Exhibit 10.4
[FORM OF FIVE YEAR
INSTALLMENT VESTING]
HCP, INC.
2006 PERFORMANCE INCENTIVE PLAN
PERFORMANCE RESTRICTED STOCK UNIT
AGREEMENT
[ ]
, Grantee:
As of the [
] day of [
20 ] (the “ Grant Date
”), HCP, Inc., a Maryland corporation (the “
Company ”), pursuant to the HCP, Inc. 2006
Performance 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 7.1 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
Performance . Your
Units will be paid only to the extent your Units are not forfeited
pursuant to this Section I and only to the extent such
non-forfeited Units vest pursuant to this Section I or
Section II below. Your Units are subject to forfeiture
if the Company’s Funds From Operations Per Share for the
[ 20 ] 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
subject to adjustment as expressly provided by the Committee at the
time it approves the grant of the Units. 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. The Committee’s determination
regarding whether the Company has attained the performance goals
(the “ Committee Determination ”) shall be made
no later than the March 15 following the end of the
Performance Period. Your Units shall not be deemed vested
pursuant to any other provision of this Agreement earlier than the
date that the Committee makes such determination, as required by
Section 162(m) of the Code and the regulations
promulgated thereunder. Any Units forfeited pursuant to this
Section I(a) shall be deemed to have been forfeited as of
the last day of the Performance Period.
S-1
(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 date of the
Committee Determination. As used in this Agreement, “
Retirement ” means a termination of your employment
with the Company or any of its Subsidiaries after you have either
(i) attained age 65 and completed at least five (5) years
of service as an employee of the Company or any of its Subsidiaries
or as a member of the Board or (ii) attained age 60 and
completed at least fifteen (15) years of service as an employee of
the Company or any of its Subsidiaries or as a member of the
Board.
(c)
Change in Control Event 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 Event occurring during the Performance
Period. In such event, any Units not forfeited pursuant
to subsection (a) shall fully vest as of the date of the
Committee Determination; provided, however, that except as
otherwise provided in any change in control or other agreement with
the Company, your Units shall not be so vested if and to the extent
the Units are, in connection with the Change in Control Event,
either to be assumed by the successor or survivor corporation (or
parent thereof) or to be replaced with a comparable right with
respect to shares of the capital stock of the successor or survivor
corporation (or parent thereof), in each case appropriately
adjusted. The determination of comparability of rights shall
be made by the Committee in good faith. The Committee may
adopt provisions to ensure that any such acceleration shall be
conditioned upon the consummation of the contemplated Change in
Control Event.
(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 Event occurring during the
Performance Period. Any Units that become vested in
accordance with this subsection (c)(ii) shall not be subject
to forfeiture in the manner set forth in subsection (a).
(d)
Forfeiture of Units Upon Certain
Terminations of Employment . 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 by
reason of your Retirement, death or Disability, 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
|
Tranche
|
|
Percentage of Non Forfeited
Units that Vest
|
|
Vesting Date
|
|
1
|
|
20%
|
|
1st Anniversary of Grant Date
|
|
2
|
|
20%
|
|
2nd Anniversary of Grant Date
|
|
3
|
|
20%
|
|
3rd Anniversary of Grant Date
|
|
4
|
|
20%
|
|
4th Anniversary of Grant Date
|
|
5
|
|
20%
|
|
5th Anniversary of Grant Date
|
The vesting schedule requires
continued employment through each applicable Vesting Date as a
condition to vesting of the applicable Tranche and the
corresponding rights and benefits under this Agreement.
Unless otherwise expressly provided herein with respect to
accelerated vesting of the Units under certain circumstances,
employment for only a portion of a vesting period, even if a
substantial portion, will not entitle you to any proportionate
vesting or avoid or mitigate a termination of rights and benefits
upon or following a termination of employment as provided in this
Agreement.
(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 (to
the extent not previously forfeited and otherwise unvested) 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 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
terminated as a result of your Retirement, your Units (to the
extent not previously forfeited and otherwise unvested) shall fully
vest immediately upon such termination of employment.
(d)
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 by reason of your Retirement, death or Disability,
any of your Units that remain outstanding and otherwise unvested at
the time of such termination of employment shall be automatically
forfeited and cancelled in full effective as of such termination of
employment.
III.
Change in Control Event Following
the Performance Period . In the event of a Change in Control
Event at any time following the completion of the Performance
Period, your Units ( to the extent not previously forfeited and
otherwise unvested) shall vest immediately prior to the effective
date of the Change in Control Event; provided, however, that except
as
3
otherwise provided in any change in control or
other agreement with the Company, your Units shall not be so vested
if and to the extent the Units are, in connection with the Change
in Control Event, either to be assumed by the successor or survivor
corporation (or parent thereof) or to be replaced with a comparable
right with respect to shares of the capital stock of the successor
or survivor corporation (or parent thereof), in each case
appropriately adjusted. The determination of comparability of
rights shall be made by the Committee in good faith. The
Committee may adopt provisions to ensure that any such acceleration
shall be conditioned upon the consummation of the contemplated
Change in Control Event.
IV.
Timing and Form of
Payment .
(a)
Distribution Date
. Except as otherwise provided
in Section IV(b), the distribution date (the “
Distribution Date ”) for your Units that become vested
pursuant to this Agreement will be the scheduled Vesting Date of
such Units as set forth in Section II(a) hereof;
provided, however, that in the event that the vesting of your Units
is accelerated in connection with your Retirement, death or
Disability, the Dist
