EXHIBIT 10.3
SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement"), effective as of March 1,
2007, is by and between LTC Properties, Inc., a corporation organized under the
laws of the State of Maryland ("LTC" or the "Company"), and Xxxxxx
Xxxxxxx-Xxxxxxx ("Executive").
NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
1. Appointment, Title and Duties. LTC hereby employs Executive to serve as
its Senior Vice President and Chief Financial Officer. In such capacity,
Executive shall report to the Chief Executive Officer of the Company, and shall
have such duties, powers and responsibilities as are customarily assigned to a
Senior Vice President and Chief Financial Officer of a publicly held
corporation, but shall also be responsible to and report to the Board of
Directors and to any committee thereof. In addition, Executive shall have such
other duties and responsibilities as the Chief Executive Officer may assign her,
with her consent, including serving with the consent or at the request of the
Chief Executive Officer as an officer or on the board of directors of affiliated
corporations.
2. Term of Agreement. The term of this Agreement shall commence as of the
date hereof and shall extend such that at each and every moment of time
hereafter the remaining term shall be one year.
3. Acceptance of Position. Executive accepts the position of Senior Vice
President and Chief Financial Officer of LTC, and agrees that during the term of
this Agreement she will faithfully perform her duties and, except as expressly
approved by the Board of Directors of LTC, will devote substantially all of her
business time to the business and affairs of LTC, and will not engage, for her
own account or for the account of any other person or entity, in a business
which competes with LTC. It is acknowledged and agreed that Executive may serve
as an officer and/or director of companies in which LTC owns voting or
non-voting stock. In addition, it is acknowledged and agreed that Executive may,
from time to time, serve as a member of the board of directors of other
companies, in which event the Board of Directors of LTC must expressly approve
such service pursuant to a Board resolution maintained in the Company's minute
books. Any compensation or remuneration which Executive receives in
consideration of her service on the board of directors of other companies shall
be the sole and exclusive property of Executive, and LTC shall have no right or
entitlement at any time to any such compensation or remuneration.
4. Salary and Benefits. During the term of this Agreement:
(a) LTC shall pay to Executive a base salary at an annual rate of not
less than One Hundred Ninety Thousand Dollars ($190,000) per annum ("Base
Salary"), paid in approximately equal installments at intervals based on any
reasonable Company policy. LTC agrees from time to time to consider increases in
such base salary in the discretion of the Board of Directors. Any increase, once
granted, shall automatically amend this Agreement to provide that thereafter
Executive's base salary shall not be less than the annual amount to which such
base salary has been increased.
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(b) Executive shall participate in all health, retirement, Company-paid
insurance, sick leave, disability, and expense reimbursement programs which LTC
makes available to any of its senior executives,; provided, however, Executive
is not eligible for Health Insurance Benefits, as such term is defined in each
of the 2007 Amended and Restated Employment Agreement by and between LTC and
Xxxxx Xxxxxxxxxxx and the 2007 Amended and Restated Employment Agreement by and
between LTC and Xxxxx Xxxxxxx, each dated as of February 6, 2007.Executive shall
be eligible for bonuses in the discretion of the Board of Directors.
(c) Executive shall be entitled to reasonable vacation time, not less
than four (4) weeks per year, provided that not more than two (2) weeks of such
vacation time may be taken consecutively without prior notice to and
non-objection by the Chief Executive Officer.
5. Certain Terms Defined. For purposes of this Agreement:
(a) Executive shall be deemed to be "disabled" if a physical or mental
condition shall occur and persist which, in the written opinion of a licensed
physician selected by the Board of Directors in good faith, has rendered
Executive unable to perform the duties set forth in Section 1 hereof for a
period of sixty (60) days or more and, in the written opinion of such physician,
the condition will continue for an indefinite period of time, rendering
Executive unable to return to her duties;
(b) A termination of Executive's employment by LTC shall be deemed for
"Cause" if, and only if, it is based upon (i) conviction of a felony; (ii)
material disloyalty to the Company such as embezzlement, misappropriation of
corporate assets or, except as permitted pursuant to Section 3 of this
Agreement, breach of Executive's agreement not to engage in business for another
enterprise of the type engaged in by the Company; or (iii) the engaging in
unethical or illegal behavior which is of a public nature, brings LTC into
disrepute, and results in material damage to the Company. The Company shall have
the right to suspend Executive with pay, for a reasonable period to investigate
allegations of conduct which, if proven, would establish a right to terminate
this Agreement for Cause, or to permit a felony charge to be tried. Immediately
upon the conclusion of such temporary period, unless Cause to terminate this
Agreement has been established, Executive shall be restored to all duties and
responsibilities as if such suspension had never occurred;
(c) A resignation by Executive shall not be deemed to be voluntary and
shall be deemed to be a resignation with "Good Reason" if it is based upon (i) a
diminution in Executive's title, duties, or salary; (ii) a reduction in benefits
which is not part of an across-the-board reduction in benefits of all executive
personnel; (iii) a direction by the Board of Directors that Executive report to
any person or group other than the Chief Executive Officer and/or Chief
Financial Officer or the Board of Directors, or (iv) a geographic relocation of
Executive's place of work a distance for more than seventy-five (75) miles from
LTC's offices located at 00000 Xxx Xxxxx Xxxxx, Xxxxx 000, Xxxxxxxx Xxxxxxx, XX
00000;
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(d) "Affiliate" means with respect to any Person, a Person who, directly
or indirectly, through one or more intermediaries, controls, is controlled by or
is under common control, with the Person specified;
(e) "Base Salary" means, as of any date of termination of employment,
the highest base salary of Executive in the then current fiscal year or in any
of the last four fiscal years immediately preceding such date of termination of
employment;
(f) "Beneficial Owner" shall have the meaning given to such term in Rule
13d-3 under the Exchange Act;
(g) A "Change in Control" occurs if:
(i) Any Person or related group of Persons (other than Executive and
her Related Persons, the Company or a Person that directly or indirectly
controls, is controlled by, or is under common control with, the Company) is or
becomes the Beneficial Owner, directly or indirectly, of securities of the
Company representing 30% or more of the combined voting power of the Company's
then outstanding securities; or
(ii) The stockholders of the Company approve a merger or
consolidation of the Company with any other corporation (or other entity), other
than a merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) more than 66-2/3% of the combined voting power of the
voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; provided, however, that a merger
or consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no Person acquires 30% or more of the combined
voting power of the Company's then outstanding securities shall not constitute a
Change in Control; or
(iii) The Stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets; or
(iv) A majority of the members of the Board of Directors of the
Company cease to be Continuing Directors;
(h) "Code" means the Internal Revenue Code of 1986, as amended.
(i) "Continuing Directors" means, as of any date of determination, any
member of the Board of Directors who (i) was a member of such Board of Directors
on the date of the Agreement or (ii) was nominated for election or elected to
such Board of Directors with the approval of a majority of the Continuing
Directors who were members of such Board of Directors at the time of such
nomination or election.
(j) "Exchange Act" means the Exchange Act of 1934, as amended.
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(k) "Person" means any individual, corporation, partnership, limited
liability company, trust, association or other entity.
(l) "Related Person" means any immediate family member (spouse, partner,
parent, sibling or child whether by birth or adoption) of the Executive and any
trust, estate or foundation, the beneficiary of which is the Executive and/or an
immediate family member of the Executive.
6. Certain Benefits Upon Termination. Executive's employment shall be
terminated upon the earlier of (i) the voluntary resignation of Executive with
or without Good Reason; (ii) Executive's death or permanent disability; or (iii)
upon the termination of Executive's employment by LTC for any reason at any
time. In the event of such termination, the below provisions of this Section 6
shall apply, and in the event of a Change in Control, whether or not Executive's
employment is terminated thereby, Section 6(b) shall apply.
(a) If Executive's employment by LTC terminates for any reason other
than as a result of (i) a termination for Cause, or (ii) a voluntary resignation
by Executive without a Good Reason, or (iii) a Change in Control of the Company,
then LTC shall pay Executive a lump sum severance payment equal to her Base
Salary; provided that if employment terminates by reason of Executive's death or
disability, then such salary shall be paid only to the extent the Company has
available "key man" life, disability or similar insurance relating to the death
or disability of Executive;
(b) Upon a Change in Control of the Company whether or not Executive's
employment is terminated thereby, in lieu of the severance payment described in
Section 6(a) above, LTC shall pay Executive a lump sum severance payment in cash
equal to two times her Base Salary, and all stock options and/or restricted
stock shall automatically vest concurrently upon a Change in Control,
notwithstanding any prior existing vesting schedule;
(c) If Executive's employment by LTC terminates for any reason, except
for LTC's termination of Executive's employment for Cause or a voluntary
resignation by Executive without a Good Reason, LTC shall offer to Executive the
opportunity to participate in all Company-provided medical and dental plans to
the extent Executive elects and remains eligible for coverage under COBRA and
for a maximum period of eighteen (18) months at Company expense; provided,
however, in the event Executive's employment by LTC terminated upon a Change in
Control of the Company, then Executive shall not be given the opportunity to
participate in any of such medical and dental plans, except to the extent
required by law;
(d) In the event that Executive's employment terminates by reason of her
death, all benefits provided in this Section 6 shall be paid to her estate or as
her executor shall direct, but payment may be deferred until Executive's
executor or personal representative has been appointed and qualified pursuant to
the laws in effect in Executive's jurisdiction of residence at the time of her
death;
(e) LTC shall make all payments pursuant to the foregoing subsections
(a) through (d) within seven (7) days following the date of termination of
Executive's employment or consummation of a Change in Control of the Company, as
applicable;
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(f) Notwithstanding the foregoing, LTC shall have no liability under
this Section if Executive's employment pursuant to this Agreement is terminated
by LTC for Cause or by Executive without a Good Reason; provided, however, that
if Executive's employment pursuant to this Agreement is terminated by LTC for
Cause or by Executive without a Good Reason at any time after a Change of
Control which did not result in Executive's employment being terminated, such
post-Change of Control termination by LTC for Cause or by Executive without a
Good Reason shall not affect in any way Executive's entitlement to the lump sum
severance payment described in Section 6(b) above or any other rights, benefits
or entitlements to which Executive may be entitled as a result of such Change of
Control;
7. Indemnification. LTC shall indemnify Executive and hold him harmless
from and against all claims, actions, losses, damages, expense or liabilities
(including expenses of defense and settlement) ("Claim") based upon or in any
way arising from or connected with her employment by LTC, to the maximum extent
permitted by law. To the extent permitted by law, LTC shall advance to Executive
any expenses necessary in connection with the defense of any Claim which is
brought if indemnification cannot be determined to be available prior to the
conclusion of, or the investigation of, such Claim. The parties hereto agree
that each understands and has understood that notwithstanding the above-stated
provisions, nothing herein shall require LTC to hold harmless or indemnify
Executive with respect to any Claim which is brought or asserted against
Executive by LTC. LTC shall investigate in good faith the availability and cost
of directors' and officers' insurance and shall include Executive as an insured
in any directors' and officers' insurance policy of such insurance it maintains.
The provisions of this Section 7 shall survive any termination or expiration of
this Agreement.
8. Attorney Fees. In the event that any action or proceeding is brought to
enforce the terms and provisions of this Agreement, the prevailing party shall
be entitled to recover reasonable attorney fees.
9. Notices. All notices and other communications provided to either party
hereto under this Agreement shall be in writing and delivered by certified or
registered mail to such party at its/his address set forth below its/his
signature hereto, or at such other address as may be designated with postage
prepaid, shall be deemed given when received.
10. Construction. In constructing this Agreement, if any portion of this
Agreement shall be found to be invalid or unenforceable, the remaining terms and
provisions of this Agreement shall be given effect to the maximum extent
permitted without considering the void, invalid or unenforceable provisions. In
construing this Agreement, the singular shall include the plural, the masculine
shall include the feminine and neuter genders as appropriate, and no meaning in
effect shall be given to the captions of the sections in this Agreement, which
are inserted for convenience of reference only.
Notwithstanding any other provision of the Agreement, to the extent
that (i) any amount paid pursuant to the Agreement is treated as nonqualified
deferred compensation pursuant to Section 409A of the Internal Revenue Code of
1986 (the "Code") and (ii) the Executive is a "specified employee" pursuant to
Section 409A(2)(B) of the Code, then such payments shall be made on the date
which is six (6) months after the date of the Executive's separation from
service. In connection with the payment of any obligation that is delayed
pursuant to this Rider, the Company shall establish an irrevocable trust to hold
funds to be used for payment of such obligations. Upon the date that such amount
would otherwise be payable, the Company shall deposit into such irrevocable
trust an amount equal to the obligation. However, notwithstanding the
establishment of the irrevocable trust, the Company's obligations under the
Agreement upon the Executive's termination of employment shall constitute a
general, unsecured obligation of the Company and any amount payable to the
Executive shall be paid solely out of the Company's general assets, and the
Executive shall have no right to any specific assets of the Company. The funds,
if any, contained or contributed to the irrevocable trust shall remain available
for the claims of the Company's general creditors.
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11. Headings. The section headings hereof have been inserted for
convenience of reference only and shall not be construed to affect the meaning,
construction or effect of this Agreement.
12. Governing Law. The provisions of this Agreement shall be construed and
interpreted in accordance with the internal laws of the State of California as
at the time in effect.
13. Entire Agreement. This Agreement constitutes the entire agreement and
supersedes all other prior agreements and undertakings, both written and oral,
among Executive and the Company, with respect to the subject matter hereof.
IN WITNESS WHEREOF, this Agreement shall be effective as of the date
specified in the first paragraph of this Agreement.
LTC PROPERTIES, INC.,
a Maryland corporation
Address: 00000 Xxx Xxxxx Xxxxx,
Xxxxx 000 /s/ Xxxxx Xxxxxxxxxxx
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Xxxxxxxx Xxxxxxx, XX 00000 Xxxxx X. Xxxxxxxxxxx
Executive Chairman
By: /s/ Xxxxxxx Xxxxxx
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Compensation Committee Representative
Address: /s/ Xxxxxx Xxxxxxx-Xxxxxxx
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Xxxxxx Xxxxxxx-Xxxxxxx
