THIS EMPLOYMENT AGREEMENT , effective the 19
th day of January 2009 (the
“Agreement”), is entered into by and between HEALTH
CARE REIT, INC., a Delaware corporation, (the
“Corporation”), and JOHN T. THOMAS (the
“Executive”).
WHEREAS, the Corporation wishes to assure itself of the
services of the Executive for the period provided in this Agreement
and the Executive is willing to serve in the employ of 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,
hereby agree as follows:
The
Corporation hereby agrees to employ the Executive as Executive Vice
President-Medical Facilities upon the terms and conditions herein
contained, and the Executive hereby agrees to accept such
employment and to serve in such position. As Executive Vice
President-Medical Facilities, the Executive will (i) develop
and update, in cooperation with the executive management team of
the Corporation, the strategic vision and direction of the
Corporation’s medical facilities group; (ii) implement
the Corporation’s strategic goals for the medical facilities
group; (iii) provide executive management of the entire
medical facilities group, including the management services group
and development services group; (iv) develop and maintain
relationships with targeted health systems and providers;
(v) establish the Corporation as a leader in providing
complete solutions to health systems and providers by actively
planning and participating in industry conferences and events and
by undertaking a wide range of activities that position the
Corporation as a thought leader and “first choice”
capital and development partner; and (vi) undertake such other
responsibilities as may be assigned to the Executive by the
Corporation’s Chief Executive Officer (the “CEO”)
or President from time to time. In such capacity, the Executive
shall report to the Corporation’s CEO, President and Board of
Directors and shall have such powers and responsibilities
consistent with his position as may be assigned.
Throughout
the term of this Agreement, the Executive shall devote his best
efforts and all of his business time and services to the business
and affairs of the Corporation.
The
current term of employment under this Agreement shall expire on
January 31, 2011. Upon the expiration of such term, the term
of employment hereunder shall automatically be extended without
further action by the parties for successive two (2) year
renewal terms, unless either party shall give at least six
(6) months advance written notice to the other of his or its
intention that this Agreement shall terminate upon the expiration
of the current term or the then current renewal term, as the case
may be.
Notwithstanding
the foregoing, the Corporation shall be entitled to terminate this
Agreement immediately, subject to a continuing obligation to make
any payments required under Section 5 below, if the Executive
(i) becomes disabled as described in Section 5(b),
(ii) is terminated for Cause, as defined in Section 5(c),
or (iii) voluntarily terminates his employment before the
current term of this Agreement expires, as described in
Section 5(d).
The
Executive shall receive a base salary during the term of this
Agreement at a rate of $290,000 per annum for 2009, and at a rate
of not less than $290,000 per annum for subsequent years, payable
in substantially equal semi-monthly installments. The Compensation
Committee of the Board shall consult with the CEO and review the
Executive’s base salary at annual intervals, and may adjust
the Executive’s annual base salary from time to time as the
Committee deems to be appropriate.
The
Executive shall also be eligible to receive an annual bonus from
the Corporation each year during the term of this Agreement, with
the actual amount of such bonus to be determined by the
Compensation Committee of the Corporation’s Board, using such
performance measures as the Committee deems to be appropriate;
provided, however, that the bonus range shall be between
thirty-five percent (35%) and one hundred five percent (105%) of
the Executive’s base salary, assuming satisfactory individual
and corporate performance. Such bonus, if any, shall be paid to the
Executive no later than sixty (60) days after the end of the
year to which the bonus relates. The annual bonus for 2009 shall be
prorated for the partial year.
On
the date of this Agreement, the Executive shall receive a grant of
shares of the Corporation’s common stock having a value of
$195,000, based on the closing price of the Corporation’s
common stock on the date of this Agreement (the
“Shares”). The Shares shall be subject to the
restrictions set forth in the restricted stock agreement between
the Corporation and the Executive and shall vest in five annual
installments, on January 15, 2010 and the next four
anniversaries of such date, or at such earlier time as the
restrictions may lapse pursuant to the terms of such restricted
stock agreement.
4.
ADDITIONAL COMPENSATION AND BENEFITS
The
Executive shall receive the following additional compensation and
welfare and fringe benefits during the term of the
Agreement:
(a) Stock
Options and Other Long-Term Incentives . During the term of the
Agreement, any stock options, restricted stock or other awards
granted under the 2005 Long-Term Incentive Plan shall be at the
discretion of the Compensation Committee of the Corporation’s
Board.
(b) Health
Insurance . The Corporation shall provide the Executive and his
dependents with health insurance, life insurance and disability
coverage on terms no less favorable than that from time to time
made available to other key employees.
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(c)
Vacation . The Executive shall be entitled to up to three
(3) weeks of vacation during each year during the term of this
Agreement and any extensions thereof, prorated for partial
years.
(d) Business
Expenses . The Corporation shall reimburse the Executive for
all reasonable expenses he incurs in promoting the
Corporation’s business, including expenses for travel and
similar items, upon presentation by the Executive from time to time
of an itemized account of such expenditures.
(e) Relocation
Arrangements . The Corporation shall pay normal and reasonable
expenses associated with having a third-party relocation company
(“Relocation Company”) facilitate the Executive’s
move to the Toledo, Ohio area. As part of that program, the
Relocation Company will offer to acquire the Executive’s home
at its appraised value and will arrange to move the
Executive’s household. If the Executive chooses not to accept
the Relocation Company’s offer, the Executive will be
responsible for any expenses associated with marketing and selling
his home.
(f) Moving
Allowance . The Corporation shall pay for normal and reasonable
expenses charged by the Relocation Company to move the
Executive’s household from the Dallas, Texas area to the
Toledo, Ohio area. In addition, the Corporation shall pay for one
trip to Toledo for the Executive’s spouse and children, up to
a maximum of $3,000. The Executive shall provide appropriate
documentation for all expenses.
(g) Temporary
Housing Allowance . The Corporation shall pay the Executive a
housing allowance of up to $10,000 for temporary accommodations in
Toledo, Ohio. The Executive shall provide appropriate documentation
for all expenses.
In
addition to the benefits provided pursuant to the preceding
paragraphs of this Section 4, the Executive shall be eligible
to participate in such other executive compensation and retirement
plans of the Corporation as are applicable generally to other
officers, and in such welfare benefit plans, programs, practices
and policies of the Corporation as are generally applicable to
other key employees, unless such participation would duplicate,
directly or indirectly, benefits already accorded to the
Executive.
5.
PAYMENTS UPON TERMINATION
(a)
Involuntary Termination . If the Executive’s
employment is involuntarily terminated by the Corporation during
the term of this Agreement, the Executive shall be entitled to
receive his base salary accrued through the date of termination,
any accrued but unpaid vacation pay, plus any bonuses earned but
unpaid with respect to fiscal years or other periods preceding the
termination date. Such payments shall be made to the Executive
within sixty (60) days following the date of involuntary
termination. The Executive shall also receive any nonforfeitable
benefits payable to him under the terms of any deferred
compensation, incentive or other benefit plans maintained by the
Corporation, payable in accordance with the terms of the applicable
plan.
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If
the termination is not a termination for Cause, as described in
paragraph (c), a voluntary termination by the Executive as
described in paragraph (d), or a result of the Executive’s
death or disability, then the Corporation shall also be obligated
to make a series of monthly severance payments to the Executive for
each month during the remaining term of this Agreement, but not
less than twelve (12) months. Each monthly payment shall be
equal to one-twelfth (1/12th) of the sum of (i) the
Executive’s annual base salary, as in effect on the date of
termination, and (ii) the average of the annual bonuses paid
to the Executive for the prior three fiscal years preceding the
termination date and shall be paid to the Executive beginning with
the month following month in which the termination occurs in
accordance with the Corporation’s normal payroll practices.
If the Executive obtains a replacement position with any new
employer (including a position as an officer, employee, consultant,
or agent, or self-employment as a partner or sole proprietor), the
payments shall be reduced by all amounts the Executive receives as
compensation for services performed during such period. The
Executive shall be under no duty to mitigate the amounts owed to
him under this paragraph (a) by seeking such a replacement
position.
In
addition, if the termination is not a termination for Cause as
described in paragraph (c), a voluntary termination by the
Executive as described in paragraph (d), or a result of the
Executive’s death or disability, then:
(i) Any stock
options, restricted stock or other awards granted to the Executive
under the Corporation’s 2005 Long-Term Incentive Plan shall
become fully vested and, in the case of stock options, exercisable
in full; and
(ii) The Executive
shall be provided continued coverage at the Corporation’s
expense under any life, health and disability insurance programs
maintained by the Corporation in which the Executive participated
at the time of his termination for the remaining term of the
Agreement (but not less than six (6) months and not more than
the period during which the Executive would be entitled to
continuation coverage under Section 4980B of the Internal
Revenue Code, as amended (the “Code”), if the Executive
elected such coverage and paid the applicable premiums), or until,
if earlier, the date the Executive obtains comparable coverage
under benefit plans maintained by a new employer.
(b)
Disability . The Corporation shall be entitled to terminate
the Executive’s employment if the Board determines that the
Executive has been unable to attend to his duties for at least
ninety (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
Executive from resuming full performance of his duties and is
likely to continue for an indefinite period. Upon such involuntary
termination, the Executive shall be entitled to receive his base
salary accrued through the date of termination, any accrued but
unpaid vacation pay, plus any bonuses earned but unpaid with
respect to fiscal years or other periods preceding the termination
date. Such payments shall be made to the Executive within sixty
(60) days following the date of involuntary termination. In
addition, the Corporation shall make a series of monthly disability
payments to Executive, each equal to one-twelfth (1/12
th ) of the sum of (i) his annual base salary,
as in effect at the time Executive became permanently disabled, and
(ii) the average of the annual bonuses paid to the Executive
for the prior three fiscal years preceding the date of disability.
Payment of such disability benefit shall be paid in accordance with
the Corporation’s normal payroll practices, shall
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commence with
the month following the month in which the involuntary termination
occurs and continue each month for the remaining current term of
this Agreement (but not less than twelve (12) months), but
shall terminate at an earlier date if the Executive returns to
active employment, either with the Corporation or otherwise. Any
amounts payable under this Section 5(b) shall be reduced by any
amounts paid to the Executive under any long-term disability plan
or other disability program or insurance policies maintained or
provided by the Corporation.
(c)
Termination for Cause . If the Executive’s employment
is terminated by the Corporation for Cause, the amount the
Executive shall be entitled to receive from the Corporation shall
be limited to his base salary accrued through the date of
termination, any accrued but unpaid vacation pay, plus any bonuses
earned but unpaid with respect to the fiscal year of the
Corporation most recently ended, and any nonforfeitable benefits
payable to the Executive under the terms of any deferred
compensation, incentive or other benefit plans maintained by the
Corporation. Such payments shall be made to the Executive within
sixty (60) days following the date of termination.
For
purposes of this Agreement, the term “Cause” shall be
limited to (i) action by the Executive involving willful
disloyalty to the Corporation, such as embezzlement, fraud,
misappropriation of corporate assets or a breach of the covenants
set forth in Sections 9 and 10 below; or (ii) the
Executive being convicted of a felony; or (iii) the Executive
being convicted of any lesser crime or offense committed in
connection with the performance of his duties hereunder
or
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