EXHIBIT 10.2
SECOND AMENDMENT TO THE 2007 AMENDED AND
RESTATED
EMPLOYMENT AGREEMENT
This Second
Amendment to the 2007 Employment Agreement (the
“Agreement”), is made as of July 1, 2007, effective as
of March 1, 2007 by and between LTC PROPERTIES, INC. , a
corporation organized under the laws of the State of Maryland
(“LTC” or the “Company”), and WENDY
SIMPSON (“Executive”) and amends and restates the
2007 Amended and Restated Employment Agreement between LTC and
Executive, dated as of February 6, 2007 (“Prior Employment
Agreement”).
NOW ,
THEREFORE , for good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties hereto
agree as follows:
1.
Effective Date,
Appointment, Title and Duties . The effective date of this Agreement is
March 1, 2007 (“Effective Date”). As of the
Effective Date, LTC employs Executive to serve as its Chief
Executive Officer. In such capacity, Executive shall report
to the Board of Directors of the Company, and shall have such
duties, powers and responsibilities as are customarily assigned to
a Chief Executive Officer of a publicly held corporation, but shall
also be responsible to the Board of Directors and to any committee
thereof. In addition, Executive shall have such other duties
and responsibilities as the Board of Directors may reasonably
assign her, with her consent, including serving with the consent or
at the request of the Board of Directors as an officer or on the
board of directors of affiliated corporations, provided that
such duties are commensurate with and customary for a senior
executive officer bearing Executive’s experience,
qualifications, title and position.
2.
Term of
Agreement . The term of this Agreement shall
commence as of the Effective Date and shall extend such that at
each and every moment of time hereafter the remaining term shall be
three years.
3.
Acceptance of
Position . Executive accepts the position of Chief
Executive Officer, and agrees that during the term of this
Agreement she will faithfully perform her duties and, except as
expressly approved by the Board of Directors of LTC, will devote
substantially all of her business time to the business and affairs
of LTC, and will not engage, for her own account or for the account
of any other person or entity, in a business which competes with
LTC. It is acknowledged and agreed that Executive may serve
as an officer and/or director of companies in which LTC owns voting
or non-voting stock. In addition, it is acknowledged and
agreed that Executive may, from time to time, serve as a member of
the board of directors of other companies, in which event the Board
of Directors of LTC must expressly approve such service pursuant to
a Board resolution maintained in the Company’s minute
books. Any compensation or remuneration which Executive
receives in consideration of her service on the board of directors
of other companies shall be the sole and exclusive property of
Executive, and LTC shall have no right or entitlement at any time
to any such compensation or remuneration.
4.
Salary and
Benefits . During the term of this
Agreement:
(a)
LTC shall pay to Executive
a base salary at an annual rate of not less than Four Hundred
Thousand Dollars ($400,000) per annum (“Base Salary”),
paid in approximately equal installments at intervals based on any
reasonable Company policy. LTC agrees from time to time to
consider increases in such base salary in the discretion of the
Board of Directors. Any increase, once granted, shall
automatically amend this Agreement to provide that thereafter
Executive’s base salary shall not be less than the annual
amount to which such base salary has been increased.
(b)
During the term hereof,
Executive shall participate in all health, retirement, Company-paid
insurance, sick leave, disability, expense reimbursement and other
benefit programs which LTC makes available to any of its senior
executives.
(c)
Health Insurance
Benefits . LTC
shall provide to Executive and her spouse LTC health
insurance benefits, of a type and nature no less favorable to
Executive than the health insurance benefits made available by LTC
to Executive and to LTC’s other senior executives at the time
of execution of this Agreement, for so long as Executive is
employed hereunder. The benefits described in the preceding
sentence shall be referred to herein as Executive’s
“Health Insurance Benefits” and upon a Change in
Control of the Company, a termination of Executive’s
employment by LTC without “cause” or a resignation by
Executive with “good reason”, these Health Insurance
Benefits will continue for Executive’s lifetime.
(i)
In the event LTC ceases to
offer health insurance coverage to its senior executives or LTC
elects in its sole discretion to discontinue providing Executive
with Executive’s Health Insurance Benefits, LTC shall have
the option (a) at the Company’s expense, to purchase health
insurance coverage no less favorable to Executive than
Executive’s Health Insurance Benefits, or (b) terminate all
further Health Insurance Benefits to Executive and in lieu thereof
make a one time payment of Two Hundred Fifty Thousand Dollars
($250,000) to Executive (a “Health Insurance
Buyout”).
(ii)
In order to effect a
Health Insurance Buyout, LTC shall give no less than sixty (60)
days’ prior written notice to Executive that LTC has elected
to terminate Executive’s Health Insurance Benefits.
Such notice shall not be effective nor shall it relieve LTC of its
obligations under this Section 4(c) unless it is accompanied by
payment in full of the aforesaid Two Hundred Fifty Thousand Dollars
($250,000).
(iii)
Executive’s rights
to the benefits set forth in this Section 4(c) and the subsections
of this Section 4(c) shall survive any termination or expiration of
this Agreement and the termination of Executive’s employment
upon a Change in Control of the Company, a termination of
Executive’s employment by LTC without “cause” or
a resignation by Executive with “good
reason”.
(d)
The Company has set an
annual target bonus for Executive equal to one hundred percent
(100%) of her Base Salary; provided, however , that the
award of any such bonus is subject to the sole discretion of the
Board of Directors. Executive also shall be eligible to
participate in any LTC incentive stock, option or bonus plan
offered by LTC to its senior executives, subject to the terms
thereof and at the sole discretion of the Board of
Directors.
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(e)
At the date
hereof:
(i)
Executive has previously
been awarded twenty-seven thousand one hundred twenty (27,120)
shares of the Company’s common stock (“Prior
RSA’s”). Twenty-two thousand five hundred
(22,500) of the Prior RSA’s were awarded under the LTC
Properties, Inc. 2004 Restricted Stock Plan (“2004
RSP”) and four thousand six hundred twenty (4,620) of the
Prior RSA’s were awarded under the LTC Properties, Inc., 1998
Equity Participation Plan (“1998 EPP”) and the
applicable LTC Property, Inc. Restrictive Stock Agreements or 1998
EPP Award Agreements, as the case may be (together the “Award
Agreements”). The Award Agreements are hereby modified
and amended to provide that (A) no prior existing schedule for the
lapsing of restriction on the shares awarded thereunder shall have
any further force and effect, and (B) all restrictions imposed by
the Company with respect to the Prior RSA’s shall lapse in
the annual amount of 9,040 shares each March 1, 2008, 2009 and
2010, respectively.
(ii)
Simultaneously with the
execution of this Agreement, the Company and Executive shall
execute a 2007 Restricted Stock Agreement in the form of Exhibit A
hereto pursuant to which the Company shall grant Executive a
Restricted Stock Award of forty thousand (40,000) shares of
restricted common stock of the Company under the 1998 EPP (the
“2007 RSA”). Restrictions imposed by the Company
on the 2007 RSA shares shall lapse in the amounts of 13,333 shares
on March 1, 2008, 13,333 on March 1, 2009 and 13,334 on March 1,
2010.
(f)
Executive shall be
entitled to reasonable vacation time, not less than four (4) weeks
per year, provided that not more than two (2) weeks of such
vacation time may be taken consecutively without prior notice to
and non-objection by the Compensation Committee of the Board of
Directors or, if there is no Compensation Committee, the Board of
Directors.
5.
Certain Terms
Defined .
For purposes of this Agreement:
(a)
Executive shall be deemed
to be “disabled” if a physical or mental condition
shall occur and persist which, in the written opinion of a licensed
physician selected by the Board of Directors in good faith, has
rendered Executive unable to perform the duties set forth in
Section 1 hereof for a period of sixty (60) days or more and, in
the written opinion of such physician, the condition will continue
for an indefinite period of time, rendering Executive unable to
return to her duties.
(b)
A termination of
Executive’s employment by LTC shall be deemed for
“Cause” if, and only if, it is based upon
(i) conviction of a felony; (ii) material disloyalty to
the Company such as embezzlement, misappropriation of corporate
assets or, except as permitted pursuant to Section 3 of this
Agreement, breach of Executive’s agreement not to engage in
business for another enterprise of the type engaged in by the
Company; or (iii) the engaging in unethical or illegal
behavior which is of a public nature, brings LTC into disrepute,
and result in material damage to the Company. The Company
shall have the right to suspend Executive with pay, for a
reasonable period to investigate allegations of conduct which, if
proven, would establish a right to terminate this Agreement for
Cause, or to permit a felony charge to be tried. Immediately
upon the conclusion of such temporary period, unless Cause to
terminate this Agreement has been established, Executive shall be
restored to all duties and responsibilities as if such suspension
had never occurred.
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(c)
A resignation by Executive
shall not be deemed to be voluntary and shall be deemed to be a
resignation with “Good Reason” if it is based upon
(i) a diminution in Executive’s title, duties, or
salary; (ii) a material reduction in benefits; (iii) a
direction by the Board of Directors that Executive report to any
person or group other than the Board of Directors, or (iv) a
geographic relocation of Executive’s place of work a distance
for more than seventy-five (75) miles from LTC’s offices
located at 31365 Oak Crest Drive, Suite 200, Westlake
Village, California 91361.
(d)
“Affiliate”
means with respect to any Person, a Person who, directly or
indirectly, through one or more intermediaries, controls, is
controlled by or is under common control, with the Person
specified.
(e)
“Base Salary”
means, as of any dat
