SECOND AMENDED AND
RESTATED
EMPLOYMENT AGREEMENT
THIS SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT ,
dated this 29th day of December, 2008 (the
“Agreement”), is entered into by and between HEALTH
CARE REIT, INC., a Delaware corporation, (the
“Corporation”), and DANIEL R. LOFTUS (the
“Executive”).
WHEREAS , the Corporation and the Executive entered into an
Employment Agreement, effective as of December 20,
2006;
WHEREAS , the Corporation and the Executive entered into an
Amended and Restated Employment Agreement, effective as of
June 18, 2008;
WHEREAS , the Compensation Committee of the
Corporation’s Board of Directors has approved certain
modifications to the terms of such Amended and Restated Employment
Agreement solely 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; and
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, which is effective as of January 1,
2009.
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 a Senior Vice
President upon the terms and conditions herein contained, and the
Executive hereby agrees to accept such employment and to serve in
such position, and to perform the duties and functions customarily
performed by a Senior Vice President of a publicly traded
corporation during the term of this Agreement. In such capacity,
the Executive shall report to the head of the Medical Facilities
Group and to the Corporation’s Chief Executive Officer (the
“CEO”) 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 not less than $267,800 per annum for 2008,
and at a rate of not less than $267,800 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. 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.
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 . The Executive has been
granted incentive stock options, nonstatutory stock options and
shares of restricted stock pursuant to the terms of the
Corporation’s 2005 Long-Term Incentive Plan. During the
remaining term of the Agreement, any additional 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.
(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.
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(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.
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.
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
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(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 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 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
involving moral turpitude; or (iv) the intentional and willful
failure by the Executive to substantially perform his duties
hereunder as directed by the Corporation’s CEO or President
(other than any such
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failure
resulting from the Executive’s incapacity due to physical or
mental disability) after a demand for substantial performance is
made on the Executive by the Board of Directors.
(d)
Voluntary Termination by the Executive . If the Executive
resigns or otherwise voluntarily terminates his employment before
the end of the current term of this Agreement (other than in
connection with a Change in Corporate Control, as described in
Section 6), 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
any fiscal years or other periods preceding the termination date,
and any nonforfeitable benefits payable to the Executive under the
terms of any deferred compensation, incentive or other benefit
plans of the Corporation. Such payment shall be made to the
Executive within sixty (60) days following the date of
resignation or voluntary termination.
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