RETIREMENT AGREEMENT
Exhibit 10.2
THIS RETIREMENT AGREEMENT (this “Agreement”) is entered into as of March 1, 2007 by and
between HEALTHCARE REALTY TRUST INCORPORATED (the “Company”) and X.X. XXXXXX XXXXXX (hereinafter
“Employee”).
WITNESSETH:
WHEREAS, Employee served as Senior Vice President and Chief Operating Officer of the Company
pursuant to an Employment Agreement dated January 1, 2003 (the “Employment Agreement”), and
WHEREAS, Employee has elected to retire from the Company subject to the terms of this
Agreement;
NOW, THEREFORE, in consideration of (1) the mutual promises and covenants herein contained,
(2) the release from restrictions of restricted stock in the Company, and (3) for other good and
valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties
hereto agree as follows:
1. Retirement. Subject to the terms and conditions set forth in this Agreement,
Employee hereby retires from the Company and resigns his employment as an employee and officer of
the Company, and as an officer and director of all subsidiaries and affiliates of the Company,
effective as of March 1, 2007 (the “Retirement Date”), and acknowledges the termination of the
Employment Agreement effective as of the Retirement Date. Employee hereby releases any rights that
he may have to compensation or other benefits as an employee of the Company, including but not
limited to any rights to receive additional shares of stock in the Company under any plan, contract
or otherwise, except to the extent otherwise provided in the Agreement.
2. Retirement benefits.
(a) Within five business days following the Retirement Date, the Company shall take all steps
necessary to cause Employee’s 25,406 shares of restricted stock awarded under the Company’s 1993
and 2003 Employee Stock Incentive Plans to be fully vested without restriction. The Company shall
satisfy federal income tax, FICA, and Medicare withholding requirements by withholding and
cancelling restricted shares having a value equal to the amount required to be withheld, or a
greater value at the written request of Employee.
(b) The Company shall pay to Employee the sum of $29,198.50 per month for a period of eighteen
(18) months following the Retirement Date. Such monthly payments shall be made in equal
semi-monthly installments on the 15th and 30th of each month (or nearest
business day), beginning March 15, 2007 and ending on August 31, 2008. Such payments shall be made
through the Company’s regular payroll system and shall be reduced by applicable federal income tax,
FICA, and Medicare withholding requirements, or amounts greater than the minimum withholding
requirements at the written request of Employee. Employee may participate in the Company’s group
health insurance program during such eighteen-month period on the same terms as are applicable to
employees of the Company during such period.
(c) The Company shall pay to Employee, within five business days following the Retirement
Date, the sum of $286,153, representing the value of Company shares reserved for issuance to
Employee under the Fourth Implementation of the Company’s 2003 Employee Restricted Stock Incentive
Plan. Such payment shall be reduced by applicable federal income tax, FICA, and Medicare
withholding requirements, or amounts greater than the minimum withholding requirements at the
written request of Employee.
3. Releases. (a) Except as provided in Section 8, Employee does hereby release and
forever discharge for himself and his heirs, representatives and assigns, the Company (including
any parent, subsidiary or affiliated organization) and its agents, directors, officers or employees
(in whatever capacity) from any and all legal claims, causes of action, agreements, obligations,
liabilities, damages, compensation (including stock in the Company) and/or demands whatsoever at
law or in equity, known or unknown, in any federal or state court or before any federal or state
commission, agency or board which he or his heirs, representatives or assigns had, has or may have,
against the Company (including any parent, subsidiary or affiliated organization) or its agents,
directors, officers or employees (in whatever capacity) (collectively referred to as “the
Releasees”), their successors or assigns relating in any way to or arising out of his employment
with the Company, his Employment Agreement and/or termination of his employment with the Company.
Employee acknowledges that he is releasing the Releasees from all claims of discrimination,
wrongful discharge and/or unlawful treatment under all employment laws. Employee understands that
he is intentionally giving up any right that he may have to pursue legal action against the
Releasees in the future.
(b) Except as set out specifically below, the Company does hereby release and forever
discharge for itself and its successors and assigns Employee from any and all legal claims, causes
of action, agreements, obligations, liabilities, or damages arising out of Employee’s previous
service as an officer of the Company. Provided, however, the Company does not waive any claim that
it may have against Employee for fraud on the part of Employee or any breach of a fiduciary duty
owed to the Company by virtue of Employee’s previous service as an officer of the Company.
4. Trade Secrets and Customer Lists. Employee agrees to hold in strict confidence all
information concerning any matters affecting or relating to the “Company’s Business” (as defined in
Section 6(a) below), including, without limiting the generality of the foregoing, its manner of
operation, business plans, business prospects, agreements, protocols, processes, computer programs,
customer lists, market strategies, internal performance statistics, financial data, marketing
information and analyses, or other data, without regard to the capacity in which such information
was acquired (collectively, the “Confidential Information”). Employee agrees that he will not,
directly or indirectly, use any Confidential Information for the benefit of any person or entity
other than the Company or disclose or communicate any Confidential Information in any manner
whatsoever other than to the directors, officers, employees, agents, and representatives of the
Company, or in the ordinary course of business acting on behalf of the Company. “Confidential
Information” does not include information which (i) was or becomes generally available to the
public other than as a result of a disclosure by Employee or his representatives, or (ii) was or
becomes available to Employee on a non-confidential basis from a source other than the Company or
its advisors provided that such source is not known to Employee to be bound by a confidentiality
agreement with the Company, or otherwise prohibited from transmitting the information to Employee
by a contractual, legal or fiduciary obligation. Upon the Company’s request, Employee will return
all Confidential Information furnished to him related to the Company’s Business. The parties hereto
stipulate that all Confidential Information gravely affects the effective and successful conduct of
the business of the Company and the Company’s goodwill, and that any breach of the terms of this
Section 4 shall be a
2
material breach of this Agreement. The terms of this Section 4 shall remain in effect up to
and including February 28, 2009.
5. Release of Proprietary Information. Employee recognizes that the Company possesses
a proprietary interest in all of the Confidential Information and has the exclusive right and
privilege to use, protect by copyright, patent or trademark, manufacture or otherwise exploit the
processes, ideas and concepts described therein to the exclusion of Employee, except as otherwise
agreed between the Company and Employee in writing. Employee expressly agrees that any products,
inventions, discoveries or improvements made by Employee, his agents or affiliates based on or
arising out of the information described in Section 4 shall be (i) deemed a work made for hire
under the terms of United States Copyright Act, 17 U.S.C. § 101 et seq., and the Company
shall be the owner of all such rights with respect thereto and (ii) the property of and inure to
the exclusive benefit of the Company.
6. Covenant Not to Compete. Employee agrees that, for the period of time up to and
including February 28, 2009:
(a) Employee shall not, without the prior written consent of the Company, directly or
indirectly, own, manage, operate, control, be connected with as an officer, employee, partner,
consultant or otherwise, or otherwise engage or participate in any corporation or other business
entity engaged in the business of buying, selling, developing, building and/or managing real estate
facilities for the medical, healthcare and retirement sectors of the real estate industry (the
“Company’s Business”); provided, however, that this Section 6 shall not prohibit Employee from
accepting employment with a hospital operator which owns real estate solely for its own use and
such real estate is ancillary to the other operations of such employer. Employee understands and
acknowledges that the Company carries on business nationwide and that the nature of the Company’s
activities cannot be confined to a limited area. Accordingly, Employee agrees that the geographic
scope of this Section 6 shall include the United States of America. Notwithstanding the foregoing,
the ownership by Employee of less than 2% of any class of the outstanding capital stock of any
corporation conducting such a competitive business which is regularly traded on a national
securities exchange or in the over-the-counter market shall not be a violation of the foregoing
covenant.
(b) Employee shall not solicit, directly or indirectly, any customer, client, tenant or
account whose identity Employee obtained through association with the Company, regardless of the
geographic location of such customer, client, tenant or account, nor shall Employee, directly or
indirectly, entice or induce, or attempt to entice or induce, any employee of the Company to leave
such employ, nor shall Employee employ any such person in any business conducting the Company’s
Business. Employee hereby acknowledges and agrees that the provisions set forth in this Section 6
constitute a reasonable restriction on his ability to compete with the Company and will not
adversely affect his ability to earn income sufficient to support himself and/or his family.
(c) The parties hereto agree that, in the event a court of competent jurisdiction shall
determine that the geographic or durational elements of this covenant are unenforceable, such
determination shall not render the entire covenant unenforceable. Rather, the excessive aspects of
the covenant shall be reduced to the threshold which the court deems enforceable, and the remaining
aspects shall not be affected thereby.
7. Injunctive Relief. Employee specifically acknowledges and agrees that the
restrictions and provisions set forth in Sections 4, 5 and 6 hereof are reasonable and necessary to
protect the legitimate interests of the Company and that the Company would not have entered into
this Agreement in the absence of such restrictions and provisions. Employee further acknowledges
that the extent of damages to the Company from a breach of Sections 4, 5 and 6 of this Agreement
would not be readily quantifiable or
3
ascertainable, that monetary damages would be inadequate to make the Company whole in case of
such a breach, and that there is not and would not be an adequate remedy at law for such a breach.
Therefore, Employee specifically agrees that the Company is entitled to injunctive or other
equitable relief from a breach of Sections 4, 5, and 6 of this Agreement, and hereby agrees and
covenants not to assert against a prayer for such relief that there exists an adequate remedy at
law, in monetary damages or otherwise.
8. No Liability; Indemnification. In addition to any rights to indemnification to
which Employee is entitled by reason of his service as an employee of the Company or by separate
agreement, the Company shall indemnify Employee at all times during and after the term of this
Agreement to the maximum extent permitted under Section 2-418 of the General Corporation Law of the
State of Maryland or any successor provision thereof and any other applicable state law, and shall
pay Employee’s expenses in defending any civil or criminal action, suit, or proceeding in advance
of the final disposition of such action, suit, or proceeding, to the maximum extent permitted under
such applicable state laws, arising out of, or in connection with, the performance of his duties as
Employee.
9. Voluntary Agreement. Employee acknowledges that he has been advised to seek legal
counsel before executing this Agreement and that he has obtained the advice of legal counsel prior
to executing this Agreement. Employee acknowledges he signs this Agreement of his own free will and
in exchange for the consideration to be given which is acknowledged to be adequate and satisfactory
and in excess of anything he might be entitled otherwise to receive. Employee declares that he is
competent to execute this Agreement.
10. Miscellaneous. This Agreement contains the entire agreement of the parties and
supersedes all prior agreements and understandings between the parties hereto with respect to the
subject matter hereof. No modification of this Agreement shall be valid unless it is in writing and
signed by both parties hereto. This Agreement shall be governed by and interpreted in accordance
with the laws of the State of Tennessee. This Agreement in no way shall be construed as an
admission by the Company that it acted wrongfully toward Employee or that Employee has any rights
against the Company. If any part of this Agreement is found to be unenforceable, the other
provisions shall remain fully valid and enforceable.
THE COMPANY:
HEALTHCARE REALTY TRUST INCORPORATED
| By: | /s/ Xxxxx X. Xxxxxx | |||
| Name: | Xxxxx X. Xxxxxx | |||
| Title: | Senior Vice President and Chief Financial Officer | |||
EMPLOYEE:
| /s/ X.X. Xxxxxx Xxxxxx | ||||
| X.X. Xxxxxx Xxxxxx | ||||
4
