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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:
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(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.
(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:
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(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:
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(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:
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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’s death or Disability, the Company shall pay to
Executive (or her designated beneficiary or estate, as the case may
be) the prorated portion of any Target Bonus (as defined in
Section 7(d)) Executive would have received for the year of
termination of employment. Such amount shall
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