Exhibit 10.3






Exhibit 10.3




VENTAS, INC.




June 30, 2011




Douglas M. Pasquale

900 E Balboa Blvd.

Newport Beach, CA 92611




Dear Mr. Pasquale,




On behalf of Ventas, Inc. (the “Company”) and in accordance with the terms and
conditions outlined in this letter (the “Letter”), I am pleased to confirm that the Company
hereby offers you employment, effective upon the Effective Time (as defined under the Agreement and
Plan of Merger by and among the Company, Needles Acquisition LLC and Nationwide Health Properties,
Inc. (“NHP”), dated as of February 27, 2011 (the “Merger Agreement”)). This Letter
will be of no force or effect if the Merger Agreement terminates before the Effective Time.
Capitalized terms used but not defined herein will have the meaning ascribed to them in the Merger
Agreement. Except as explicitly provided in this Letter, as of and following the Effective Time,
this Letter shall supersede and preempt the Second Amended and Restated Employment Agreement
between you and NHP, effective as of October 28, 2008 (the “NHP Employment Agreement”).



Below are the terms of your employment with the Company on and following the Effective Time,
as well as the treatment of certain equity and equity-related NHP awards held by you:




	 	•	 	Position. Member of the Board of Directors of the Company (the
“Board”) and Senior Advisor to the Chief Executive Officer (“Senior
Advisor”). As Senior Advisor, you will report to the Chief Executive Officer of the
Company, with duties and responsibilities consistent with assisting in an orderly
transition and integration of NHP into the Company, and otherwise as reasonably
requested by the Chief Executive Officer of the Company consistent with the terms and
conditions of this Letter.






	 	•	 	Location. Newport Beach, CA






	 	•	 	Term and Termination. Your employment with the Company shall be for a
period commencing at the Effective Time and terminating as of December 31, 2011 (the
“Term”). Notwithstanding the above, either you or the Company may terminate
your employment with the Company for any reason upon two days’ advance written notice
to the other. The “Termination Date” shall be the date on which your
employment with the Company (but not your service as member of the Board) ceases for
any reason in a manner that constitutes a “separation from service” within the meaning
of Treasury Regulation Section 1.409A-1(h), including your resignation for any reason,
the Company’s termination of your employment for any reason, or your death or
Disability (as defined in the NHP Employment Agreement).




 


 









 











	 	•	 	Termination for Cause. The term “Cause” shall be as defined in the NHP
Employment Agreement; provided however, a determination of a termination for Cause must
be approved by a vote of at least two-thirds of the Board (excluding you), including at
least one member of the Board voting for Cause termination who was a member of the
board of directors of NHP immediately prior to the Effective Time.






	 	•	 	Duties. During the Term, you agree to devote your full attention and time
during normal business hours to the business and affairs of the Company, to discharge
the responsibilities reasonably assigned to you hereunder, and to use your reasonable
best efforts to perform faithfully and efficiently such responsibilities. During the
Term, you shall not, without the consent of the Chief Executive Officer of the Company,
be actively engaged in any other business activity, whether or not such business
activity is pursued for gain, profit or other pecuniary advantage, that competes,
conflicts or interferes with the performance of your duties hereunder in any material
way; provided that, it will not be a violation of this Letter for you to serve on civic
or charitable boards or committees, or, with the advance consent of the Chief Executive
Officer of the Company, which consent shall not be unreasonably withheld, and subject
to Ventas’ Guidelines on Governance, to serve on other corporate boards. The following
corporate boards are hereby pre-approved: Alexander & Baldwin; Matson Navigation
Company, Inc. (a wholly-owned subsidiary of Alexander & Baldwin); and Terreno Realty
Corporation.






	 	•	 	Base Salary. You shall be a paid base salary at an annual rate of $700,000
(“Base Salary”), in accordance with the Company’s normal payroll practices, and
subject to your continued employment on each payment date; provided however, in the
event you are terminated by the Company without Cause, or are terminated for death or
Disability during the Term, your Base Salary will continue to be payable on the same
schedule as if you had continued to work until the end of the Term. In the event your
employment with the Company is terminated by either you or the Company, or upon
expiration of the Term, and you continue to serve as a member of the Board, you shall
receive compensation with respect to your director services on the same terms as all
other non-employee directors of the Company during the period of such service.






	 	•	 	Supplemental Salary. In consideration for the restrictive covenants set
forth in this Agreement and for the services you will provide to the Company during the
Term, you shall receive an additional cash payment at an annual rate of $180,000 (the
“Supplemental Salary”), paid in accordance with the Company’s normal payroll
practices, subject to your continued employment at the Company. The Supplemental
Salary shall terminate upon the termination of your employment with the Company for any
reason.






	 	•	 	Incentive Compensation. In consideration for the restrictive covenants set
forth in this Agreement and for the services you will provide to the Company during the
Term, you shall receive incentive compensation in the amount of $4,320,000 (the
“Incentive Compensation”), payable promptly following the earlier of (i)
December 31, 2011, if you remain employed with the Company through such date or (ii)
your termination either by the Company without Cause or due to death or Disability
during
the Term. For the avoidance of doubt, if your employment with the Company ceases prior
to December 31, 2011 for any reason other than (i) termination by the Company without
Cause, (ii) death or (iii) Disability, you shall not receive the Incentive Compensation.




 


 









 











	 	•	 	Benefit Plans. The Company shall provide to you during your employment with
the Company the following benefits: (i) medical insurance (including dental, vision,
and prescription drug coverage) and life insurance with terms no less favorable, in the
aggregate, than the most favorable of those provided to you during the year immediately
preceding the Effective Time and (ii) the following perquisites, in annual amounts no
greater than listed below, pro-rated for the period of time you are employed with the
Company:






	 	•	 	Performing Arts — $3,500






	 	•	 	Pacific Club — $7,100






	 	•	 	Tennis Club — $1,800






	 	•	 	Gym — $1,100.






The Company shall also, consistent with the Company’s customary practices, arrange to
provide you, during the period of your employment with the Company, with office
accommodations and support, which shall include computer, personal digital assistant,
cell phone, and telecommunication office equipment (e.g., fax machine, copy machine,
telephone), reasonable office supplies, subscription to the Wall Street Journal and
other publications to which you currently subscribe, and full-time secretarial and IT
support (“Advisor Benefits”). If at any point during the Term, the Company
terminates your employment as Senior Advisor without Cause, your Advisor Benefits will
continue until December 31, 2011.




	 	•	 	Termination of Employment: Severance and Benefits. If, at any time, your
employment ceases for any reason in a manner that constitutes a “separation from
service” within the meaning of Treasury Regulation Section 1.409A-1(h), you will be
entitled to receive severance payments and benefits equal to those you would have
received under Section IV(1) of the NHP Employment Agreement had you resigned with
“Good Reason” as defined therein immediately prior to the Effective Time, which
payments and benefits you and the Company agree are properly summarized on Exhibit A
hereto. For the avoidance of doubt, the parties agree that you shall not be entitled
to any severance payments or benefits under the NHP Employment Agreement other than
what is explicitly set forth in this Letter.




 


 









 











	 	•	 	Vacation. You shall be eligible for paid vacation time of three (3) weeks
during the Term.






	 	•	 	Expense Reimbursement. You shall be reimbursed for out-of-pocket expenses
(in your capacity as an employee or director of the Board) in accordance with the
Company’s policies and procedures.






	 	•	 	Stock Options. At the Effective Time, each of your unvested NHP stock
options shall become vested, and you shall be entitled to a cash payment in respect of
each of your NHP stock options (including both previously vested options and options
which become vested at the Effective Time, each of which is listed on Exhibit B) in
accordance with Section 3.3(a)(i) of the Merger Agreement; provided, however, that the
NHP stock options granted to you pursuant to the Stock Option Agreement between you and
the Company dated February 15, 2011, shall not become vested at the Effective Time, and
instead will be assumed by the Company, in accordance with Section 3.3(a)(ii) of the
Merger Agreement and shall vest on the Termination Date as set forth in Section 2(c) of
Exhibit A.






	 	•	 	Restricted Stock Units. At the Effective Time, each of your outstanding and
unvested NHP restricted stock units (each, an “NHP RSU”) (as listed in Exhibit
B) shall become vested and you shall be entitled to a cash payment in respect thereof
in accordance with Section 3.3(b)(i) of the Merger Agreement; provided, however, that
the NHP RSUs granted to you pursuant to the Stock Unit Award Agreement between you and
the Company dated February 15, 2011 (“2011 RSUs”), shall not become vested at
the Effective Time, and instead will be assumed by the Company in accordance with
Section 3.3(b)(ii) of the Merger Agreement (including with respect to the dividend
rights described in the 2011 RSU Stock Unit Award Agreement) and shall vest on the
Termination Date as set forth in Section 2(c) Exhibit A.






	 	•	 	2009 and 2010 Performance Shares. At or immediately following the Effective
Time, you shall receive, with respect to each of your 2009 and 2010 NHP performance
 shares (as listed in Exhibit B), a number of shares of common stock of the Company
(“Company Common Stock”) equal to the greater of the Actual Performance Share
Amount (as defined below) or the Target Performance Share Amount (as defined below).
The “Actual Performance Share Amount” shall mean a number of shares of Company
Common Stock equal to (x) the number of performance shares that would have vested in
accordance with the applicable Performance Share Award Agreement based on NHP’s actual
performance for a shortened performance period that terminates immediately prior to the
Effective Time, multiplied by (y) the Exchange Ratio (as defined in the Merger
Agreement). The “Target Performance Share Amount” shall mean a number of shares
of Company Common Stock equal to (x) one hundred percent (100%) of the number of
performance shares subject to the applicable Performance Share Award Agreement (i.e.,
the number of shares vesting at an “Applicable Percentage” (as defined in the each
Performance Share Award Agreement) of 100%, and which number of Performance Shares are
listed on Exhibit B), multiplied by (y) the Exchange Ratio. Your right to receive the
excess of the Target Performance Share Amount over the Actual Performance Share Amount,
if any, is in consideration for the restrictive covenants set forth in this Agreement.




 


 









 











	 	•	 	2011 Performance Shares. At or immediately following the Effective Time,
you shall receive with respect to each of your 2011 NHP performance shares (as listed
in Exhibit B) a number of shares of Company Common Stock equal to the lesser of the
Actual Performance Share Amount or the Target Performance Share Amount (for the
avoidance of doubt, taking into account any pro-ration thereof, in accordance with
Section 7.1 of the 2011 Performance Share Award Agreement).






	 	•	 	Dividend Equivalent Rights. The dividend equivalent rights that were
granted to you in respect of your 2003, 2004, 2009, 2010 and 2011 NHP stock options and
2006 NHP RSUs (each of which are listed in Exhibit B and collectively referred to as
the “NHP DERs”) shall terminate at the Effective Time in accordance with
Section 3.3(e) of the Merger Agreement, and be treated in accordance with the terms set
forth below.






	 	•	 	2003/2004 Stock Option NHP DERs. Terminate at the
Effective Time except with respect to the rights preserved under Section
2(b)(i) of Exhibit A.






	 	•	 	2009/2010 Stock Option NHP DERs. Terminate at the
Effective Time and an amount in respect of each of the 2009 and 2010 DERs
shall be paid to you at or immediately following the Effective Time (and in
no event later than sixty (60) days following the Effective Time) equal to
the product of (i) the number of remaining dividend payments (as listed on
Exhibit B) that would have been payable following the Effective Time
pursuant to the terms of the 2009 or 2010 NHP DERs, as applicable, if the
transaction contemplated by the Merger Agreement had not occurred,
multiplied by (ii) the number of 2009 or 2010 NHP DERs, as applicable (as
listed on Exhibit B), multiplied by (iii) the value of the regularly
scheduled quarterly dividend payment paid on NHP common stock that was most
recently paid prior to the Effective Time.






	 	•	 	2011 Stock Option NHP DERs. You shall receive a number
of replacement dividend rights (each a “Company DER Replacement
Right”) equal to the number of 2011 stock option NHP DERs (the
“2011 NHP Option DERs”) multiplied by the Exchange Ratio (the
number of Company DER Replacement Rights with respect to the 2011 NHP
Option DERs is set forth in Exhibit B). The Company DER Replacement Rights
will replace the 2011 NHP Option DERs, which will terminate at the
Effective Time. The Company DER Replacement Rights shall entitle you to
receive a payment, on each date on which a dividend is paid on Company
Common Stock (a “Dividend Payment Date”) which occurs during your
employment with the Company, equal to the product of (i) the number of
Company DER Replacement Rights, multiplied by (ii) the per-share ordinary
cash dividend paid on Company Common Stock on such Dividend Payment Date,
and all remaining Company DER Replacement Rights in respect of the 2011 NHP
Option DERs shall accelerate and be
paid to you on or immediately following the Termination Date in accordance
with Section 2(b)(ii) of Exhibit A.




 


 









 











	 	•	 	2006 NHP RSU DERs. In the event that NHP pays a cash
dividend on its common stock for which the related dividend payment record
date occurs during the calendar quarter in which the Effective Time occurs
and prior to the occurrence of the Effective Time, you shall be entitled to
an additional number of NHP RSUs immediately prior to the Effective Time
equal to (i) the per-share cash dividend paid by NHP on its common stock
with respect to such record date, multiplied by (ii) the total number of
outstanding and unpaid 2006 NHP RSUs (including any dividend equivalents
previously credited thereunder) held by you as of such record date, and in
the event that the Effective Time is on or after July 1, 2011, you shall
also be entitled to an additional number of NHP RSUs that accrue from the
last dividend record date through the Effective Time on a daily rate basis
of $.00526 per share of NHP common stock. You shall receive, in respect of
any such additional RSUs thereof, a cash payment in accordance with Section
3.3(b)(i) of the Merger Agreement.






	 	•	 	10b5-1 Plan. The Company shall give you the opportunity to participate in a
10b5-1 plan commencing on the Effective Time on the same terms as provided to any other
executive officer of the Company.






	 	•	 	Irrevocable Grantor Trust. Not later than the Effective Time, the following
amounts shall be placed in an irrevocable “rabbi trust” (which shall be a grantor trust
consistent with the form prescribed by IRS Revenue Procedure 92-64) for your benefit
(the “Grantor Trust”): (i) the cash severance amounts described in Sections
1(b), 1(c) and 1(d) of Exhibit A, (ii) the cash amount set forth in Section 2(a) of
Exhibit A, (iii) the deferred compensation amount set forth on Section 2(d) of Exhibit
A, and (iv) the Incentive Compensation. The amounts in the Grantor Trust will vest and
will be paid to you in accordance with the timing set forth in Exhibit A. The grantor
of the Grantor Trust shall be the Company and the trustee of the Grantor Trust shall be
a bank or trust company as reasonably agreed upon between you and the Company. With
respect to the Annual Bonus (as defined in the NHP Employment Agreement) described in
Section 1(b) of Exhibit A, an estimated amount equal to $910,000 (the “Estimated
2011 Bonus”) shall be placed into the Grantor Trust not later than the Effective
Time. Within thirty (30) days after the end of the 2011 calendar year, a pro-rated
portion of your actual Annual Bonus for such year shall be determined (the “Actual
2011 Bonus”) by a subcommittee of the Board comprised of (i) two members of the
Board who were each a member of the board of directors of NHP immediately prior to the
Effective Time (but shall not include you) and (ii) one member of the Board who was not
a member of the board of directors of NHP immediately prior to the Effective Time. Any
excess of the Estimated 2011 Bonus over the Actual 2011 Bonus will be promptly returned
by the Grantor Trust to the Company, and any excess of the Actual 2011 Bonus over the
Estimated 2011 Bonus will be promptly paid to you by the Company. The amounts in the
Grantor Trust shall be placed in cash or cash equivalents, including U.S. Treasury
bills and
certificates of deposit. Upon the satisfaction of the portion of the amounts described
above in accordance with the terms of this Letter and Exhibit A hereof, the Grantor
Trust shall be terminated.




 


 









 











	 	•	 	Additional Payments by the Company. Notwithstanding anything in this Letter
to the contrary, Section IV(5) of your NHP Employment Agreement relating to “excess
parachute payments” under Section 280G of the Internal Revenue Code of 1986, as amended
(the “Code”), shall survive and remain in effect in respect of the “change of
ownership” (as such term is used in Section 280G of the Code) of NHP which occurs by
virtue of the transactions described in the Merger Agreement (the “280G Gross
Up”); provided that, the following terms shall apply:






Within 10 days following the Effective Time, the Company shall submit a proposed
computation of the amount that must be paid to you such that after the payment of (i)
the excise tax payable under Section 4999 of the Code by you in respect of any amounts
payable to you and (ii) any and all federal and state income, excise and other tax
payable by you on the increased amounts payable hereunder, the amount received by you is
equal to all severance amounts payable by the Company to you (the “Proposed 280G
Calculation”), which Proposed 280G Calculation shall be substantially the same as
the 280G calculation which is attached as Exhibit C hereto (other than in respect of
facts which have changed since the date of this letter (e.g., the Company stock price),
for your review and comment, which comments shall be made within 10 days of your receipt
of the Proposed 280G Calculation. For purposes of making the Proposed 280G Calculation,
the Company shall assume that you pay U.S. federal and state income tax at the highest
marginal rates applicable to an individual resident of California, with the Federal rate
being adjusted to take into account the deduction against federal taxable income for
state income taxes.




The Company shall be obligated, in good faith, to review any of your suggested
modification to the Proposed 280G Calculation, and consider changes based thereon. The
Company shall make a final determination of the amount payable to you pursuant to the
280 Gross Up within 15 days of receiving any suggested modifications from you (or
immediately after 10 days of your receipt of the Proposed 280G Calculation in the event
you do not make any suggested modifications), and such final determination shall become
the “Final Calculation.” Any time after the date the Company determines the Final
Calculation, upon your written request to the Company, the Company shall pay to you the
amount determined by the Final Calculation as soon as practicable and no later than 10
days after receiving your written request; provided however, the Final Calculation shall
be paid no later than the end of the first year following the year in which the related
taxes are remitted to the appropriate taxing authority. You shall report, for U.S.
federal and state income tax purposes, in a manner that is consistent with the Final
Calculation (the “Reported Position”).


 


 









 






Without duplication of the 280G Gross Up, the Company shall indemnify you for any
additional tax, penalty and interest, and legal, accounting, and related costs
(including tax return preparation and defense) incurred by you as a result of the
application of
either Code Section 4999 or any similar provision of state or local income tax law, to
any severance amounts payable by the Company to you. Any amount for which you are
indemnified under the preceding sentence (“Indemnified Amount”) shall be
computed on an after-tax basis, taking into account any income, excise or other taxes,
including interest and penalties. Upon payment of any Indemnified Amount, or (if the
Indemnified Amount is not yet payable) upon the Company’s written affirmation of the
Company’s obligation to indemnify you with respect to the Reported Position, the Company
shall be entitled, at its sole expense, to control the contest of any disallowance or
proposed disallowance of the Reported Position (a “Contest”), and you agree to
cooperate in good faith in connection with a Contest, including, without limitation,
executing powers of attorney and other documents, and providing information relating to
such Contest requested by the Company, all at the reasonable request of the Company. An
Indemnified Amount shall be payable by the Company whenever the related amount is
payable to a taxing authority or whenever you incur an expense or cost described in the
first sentence of this paragraph. Following payment by the Company of any Indemnified
Amount, if the Reported Position is sustained by the Internal Revenue Service or the
courts, the Company shall be entitled to any resulting receipt of interest or refund of
taxes, interest and penalties that were properly attributable to the Indemnified Amount.
If the Reported Position is sustained in whole or in part in a final resolution of a
Contest, and if the Indemnified Amount therefore exceeds the amount of taxes, penalties
and interest payable by you as a result of the Reported Position (determined on an
after-tax basis after taking into account payments made pursuant to the preceding
sentence and this sentence), any such excess portion of the Indemnified Amount shall be
returned by you to the Company. The Company shall make any payment of an Indemnified
Amount to you as soon as practicable, but not later than 10 days after you have provided
to the Company a written notice that you have remitted the taxes or incurred the expense
to which the Indemnified Amount is related; provided however, any Indemnified Amount
shall be paid no later than the end of the first year following the year in which the
related taxes are remitted to the appropriate taxing authority, or where as a result of
a Contest no taxes are remitted, no later than the end of the year following the year in
which the Contest is completed or there is a final and nonappealable settlement or other
resolution of the Contest (for the avoidance of doubt, the foregoing proviso shall not
permit the Company to delay the payment of the Indemnified Amount to you beyond 10 days
after you have provided to the Company a written notice that you have remitted the taxes
or incurred the expense to which the Indemnified Amount is related).




	 	•	 	Other Payments and Benefits. Except as provided in this Letter, any
payments or benefits to which you are entitled pursuant to the terms of any NHP benefit
plans, agreements and arrangements as of the date hereof shall be governed by the terms
of such plans, agreements and arrangements.




 


 









 











	 	•	 	Confidentiality. You shall hold in a fiduciary capacity for the benefit of
the Company all secret or confidential business information and knowledge or data
relating to the Company and its business which shall have been obtained during your
employment by the Company and which shall not be or become public knowledge (other than
by acts of you or your representatives in violation of this Letter). After the Termination
Date, you shall not, without the prior written consent of the Board, or as may otherwise
be required by law or legal process, communicate or divulge any such information,
knowledge or data to anyone other than the Company or those designated by it. For the
avoidance of doubt, nothing in this paragraph shall be deemed to be a “non-compete”
provision.






	 	•	 	Restrictive Covenants. You shall not during the Term and through the period
ending on June 30, 2012 (the “Restricted Period”), either directly or
indirectly (through another business or person) engage in or facilitate any of the
following activities anywhere in the United States or in any location outside the
United States where the Company conducts business: (i) soliciting to hire, recruit or
employ any person who is, or during the six-month period preceding such activity was,
employed by the Company or any subsidiary, or causing or attempting to cause any third
party to do any of the foregoing or (ii) performing services as an employee, director,
officer, consultant, independent contractor or advisor; or investing in, whether in the
form of equity or debt, owning any interest or otherwise having an ownership or other
interest in any Prohibited Entity (as defined below); provided however, on or after
January 1, 2012, you shall have the right to terminate the Restricted Period by
providing written notice (“Non-Compete Termination Notice”) to the Company of
such intent and making a lump-sum cash payment of $8 million to the Company no later
than five (5) business days following the delivery to the Company of the Non-Compete
Termination Notice.






Nothing in the foregoing clause (ii) shall however, restrict you from (A) making an
investment in or owning up to five percent (5%) of the common stock of any company,
provided that such investment does not give you the right or ability to control or
influence the policy decisions of any Prohibited Entity, and provided further that you
may, with the advance written consent of the Chief Executive Officer of the Company,
make investments in over five percent (5%) of the common stock of a company, or (B)
performing services as an employee, director, officer, consultant, independent
contractor or advisor for any entity that is not a Prohibited Entity. For purposes of
this Letter, a “Prohibited Entity” means any of the following entities and any
of their respective parents, affiliated entities, or subsidiaries: (1) HCP, Inc., (2)
Health Care REIT, Inc., (3) Healthcare Trust of America, Inc., (4) H&R REIT or (5) Grubb
& Ellis Healthcare REIT.


 


 









 






	 	•	 	Section 409A of the Code. Each amount to be paid or benefit to be provided
pursuant to this Letter shall be construed to be a separately identified payment for
purposes of Section 409A of the Code. If, at the time of your termination of
employment, you are a “specified employee” (as defined in Section 416(i) of the Code
and the regulations and other published guidance under Section 409A of the Code) and
the Company’s stock is publicly traded on an established securities market or
otherwise, any portion of the payments or benefits under this Letter that would
otherwise be subject to taxation pursuant to Section 409A of the Code shall be payable
not earlier than the earlier of (i) six (6) months after the date of your termination
for any reason other than death, or (ii) the date of your death. As soon as practicable
following the earlier
of (i) or (ii), and in any event within ten (10) business days of such date, you shall
receive the entire amount that would have been paid earlier but for such six (6) month
delay. Notwithstanding any provision of this Letter to the contrary, to the extent
necessary to avoid the imposition of any taxes under Section 409A of the Code, no
payment or distribution under this Letter that becomes payable by reason of your
termination of employment with the Company will be made to you unless your termination
of employment constitutes a “separation from service” (as such term is defined in the
Treasury Regulations issued under Section 409A of the Code). The Company and you intend
that no payments or benefits to you under this Letter or any other compensation plan or
arrangement shall be subject to the tax imposed under Section 409A of the Code, and this
Letter is to be interpreted according to such intention and administered by the Company
in accordance with such interpretation and Section 409A of the Code. No payment to be
made under this Letter shall be made at a time earlier than that provided for in this
Letter unless such payment is (i) an acceleration of payment permitted to be made under
Treasury Regulation Section 1.409A-3(j)(4) or (ii) a payment that would otherwise not be
subject to additional taxes and interest under Section 409A of the Code. With regard to
any provision herein that provides for reimbursement of expenses, except as permitted by
Section 409A of the Code, (i) the right to reimbursement shall not be subject to
liquidation or exchange for another benefit, (ii) the amount of expenses eligible for
reimbursement provided during any taxable year shall not affect the expenses eligible
for reimbursement in any other taxable year, and (iii) such payments shall be made in
accordance with the Company’s applicable policies, but in no event later than on or
before the last day of your taxable year following the taxable year in which the expense
occurred (for the avoidance of doubt, the foregoing proviso shall not permit the Company
to delay the payments beyond what is required under the Company’s applicable policies).
The Company and you further agree to act reasonably and to cooperate to amend or modify
this Letter or any other such compensation arrangement to the extent reasonably
necessary to avoid the imposition of tax under Section 409A of the Code. Pursuant to
Treasury Regulations Section 1.409A-1(h)(4), there shall be no “separation from service”
upon the Effective Time.






	 	•	 	No Set-Offs. The Company’s obligations to make the payments provided for in
this Letter and otherwise to perform its obligations hereunder shall not be affected by
any set-off, counterclaim, defense or other claim, right or action which the Company
may have against you or others. You shall not be obligated to seek other employment or
to take any other action by way of mitigation of the amounts payable to you under any
of the provisions of this Letter, and in the event you do seek other employment, the
terms of such employment (including any compensation received in conjunction therewith)
shall not modify, mitigate or offset the amounts payable to you under any of the
provisions of this Letter.




 


 









 











	 	•	 	General. This Letter shall be governed by and construed in accordance with
the laws of the State of Illinois. Any disputes arising in connection with, or actions
to enforce, this Letter shall be resolved by arbitration as provided in Section X of
the NHP Employment Agreement. Notwithstanding the foregoing sentence, in any
arbitration to enforce any of the provisions or rights under this Letter or the
surviving provisions
of the NHP Employment Agreement, each party shall bear its own expenses. The captions of
this Letter are not part of the provisions hereof and shall have no force or effect.
Except as explicitly provided, this Letter contains the entire agreement of the parties
with respect to the subject matter hereof and supersedes all prior agreements (including
the NHP Employment Agreement), promises, covenants, arrangements, communications,
whether written or oral, with respect to the subject matter hereof. This Letter may not
be amended or modified otherwise than by a written agreement executed by the parties
hereto or their respective successors and legal representatives. The invalidity or
unenforceability of any provision of this Letter shall not affect the validity or
enforceability of any other provision of this Letter. Any failure by you or the Company
to insist upon strict compliance with any provision hereof or any other provision of
this Letter, or the failure to assert any right you or the Company may have hereunder,
shall not be deemed to be a waiver of such provision or right or any other provision or
right of this Letter.






	 	•	 	Successors. This Letter is personal to you and without the prior written
consent of the Board shall not be assignable by you otherwise than by will or by the
laws of descent and distribution. This Letter shall inure to the benefit of and be
enforceable by your legal representatives. This Letter shall inure to the benefit of
and be binding upon the Company and its successors and assigns.






	 	•	 	Directors and Officers Insurance. You shall have indemnification rights
against the Company no less favorable than those for other executives or directors of
the Company, and you shall be covered under directors and officers liability insurance
on the most favorable terms as provided to any other executive officer of the Company
from the Effective Time until no potential liability exists for you after the period of
your employment hereunder.






	 	•	 	Legal Expenses. The Company shall reimburse all legal expenses incurred by
you in the preparation, negotiation and execution of this Letter, the Grantor Trust and
any other related documents, at your counsel’s regular hourly rates, and such expenses
shall be reimbursed to you as soon as practicable, but not later than 10 days after you
have provided to the Company written evidence, reasonably satisfactory to the Company,
that you have incurred any such legal fees expense, regardless of whether the Merger
Agreement terminates before the Effective Time.






	 	•	 	Tax Preparation Expenses. The Company shall reimburse all expenses not to
exceed $10,000 incurred by you in the preparation of your 2011 income tax return, and
such expenses shall be reimbursed to you as soon as practicable, but not later than 10
days after you have provided to the Company written evidence, reasonably satisfactory
to the Company, that you have incurred any such expense.




 


 









 











	 	•	 	Non-Exclusivity of Rights; Controlling Agreement. Nothing in this Letter
shall prevent or limit your continuing or future participation in any plan, program,
policy or practice provided by the Company for which you may qualify, nor shall
anything herein limit or otherwise affect such rights as you may have under any
contract or agreement with the Company. Amounts which are vested or which you are
otherwise
entitled to receive under any plan, policy, practice or program of, or any contract or
agreement (other than this Letter) with the Company at or subsequent to the Termination
Date shall be payable in accordance with such plan, policy, practice or program or
contract or agreement except as explicitly modified by this Letter. Notwithstanding any
other provision of any plan, policy, award agreement, practice or program in which you
participate, in the event there is any conflict between the terms of such plan, policy,
award agreement practice or program with the rights that you have under this Letter with
regard to payments, vesting or any other matter, this Letter shall control.






	 	•	 	Notices.






If to you:




Douglas M. Pasquale

900 E Balboa Blvd.

Newport Beach, CA 92611




With a copy to:




Matthew R. Perkins

Davis Graham & Stubbs LLP

1550 17th Street, Suite 500

Denver, Colorado 80202




If to the Company:




Ventas, Inc.

10350 Ormsby Park Place

Suite 300

Louisville, Kentucky 40223

Attn: General Counsel




With a copy to:




Michael J. Segal

Wachtell, Lipton, Rosen & Katz

51 W. 52nd Street

New York, New York 10019


 


 









 





On behalf of the Board, we are excited that you have agreed to accept this offer of employment
and look forward to the consummation of the transactions described in the Merger Agreement and the
commencement of your employment. Please sign in the space provided below to formally accept this
Letter and return the original to me.



	 	 	 	 	 
	 	Very Truly Yours,

 	 
	 	By:  	/s/ Debra A. Cafaro
 	 
	 	 	Name:  	Debra A. Cafaro 	 
	 	 	Title:  	Chief Executive Officer 	 
	 



Acknowledgement:





I accept the position as offered under the terms and conditions set forth in this Letter.



	 	 	 	 	 	 	 
	/s/ Douglas M. Pasquale
 

Name: Douglas M. Pasquale

	 	 	 	6/30/2011
 

Date: