Exhibit 10.17
[CEO FIVE YEAR INSTALLMENT
VESTING]
HEALTH CARE PROPERTY
INVESTORS, INC.
2006 PERFORMANCE INCENTIVE
PLAN
PERFORMANCE RESTRICTED STOCK
UNIT AGREEMENT
James F. Flaherty
III
[ ]
, Grantee:
As of the [
] day of [
2007 ] (the “ Grant Date ”),
HCP, Inc. (formerly known as Health Care Property
Investors, Inc.), a Maryland corporation (the “
Company ”), pursuant to the Health Care Property
Investors, 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 2007
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 non-recurring charges
incurred by the Company with respect to the Performance Period for
(i) material strategic or financing transactions approved by
the Board of Directors and (ii) impairments. 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.
1
(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.
(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.
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
|
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
2
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 . Unless you elect otherwise on or
before the Grant Date, the distribution date (the “
Distribution Date ”) for your Units that become vested
pursuant to this Agreement will be the date that such Units vest;
provided 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 year
in which such Units became vested. You will only receive
distributions in respect of your vested Units and will have no
right to distribution of your unvested Units unless and until such
Units vest (and are not otherwise forfeited pursuant to
Section I(a)). Once a vested Unit has been paid pursuant
to this Agreement, you will have no further rights with respect to
that Unit. You may, however, 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 as
provided in Section IV(b), provided that such election
complies with this Section IV. You may change your
Distribution Election with respect to each Tranche (set forth in
Section II(a) above) up to three times without the
approval of the Committee, provided such Distribution Election
is
3
made in a timely
manner. Any Distribution Elections with respect to a Tranche
in addition to the three provided in the preceding sentence may
only be made with the approval of the Committee, in its sole
discretion. In order for a Distribution Election to be valid,
it must be made at least one year prior to the then-existing
Distribution Date with respect to the Units subject to such
Distribution Election, the new Distribution Date must be at least
five years after the then-existing Distribution Date with respect
to such Units, and the election must otherwise be consistent with
the “subsequent election” rules of
Section 409A(a)(4)(C) of the Code so as to prevent
application of the penalty and interest provisions of
Section 409A(a)(1)(B) of the Code. Your
Distribution Date with respect to any portion of your Units may not
be prior to the earlier of the Vesting Date for such vested Units
or the date of the Committee Determination. Distribution
Elections may only be made by delivering a written election to the
Company care of its General Counsel in the form attached as
Exhibit B hereto.
(b)
Form of Distribution . Unless you elect otherwise
on or before the Grant Date, distribution of your vested Units with
respect to any Tranche will be made in a lump sum on or as soon as
administratively practicable after your Distribution Date, but in
no event later than two and one-half (2 ½) months after the
year in which such Units became vested. You may, however,
elect to have vested Units with respect to any Tranche distributed
in the form of two or more annual installments over a fixed number
of years, provided that each installment payment must be for a
minimum of 1,000 shares of Common Stock. If you elect to have
some or all of your vested Units underlying a Tranche distributed
in annual installments, the first installment will be paid on or
within 90 days after the Distribution Date with respect to such
Tranche and subsequent installments will be paid on or within 90
days after each of the anniversaries of the Distribution Date with
respect to such Tranche during your elected installment period,
with each such payment date during such time period within the
Company’s sole discretion. You may change an election
you make pursuant to this Section IV(b) (or you may make
an initial election in the event that you did not elect a form of
payment at the time of your award and, accordingly, your Units were
subject to the lump sum default payment rule) by filing a new
written election with the Committee; provided that you must also
elect a later Distribu
|
