EMPLOYMENT AGREEMENT
Exhibit 10.1
EXECUTION COPY
This EMPLOYMENT AGREEMENT (the “Agreement”) made as of the 22nd day of June, 2010
(the “Effective Date”), by and between Ventas, Inc., a Delaware corporation (the “Company”) and
Xxxx X. Xxxxxxxxxxx (the “Executive”).
WHEREAS, the Executive is currently employed by Xxxxxxxxxxx Healthcare Services, Inc.
(“Lillibridge”); and
WHEREAS, concurrently herewith, the Company has entered into that certain Master Transaction
Agreement dated as of June 22, 2010 by and among the Company, the other Buyer Parties identified
therein, the Seller Parties identified therein and the Shareholders identified therein (the
“Transaction Agreement”), pursuant to which each such Buyer Party, Seller Party and Shareholder has
agreed to and shall consummate, and, to the extent applicable, shall cause each of its controlled
affiliates to consummate, on or before the “Closing” (as defined therein), their respective
obligations pursuant to and pertaining to the transactions described therein (the “Transactions”)
including the acquisition of each of Xxxxxxxxxxx Healthcare Real Estate Trust (“LHRET”),
Xxxxxxxxxxx Healthcare Properties Trust and LHP-B Trust by the Company through the merger of an
Affiliate of the Company with and into each such entity (such acquisition, the “Acquisition”); and
WHEREAS, as of the Closing, the Executive desires to be employed by the Company and the
Company desires to hire the Executive subject to, and strictly conditioned upon the occurrence of
the Closing; and
WHEREAS, the Board of Directors of the Company (the “Board”), or in the alternative, the
Company’s Executive Compensation Committee (the “Committee”), has determined that it is in the best
interests of the Company to enter into this Agreement; and
WHEREAS, the Company has provided good and valuable consideration for the promises and
agreements of the Executive contained herein,
NOW, THEREFORE, in consideration of the promises and the respective covenants and agreements
contained herein, and intending to be legally bound hereby, the Company and the Executive agree as
follows:
1. Employment. The Company hereby agrees to employ the Executive, and the Executive
hereby agrees to be employed by the Company, on the terms and conditions herein set forth. Subject
to the termination provisions hereinafter provided, the term of the Executive’s employment under
this Agreement (the “Term”) shall begin on the date on which the Closing occurs (the “Commencement
Date”) and shall end on the fifth (5th) anniversary of the Commencement Date (the
“Expiration Date”). The parties agree and acknowledge that if the Closing does not occur as
contemplated in the Transaction Agreement by December 31, 2010, that this Agreement shall be null
and void ab initio; provided, however, that notwithstanding the foregoing, the provisions of
Section 9 and Section 10 shall survive and apply to the Executive upon execution of this Agreement,
regardless of the occurrence of the Closing.
2. Duties. The Company shall employ the Executive during the Term as its Executive
Vice President – MPO and as CEO of Lillibridge and, subject to the oversight, control and direction
of the Board and the CEO (defined below), the Executive shall serve as the principal executive
officer of the Company’s Medical Property Operations (“MPO”). The term “Medical Property
Operations” means the activities of the Company and its affiliates and their respective
subsidiaries with respect to the acquisition, disposition, development, advising and management of
Medical Properties (defined below), including the Company’s current MPO activities and the
oversight of the Company’s existing MPO relationships, all to the extent mutually agreed to be in
the best interest of the Company and in compliance with the Company’s existing contractual
relationships, all as determined on a case-by-case basis. In addition to the above, the Executive
and the Company shall jointly determine from time to time the Executive’s role and responsibilities
in connection with the acquisition, disposition, development, advising and management of inpatient
hospital properties of the Company and its affiliates and subsidiaries covered by long-term single
tenant leases with not-for-profit organizations. The term “Medical Properties” means medical
office and outpatient healthcare properties, including medical office and outpatient healthcare
properties covered by long-term single tenant leases. For the avoidance of doubt, Medical
Properties shall not include for-profit hospital properties with either whole or partial inpatient
operations. The Executive shall report to the Company’s Chief Executive Officer (the “CEO”). The
Executive shall have duties and responsibilities consistent with similarly situated senior officers
of MPO divisions of other publicly-traded healthcare real estate investment trusts, at all times
within the context of the Company’s organizational goals, budgets, polices, controls and processes
and such other duties as determined by the CEO from time to time. The Executive shall be a member
of the Management Capital Committee. The Executive shall perform such other duties (including
presentations at industry conferences) as are assigned to him and are consistent with his title and
other duties. The Executive’s duties will be performed at and from the Company’s offices in
Chicago, Illinois; subject, however, to such travel to the Company’s corporate offices in
Louisville, Kentucky as may be reasonably required for the performance of the Executive’s duties or
as may be reasonably requested by the Company.
3. Extent of Services. Subject to the direction and control of the Board and the CEO,
the Executive shall have the power and authority commensurate with his executive status and
necessary to perform his duties hereunder. The Company will provide the Executive the resources
necessary to perform his duties hereunder, as determined by the Company in its sole discretion.
During the Term, the Executive shall devote his entire working time, attention, labor, skill and
energies in and to the business of the Company, and shall not, without the prior written consent of
the Company, be actively engaged in any other business activity (including arranging or
establishing new businesses), whether or not such business activity is pursued for gain, profit or
other pecuniary advantage; provided, however, that, the Executive will be entitled
to be a member of, participate in, and serve on the boards of professional organizations and
charitable organizations to the extent that such participation or service does not interfere with
the Executive’s duties under this Agreement; provided further, that serving as a
member of any board of any entity will be subject to approval of the Nominating and Governance
Committee of the Board and other Company policies as may be in effect or required from time to
time; provided further, that as of the Effective Date the Company has so approved
the Executive’s service as (i) Vice Chairman and Incoming Chairman for 2010 – 2011 of the World
Presidents’ Organization, (ii) member of the Membership Committee of the Economic Club of Chicago
and (iii) member of the Board of Directors and Chairman of the Facilities Committee of the Joffrey
Ballet.
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4. Compensation. As compensation for services hereunder rendered, the Executive shall
receive during the Term (each as may be subject to Section 13 ):
(a) Base Salary. An annual base salary (“Base Salary”) of not less than $375,000,
payable in equal installments in accordance with the Company’s normal payroll procedures, to be
reviewed annually by the Committee, with input from the CEO. The Executive may receive increases
(but not decreases) in his Base Salary from time to time, as approved by the Committee, with input
from the CEO. The amount of the Base Salary of the Executive will first be reviewed for adjustment
with regard to the Base Salary to be paid in calendar year 2011.
(b) Annual Bonus. The Company shall pay or cause to be paid to the Executive an
annual cash bonus (“Annual Bonus”) in accordance with the terms set forth below (in each instance,
provided that the Executive is employed by the Company on the date such bonuses are paid).
(i) For calendar year 2010, the amount of the Annual Bonus shall be not less
than $525,000, pro-rated, on a per diem basis, for that portion of calendar year 2010
in which the Executive is employed. The Annual Bonus for calendar year 2010 shall be
paid within two and one-half (2 1/2) months following the end of calendar year 2010,
provided that the Executive is employed by the Company on the date of payment
(subject to Sections 7(e) and 8(a)(5)).
(ii) For calendar year 2011 and thereafter, the Executive shall be eligible for
an Annual Bonus with an expected annual target of 140% of the Executive’s Base Salary
for such relevant year based on the Executive’s and the Company’s achievement of
individual, MPO and corporate performance goals, as determined by the Committee or
such annual incentive plan as may be in effect from time to time (any or all of
which, the “Bonus Plan”) in the Committee’s discretion. The actual amount of each
Annual Bonus will be determined based on the attainment of performance goals set by
the Committee in accordance with its policies, plans and programs as in effect from
time to time and a performance evaluation for the applicable year, each in a manner
consistent with that applicable to other executive officers of the Company; the
Annual Bonus shall be paid within two and one-half (2 1/2) months following the end of
the calendar year in which earned, provided that the Executive is employed by the
Company on the date of payment (subject to Sections 7(e) and 8(a)(5)).
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(c) Annual Long-Term Incentive Awards. The Executive shall be entitled to participate
in the Company’s 2006 Incentive Plan (“LTIP”), and be granted awards under the LTIP, all on such
terms and conditions as may be determined by the Committee from time to time.
(i) For calendar year 2010, the Executive shall receive an award pursuant to the
LTIP having a grant date fair value of not less than $600,000, pro-rated, on a per
diem basis, for that portion of calendar year 2010 in which the Executive is
employed, and consisting of both Options (as defined in the LTIP) to purchase Shares
(as defined in the LTIP) of the Company’s common stock and Shares of Restricted Stock
(as defined in the LTIP). The LTIP award to the Executive for calendar year 2010
shall be made when equity grants are made to other executive officers of the Company,
generally not later than March 31, provided that the Executive is employed by the
Company on the date of grant to other executive officers of the Company. The
methodology for the valuation of the Options and the allocation between Options and
Restricted Stock shall be made in the sole discretion of the Committee; provided that
such methodology for the valuation and allocation will be similar to the methodology
for valuation and allocation used for other executive officers of the Company, except
as may otherwise be determined by the Committee. It is the current intention of the
Company that the allocation shall be 30% Options and 70% Restricted Stock;
provided, however, that, such allocation is subject to change in the
sole discretion of the Committee provided such change is also applicable to other
executive officers of the Company. Such Options and Restricted Stock shall vest (and
in the case of the Options become exercisable), subject to continued employment on
the applicable vesting date, as follows: one third (1/3) on the date of grant; one
third (1/3) on the first anniversary of the date of grant; and the remaining one
third (1/3) on the second anniversary of the date of grant; provided,
however, that such Options and Restricted Stock that are not vested (or
exercisable) upon the Executive’s termination of employment shall be forfeited upon
the Executive’s termination of employment except as otherwise provided in the LTIP,
the applicable Option or Restricted Stock Award Agreement or this Agreement.
(ii) For calendar year 2011 and thereafter, the Executive shall be eligible for
an annual award pursuant to the LTIP with an expected annual target grant date fair
value of 160% of the Executive’s Base Salary (the “Annual Grant”), it being
understood that the actual amount of each Annual Grant will be determined based on
the Executive’s and the Company’s achievement of individual, MPO and corporate
performance goals, as determined by the Committee, each in a manner consistent with
that applicable to other executive officers of the Company and taking into account
the performance of the MPO, subject in all events to the authority and discretion of
the Committee. The Annual Grants will consist of Options to purchase Shares of the
Company’s common stock and Shares of Restricted Stock. The methodology for the
valuation of the Options and the allocation between Options and Restricted Stock
shall be made in the sole discretion of the Committee; provided that such methodology
for the valuation and allocation will be similar to the methodology for valuation and
allocation used for other executive officers of the Company, except as may otherwise
be determined by the Committee. The LTIP award to the Executive for calendar year
2011 and thereafter shall be made when equity grants are made to other executive
officers of the Company, generally not later than March 31 of the relevant year,
provided that the Executive is employed by the Company on the date of grant to other
executive officers of the Company. Such Options and Restricted Stock shall vest (and
in the case of the Options become exercisable) all as determined by the Committee;
provided, however, that such Options and Restricted Stock that are
not vested (or exercisable) upon the Executive’s termination of employment shall be
forfeited upon the Executive’s termination of employment except as otherwise provided
in the LTIP, the Option or Restricted Award Agreement or this Agreement.
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(iii) Except for any terms set forth in this Agreement, the Options and
Restricted Stock Award Agreements will be in form and substance generally similar to
the forms adopted under the LTIP and on file with the U.S. Securities and Exchange
Commission, subject at all times to the discretion of the Committee to establish the
terms and conditions of any award.
(d) Incentive Share Grant I. Subject to Section 4(g), as of the date of Closing, the
Company shall issue to the Executive 55,561 restricted shares of its common stock (the “Incentive
Share Grant I”), pursuant to the LTIP, under the terms and conditions set forth in the restricted
stock grant agreement, dated as of the Closing date (the “Incentive Share Grant I Agreement”).
Subject to the Incentive Share Grant I Agreement, the Incentive Share Grant I will be forfeited
upon the termination of the Executive’s employment with the Company, other than terminations that
occur by reason of death, Disability, termination of employment by the Company without Cause or
termination by the Executive for Good Reason (each of Disability, Cause and Good Reason as defined
below). In addition, subject to the Incentive Share Grant I Agreement, the Incentive Share Grant I
will be forfeited upon a termination for Cause under Section 6(b)(i) hereof. If the Executive is
terminated for Cause under Sections 6(b)(ii), 6(b)(iii) or 6(b)(iv) hereof, the Incentive Share
Grant I will continue to vest on the then-current vesting schedule unless the Executive (i)
breaches his obligations under Section 9 hereof, or (ii) breaches his obligations or restrictions
under that certain Intellectual Property Rights Purchase and Sale Agreement, of even date herewith,
by and among the Company and the Executive, in which case, subject to the Incentive Share Grant I
Agreement, the Incentive Share Grant I will be forfeited. The Incentive Share Grant I Agreement
shall provide that such forfeiture restrictions will lapse subject to the applicable vesting
schedule, as follows: 30% on the first anniversary of the Closing; 60% on the second anniversary
of the Closing; and 100% on the earliest of:
(i) the third anniversary of the Closing;
(ii) upon the Executive’s death or Disability;
(iii) upon the direct or indirect sale of substantially all of (A) the Medical
Properties or (B) the Medical Property Operations acquired in the Transactions
contemplated by the Acquisition definitive documents (and any other properties, which
become 100% owned by the Company or its affiliates after the date hereof, in which
THL-191 JV, LLC or LHT SH, LLC or LilliCal JV, LLC owned a minority interest in on
the date hereof), if, in the case of (B), those Medical Property Operations represent
more than 50% of the net operating income of all of the Company’s Medical Property
Operations (measured on a trailing 12-month basis, which shall include pro forma net
operating income from acquisitions of Medical Properties made within that 12-month
period); provided, however, that the foregoing shall not include any
transaction where all or a portion of the Medical Property Operations are
transferred to a joint venture between the Company and an institutional third party,
and following the formation of the joint venture the Company continues to manage the
properties transferred into the joint venture;
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(iv) the first anniversary of a Change of Control (as defined below) of the
Company, if the Executive is then employed by the Company or its successors; or
(v) the termination of the Executive’s employment by the Company other than for
Cause, or by the Executive for Good Reason.
(e) Incentive Share Xxxxx XX. As of the date of Closing, the Company shall issue to
the Executive 55,561 restricted shares of its common stock (the “Incentive Share Xxxxx XX”),
pursuant to the LTIP, under the terms and conditions set forth in the restricted stock grant
agreement, dated as of the Closing date (the “Incentive Share Xxxxx XX Agreement”). Subject to the
Incentive Share Xxxxx XX Agreement, the Incentive Share Xxxxx XX will be forfeited upon the
termination of the Executive’s employment with the Company, other than terminations that occur by
reason of death, Disability, termination of employment by the Company without Cause or termination
by the Executive for Good Reason (each of Disability, Cause and Good Reason as defined below). In
addition, subject to the Incentive Share Xxxxx XX Agreement, the Incentive Share Xxxxx XX will be
forfeited upon a termination for Cause under Section 6(b)(i) hereof. If the Executive is
terminated for Cause under Sections 6(b)(ii), 6(b)(iii) or 6(b)(iv) hereof, the Incentive Share
Xxxxx XX will continue to vest on the then-current vesting schedule unless the Executive (i)
breaches his obligations under Section 9 hereof, or (ii) breaches his obligations or restrictions
under that certain Intellectual Property Rights Purchase and Sale Agreement, of even date herewith,
by and among the Company and the Executive, in which case, subject to the Incentive Share Xxxxx XX
Agreement, the Incentive Share Xxxxx XX will be forfeited. The Incentive Share Xxxxx XX Agreement
shall provide that such forfeiture restrictions will lapse subject to the applicable vesting
schedule, as follows: 50% on the fourth anniversary of the Closing; and 100% on the earliest of:
(i) the fifth anniversary of the Closing;
(ii) upon the Executive’s death or Disability;
(iii) upon the direct or indirect sale of substantially all of (A) the Medical
Properties or (B) the Medical Property Operations acquired in the Transactions
contemplated by the Acquisition definitive documents (and any other properties, which
become 100% owned by the Company or its affiliates after the date hereof, in which
THL-191 JV, LLC or LHT SH, LLC or LilliCal JV, LLC owned a minority interest in on
the date hereof), if, in the case of (B), those Medical Property Operations represent
more than 50% of the net operating income of all of the Company’s Medical Property
Operations (measured on a trailing 12-month basis, which shall include pro forma net
operating income from acquisitions of Medical Properties made within that 12-month
period); provided, however, that the foregoing shall not include any
transaction where all or a portion of the Medical Property Operations are
transferred to a joint venture between the Company and an institutional third party,
and following the formation of the joint venture the Company continues to manage the
properties transferred into the joint venture;
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(iv) the first anniversary of a Change of Control (as defined below) of the
Company, if the Executive is then employed by the Company or its successors; or
(v) the termination of the Executive’s employment by the Company other than for
Cause, or by the Executive for Good Reason.
(f) Incentive Share Agreements. The Incentive Share Grant I Agreement and Incentive
Share Xxxxx XX Agreement (together, the “Incentive Share Agreements”) shall provide that all
dividends declared with respect to the Incentive Share Grant I and Incentive Share Xxxxx XX
(together, the “Incentive Shares”) shall be distributed to the holders of the Incentive Shares
without regard to vesting; provided that all dividends paid with respect to unvested shares shall
be subject to applicable wage withholding to the extent required by law. Except for any terms set
forth in this Agreement, the Incentive Share Agreements will be in form and substance generally
similar to the forms adopted under the LTIP and on file prior to the Effective Date with the U.S.
Securities and Exchange Commission. If requested by the Executive not more than twenty-five (25)
days following the date of Closing, the Company will cooperate with the Executive in the making of
one or more elections contemplated under Section 83(b) of the Internal Revenue Code of 1986, as
amended (a “Section 83(b) Election”) with respect to all or any portion of the Incentive Shares.
In the event that the Executive and the Company make a timely Section 83(b) Election with respect
to all or any portion of the Incentive Shares, to the extent permitted by law such Incentive Shares
will be treated as vested for purposes of determining whether applicable wage withholding is
required with respect to all dividends paid with respect to such Incentive Shares.
(g) Profits Interests. Notwithstanding the foregoing, as an alternative to the grant
of the Incentive Share Grant I, the parties may mutually agree that the Company may grant to the
Executive an economic equivalent award of downREIT profits interests, which are convertible into
shares of the Company in place of some or all of Incentive Share Grant I. Any such profits
interests issued in place of Incentive Share Grant I shall be subject to the terms and provisions
of Section 4(d), including, without limitation, the vesting schedule.
5. Benefits.
(a) The Executive shall be entitled to participate in the Ventas, Inc. 401(k) Retirement
Savings Plan (the “401(k) Plan”), Deferred Compensation Plan (if any), medical, dental, long term
disability and group life insurance coverages and fringe benefit plans, policies, practices and
programs, from time to time in effect for executives of the Company and its affiliates in
accordance with the terms and conditions thereof.
(b) The Executive shall be entitled to accrue four weeks of paid vacation per calendar year,
in accordance with the Company’s vacation plan, policy or program in effect from time to time, at a
time or times mutually agreed between the Executive and the CEO.
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(c) The Executive may incur reasonable expenses for promoting the Company’s business,
including expenses for entertainment, travel and similar items. The Company shall reimburse the
Executive for such reasonable expenses upon receipt by the Company of accounting in accordance with
the Company’s reimbursement policies and procedures in effect from time to time.
(d) The Company will reimburse the Executive for the cost of parking for one automobile at the
offices of the Executive’s employment and for the cost of membership in the Union League Club of
Chicago, Urban Land Institute, Economic Club of Chicago and for 2011 only, the World Presidents’
Organization, not to exceed $22,000 in the aggregate annually. Beginning in 2012, the Company and
the Executive shall mutually determine the most beneficial use of the funds attributable to the
membership dues for the World Presidents’ Organization (approximately $11,000 annually), including
the use of such funds for professional development (e.g. executive coaching, media training and the
like) for the Executive, and the Company shall determine whether to continue to reimburse the
Executive for such World Presidents’ Organization membership dues.
(e) Notwithstanding the foregoing, the parties acknowledge and agree that for a period of time
following the Closing, the Executive may remain in certain benefit plans, programs or arrangements
of Lillibridge until such plans, programs or arrangements are terminated or integrated into such
plans, programs or arrangements maintained by the Company, all as may be determined in the sole
discretion of the Company.
6. Termination of Employment. The Executive’s employment hereunder and this Agreement
may be terminated during the Term by the Company or the Executive at any time, for any reason,
without a breach of this Agreement. The Executive’s right to benefits and payments, if any, for
periods after the date on which his employment with the Company terminates during the Term shall be
determined in accordance with the provisions of this Section 6 and Section 7.
(a) Death or Disability. The Executive’s employment hereunder and this Agreement
shall terminate automatically upon the Executive’s death during the Term. If the Company
determines in good faith that the Executive’s Disability has occurred during the Term, it may give
to the Executive written notice of its intention to terminate the Executive’s employment. In such
event, the Executive’s employment with the Company shall terminate effective on the 30th day after
receipt of such notice by the Executive, or the Expiration Date, if earlier (the “Disability
Effective Date”), provided that, within the thirty (30) days after such receipt, the Executive
shall not have returned to full-time performance of the Executive’s duties. For purposes of this
Agreement, “Disability” shall mean a mental or physical condition which, in the reasonable opinion
of the Company, based on the opinion of a doctor, renders the Executive with or without reasonable
accommodation unable or incompetent to carry out his material job responsibilities which he held or
the material duties he was assigned at the time the disability was incurred, which has existed for
at least three (3) months and which in the opinion of a physician selected by the Company is
expected to be permanent or to last for an indefinite duration or a duration in excess of six (6)
months.
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(b) Cause. The Company may terminate the Executive’s employment hereunder and this
Agreement during the Term for Cause. For purposes of this Agreement, “Cause” shall mean the
Executive’s:
(i) indictment for, conviction of, or plea of nolo contendere
to, any felony, of any type, or a misdemeanor involving fraud, dishonesty or moral
turpitude;
(ii) willful or intentional material breach of his duties and responsibilities
hereunder;
(iii) willful or intentional material misconduct in the performance of his
duties under this Agreement; or
(iv) willful or intentional material failure to comply with any lawful written
instruction or directive of the CEO.
With respect to provisions (ii), (iii) and (iv) above, 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 the Executive
in good faith and in the best interests of the Company, and as such, will not constitute grounds
for a determination of “Cause.”
(c) Good Reason. The Executive may terminate his employment hereunder and this
Agreement during the Term for Good Reason. For purposes of this Agreement, “Good Reason” shall
mean any of the following:
(i) the assignment to the Executive of any duties materially and adversely
inconsistent with, or a material diminution of, the Executive’s position (including
offices, titles, reporting requirements or responsibilities), authority or duties as
prescribed by Section 2;
(ii) the Company’s requiring the Executive to be based at any office or location
that is more than fifty (50) miles from Chicago, Illinois;
(iii) the failure to pay Base Salary in at least the amount prescribed by
Section 4(a);
(iv) the failure to provide an Annual Bonus opportunity prescribed by Section
4(b);
(v) the failure to provide benefits or perquisites prescribed by Section 5 or
substantially similar benefits or perquisites;
(vi) if without the Executive’s consent (which may be withheld in his sole
discretion), the MPO ceases to be operated under the Lillibridge brand and name,
either exclusively or non-exclusively in conjunction with the Company’s brand and
name, as determined from time to time by the Company (by way of example, and not
limitation, using “Xxxxxxxxxxx — a Ventas Company” would not constitute Good Reason);
or
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(vii) any other action or inaction that constitutes a material breach by the
Company of this Agreement, or a failure by the Company to cause a successor, prior to
or as of the date it becomes a successor, to assume and agree to perform this
Agreement in accordance with the provisions of Section 11(c);
which in each case either is not curable, or if curable is not cured within thirty (30)
days after written notice from the Executive to the Company setting forth in reasonable
detail the facts and circumstances claimed to constitute Good Reason and affording the
Company an opportunity to cure. Any termination of employment by the Executive for Good
Reason shall be communicated to the Company by Notice of Termination in accordance with
this Agreement. The Executive must deliver to the Company the Notice of Termination not
later than ninety (90) days after the Executive has actual knowledge of an act or omission
which constitutes Good Reason. In the event that the Company fails to remedy the
condition constituting Good Reason during the applicable cure period, the Separation from
Service (as defined below) must occur, if at all, within six (6) months following the end
of such cure period in order for such termination as a result of such condition to
constitute a termination for Good Reason.
(d) Notice of Termination. Any termination of the Executive’s employment hereunder by
the Company or the Executive’s resignation of employment hereunder shall be communicated by notice
(a “Notice of Termination”) given in accordance with this Agreement.
(i) For purposes of any termination by the Company for Cause or by the Executive
for Good Reason, as provided herein, a Notice of Termination means a written notice
which (A) indicates the specific termination provision in this Agreement relied upon,
(B) sets forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination by the Company (for Cause) or by the Executive (with Good
Reason) of the Executive’s employment under the provision so indicated, and (C)
specifies the intended termination date. The failure by the Company or the Executive
to set forth in the Notice of Termination any fact or circumstance which contributes
to a showing of Cause or Good Reason shall not waive any right of the Company or the
Executive, respectively, hereunder or preclude the Company or the Executive,
respectively, from asserting such fact or circumstance in enforcing their respective
rights hereunder.
(ii) For purposes of any termination by the Executive without Good Reason, as
provided herein, a Notice of Termination means a written notice to such effect
provided to the Company not less than sixty (60) days prior to the effective date
thereof.
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(e) Date of Termination. “Date of Termination” means (i) if the Executive’s
employment is terminated by the Company for Cause or by the Executive for Good Reason, the date
specified in the Notice of Termination (consistent with the provisions of Section 6(c)), (ii) if
the Executive’s employment is terminated by the Company other than for Cause or Disability, the
Date of Termination shall be the date on which the Company notified the Executive of such
termination, (iii) if the Executive resigns other than for Good Reason, the Date of Termination
shall be the date sixty (60) days after the Executive notified the Company of such termination and
(iv) if the Executive’s employment is terminated by reason of death or Disability, the Date of
Termination shall be the date of death of the Executive or the Disability Effective Date, as the
case may be. Following the Company’s receipt of a Notice of Termination pursuant to (iii) above,
the Company may, by written notice to the Executive, designate an earlier date (not earlier than
the date of such notice to the Executive) as of which the Executive’s Date of Termination shall
occur; provided that the Company continue to provide Base Salary and insurance benefits to the
Executive in lieu of the continued employment of the Executive through the original Date of
Termination had such earlier termination not occurred. To the extent necessary to have payments
and benefits under this Agreement be exempt from the requirements of Section 409A of the Internal
Revenue Code of 1986, as amended (“Section 409A”) or comply with the requirements of Section 409A,
the Company and the Executive agree to cooperate in a reasonable manner (including with regard to
any post-termination services by the Executive) such that the Date of Termination as defined in
this Agreement shall constitute a “separation from service” pursuant to Section 409A (“Separation
from Service”). Notwithstanding anything contained in this Agreement to the contrary, the date on
which a Separation from Service occurs shall be the “Date of Termination” or termination of
employment for purposes of determining the timing of payments under this Agreement to the extent
necessary to have such payments and benefits under this Agreement be exempt from the requirements
of Section 409A or comply with the requirements of Section 409A.
7. Obligations of the Company Upon Termination. Following any termination of the
Executive’s employment hereunder during the Term except for a termination in connection with a
Change of Control covered by Section 8 hereof, the Company shall pay the Executive his Base Salary
through the Date of Termination, unpaid expense reimbursement (subject to appropriate
documentation) and any amounts accrued or owed (but yet unpaid) to the Executive pursuant to the
terms and conditions of the executive benefit plans and programs of the Company at the time such
payments are due, including accrued and unpaid vacation (the “Accrued Obligations”). In addition
to the Accrued Obligations, as may be provided below, and strictly conditioned upon the Executive’s
execution and non-revocation of a general release of claims in form substantially similar to the
form attached hereto as Attachment A (the “Release”) within thirty (30) days following the Date of
Termination, the Executive shall be entitled to the following additional payments:
(a) Death or Disability. If, during the Term, the Executive’s employment shall
terminate by reason of the Executive’s death or Disability, the Company shall pay to the Executive
(or his designated beneficiary or estate, as the case may be) the Accrued Obligations, plus the
Annual Bonus the Executive would have received for the year of termination of employment assuming
maximum individual and Company performance (the “Maximum Annual Bonus”), prorated, on a per diem
basis, for the number of days in the year of the termination of employment during which the
Executive was employed by the Company. The Company will pay such amount to the Executive on the
date that such amount would otherwise have been payable to the Executive if the Executive’s
employment had not terminated.
11
(b) Other than for Cause, or for Good Reason. If, during the Term, the Company shall
terminate the Executive’s employment other than for Cause (but not for Disability), or if the
Executive shall terminate his employment for Good Reason,
(1) The Company shall pay the Executive, within thirty (30) days of the Date of
Termination of employment (but not earlier than the date on which the Release
becomes irrevocable), a severance amount equal to the sum of one (1) year of the
Executive’s annual Base Salary as then in effect, plus the Maximum Annual Bonus
(together the “Severance Payment”), with such Severance Payment payable in a single
lump-sum payment within thirty (30) days following the date of termination. If the
Executive should die after amounts become payable under this Paragraph, such amounts
shall thereafter be paid to the Executive’s estate. In no event shall the Severance
Payment made pursuant to this Section 7(b)(1) be in excess of the Maximum Amount.
“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 2011,
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, 2010 and the end
of the calendar year immediately preceding the date of termination. As an example,
if the termination occurs in 2012, the Maximum Amount shall be adjusted for
increases in the Consumer Price Index that occur between December 31, 2010 and
December 31, 2011 and if the termination occurs in 2013, the Maximum Amount shall be
adjusted for increases in the Consumer Price Index that occur between December 31,
2010 and December 31, 2012. 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.
(2) During the one (1) year period commencing on the Date of Termination (the
“Benefit Period”), provided the Executive is eligible for and elects continuing
coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended (“COBRA”), the Company shall provide the Executive with continued medical,
dental, long-term disability and life insurance benefits at the same levels and
costs as if he had remained actively employed during the Benefit Period; provided
that the Executive shall not participate in any short term disability, bonus (except
as provided in Section 7(b)(1)), vacation pay, retirement benefits, long-term
incentive, stock option or other equity grant plan, program or arrangement after the
Date of Termination. The receipt of the medical and dental benefits shall be
conditioned upon the Executive continuing to pay the Company on a monthly basis the
portion of the periodic cost of such continued coverage equal to the dollar amount
of such periodic cost as if he had remained employed during the Benefit Period.
Such medical and dental benefits shall become secondary to the extent the Executive
receives similar benefits from a subsequent employer; provided, that the Executive
agrees to report to the Company any coverage and benefits actually received by or
made available to the Executive from such other employer(s). In the event continued
long-term disability is unavailable for the Executive on a post-termination basis,
the Company shall pay to the Executive, in a single lump-sum, an amount equal to the
premiums previously paid for such coverage for a twelve (12) month period.
12
(3) To the extent requested by the Executive within thirty (30) days following
the Date of Termination, the Company shall take all action necessary, if any, to
facilitate the Executive’s exercise of all conversion privileges, if any, under any
applicable group term life insurance policy.
(4) Options and restricted stock held by the Executive for which the exercise
period has not yet lapsed or expired shall be subject to applicable terms and
conditions of the LTIP and applicable option or restricted stock award agreements;
provided, however, that any outstanding and unvested Incentive
Shares shall become fully vested.
(c) Cause; Executive Resignation. If the Executive’s employment shall be terminated
by the Company for Cause or by the Executive other than for Good Reason (and other than due to the
Executive’s death), during the Term, the Company shall have no further obligations to the Executive
under this Agreement other than to pay the Accrued Obligations as provided above.
(d) Death after Termination. In the event of the death of the Executive during the
period the Executive is receiving payments pursuant to this Agreement, the Executive’s designated
beneficiary shall be entitled to receive the balance of the payments, or in the event of no
designated beneficiary, the remaining payments shall be made to the Executive’s estate.
(e) Annual Bonus Entitlement. In the event of the Executive’s termination pursuant to
Sections 7(a) or 7(b), and such termination occurs (i) following the completion of an applicable
performance period for purposes of the Annual Bonus and (ii) prior to the payment of the Annual
Bonus for such performance period, then the Executive shall be entitled to such Annual Bonus, based
on the actual performance relative to the performance measures established pursuant to Section
4(b), as determined by the Committee (with the same authority and discretion as provided in Section
4(b)), with such payment being made at the same time and in the same manner as annual bonuses are
paid to the other executive officers of the Company.
(a) Termination other than for Cause, or for Good Reason. If during the Term (i) a
Change of Control (as defined below) shall occur, and (ii) within one year from the date of the
occurrence of such Change of Control (and within the Term) the Company shall terminate the
Executive’s employment other than for Cause or the Executive shall terminate his employment for
Good Reason (a “Change of Control Severance”), subject to the Executive’s execution and
non-revocation of the Release within thirty (30) days following the Date of Termination and in lieu
of the benefits under Section 7 hereof, in addition to payment of the Accrued Obligations, the
Executive shall be entitled to the following payments:
(1) The Company shall pay the Executive within thirty (30) days of the Date of
Termination of employment (but not earlier than the date on which the Release
becomes irrevocable) a lump-sum payment equal to two (2) times the sum of (i) one
(1) year of the Executive’s annual Base Salary as then in effect, plus (ii) the
Executive’s Maximum Annual Bonus for the year of termination, plus (iii) the fair
market value (determined as of the Date of Termination) of the target number of
shares of Restricted Stock authorized to be granted to the Executive under the LTIP
in the year of termination assuming all performance criteria for such awards were
deemed satisfied (the “CIC Severance Payment”); provided that in no event shall the
amount of such payment exceed the Maximum Amount.
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(2) Options held by the Executive for which the exercise period has not yet
lapsed or expired shall become fully vested and exercisable, and all Restricted
Stock held by the Executive shall become fully vested.
(3) During the eighteen (18) month period commencing on the date of the Change
in Control Severance (the “CIC Benefit Period”), provided the Executive is eligible
for and elects continuing coverage under COBRA, the Company shall provide the
Executive with continued medical, dental, long-term disability and life insurance
benefits at the same levels and costs as if he had remained actively employed during
the CIC Benefit Period; provided that the Executive shall not participate in any
short term disability, bonus (except as provided in Section 8(a)(1)), vacation pay,
retirement benefits, long-term incentive, stock option or other equity grant plan,
program or arrangement after the Date of Termination. The receipt of the medical
and dental benefits shall be conditioned upon the Executive continuing to pay the
Company on a monthly basis the portion of the periodic cost of such continued
coverage equal to the dollar amount of such periodic cost as if he had remained
employed during the CIC Benefit Period. Such medical and dental benefits shall
become secondary to the extent the Executive receives similar benefits from a
subsequent employer; provided, that the Executive agrees to report to the Company
any coverage and benefits actually received by or made available to the Executive
from such other employer(s).
(4) To the extent requested by the Executive within thirty (30) days following
the Date of Termination, the Company shall take all action necessary, if any, to
facilitate the Executive’s exercise of all conversion privileges, if any, under any
applicable group term life insurance policy.
(5) In the event of the Executive’s termination pursuant to this Section 8(a),
and such termination occurs (i) following the completion of an applicable
performance period for purposes of the Annual Bonus and (ii) prior to the payment of
the Annual Bonus for such performance period, then the Executive shall be entitled
to such Annual Bonus, based on the actual performance relative to the performance
measures established pursuant to Section 4(b), as determined by the Committee (with
the same authority and discretion as provided in Section 4(b)), with such payment
being made at the same time and in the same manner as annual bonuses are paid to the
other executive officers of the Company.
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Notwithstanding the foregoing, in the event that the Change of Control does not also qualify
as a “change in ownership” or “change in the effective control” of a corporation, as defined under
Section 409A of the Code, and the CIC Severance Payment amounts constitute “deferred compensation”
under Section 409A of the Code, then such CIC Severance Payment shall be paid in the same time and
manner as provided under Section 7(b)(1).
(b) For purposes of this Agreement, a “Change in Control” means the occurrence of any of the
following events:
(1) An acquisition (other than directly from the Company) of any voting
securities of the Company (the “Voting Securities”) by any “Person” (as defined in
Section 3(a)(9) of the Securities Exchange Act of 1934 (the “1934 Act”) and used in
Section 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d)),
immediately after which such Person has “Beneficial Ownership” (within the mean of
Rule 13d-3 under the 0000 Xxx) of more than 50% of the combined voting power of
Company’s then outstanding Voting Securities; provided, however, that in determining
whether a Change in Control has occurred, Voting Securities which are acquired in an
acquisition by (i) the Company or any of its subsidiaries, (ii) an employee benefit
plan (or a trust forming a part thereof) maintained by the Company or any of its
subsidiaries or (iii) any Person in connection with an acquisition referred to in
the preceding clause (i), shall not constitute an acquisition which would cause a
Change in Control.
(2) During any twelve month period, the individuals who, as of the Closing,
constituted the Board (the “Incumbent Board”) cease for any reason to constitute
over 50% of the Board; provided, however, that if the election, or nomination for
election by the Company’s stockholders, of any new director was approved by a vote
of over 50% of the Incumbent Board, such new director shall, for purposes of this
Section 8(b), be considered as though such person were a member of the Incumbent
Board; provided, further, however, that no individual shall be considered a member
of the Incumbent Board if such individual initially assumed office as a result of
either an actual or threatened “Election Contest” (as described in Rule 14a-11
promulgated under the 0000 Xxx) or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board of Directors of
the Company (a “Proxy Contest”), including by reason of any agreement intended to
avoid or settle any Election Contest or Proxy Contest.
15
(3) Consummation of a merger, consolidation or reorganization involving the
Company, unless each of the following events occurs in connection with such merger,
consolidation or reorganization:
(i) the stockholders of the Company, immediately before such merger,
consolidation or reorganization, own, directly or indirectly immediately following
such merger, consolidation or reorganization, 50% or more of the combined voting
power of all voting securities of the corporation resulting from such merger or
consolidation or reorganization (the “Surviving Company”) over which any Person has
Beneficial Ownership in substantially the same proportion as their ownership of the
Voting Securities immediately before such merger, consolidation or reorganization;
(ii) the individuals who were members of the Incumbent Board immediately prior
to the execution of the agreement providing for such merger, consolidation or
reorganization constitute over 50% of the members of the board of directors of the
Surviving Company; and
(iii) no Person (other than the Company, any of its subsidiaries, any employee
benefit plan (or any trust forming a part thereof) maintained by the Company, the
Surviving Company or any Person who, immediately prior to such merger, consolidation
or reorganization had Beneficial Ownership of 35% or more of the then outstanding
Voting Securities) has Beneficial Ownership of more than 35% of the combined voting
power of the Surviving Company’s then outstanding voting securities.
(4) A complete liquidation or dissolution of the Company.
(5) Approval by Company’s stockholders of an agreement for, and the
consummation of, the sale or other disposition of all or substantially all of the
assets of the Company to any Person (other than a transfer to a subsidiary of the
Company).
(6) Notwithstanding the foregoing, a Change in Control shall not be deemed to
occur solely because any Person (the “Subject Person”) acquired Beneficial Ownership
of more than the permitted amount of the outstanding Voting Securities as a result
of the acquisition of Voting Securities by the Company which, by reducing the number
of Voting Securities outstanding, increases the proportional number of shares
Beneficially Owned by the Subject Person; provided that if a Change in Control would
occur (but for the operation of this sentence) as a result of the acquisition of
Voting Securities by the Company, and after such share acquisition by the Company,
the Subject Person becomes the Beneficial Owner of any additional Voting Securities
which increases the percentage of the then outstanding Voting Securities
Beneficially Owned by the Subject Person, then a Change in Control shall occur.
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9. Restrictive Covenants. The Executive acknowledges that his key position at the
Company will provide him with access to highly sensitive information concerning, and participation
in material decisions and policies regarding, the Company, including the Company’s principal
operators, managers, lessors, tenants and their respective affiliates and the contractual
arrangements of the Company with such operators, managers, lessors, tenants and their respective
affiliates and including decisions regarding the purchase and sale of properties by the Company,
all of which are critical to the Company’s ability to effectively function and compete in the
markets in which it does business, and that if the Executive were to provide services for or
information to such principal operators, managers, lessors, tenants and their respective
affiliates, or to competitors of the Company who similarly deal with such operators, managers,
lessors, tenants and their respective affiliates, or if he were to otherwise violate any of the
provisions of this Section 9, such services or information would cause irreparable damage to the
Company. For the purposes of this Section 9, unless the context implies otherwise, the term
“Company” shall include the Company’s affiliates and subsidiaries (including all entities acquired
in the Transaction) and for the period commencing on the Effective Date and ending on the Closing
or the cancellation of the Transaction Agreement, the term “Company” shall also include Xxxxxxxxxxx
and its affiliates and subsidiaries. Because of the extensive due diligence and sharing of
Confidential Information and other sensitive and proprietary information between the parties in
contemplation of the Transactions, the Executive agrees and acknowledges that notwithstanding (i)
the termination of this Agreement, (ii) termination of the Executive’s employment or (iii) the
occurrence of the Closing, this Section 9 shall apply to the Executive as of the Effective Date;
provided, however, that in the event that the Closing does not occur as contemplated by the
Transaction Agreement by December 31, 2010 or the Transaction Agreement is terminated at any time
in accordance with its terms, then only the Restrictive Covenants contained in Section 9(a) shall
be effective beyond the date of such termination.
(a) Confidentiality.
(i) The Executive shall not, unless written permission is granted by the
Company, disclose to or communicate in any manner with the press or any other media
about his employment with the Company, the terms of this Agreement, the termination
of his employment with the Company, the Company’s businesses or affairs, the
Company’s officers, directors, employees and/or consultants, or any matter related to
any of the foregoing.
(ii) The Executive acknowledges that it is the policy of the Company to maintain
as secret and confidential all valuable and unique information and techniques
acquired, developed or used by the Company relating to their business, operations,
actual or potential products, strategies, potential liabilities, employees, tenants,
proposed or prospective tenants and customers, business partners and customers,
(including information protected by the Company’s attorney/client, work product, or
tax advisor/audit privileges; tax matters and information; financial analysis models;
the Company’s strategic plans; negotiations with third parties; methods, policies,
processes, formulas, techniques, know-how and other knowledge; trade practices, trade
secrets, or financial matters; lists of customers or customers’ purchases; lists of
suppliers, representatives, or other distributors; lists of and information about
tenants
17
and lessors; requirements for systems, programs,
machines, or their equipment; information regarding the Company’s bank accounts,
credit agreement or financial projections information; information regarding the
Company’s directors or officers or their personal affairs) which gives the Company
and its subsidiaries a competitive advantage in the businesses in which the Company
and its subsidiaries are engaged, whether or not any such information or any of the
material described above is explicitly designated or marked as “confidential”
(“Confidential Information”). Confidential Information shall not include information
that (A) is or becomes generally available to the public other than as a result of a
disclosure by the Executive in violation of this Agreement, (B) was available to the
Executive on a non-confidential basis prior to the date hereof, or (C) is compelled
to be disclosed by a court or governmental agency, provided that prior written notice
is given to the Company and the Executive cooperates with the Company in any efforts
by the Company to limit the scope of such obligation and/or to obtain confidential
treatment of any material disclosed pursuant to such obligation. The Executive
recognizes that all such Confidential Information is the sole and exclusive property
of the Company and its subsidiaries, and that disclosure of Confidential Information
would cause damage to the Company and its subsidiaries. The Executive shall not
disclose, directly or indirectly, any Confidential Information obtained during his
employment with the Company, and will take all necessary precautions to prevent
disclosure, to any unauthorized individual or entity inside or outside the Company,
and will not use the Confidential Information or permit its use for the benefit of
the Executive or other third party other than the Company. These obligations shall
continue for so long as the Confidential Information remains Confidential
Information.
(b) Noncompetition, Nonsolicitation, Noninterference. The Executive shall not, during
the period commencing on the Effective Date and ending on the latest to occur of (i) the fifth
(5th) anniversary of the date of the Closing, or (ii) the second (2nd)
anniversary of the date of termination of the Executive’s employment with the Company for any
reason whether such termination occurs during the Term or thereafter (together, the “Restricted
Period”), either directly or indirectly (through another business or person) engage in or
facilitate any of the following activities anywhere in the United States:
(i) hiring, recruiting, engaging as a consultant or adviser, employing or
attempting or soliciting to hire, recruit or employ any person employed by the
Company, or causing or attempting to cause any third party to do any of the
foregoing;
(ii) causing or attempting to cause any person employed at any time during the
Restricted Period by the Company to terminate his or her relationship with the
Company;
18
(iii) soliciting, enticing away, or endeavoring to entice away, or otherwise
interfering with any employee, customer, tenant, financial partner, vendor, supplier
or other similar business relation, who at any time during the Restricted Period or
who at any time during the period commencing one year prior to the Date of
Termination, to the Executive’s knowledge, maintained a material business
relationship with the Company or with whom the Company is targeting for a material
business relationship or is engaged in discussions with to commence a material
business relationship at the time of the Executive’s termination of employment with
the Company (in each case where the Executive participates in such relationship or
potential relationship or where the Executive has had access to Confidential
Information regarding such relationship);
(iv) performing services as an employee, director, officer, consultant,
independent contractor or advisor to; or investing in (whether in the form of equity
or debt, owning any interest or otherwise having an ownership or other interest in or
a connection to), any healthcare real estate investment trust (“REIT”), or any person
which owns in excess of five percent (5%) of the issued and outstanding equity
interest of a healthcare REIT, or any other company, entity or person that directly
and materially competes with the Company anywhere in the United States. Nothing in
this Section (iv) shall, however, restrict the Executive from making an investment in
and owning, directly or indirectly, up to two percent (2%) of the common stock of any
company whose stock is listed on a national exchange, provided that such
investment does not give the Executive the right or ability to control or influence
the policy decisions of any direct competitor; or
(v) owning, directing, managing, developing, leasing, operating or supervising,
or working or performing any services, including consulting or advisory services, for
any business or person that, directly or indirectly, owns, directs, manages,
develops, leases, operates, or supervises for, any healthcare real estate property,
healthcare asset, healthcare facility, or healthcare community, including (whether
inpatient or outpatient) any medical office, ambulatory care/surgery, hospital
(specialty, short/general term acute, long term acute, psychiatric), diagnostic
center, emergency centers, medical centers located in retail businesses and MRI
centers. Nothing in this Section (v) shall, however, restrict the Executive from
making an investment in and owning, directly or indirectly, up to two percent (2%) of
the common stock of any company whose stock is listed on a national exchange,
provided that such investment does not give the Executive the right or ability to
control or influence the policy decisions of any direct competitor. Notwithstanding
anything to the contrary set forth in this Agreement, the Executive’s existing
investments in real estate that are leased to two retail stores, as previously
disclosed to the Company, will be deemed not to violate any provision of this
Agreement.
(c) Other Prohibited Activities. The Executive shall not during the Restricted
Period, either directly or indirectly (through another business or person) engage in or facilitate
any of the following activities anywhere in the United States or in any location outside the United
States where the Company conducts or plans to conduct business: (i) performing services as an
employee, director, officer, consultant, independent contractor or advisor to, or (ii) investing
in, whether in the form of equity or debt, owning any interest or otherwise having an ownership or
other interest or a connection to, any company or entity, or any of its parent, sister, subsidiary
or affiliated entities in any manner, including as an owner, principal, partner, officer, director,
stockholder, employee, consultant, contractor, agent, broker, representative or otherwise of any
Person that is then in an existing operator, tenant, lessor or manager relationship with the
Company, or any of its affiliates. Nothing in this Section (c) shall, however, restrict the
Executive from making an investment in and owning, directly or indirectly, up to two percent (2%)
of the common stock of any company whose stock is listed on a national exchange, provided that such
investment does not give the Executive the right or ability to control or influence the policy
decisions of any direct competitor.
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(d) Non-Disparagement.
(i) The Executive agrees not to make, or cause to be made, any statement,
observation or opinion, or communicate any information (whether oral or written,
directly or indirectly) that (A) accuses or implies that the Company and/or any of
its affiliates, together with their respective present or former officers, directors,
partners, stockholders, employees and agents, and each of their predecessors,
successors and assigns, engaged in any wrongful, unlawful, unethical or improper
conduct, whether relating to the Executive’s employment (or termination thereof), the
business or operations of the Company, or otherwise; or (B) disparages, impugns or in
any way reflects adversely upon the business, good will, products, business
opportunities, competency, character, behavior or reputation of the Company and/or
any of its affiliates, together with their respective present or former officers,
directors, partners, stockholders, employees and agents, and each of their
predecessors, successors and assigns.
(ii) The Company agrees not to make, or cause to be made, any statement,
observation or opinion, or communicate any information (whether oral or written,
directly or indirectly) that (A) accuses or implies that the Executive engaged in any
wrongful, unlawful, unethical or improper conduct, whether relating to the
Executive’s employment (or termination thereof), the business or operations of the
Company, or otherwise; or (B) disparages, impugns or in any way reflects adversely
upon the business, good will, business opportunities, competency, character, behavior
or reputation of the Executive. Obligations of the Company under this Section (ii)
shall only apply to the Board and the CEO.
(iii) Nothing herein shall be deemed to preclude the Executive or the Company
from providing truthful testimony or information pursuant to subpoena, court order or
other similar legal process.
(e) Limitations on Restrictive Covenants. It is the intention of the parties that,
the limitations contained in Sections 9(b)(iv) and 9(b)(v) herein shall not be deemed breached by
the Executive’s continuing to operate in the employ of Xxxxxxxxxxx in the ordinary course of
business as in effect prior to the Effective Date, provided that such activity does not utilize any
Confidential Information or other proprietary information of the Company obtained during the due
diligence process in contemplation of the Transactions. In addition, in the event that the
Transaction Agreement is terminated, the Restrictive Covenants, other than Section 9(a), will be
null and void in their entirety.
20
(f) New Employer. The Executive shall provide the terms and conditions of this
Section 9 to any prospective new employer and shall permit the Company to contact any such company,
entity or individual to confirm the Executive’s compliance with this Section 9 and shall provide
such company, entity or individual with such information (including a copy of this Section 9) as it
requests to allow such inquiry.
(i) The Executive acknowledges that the covenants contained in this Section 9
are reasonable in the scope of the activities restricted, the geographic area covered
by the restrictions, and the duration of the restrictions, and that such covenants
are reasonably necessary to protect the Company’s legitimate interests in its
Confidential Information, its reputation, and in its relationships with its
employees, customers, and suppliers.
(ii) The Company has, and the Executive has had an opportunity to, consult with
their respective legal counsel and to be advised concerning the reasonableness and
propriety of such covenants. The Executive acknowledges that his observance of the
covenants contained herein will not deprive the Executive of the ability to earn a
livelihood or to support his dependents.
(h) Right to Injunction. In recognition of the confidential nature of the
Confidential Information, and in recognition of the necessity of the limited restrictions imposed
by Section 9, the Executive and the Company agree that it would be impossible to measure solely in
money the damages which the Company would suffer if the Executive were to breach any of his
obligations hereunder. The Executive acknowledges that any breach of any provision of this
Agreement would irreparably injure the Company. Accordingly, the parties agree that if a party
breaches any of the provisions of Section 9, the other party shall be entitled, in addition to any
other remedies to which the other party may be entitled under this Agreement or otherwise
(including the arbitration provisions of Section 10), to an injunction to be issued by a court of
competent jurisdiction, to restrain any breach, or threatened breach, of any provision of Section
9, and the breaching party hereby waives any right to assert any claim or defense that the
non-breaching party has an adequate remedy at law for any such breach.
(i) Assistance. During the one-year period following a termination of the Executive’s
employment with the Company, the Executive shall from time to time provide the Company with such
reasonable assistance and cooperation (not in excess of twenty (20) hours per month) as the Company
may reasonably from time to time request in connection with any financial and business issues,
investigation, claim, dispute, judicial, legislative, administrative or arbitral proceeding, or
litigation (any of the foregoing, a “Proceeding”) arising out of matters within the knowledge of
the Executive and related to his position as an employee of the Company. Such assistance and
cooperation shall include providing information, declarations or statements to the Company, signing
documents, meeting with attorneys or other representatives of the Company, and preparing for and
giving truthful testimony in connection with any Proceeding or related deposition. The Executive
shall agree to also make himself available to assist the Company with transition of the Executive’s
duties to his successor and addressing ongoing issues and problems. In any such instance, the
Executive shall provide such assistance and cooperation at times and in places mutually convenient
for the Company and the Executive and which do not unreasonably interfere with the Executive’s
business or personal activities. If and to the extent that the Company shall require the Executive
to render assistance pursuant to this Section 9(i), the Company shall pay the Executive $300 per
hour for all time in excess of five (5) hours per month for such services. The Company shall
reimburse the Executive’s reasonable out-of-pocket costs and expenses in connection with such
assistance and cooperation upon the Executive’s written request in such form and containing such
information as the Company shall reasonably request.
21
(j) Consideration. In consideration of the restrictions set forth in Sections 9(b)
and 9(c), the Company will pay the Executive the amount set forth on Schedule 1 hereto,
subject to any applicable withholding pursuant to Section 13, with such amount to be paid in a
single lump-sum on the day of Closing.
10. Disputes. Any dispute or controversy arising under, out of, or in connection with
this Agreement (with the exception of the Company’s right to seek an injunction under Section 9 of
this Agreement) shall, at the election and upon written demand of the Company, be finally
determined and settled by binding arbitration in the City of Chicago, Illinois, in accordance with
the commercial arbitration rules and procedures of JAMS, and judgment upon the award may be entered
in any court having jurisdiction thereof. Each party shall bear its own costs, legal fees and
other expenses respecting such arbitration; provided, however, if one party shall prevail in the
claims in such arbitration, the non-prevailing party shall pay the prevailing party’s costs,
non-contingent legal fees and other reasonable expenses respecting such arbitration party.
11. Successors.
(a) This Agreement is personal to the Executive and without the prior written consent of the
Company shall not be assignable by the Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable by the 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 the Executive’s services are principally
performed, to assume and agree to perform this Agreement in the same manner and to the same amount
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.
12. Other Severance Benefits. Other than as expressly provided therein, the Executive
hereby agrees that in consideration for the payments to be received under Sections 7 or 8 of this
Agreement, the 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.
22
13. Withholding. The Company may withhold all applicable required federal, state,
local and other employment, income and other taxes from any and all payments to be made pursuant to
this Agreement.
14. No Mitigation. The Executive shall have no duty to mitigate his damages by
seeking other employment and, should the Executive actually receive compensation from any such
other employment, the payments required hereunder, shall not be reduced or offset by any such
compensation except that the welfare benefits provided pursuant to Section 7(b)(2) or Section
8(a)(3) shall end to the extent the Executive receives similar benefits from a subsequent employer
and would no longer be eligible for continuation coverage under COBRA.
15. 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 the Executive: at the most recent address on file with the Company.
With a copy to:
Xxxxx X. Xxxxx
Xxxxxxxx & Xxxxxx, LLP
310 X. Xxxxxx Xx., Xxx 0000
Xxxxxxx, XX 00000
Xf to Company:
Ventas, Inc.
110 X. Xxxxxx, Xxx. 0000
Xxxxxxx, XX 00000
Xttention: VP Human Resources
With a copy to
Ventas, Inc.
10000 Xxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Xttn.: General Counsel
Xxxxx X. Xxxxx
Xxxxxxxx & Xxxxxx, LLP
310 X. Xxxxxx Xx., Xxx 0000
Xxxxxxx, XX 00000
Xf to Company:
Ventas, Inc.
110 X. Xxxxxx, Xxx. 0000
Xxxxxxx, XX 00000
Xttention: VP Human Resources
With a copy to
Ventas, Inc.
10000 Xxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Xttn.: General Counsel
16. Waiver of Breach. 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.
17. 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, wither
written or oral, with respect to the subject matter hereof (excluding the Acquisition definitive
documents). No provisions of this Agreement may be modified, waived or discharged unless such
modification, waiver or discharge is agreed to in writing signed by the Executive and the Company.
23
18. Severability and Partial Invalidity. The various covenants and provisions of this
Agreement are intended to be severable and to constitute independent and distinct binding
obligations. If any covenant or provision of this Agreement is determined to be void and
unenforceable, in whole or in part, it shall not be deemed to affect or impair the validity of any
other covenant or provision or part thereof, and such covenant or provision or part thereof shall
be deemed modified to the extent required to permit enforcement. Without limiting the generality
of the foregoing, if the scope of any covenant contained in this Agreement is too broad to permit
enforcement to its full extent, such covenant shall be enforced to the maximum extent permitted by
law, and the parties hereby agree that such scope may be judicially modified accordingly.
19. Governing Law. This Agreement shall be construed in accordance with and governed
by the laws of the State of Illinois, without regards to the conflict of laws provisions of any
jurisdiction.
20. Fees and Costs. Upon, and subject to the occurrence of, Closing, the Company
agrees to pay, or to reimburse senior management of Xxxxxxxxxxx, including the Executive, for their
reasonable out of pocket legal and financial planning expenses incurred solely in connection with
and related to the preparation and negotiation of their applicable employment and related
agreements (including this Agreement), subject to a cap of $150,000 in the aggregate for all such
Xxxxxxxxxxx senior management.
21. Headings. The headings in this Agreement are for convenience only and shall not
be used to interpret or construe its provisions.
22. Survival. The rights and obligations of the Executive and the Company under
Sections 9 and 10 of this Agreement shall survive the termination of the Executive’s employment and
the termination or expiration of this Agreement. Subject to Section 9(e), it is specifically
acknowledged and agreed to by the parties that the rights and obligations of the Executive and the
Company under Sections 9 and 10 of this Agreement are not conditioned upon Closing and shall become
effective upon execution of this Agreement. All other rights and obligations of the Executive and
the Company (including those rights in Sections 7 and 8) shall survive the termination or
expiration of this Agreement only to the extent that they expressly contemplate future performance
and remain unperformed.
23. 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.
24. Compliance With Section 409A. All payments pursuant to this Agreement shall be
subject to the provisions of this Section 24. Notwithstanding anything herein to the contrary,
this Agreement is intended to be interpreted and operated to the fullest extent possible so that
the payments and benefits under this Agreement either shall be exempt from or shall comply with the
requirements of the requirements of Section 409A; provided, however, that,
notwithstanding anything to the contrary in this Agreement, in no event shall the Company be liable
to the Executive for or with respect to any taxes, penalties or interest which may be imposed upon
the Executive pursuant to Section 409A.
(a) Payments to Specified Employees. To the extent that any payment or benefit
pursuant to this Agreement constitutes a “deferral of compensation” subject to Section 409A (after
taking into account to the maximum extent possible any applicable exemptions) (a “409A Payment”)
treated as payable upon Separation from Service, then, if on the date of the Executive’s Separation
from Service, the Executive is a Specified Employee, then to the extent required for the Executive
not to incur additional taxes pursuant to Section 409A, no such 409A Payment shall be made to the
Executive earlier than the earlier of (i) six (6) months after the Executive’s Separation from
Service; or (ii) the date of his death. Should this Section 24 result in the delay
24
of benefits,
any such benefit shall be made available to the Executive by the Company during such delay period
at the Executive’s expense. Should this Section 24 result in a delay of payments or benefits to
the Executive, on the first day any such payments or benefits may be made without incurring
additional tax pursuant to Section 409A (the “409A Payment Date”), the Company shall make such
payments and provide such benefits as provided for in this Agreement, provided that any amounts
that would have been payable earlier but for the application of this Section 24, as well as any
reimbursement of the amount the Executive paid for benefits pursuant to the preceding sentence,
shall be paid in a lump-sum on the 409A Payment Date along with accrued interest at the rate of
interest published in the Wall Street Journal as the “prime rate” (or equivalent) on the date that
payments or benefits, as applicable, to the Executive should have been made under this Agreement.
For purposes of this Section 24, the term “Specified Employee” shall have the meaning set forth in
Section 409A, as determined in accordance with the methodology established by the Company. For
purposes of determining whether a Separation from Service has occurred for purposes of Section
409A, to the extent permissible under Section 409A, subsidiaries and affiliates of the Company are
those included by using a twenty percent (20%) standard to define the controlled group under Code
Section 1563(a) in lieu of the fifty percent (50%) default rule. In addition, for purposes of
determining whether a Separation from Service has occurred for purposes of Section 409A, a
Separation from Service is deemed to include a reasonably anticipated permanent reduction in the
level of services performed by the Executive to less than fifty (50%) of the average level of
services performed by the Executive during the immediately preceding 36-month period.
(b) Reimbursements. For purposes of complying with Section 409A and without extending
the payment timing otherwise provided in this Agreement, taxable reimbursements under this
Agreement, subject to the following sentence and to the extent required to comply with Section
409A, will be made no later than the end of the calendar year following the calendar year the
expense was incurred. To the extent required to comply with Section 409A, any taxable
reimbursements and any in-kind benefit under this Agreement will be subject to the following:
(a) payment of such reimbursements or in-kind benefits during one calendar year will not affect the
amount of such reimbursement or in-kind benefits provided during any other calendar year (other
than for medical reimbursement arrangements as excepted under Treasury Regulations
§1.409A-3(i)(1)(iv)(B) solely because the arrangement provides for a limit on the amount of
expenses that may be reimbursed under such arrangement over some or all of the period the
arrangement remains in effect); (b) such right to reimbursement or in-kind benefits is not subject
to liquidation or exchange for another form of compensation to the Executive and (c) the right to
reimbursements under this Agreement will be in effect for the lesser of the time specified in this
Agreement or ten years plus the lifetime of the Executive. Any taxable reimbursements or in-kind
benefits shall be treated as not subject to Code Section 409A to the maximum extent provided by
Treasury Regulations §1.409A-1(b)(9)(v) or otherwise under Section 409A.
25
(c) Release. Subject to Section 24(a), (i) to the extent that the Executive is
required to execute and deliver a Release to receive a 409A Payment and (ii) this Agreement
provides for such 409A Payment to be provided prior to the thirtieth (30th) day
following the Executive’s Separation from Service, such 409A Payment will be provided upon the
thirtieth (30th) day following the Executive’s Separation from Service provided the
Release in the form mutually agreed upon between the Executive and the Company or in the form set
forth in Attachment A has been executed, delivered and effective prior to such time. If a Release
is required for a 409A Payment and such Release is not executed, delivered and is effective by the
thirtieth (30th) day following the Executive’s Separation from Service, such 409A
Payment shall not be provided to the Executive to the extent that providing such 409A Payment would
cause such 409A Payment to fail to comply with Section 409A. To the extent that any payments or
benefits under this Agreement are intended to be exempt from Section 409A as a short-term deferral
pursuant to Treasury Regulations §1.409A-1(b)(4) or any successor thereto and require the Executive
to provide a Release to the Company to obtain such payments or benefits, any Release required for
such payment or benefit must be provided in the form mutually agreed upon between the Executive and
the Company or in the form set forth in Attachment A no later than March 7th of the calendar year
following the calendar year of the Executive’s Separation from Service.
(d) No Acceleration; Separate Payments. No 409A Payment payable under this Agreement
shall be subject to acceleration or to any change in the specified time or method of payment,
except as otherwise provided under this Agreement and consistent with Section 409A. If under this
Agreement, a 409A Payment is to be paid in two or more installments, for purposes of Section 409A,
each installment shall be treated as a separate payment.
(e) Cooperation. If any compensation or benefits provided by this Agreement may
result in the application of Section 409A, the Company shall, in consultation with the Executive,
modify the Agreement in the least restrictive manner necessary in order to either exclude such
compensation from the definition of “deferred compensation” within the meaning of such Section 409A
or comply with the provisions of Section 409A and without any diminution in the value of the
payments or benefits to the Executive. This Section 24 is not intended to impose any restrictions
on payments or benefits to the Executive other than those otherwise set forth in this Agreement or
required for the Executive not to incur additional tax under Section 409A and shall be interpreted
and operated accordingly. The Company to the extent reasonably requested by the Executive shall
modify this Agreement to effectuate the intention set forth in the preceding sentence.
26
25. Interpretation and Construction. The parties hereto participated jointly in the
negotiation and preparation of this Agreement, and each party has had the opportunity to obtain the
advice of legal counsel and to review and comment upon this Agreement. Accordingly, it is agreed
that no rule of construction shall apply against any party or in favor of any party. This
Agreement shall be construed as if the parties jointly prepared this Agreement, and any uncertainty
or ambiguity shall not be interpreted against one party and in favor of the other. In this
Agreement, unless otherwise stated or the context otherwise requires, the following uses apply:
(a) “including” means “including, but not limited to;” (b) all references to sections are to
sections in this Agreement unless otherwise specified; (c) all words used in this Agreement will be
construed to be of such gender or number as the circumstances and context require; (d) the captions
and headings of sections appearing in this Agreement have been inserted solely for convenience of
reference and shall not be considered a part of this Agreement nor shall any of them affect the
meaning or interpretation of this Agreement or any of its provisions; and (e) any reference to a
document or set of documents in this Agreement, and the rights and obligations of the parties under
any such documents, shall mean such document or documents as amended from time to time, and any and
all modifications, extensions, renewals, substitutions or replacements thereof.
26. WAIVER. TO THE EXTENT PERMITTED BY LAW, EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVES ANY RIGHT THAT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION
ARISING IN ANY WAY IN CONNECTION WITH THIS AGREEMENT. EACH PARTY ACKNOWLEDGES THAT SUCH PARTY HAS
BEEN REPRESENTED IN THE SIGNING OF THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT
LEGAL COUNSEL SELECTED OF SUCH PARTY’S OWN FREE WILL AND THAT IT HAS DISCUSSED THIS WAIVER WITH
SUCH LEGAL COUNSEL, OR HAS HAD ADEQUATE OPPORTUNITY TO SEEK SUCH COUNSEL. EACH PARTY FURTHER
ACKNOWLEDGES THAT (i) IT HAS READ AND UNDERSTANDS THE MEANING AND RAMIFICATIONS OF THIS WAIVER, AND
(ii) THIS WAIVER IS A MATERIAL INDUCEMENT FOR THE OTHER PARTIES TO ENTER INTO THIS AGREEMENT.
[The Remainder of this Page Intentionally Left Blank]
27
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.
VENTAS, INC. |
||||
By: | /s/ T. Xxxxxxx Xxxxx | |||
Name: | T. Xxxxxxx Xxxxx | |||
Its: | Executive Vice President, Chief Administrative Officer and General Counsel |
|||
/s/ Xxxx X. Xxxxxxxxxxx | ||||
Xxxx X. Xxxxxxxxxxx Executive |
Signature Page to Employment Agreement
Attachment A
Employment Agreement by and between Ventas, Inc. and
Xxxx X. Xxxxxxxxxxx
Xxxx X. Xxxxxxxxxxx
AGREEMENT AND GENERAL RELEASE
THIS AGREEMENT AND GENERAL
RELEASE (the “Release”) is made and entered into as of this _____
day of [ , 20___], by
and between [ ]
(“_____”) and its successors
(collectively referred to herein as the “Company”), and Xxxx X. Xxxxxxxxxxx (the “Executive”).
WHEREAS, the Executive and the Company have entered into an Employment Agreement dated
the _____
day of ,
_____
(“Employment Agreement”); and
WHEREAS, the Executive’s employment with the Company and the Employment Agreement have been
terminated,
NOW THEREFORE, in consideration for receiving benefits and severance under the Employment
Agreement and in consideration of the representations, covenants and promises set forth in this
Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:
1. Termination of Employment. The Executive and the Company agree that the
Executive’s employment with the Company terminated effective .
2. Severance Benefits. In consideration for the promises made in this Release, the
Company agrees to provide the Executive [ ] [to include all cash payments or
benefits due to the Executive under the terms of the Employment Agreement, as may be applicable],
payable on the [_____] (_____) day following the Date of Termination, after the execution by the
Executive (without subsequent revocation) of this Release [Modify for lump-sum or installment
payments, as may be applicable]. The Executive acknowledges that the [severance payment and health
insurance benefits] are being provided by the Company as consideration for the Executive entering
into this Agreement, including the release of claims and waiver of rights provided for herein. The
Executive acknowledges that the [severance payment and health insurance benefits] shall be subject
to all applicable withholding and reporting requirements.
3. General Release. The Executive, with full understanding of the contents and legal
effect of this Release and having the right and opportunity to consult with his counsel, releases
and discharges the Company, its shareholders, officers, directors, supervisors, managers,
employees, agents, representatives, attorneys, parent companies, divisions, subsidiaries and
affiliates, and all related entities of any kind or nature, and its and their predecessors,
successors, heirs, executors, administrators, and assigns (collectively, the “Company Released
Parties”) from any and all claims, actions, causes of action, grievances, suits, charges, or
complaints of any kind or nature whatsoever, that he ever had or now has, whether fixed or
contingent, liquidated or unliquidated, known or unknown, suspected or unsuspected, and whether
arising in tort, contract, statute, or equity, before any federal, state, local, or private court,
agency, arbitrator, mediator, or other entity, regardless of the relief or remedy, arising prior to
the execution of this Release. Without limiting the generality of the foregoing, it being the
intention of the parties to make this Release as broad and as general as the law permits, this
Release specifically includes any and all subject matters and claims arising from any alleged
violation by the Released Parties under the United States Constitution, the constitution of any
state, the Age Discrimination in Employment Act of 1967, as amended; Title VII of the Civil Rights
Act of 1964, as amended; the Civil Rights Act of 1866, as amended by the Civil Rights Act of 1991
(42 U.S.C. § 1981); the Rehabilitation Act of 1973, as amended; the Executive Retirement Income
Security Act of 1974, as amended; the Illinois Human Rights Act, as amended; the Illinois Personnel
Record Review Act, as amended, and other similar state or local laws; the Americans with
Disabilities Act; the Worker Adjustment and Retraining Notification Act; the Equal Pay Act;
Executive Order 11246; Executive Order 11141; and any other statutory claim, employment or other
contract or implied contract claim, claim for equity in the Company, or common law claim for
wrongful discharge, breach of an implied covenant of good faith and fair dealing, defamation, or
invasion of privacy arising out of or involving his employment with the Company, the termination of
his employment with the Company, or involving any continuing effects of his employment with the
Company or termination of employment with the Company; provided, however, that nothing herein
waives or releases the Executive’s rights to which the Executive may be entitled under a Company
sponsored tax qualified retirement or savings plan, to any rights of the Executive to
indemnification under the Articles of Incorporation or by-laws of the Company or other agreement
between the Executive and the Company, to any rights of the Executive under any directors’ and
officers’ liability insurance policy maintained by the Company, nor to any payments or benefits the
Company is required to pay or provide pursuant to the terms of this Release.
THE UNDERSIGNED ACKNOWLEDGES THAT HE HAS BEEN ADVISED BY LEGAL COUNSEL AND
IS FAMILIAR WITH THE PROVISIONS OF ANY APPLICABLE STATE CIVIL CODE (OR ANY
SIMILAR PROVISION OF ANY STATE LAW, WHICH MAY BE APPLICABLE), WHICH MAY
PROVIDE AS FOLLOWS:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT
WITH THE DEBTOR.”
THE UNDERSIGNED, BEING AWARE OF SAID CODE SECTION (OR APPLICABLE CODE
SECTIONS OR LAW), HEREBY EXPRESSLY WAIVES ANY RIGHTS HE MAY HAVE THEREUNDER,
AS WELL AS UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR
EFFECT.
2
4. Covenant Not to Xxx. The Executive agrees not to bring, file, charge, claim, xxx
or cause, assist, or permit to be brought, filed, charged or claimed any action, cause of action,
or proceeding regarding or in any way related to any of the claims described in Paragraph 3 hereof,
and further agrees that this Release is, will constitute and may be pleaded as, a bar to any such
claim, action, cause of action or proceeding. If any government agency or court assumes
jurisdiction of any charge, complaint, or cause of action covered by this Release, the Executive
will not seek and will not accept any personal equitable or monetary relief in connection with such
investigation, civil action, suit or legal proceeding.
5. Severability. If any provision of this Release shall be found by a court to be
invalid or unenforceable, in whole or in part, then such provision shall be construed and/or
modified or restricted to the extent and in the manner necessary to render the same valid and
enforceable, or shall be deemed excised from this Release, as the case may require, and this
Release shall be construed and enforced to the maximum extent permitted by law, as if such
provision had been originally incorporated herein as so modified or restricted, or as if such
provision had not been originally incorporated herein, as the case may be. The parties further
agree to seek a lawful substitute for any provision found to be unlawful; provided, that, if the
parties are unable to agree upon a lawful substitute, the parties desire and request that a court
or other authority called upon to decide the enforceability of this Release modify the Release so
that, once modified, the Release will be enforceable to the maximum extent permitted by the law in
existence at the time of the requested enforcement.
6. Non-Disclosure. The Executive agrees that he will keep the terms and amounts set
forth in this Release completely confidential and will not disclose any information concerning this
Release’s terms and amounts to any person other than his attorney, accountant, tax advisor, or
immediate family.
7. Representation. The Executive hereby agrees that this Release is given knowingly
and voluntarily and acknowledges that:
(a) this Release is written in a manner understood by the Executive;
(b) this Release refers to and waives any and all rights or claims that the Executive may have
arising under the Age Discrimination in Employment Act, as amended;
(c) the Executive has not waived any rights arising after the date of this Release;
(d) the Executive has received valuable consideration in exchange for this Release in addition
to amounts Executive is already entitled to receive; and
(e) the Executive has been advised to consult with an attorney prior to executing this
Release.
8. Consideration and Revocation. The Executive is receiving this Release on
_____, 20_____, and Executive shall be given twenty-one (21) days from receipt of this
Release to consider whether to sign the Release. The Executive agrees that changes or
modifications to this Release do not restart or otherwise extend the above twenty-one (21) day
period. Moreover, the Executive shall have seven (7) days following execution to revoke this
Release in writing to the Secretary of the Company and this Release shall not take effect until
those seven (7) days have ended.
3
9. Amendment. This Release may not be altered, amended, or modified except in writing
signed by both the Executive and the Company.
10. Joint Participation. The parties hereto participated jointly in the negotiation
and preparation of this Release, and each party has had the opportunity to obtain the advice of
legal counsel and to review and comment upon the Release. Accordingly, it is agreed that no rule
of construction shall apply against any party or in favor of any party. This Release shall be
construed as if the parties jointly prepared this Release, and any uncertainty or ambiguity shall
not be interpreted against one party and in favor of the other.
11. Binding Effect; Assignment. This Agreement and the various rights and obligations
arising hereunder shall inure to the benefit of and be binding upon the parties and their
respective successors, heirs, representatives and permitted assigns. Neither party may assign its
respective interests hereunder without the express written consent of the other party.
12. Applicable Law and Disputes. This Release shall be governed by, and construed in
accordance with, the state laws as provided in the Employment Agreement. The resolution of any
disputes under this Release shall be subject to the provisions of Section 10 of the Employment
Agreement.
13. Execution of Release. This Release may be executed in several counterparts, each
of which shall be considered an original, but which when taken together, shall constitute one
Release.
PLEASE READ THIS RELEASE AND CAREFULLY CONSIDER ALL OF ITS PROVISIONS BEFORE SIGNING IT. THIS
RELEASE CONTAINS A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS, INCLUDING THOSE UNDER THE FEDERAL AGE
DISCRIMINATION IN EMPLOYMENT ACT, AND OTHER FEDERAL, STATE AND LOCAL LAWS PROHIBITING
DISCRIMINATION IN EMPLOYMENT.
If the Executive signs this Release less than twenty-one (21) days after he receives it from
the Company, he confirms that he does so voluntarily and without any pressure or coercion from
anyone at the Company.
The Company | Xxxx X. Xxxxxxxxxxx | |||||
By: |
||||||
Its:
|
[ ] | |||||
Date
|
Date |
4
Schedule 1
Consideration
$1,900,000.00