Exhibit 10.2
INDEMNIFICATION
AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this
“Agreement”) is made and entered March 10, 2004
(the “Effective Date”), by and between Senior Housing
Properties Trust, a Maryland real estate investment trust (the
“Company”), and David J. Hegarty
(“Indemnitee”).
WHEREAS Indemnitee currently serves
as an officer of the Company and may, in connection therewith, be
subjected to claims, suits or proceedings arising from such
service; and
WHEREAS, as an inducement to
Indemnitee to continue to serve as such officer, the Company has
agreed to indemnify and to advance expenses and costs incurred by
Indemnitee in connection with any such claims, suits or
proceedings, to the fullest extent permitted by law as hereinafter
provided; and
NOW, THEREFORE, in consideration of
the premises and the covenants contained herein, the Company and
Indemnitee do hereby covenant and agree as follows:
Section 1.
Definitions . For purposes of this
Agreement:
(a)
“Change in Control” means a change in control of the
Company occurring after the Effective Date of a nature that would
be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A (or in response to any similar
item on any similar schedule or form) promulgated under the
Securities Exchange Act of 1934, as amended (the
“Act”), whether or not the Company is then subject to
such reporting requirement; provided, however, that, without
limitation, such a Change in Control shall be deemed to have
occurred if after the Effective Date (i) any
“person” (as such term is used in Sections
13(d) and 14(d) of the Act) is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under
the Act), directly or indirectly, of securities of the Company
representing 10% or more of the combined voting power in the
election of trustees of the Company’s then outstanding
securities without the prior approval of at least two-thirds of the
members of the Board of Trustees in office immediately prior to
such person attaining such percentage interest; (ii) there
occurs a proxy contest, or the Company is a party to a merger,
consolidation, sale of assets, plan of liquidation or other
reorganization not approved by at least two-thirds of the members
of the Board of Trustees then in office, as a consequence of which
members of the Board of Trustees in office immediately prior to
such transaction or event constitute less than a majority of the
Board of Trustees thereafter; or (iii) during any period of
two consecutive years, other than as a result of an event described
in clause (a)(ii) of this Section 1 , individuals
who at the beginning of such period constituted the Board of
Trustees (including for this purpose any new trustee whose election
or nomination for election by the Company’s shareholders was
approved by a vote of at least two-thirds of the trustees then
still in office who were trustees at the beginning of such period)
cease for any reason to constitute at least a majority of the Board
of Trustees.
(b)
“Corporate Status” means the status of a person who is
or was a director, trustee, officer or agent of the
Company.
(c)
“Disinterested Trustee” means a trustee of the Company
who is not and was not a party to the Proceeding in respect of
which indemnification is sought by Indemnitee.
(d)
“Expenses” means all expenses, including, but not
limited to, all reasonable attorneys’ fees, retainers, court
costs, transcript costs, fees of experts, witness fees, travel
expenses, duplicating costs, printing and binding costs, telephone
charges, postage, delivery service fees, and all other
disbursements or expenses of the types customarily incurred in
connection with prosecuting, defending, preparing to prosecute or
defend, investigating, or being or preparing to be a witness in a
Proceeding.
(e)
“Independent Counsel” means a law firm, or a member of
a law firm, that is retained by Indemnitee and is not serving as
counsel to the Company.
(f)
“Proceeding” means any threatened, pending or completed
action, suit, arbitration, alternate dispute resolution mechanism,
investigation, administrative hearing or any other proceeding,
whether civil, criminal, administrative or investigative (including
on appeal), except one initiated by an Indemnitee pursuant to
Section 9 .
Section 2.
Indemnification - General . The Company shall
indemnify, and advance Expenses to, Indemnitee (a) as provided
in this Agreement and (b) otherwise to the fullest extent
permitted by Maryland law in effect on the date hereof and as
amended from time to time; provided , however , that
no change in Maryland law shall have the effect of reducing the
benefits available to Indemnitee hereunder based on Maryland law as
in effect on the date hereof. The rights of Indemnitee
provided in this Section 2 shall include, without
limitation, the rights set forth in the other sections of this
Agreement, including any additional indemnification permitted by
Section 2-418(g) of the Maryland General Corporation Law
(“MGCL”), as applicable to a Maryland real estate
investment trust by virtue of Section 8-301(15) of the
Maryland REIT Law.
Section 3.
Proceedings Other Than Proceedings by or in the Right of the
Company . Indemnitee shall be entitled to the rights of
indemnification provided in this Section 3 if, by
reason of his Corporate Status, he is, or is threatened to be, made
a party to any threatened, pending, or completed Proceeding, other
than a Proceeding by or in the right of the Company. Pursuant
to this Section 3 , Indemnitee shall be indemnified
against all judgments, penalties, fines and amounts paid in
settlement and all Expenses incurred by him or on his behalf in
connection with a Proceeding by reason of Indemnitee’s
Corporate Status unless it is established that (i) the act or
omission of Indemnitee was material to the matter giving rise to
the Proceeding and (a) was committed in bad faith or
(b) was the result of active and deliberate dishonesty,
(ii) Indemnitee actually received an improper personal benefit
in money, property or services, or (iii) in the case of any
criminal Proceeding, Indemnitee had reasonable cause to believe
that his conduct was unlawful.
Section 4.
Proceedings by or in the Right of the Company .
Indemnitee shall be entitled to the rights of indemnification
provided in this Section 4 if, by reason of his
Corporate Status, he is, or is threatened to be, made a party to
any threatened, pending or completed Proceeding brought by or in
the right of the Company to procure a judgment in its favor.
Pursuant to this Section 4 , Indemnitee shall be
indemnified against all amounts paid in settlement and all Expenses
incurred by him or on his behalf in connection with such Proceeding
unless it is established that (i) the act or omission of
Indemnitee was material to the matter giving rise to such a
Proceeding and (a) was committed in bad faith or (b) was
the result of active and deliberate dishonesty or
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(ii) Indemnitee actually
received an improper personal benefit in money, property or
services.
Section 5.
Indemnification for Expenses of a Party Who is Partly
Successful . Without limitation on Section 3
and Section 4 , if Indemnitee is not wholly successful
in any Proceeding covered by this Agreement, but is successful, on
the merits or otherwise, as to one or more but less than all
claims, issues or matters in such Proceeding, the Company shall
indemnify Indemnitee under this Section 5 for all
Expenses incurred by him or on his behalf in connection with each
successfully resolved claim, issue or matter, allocated on a
reasonable and proportionate basis. For purposes of this
Section and without limitation, the termination of any claim,
issue or matter in such a Proceeding by dismissal, with or without
prejudice, shall be deemed to be a successful result as to such
claim, issue or matter.
Section 6.
Advance of Expenses . The Company shall advance all
Expenses incurred by or on behalf of Indemnitee in connection with
any Proceeding to which Indemnitee is, or is threatened to be, made
a party or a witness, within ten days after the receipt by the
Company of a statement or statements from Indemnitee requesting
such advance or advances from time to time, whether prior to or
after final disposition of such Proceeding. Such statement or
statements shall reasonably evidence the Expenses incurred by
Indemnitee and shall include or be preceded or accompanied by a
written affirmation by Indemnitee of Indemnitee’s good faith
belief that the standard of conduct necessary for indemnification
by the Company as authorized by law and by this Agreement has been
met and a written undertaking by or on behalf of Indemnitee, in
substantially the form attached hereto as Exhibit A or
in such form as may be required under applicable law as in effect
at the time of the execution thereof, to reimburse the portion of
any Expenses advanced to Indemnitee relating to claims, issues or
matters in the Proceeding as to which it shall ultimately be
established that the standard of conduct has not been met and which
have not been successfully resolved as described in
Section 5 . To the extent that Expenses advanced
to Indemnitee do not relate to a specific claim, issue or matter in
the Proceeding, such Expenses shall be allocated on a reasonable
and proportionate basis. The undertaking required by this
Section 6 shall be an unlimited general obligation by
or on behalf of Indemnitee and shall be accepted without reference
to Indemnitee’s financial ability to repay such advanced
Expenses and without any requirement to post security
therefor.
Section 7.
Procedure for Determination of Entitlement to
Indemnification .
(a)
To obtain indemnification under this Agreement, Indemnitee shall
submit to the Company a written request, including such
documentation and information as is reasonably available to
Indemnitee and is reasonably necessary to determine whether and to
what extent Indemnitee is entitled to indemnification. The
Secretary of the Company shall, promptly upon receipt of such a
request for indemnification, advise the Board of Trustees in
writing that Indemnitee has requested indemnification.
(b)
Upon written request by Indemnitee for indemnification pursuant to
the first sentence of Section 7(a) hereof, a
determination, if required by applicable law, with respect to
Indemnitee’s entitlement thereto shall promptly be made in
the specific case: (i) if a Change in Control shall have
occurred, by Independent Counsel in a written opinion to the Board
of Trustees, a copy of
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which shall be delivered to
Indemnitee; or (ii) if a Change of Control shall not have
occurred or if after a Change of Control Indemnitee shall so
request, (A) by the Board of Trustees (or a duly authorized
committee thereof) by a majority vote of a quorum consisting of
Disinterested Trustees (as herein defined), or (B) if a quorum
of the Board of Trustees consisting of Disinterested Trustees is
not obtainable or, even if obtainable, such quorum of Disinterested
Trustees so directs, by Independent Counsel in a written opinion to
the Board of Trustees, a copy of which shall be delivered to
Indemnitee, or (C) if so directed by a majority of the members
of the Board of Trustees, by the shareholders of the Company; and,
if it is so determined that Indemnitee is entitled to
indemnification, payment to Indemnitee shall be made within ten
days after such determination. Indemnitee shall cooperate
with the person, persons or entity making such determination with
respect to Indemnitee’s entitlement to indemnification,
including providing to such person, persons or entity upon
reasonable advance request any documentation or information which
is not privileged or otherwise protected from disclosure and which
is reasonably available to Indemnitee and reasonably necessary to
such determination. Any Expenses incurred by Indemnitee in so
cooperating with
