Exhibit 10.41
HEALTH
CARE PROPERTY INVESTORS, INC.
CHANGE IN CONTROL SEVERANCE PLAN
1.
Establishment and Purpose . Health Care Property
Investors, Inc. (the “ Corporation ”)
considers it essential to the best interests of its shareholders to
foster the continuous employment of key management personnel. In
connection with this, the Corporation’s Board of Directors
(the “ Board ”) recognizes that, as is the case
with many publicly held corporations, the possibility of a change
in control of the Corporation may exist and that the
uncertainty and questions that it may raise among management
could result in the departure or distraction of management
personnel to the detriment of the Corporation and its shareholders.
The Board has decided to reinforce and encourage the continued
attention and dedication of selected members of the
Corporation’s management to their assigned duties without the
distraction arising from the possibility of a change in control of
the Corporation. In order to induce such members of management to
remain in its employ, the Corporation hereby agrees that on and
after the Effective Date (as defined in Section 2), subject to
the terms and conditions of this Plan, Participants (as defined in
Section 3) shall be eligible to receive the severance benefits
set forth in Section 6 of this Plan in the event that the
Participants’ employment with the Corporation is terminated
under the circumstances described in Section 5 of this Plan
subsequent to a Change in Control (as defined in Section 4).
Upon the Effective Date, any prior severance agreement or letter
between each participant and the Corporation shall terminate and be
of no further effect.
2.
Term of Plan . This Plan shall commence on the date of its
approval by the Compensation Committee of the Board (the “
Effective Date ”) and shall continue in effect through
December 31, 2008 (the “ Term ”); provided,
however, commencing on January 1, 2008 and on each
January 1 thereafter, the Term shall automatically be extended
for one additional year as to each Participant then in the Plan
unless, not later than November 30 of the preceding year, the
Corporation shall have given notice to the Participant that it does
not wish to extend the Term, and if such notice is timely given,
the Plan will terminate at the end of the Term then in effect as to
each Participant who is timely given such notice (with no extension
or further notice, as the case may be); provided, further,
that if a Change in Control, occurs during the Term (or the
extended Term, as the case may be), the Term shall continue in
effect as to each Participant in the Plan at the time of the Change
in Control for a period of not less than twenty-four (24) months
beyond the month in which such Change in Control occurred. For
purposes of clarity, the Corporation may give notice of
termination of the Term to all or only certain Participants. If
such notice is given to only certain Participants, the Term shall
continue as set forth above as to all other Participants (subject
to the Corporation’s rights to similarly terminate the Term
in accordance with the foregoing on some future date(s) as to any
such Participants). A Participant shall cease to be eligible for
benefits under this Plan (and shall cease to be a Participant) at
midnight Pacific Time on the last day of the Term applicable to
that Participant. The termination or expiration of the Term as to a
Participant shall not affect the Participant’s obligations
under Section 10 or affect the Participant’s right to
benefits (if any) pursuant to Section 6 as to any termination
of employment that occurred during such Term.
3.
Participation .
(a)
Participation . The Compensation Committee of the Board (the
“ Committee ”) shall from time to time designate
in writing those employees of the Corporation (each, an “
Eligible Person ”) who are, subject to
Section 3(b), eligible to participate in the Plan (each, a
“ Participant ”). Notwithstanding anything else
contained herein to the contrary, the Committee shall limit the
class of persons selected to participate in this Plan to a
select group of management or highly compensated employees, as set
forth in Sections 201, 301 and 401 of ERISA.
(b)
Participation Agreement . To the extent the Committee has
designated an Eligible Person as being eligible to participate in
this Plan, the Eligible Person shall become a Participant only by
promptly completing, fully executing, and returning to the
Corporation a participation agreement in substantially the
form attached hereto as Exhibit A (or such other
form as the Committee may require and provide for at the
time it designates the Eligible Person as being eligible to
participate in this Plan). The Participation Agreement shall set
forth the Participant’s applicable “Severance
Multiplier” for the purposes of calculating the
Participant’s benefits under Section 6.
(c)
Termination of Employment . Notwithstanding anything else
contained in the Plan to the contrary, a Participant shall not be
deemed to have terminated employment with the Corporation if his or
her employment by the Corporation terminates but he or she
otherwise continues, immediately after such termination of
employment, as an employee of a subsidiary of the Corporation (a
“ Subsidiary ”); provided that whether the
Participant has Good Reason to terminate employment shall be
determined by comparing the Participant’s authority, duties,
responsibilities and other terms of employment after giving effect
to such change to the Participant’s authority, duties,
responsibilities and other terms of employment before giving effect
to such change (in each case relative to the Corporation and its
Subsidiaries on a consolidated basis, not simply with reference to
the Participant’s employer).
(d)
Benefit Offset . Notwithstanding anything else contained in
the Plan to the contrary, any severance benefits otherwise payable
under the Plan to a Participant shall be offset or reduced by the
amount of severance benefits payable or deliverable to the
Participant under any other plan, program, or agreement of or with
the Corporation or any of its Subsidiaries.
4.
Change in Control . No benefits shall be payable under
Section 6 of this Plan unless there has been a Change in
Control. For purposes of this Plan, a Change in Control shall be
deemed to occur if any of the following take place on or after the
Effective Date:
(a)
The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934 (the “ Exchange Act
”) (a “ Person ”)) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 25% or more of either (1) the
then-outstanding shares of common stock of the Corporation (the
“ Outstanding Company Common Stock ”) or
(2) the combined voting power of the then-outstanding voting
securities of the Corporation entitled to vote generally in the
election of directors (the “ Outstanding Company Voting
Securities ”); provided, however, that, for purposes of
this clause (a), the following acquisitions shall not constitute a
Change in Control:
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(A) any
acquisition directly from the Corporation, (B) any acquisition
by the Corporation, (C) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the
Corporation or any affiliate of the Corporation or a successor,
(D) any acquisition by any entity pursuant to a transaction
that complies with clauses (c)(1), (2) and (3) below, and
(E) any acquisition by a Person who owned at least 25% of
either the Outstanding Company Common Stock or the Outstanding
Company Voting Securities as of the Effective Date or an affiliate
of any such Person;
(b)
A change in the Board or its members such that individuals who, as
of the later of the Effective Date or the date that is two years
prior to such change (the later of such two dates is referred to as
the “ Measurement Date ”), constitute the Board
(the “ Incumbent Board ”) cease for any reason
to constitute at least a majority of the Board; provided, however,
that any individual becoming a director subsequent to the
Measurement Date whose election, or nomination for election by the
Corporation’s stockholders, was approved by a vote of at
least two-thirds of the directors then comprising the Incumbent
Board (including for these purposes, the new members whose election
or nomination was so approved, without counting the member and his
predecessor twice) shall be considered as though such individual
were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office
occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board;
(c)
Consummation of a reorganization, merger, statutory share exchange
or consolidation or similar corporate transaction involving the
Corporation or any of its Subsidiaries, a sale or other disposition
of all or substantially all of the assets of the Corporation, or
the acquisition of assets or stock of another entity by the
Corporation or any of its Subsidiaries (each, a “ Business
Combination ”), in each case unless, following such
Business Combination, (1) all or substantially all of the
individuals and entities that were the beneficial owners of the
Outstanding Company Common Stock and the Outstanding Company Voting
Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 66-2/3% of the
then-outstanding shares of common stock and the combined voting
power of the then-outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of
the entity resulting from such Business Combination (including,
without limitation, an entity that, as a result of such
transaction, owns the Corporation or all or substantially all of
the Corporation’s assets directly or through one or more
subsidiaries (a “ Parent ”)) in substantially
the same proportions as their ownership immediately prior to such
Business Combination of the Outstanding Company Common Stock and
the Outstanding Company Voting Securities, as the case may be,
(2) no Person (excluding any entity resulting from such
Business Combination or a Parent or any employee benefit plan (or
related trust) of the Corporation or such entity resulting from
such Business Combination or Parent) beneficially owns, directly or
indirectly, more than 25% of, respectively, the then-outstanding
shares of common stock of the entity resulting from such Business
Combination or the combined voting power of the then-outstanding
voting securities of such entity, except to the extent that the
ownership in excess of 25% existed prior to the Business
Combination, and (3) at least a majority of the members of the
board of directors or trustees of the entity resulting from such
Business Combination or a Parent were members of the Incumbent
Board (determined pursuant to clause (b) above using the date
that is the later of the Effective Date or the date that is two
3
years prior to the
Business Combination as the Measurement Date) at the time of the
execution of the initial agreement or of the action of the Board
providing for such Business Combination; or
(d)
Approval by the stockholders of the Corporation of a complete
liquidation or dissolution of the Corporation other than in the
context of a transaction that does not constitute a Change in
Control under clause (c) above.
5.
Termination Following Change in Control .
(a)
General . During the Term, if any of the events described in
Section 4 constituting a Change in Control shall have
occurred, each Participant shall be entitled to the benefits
provided in Section 6(b) upon the subsequent termination
of his or her employment, provided that such termination occurs
during the Term and within the two (2) year period immediately
following the date of such Change in Control, unless such
termination is (i) because of the Participant’s death or
Disability (as defined in Section 5(b)), (ii) by the
Corporation for Cause (as defined in Section 5(c)), or
(iii) by the Participant other than for Good Reason (including
a voluntary retirement when the Participant otherwise does not have
Good Reason to terminate employment). In the event that the
Participant is entitled to such benefits, such benefits shall be
paid notwithstanding the subsequent expiration of the Term. For
purposes of clarity, no Participant shall be entitled to any
benefits under this Plan if his or her employment with the
Corporation terminates for any reason before a Change in Control
occurs or more than two (2) years after a Change in Control
occurs.
(b)
Disability . As to any particular Participant, “
Disability ” means the Participant’s inability,
because of physical or mental illness or injury, to
perform the essential functions of his or her customary duties
to the Corporation, even with a reasonable accommodation, and the
continuation of such disabled condition for a period of one hundred
eighty (180) continuous days, or for not less than two hundred ten
(210) days during any continuous twenty-four (24) month period.
(c)
Cause . Termination by the Corporation of a
Participant’s employment for “ Cause ”
shall mean termination (i) upon the Participant’s
willful and continued failure to perform his or her duties
with the Corporation (other than any such failure resulting from
his or her incapacity due to physical or mental illness or any such
actual or anticipated failure after the Participant’s
issuance of a Notice of Termination (as defined in
Section 5(f)) for Good Reason, after a written demand for
performance is delivered to the Participant by the Committee, which
demand specifically identifies the manner in which the Committee
believes that the Participant has not performed his or her duties,
(ii) upon the Participant’s willful and continued
failure to follow and comply with the specific and lawful
directives of the Committee, as reasonably determined by the
Committee (other than any such failure resulting from the
Participant’s incapacity due to physical or mental illness or
any such actual or anticipated failure after the
Participant’s issuance of a Notice of Termination for Good
Reason), after a written demand for performance is delivered to the
Participant by the Committee, which demand specifically identifies
the manner in which the Committee believes that the Participant has
not performed his or her duties, (iii) upon the
Participant’s willful and continued failure to follow and
comply with the policies of the Corporation as in effect from time
to time (other than any such failure
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resulting from the
Participant’s incapacity due to physical or mental illness or
any such actual or anticipated failure after the
Participant’s issuance of a Notice of Termination (as defined
in Section 5(f)) for Good Reason, after a written demand for
performance is delivered to the Participant by the Committee, which
demand specifically identifies the manner in which the Committee
believes that the Participant has not followed or complied with
such Corporation policies; (iv) upon the Participant’s
willful commission of an act of fraud or dishonesty resulting in
material economic or financial injury to the Corporation;
(v) upon the Participant’s willful engagement in illegal
conduct or gross misconduct, in each case which is materially and
demonstrably injurious to the Corporation; or (vi) upon the
Participant’s indictment for, conviction of, or a plea of
guilty or nolo contendere to any felony.
(d)
Good Reason . A Participant shall be entitled to terminate
his or her employment for Good Reason. For purposes of this Plan,
“ Good Reason ” shall mean, without the
Participant’s express written consent, the occurrence after a
Change in Control and during the Term of any of the following:
(i)
the assignment to the Participant of any duties inconsistent with
the position in the Corporation that the Participant held
immediately prior to the Change in Control, a significant adverse
alteration in the nature or status of the Participant’s
responsibilities or the conditions of the Participant’s
employment from those in effect immediately prior to such Change in
Control, or any other action by the Corporation that results in a
material diminution in the Participant’s position, authority,
duties or responsibilities;
(ii)
the Corporation’s reduction of the Participant’s annual
base salary as in effect on the Effective Date or as the same
may be increased from time to time;
(iii)
the relocation of the Corporation’s offices at which the
Participant is principally employed immediately prior to the date
of the Change in Control (the Participant’s “
Principal Location ”) to a location more than thirty
(30) miles from such location, or the Corporation’s requiring
the Participant, without the Participant’s written consent,
to be based anywhere other than his or her Principal Location,
provided that such relocation results in a longer commute (measured
by actual mileage) for the Participant from the Participant’s
primary residence to such new location and except for required
travel on the Corporation’s business to an extent
substantially consistent with the Participant’s current
business travel obligations;
(iv)
the Corporation’s failure to pay to the Participant any
portion of his or her current compensation or to pay to the
Participant any portion of an installment of deferred compensation
under any deferred compensation program of the Corporation
reasonably promptly after the date such compensation is due;
(v)
the Corporation’s failure to continue in effect any material
compensation or benefit plan in which the Participant participates
immediately prior to the Change in Control, unless an equitable
arrangement (embodied in an ongoing substitute or alternative plan)
has been made with respect to such plan, or the Corporation’s
failure to continue the Participant’s participation therein
(or in such substitute or alternative plan)
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on a basis not
materially less favorable, both in terms of the amount of benefits
provided and the level of the Participant’s participation
relative to other participants, as existed at the time of the
Change in Control;
(vi)
the Corporation’s failure to obtain a satisfactory agreement
from any successor to assume and agree to perform this Plan,
as contemplated in Section 8 hereof; or
(vii)
any purported termination of the Participant’s employment
that is not effected pursuant to a Notice of Termination satisfying
the requirements of Section 5(f) hereof (and, if
applicable, the requirements of Section 5(c) hereof),
which purported termination shall not be effective for purposes of
this Agreement.
Notwithstanding the
foregoing, no such condition shall constitute “Good
Reason” unless the Participant provides written notice of
such condition to the Corporation and the Corporation fails to
remedy the condition claimed to constitute Good Reason within
thirty (30) days of receiving written notice thereof; and provided,
further, that in all events the termination of the
Participant’s employment with the Corporation shall not be
treated as a termination for “Good Reason” unless such
termination occurs not more than six (6) months following the
initial existence of the condition claimed to constitute Good
Reason. A Participant’s right to terminate his or her
employment pursuant to this Section 5(d) shall not be
affected by his or her incapacity due to physical or mental
illness. A Participant’s continued employment shall not
constitute consent to, or a waiver of rights with respect to, any
circumstance constituting Good Reason hereunder. .
(e)
Termination Generally . For purposes of clarity, a
Participant or the Corporation shall be entitled to terminate the
Participant’s employment for any reason or no reason at any
time after a Change in Control effective as of the applicable date
set forth in Section 5(a).
(f)
Notice of Termination . Any purported termination of a
Participant’s employment by the Corporation or by the
Participant (other than termination due to death which shall
terminate the Participant’s employment automatically) shall
be communicated by written Notice of Termination to the Participant
or the Corporation, respectively, other party hereto in accordance
with Section 14. “ Notice of Termination ”
shall mean a notice that shall indicate the specific termination
provision in this Plan relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Participant’s employment under
the provision so indicated.
(g)
Date of Termination, Etc . “ Date of
Termination ” shall mean (a) if a
Participant’s employment is terminated due to the
Participant’s death, the date of the Participant’s
death; (b) if a Participant’s employment is terminated
for Disability, thirty (30) days after Notice of Termination is
given (provided that the Participant shall not have returned to the
full-time performance of his or her duties during such thirty
(30)-day period), and (c) if a Participant’s employment
is terminated for any other reason, the date specified in the
Notice of Termination.
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6.
Compensation Upon Termination Following A Change in Control
. If a Participant’s employment is terminated following a
Change in Control during the Term and during the two (2) year
period immediately following the date of the Change in Control, the
Participant shall be entitled to the benefits described below,
subject to the other terms and conditions of this Plan:
(a)
If the Participant’s employment is terminated in such
circumstances by the Corporation for Cause or Disability or by the
Participant other than for Good Reason or due to the
Participant’s death, the Corporation shall pay the
Participant (i) the Participant’s accrued and unpaid
base salary and vacation (if any) through the Date of Termination,
and (ii) all other amounts to which the Participant is
entitled under any compensation plan of the Corporation at the time
such payments are due, and the Corporation shall have no further
obligations to the Participant under this Agreement.
(b)
If the Participant’s employment by the Corporation shall be
terminated by the Participant for Good Reason or by the Corporation
other than for Cause or Disability and in all cases other than due
to the Participant’s death, then, subject to the provisions
of Section 7, the Participant shall be entitled to the
benefits provided below. For purposes of this Section 6(b), a
Participant’s “ Annual Bonus Amount ”
shall mean the greater of (i) one-third (1/3) of the
Participant’s annual base salary as in effect as of the Date
of Termination or (ii) the average annual bonus received by
the Participant in the three (3) years immediately prior to
the Change in Control for each full year of employment with the
Corporation, which shall be determined without regard to the
payment of any special bonuses (e.g. transaction bonuses). For
purposes of this Section 6(b), a Participant’s “
Annual Base Salary ” shall mean the greater of (x) the
Participant’s annual base salary as in effect as of the Date
of Termination or (y) the Participant’s annual base salary as
in effect immediately prior to the Change in Control.
(i)
The Corporation shall pay to the Participant (1) the
Participant’s accrued and unpaid base salary and vacation (if
any) through the Date of Termination, (2) the unpaid portion,
if any, of any annual bonus, plus an amount equal to the
Participant’s applicable Annual Bonus Amount multiplied by a
fraction, the numerator of which is the number of calendar days
that the Participant was employed by the Corporation during the
year of termination and the denominator of which is 365, and
(3) all other amounts to which the Participant is entitled
under any compensation plan of the Corporation at the time such
payments are due;
(ii)
A lump sum severance payment equal to the sum of: (A) the
Participant’s Severance Multiplier times the
Participant’s Annual Base Salary; plus (B) the
Participant’s Severance Multiplier times the
Participant’s Annual Bonus Amount;
(iii)
A cash payment equal to the expected aggregate cost of the premiums
that would be charged to the Participant to continue medical
coverage pursuant to the Consolidated Omnibus Budget Reconciliation
Act (“ COBRA ”), at the same or reasonably
equivalent medical coverage for the Participant (and, if
applicable, the Participant’s eligible dependents) as in
effect immediately prior to the Participant’s Date of
Termination, for a period of months after the Participant’s
Date of Termination equal to twelve (12) multiplied by the
Participant’s Severance Multiplier.
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(iv)
(A) Any stock options or equity or equity-related compensation
or grants that vest based on the passage of time and continued
performance of services (to the extent outstanding and not
otherwise vested as of the Date of Termination, and exclusive of
any grants that include performance-based vesting criteria) shall
become fully vested immediately prior to such termination;
(B) any stock options or equity or equity-related compensation
or grants that vest based on the satisfaction of performance-based
criteria (to the extent outstanding and not otherwise vested as of
the Severance Date) shall continue to be governed by the provisions
of the applicable award agreement in the circumstances; provided,
however, that to the extent that any such then-outstanding
equity-based awards are subject to forfeiture and/or vesting
requirements based on the passage of time, such awards shall be
fully accelerated with respect to such time-based forfeiture and/or
vesting provisions; and (C) the Participant shall have until
the date that is twelve (12) months after his or her Date of
Termination to exercise any stock option to the extent that it has
become vested on the Date of Termination, subject to earlier
termination of the stock option upon the stock option’s
original expiration date or the occurrence of a change in control
event or certain similar reorganization event under the terms of
the applicable award agreement. Except as provided in this
Section 6(b)(iv), the effect of a termination of employment on
a Participant’s equity-based awards shall be determined under
the terms of the applicable award agreement.
(v)
The Participant shall be fully vested in his or her accrued
benefits under any nonqualified pension, profit sharing, deferred
compensation or supplemental plans maintained by the Corporation
and the Corporation shall pay the Participant a cash lump sum
amount equal to the portion of the Participant’s account
under the Corporation’s 401(k) plan (including, without
limitation, any 401(k) matching contributions), if any, that has
not become vested under the terms of such plan as of the Date of
Termination.
(vi)
The Corporation shall furnish the Participant for six
(6) years following the Date of Termination (without reference
to whether the Term continues in effect) with directors’ and
officers’ liability insurance insuring the Participant
against insurable events which occur or have occurred while the
Participant was a director or officer of the Corporation, such
insurance to have policy limits aggregating not less than the
amount in effect immediately prior to the Change in Control, and
otherwise to be in substantially the same form and to contain
substantially the same terms, conditions and exceptions as the
liability issuance policies provided for officers and directors of
the Corporation in force from time to time, provided, however, that
such terms, conditions and exceptions shall not be, in the
aggregate, materially less favorable to the Participant than those
in effect on the Effective Date; provided, further, that if the
aggregate annual premiums for such insurance at any time during
such period exceed one hundred and fifty percent (150%) of the per
annum rate of premium currently paid by the Corporation for such
insurance, then the Corporation shall provide the maximum coverage
that will then be available at an annual premium equal to one
hundred and fifty percent (150%) of such rate; and
(vii)
In any situation where under applicable law the Corporation has the
power to indemnify (or advance expenses to) the Participant in
respect of any judgments, fines, settlements, loss, cost or expense
(including attorneys’ fees) of any nature related to or
arising out of the Participant’s activities as an agent,
employee, officer or director of the
8
Corporation or in any
other capacity on behalf of or at the request of the Corporation,
the Corporation shall promptly on written request, indemnify (and
advance expenses to) the Participant to the fullest extent
permitted by applicable law, including but not limited to making
such findings and determinations and taking any and all such
actions as the Corporation may, under applicable law, be permitted
to have the discretion to take so as to effectuate such
indemnification or advancement. Such agreement by the Corporation
shall not be deemed to impair any other obligation of the
Corporation respecting the Participant’s indemnification
otherwise arising out of this or any other agreement or promise of
the Corporation or under any statute.
(c)
Subject to Section 7 and Section 22, the payments
described in Sections 6(a)(i), 6(b)(i)(1), 6(b)(i)(2), 6(b)(ii),
6(b)(iii) and 6(b)(iv), as applicable, shall be paid in cash
to the Participant in a single lump sum as soon as practicable
following the Date of Termination, but in no event beyond seventy
four (74) days from such date (or, if earlier, the
(10) business days after the Participant’s release
contemplated by Section 7(a) becomes irrevocable by the
Participant in accordance with applicable law.
(d)
The foregoing provisions of this Section 6 shall not affect:
(i) a Participant’s receipt of benefits otherwise due
terminated employees under group insurance coverage consistent with
the terms of the applicable Corporation welfare benefit plan;
(ii) a Participant’s rights under COBRA to continue
participation in medical, dental, hospitalization and life
insurance coverage; or (iii) a Participant’s receipt of
benefits otherwise due in accordance with the terms of the
Corporation’s 401(k) plan (if any).
7.
Release; Exclusive Remedy .
(a)
This Section 7 shall apply notwithstanding anything else
contained in this Plan or any other stock option, restricted stock
or other equity-based award agreement to the contrary.
Notwithstanding anything to the contrary contained in this Plan,
the Corporation’s obligation to make any payment of benefits
with respect to a Participant pursuant to Section 6(b) of
this Plan (if the Participant is otherwise entitles to such
benefits) is subject to the condition precedent that (i) the
Participant has fully executed a valid and effective release (in
the form attached hereto as Exhibit B or such
other form as the Committee may reasonably require in the
circumstances, which other form shall be substantially similar
to that attached hereto as Exhibit B but with such
changes as the Committee may determine to be required or
reasonably advisable in order to make the release enforceable and
otherwise compliant with applicable laws), (ii) such executed
release is delivered by the Participant to the Corporation so that
it is received by the Corporation in the time period specified
below, and (iii) such release is not revoked by the
Participant (pursuant to any revocation rights afforded by
applicable law). In order to satisfy the requirements of this
Section 7(a), a Participant’s release referred to in the
preceding sentence must be delivered by the Participant to the
Corporation so that it is received by the Corporation no later than
twenty five (25) calendar days after the Participant’s Date
of Termination (or such later date as may be required for an
enforceable release of the Participant’s claims under the
United States Age Discrimination in Employment Act of 1967, as
amended (“ ADEA ”), to the extent the ADEA is
applicable in the circumstances, in which case the Participant will
be provided with either twenty one (21) or forty five (45) days,
depending on the circumstances of the termination, to consider the
release). In addition, the Corporation may require that
the
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Participant’s
release be executed no earlier than the date that the
Participant’s employment with the Corporation
terminates.
(b)
Each Participant agrees that the general release agreement
described in Section 7(a) will require that the
Participant acknowledge, as a condition to the payment of any
benefits under Section 6(b), that the payments contemplated by
Section 6(b) shall constitute the exclusive and sole
remedy for any termination of the Participant’s employment,
and each Participant will be required to covenant, as a condition
to receiving any such payment, not to assert or pursue any other
remedies, at law or in equity, with respect to any termination of
employment. No Participant shall be required to mitigate the amount
of any payment provided for in Section 6 by seeking other
employment or otherwise nor shall the amount of any payment or
benefit provided for in Section 6 be reduced by any
compensation earned by the Participant as the result of employment
by another employer or self-employment, by retirement benefits, by
offset against any amount claimed to be owed by the Participant to
the Corporation, or otherwise.
8.
Section 280G. Each Participant shall be covered by the
provisions set forth in Exhibit C hereto, incorporated
herein by this reference.
9.
Successors; Assigns
(a)
The Corporation 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
Corporation to expressly assume and agree to perform the
obligations under this Plan in the same manner and to the same
extent that the Corporation would be required to perform it if
no such succession had taken place. Failure of the Corporation to
obtain such assumption and agreement prior to the effectiveness of
any such succession shall be deemed a material breach of this Plan
by the Corporation and shall entitle each Participant to terminate
his or her employment and receive compensation from the Corporation
in the same amount and on the same terms to which the Participant
would be entitled hereunder if the Participant terminates his or
her employment for Good Reason following a Change in Control,
except that for purposes of implementing the foregoing, the date on
which any such succession becomes effective shall be deemed the
Date of Termination. Unless expressly provided otherwise,
“Corporation” as used herein shall mean the Corporation
as defined in this Plan and any successor to its business and/or
assets as aforesaid.
(b)
None of the benefits, payments, proceeds or claims of any Eligible
Person or Participant shall be subject to any claim of any creditor
and, in particular, the same shall not be subject to attachment or
garnishment or other legal process by any creditor, nor shall any
such Eligible Person or Participant have any right to alienate,
anticipate, commute, pledge, encumber or assign any of the benefits
or payments or proceeds which he or she may expect to receive,
contingently or otherwise, under the Plan. Notwithstanding the
foregoing, benefits which are in pay status may be subject to
a court-ordered garnishment or wage assignment, or similar order,
or a tax levy. The Plan shall inure to the benefit of and be
enforceable by each Participant’s personal or legal
representatives, executors, administrators, successors, heirs,
distributees, devisees, and legatees. If a Participant dies while
any amount would still be payable to him or her hereunder had he or
she continued to live, all such amounts, unless otherwise provided
herein, shall be paid to the Participant’s estate in
accordance with the terms of the Plan.
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10.
Confidentiality, Noncompetition and Non-Solicitation
Covenants . Each Participant by accepting participation in the
Plan expressly agrees to each of the foregoing provisions of this
Section 10:
(a)
Confidentiality . Each Participant shall not at any time
(whether during or after the Participant’s employment with
the Corporation and whether or not the Participant subsequently
ceases to participate in this Plan or is ever entitled to the
benefits provided in Section 6) directly or indirectly, other
than in the course of the Participant’s duties hereunder,
disclose or make available to any person, firm, corporation,
association or other entity for any reason or purpose whatsoever,
any Confidential Information (as defined below); provided, however,
that this Section 10(a) shall not apply when
(i) disclosure is required by law or by any court, arbitrator,
mediator or administrative or legislative body (including any
committee thereof) with apparent jurisdiction to order the
Participant to disclose or make available such information
(provided, however, that the Participant shall promptly notify the
Corporation in writing upon receiving a request for such
information), or (ii) with respect to any other litigation,
arbitration or mediation involving this Plan, including but not
limited to enforcement of this Plan. Upon termination of a
Participant’s employment with the Corporation, all
Confidential Information in the Participant’s possession that
is in written, digital or other tangible form (together with
all copies or duplicates thereof, including computer files) shall
be returned to the Corporation and shall not be retained by the
Participant or furnished to any third party, in any
form except as provided herein; provided, however, that the
Participant shall not be obligated to treat as confidential, or
return to the Corporation copies of any Confidential Information
that (x) was publicly known at the time it was disclosed to the
Participant, (y) becomes publicly known or available thereafter
other than by any means in violation of this Plan or any other duty
owed to the Corporation by any person or entity, or (z) is lawfully
disclosed to the Participant by a third party. As used in this
Plan, the term “ Confidential Information ”
means: information disclosed to a Participant or known by a
Participant as a consequence of or through the Participant’s
relationship with the Corporation, about the suppliers, customers,
employees, business methods, public relations methods,
organization, procedures or finances, including, without
limitation, information of or relating to supplier lists or
customer lists, of the Corporation and its affiliates
(collectively, the “ Company Group ”).
(b)
Noncompetition . Each Participant acknowledges that the
nature of the Company Group’s business and the
Participant’s position with the Corporation is such that if
the Participant were to become employed by, or substantially
involved in, the business of a competitor of the Company Group
during the twelve (12) months following the termination of the
Participant’s employment with the Corporation, it would be
very difficult for the Participant not to rely on or use the
Company Group’s trade secrets and Confidential Information.
Thus, to avoid the inevitable disclosure of the Company
Group’s trade secrets and Confidential Information, and to
protect such trade secrets and Confidential Information and the
Company Group’s relationships and goodwill with customers,
during the Participant’s employment with the Corporation and
for a period of twelve (12) months after the Date of Termination
for any reason (the “ Restricted Period ”), the
Participant will not directly or indirectly engage in (whether as
an employee, consultant, agent, proprietor, principal, partner,
stockholder, corporate officer, director or otherwise), nor have
any ownership interest in, or participate in the financing,
operation, management or control of, any person, firm, corporation
or business anywhere in the United States and Mexico (the “
Restricted Area ”) that competes with any member of
the
11
Company Group in the
healthcare real estate acquisition, development, management,
investment or financing industry (a “ Competing
Business ”); provided, that the Participant
may purchase and hold only for investment purposes less than
2% of the shares of any corporation in competition with the Company
Group whose shares are regularly traded on a national securities
exchange. Notwithstanding the preceding sentence, in the event a
Participant accepts employment with or provides services to a
business (the “ Service Recipient ”) that is
affiliated with another business that engages in a Competing
Business or which derives a de minimis portion of its gross
revenues from Competing Businesses, the Participant’s
employment by or service to the Service Recipient shall not
constitute a breach by that Participant of his or her obligations
pursuant to this Section 10(b) so long as each of the
following conditions is satisfied at all times during the
Restricted Period and while the Participant is employed by or
providing service to the Service Recipient: (i) no more than
10% of the gross revenues of the Service Recipient are derived from
Competing Businesses; (ii) no more than 10% of the gross
revenues of the Service Recipient and those entities that (directly
or through one or more intermediaries) are controlled by, control,
or are under common control with such Service Recipient, together
on a consolidated basis, are derived from Competing
Business
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