Exhibit 10.2
[FORM OF CEO FIVE YEAR
INSTALLMENT VESTING]
HCP, INC.
2006 PERFORMANCE INCENTIVE
PLAN
PERFORMANCE RESTRICTED STOCK UNIT
AGREEMENT
James F. Flaherty III
[ ]
, 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.
(b)
Forfeiture of Units Upon
Termination of Employment . Except as provided in Section I(c),
if at any time during the Performance Period your employment with
the Company is terminated, 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.
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(c)
Certain Terminations during the
Performance Period . This Section I(c) applies in
the event your employment with the Company is terminated as a
result of (i) your death, Disability or Retirement,
(ii) a Termination Other Than For Cause, (iii) a
Termination For Good Reason, or (iv) a Termination Upon a
Change in Control (including a Covered Resignation). In the
event of any such termination 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. In such a case, any Units not so forfeited pursuant
to subsection (a) shall fully vest as of the date of the
Committee Determination. For purposes of this Agreement, the
terms “ Covered Resignation ,” “
Disability ,” “ Termination Other Than For
Cause ,” “ Termination For Good Reason
,” and “ Termination Upon a Change in Control
” shall have the meanings ascribed to such terms in your
Employment Agreement with the Company dated October 26, 2005
(the “ Employment Agreement ”). Such
meanings shall continue to apply for purposes of this Agreement
notwithstanding any termination of the “ Employment
Period ” (as such term is defined in the Employment
Agreement) in accordance with the Employment Agreement. For
purposes of 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.
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.)
|
Tranche
|
|
Percentage of Non Forfeited
Units that Vest
|
|
Vesting Date
|
|
1
|
|
20%
|
|
1 st
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
|
2
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)
Acceleration on Certain
Terminations Following Performance Period . If at any time following the completion
of the Performance Period and prior to the date your Units become
fully vested in accordance with Section II(a), your employment
with the Company is terminated as a result of (i) your death,
Disability or Retirement, (ii) a Termination Other Than For
Cause (iii) a Termination For Good Reason, or (iv) a
Termination Upon a Change in Control (including a Covered
Resignation), your then outstanding Units (to the extent not
previously forfeited and otherwise unvested) shall fully vest
immediately upon such termination of employment.
(c)
No Acceleration or Vesting Upon
Other Terminations . Except as otherwise provided in the
Plan, if at any time your employment with the Company is terminated
(i) by the Company, or (ii) by you, under any
circumstances (other than as a result of your death, Disability,
Retirement, a Termination Other Than For Cause, a Termination For
Good Reason, or a Termination Upon a Change in Control, including a
Covered Resignation), 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.
(d)
Employment Termination
Date . If the
Employment Period is in effect, the date of your termination of
employment for purposes of this Agreement shall be no earlier than
the “ Date of Termination ,” as such term is
defined in the Employment Agreement. If the Employment Period
is not then in effect, the date of termination of your termination
of employment for purposes of this Agreement shall be your actual
date of termination of employment.
III.
Timing and Form of
Payment .
(a)
Distribution Date
. Except as otherwise provided
in Section III(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 pursuant to Section I(c) or II(b), the
Distribution Date of such accelerated Units will be the earlier of
(i) subject to Section XIV, your Separation from Service
and (ii) the scheduled Vesting Date of such Units as set forth
in Section II(a) hereof; and provided, further, that in
no event shall the Distribution Date occur earlier than the date of
the Committee Determination. Distribution of your vested
Units will be made by the Company in shares of Common Stock (on a
one-to-one basis) on or as soon as practicable after the
Distribution Date with respect to such vested Units, but in no
event later than two and one-half (2 ½) months after the
Distribution Date. You will have no right to distribution of
any of your Units that do not vest in accordance with
the
3
provisions hereof. Once a vested Unit has
been paid pursuant to this Agreement, you will have no further
rights with respect to that Unit. For purposes of this
Agreement, “ Separation from Service ” means a
“separation from service” within the meaning of
Treasury Regulation Section 1.409A-1(h)(1), without regard to
the optio
