Exhibit 10.25
AMENDMENT TO EMPLOYMENT AGREEMENT
THIS AMENDMENT TO EMPLOYMENT AGREEMENT ("Amendment") is made and entered
into as of October 8, 2002 by and between HEALTH CARE PROPERTY INVESTORS, INC.,
a Maryland corporation ("Corporation"), and XXXXXXX X. XXXXX ("Officer").
RECITALS
A. Corporation and Officer are presently parties to a certain Employment
Agreement entered into as of October 13, 2001 and effective as of January 1,
2000 (the "Employment Agreement").
B. Corporation and Officer desire to amend the Employment Agreement in
certain respects and wish to set forth their agreements in this regard in this
Amendment. Capitalized terms used in this Amendment are used as defined in the
Employment Agreement unless otherwise indicated.
AGREEMENT
The parties agree as follows:
1. Duties and Title. Officer presently serves Corporation as its most
senior executive officer and has the titles Chairman, President and Chief
Executive Officer. Corporation desires Officer to continue to serve it in an
executive capacity but desires to implement an orderly succession plan. As part
of this, Corporation and Officer have agreed that Corporation shall employ a
President and Chief Operating Officer. Accordingly:
(a) Effective October 8, 2002, Officer's title shall be Chairman and
Chief Executive Officer. Officer shall remain the most senior executive officer
of the Corporation, and the other officers of the Corporation shall continue to
report to Officer.
(b) Effective upon the determination of the Board of Directors to
elect Xxxxx X. Xxxxxxxx III ("Xxxxxxxx") as Chief Executive Officer, Officer
agrees to resign such title and thereafter his title shall be Chairman.
Corporation and Officer expect that this change will occur on or about the time
of the Corporation's annual meeting in May 2003, but the Corporation shall have
the right to cause the election of Xxxxxxxx as Chief Executive Officer at an
earlier or later date as its Board of Directors may determine.
(c) Upon the determination by the Corporation, acting through its
Board of Directors, to elect Xxxxxxxx to the title of Chief Executive Officer as
part of an orderly transition plan, Officer shall have such duties and
responsibilities as the Board shall reasonably request and appoint and agrees to
perform such duties to the best of his
ability and devote so much of his business time, energy and skill as shall be
required to carry out the duties reasonably assigned by the Corporation.
(d) Officer agrees to continue to serve as a director of Corporation,
if nominated and elected, through at least the Employment Period.
2. Adjustments to Compensation.
(a) On May 1, 2003, or, if later, the date of the Corporation's
annual meeting for the year 2003 (the later of such dates being the "Change in
Compensation Date"), Officer agrees that his base salary shall be reduced to
$350,000 per year, provided that or before such date Corporation has elected
Xxxxxxxx to be its Chief Executive Officer as part of the orderly transition
plan contemplated by this Amendment. If Xxxxxxxx is elected to the position of
Chief Executive Officer at some later date, such later date shall be the Change
in Compensation Date. On the one-year anniversary of the Change in Compensation
Date, Officer's base salary shall be further reduced to $250,000 per year. After
the Change in Compensation Date, if Corporation assigns duties to Officer
pursuant to paragraph 1(c) above, which require Officer to perform on a
substantially full-time basis for an extended period, Officer may request the
Corporation to increase his base salary to a level commensurate with his former
base salary and the duties being requested.
(b) Officer shall continue to remain eligible for benefits and bonuses
throughout the Employment Period, and Corporation agrees that Officer's bonus
for the year 2002 shall not be negatively impacted by reason of the
implementation of a transition plan and the election of a new Chief Operating
Officer. Officer recognizes that his bonus for the year 2002 and for any
subsequent year remains at the discretion of the Corporation and its Nominating
and Compensation Committee, and that the Corporation will not, absent
extraordinary or unanticipated circumstances, expect to pay Officer a bonus for
periods after he ceases to serve as Chief Executive Officer.
3. Term of Agreement. Unless extended by a written agreement of both
parties, Officer and the Corporation agree that the Employment Period shall
terminate on the second anniversary of the Change in Compensation Date without
any requirement for a Notice of Termination by either party. Such date shall be
a Date of Termination but shall not be deemed a Termination Other Than For Cause
for purposes of Section 5(b) (ii) or (iii) of the Employment Agreement.
4. Officer Benefits.
(a) For the duration of the Employment Period, Officer shall continue
to receive the benefits described in the Employment Agreement. Further, during
the period following the expiration of the Employment Period, Officer and his
eligible dependents shall continue to receive the medical benefits currently
available to Officer and such eligible dependents, at the Corporation's expense,
for five years. The
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Corporation may, however, reduce the level of medical benefits provided after
the Employment Period expires to the extent such benefits cannot be made
available at a reasonable cost.
(b) Officer shall no longer receive automobile benefits following
December 31, 2003 or, if later, the Change in Compensation Date.
(c) Corporation shall, after the Change in Compensation date, provide
Officer appropriate office space and secretarial support to perform the duties
requested pursuant to Section 1(c) above.
(d) Corporation shall continue to pay Officer's club dues for the
clubs contemplated by Section 7(b) of the Employment Agreement. Upon the
expiration of the Employment Period, as amended by this Amendment, Officer shall
be entitled to purchase from the Corporation the membership interest in the club
commonly known as The Reserve at the Corporation's cost. Corporation
acknowledges that this membership is currently held in Officer's name, and
Officer acknowledges that the Corporation provided the funds to purchase this
membership interest.
(e) For purposes of the Corporation's stock incentive plans, the
officer shall be deemed to retire at the end of the Employment Period.
5. Executive Retirement Plan.
(a) Corporation has established, and Officer participates in, an
Amended and Restated Executive Retirement Plan (the "Plan"). Corporation
confirms that Officer continues to accrue an increased percentage of his Final
Average Earnings (as defined in the Plan), notwithstanding the fact that Officer
has exceeded the age of 65 years and shall continue to accrue such increased
percentage through the end of calendar year 2003. Officer agrees, that
notwithstanding the fact that he shall continue to receive a salary from the
Corporation during 2004 pursuant to the terms of the Employment Agreement as
amended by this Amendment, he shall no longer continue to receive an increased
percentage of earnings for any year after 2003, provided that a Change in
Compensation Date has occurred by December 31, 2003. Corporation agrees,
provided the Change in Compensation Date has occurred, that Officer may begin to
receive his accrued benefits in calendar year 2004, although Officer will
continue to receive a salary from Corporation during such year. Corporation
agrees to make, prior to December 31, 2002, such amendments to the Plan as are
necessary to permit Officer to receive such benefits. However, Officer agrees
that such amendments and such eligibility to receive benefits beginning in
calendar year 2004 shall not confer upon Officer the right to require in 2004
the establishment of a trust pursuant to any terms of the Plan providing for
such a trust.
6. Agreement Otherwise Confirmed. Except for the specific changes made by
this Amendment, the Employment Agreement shall remain in full force and effect.
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IN WITNESS WHEREOF, the parties have executed this Amendment to
Employment Agreement this ____ day of October, 2002, to be effective as of
October 8, 2002.
"Corporation"
HEALTH CARE PROPERTY INVESTORS, INC.,
a Maryland corporation
By: ____________________________________
Name: Xxxxxxx XxXxx
Title: Director signing at direction of the Board
"Officer"
_________________________________________
XXXXXXX X. XXXXX
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