SEPARATION AGREEMENT AND GENERAL RELEASE
Exhibit 10.1
SEPARATION AGREEMENT AND GENERAL RELEASE
This Separation Agreement and General Release
(“Agreement”) is entered into as of
the 11 day of June, 2010, by and among XXXXXXX X. XXXXXXX (the “Executive”) and MEDICAL PROPERTIES
TRUST, INC., a Maryland real estate investment trust (the “REIT”), and MPT OPERATING PARTNERSHIP,
L.P., a Delaware limited partnership (the “Operating Partnership”) (the REIT and the Operating
Partnership being herein referred to, together, as the “Company”)(collectively, the “Parties”).
RECITALS:
WHEREAS, the Executive has been employed by the Company as an Executive Vice-President,
General Counsel and Secretary pursuant to that certain Employment Agreement dated April 28, 2005,
as amended by that First Amendment to Employment Agreement dated September 29, 2006; that Second
Amendment to Employment Agreement dated January 1, 2008; and that Third Amendment to Employment
Agreement dated January 1, 2009 (together, the “Employment Agreement”); and
WHEREAS, the Company and the Executive have agreed to terminate the Executive’s employment by
the Company and its affiliates effective June 15, 2010 (the “Effective Date”).
NOW THEREFORE, in consideration of the promises and mutual covenants contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are expressly
acknowledged, the Parties agree and promise as follows:
1. TERMINATION AND RESIGNATION. As of the Effective Date, the employment of the Executive by the
Company is hereby terminated. Also effective as of the Effective Date, the Executive hereby
resigns from the offices of Executive Vice-President, General Counsel and Secretary of the Company
and from any other office or position of the Company or any affiliate of the Company that he may
hold. On or before the Effective Date, the Executive shall also execute all necessary
documentation to effect his resignation as co-trustee of the Company’s 401(k) plan.
2. SEVERANCE PAYMENT. Subject to the Executive abiding by the terms of this Agreement, and in
consideration of the Executive’s release of claims and the Executive’s other covenants and
agreements contained herein, the Company shall pay to the Executive an amount equal to One Million
Nine Hundred Nine Thousand Six Hundred Seven and No/100 Dollars ($1,909,607.00) (the “Severance
Payment”) payable in a lump sum on December 16, 2010. The Company shall be entitled to deduct from
the Severance Payment any sums required by federal, state or local tax law to be withheld with
respect to the Severance Payment.
3. RESTRICTED STOCK; NO OTHER BENEFITS. Subject to the Executive abiding by the terms of this
Agreement, and in consideration of the Executive’s release of claims and the
Executive’s other covenants and agreements contained herein, the Parties acknowledge and agree
that: (a) the Executive has been awarded certain restricted common stock of the Company that will
not have yet vested as of the Effective Date (the “Restricted Stock”); (b) the Restricted Stock
shall be governed by the terms and conditions of the Restricted Stock Agreements identified on
Schedule I attached hereto; (c) all unvested shares of Restricted Stock shall vest in
accordance with the vesting schedules set forth on Schedule II attached hereto; and (d) the
vesting and payment of dividends with respect to such Restricted Stock are subject to federal,
state and local tax withholding requirements. In order to meet the Company’s withholding
obligations with respect to the Restricted Stock under federal, state and local tax law, the
Company shall be entitled to elect, in its sole discretion, either to (i) require payment or
reimbursement in cash by the Executive for the sums required to be so withheld, (ii) deduct from
any cash amounts payable to Executive for the sums required to be withheld; or (iii) with respect
to the vesting of Restricted Stock, permit the Executive to elect, by providing the Company with
notice prior to the vesting date, to have the Company withhold shares of common stock otherwise
issuable upon the vesting of Restricted Stock having a Fair Market Value (as such term is defined
in the Company’s Second Amended and Restated 2004 Equity Incentive Plan) equal to the sums required
to be withheld; provided, however, that any shares of common stock withheld shall be no greater
than an amount that does not exceed the Executive’s minimum applicable withholding tax rate for
federal, state and local tax liabilities. Except as set forth in this Agreement, and with respect
to any benefits or rights under any of the Company’s “employee benefit plans” within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), the
Executive acknowledges and agrees that he is not entitled to receive any other compensation or
benefits of any sort from the Company or any of its plans, direct or indirect subsidiaries, or
other entities controlled by the Company, including, without limitation, salary, vacation, bonuses,
annual incentives, stock options, short-term or long-term disability benefits.
4. INDEMNIFICATION. The Executive shall be indemnified to the fullest extent required or permitted
by the Maryland General Corporation Law (“MGCL”) from and against any claim or liability to which
the Executive may be subject by reason of his former status as an officer of the Company, as
provided in the Medical Properties Trust, Inc. Second Amended and Restated Bylaws and the Medical
Properties Trust, Inc. Second Articles of Amendment and Restatement (the “Charter”). In addition,
the Executive’s personal liability for monetary damages shall be limited to the fullest extent
permitted under the MGCL, as provided in the Charter.
5. GENERAL RELEASE. The Executive intends to release and discharge the Company from any and all
claims he has or may have against the Company, and that such releases and discharges extend to the
Company and to the Released Parties, as defined below. Therefore, the Executive agrees:
(a) For purposes of this Agreement, the “Released Parties” are the Company and all related and
affiliated entities of the Company (including corporations, limited liability companies,
partnerships, and joint ventures), as well as each of their respective predecessors and successors,
and past, present and future employees, officers, directors, stockholders, owners, partners,
members, representatives, assigns, attorneys, agents, insurers, employee benefit programs and plans
(and the trustees, administrators, fiduciaries, and insurers of such programs
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and/or plans), and any other persons acting by, through, under, or in concert with any of the
foregoing identified Released Parties.
(b) Except as otherwise provided in this Agreement and except for any claim relating to the
breach by the Company of any of the terms of this Agreement, including without limitation, the
provisions of Sections 6(c) and 6(e), the Executive hereby voluntarily releases all claims,
promises, causes of action, or similar rights of any type, whether known or unknown, unforeseen,
unanticipated, unsuspected or latent he has or may have against the Released Parties (the
“Claims”).
(c) The foregoing release specifically extends to, without limitation, claims or causes of
action for wrongful termination, failure by the Company to provide notice of termination pursuant
to the Employment Agreement, impairment of ability to compete in the open labor market, breach of
an express or implied contract, breach of any collective bargaining agreement, breach of the
covenant of good faith and fair dealing, breach of fiduciary duty, fraud, misrepresentation,
defamation, slander, infliction of emotional distress, disability and loss of future earnings. The
Executive understands that the Claims he is releasing might arise under different laws and
statutes, such as, but not limited to, the following: the Securities Act of 1933, the Securities
Exchange Act of 1934, any federal or state corporation or securities laws, the National Labor
Relations Act, as amended, the Labor-Management Relations Act, as amended, the Americans with
Disabilities Act (prohibiting discrimination in employment on account of disability), Title VII of
the Civil Rights Act of 1964 (prohibiting discrimination in employment on account of race, sex,
color, religion, or national origin), 42 U.S.C. § 1981 (prohibiting certain types of discrimination
in employment), the Xxxxxxxx-Xxxxx Act of 2002 (which prohibits retaliation against employees who
participate in any investigation or proceeding relative to an alleged violation of mail, wire, bank
or securities fraud), the Workers’ Adjustment & Retraining Notification Act (which requires that
advance notice be given of certain work force reductions), the Fair Labor Standards Act, as amended
(“FLSA”), the Employee Retirement Income Security Act of 1974 (which, among other things, protects
employees benefits), the Age Discrimination in Employment Act (“ADEA”) and the Alabama Age
Discrimination in Employment Act (“AADEA”) (prohibiting discrimination in employment on account of
age), and Section 25-5-11.1 of the Alabama Code.
(d) The Executive understands that the Executive is releasing claims of which the Executive
may not be aware. It is further understood and agreed that the Executive is waiving all his rights
under any statute or common law principle which otherwise limit application of a general release to
claims which the Executive does not know or suspect to exist in his favor at the time of signing
the release which, if known by him, would have materially affected his settlement with the
applicable Released Party.
(e) Neither the Executive, nor his heirs, successors, agents, representatives or attorneys has
filed or caused to be filed any lawsuit, complaint, or charge with respect to any Claim that the
Executive is releasing in this Agreement. Except as prohibited by law or public policy, the
Executive promises never (i) to file or prosecute a lawsuit or complaint based on the Claims
released by him in this Agreement, or (ii) to seek any damages, remedies, or other relief for him
by filing or prosecuting a claim or charge with any administrative, judicial, or other governmental
body, or in any arbitration proceeding with respect to any claim released by the
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Executive in this Agreement. The Executive promises to request any governmental body or
arbitration tribunal assuming jurisdiction of any such lawsuit, complaint, or charge to withdraw
from the matter or dismiss the matter against any and all Released Parties with prejudice against
it. The Executive has not assigned or transferred any claim that he is releasing, nor has the
Executive purported to do so. This provision shall not apply to any non-waiveable charges or
claims brought before any governmental agency. Particularly, this provision and the release
contained in this Agreement do not apply to charges filed with the Equal Employment Opportunity
Commission, to the extent, if any, that this provision and the release are prohibited by applicable
law. With respect to any such non-waiveable claims or charges of discrimination, however the
Executive agrees to waive his right (if any) to any monetary or other recovery.
(f) The Executive acknowledges: (a) that the Executive has hereby been advised in writing to
consult with an attorney before signing this Agreement and agreeing to the foregoing release, and
(b) that the Executive has had at least twenty-one (21) days after receipt of this Agreement
containing the foregoing release to consider whether to accept or reject the same. The Executive
understands that the Executive may sign this Agreement prior to the end of such twenty-one (21) day
period, but is not required to do so. In addition, under ADEA, the Executive has seven (7) days
after the Executive signs this Agreement to revoke the release provisions contained herein by
providing written notice to the Company, in which case the Severance Payment shall be forfeited.
Such revocation must be in writing and delivered either by hand or mailed and postmarked within the
seven (7) day period. If sent by mail, it is requested that it be sent by certified mail, return
receipt.
(g) The Executive agrees and acknowledges that he has received or will receive from the
Company valuable consideration, including the Severance Payment, for the promises and agreements
contained in this Agreement, specifically the release contained in this Section 5 and the covenants
contained in Sections 6, 7 and 8 of this Agreement. The Executive further acknowledges and agrees
that the Executive has been paid any and all sums to which the Executive is or would be entitled as
a result of the Executive’s employment with the Company or the termination of that employment,
including all amounts of salary, commissions, bonuses, and benefits, and that the Executive is not
entitled to any additional accrued vacation pay, sick pay, bonus or commission pay or other
benefits subsequent to the Effective Date, other than the Severance Payment and the receipt of
certain Restricted Stock as described in Section 3 of this Agreement. The Executive acknowledges
that he has received all of the leave from work for family and/or personal medical reasons and/or
other benefits to which he believes he is entitled under the Company’s policy and the Family and
Medical Leave Act of 1993 (“FMLA”), as amended. The Executive has no pending request for FMLA
leave with the Company; nor has the Company mistreated the Executive in any way on account of any
illness or injury to the Executive or any member of the Executive’s family. The Executive further
acknowledges that he has received all of the monetary compensation, including hourly wage, salary
and/or overtime compensation, to which he believes he is entitled under the FLSA.
6. CONFIDENTIALITY; NON-DISPARAGEMENT.
(a) The Executive recognizes and acknowledges that certain assets of the Company constitute
Confidential Information. The term “Confidential Information” as used in this Agreement shall mean
all information which is known only to the Executive or the Company,
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other employees of the Company, or others in a confidential relationship with the Company, and
relating to the Company’s business including, without limitation, information regarding clients,
customers, pricing policies, methods of operation, proprietary the Company programs, sales
products, profits, costs, markets, key personnel, formulae, product applications, technical
processes, and trade secrets, as such information may exist from time to time, which the Executive
acquired or obtained by virtue of work performed for the Company, or which the Executive may
acquire or may have acquired knowledge of during the performance of said work. The Executive shall
not, for a period of three (3) years following the Effective Date, disclose all or any part of the
Confidential Information to any person, firm, corporation, association, or any other entity for any
reason or purpose whatsoever, directly or indirectly, except as may be required by law, unless and
until such Confidential Information becomes publicly available other than as a consequence of the
breach by the Executive of his confidentiality obligations hereunder by law or in any judicial or
administrative proceeding (in which case, the Executive shall promptly provide the Company with
written notice). Within three (3) days of the Effective Date, the Executive shall deliver to the
Company all documents and data pertaining to the Confidential Information and shall not retain any
documents or data of any kind or any reproductions (in whole or in part) or extracts of any items
relating to the Confidential Information.
(b) In the event that the Executive receives a request or is required (by deposition,
interrogatory, request for documents, subpoena, civil investigative demand or similar process) to
disclose all or any part of the Confidential Information, the Executive agrees to (i) promptly
notify the Company in writing of the existence, terms and circumstances surrounding such request or
requirement, (ii) consult with the Company on the advisability of taking legally available steps to
resist or narrow such request or requirement, and (iii) assist the Company in seeking a protective
order or other appropriate remedy. In the event that such protective order or other remedy is not
obtained or that the Company waives compliance with the provisions hereof the Executive shall not
be liable for such disclosure unless disclosure to any such tribunal was caused by or resulted from
a previous disclosure by the Executive not permitted by this Agreement.
(c) The Parties agree that their professional and personal reputations are important and
should not be impaired by either Party after this Agreement is executed. The Executive therefore
agrees to not make any oral or written communication to any person or entity which disparages, or
has the effect of damaging the reputation of, or otherwise working in any way to the detriment of,
the Company, its officers, shareholders, directors, or management. The Company agrees that it will
likewise not make any oral or written communication to any person or entity which disparages, or
has the effect of damaging the reputation of, or otherwise working in any way to the detriment of
the Executive’s professional or personal reputation. The Executive further agrees not to use the
Company or any of its affiliates, or any current or former officer, director or employee of the
Company or any of its affiliates, as the subject of any published or to be published written work,
including, without limitation, any published or to be published work of fiction.
(d) Nothing in this Section 6 shall prevent either Party from giving truthful testimony or
information to law enforcement entities, administrative agencies or courts or in any other legal
proceedings as required by law, including, but not limited to, assisting in an investigation or
proceeding brought by any governmental or regulatory body or official related to alleged
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violations of any law relating to fraud or any rule or regulation of the Securities and
Exchange Commission, or in asserting, enforcing, prosecuting or defending any rights or claims of
the Company or the Executive under this Agreement or otherwise.
(e) The Parties agree that they will keep any information regarding any of the negotiations
preceding or following this Agreement confidential, and will not disclose any such information to
any third party, except (i) with the prior written consent of the other Party; (ii) pursuant to an
order or direction of court or agency or other governmental body having jurisdiction to issue such
order; (iii) to tax advisors or accounting professionals themselves bound by ethical restraints of
confidentiality; (iv) to counsel for the disclosing Party, or (v) as may be necessary for the
Parties to establish or enforce rights under this agreement.
7. NON-COMPETITION AND NONSOLICITATION.
(a) For a period of eighteen (18) calendar months following the Effective Date (the
“Non-Compete Period”), the Executive shall not, directly or indirectly, either as a principal,
agent, employee, employer, stockholder, partner or in any other capacity whatsoever: (i) engage or
assist others engaged, in whole or in part, in any business which is engaged in a business or
enterprise involving the ownership, leasing or management of healthcare real estate (it being
understood that engaging in the activity of operating a healthcare operating company which owns its
own healthcare real estate is not so prohibited), or (ii) without the prior consent of the board of
directors of the REIT, solicit the employment of, or assist others in soliciting the employment of,
any individual employed by the Company (other than the Executive’s personal assistant or the
Executive’s secretary) at any time while the Executive was also so employed.
(b) Nothing in this Section 7 shall prohibit the Executive from making any passive investment
in a public company, where he is the owner of five percent (5%) or less of the issued and
outstanding voting securities of any entity, provided such ownership does not result in his being
obligated or required to devote any managerial efforts.
(c) The Executive agrees that the restraints imposed upon him pursuant to this Section 7 are
necessary for the reasonable and proper protection of the Company and its subsidiaries and
affiliates, and that each and every one of the restraints is reasonable in respect to subject
matter, length of time and geographic area. The Parties further agree that, in the event that any
provision of this Section 7 shall be determined by any court of competent jurisdiction to be
unenforceable by reason of its being extended over too great a time, too large a geographic area or
too great a range of activities, such provision shall be deemed to be modified to permit its
enforcement to the maximum extent permitted by law.
(d) The Non-Compete Period shall automatically be tolled and suspended for the duration of any
time that the Executive is in violation of any provision of this Agreement, and the entire time of
such tolling and suspension shall be added to, and shall extend the duration of, the Non-Compete
Period.
8. COOPERATION BY EXECUTIVE. The Executive hereby agrees that for a period of twelve (12) months
following the Effective Date, he shall cooperate with the Company’s reasonable requests relating to
matters that pertain to the Executive’s employment by the
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Company, including, without limitation, providing information or limited consultation as to such
matters, participating in legal proceedings, investigations or audits on behalf of the Company, or
otherwise making himself reasonably available to the Company for other related purposes. Any such
cooperation shall be performed at scheduled times taking into consideration the Executive’s other
commitments, and the Executive shall be compensated at a reasonable hourly or per diem rate to be
agreed upon by the Parties to the extent such cooperation is required on more than an occasional
and limited basis. The Executive shall not be required to perform such cooperation to the extent it
conflicts with any requirements of exclusivity of services for another employer or otherwise, nor
in any manner that in the good faith belief of the Executive would conflict with his rights under
or ability to enforce this Agreement.
9. NON-ADMISSION OF LIABILITY. Nothing in this Agreement shall be construed as an admission of
liability by any stockholder, partner or member of the Company or any of the Released Parties;
rather, the Executive, the Company and the Released Parties are resolving all matters arising out
of their employer-employee relationship and all other relationships between them, as to which the
Released Parties each deny any liability.
10. NECESSARY ACTIONS. The Parties will take or cause to be taken such actions as are necessary to
authorize, approve and take and/or carry out the actions contemplated by this Agreement.
11. BINDING EFFECT. This Agreement shall be binding upon and inure to the benefit of the Parties,
and their respective heirs, administrators, representatives, executors, attorneys, successors and
assigns.
12. SEVERABILITY. While the provisions contained in this Agreement are considered by the Parties to
be reasonable in all circumstances, it is recognized that some provisions may fail for technical
reasons. Accordingly, it is hereby agreed and declared that if any of such provisions shall, either
by itself or themselves or taken with others, be adjudged to be invalid as exceeding what is
reasonable in all circumstances for the protection of the interests of the Company, but would be
valid if any particular restrictions or provisions were deleted or restricted or limited in a
particular manner, then said provisions shall apply with any such deletions, restrictions,
limitations, reductions, curtailments, or modifications as may be necessary to make them valid and
effective, and the remaining provisions shall be unaffected thereby, so long as both Parties obtain
the essential benefits of this Agreement notwithstanding such deletions, restrictions, limitations,
reductions, curtailments, or modifications.
13. ENTIRE AGREEMENT; MODIFICATION. Except as set out herein, this Agreement constitutes the
entire understanding among the Parties with respect to the matters set forth herein. This Agreement
supersedes all prior written and/or oral and all contemporaneous oral agreements, understandings
and negotiations regarding the subject matter hereof, including without limitation, the Employment
Agreement and any indemnification agreement.
14. INTERPRETATION; GOVERNING LAW. This Agreement shall be construed as a whole according to its
fair meaning and shall not be construed strictly for or against either Party. Any uncertainty or
ambiguity shall not be construed against the drafter. Captions are intended solely for convenience
of reference and shall not be used in the interpretation of this Agreement.
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This Agreement shall be governed by and construed and enforced pursuant to the laws of the State of
Alabama applicable to contracts made and entirely to be performed therein without regard to rules
relating to conflicts of law.
15. VOLUNTARY AGREEMENT; NO INDUCEMENTS. Each of the Parties to this Agreement acknowledges and
represents that he or it has had the benefit of review by legal counsel and tax advisors and has
fully and carefully read this Agreement prior to signing it and is signing and entering into this
Agreement as a free and voluntary act without duress or undue pressure or influence of any kind or
nature whatsoever and has not relied on any promises, representations or warranties regarding the
subject matter hereof other than as set forth in this Agreement.
16. NOTICES. Any notice or other communications required or permitted to be given hereunder shall
be in writing and shall be sufficiently given if delivered in person or transmitted by facsimile or
similar means of recorded electronic communication to the relevant Party as follows:
| (a) Executive: | ||||
| Xxxxxxx X. Xxxxxxx | ||||
| To the address on file with the Company | ||||
| (b) Company: | ||||
| Medical Properties Trust, Inc. | ||||
| 0000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000 | ||||
| Xxxxxxxxxx, Xxxxxxx 00000 | ||||
| Facsimile: (000) 000-0000 |
Any such notice or other communication shall be deemed to have been given and received on the day
on which it is delivered or faxed (or, if day is not a business day or if the notice or other
communication is not faxed during business hours, at the place of receipt, on the next following
business day.) Any Party may change its address for the purposes of this Section by giving notice
to the other Parties in accordance with the foregoing. Executive
shall promptly inform the Company of any change in his address by
giving notice in the manner provided in this Section 16.
[Signatures are on the next page.]
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IN WITNESS WHEREOF, the Parties have set their hand as of the date first written above.
| EXECUTIVE: |
||||
| XXXXXXX X. XXXXXXX | ||||
| COMPANY: MEDICAL PROPERTIES TRUST, INC. |
||||
| By: | ||||
| Name: | ||||
| Its: | ||||
| MPT OPERATING PARTNERSHIP, L.P. |
||||
| By: | ||||
| Name: | ||||
| Its: | ||||
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Schedule I
Restricted Stock
The Executive was awarded Restricted Stock pursuant to the following Restricted Stock Agreements:
| • | That certain Award Agreement for Restricted Stock dated May 24, 2006, as amended. | ||
| • | That certain Award Agreement for Restricted Stock dated March 8, 2007, as amended. | ||
| • | That certain Award Agreement for Restricted Stock dated August 7, 2007, as amended. | ||
| • | That certain Award Agreement for Restricted Stock dated February 14, 2008, as amended. | ||
| • | That certain Award Agreement for Restricted Stock dated January 2, 2009, as amended. | ||
| • | That certain Award Agreement for Restricted Stock dated January 6, 2010, as amended. |
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Schedule II
Vesting of Restricted Stock
| • | With respect to that certain Award Agreement for Restricted Stock dated May 24, 2006, as amended, 750 of the unvested shares subject to this Award Agreement, which vest based upon the passage of time, shall fully vest as of the Effective Date; 9,375 of the unvested shares subject to this Award Agreement shall fully vest based upon the performance criteria and other terms set forth therein; provided, however that Executive’s employment status shall be disregarded in determining whether vesting or forfeiture has occurred. | ||
| • | With respect to that certain Award Agreement for Restricted Stock dated March 8, 2007, as amended, 5,000 of the unvested shares subject to this Award Agreement, which vest based upon the passage of time, shall fully vest as of the Effective Date. | ||
| • | With respect to that certain Award Agreement for Restricted Stock dated August 7, 2007, as amended, 20,000 of the unvested shares subject to this Award Agreement, which vest based upon the passage of time, shall fully vest as of the Effective Date; 98,571 of the unvested shares subject to this Award Agreement shall vest based upon the performance criteria and other terms set forth therein; provided, however that Executive’s employment status shall be disregarded in determining whether vesting or forfeiture has occurred. | ||
| • | With respect to that certain Award Agreement for Restricted Stock dated February 14, 2008, as amended, 25,062 of the unvested shares subject to this Award Agreement, which vest based upon the passage of time, shall fully vest as of the Effective Date. | ||
| • | With respect to that certain Award Agreement for Restricted Stock dated January 2, 2009, as amended, 14,836 of the unvested shares subject to this Award Agreement, which vest based upon the passage of time, shall fully vest as of the Effective Date. | ||
| • | With respect to that certain Award Agreement for Restricted Stock dated January 6, 2010, as amended, 3,371 of the unvested shares subject to this Award Agreement, which vest based upon the passage of time, shall fully vest as of the Effective Date; 3,677 of the unvested shares subject to this Award Agreement shall vest based upon the performance criteria and other terms set forth therein; provided, however that Executive’s employment status shall be disregarded in determining whether vesting or forfeiture has occurred. |
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