AMENDED AND RESTATED
CONSULTING AGREEMENT
THIS AMENDED AND RESTATED CONSULTING AGREEMENT (the “
Agreement ”), dated this 20th day of
December 2008, is entered into by and between HEALTH CARE
REIT, INC., a Delaware corporation (the “
Corporation ”), and FREDERICK L. FARRAR (the
“ Consultant ”).
WHEREAS , the Corporation and the Consultant entered into a
Consulting Agreement, effective as of December 20, 2006 (the
“Original Consulting Agreement”);
WHEREAS , the Compensation Committee of the
Corporation’s Board of Directors has approved certain
modifications to the terms of such Consulting Agreement, including,
without limitation, for purposes of compliance with the
requirements of Section 409A of the Internal Revenue Code, as
amended (the “ Code ”), and the rules and
regulations promulgated thereunder;
WHEREAS , the Corporation wishes to assure itself of the
services of the Consultant for the period provided in this
Agreement and the Consultant is willing to provide services to the
Corporation for such period upon the terms and conditions set forth
in this Agreement.
NOW THEREFORE , in consideration of the mutual covenants
herein contained, the parties, intending to be legally bound, agree
as follows:
The
Corporation shall retain the Consultant as an Executive Vice
President of the Corporation and President of the Medical
Properties Division (the “ Division ”) of the
Corporation, and the Consultant agrees to perform such services as
the parties mutually agree that are customarily performed by such
officer in a publicly traded corporation, upon the terms and
conditions herein contained. In such capacity, the Consultant shall
report to the Chairman and Chief Executive Officer of the
Corporation and to the President of the Corporation.
Throughout
the Term of this Agreement, the Consultant shall devote his best
efforts to the business and affairs of the Corporation and shall
devote such time to the performance of the duties described herein
as the parties mutually agree. The Corporation acknowledges that
the Consultant has an ownership interest in, and management
responsibilities with, Klipsch Group Inc., and may have other
positions, duties and responsibilities involving the Klipsch Group,
Inc. that are permissible in all respects hereunder.
The
term of this Agreement (“ Term ”) shall begin on
December 20, 2008 and expire on December 19,
2009.
Notwithstanding
the foregoing, the Corporation or the Consultant shall be entitled
to terminate this Agreement before the Term expires, as described
in Section 5, subject to a continuing obligation to make any
payments required under Section 5 below.
(a)
Base Fee . The Consultant shall receive a base consulting
fee (“ Base Fee ”) during the Term of $200,000,
payable in equal semi-monthly installments in a manner consistent
with the Corporation’s customary practice for payroll
payments.
(b)
Performance Bonus . The Consultant shall also be eligible to
receive an annual bonus (“ Performance Bonus ”)
from the Corporation during the Term. The amount of the Performance
Bonus shall be determined by the Compensation Committee of the
Corporation’s Board, using such performance measures as the
Compensation Committee deems to be appropriate; provided, however,
that the target amount of such Performance Bonus for 2009 shall be
between $50,000 and $150,000. Such bonus, if any, shall be paid to
the Consultant no later than sixty (60) days after the end of
the year.
(c)
Long-Term Incentives . Any stock options and restricted
stock granted to the Consultant under the Corporation’s 2005
Long-Term Incentive Plan (the “Plan”) shall become
fully vested and, in the case of stock options, exercisable in full
on December 20, 2008. Any stock options and restricted stock
to be granted to the Consultant in January 2009 under the Plan
shall become fully vested and, in the case of stock options,
exercisable in full, on the date of grant. Additionally, in the
case of all stock options granted to the Consultant under the Plan,
the exercise period shall terminate 90 days after the date the
Consultant’s services under this Agreement cease (for
whatever reason).
The
Corporation shall reimburse the Consultant for all reasonable
expenses he incurs in promoting the Corporation’s business,
including expenses for travel (including first class air travel)
and similar items, upon presentation by the Consultant from time to
time of an itemized account of such expenditures.
5.
PAYMENTS UPON TERMINATION .
(a)
Termination . If the Consultant’s services are
terminated by the Corporation or the Consultant terminates
providing services to the Corporation before the end of the Term,
for any reason other than death or disability, the Consultant shall
be entitled to receive his Base Fee accrued through the date of
termination, plus any Performance Bonuses earned but unpaid with
respect to fiscal years or other periods (including partial fiscal
years) preceding the termination date. Such payments shall be made
to the Consultant within sixty (60) days following the date of
termination.
The
Corporation shall also be obligated to make a series of monthly
severance payments to the Consultant for each month during the
remainder of the Term. Each monthly payment shall be equal to the
Consultant’s monthly Base Fee during the balance of the Term
and
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shall be paid
to the Consultant at such time as the monthly Base Fee would
otherwise be payable (beginning with the month following the month
in which the termination occurs).
In
addition, the Corporation shall make the eight consecutive
quarterly payments to the Consultant described in Section 7,
with the first such payment commencing on the date of
termination.
As
used herein, “Cause” means (i) action by the
Consultant involving willful disloyalty to the Corporation, such as
embezzlement, fraud, misappropriation of corporate assets or a
breach of the covenants set forth in Sections 6 and 7 below;
or (ii) the Consultant being convicted of a felony; or
(iii) the Consultant being convicted of any lesser crime or
offense committed in connection with the performance of his duties
hereunder or involving moral turpitude; or (iv) the
intentional and willful failure by the Consultant to substantially
perform his duties hereunder as directed by the Corporation’s
Chairman, Vice Chairman, Chief Executive Officer or President
(other than any such failure resulting from the Consultant’s
incapacity due to physical or mental disability); or (v) the
Consultant’s failure to obtain minimum performance goals to
be determined by the Compensation Committee of the
Corporation’s Board, in its discretion. Notwithstanding the
foregoing, willful disloyalty shall not be deemed to include the
refusal of the Consultant to engage in any unlawful or unethical
conduct or conduct in violation of the Corporation’s
policies.
(b)
Disability . The Corporation shall be entitled to terminate
Consultant’s services if the Board determines that the
Consultant has been unable to attend to his duties for at least
90 days because of a medically diagnosable physical or mental
condition, and has received a written opinion from a physician
acceptable to the Board that such condition prevents the Consultant
from resuming full performance of his duties and is likely to
continue for an indefinite period. Upon such termination, the
Consultant shall be entitled to receive his Base Fee accrued
through the date of termination, plus any Performance Bonuses
earned but unpaid with respect to fiscal years or other periods
(including partial fiscal years) preceding the termination date.
Such payments shall be made to the Consultant within sixty
(60) days following the date of termination. In addition, the
Corporation shall make a series of monthly disability payments to
the Consultant, each equal to his monthly Base Fee, during the
balance of the Term (provided that in no event will the Consultant
fail to receive, in each month during the Term, an amount equal to
the monthly Base Fee). Payment of such disability benefit shall
commence with the month following the month in which the
termination occurs and shall continue each month for the remainder
of the Term, but shall terminate at an earlier date if the
Consultant returns to active service as a consultant to the
Corporation. Any amounts payable under this Section 5(b) shall be
reduced by any amounts paid to the Consultant under any long-term
disability plan or other disability program or disability insurance
policies maintained or provided by the Corporation.
(c)
Death . If the Consultant dies during the Term, the
Corporation shall pay to the Consultant’s estate a lump sum
payment equal to the sum of the Consultant’s Base Fee accrued
through the date of death, plus any Performance Bonus earned but
unpaid with respect to fiscal years or other periods (including
partial fiscal years) preceding the date of death. In addition, the
Corporation shall pay to the Consultant’s surviving spouse
(or such other beneficiary as the Consultant may designate in
writing) a lump sum payment equal to the present value of
(i) the monthly Base Fee that would have been paid during the
remainder of the Term
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plus
(ii) the sum of the payments described in the third paragraph
of Section 7 if the Consultant’s services terminate for
a reason other than death. Such present value shall be calculated
using a discount rate equal to the interest rate on 90-day Treasury
bills, as reported in The Wall Street Journal (or similar
publication) for the date of death. Both the lump sum payment to
the Consultant’s estate and the lump sum payment to the
Consultant’s surviving spouse (or other designated
beneficiary) shall be paid within sixty (60) days following
the date of the Consultant’s death. In addition, stock
options, restricted stock or other awards held by the Consultant
under the Corporation’s stock plans shall become fully
vested, and, in the case of stock options, exercisable in full, in
accordance with the terms
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