EXHIBIT 10.22
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement"), effective as of April 10,
2000, is by and between LTC PROPERTIES, INC., a corporation organized under the
laws of the State of Maryland ("LTC" or the "Company"), and ▇▇▇▇▇ ▇▇▇▇▇▇▇
("EXECUTIVE").
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
1. APPOINTMENT, TITLE AND DUTIES. LTC hereby employs Executive to serve
as its Vice Chairperson and Chief Financial Officer. In such capacity, Executive
shall report to the Chief Executive Officer of the Company, and shall have such
duties, powers and responsibilities as are customarily assigned to a Vice
Chairperson and Chief Financial 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 Chief Executive Officer may assign her, with her
consent, including serving with the consent or at the request of the Chief
Executive Officer as an officer or on the board of directors of affiliated
corporations.
2. TERM OF AGREEMENT. The term of this Agreement shall commence as of
the date hereof and shall extend such that at each and every moment of time
hereafter the remaining term shall be one year.
3. ACCEPTANCE OF POSITION. Executive accepts the position of Vice
Chairperson of LTC and Chief Financial 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, to the extent
requested by the Chief Executive Officer, LTC Healthcare, Inc.), 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 Three Hundred Thousand Dollars ($300,000) 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.
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(b) 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, and
shall be eligible for bonuses in the discretion of the Board of Directors.
(c) 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.
(d) LTC shall grant Executive 85,000 stock options pursuant to the
1998 Equity Participation Plan at the price of closing on April 10, 2000, $5.31
per share, which options shall vest at 20% per year, beginning on the first
anniversary of Executive's employment, April 10, 2001.
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;
(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 reduction in
benefits which is not part of an across-the-board reduction in benefits of all
senior executive personnel; (iii) a direction by the Board of Directors that
Executive report to any person or group other than the Chief Executive Officer
or 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 ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇;
(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;
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(e) "Base Salary" means, as of any date of termination of
employment, the highest base salary of Executive in the then current fiscal year
or in any of the last four fiscal years immediately preceding such date of
termination of employment;
(f) "Beneficial Owner" shall have the meaning given to such term in
Rule 13d-3 under the Exchange Act;
(g) A "Change in Control" occurs if:
(i) Any Person or related group of Persons (other than Executive
and her Related Persons, the Company or a Person that directly or indirectly
controls, is controlled by, or is under common control with, the Company) is or
becomes the Beneficial Owner, directly or indirectly, of securities of the
Company representing 30% or more of the combined voting power of the Company's
then outstanding securities; or
(ii) The stockholders of the Company approve a merger or
consolidation of the Company with any other corporation (or other entity), other
than a merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) more than 66-2/3% of the combined voting power of the
voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; PROVIDED, HOWEVER, that a merger
or consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no Person acquires more than 30% of the combined
voting power of the Company's then outstanding securities shall not constitute a
Change in Control; or
(iii) The Stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets; or
(iv) A majority of the members of the Board of Directors of the
Company cease to be Continuing Directors;
(h) "Code" means the Internal Revenue Code of 1986, as amended.
(i) "Continuing Director" means, as of any date of determination,
any member of the Board of Directors who (i) was a member of such Board of
Directors on the date of the Agreement or (ii) was nominated for election or
elected to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board of Directors at the time
of such nomination or election.
(j) "Exchange Act" means the Exchange Act of 1934, as amended.
(k) "Person" means any individual, corporation, partnership, limited
liability company, trust, association or other entity.
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(l) "Related Person" means any immediate family member (spouse,
partner, parent, sibling or child whether by birth or adoption) of the Executive
and any trust, estate or foundation, the beneficiary of which is the Executive
and/or an immediate family member of the Executive.
6. CERTAIN BENEFITS UPON TERMINATION. Executive's employment shall be
terminated upon the earlier of (i) the voluntary resignation of Executive with
or without Good Reason; (ii) Executive's death or permanent disability; or (iii)
upon the termination of Executive's employment by LTC for any reason at any
time. In the event of such termination, the below provisions of this Section 6
shall apply.
(a) If Executive's employment by LTC terminates for any reason other
than as a result of (i) a termination for Cause, or (ii) a voluntary resignation
by Executive without a Good Reason, or (iii) a Change in Control of the Company,
then LTC shall pay Executive a lump sum severance payment equal to two times her
Base Salary; PROVIDED that if employment terminates by reason of Executive's
death or disability, then such salary shall be paid only to the extent the
Company has available "key man" life, disability or similar insurance relating
to the death or disability of Executive;
(b) Upon a Change in Control of the Company whether or not
Executive's employment is terminated thereby, in lieu of the severance payment
described in Section 6(a) above, LTC shall pay Executive a lump sum severance
payment in cash equal to two times her Base Salary;
(c) If Executive's employment by LTC terminates for any reason,
except for LTC's termination of Executive's employment for Cause or a voluntary
resignation by Executive without a Good Reason, LTC shall offer to Executive the
opportunity to participate in all Company-provided medical and dental plans to
the extent Executive elects and remains eligible for coverage under COBRA and
for a maximum period of eighteen (18) months at Company expense; PROVIDED,
HOWEVER, in the event Executive's employment by LTC terminated upon a Change in
Control of the Company, then Executive shall not be given the opportunity to
participate in any of such medical and dental plans, except to the extent
required by law;
(d) In the event that Executive's employment terminates by reason of
her death, all benefits provided in this Section 6 shall be paid to her estate
or as her executor shall direct, but payment may be deferred until Executive's
executor or personal representatives has been appointed and qualified pursuant
to the laws in effect in Executive's jurisdiction of residence at the time of
her death;
(e) LTC shall make all payments pursuant to the foregoing
subsections (a) through (d) within seven (7) days following the date of
termination of Executive's employment or consummation of a Change in Control of
the Company, as applicable;
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(f) Notwithstanding the foregoing, LTC shall have no liability under
this Section if Executive's employment pursuant to this Agreement is terminated
by LTC for Cause or by Executive without a Good Reason; provided, however, that
if Executive's employment pursuant to this Agreement is terminated by LTC for
Cause or by Executive without a Good Reason at any time after a Change of
Control which did not result in Executive's employment being terminated, such
post-Change of Control termination by LTC for Cause or by Executive without a
Good Reason shall not affect in any way Executive's entitlement to the lump sum
severance payment described in Section 6(b) above or any other rights, benefits
or entitlements to which Executive may be entitled as a result of such Change of
Control;
(g) GROSS-UP.
(i) If it shall be determined that any payment, distribution or
benefit received or to be received by Executive from the Company (whether
payable pursuant to the terms of this Agreement or any other plan, arrangements
or agreement with the Company or a Affiliate (as defined above) ("Payments"))
would be subject to the excise tax imposed by Section 4999 of the Code (the
"Excise Tax"), then Executive shall be entitled to receive an additional payment
(the "Excise Tax Gross-Up Payment") in an amount such that the net amount
retained by Executive, after the calculation and deduction of any Excise Tax on
the Payments and any federal, state and local income taxes and excise tax on the
Excise Tax Gross-Up Payment provided for in this Section 6(g), shall be equal to
the Payments. In determining this amount, the amount of the Excise Tax Gross-Up
Payment attributable to federal income taxes shall be reduced by the maximum
reduction in federal income taxes that could be obtained by the deduction of the
portion of the Excise Tax Gross-Up Payment attributable to state and local
income taxes. Finally, the Excise Tax Gross-Up Payment shall be reduced by
income or excise tax withholding payment made by the Company or any affiliate of
either to any federal, state or local taxing authority with respect to the
Excise Tax Gross-Up Payment that was not deducted from compensation payable to
Executive.
(ii) All determinations required to be made under this Section
6(g), including whether and when an Excise Tax Gross-Up Payment is required and
the amount of such Excise Tax Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, except as specified in Section
6(g)(i) above, shall be made by the Company's independent auditors (the
"Accounting Firm"), which shall provide detailed supporting calculations both to
the Company and Executive. Such determination of tax liability made by the
Accounting Firm shall be subject to review by Executive's tax advisor and, if
Executive's tax advisor does not agree with such determination reached by the
Accounting Firm, then the Accounting Firm and Executive's tax advisor shall
jointly designate a nationally recognized public accounting firm, which shall
make such determination. All reasonable fees and expenses of the accountants and
tax advisors retained by either Executive or the Company shall be borne by the
Company. Any Excise Tax Gross-Up Payment, as determined pursuant to this Section
6(g), shall be paid by the Company to Executive within five days after the
receipt of such determination. Any determination by a jointly designated public
accounting firm shall be binding upon the Company and Executive.
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(iii) As a result of the uncertainty in the application of
Subsection 4999 of the Code at the time of the initial determination thereunder,
it is possible that Excise Tax Gross-Up Payments will not have been made by the
Company that should have been made consistent with the calculations required to
be made hereunder ("Underpayment"). In the event that Executive thereafter is
required to make a payment of any Excise Tax, any such Underpayment calculated
in accordance with and in the same manner as the Excise Tax Gross-Up Payment in
Section 6(g)(i) above shall be promptly paid by the Company to or for the
benefit of Executive. In the event that the Excise Tax Gross-Up Payment exceeds
the amount subsequently determined to be due, such excess shall constitute a
loan from the Company (together with interest at the rate provided in Section
1274(b)(2)(B) of the Code).
7. TAX LIABILITY LOAN. Upon a Change in Control of the Company, whether
or not Executive's employment is terminated as a result thereof, the Company
shall offer Executive an unsecured loan in the amount necessary to fund
Executive's tax liability arising from the accelerated vesting of restricted
shares held by Executive, if any. Such loan shall be due, in full, in ten (10)
years from the date made and shall bear interest at the then-current Applicable
Federal Rate (the minimum rate necessary to avoid "unstated interest" under
Section 7872 of the Code) with interest payments to be paid to the Company
annually. Such loan shall be evidenced by a promissory note signed by, and with
full recourse to, Executive.
8. INDEMNIFICATION. LTC shall indemnify Executive and hold her harmless
from and against all claims, actions, losses, damages, expense or liabilities
(including expenses of defense and settlement) ("Claim") based upon or in any
way arising from or connected with her employment by LTC, to the maximum extent
permitted by law. To the extent permitted by law, LTC shall advance to Executive
any expenses necessary in connection with the defense of any Claim which is
brought if indemnification cannot be determined to be available prior to the
conclusion of, or the investigation of, such Claim. The parties hereto agree
that each understands and has understood that notwithstanding the above-stated
provisions, nothing herein shall require LTC to hold harmless or indemnify
Executive with respect to any Claim which is brought or asserted against
Executive by LTC. LTC shall investigate in good faith the availability and cost
of directors' and officers' insurance and shall include Executive as an insured
in any directors and officers insurance policy of such insurance it maintains.
9. ATTORNEY FEES. In the event that any action or proceeding is brought
to enforce the terms and provisions of this Agreement, the prevailing party
shall be entitled to recover reasonable attorney fees.
10. NOTICES. All notices and other communications provided to either
party hereto under this Agreement shall be in writing and delivered by certified
or registered mail to such party at its/her address set forth below its/her
signature hereto, or at such other address as may be designated with postage
prepaid, shall be deemed given when received.
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11. CONSTRUCTION. In constructing this Agreement, if any portion of
this Agreement shall be found to be invalid or unenforceable, the remaining
terms and provisions of this Agreement shall be given effect to the maximum
extent permitted without considering the void, invalid or unenforceable
provisions. In construing this Agreement, the singular shall include the plural,
the masculine shall include the feminine and neuter genders as appropriate, and
no meaning in effect shall be given to the captions of the sections in this
Agreement, which are inserted for convenience of reference only.
12. HEADINGS. The section headings hereof have been inserted for
convenience of reference only and shall not be construed to affect the meaning,
construction or effect of this Agreement.
13. GOVERNING LAW. The provisions of this Agreement shall be construed
and interpreted in accordance with the internal laws of the State of California
as at the time in effect.
14. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
and supersedes all other prior agreements (including the Employment Agreement
dated as of the date hereof) and undertakings, both written and oral, among
Executive and the Company, with respect to the subject matter hereof.
IN WITNESS WHEREOF, this Agreement shall be effective as of the date
specified in the first paragraph of this Agreement.
LTC, PROPERTIES, INC., a Maryland corporation
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇., #▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Chairman and Chief Executive Officer
By: /s/
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Compensation Committee Representative
Address: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ------------------------------------------
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AMENDMENT NO. 1
EMPLOYMENT AGREEMENT
This Amendment No. 1 ("Amendment") is effective June 23, 2000, and
amends the Employment Agreement dated April 10, 2000 by and between LTC
PROPERTIES, INC., a corporation organized under the laws of the State of
Maryland, and ▇▇▇▇▇ ▇▇▇▇▇▇▇ ("EXECUTIVE").
Section 5, subparagraph (g)(ii) is hereby amended as follows:
Delete the words "more than 30%" and add the following in its
place "30% or more."
The last sentence of the first paragraph of Section "6" is hereby
deleted and the following sentence is hereby added:
"In the event of such termination, the below provisions of
this Section 6 shall apply, and, in the event of a Change in
Control, whether or not Executive's employment is terminated
thereby, Section 6(b) shall apply."
Section "6(b)" is hereby amended by deleting the semicolon and adding
the following language at the end of the sentence:
"..., and all stock options and/or restricted stock shall
automatically vest concurrently upon a Change in Control,
notwithstanding any prior existing vesting schedule;"
IN WITNESS WHEREOF, this Amendment No. 1 shall be effective as of the
date specified in the first paragraph of this Amendment.
LTC PROPERTIES, INC., a Maryland corporation
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇., #▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ --------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Chairman and Chief Executive Officer
By: /s/
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Compensation Committee Representative
Address: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ /S/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ -------------------------------------------
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