Exhibit 10.4
CHANGE IN CONTROL
AGREEMENT
This CHANGE IN CONTROL AGREEMENT
(the “Agreement”) is entered into this
day of
, 2007, by and between Nationwide Health Properties, Inc., a
Maryland corporation (the “Company”), and
(the “Executive”). This Agreement shall amend and
restate the prior Change in Control Agreement between the Company
and the Executive, dated as of [
, 200 ] (the “Prior
Agreement”).
The Company has determined that it
is in the best interests of the Company and its shareholders that
Executive be encouraged to remain with the Company and continue to
devote full attention to the Company’s business
notwithstanding the possibility, threat or occurrence of a Change
in Control (as defined below) involving the Company. The Company
believes that it is in the best interest of the Company and its
shareholders to reinforce and encourage the continued attention and
dedication of Executive and to diminish inevitable distractions
arising from the possibility of a Change in Control. Accordingly,
to assure the Company that it will have Executive’s undivided
attention and services notwithstanding the possibility, threat or
occurrence of a Change in Control, and to induce Executive to
remain in the employ of the Company, and for other good and
valuable consideration, the Company has, at the recommendation of
its Compensation Committee, caused the Company to enter into this
Agreement. This Agreement contains the entire agreement between the
parties with respect to the matters specified herein, and
supersedes any prior oral and written agreements, understandings
and commitments between the Company and Executive with respect to
any change in control policy of the Company which may cover
Executive (including, without limitation, the Prior
Agreement).
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NOW, THEREFORE, IT IS HEREBY
AGREED AS FOLLOWS:
(1) “ Cause ”
shall mean (a) the willful and continued failure of Executive
to perform substantially his duties with the Company (other than
any such failure resulting from incapacity due to physical or
mental illness) which is not remedied promptly by Executive after a
written demand for substantial performance is delivered to
Executive by the Chief Executive Officer or by the Board or the
Compensation Committee which specifically identifies the manner in
which the Chief Executive Officer or the Board or the Compensation
Committee believes that Executive has not substantially performed
his duties, or (b) the willful engaging by Executive in
illegal conduct as determined by a court of law or gross
misconduct, which is materially and demonstrably injurious to the
Company. For purposes of this definition, no act or failure to act
on the part of Executive shall be considered “willful”
unless it is done, or omitted to be done, by Executive in bad faith
or without reasonable belief that Executive’s action or
omission was in the best interests of the Company. Any act, or
failure to act, based upon authority given pursuant to a resolution
duly adopted by the Board or a Committee thereof or based on the
advice of counsel for the Company shall be conclusively presumed to
be done, or omitted to be done, by Executive in good faith and in
the best interests of the Company.
(2) “Change in
Control” shall mean a change in control of the Company of
a nature that would be required to be reported in response to
Item 6(e) of Schedule 14A, Regulation 240.14a-101, promulgated
under the Securities Exchange Act of 1934, or, if Item 6(e) is
no longer in effect, any regulation issued by the Securities and
Exchange Commission pursuant to the Securities Exchange Act of 1934
which serves similar purposes; provided that, without limitation, a
Change in Control shall be deemed to have occurred if and when
(a) any “person” (as such term is used in Sections
13(d) and 14(d)(2) of the Securities Exchange Act of 1934) is or
becomes a beneficial owner, directly or indirectly, of securities
of the Company representing fifty percent (50%) or more of the
combined voting power of the Company’s then outstanding
securities, or (b) individuals who are members of the Board
immediately prior to a meeting of the shareholders of the Company
involving the election of directors shall not constitute a majority
of the Board following such election.
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(3) “Date of
Termination” means if Executive’s employment is
terminated as a Change in Control Termination, the date of receipt
of a written notice of termination or any later date specified
therein, as the case may be.
(4) “Disability”
shall mean the absence of Executive from his duties with the
Company on a full-time basis for a period of (a) ninety
(90) consecutive calendar days or (b) an aggregate of one
hundred fifty (150) or more calendar days in any fiscal year,
as a result of mental or physical illness which is determined to be
total and permanent by a physician selected by the Company or its
insurers and acceptable to Executive.
(5) “Effective
Date” shall mean the date of Executive’s commencing
employment with the Company.
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II.
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Termination of Employment in Connection With a
Change in Control
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If within six months prior to or
three years following a Change in Control, Executive’s
employment with the Company is terminated by Executive for Good
Reason or is terminated for any other reason other than death or
Disability or by the Company for Cause, such termination of
employment shall be deemed to be a “Change in Control
Termination.” For purposes of this Agreement, “Good
Reason” shall mean (a) without the express written
consent of Executive, the assignment to Executive of any duties or
any other action by the Board or the Compensation Committee or the
Chief Executive Officer, which results in a material diminution in
Executive’s position (including titles), authority, duties,
responsibilities, compensation or benefits from the most
significant of those held, exercised, assigned and/or awarded to
Executive at any time, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and
which is remedied promptly after receipt of notice thereof given by
Executive; or (b) a requirement by the Board that the primary
business location of Executive be relocated more than ten
(10) miles from the location where Executive was employed on
the date of the Change in Control.
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III.
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Obligations of the Company Upon a Change in
Control Termination .
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(1) Change in Control Termination
Benefits. In the event of a Change in Control Termination, the
Company shall pay to Executive (i) any annual base salary owed
to Executive through the Date of Termination to the extent not
previously paid, (ii) an amount equal to three (3) times
Executive’s highest annual base salary during any of the last
three full fiscal years prior to the Date of Termination, and
(iii) an amount equal to three (3) times either
(A) if Executive has been employed by the Company for at least
three full fiscal years and has received three annual bonuses, the
average annual bonus earned by Executive over the last three full
fiscal years prior to the Date of Termination, or (B) if
Executive has not been employed by the Company for at least three
full fiscal years or has not received three annual bonuses, the
average of (a) the last two actual bonuses received plus
(b) the target bonus for the current year.
In addition to the payments
described in subparagraphs (i), (ii), and (iii) above, the
Company also shall (A) arrange to provide to Executive for a
period of three years from the Date of Termination, medical
(including dental, vision and prescription drug coverage) and life
insurance with terms no less favorable, in the aggregate, than the
most favorable of those provided to Executive during the year
immediately preceding the Date of Termination, (B) immediately
vest all previously unvested shares of restricted stock, stock
options, restricted stock units, stock appreciation rights,
performance shares, and any and all other stock-based compensation
awards received and held by Executive (which shall occur
automatically without any action on the part of the Company),
(C) provide Executive with any Performance-Based Dividend
Equivalents, if any (to the extent earned by the Executive though
the Date of Termination, as determined by the Company’s
Compensation Committee) for the three years following the Date of
Termination, and (D) pay any compensation previously deferred
by Executive in accordance with the provisions of the plan under
which such compensation was deferred.
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(2) Payments. Payments pursuant to
subparagraph III (1)(i) above shall be made within thirty
(30) days following the Date of Termination. Payments pursuant
to subparagraph III (1)(ii) above shall be made in equal
monthly installments over the three-year period following the Date
of Termination. Payment pursuant to III (1)(iii) shall be made
in three equal annual installments over the three-year period
following the Date of Termination on each anniversary following the
Date of Termination. Any payments pursuant to subparagraph
(C) above shall be made at the time such payments would have
been made had Executive remained in the employment of the
Company.
If