Exhibit 10.3

Confidential

MEDEQUITIES REALTY TRUST, INC.

3100 West End Avenue, Suite 1000

Nashville, TN 37203

January 2, 2019

To: Jeffery C. Walraven

Subject: Retention Incentive Award

MedEquities Realty Trust, Inc. (the “Company”) is pleased to offer you the
opportunity to earn a cash retention incentive award (the “Award”) on the terms
and conditions set forth in this letter agreement (the “Agreement”). The Company
is offering you the opportunity to earn the Award because it recognizes your
importance to the continued success of the Company and to the successful
consummation of the proposed merger (the “Merger”) contemplated by that certain
Agreement and Plan of Merger, by and among Omega Healthcare Investors, Inc., OHI
Healthcare Properties Limited Partnership, the Company, MedEquities OP GP, LLC,
and MedEquities Realty Operating Partnership, LP (the “Operating Partnership”)
(the “Merger Agreement”).

The terms of this Agreement are confidential and should not be discussed with
anyone (including co-workers) other than your immediate family, and any tax,
legal or other counsel, absent advance approval by the Company.

 

  1.

The Award. If the Merger is consummated and all of the terms and conditions in
this Agreement are satisfied, you will be paid a cash award in an amount equal
to $121,000.00, less applicable tax withholdings.

 

  2.

Conditions; Payment.

 

  (a)

To be eligible to receive payment of the Award, you must have remained employed
and in good standing with the Company or an affiliate of the Company until the
Merger “Closing Date” (as that term is defined in the Merger Agreement, the
“Closing Date”) or your employment must have terminated due to your death or due
to a termination by the Company due to your Disability (as defined below). If,
at any time before the Closing Date, your employment terminates for any reason,
other than due to death or your Disability, you will not be eligible for the
Award. Your right to receive payment of the Award is subject to the additional
conditions that (i) you must have executed this Agreement, (ii) you (or, in the
case of a termination due to your death or Disability, your estate, personal
representative or guardian, as the case may be) must have executed the general
release of claims attached hereto as Exhibit A (the “Release”) on or within five
(5) days after the Closing Date and not revoked it; and (iii) you must have
complied in all

 

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  material respects with the terms of your Amended and Restated Employment
Agreement with the Company and the Operating Partnership, dated as of
September 15, 2016 (the “Employment Agreement”), including the restrictive
covenants in Section 10 thereof, through the Closing Date or the date of your
termination due to death or Disability. For purposes of this Agreement, the term
“Disability” means you are unable to perform your material duties hereunder due
to a physical or mental injury, infirmity or incapacity which is determined to
be permanent by a physician selected by the Company or its insurers and
reasonably acceptable to you, for one hundred eighty (180) days (including
weekends and holidays) in any 365-day period. If you are employed by the Company
until the Closing Date, you will be deemed to have remained an employee in good
standing unless expressly determined otherwise before the Closing Date by the
Board of Directors of MedEquities Realty Trust, Inc.

 

  (b)

If earned, the Award will be paid on the eighth day following the date you
execute the Release.

 

  3.

Exclusive Rights; Prior Agreements; Nature of Obligation. You hereby acknowledge
and agree that (a) neither this Agreement nor the Award creates or conveys any
actual equity or other ownership interest in the Company nor any rights commonly
associated with any such interest, (b) this Agreement supersedes all prior oral
or written discussions, agreements and understandings of, and constitutes the
entire agreement relating to, the subject matter hereof, and (c) the Company’s
obligation under this Agreement (and the rights conveyed by this Agreement) are
unfunded and unsecured. For avoidance of doubt, neither this Agreement nor the
Award supersedes or otherwise affects any of your rights or obligations under
the Employment Agreement, and any payment hereunder will not be considered
compensation for purposes of the Employment Agreement or any employee benefit
plan, program, policy or arrangement maintained or hereafter established by the
Company or its affiliates, unless otherwise specifically required by such plan,
program, policy or arrangement.

 

  4.

At Will Employment; No Restraint on Company. Notwithstanding any provision
hereof, your employment by the Company is employment “at will” for an indefinite
term, and may be terminated at the option of you or the Company at any time. The
decision to pursue, accept or reject any potential transaction, including the
Merger, is in the sole discretion of the Company, and nothing herein alters the
Company’s discretion with respect to any potential transaction, including the
Merger.

 

  5.

Successors. This Agreement will inure to the benefit of, and be enforceable by,
the Company’s successors and assigns. The Company shall require any such
successor or assign to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place. References in this Agreement
to the Company shall be deemed to be references to any such successors or
assigns. Your rights and obligations under this Agreement are personal and will
not be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, levy, or charge. Any attempt to anticipate,
alienate, sell, transfer, assign, pledge, encumber, levy or charge the same will
be void.

 

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  6.

Notices. Notices hereunder will be mailed or delivered to the Company at its
principal place of business and will be mailed or delivered to you at the
address on file with the Company or, in either case, at such other address as
one party may subsequently furnish to the other party in writing.

 

  7.

Tax Withholding. The Company may deduct from all payments hereunder, or to
require you to remit to the Company promptly upon notification of the amount
due, any amount required to satisfy any federal, state, local or other taxes
required by law to be withheld with respect to the Award.

 

  8.

Section 409A. It is intended that any amounts payable under this Agreement will
either be exempt from or will comply with Section 409A of the Internal Revenue
Code of 1986, as amended, and all regulations, guidance and other interpretive
authority issued thereunder (“Section 409A”), so as not to subject you to
payment of any additional tax penalty or interest imposed under Section 409A,
and this Agreement will be interpreted on a basis consistent with such intent.

 

  9.

Miscellaneous. Except as otherwise provided in Section 12, this Agreement may
not be modified, amended or terminated unless such modification, amendment or
termination is agreed to in writing and signed by you and the Company. No waiver
by either party hereto at any time of any breach by the other party hereto of,
or compliance with, any condition or provision of this Agreement to be performed
by such other party will be deemed a waiver of similar or dissimilar provisions
or conditions at the same or at any prior or subsequent time. This Agreement,
the rights and obligations of the parties hereto, and any claims or disputes
relating thereto, shall be governed by and construed in accordance with the laws
of the State of Tennessee (without regard to its choice of law provisions). The
invalidity or unenforceability of any provision of this Agreement will not
affect the validity or enforceability of any other provision of this Agreement,
which will remain in full force and effect.

 

  10.

Arbitration. Any controversy, claim or dispute between the parties relating to
this Agreement or the Award will be resolved by binding arbitration in
accordance with the Employment Arbitration Rules and Mediation Procedures
(“Rules”) of the American Arbitration Association through a panel of three
(3) neutral arbitrators, selected in accordance with the Rules. The arbitration
award will be written and judgment thereon may be entered in any court having
jurisdiction thereof. Each party shall bear all of his or its own legal fees,
and all administrative costs of the arbitration itself (including the
arbitrators’ fees) will be split evenly between the Company and you. Any
arbitration shall occur only in the State of Maryland. You hereby acknowledge
and agree that you are waiving your rights to a jury trial to determine any such
controversy, claim or dispute.

 

  11.

Counterparts. This Agreement may be executed in counterparts, each of which will
be deemed to be an original but all of which together will constitute one and
the same instrument.

 

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  12.

Termination of Agreement. If the transactions contemplated by the Merger
Agreement are not consummated, this Agreement, and all of your rights and
obligations hereunder, shall immediately and automatically terminate and be of
no further force or effect.

(remainder of page intentionally left blank)

 

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To indicate your acceptance of the terms of this Agreement, please sign and date
both copies of the Agreement and return one signed copy to me. The duplicate has
been provided for your records.

Sincerely,

MEDEQUITIES REALTY TRUST, INC.

 

/s/ John W. McRoberts John W. McRoberts Chief Executive Officer

 

AGREED AND ACCEPTED: Signature: /s/ Jeffery C. Walraven Printed Name: Jeffery C.
Walraven Date: January 2, 2019

Enclosures

Duplicate Original Agreement

 

Signature Page to Retention Agreement

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Exhibit A

GENERAL RELEASE1

I, Jeffery C. Walraven, in consideration of and subject to the performance by
MedEquities Realty Trust, Inc., a Maryland corporation (the “Company”), of its
obligations under the Retention Incentive Award letter agreement dated
January 2, 2019 (the “Agreement”), including, without limitation, all payment
obligations required thereunder, do hereby release and forever discharge the
Company and Omega Healthcare Investors, Inc., as well as, each of their
respective parent, subsidiary, and affiliated entities and the present, former
and future managers, directors, partners, members, officers, employees,
attorneys, advisors, successors and assigns of each of the aforementioned
entities (collectively, the “Released Parties”) to the extent provided below
(this “General Release”). The Released Parties are intended to be third-party
beneficiaries of this General Release, and this General Release may be enforced
by each of them in accordance with the terms hereof in respect of the rights
granted to such Released Parties hereunder. Terms used herein but not otherwise
defined shall have the meanings given to them in the Agreement.

1.     I understand that any amounts paid to me under the Agreement represent
consideration for signing this General Release and not salary, wages or benefits
to which I was already entitled. I understand and agree that I will not receive
any payments under the Agreement unless I execute this General Release and do
not revoke this General Release within the time period permitted hereafter. Such
payment will not be considered compensation for purposes of any employment
agreement, employee benefit plan, program, policy or arrangement maintained or
hereafter established by the Company or its affiliates, unless otherwise
specifically required by such plan, program, policy or arrangement.

2.     Except as provided in paragraphs 4 and 5 below, I knowingly and
voluntarily (for myself, my heirs, executors, administrators and assigns)
release and forever discharge the Company and the other Released Parties from
any and all claims, suits, controversies, actions, causes of action,
cross-claims, counter claims, demands, debts, compensatory damages, liquidated
damages, punitive or exemplary damages, other damages, claims for costs and
attorneys’ fees, or liabilities of any nature whatsoever in law and in equity,
both past and present (through the date that this General Release becomes
effective and enforceable) and whether known or unknown, suspected, or claimed
against the Company or any of the Released Parties which I, my spouse, or any of
my heirs, executors, administrators or assigns, may have, which arise out of or
are connected with my employment with the Company and any Released Parties
(including, but not limited to, any allegation, claim or violation, arising
under: Title VII of the Civil Rights Act of 1964, as amended; the Civil Rights
Act of 1991; the Age Discrimination in Employment Act of 1967, as amended
(including the Older Workers Benefit Protection Act); the Equal Pay Act of 1963,
as amended; the Americans with Disabilities Act of 1990; the Family and Medical
Leave Act of 1993; the Worker Adjustment Retraining and Notification Act; the
Employee Retirement Income Security Act of 1974; any applicable Executive Order
Programs; the Fair Labor Standards Act; or their state or local counterparts; or
under any other federal, state or local civil or human rights law, or under any
other local, state, or federal law, regulation or ordinance; or under any public
policy, contract or tort, or under common law; or arising under

 

1 

In the event of a termination due to death or Disability before the Closing
Date, this release agreement will be revised to provide for execution by the
employee’s estate, personal representative or guardian, as applicable.

 

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any policies, practices or procedures of the Company; or any claim for wrongful
discharge, breach of contract, infliction of emotional distress, defamation; or
any claim for costs, fees, or other expenses, including attorneys’ fees incurred
in these matters) (all of the foregoing collectively referred to herein as the
“Claims”).

3.    I represent that I have made no assignment or transfer of any right,
claim, demand, cause of action or other matters covered by paragraph 2 above.

4.    I agree that this General Release does not waive or release any rights or
claims that I may have under the Age Discrimination in Employment Act of 1967
which arise after the date I execute this General Release.

5.    I agree that I hereby waive all rights to sue or obtain equitable,
remedial or punitive relief from any or all Released Parties of any kind
whatsoever in respect of any Claims, including, without limitation,
reinstatement, back pay, front pay, and any form of injunctive relief.
Notwithstanding the above, I further acknowledge that I am not (a) waiving and
am not being required to waive any right that cannot be waived under law,
including the right to file an administrative charge or participate in an
administrative investigation or proceeding; provided, however, that I disclaim
and waive any right to share or participate in any monetary award resulting from
the prosecution of such charge or investigation or proceeding, or (b) prevented
from reporting possible violations of federal law or regulation to any United
States governmental agency or entity in accordance with the provisions of and
rules promulgated under Section 21F of the Securities Exchange Act of 1934 or
Section 806 of the Sarbanes-Oxley Act of 2002, or any other whistleblower
protection provisions of state or federal law or regulation. Additionally, I am
not waiving (i) any rights under the Agreement or under any employment,
incentive, equity or other agreement with the Company or an affiliate, (ii) any
right to accrued but unpaid or vested compensation or benefits under any
employee benefit plan, policy or program, including without limitation,
eligibility to receive an annual cash bonus in respect of calendar year 2018 if
a bonus is earned and payable, (iii) any claim relating to directors’ and
officers’ liability insurance coverage or any right of indemnification under any
employment or other agreement with the Company or the Company’s organizational
documents or otherwise, (iv) any rights as an equity or security holder in the
Company or its affiliates, or (v) any rights under applicable law to continued
medical and dental coverage.

6.    In signing this General Release, I acknowledge and intend that it shall be
effective as a bar to each and every one of the Claims hereinabove waived or
released. I expressly consent that this General Release shall be given full
force and effect according to each and all of its express terms and provisions,
including those relating to unknown and unsuspected Claims (notwithstanding any
state or local statute that expressly limits the effectiveness of a general
release of unknown, unsuspected and unanticipated Claims), if any, as well as
those relating to any other Claims hereinabove mentioned or implied. I
acknowledge and agree that this waiver is an essential and material term of this
General Release and that without such waiver the Company would not have agreed
to the terms of the Agreement. I further agree that in the event I should bring
a Claim seeking damages against the Company, or in the event I should seek to
recover against the Company in any Claim brought by a governmental agency on my
behalf, this General Release shall serve as a complete defense to such Claims to
the maximum extent permitted by law. I further agree that I am not aware of any
pending claim of the type described in paragraph 2 above as of the execution of
this General Release.

 

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7.    I agree that neither this General Release, nor the furnishing of the
consideration for this General Release, shall be deemed or construed at any time
to be an admission by the Company, any Released Party or myself of any improper
or unlawful conduct.

8.    I agree that if I violate this General Release by suing the Company or the
other Released Parties, I will pay all costs and expenses of defending against
the suit incurred by the Released Parties, including reasonable attorneys’ fees.

9.    I agree that this General Release and the Agreement are confidential and
agree not to disclose any information regarding the terms of this General
Release or the Agreement, except to my immediate family and any tax, legal or
other counsel I have consulted regarding the meaning or effect hereof or as
required by law, and I will instruct each of the foregoing not to disclose the
same to anyone.

10.    Any non-disclosure provision in this General Release does not prohibit or
restrict me (or my attorney) from responding to any inquiry about this General
Release or its underlying facts and circumstances by the Securities and Exchange
Commission (SEC), the Financial Industry Regulatory Authority (FINRA), any other
self-regulatory organization or any governmental entity.

11.    I represent that I am not aware of any claim by me other than the claims
that are released by this General Release. I acknowledge that I may hereafter
discover claims or facts in addition to or different than those which I now know
or believe to exist with respect to the subject matter of the release set forth
in paragraph 2 above and which, if known or suspected at the time of entering
into this General Release, may have materially affected this General Release and
my decision to enter into it.

12.    Notwithstanding anything in this General Release to the contrary, this
General Release shall not relinquish, diminish, or in any way affect any rights
or claims arising out of any breach by the Company or by any Released Party of
the Agreement after the date hereof.

13.    Whenever possible, each provision of this General Release shall be
interpreted in, such manner as to be effective and valid under applicable law,
but if any provision of this General Release is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this General Release shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.

14.    To the fullest extent permitted by law, any dispute regarding the scope
of this General Release shall be determined by an arbitrator under the
procedures set forth in the Agreement.

15.    This General Release, the rights and obligations of the parties hereto,
and any claims or disputes relating thereto, shall be governed by and construed
in accordance with the laws of the State of Tennessee (without regard to its
choice of law provisions).

BY SIGNING THIS GENERAL RELEASE, I REPRESENT AND AGREE THAT:

 

  1.

I HAVE READ IT CAREFULLY;

 

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  2.

I UNDERSTAND ALL OF ITS TERMS AND KNOW THAT I AM GIVING UP IMPORTANT RIGHTS,
INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT
ACT OF 1967, AS AMENDED, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED;
THE EQUAL PAY ACT OF 1963, THE AMERICANS WITH DISABILITIES ACT OF 1990; AND THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED;

 

  3.

I VOLUNTARILY CONSENT TO EVERYTHING IN IT;

 

  4.

I HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND I HAVE
DONE SO OR, AFTER CAREFUL READING AND CONSIDERATION, I HAVE CHOSEN NOT TO DO SO
OF MY OWN VOLITION;

 

  5.

I HAVE HAD AT LEAST 45 DAYS FROM THE DATE OF MY RECEIPT OF THIS RELEASE TO
CONSIDER IT, AND THE CHANGES MADE SINCE MY RECEIPT OF THIS RELEASE ARE NOT
MATERIAL OR WERE MADE AT MY REQUEST AND WILL NOT RESTART THE 45 DAY PERIOD;

 

  6.

I UNDERSTAND THAT THIS GENERAL RELEASE CANNOT BE SIGNED AND ACCEPTED PRIOR TO
THE CLOSING DATE OR MORE THAN FIVE (5) DAYS AFTER THE CLOSING DATE;

 

  7.

I UNDERSTAND THAT I HAVE SEVEN (7) DAYS AFTER THE EXECUTION OF THIS GENERAL
RELEASE TO REVOKE IT AND THAT THIS GENERAL RELEASE SHALL NOT BECOME EFFECTIVE OR
ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS EXPIRED;

 

  8.

PURSUANT TO THE AGE DISCRIMINATION IN EMPLOYMENT ACT, ADDITIONAL INFORMATION
REGARDING THE PROGRAM THAT RESULTED IN THE OFFER OF CONSIDERATION IN EXCHANGE
FOR MY WAIVER OF CLAIMS IS CONTAINED IN EXHIBIT 1 HERETO;

 

  9.

I HAVE SIGNED THIS GENERAL RELEASE KNOWINGLY AND VOLUNTARILY AND WITH THE ADVICE
OF ANY COUNSEL RETAINED TO ADVISE ME WITH RESPECT TO IT; AND

 

  10.

I AGREE THAT THE PROVISIONS OF THIS GENERAL RELEASE MAY NOT BE AMENDED, WAIVED,
CHANGED OR MODIFIED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY AN AUTHORIZED
REPRESENTATIVE OF THE COMPANY AND BY ME.

As set forth above, I understand that this General Release cannot be signed and
accepted prior to the Closing Date.

 

SIGNED:          DATED:      

EXHIBIT 1

 

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The following information is provided pursuant to the Age Discrimination in
Employment Act because the consideration offered to you has been established in
connection with a program applicable to a group or class of employees of the
Company.

The class, unit, or group of individuals considered for the program is comprised
of [all employees of the Company] (the “Considered Group”).

You have been selected for the program and the offer of consideration for
signing a waiver. The following is a listing of job titles and ages of employees
in the Considered Group that were and were not selected for the program and the
offer of consideration for signing a waiver:

 

Job Title

   Age2      Number Selected      Number Not Selected                          
                                               

 

2 

All ages referenced in this document were calculated as of [DATE].

 

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