EXHIBIT 10.33
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement (the "Agreement"),
effective as of January 1, 2000, is by and between LTC PROPERTIES, INC., a
corporation organized under the laws of the State of Maryland ("LTC" or the
"Company"), and XXXXX X. XXXXX ("EXECUTIVE").
NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
1. APPOINTMENT, TITLE AND DUTIES. LTC hereby employs Executive to
serve as its Senior Vice President, General Counsel and Corporate Secretary. In
such capacity, Executive shall report to the Chief Executive Officer of the
Company, and shall have such duties, powers and responsibilities as are
customarily assigned to a Senior Vice President, General Counsel and Corporate
Secretary of a publicly held corporation, but shall also be responsible to the
Board of Directors and to any committee thereof. In addition, Executive shall
have such other duties and responsibilities as the Chief Executive Officer may
assign her, with her consent, including serving with the consent or at the
request of the Chief Executive Officer as an officer or on the board of
directors of affiliated corporations. In addition, at the request of the Chief
Executive Officer, Executive shall serve as the General Counsel and Corporate
Secretary of LTC Healthcare, Inc., a Nevada corporation.
2. TERM OF AGREEMENT. The term of this Agreement shall commence as of
the date hereof and shall extend such that at each and every moment of time
hereafter the remaining term shall be one year.
3. ACCEPTANCE OF POSITION. Executive accepts the position of Senior
Vice President, General Counsel and Corporate Secretary of LTC, and agrees that
during the term of this Agreement she will faithfully perform her duties and,
except as expressly approved by the Board of Directors of LTC, will devote
substantially all of her business time to the business and affairs of LTC (and,
to the extent requested by the Chief Executive Officer, LTC Healthcare, Inc.),
and will not engage, for her own account or for the account of any other person
or entity, in a business which competes with LTC. It is acknowledged and agreed
that Executive may serve as an officer and/or director of companies in which LTC
owns voting or non-voting stock. In addition, it is acknowledged and agreed that
Executive may, from time to time, serve as a member of the board of directors of
other companies, in which event the Board of Directors of LTC must expressly
approve such service pursuant to a Board resolution maintained in the Company's
minute books. Any compensation or remuneration which Executive receives in
consideration of her service on the board of directors of other companies shall
be the sole and exclusive property of Executive, and LTC shall have no right or
entitlement at any time to any such compensation or remuneration.
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4. SALARY AND BENEFITS. During the term of this Agreement:
(1) LTC shall pay to Executive a base salary at an annual rate
of not less than Two Hundred Twenty-Five Thousand Dollars ($225,000) per annum
("Base Salary"), paid in approximately equal installments at intervals based on
any reasonable Company policy. LTC agrees from time to time to consider
increases in such base salary in the discretion of the Board of Directors. Any
increase, once granted, shall automatically amend this Agreement to provide that
thereafter Executive's base salary shall not be less than the annual amount to
which such base salary has been increased.
(2) Executive shall participate in all health, retirement,
Company-paid insurance, sick leave, disability, expense reimbursement and other
benefit programs which LTC makes available to any of its senior executives, and
shall be eligible for bonuses in the discretion of the Board of Directors.
(3) Executive shall be entitled to reasonable vacation time,
not less than four (4) weeks per year, PROVIDED that not more than two (2) weeks
of such vacation time may be taken consecutively without prior notice to and
non-objection by the Compensation Committee of the Board of Directors or, if
there is no Compensation Committee, the Board of Directors.
(4) LTC shall grant Executive 20,000 shares of restricted stock
pursuant to LTC's Amended and Restated 1992 Stock Option Plan, which
restrictions shall lapse in five consecutive installments beginning January 1,
2001.
(5) LTC shall reimburse Executive for $23,600 for her estimated
expenses incurred in connection with her relocation from Pennsylvania to
California and the LTC will have no further liability for said relocation
expenses.
(6) Concurrently with the execution hereof, the Company will be
ready to loan Executive $150,000. Such loan shall be unsecured and shall bear
interest at a rate equal to the lowest rate under which the Company may borrow
money under it credit arrangements. Such loan shall be due upon the sale of
Executive's residence in Pennsylvania.
5. CERTAIN TERMS DEFINED. For purposes of this Agreement:
(1) Executive shall be deemed to be "disabled" if a physical or
mental condition shall occur and persist which, in the written opinion of a
licensed physician selected by the Board of Directors in good faith, has
rendered Executive unable to perform the duties set forth in Section 1 hereof
for a period of sixty (60) days or more and, in the written opinion of such
physician, the condition will continue for an indefinite period of time,
rendering Executive unable to return to her duties;
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(2) A termination of Executive's employment by LTC shall be
deemed for "Cause" if, and only if, it is based upon (i) conviction of a
felony; (ii) material disloyalty to the Company such as embezzlement,
misappropriation of corporate assets or, except as permitted pursuant to
Section 3 of this Agreement, breach of Executive's agreement not to engage in
business for another enterprise of the type engaged in by the Company; or
(iii) the engaging in unethical or illegal behavior which is of a public
nature, brings LTC into disrepute, and result in material damage to the
Company. The Company shall have the right to suspend Executive with pay, for
a reasonable period to investigate allegations of conduct which, if proven,
would establish a right to terminate this Agreement for Cause, or to permit a
felony charge to be tried. Immediately upon the conclusion of such temporary
period, unless Cause to terminate this Agreement has been established,
Executive shall be restored to all duties and responsibilities as if such
suspension had never occurred;
(3) A resignation by Executive shall not be deemed to be
voluntary and shall be deemed to be a resignation with "Good Reason" if it is
based upon (i) a diminution in Executive's title, duties, or salary; (ii) a
reduction in benefits which is not part of an across-the-board reduction in
benefits of all senior executive personnel; (iii) a direction by the Board of
Directors that Executive report to any person or group other than the Chief
Executive Officer or the Board of Directors, or (iv) a geographic relocation
of Executive's place of work a distance for more than seventy-five (75) miles
from LTC's offices located at 000 Xxxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxx,
Xxxxxxxxxx;
(4) "Affiliate" means with respect to any Person, a Person
who, directly or indirectly, through one or more intermediaries, controls, is
controlled by or is under common control, with the Person specified;
(5) "Base Salary" means, as of any date of termination of
employment, the highest base salary of Executive in the then current fiscal
year or in any of the last four fiscal years immediately preceding such date
of termination of employment;
(6) "Beneficial Owner" shall have the meaning given to such
term in Rule 13d-3 under the Exchange Act;
(7) A "Change in Control" occurs if:
(1) Any Person or related group of Persons (other
than Executive and her Related Persons, the Company or a Person that directly
or indirectly controls, is controlled by, or is under common control with,
the Company) is or becomes the Beneficial Owner, directly or indirectly, of
securities of the Company representing 30% or more of the combined voting
power of the Company's then outstanding securities; or
(2) The stockholders of the Company approve a merger
or consolidation of the Company with any other corporation (or other entity),
other than a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities
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of the surviving entity) more than 66-2/3% of the combined voting power of
the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; PROVIDED, HOWEVER, that a
merger or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no Person acquires more than 30% of
the combined voting power of the Company's then outstanding securities shall
not constitute a Change in Control; or
(3) The Stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's
assets; or
(4) A majority of the members of the Board of
Directors of the Company cease to be Continuing Directors;
(8) "Code" means the Internal Revenue Code of 1986, as
amended.
(9) "Continuing Director" means, as of any date of
determination, any member of the Board of Directors who (i) was a member of
such Board of Directors on the date of the Agreement or (ii) was nominated
for election or elected to such Board of Directors with the approval of a
majority of the Continuing Directors who were members of such Board of
Directors at the time of such nomination or election.
(10) "Exchange Act" means the Exchange Act of 1934, as
amended.
(11) "Person" means any individual, corporation, partnership,
limited liability company, trust, association or other entity.
(12) "Related Person" means any immediate family member
(spouse, partner, parent, sibling or child whether by birth or adoption) of
the Executive and any trust, estate or foundation, the beneficiary of which
is the Executive and/or an immediate family member of the Executive.
6. CERTAIN BENEFITS UPON TERMINATION. Executive's employment shall
be terminated upon the earlier of (i) the voluntary resignation of Executive
with or without Good Reason; (ii) Executive's death or permanent disability;
or (iii) upon the termination of Executive's employment by LTC for any reason
at any time. In the event of such termination, the below provisions of this
Section 6 shall apply.
(1) If Executive's employment by LTC terminates for any reason
other than as a result of (i) a termination for Cause, or (ii) a voluntary
resignation by Executive without a Good Reason, or (iii) a Change in Control of
the Company, then LTC shall pay Executive a lump sum severance payment equal to
her Base Salary; PROVIDED that if employment terminates by reason of Executive's
death or disability, then such salary shall be paid only to the extent the
Company has
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available "key man" life, disability or similar insurance relating to the death
or disability of Executive;
(2) Upon a Change in Control of the Company whether or not
Executive's employment is terminated thereby, in lieu of the severance payment
described in Section 6(a) above, LTC shall pay Executive a lump sum severance
payment in cash equal to two times her Base Salary;
(3) If Executive's employment by LTC terminates for any reason,
except for LTC's termination of Executive's employment for Cause or a voluntary
resignation by Executive without a Good Reason, LTC shall offer to Executive the
opportunity to participate in all Company-provided medical and dental plans to
the extent Executive elects and remains eligible for coverage under COBRA and
for a maximum period of eighteen (18) months at Company expense; PROVIDED,
HOWEVER, in the event Executive's employment by LTC terminated upon a Change in
Control of the Company, then Executive shall not be given the opportunity to
participate in any of such medical and dental plans, except to the extent
required by law;
(4) In the event that Executive's employment terminates by
reason of her death, all benefits provided in this Section 6 shall be paid to
her estate or as her executor shall direct, but payment may be deferred until
Executive's executor or personal representatives has been appointed and
qualified pursuant to the laws in effect in Executive's jurisdiction of
residence at the time of her death;
(5) LTC shall make all payments pursuant to the foregoing
subsections (a) through (d) within seven (7) days following the date of
termination of Executive's employment or consummation of a Change in Control of
the Company, as applicable;
(6) Notwithstanding the foregoing, LTC shall have no liability
under this Section if Executive's employment pursuant to this Agreement is
terminated by LTC for Cause or by Executive without a Good Reason; provided,
however, that if Executive's employment pursuant to this Agreement is terminated
by LTC for Cause or by Executive without a Good Reason at any time after a
Change of Control which did not result in Executive's employment being
terminated, such post-Change of Control termination by LTC for Cause or by
Executive without a Good Reason shall not affect in any way Executive's
entitlement to the lump sum severance payment described in Section 6(b) above or
any other rights, benefits or entitlements to which Executive may be entitled as
a result of such Change of Control;
(7) Gross-Up.
(1) If it shall be determined that any payment,
distribution or benefit received or to be received by Executive from the Company
(whether payable pursuant to the terms of this Agreement or any other plan,
arrangements or agreement with the Company or a Affiliate (as defined above)
("Payments")) would be subject to the excise tax imposed by Section 4999 of the
Code (the "Excise Tax"), then Executive shall be entitled to receive an
additional payment (the
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"Excise Tax Gross-Up Payment") in an amount such that the net amount retained by
Executive, after the calculation and deduction of any Excise Tax on the Payments
and any federal, state and local income taxes and excise tax on the Excise Tax
Gross-Up Payment provided for in this Section 6(g), shall be equal to the
Payments. In determining this amount, the amount of the Excise Tax Gross-Up
Payment attributable to federal income taxes shall be reduced by the maximum
reduction in federal income taxes that could be obtained by the deduction of the
portion of the Excise Tax Gross-Up Payment attributable to state and local
income taxes. Finally, the Excise Tax Gross-Up Payment shall be reduced by
income or excise tax withholding payment made by the Company or any affiliate of
either to any federal, state or local taxing authority with respect to the
Excise Tax Gross-Up Payment that was not deducted from compensation payable to
Executive.
(2) All determinations required to be made under this
Section 6(g), including whether and when an Excise Tax Gross-Up Payment is
required and the amount of such Excise Tax Gross-Up Payment and the assumptions
to be utilized in arriving at such determination, except as specified in Section
6(g)(i) above, shall be made by the Company's independent auditors (the
"Accounting Firm"), which shall provide detailed supporting calculations both to
the Company and Executive. Such determination of tax liability made by the
Accounting Firm shall be subject to review by Executive's tax advisor and, if
Executive's tax advisor does not agree with such determination reached by the
Accounting Firm, then the Accounting Firm and Executive's tax advisor shall
jointly designate a nationally recognized public accounting firm, which shall
make such determination. All reasonable fees and expenses of the accountants and
tax advisors retained by either Executive or the Company shall be borne by the
Company. Any Excise Tax Gross-Up Payment, as determined pursuant to this Section
6(g), shall be paid by the Company to Executive within five days after the
receipt of such determination. Any determination by a jointly designated public
accounting firm shall be binding upon the Company and Executive.
(3) As a result of the uncertainty in the application of
Subsection 4999 of the Code at the time of the initial determination thereunder,
it is possible that Excise Tax Gross-Up Payments will not have been made by the
Company that should have been made consistent with the calculations required to
be made hereunder ("Underpayment"). In the event that Executive thereafter is
required to make a payment of any Excise Tax, any such Underpayment calculated
in accordance with and in the same manner as the Excise Tax Gross-Up Payment in
Section 6(g)(i) above shall be promptly paid by the Company to or for the
benefit of Executive. In the event that the Excise Tax Gross-Up Payment exceeds
the amount subsequently determined to be due, such excess shall constitute a
loan from the Company (together with interest at the rate provided in Section
1274(b)(2)(B) of the Code).
7. TAX LIABILITY LOAN. Upon a Change in Control of the Company,
whether or not Executive's employment is terminated as a result thereof, the
Company shall offer Executive an unsecured loan in the amount necessary to fund
Executive's tax liability arising from the accelerated vesting of restricted
shares held by Executive, if any. Such loan shall be due, in full, in ten (10)
years from the date made and shall bear interest at the then-current Applicable
Federal Rate (the minimum rat necessary to avoid "unstated interest" under
Section 7872 of the Code) with interest payments to
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be paid to the Company annually. Such loan shall be evidenced by a promissory
note signed by, and with full recourse to, Executive.
8. INDEMNIFICATION. LTC shall indemnify Executive and hold her
harmless from and against all claims, actions, losses, damages, expense or
liabilities (including expenses of defense and settlement) ("Claim") based upon
or in any way arising from or connected with her employment by LTC, to the
maximum extent permitted by law. To the extent permitted by law, LTC shall
advance to Executive any expenses necessary in connection with the defense of
any Claim which is brought if indemnification cannot be determined to be
available prior to the conclusion of, or the investigation of, such Claim. The
parties hereto agree that each understands and has understood that
notwithstanding the above-stated provisions, nothing herein shall require LTC to
hold harmless or indemnify Executive with respect to any Claim which is brought
or asserted against Executive by LTC. LTC shall investigate in good faith the
availability and cost of directors' and officers' insurance and shall include
Executive as an insured in any directors and officers insurance policy of such
insurance it maintains.
9. ATTORNEY FEES. In the event that any action or proceeding is
brought to enforce the terms and provisions of this Agreement, the prevailing
party shall be entitled to recover reasonable attorney fees.
10. NOTICES. All notices and other communications provided to either
party hereto under this Agreement shall be in writing and delivered by certified
or registered mail to such party at its/her address set forth below its/her
signature hereto, or at such other address as may be designated with postage
prepaid, shall be deemed given when received.
11. CONSTRUCTION. In constructing this Agreement, if any portion of
this Agreement shall be found to be invalid or unenforceable, the remaining
terms and provisions of this Agreement shall be given effect to the maximum
extent permitted without considering the void, invalid or unenforceable
provisions. In construing this Agreement, the singular shall include the plural,
the masculine shall include the feminine and neuter genders as appropriate, and
no meaning in effect shall be given to the captions of the sections in this
Agreement, which are inserted for convenience of reference only.
12. HEADINGS. The section headings hereof have been inserted for
convenience of reference only and shall not be construed to affect the meaning,
construction or effect of this Agreement.
13. GOVERNING LAW. The provisions of this Agreement shall be construed
and interpreted in accordance with the internal laws of the State of California
as at the time in effect.
14. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
and supersedes all other prior agreements (including the Employment Agreement
dated as of the date hereof) and undertakings, both written and oral, among
Executive and the Company, with respect to the subject matter hereof.
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IN WITNESS WHEREOF, this Agreement shall be effective as of the date
specified in the first paragraph of this Agreement.
LTC, PROPERTIES, INC., a Maryland corporation
Address: 000 Xxxxxxxxx Xx., #0000 By: /s/ Xxxxx Xxxxxxxxxxx
Xxxxxx, XX 00000 -----------------------------------------
Chairman and Chief Executive Officer
By: /s/ Xxxxx Xxxxxxx
-----------------------------------------
Chairman of Compensation Committee
Address: /s/ Xxxxx Xxxxx
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Executive
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