Item 5.02
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(b)
Departure of Directors or Certain Officers
On July 11, 2016, Lauralee E. Martin, President and Chief Executive Officer of HCP, Inc. (the Company), and the Company entered into a Separation and General Release Agreement (the Separation Agreement) pursuant to which Ms. Martins employment with the Company will terminate effective July 11, 2016 (the Separation Date).
Ms. Martin will receive the following consideration under the Separation Agreement: (1) salary continuation in an aggregate amount equal to $6,000,000, less all applicable state and federal tax withholdings and other lawful deductions, payable in equal installments in accordance with the Companys normal payroll practice over a twenty-four (24) month period, provided that the payments that would otherwise be paid during the first six months following the Separation Date shall instead be paid on January 12, 2017, and the remaining payments shall be paid over the remaining eighteen (18) month period; (2) reimbursement of any COBRA premiums incurred for up to twenty-four (24) months following the Separation Date; (3) a lump sum payment of $10,000, less all applicable state and federal tax withholdings and other lawful deductions, representing transition-related expenses and payable within ten (10) days following the Separation Date; and (4) continued directors and officers insurance coverage for six years following the Separation Date under the Companys existing or successor policy.
All of Ms. Martins outstanding restricted stock units (RSUs) that are subject to time-based vesting conditions and the RSUs she was granted in respect of her service as a director will vest upon the Separation Date. Her performance-based RSUs granted in 2014 and 2015 (and their accrued dividend equivalents) will vest based on target performance upon the Separation Date, and performance-based RSUs granted in 2016 (and their accrued dividend equivalents) will remain outstanding and will vest (if at all) based on achievement of applicable performance goals for the performance period ending December 31, 2018. Ms. Martins restricted stock awards will vest in connection with her separation, but will remain subject to transfer restrictions until December 31, 2018. Ms. Martins outstanding options will remain exercisable for the remainder of their term.
The foregoing description of the Separation Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Separation Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
In connection with her termination of employment, Ms. Martin also resigned from the Companys Board of Directors (the Board), effective July 11, 2016.
(c) Appointment of Certain Officers
Election of President and Chief Executive Officer
On July 11, 2016,
the Board elected Michael D. McKee, its Executive Chairman, to serve as President and Chief Executive Officer.
Mr. McKee will serve as President and Chief Executive Officer effective immediately, and continuing until a successor is named and fills the position. Mr. McKee has served as Executive Chairman of the Company since May 2016, and served as the Boards Independent Chairman from 2013 until his election as Executive Chairman. He has served as a director of the Company since 1989. Additional biographical information about Mr. McKee is available under the heading Director Nominees in our definitive proxy statement filed with the Securities and Exchange Commission on March 17, 2016, and is incorporated herein by reference.
Mr. McKee will not receive any additional compensation for his service as President and Chief Executive Officer. There are no family relationships involving Mr. McKee that would require disclosure under Item 401(d) of Regulation S-K. There are no current or proposed transactions in which he or any member of his immediate family has, or will have, a direct or indirect material interest that would require disclosure under Item 404(a) of Regulation S-K.
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