Exhibit 10.1
AMENDED AND RESTATED EMPLOYMENT
AGREEMENT
This AMENDED AND RESTATED EMPLOYMENT
AGREEMENT (“ Agreement ”) is made as of the 28th
day of December, 2006 (the “ Effective Date ”),
by and between Ventas, Inc., a Delaware corporation (the “
Company ”), and Debra A. Cafaro (the “
Executive ”).
W I T N E S
S E T H :
WHEREAS, Executive has, pursuant to
the terms of an Employment Agreement dated as of March 5, 1999
(the “ Existing Employment Agreemen t”), served
as President and Chief Executive Officer of the Company since
March 5, 1999 and as Chairman of the Board of Directors of the
Company (the “ Board ”) since January 28,
2003;
WHEREAS, the Company and Executive
desire to amend and restate in its entirety, subject to
Section 21 herein, the Existing Employment Agreement and enter
into this Agreement pursuant to which the Executive will continue
to serve as the Company’s President, Chief Executive Officer
and Chairman of the Board; and
NOW, THEREFORE, in consideration of
the premises and the respective covenants and agreements contained
herein, and intending to be legally bound hereby, the Company and
Executive agree as follows:
1. EMPLOYMENT.
The Company hereby agrees to employ
the Executive and Executive hereby agrees to be employed by the
Company upon the terms and subject to the conditions herein set
forth. The term of employment of Executive by the Company pursuant
to this Agreement (the “ Employment Term ”)
shall commence on the date hereof and shall continue until
terminated pursuant to Section 6 or amended pursuant to
Section 21.
2. DUTIES.
The Company hereby employs Executive
and Executive hereby accepts employment with the Company as
President and Chief Executive Officer. During the Employment Term,
Executive shall have the title, status and duties of President and
Chief Executive Officer, shall report directly to the Board, and
shall have duties consistent with and authority comparable to Chief
Executive Officers of other publicly-traded REITs, including the
designation of senior management. During the Employment Term, the
Company shall cause Executive to be nominated for election as a
member of the Board.
3. EXTENT OF SERVICES.
Executive, subject to the direction
and control of the Board, shall have the power and authority
commensurate with her status as President and Chief Executive
Officer and necessary to perform her full-time duties hereunder.
During the term, Executive shall devote her working time,
attention, labor, skill and energies to the business of the
Company, and shall not, without the consent of the Company, be
actively engaged in any other business activity, whether or not
such business activity is pursued for gain, profit or other
pecuniary advantage, that competes, conflicts or interferes with
the performance of her duties hereunder in any material
way.
4. COMPENSATION.
As compensation for services
hereunder rendered, Executive shall receive during the Employment
Term:
(a) BASE SALARY . A base
salary at a rate of not less than six hundred thousand dollars
($600,000) per year subject to increases from time to time as
determined by the Executive Compensation Committee acting in its
sole discretion. Executive’s base salary shall be payable in
equal installments in accordance with the Company’s normal
payroll procedures (but no less frequently than semimonthly). The
term “ Base Salary ” for purposes of this
Agreement shall refer to Executive’s base salary annualized,
as most recently increased.
(b) 2007 ANNUAL BONUS AND
LONG-TERM INCENTIVE COMPENSATION . In addition to Base Salary,
Executive shall be eligible to receive such other bonuses and
incentive compensation as the Board may approve from time to time.
Provided that Executive’s employment is not terminated prior
to December 31, 2007, she shall be entitled to the following annual
bonus and long-term incentive compensation in respect of her
services during 2007:
(i) Annual Bonus Paid in 2008 in
Respect of Services Rendered During 2007 . Executive’s
annual bonus for the 2007 fiscal year under the Company’s
annual incentive plan shall be $2,100,000, which shall be paid at
the same time and in the same manner as annual bonuses in respect
of fiscal 2007 are paid to the Company’s other senior
executives. Executive shall not be entitled to any other annual
bonus in respect of fiscal 2007; provided, however, that if
Executive’s employment is terminated by the Company without
Cause or by the Executive for Good Reason and Executive has
executed and delivered a general release of claims in form
substantially similar to the form attached hereto as Exhibit B (the
“Release”), the Company shall pay Executive on
Executive’s Date of Termination a lump sum payment in the
amount of $2,100,000;
(ii) Long-Term Incentives Awarded
in 2008 in Respect of Services Rendered During 2007. Executive
shall in 2008 be awarded a package of long-term incentives in
respect of services during 2007 that shall have a total value at
grant of $5,400,000. This package of incentives shall be divided
among restricted stock, stock options and/or awards under the
Company’s Performance Cash Plan in the manner determined by
the Executive Compensation Committee in the exercise of its sole
discretion; provided, however, that if Executive’s employment
is terminated by the Company without Cause or by the Executive for
Good Reason and Executive has executed and delivered the Release,
the Company shall pay Executive on Executive’s Date of
Termination a lump sum payment in cash in the amount of $5,400,000.
Executive shall not be entitled to any other long-term incentive
compensation in respect of fiscal 2007.
5. BENEFITS.
(a) Executive shall be entitled to
participate in any and all pension benefit, welfare benefit
(including, without limitation, medical, dental, disability and
group life insurance coverages) and fringe benefit plans from time
to time in effect for executives of the Company and its affiliates.
Without limitation of the foregoing, the Company shall provide
Executive,
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without any cost to Executive, with two million
dollars of life insurance coverage and executive disability
coverage with an “own occupation” definition of
disability providing annual benefits of at least 100% of
Executive’s Base Salary. To the extent any of the benefits or
payments within this Section 5(a) are treated as taxable to
the Executive, the Company shall pay Executive an additional amount
such that the net amount or benefit retained by Executive after
deduction or payment of all federal, state, local and other taxes
with respect to amounts or benefits under this Section 5(a)
shall be equal to the full amount of the payments or benefits
required by this Section 5(a).
(b) Executive shall be granted on
the Effective Date 179,813 shares of restricted common stock of the
Company under the Ventas, Inc. 2000 Incentive Compensation Plan, as
amended. The agreement evidencing such award shall be substantially
in the form attached to this Agreement as Exhibit A.
(c) Executive shall be entitled to
participate in such bonus, stock option and other incentive
compensation plans of the Company and its affiliates in effect from
time to time for executives of the Company.
(d) Executive shall be entitled to
four weeks of paid vacation each year, earned on the Effective Date
and the first day of each subsequent calendar year. The Executive
shall schedule the timing of such vacations in a reasonable manner.
The Executive may also be entitled to such other leave, with or
without compensation, as shall be mutually agreed by the Company
and Executive.
(e) Executive may incur reasonable
business related expenses including for promoting the business and
expenses for entertainment, travel, cellular telephone and similar
items related thereto. The Company shall reimburse Executive for
all such reasonable expenses subject to the Company’s
reimbursement procedures regarding the reporting and documentation
of such expenses.
(f) The Company shall pay or
promptly reimburse Executive for all reasonable travel expenses
incurred by Executive to travel to and from the Chicago area once
each week. To the extent any of the payments within this
Section 5(f) are treated as taxable to the Executive, the
Company shall pay Executive an additional amount such that the net
amount retained by Executive after deduction or payment of all
federal, state, local and other taxes with respect to amounts under
this Section 5(f) shall be equal to the full amount of the
payments required by this Section 5(f).
(g) The Company intends that all
provisions of this Agreement will be fully operative, effective,
binding and enforceable as of the Effective Date and agrees to
adopt such employee benefit plans, amendments to employee benefit
plans or other arrangements, as applicable, take such other acts
and pay such other amounts as are necessary to effectuate the
provisions of this Agreement effective on the Effective Date.
Without limitation of the foregoing, to the extent Executive
experiences any economic or tax or other detriment or diminution in
benefit on account of or related to any of such provisions not
being fully operative, effective, binding and enforceable on the
Effective Date fully in accordance with the terms and provisions of
such provisions, or any delay or failure to comply with such
provisions, the
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Company shall immediately take such actions, and
pay such amounts, as Executive and the Executive Compensation
Committee reasonably determine are appropriate so that the
Executive achieves at least the same economic, tax and other
benefits the Executive would have had if such provisions were fully
operative, effective, binding and enforceable in accordance with
their terms as of the Effective Date.
6. TERMINATION OF
EMPLOYMENT.
(a) DEATH OR DISABILITY .
Executive’s employment shall terminate automatically upon
Executive’s death during the Employment Term. If the Company
determines in good faith that the Disability of Executive has
occurred during the Employment Term (pursuant to the definition of
Disability set forth below), it may give to Executive written
notice of its intention to terminate Executive’s employment.
In such event, Executive’s employment with the Company shall
terminate effective on the 30th day after receipt of such notice by
Executive (the “ Disability Effective Date ”),
provided that, within the 30 days after such receipt, Executive
shall not have returned to performance of Executive’s duties.
For purposes of this Agreement, “ Disability ”
shall mean the total disability as determined by the Board in
accordance with standards and procedures similar to those under the
Company’s long-term disability plan, or, if none, a physical
or mental infirmity which impairs the Executive’s ability to
perform substantially her duties for a period of 180 consecutive
days.
(b) CAUSE . The Company may
terminate Executive’s employment during the Employment Term
for Cause or without Cause. For purposes of this Agreement, “
Cause ” shall mean the Executive’s
(i) conviction of or plea of nolo contendere to a crime
involving moral turpitude; or (ii) willful and material breach
by Executive of her duties and responsibilities which is directly
and materially harmful to the business and reputation of the
Company and which is committed in bad faith or without reasonable
belief that such breaching conduct is in the best interests of the
Company and its affiliates, but with respect to (ii) only if
the Board adopts a resolution by a vote of at least 75% of its
members so finding after giving the Executive and her attorney an
opportunity to be heard by the Board. Any act, or failure to act,
based upon authority given pursuant to a resolution duly adopted by
the Board or based upon 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.
(c) GOOD REASON .
Executive’s employment may be terminated by Executive for
Good Reason or otherwise. “ Good Reason ” shall
exist upon the occurrence, without Executive’s express
written consent, of any of the following events:
(i) a diminution in
Executive’s position (including status, offices, titles and
reporting requirements), authority, duties or responsibilities
(including the assignment to Executive of any duties inconsistent
with Executive’s position, authority, duties or
responsibilities), in each case, as President and Chief Executive
Officer, excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith and which is remedied by
the Company promptly after receipt of notice thereof given by the
Executive, it being understood that it shall constitute a
diminution in Executive’s position within the meaning of this
provision if Executive is, following a
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transaction in which the Company is
a participant, no longer the chief executive officer of a publicly
traded company;
(ii) the Company shall
(A) reduce the Base Salary or annual maximum bonus opportunity
of Executive or (B) reduce (other than pursuant to a uniform
reduction applicable to all similarly situated executives of the
Company) Executive’s benefits and perquisites;
(iii) the Company shall require
Executive to relocate Executive’s principal business office
to any location more than 30 miles from its location on the
Effective Date except that a relocation of the Executive’s
principal business office to the Chicago business district shall
not constitute Good Reason;
(iv) the Company’s failure or
refusal to comply with any provision of this Agreement;
(v) the Company (1) is a debtor
in any bankruptcy case in which an order for relief is entered
under any chapter of the federal Bankruptcy Code; (2) is
adjudicated a bankrupt under any bankruptcy, insolvency, or
reorganization law; (3) has a receiver of all or a substantial
portion of its assets or property appointed; or (4) makes an
assignment for the benefit of creditors; or
(vi) the failure of the Company to
obtain the assumption of this Agreement as contemplated by
Section 12(c).
Notwithstanding anything in this
Agreement to the contrary, a termination by Executive for any
reason during the 30-day period immediately following the one-year
anniversary of a Change of Control shall be deemed to be a
termination with Good Reason for all purposes of this
Agreement.
(d) For purposes of this Agreement,
“Change of Control” shall mean the occurrence of any
one of the following events:
(i) An acquisition of any voting or
other securities by any “Person” (having the meaning
ascribed to such term in Section 3(a)(9) of the Securities
Exchange Act of 1934, as amended (“1934 Act”) and used
in Sections 13(d) and 14(d) thereof, including a
“group” as defined in Section 13(d)), such that
immediately after which such Person has “Beneficial
Ownership” (within the meaning of Rule 13d-3 under the 1934
Act) of 20% or more of either (i) any class of
then-outstanding equity securities of the Company
(“Outstanding Shares”) or (ii) the combined voting
power of the Company’s then outstanding voting securities
entitled to vote generally in the election of directors
(“Voting Securities”); provided, however, that in
determining whether a Change of Control has occurred, Outstanding
Shares or Voting Securities which are acquired in an acquisition by
(i) the Company or any of its subsidiaries or, (ii) an
employee benefit plan (or a trust forming a part thereof)
maintained by the Company or any of its subsidiaries shall not
constitute an acquisition which would cause a Change of
Control;
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(ii) The individuals who, as of the
Effective Date, constituted the Board (the “Incumbent
Board”) cease for any reason to constitute over 50% of the
Board; provided, however, that if the election, or nomination for
election by the Company’s stockholders, of any new director
was approved by a vote of over 50% of the Incumbent Board, such new
director shall, for purposes of this Section 6(d), be considered as
though such person were a member of the Incumbent Board; provided,
further, however, that no individual shall be considered a member
of the Incumbent Board if such individual initially assumed office
as a result of either an actual or threatened “Election
Contest” (as described in Rule 14a-11 promulgated under the
1934 Act) or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Incumbent Board
(a “Proxy Contest”), including by reason of any
agreement intended to avoid or settle any Election Contest or Proxy
Contest;
(iii) Consummation of a merger,
consolidation or reorganization involving the Company, unless each
of the following events occurs in connection with such merger,
consolidation or reorganization:
1) the stockholders of the Company,
immediately before such merger, consolidation or reorganization,
have Beneficial Ownership, directly or indirectly immediately
following such merger, consolidation or reorganization, of over 50%
of the then outstanding shares of common stock and the combined
voting power of all voting securities of the corporation resulting
from such merger or consolidation or reorganization (the
“Surviving Company”) in substantially the same
proportion as their Beneficial Ownership of the Outstanding Shares
and Voting Securities immediately before such merger, consolidation
or reorganization;
2) the individuals who were members
of the Incumbent Board immediately prior to the execution of the
agreement providing for such merger, consolidation or
reorganization constitute over 50% of the members of the board of
directors of the Surviving Company; and
3) no Person (other than the
Company, any of its subsidiaries, any employee benefit plan (or any
trust forming a part thereof) maintained by the Company, the
Surviving Company or any Person who, immediately prior to such
merger, consolidation or reorganization had Beneficial Ownership of
20% or more of the then Outstanding Shares or Voting Securities)
has Beneficial Ownership of 20% or more of the then Outstand Shares
of the Surviving Company or combined voting power of the Surviving
Company’s then outstanding voting securities;
(iv) Approval by the Company’s
stockholders of a complete liquidation or dissolution of the
Company, or the occurrence of the same.
(v) Approval by the Company’s
stockholder of an agreement for the assignment, sale, conveyance,
transfer, lease or other disposition of all or substantially all of
the assets of the Company to any Person (other than a transfer to a
subsidiary of the Company), or the occurrence of the
same.
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(vi) The occurrence of any
transaction which is reasonably likely to result in the Company not
continuing to be a real estate investment trust as defined under
section 856 of the Code (for example, such as because the Company
will not have sufficient qualifying income or assets).
(vii) Any other event that the Board
shall determine constitutes an effective Change of Control or
Company.
(viii) Notwithstanding the
foregoing, a Change of Control shall not be deemed to occur solely
because any Person (the “Subject Person”) acquired
Beneficial Ownership of more than the permitted amount of the
Outstanding Shares or Voting Securities as a result of the
acquisition of Outstanding Shares or Voting Securities by the
Company which, by reducing the number of Outstanding Shares or
Voting Securities outstanding, increases the proportional number of
shares Beneficially Owned by the Subject Person; provided that if a
Change of Control would occur (but for the operation of this
sentence) as a result of the acquisition of Shares or Voting
Securities by the Company, the Subject Person becomes the
Beneficial Owner of any additional Outstanding Shares or Voting
Securities which increases the percentage of the then Outstanding
Shares or Voting Securities Owned by the Subject Person, then a
Change of Control shall occur.
(e) NOTICE OF TERMINATION .
Any termination by the Company for Cause, or by Executive for Good
Reason, shall be communicated by a Notice of Termination given in
accordance with this Agreement. For purposes of this Agreement, a
“ Notice of Termination ” means a written notice
which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) sets forth in reasonable detail
the facts and circumstances claimed to provide a basis for
termination of Executive’s employment under the provision so
indicated, and (iii) specifies the intended termination date
(which date, in the case of a termination for Good Reason, shall be
not more than thirty days after the giving of such notice). The
failure by Executive or the Company to set forth in the Notice of
Termination any fact or circumstance which contributes to a showing
of Good Reason or Cause shall not waive any right of Executive or
the Company, respectively, hereunder or preclude Executive or the
Company, respectively, from asserting such fact or circumstance in
enforcing Executive’s or the Company’s rights
hereunder.
(f) DATE OF TERMINATION .
“ Date of Termination ” means (i) if
Executive’s employment is terminated by the Company for
Cause, or by Executive for Good Reason, the later of the date
specified in the Notice of Termination or the date that is one day
after the last day of any applicable cure period, (ii) if
Executive’s employment is terminated by the Company other
than for Cause or Disability, or Executive resigns without Good
Reason, the Date of Termination shall be the date on which the
Company or Executive notified Executive or the Company,
respectively, of such termination and (iii) if
Executive’s employment is terminated by reason of death or
Disability, the Date of Termination shall be the date of death of
Executive or the Disability Effective Date, as the case may
be.
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7. OBLIGATIONS OF THE COMPANY
UPON TERMINATION. Following any termination of Executive’s
employment hereunder for any reason whatsoever, the Company shall
pay Executive her Base Salary through the Date of Termination, all
amounts earned by Executive through the Date of Termination
(including accrued vacation and bonus and expenses incurred but not
yet reimbursed), and all amounts owed to Executive pursuant to the
terms and conditions of the benefit plans, programs and
arrangements of the Company at the time such payments are due. In
addition, Executive shall be entitled to the following additional
payments and benefits.
(a) DEATH OR DISABILITY . If,
during the Employment Term, Executive’s employment shall
terminate by reason of Executive&
