EXHIBIT 10.34
PERFORMANCE RESTRICTED STOCK UNIT
AGREEMENT
James F. Flaherty III, Grantee:
On the
day of
(the “ Grant Date ”), Health Care Property
Investors, Inc., a Maryland corporation (the “ Company
”), pursuant to the Health Care Property Investors, Inc. 2000
Stock Incentive Plan, as amended and/or restated from time to time
(the “ Plan ”), has granted to you, the Grantee
named above,
performance restricted stock units (the “ Units
”) with respect to
shares of Common Stock on the terms and conditions set forth in
this Performance Restricted Stock Unit Agreement (this “
Agreement ”) and the Plan. The Units are subject to
adjustment as provided in Section 11(a) of the Plan. Capitalized
terms not defined herein shall have the meanings assigned to such
terms in the Plan. The Compensation Committee (the
“Committee”) of the Board of Directors of the Company
(the “Board”) is the administrator of the Plan for
purposes of your Units.
I. Forfeiture of Units
.
(a) Forfeiture Based Upon Company
Performances . Your Units are subject to forfeiture if the
Company’s Funds From Operations Per Share for the 2004
calendar year (the “ Performance Period ”) is
less than $
. If the Company’s Funds From Operations Per Share for the
Performance Period is less than $
, the aggregate percentage of Units that you will forfeit will be
determined in accordance with Exhibit A hereto. For purposes
of this Agreement, “ Funds From Operations Per Share
” means the Company’s funds from operations per share
during the Performance Period, as prescribed by the National
Association of Real Estate Investment Trusts (NAREIT) as in effect
on the first day of the Performance Period, and shall be calculated
on a fully diluted basis using the weighted average of diluted
shares of Common Stock outstanding during the Performance Period.
Funds From Operations Per Share shall be calculated before taking
into account any charges incurred by the Company with respect to
the Performance Period for (i) amounts paid in connection with the
settlement of disputes with employees or former employees regarding
their employment or former employment with the Company or the
payment of severance benefits and (ii) impairment. The
determination as to whether the Company has attained the
performance goals with respect to the Performance Period shall be
made by the Committee acting in good faith and based upon the
Company’s audited financial statements. The Committee’s
determination regarding whether the Company has attained the
performance goals shall be made no later than 120 days following
the end of the Performance Period. Your Units shall not vest in
accordance with Section 2 unless and until the Company has achieved
the performance goals with respect to the Performance Period, as
required by Section 162(m) of the Code and the regulations
promulgated thereunder.
(b) Termination due to Retirement
during the Performance Period . Your Units will remain
outstanding during the remainder of the Performance Period and will
be subject to forfeiture in the manner set forth in subsection (a)
upon completion of the Performance Period if, prior to the
completion of the Performance Period, your employment with the
Company is terminated as a result of your Retirement. In the event
of any such termination during the Performance Period, any Units
not forfeited pursuant to subsection (a) shall fully vest as of the
first day following the completion of the Performance
Period.
(c) Termination Other Than For
Cause under Employment Agreement during the Performance Period.
Your Units will remain outstanding during the remainder of the
Performance Period and will be subject to forfeiture in the manner
set forth in subsection (a) upon completion of the Performance
Period if, prior to the completion of the Performance Period, your
employment with the Company is “Terminated Other Than For
Cause” as defined in, and otherwise pursuant to the terms of,
your Employment Agreement with the Company dated October 8, 2002,
as the same may be amended or restated from time to time and any
successor agreement (the “Employment Agreement”). In
the event of any such termination during the Performance Period,
any Units not forfeited pursuant to subsection (a) shall fully vest
as of the first day following the completion of the Performance
Period.
(d) Change in Control during the
Performance Period .
(i) Your Units will remain
outstanding during the remainder of the Performance Period and will
be subject to forfeiture in the manner set forth in subsection (a)
in the event of a Change in Control occurring during the
Performance Period. In such event, any Units not forfeited pursuant
to subsection (a) shall be deemed restricted stock under your
Employment Agreement and shall fully vest as of the first day
following the completion of the Performance Period.
(ii) Notwithstanding the foregoing,
the Committee may, in its sole and absolute discretion, take action
to fully vest your Units immediately prior to, and subject to the
consummation of, a Change in Control occurring during the
Performance Period. Any Units that become vested in accordance with
this subsection (d)(ii) shall not be subject to forfeiture in the
manner set forth in subsection (a).
(e) Forfeiture of Units Upon
Other Terminations . If at any time during the Performance
Period, your employment with the Company is terminated (i) by the
Company, or (ii) by you, excluding any Termination Other Than For
Cause pursuant to your Employment Agreement, or any termination by
reason of your Retirement, death or Disability, or any termination
that occurs upon or after a Change in Control, all of your Units
shall be automatically forfeited and cancelled in full effective as
of such termination of employment and this Agreement shall be null
and void and of no further force and effect
II. Vesting .
(a) Vesting of Non-Forfeited
Units. You will have no further rights with respect to any
Units that are forfeited in accordance with Section I. Subject to
the terms and conditions of this Agreement, your Units that (i) are
not forfeited in accordance with Section I and (ii) do not
otherwise vest in accordance with Section I, if any, shall vest in
accordance with the following schedule, subject to your continuous
service to the Company until the applicable vesting date. (Vesting
amounts pursuant to the following schedule are
cumulative.)
2
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Tranche
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Percentage of Non
Forfeited
Units that vest
(number of Units)
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Vesting Date
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1
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20% (Maximum of
)
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1 st Anniversary of Grant Date
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2
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20% (Maximum of
)
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2 nd Anniversary of Grant Date
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3
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20% (Maximum of
)
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3 rd Anniversary of Grant Date
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4
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20% (Maximum of
)
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4 th Anniversary of Grant Date
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5
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20% (Maximum of
)
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5 th Anniversary of Grant Date
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(b) Termination for death or
Disability . If at any time during the Performance Period or
following the completion of the Performance Period, your employment
with the Company is terminated as a result of your death or
Disability, your Units shall fully vest immediately upon such
termination of employment. For the avoidance of doubt, any Units
that become vested in accordance with this subsection (b) during
the Performance Period shall not be subject to the forfeiture
provisions of Section I(a).
(c) Termination Other Than For
Cause or by reason of Retirement following the Performance
Period . If at any time following the completion of the
Performance Period, your employment with the Company is (i)
Terminated Other Than For Cause pursuant to your Employment
Agreement, or (iii) terminated as a result of your Retirement, your
unvested Units shall fully vest immediately upon such termination
of employment.
(d) Acceleration Upon Failure to
Offer Employment Agreement on Substantially Similar Terms.
Notwithstanding anything herein to the contrary, your unvested
Units shall fully vest upon the expiration of your Employment
Agreement on October 8, 2005 in the event the Company fails to
offer you an extension of your employment agreement prior to such
expiration on substantially the same terms and conditions as then
in existence.
(e) No Acceleration or Vesting
Upon Other Terminations . If at any time following the
completion of the Performance Period, your employment with the
Company is terminated (i) by the Company, or (ii) by you, excluding
any Termination Other Than For Cause pursuant to your Employment
Agreement, or any termination by reason of your Retirement, death
or Disability, or any termination that occurs upon or after a
Change in Control, your unvested Units shall be automatically
forfeited and cancelled in full effective as of such termination of
employment.
III. Change in Control following
the Performance Period .
(a) In the event of a Change in
Control at any time following the completion of the Performance
Period, your Units shall be deemed to be “restricted
stock” under your Employment Agreement and your Units shall
vest fully upon such Change in Control as provided in your
Employment Agreement.
3
(b) Notwithstanding the foregoing,
in the event of a pending or threatened takeover bid or tender
offer at any time following the completion of the Performance
Period and pursuant to which 10% or more of the outstanding
securities of the Company is acquired, whether or not deemed a
tender offer under applicable state or Federal laws, or in the
event that any person makes any filing under Sections 13(d) or
14(d) of the Securities Exchange Act of 1934 with respect to the
Company, the Committee may in its sole discretion:
(i) Make the Units fully vested;
or
(ii) Make any other reasonable
adjustments or amendments to the Units or substitute new units on
substantially similar terms.
IV. Timing and Form of
Payment .
(a) Unless you elect otherwise, the
distribution date (the “Distribution Date”) for your
vested Units will be the Vesting Date with respect to such vested
Units. Distribution of your vested Units will be made by the
Company in shares of Common Stock (on a one-to-one basis) on the
Distribution Date with respect to such vested Units. You will only
receive distributions in respect of your vested Units and will have
no right to distribution of your unvested Units. You may elect (a
“Distribution Election”) to (A) defer your Distribution
Date with respect to some or all of your vested Units and/or (B)
have your vested Units distributed to you in annual installments
over a fixed number of years selected by you; provided that each
installment payment must be for a minimum of 1,000 shares of Common
Stock. You may make up to three Distribution Elections with respect
to each Tranche (set forth in Section II(a) above) without the
approval of the Committee, provided such Distribution Election is
made in a timely manner. Any Distribution Elections with respect to
a Tranche in addition to the three provided in the prece
