PERFORMANCE RESTRICTED STOCK UNIT AGREEMENT PURSUANT TO THE OMEGA HEALTHCARE INVESTORS, INC.
PURSUANT
TO THE OMEGA HEALTHCARE INVESTORS, INC.
2004
STOCK INCENTIVE PLAN
THIS
AGREEMENT (sometimes referred to as this “Award”) is made as of the Grant Date,
by Omega Healthcare Investors, Inc. (the “Company”) to ______________ (the
“Recipient”) subject to acceptance by the Recipient.
Upon
and
subject to the Terms and Conditions attached hereto and incorporated herein
by
reference as part of this Agreement, the Company hereby awards as of the Grant
Date to the Recipient, the Restricted Units (the “Restricted Unit Grant”).
Underlined and capitalized terms in items A through F below shall have the
meanings there ascribed to them.
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▇.
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▇▇▇▇▇
Date:
May 7, 2007.
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B.
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Plan
(under which Restricted Unit Grant is granted):
Omega Healthcare Investors, Inc. 2004 Stock Incentive
Plan.
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C.
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Restricted
Units:
_________Restricted Units. Each Restricted Unit represents the Company’s
unsecured obligation to issue one share of the Company’s common stock
(“Common Stock”) and accrued dividend equivalents (and accrued interest)
in accordance with this Agreement, subject to the Vesting Schedule
and
subject to adjustment as provided in the attached Terms and
Conditions.
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D.
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Vesting
Schedule:
The Restricted Units and shares of Common Stock represented by the
Restricted Units (the “Shares”) shall vest according to the Vesting
Schedule attached hereto as Exhibit
1
(the “Vesting Schedule”). The Restricted Units and Shares which have
become vested pursuant to the Vesting Schedule are herein referred
to as
the “Vested Units” and “Vested Shares,” respectively.
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| E. |
Distribution
Date of Vested Shares.
Vested Shares attributable to Vested Units are to be issued and
distributable within ten (10) business days following the earliest
of the
events listed below, subject to receipt from the Recipient of the
required
tax withholding:
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1.
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January
2, 2011;
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2.
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the
Recipient’s cessation of services as an employee, director or consultant
of the Company or an Affiliate due to the Recipient’s death or Disability;
or
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3.
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the
Recipient’s resignation from the Company for Good Reason or termination of
employment by the Company without Cause provided that, if
the Executive is a "specified employee" within the meaning of Code
Section
409A at the date of his termination of employment and the distribution
of
the Vested Shares would result in a tax under Code Section 409A,
then the
distribution shall be delayed for six months and paid to the Executive
during the seventh month following the date of his termination of
employment.
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| F. |
Distribution
Date of Dividend Equivalents.
Dividend Equivalents (and accrued interest) attributable to Restricted
Units that are or become Vested Units are distributable to the Recipient
on the same date as Vested Shares are distributable to the Recipient
under
Section E above.
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IN
WITNESS WHEREOF, the Company and the Recipient have executed this Agreement
as
of the Grant Date set forth above.
RECIPIENT OMEGA
HEALTHCARE INVESTORS, INC.
By:
[Signature] Title:
TERMS
AND CONDITIONS TO THE
PURSUANT
TO THE OMEGA HEALTHCARE INVESTORS, INC.
2004
STOCK INCENTIVE PLAN
1. Payment
for Restricted Units.
This
Section applies to Vested Units. The Company shall issue and deliver a share
certificate representing the number of Vested Shares attributable to Vested
Units to the Recipient within ten (10) business days following the Distribution
Date of Vested Shares. In the event that the Recipient forfeits any of the
Restricted Units, and the number of Vested Units includes a fraction of a Share,
the Company shall not deliver the fractional Share, and the Company shall pay
the Recipient the amount determined by the Company to be the estimated fair
market value thereof. In the event the number of shares of Common Stock is
increased or reduced by a change in the par value, split-up, stock split,
reverse stock split, reclassification, merger, reorganization, consolidation,
or
otherwise, the Recipient agrees that any certificate representing shares of
Common Stock or other securities of the Company issued as a result of any of
the
foregoing shall be subject to all of the provisions of this Award as if
initially granted thereunder.
2. Dividends
Equivalents.
Each
Restricted Unit will accrue an amount equal to the dividends per share paid
on
Common Stock to Shareholders of record on or after the Grant Date. Dividends
equivalents attributable to Restricted Units that are or become Vested Units
will be paid to the Recipient
within ten (10) business days following the Distribution Date for
Dividend Equivalents,
with
interest accrued on a quarterly basis at a rate equal to the Company's average
borrowing rate for the preceding calendar quarter as determined in the sole
discretion of the Company, and
less
required tax withholding.
Dividend
equivalents (and interest) on Restricted Units that do not become Vested Units
are not paid to the Recipient but are forfeited when the Restricted Units to
which they relate are forfeited.
3. Tax
Withholding.
(a) The
Recipient must deliver to the Company, within ten (10) days after written
notification from the Company as to the amount of the tax withholding that
is
due, either (i) cash, or (ii) a certified check payable to the Company, in
the
amount of all tax withholding obligations imposed on the Company on the
Distribution Date of the Restricted Shares, except as provided in Section 3(b),
or (iii) by tendering a number of whole shares of Common Stock which, when
multiplied by the Fair Market Value of the Common Stock on the Distribution
Date
of the Restricted Shares, is sufficient to satisfy the minimum amount of the
required tax withholding obligations imposed on the Company (the “Stock
Tendering Election”); provided, however, the Committee may in its sole
discretion, disapprove and give no effect to the Stock Tendering Election by
giving written notice to the Recipient within ten (10) days after receipt of
the
Stock Tendering Election, in which event the Recipient must deliver, within
ten
(10) days after receiving such notice, the tax withholding in the manner
provided in clause (i) or (ii). If the Recipient does not timely satisfy payment
of the tax withholding obligation, the Recipient will forfeit the Vested
Shares.
(b) In
lieu
of paying the tax withholding obligation as described in Section 3(a), Recipient
may elect to have the actual number of Vested Shares reduced by the number
of
whole shares of Common Stock which, when multiplied by the Fair Market Value
of
the Common Stock on the Distribution Date of the Vested Shares, is sufficient
to
satisfy the minimum amount of the required tax obligations imposed on the
Company on the Distribution Date of the Vested Shares (the “Withholding
Election”). Recipient may make a Withholding Election only if all of the
following conditions are met:
(i) the
Withholding Election must be made within ten (10) days after the Recipient
receives written notification from the Company as to the amount of the tax
withholding that is due (the “Tax Notice Date”), by executing and delivering to
the Company a properly completed Notice of Withholding Election, in
substantially the form of Exhibit
2
attached
hereto; and
(ii) any
Withholding Election made will be irrevocable; however, the Committee may,
in
its sole discretion, disapprove and give no effect to any Withholding Election,
by giving written notice to the Recipient no later than ten (10) days after
the
Company’s receipt of the Notice of Withholding Election, in which event the
Recipient must deliver to the Company, within ten (10) days after receiving
such
notice, the amount of the tax withholding pursuant to Section 3(a).
4. Restrictions
on Transfer.
Except
for the transfer by bequest
or
inheritance, the Recipient shall not have the right to make or permit to exist
any transfer or hypothecation, whether outright or as security, with or without
consideration, voluntary or involuntary, of all or any part of any right, title
or interest in or to any Restricted Units. Any such disposition not made in
accordance with this Award shall be deemed null and void. Any permitted
transferee under this Section shall be bound by the terms of this
Award.
5. Additional
Restrictions on Transfer. Certificates
evidencing the Restricted Shares shall have noted conspicuously on the
certificate a legend required under applicable securities laws or otherwise
determined by the Company to be appropriate, such as:
TRANSFER
IS RESTRICTED
The
securities evidenced by this certificate are subject to restrictions on transfer
and forfeiture provisions which also apply to the transferee as set forth in
a
restricted stock agreement dated May 7,
2007,
a copy
of which is available from the company. The
securities evidenced by this certificate may not be sold, transferred, assigned,
or hypothecated unless (1) there is an effective registration under such act
covering such securities, (2) the transfer is made in compliance with rule
144
promulgated under such act, or (3) the issuer receives an opinion of counsel,
reasonably satisfactory to the company, stating that such sale, transfer,
assignment or hypothecation is exempt from the registration requirements of
such
act.
6. Change
in Capitalization.
(a) The
number and kind of Shares shall be proportionately adjusted for any increase
or
decrease in the number of issued shares of Common Stock resulting from a
subdivision or combination of shares or the payment of a stock dividend in
shares of Common Stock to holders of outstanding shares of Common Stock or
any
other increase or decrease in the number of shares of Common Stock outstanding
is effected without receipt of consideration by the Company. No fractional
shares shall be issued in making such adjustment.
(b) In
the
event of a merger, consolidation, extraordinary dividend, spin-off, sale of
substantially all of the Company’s assets or other material change in the
capital structure of the Company, or a tender offer for shares of Common Stock,
or other reorganization of the Company or upon a Change in Control, the
Committee shall take such action to make such adjustments with respect to the
Shares or the terms of this Award as the Committee, in its sole discretion,
determines in good faith is necessary or appropriate, including, without
limitation, adjusting the number and class of securities subject to the Award,
substituting cash, other securities, or other property to replace the Award,
or
removing of restrictions on Shares. If the Committee substitutes cash, the
unvested portion of the Award shall be adjusted through the Distribution Date
for Vested Shares by the annualized dividend yield of the Company for the four
(4) most recently completed calendar quarters as of the date of the transaction
and, within ten (10) business days following the Distribution Date of Vested
Shares, payment shall be released from escrow and made to the
Recipient.
(c) All
determinations and adjustments made by the Committee pursuant to this Section
will be final and binding on the Recipient. Any action taken by the Committee
need not treat all recipients of awards under the Plan equally.
(d) The
existence of the Plan and the Restricted Unit Grant shall not affect the right
or power of the Company to make or authorize any adjustment, reclassification,
reorganization or other change in its capital or business structure, any merger
or consolidation of the Company, any issue of debt or equity securities having
preferences or priorities as to the Common Stock or the rights thereof, the
dissolution or liquidation of the Company, any sale or transfer of all or part
of its business or assets, or any other corporate act or
proceeding.
7. Governing
Laws.
This
Award shall be construed, administered and enforced according to the laws of
the
State of Maryland; provided, however, no Shares shall be issued except, in
the
reasonable judgment of the Committee, in compliance with exemptions under
applicable state securities laws of the state in which Recipient resides, and/or
any other applicable securities laws.
8. Successors.
This
Award shall be binding upon and inure to the benefit of the heirs, legal
representatives, successors, and permitted assigns of the parties.
9. Notice.
Except
as otherwise specified herein, all notices and other communications under this
Award shall be in writing and shall be deemed to have been given if personally
delivered or if sent by registered or certified United States mail, return
receipt requested, postage prepaid, addressed to the proposed recipient at
the
last known address of the recipient. Any party may designate any other address
to which notices shall be sent by giving notice of the address to the other
parties in the same manner as provided herein.
10. Severability.
In the
event that any one or more of the provisions or portion thereof contained in
this Award shall for any reason be held to be invalid, illegal, or unenforceable
in any respect, the same shall not invalidate or otherwise affect any other
provisions of this Award, and this Award shall be construed as if the invalid,
illegal or unenforceable provision or portion thereof had never been contained
herein.
11. Entire
Agreement.
Subject
to the terms and conditions of the Plan, this Award expresses the entire
understanding and agreement of the parties with respect to the subject matter.
12. Headings
and Capitalized Terms.
Paragraph headings used herein are for convenience of reference only and shall
not be considered in construing this Award. Capitalized
terms used, but not defined, in this Award shall be given the meaning ascribed
to them in the Plan.
13. Specific
Performance.
In the
event of any actual or threatened default in, or breach of, any of the terms,
conditions and provisions of this Award, the party or parties who are thereby
aggrieved shall have the right to specific performance and injunction in
addition to any and all other rights and remedies at law or in equity, and
all
such rights and remedies shall be cumulative.
14. No
Right to Continued Retention.
Neither
the establishment of the Plan nor the award of Restricted Shares hereunder
shall
be construed as giving Recipient the right to continued service with the Company
or an Affiliate.
15. Definitions.
As used
in these Terms and Conditions in this Agreement:
“Applicable
Performance Period”
means the period from and including the Grant Date through (i) December 31,
2008; (ii) December 31, 2009; or (iii) December 31, 2010.
Notwithstanding the foregoing, the Applicable Performance Period shall end
on
the earliest to occur of the following:
(a) the
date
of the Change in Control;
(b) the
Recipient’s cessation of services as an employee, director or consultant of the
Company or an Affiliate due to death or Disability;
(c) the
Recipient’s resignation from the Company for Good Reason; or
(d) the
Recipient’s termination of employment by the Company for Cause.
“Beginning
Stock Price”
means
the average closing price per share of the Company’s Common Stock for the twenty
(20) days the exchange on which the Company’s Common Stock is traded is open
which immediately precede the Grant Date.
“Cause”
shall
have the meaning set forth in the employment agreement then in effect between
the Recipient and the Company, or, if there is none, then Cause shall mean
the
occurrence of any of the following events:
(a) willful
refusal by the Recipient to follow a lawful direction of the person to whom
the
Recipient reports or the Board of Directors of the Company (the “Board”),
provided the direction is not materially inconsistent with the duties or
responsibilities of the Recipient’s position with the Company, which refusal
continues after the Board has again given the direction in writing;
(b) willful
misconduct or reckless disregard by the Recipient of his duties or of the
interest or property of the Company;
(c) intentional
disclosure by the Recipient to an unauthorized person of Confidential
Information or Trade Secrets, which causes material harm to the Company;
(d) any
act
by the Recipient of fraud against material misappropriation from, significant
dishonesty to either the Company or an Affiliate, or any other party, but in
the
latter case only if in the reasonable opinion of at least two-thirds of the
members of the Board (excluding the Recipient), such fraud, material
misappropriation, or significant dishonesty could reasonably be expected to
have
a material adverse impact on the Company or its Affiliates; or
(e) commission
by the Recipient of a felony as reasonably determined by at least two-thirds
of
the members of the Board (excluding the Recipient).
“Change
in Control”
means
any one of the following events which occurs following the Grant
Date:
(a) the
acquisition, directly or indirectly, by any “person” or “persons” (as such terms
are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934,
as
amended), other than the Company or any employee benefits plan of the Company
or
an Affiliate, or any corporation pursuant to a reorganization, merger or
consolidation, of equity securities of the Company, resulting in such person
or
persons holding equity securities of the Company that in the aggregate represent
thirty percent (30%) or more of the combined ordinary voting power of the
Company’s then outstanding equity securities;
(b) individuals
who as of the date hereof, constitute the Board (the “Incumbent Board”) cease
for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the date hereof
whose election, or nomination for election by the Company’s shareholders, was
approved by a vote of at least two-thirds of the directors then comprising
the
Incumbent Board shall be considered as though such individual were a member
of
the Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of
a
person other than the Board;
(c) a
reorganization, merger or consolidation, with respect to which persons who
were
the holders of equity securities of the Company immediately prior to such
reorganization, merger or consolidation do not, immediately thereafter, own
equity securities of the surviving entity representing more than fifty percent
(50%) of the combined ordinary voting power of the then outstanding voting
securities of the surviving entity; or
(d) a
sale,
or one or more sales occurring in a twelve-month period, of all or substantially
all of the assets of the Company to any third party.
Notwithstanding
the foregoing, no Change in Control shall be deemed to have occurred for
purposes of this Award by reason of any actions or events in which the Recipient
participates in a capacity other than in his capacity as an officer, employee,
or director of the Company or an Affiliate.
“Confidential
Information”
means
data and information relating to the Business of the Company or an Affiliate
(which does not rise to the status of a Trade Secret) which is or has been
disclosed to the Recipient or of which the Recipient became aware as a
consequence of or through his relationship to the Company or an Affiliate and
which has value to the Company or an Affiliate and is not generally known to
its
competitors. Confidential Information shall not include any data or information
that has been voluntarily disclosed to the public by the Company or an Affiliate
(except where such public disclosure has been made by the Recipient without
authorization) or that has been independently developed and disclosed by others,
or that otherwise enters the public domain through lawful means without breach
of any obligations of confidentiality owed to the Company or any of its
Affiliates.
“Ending
Stock Price”
means
the average closing price per share of the Company’s Common Stock for the twenty
(20) days the exchange on which the Company’s Common Stock is traded is open
which end on the last day of the Applicable Performance Period, except that
in
the case of a Change in Control, the Ending Stock Price shall mean the closing
price per share of the Company’s Common Stock on the date of the Change in
Control or, if no closing price, the implied price the share of Common Stock
paid in the Change in Control transaction.
“Good
Reason”
shall
have the meaning set forth in the employment agreement then in effect between
the Recipient and the Company, or, if there is none, then Good Reason shall
mean
the occurrence of all of the events listed in either (a) or (b)
below:
(a) (i)
the
Recipient experiences a material diminution of the Recipient’s responsibilities
of his position, as reasonably modified by the person to whom the Recipient
reports or the Board from time to time, such that the Recipient would no longer
have responsibilities substantially equivalent to those of other executives
holding equivalent positions at companies with similar revenues and market
capitalization;
(ii) the
Recipient gives written notice to the Company of the facts and circumstances
constituting the material diminution in responsibilities within ten (10) days
following the occurrence of such material diminution;
(iii) the
Company fails to remedy the material diminution in responsibilities within
ten
(10) days following the Recipient’s written notice of the material diminution in
responsibilities; and
(iv) the
Recipient terminates his employment and this Agreement within ten (10) days
following the Company’s failure to remedy the material diminution in
responsibilities.
(b) (i)
the
Company requires the Recipient to relocate the Recipient’s primary place of
employment to a new location, that is more than fifty (50) miles from its
current location (determined using the most direct driving route), without
the
Recipient’s consent;
(ii) the
Recipient gives written notice to the Company within ten (10) days following
receipt of notice of relocation of his objection to the relocation;
(iii) the
Company fails to rescind the notice of relocation within ten (10) days following
the Recipient’s written notice; and
(iv) the
Recipient terminates his employment within ten (10) days following the Company’s
failure to rescind the notice.
“Target
Shareholder Return”
means
an annualized Total Shareholder Return of at least 11% compounded as of December
31, 2007 and thereafter annually as of the last day of each Applicable
Performance Period.
“Total
Shareholder Return”
means,
with respect to each Applicable Performance Period, the sum of the total
increase (decrease) of the Ending Stock Price over the Beginning Stock Price,
plus any dividends paid to a shareholder of record with respect to one share
of
Common Stock during each Applicable Performance Period.
“Trade
Secrets”
means
information including, but not limited to, technical or nontechnical data,
formulae, patterns, compilations, programs, devices, methods, techniques,
drawings, processes, financial data, financial plans, product plans or lists
of
actual or potential customers or suppliers which (i) derives economic value,
actual or potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use, and (ii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy.
EXHIBIT
1
VESTING
SCHEDULE
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A.
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The
Restricted Units shall become Vested Units in accordance with the
schedule
below:
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Date
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Fraction
of Restricted
Units
which are Vested Units
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December
31, 2008
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1/3
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December
31, 2009
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1/3
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December
31, 2010
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1/3
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;
provided that the Company has achieved the Target Shareholder Return as of
the
last day of the Applicable Performance Period set forth above, and provided
further that the Recipient must remain an employee, director or consultant
of
the Company or an Affiliate through the date set forth above to vest in
accordance with the schedule above. In the event the Company fails to achieve
the Target Shareholder Return as of the last day of any Applicable Performance
Period, the Restricted Units that would have become Vested Units on the last
day
of such Applicable Performance Period shall become Vested Units on December
31,
2010 if the Company achieves the Target Shareholder Return for the period
beginning on the Grant Date and ending on December 31, 2010, provided that
the
Recipient must remain an employee, director or consultant of the Company or
an
Affiliate through December 31, 2010.
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B.
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Notwithstanding
the foregoing, all Restricted Units shall become Vested Units if
they have
not been previously forfeited on the earliest to occur of the
following:
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1.
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the
Recipient’s cessation of services as an employee, director or consultant
of the Company or an Affiliate due to the Recipient’s death or
Disability;
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2.
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the
Recipient’s resignation from the Company for Good Reason;
or
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3.
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the
Recipient’s termination of employment by the Company without
Cause.
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,
but, in
each case, only if the Company has achieved the Target Shareholder Return as
of
the date of such event. If the Company has not achieved the Target Shareholder
Return as of such date, the Restricted Units which have not become Vested Units
shall be forfeited.
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C.
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Notwithstanding
any other provision hereof, Restricted Units which have not become
Vested
Units by December 31, 2010 are forfeited. Restricted
Shares which have not become Vested Shares as of the Recipient’s cessation
of services as an employee, director, or consultant of the Company
or an
Affiliate shall be forfeited.
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EXHIBIT
2
NOTICE
OF WITHHOLDING ELECTION
PURSUANT
TO OMEGA HEALTHCARE INVESTORS, INC.
2004
STOCK INCENTIVE PLAN
TO: Omega
Healthcare Investors, Inc.
Attention:
Chief Financial Officer
FROM:
RE: Withholding
Election
This
election relates to the Performance Restricted Unit Grant identified in
Paragraph 3 below. I hereby certify that:
(1) My
correct name and social security number and my current address are set forth
at
the end of this document.
(2) I
am
(check one, whichever is applicable).
[
] the
original recipient of the Performance Restricted Unit Grant.
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[
]
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the
legal representative of the estate of the original recipient of the
Performance Restricted Unit Grant.
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|
[
]
|
a
legatee of the original recipient of the Performance Restricted Unit
Grant.
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[
]
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the
legal guardian of the original recipient of the Performance Restricted
Unit Grant.
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(3) The
Performance Restricted Unit Grant pursuant to which this election relates was
issued with a Grant Date of __________________ under the Omega Healthcare
Investors, Inc. 2004 Stock Incentive Plan (the “Plan”) in the name of
_________________ for a total of ______________ Restricted Units. This election
relates to ______ shares of Common Stock issuable pursuant to the Performance
Restricted Unit Grant, provided that the numbers set forth above shall be deemed
changed as appropriate to reflect stock splits and other adjustments
contemplated by the applicable Plan provisions.
(4) I
hereby
elect to have certain of the shares of Common Stock withheld by the Company
for
the purpose of having the value of the shares applied to pay federal, state
and
local, if any, taxes arising from the exercise.
The
fair
market value of the shares of Common Stock to be withheld in addition to
$_________ in cash to be tendered to the Company by the recipient of the
Performance Restricted Unit Grant shall be equal to the minimum statutory tax
withholding requirement under federal, state and local law in connection with
the exercise.
(5) This
Withholding Election is made no later than ten (10) days after the Tax Notice
Date and is otherwise timely made pursuant to the Plan.
(6) I
further
understand that, if this Withholding Election is not disapproved by the
Committee, the Company shall withhold from the Common Stock issuable to me
a
whole number of shares of Common Stock having the value specified in Paragraph
4
above.
(7) The
Plan
has been made available to me by the Company, I have read and understand the
Plan and I have no reason to believe that any of the conditions therein to
the
making of this Withholding Election have not been met. Capitalized terms used
in
this Notice of Withholding Election without definition shall have the meanings
given to them in the Plan.
Dated:
Signature:
Name
(Printed)
______________________________
Street
Address
______________________________
City,
State, Zip Code