHOLDING. All payments to be made to Executive hereunder will
be subject to all applicable required withholding of taxes.
12. NO MITIGATION. Executive shall have no duty to mitigate his
damages by seeking other employment and, should Executive actually receive
compensation from any such other employment, the payments required hereunder
shall not be reduced or offset by any such compensation. Further, the Company's
obligations to make any payments hereunder shall not be
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subject to or affected by any setoff, counterclaims or defenses which the
Company may have against Executive or others.
13. NOTICES. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been duly given when
delivered or sent by telephone facsimile transmission, personal or overnight
couriers, or registered mail with confirmation of receipt, addressed as follows:
If to Executive:
Xxxxxx X. Xxxxxx
--------------------------
Louisville, KY
----
If to Company:
Ventas, Inc.
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attn: President
14. WAIVER OF BREACH AND SEVERABILITY. The waiver by either party of
a breach of any provision of this Agreement by the other party shall not operate
or be construed as a waiver of any subsequent breach by either party. In the
event any provision of this Agreement is found to be invalid or unenforceable,
it may be severed from the Agreement and the remaining provisions of the
Agreement shall continue to be binding and effective.
15. ENTIRE AGREEMENT; AMENDMENT. This instrument contains the entire
agreement of the parties with respect to the subject matter hereof and
supersedes all prior agreements, promises, covenants, arrangements,
communications, representations and warranties between them, whether written or
oral, with respect to the subject matter hereof. No provisions of this
Agreement may be modified, waived or discharged unless such modification, waiver
or discharge is agreed to in writing signed by Executive and such officer of the
Company specifically designated by the Board.
16. GOVERNING LAW. This Agreement shall be construed in accordance
with and governed by the laws of the State of Delaware.
17. HEADINGS. The headings in this Agreement are for convenience
only and shall not be used to interpret or construe its provisions.
18. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
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VENTAS, INC.
By: /s/ Xxxxxx X. Xxxx
Xxxxxx X. Xxxx
President and Chief Operating Officer
/s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
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