Exhibit 10.1
RESTRICTED STOCK PLAN
ARTICLE I.
PURPOSE.
The purpose of the SHG Holding Solutions, Inc. Restricted Stock Plan
(the "Plan") is to aid SHG Holding Solutions, Inc. (the "Company") and its
subsidiaries in attracting and retaining key employees of outstanding ability
and in motivating such employees to exert their best efforts on behalf of the
Company and its subsidiaries. In addition, the Company expects that the Plan
will induce any such employees who receive an Award hereunder to contribute
fully to the further growth and development of the business of the Company and
its subsidiaries.
ARTICLE II.
DEFINITIONS
2.1 "Affiliate" means, with respect to any Person, (a) any director or
executive officer of such Person, (b) any spouse, parent, sibling, descendant or
trust for the exclusive benefit of such Person or his or her spouse, parent,
sibling or descendant (or the spouse, parent, sibling or descendant of any
director or executive officer of such Person), and (c) any other Person that,
directly or indirectly, controls or is controlled by or is under common control
with such Person. For the purpose of this definition, (i) "control" (including
with correlative meanings, the terms "controlling," "controlled by" and "under
common control with"), as used with respect to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities, status as a general partner, or by contract or otherwise and (ii)
Onex Corporation shall be deemed to control any Person controlled by Gerald W.
Schwartz so long as Mr. Schwartz controls Onex Corporation.
2.2 "Award" means an award of Restricted Stock under this Plan which may be
outright or at a purchase price per share determined by the Committee.
2.3 "Board" shall mean the Board of Directors of the Company.
2.4 "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
2.5 "Committee" shall mean the Committee described in Article VII to
administer the Plan.
2.6 "Common Stock" shall mean common stock of the Company, $0.01 par value
per share.
2.7 "Date of Grant" shall mean the date on which any Restricted Stock is
awarded hereunder, provided, that the Committee may grant Awards to Participants
to be effective and deemed to be granted on the occurrence of certain specified
contingencies.
2.8 "Merger" shall mean the merger of SHG Acquisition Corp., a Delaware
corporation, into Skilled Healthcare Group, Inc., a Delaware corporation,
pursuant to the Agreement and Plan of Merger, dated as of October 22, 2005,
among the Company, SHG Healthcare Group, Inc., SHG Acquisition Corp., Heritage
Partners Management Company, LLP, a Delaware limited liability partnership,
Heritage Fund II, L.P., a Delaware limited partnership and Heritage Investors
II, L.L.C., a Delaware limited liability company.
2.9 "Participant" shall mean any employee of the Company to whom an Award
is made in accordance with the terms hereof.
2.10 "Qualified Trust" shall mean, with respect to a Participant, a trust
for the exclusive benefit of that Participant and/or members of that
Participant's immediate family of which that Participant is the sole trustee.
The Restricted Stock that has been transferred to a Qualified Trust shall be
deemed to be held by the transferor Participant for purposes of this Plan,
including the vesting and forfeiture provisions hereof.
2.11 "Restricted Stock" shall mean Common Stock awarded hereunder that is
subject to the restrictions set forth hereunder, for so long as such Common
Stock remains subject to any such restriction.
2.12 "Restricted Stock Agreement" shall have the meaning set forth in
Section 5.7.
2.13 "Sale of the Company" means any transaction pursuant to which
Person(s) other than the Company's existing stockholders as of immediately after
the Merger and their respective Affiliates acquire (a) capital stock of the
Company possessing the voting power under normal circumstances to elect a
majority of the Board (whether by merger, consolidation, recapitalization,
reorganization or sale or transfer of the Company's equity interests or
otherwise) or (b) all or substantially all of the assets of the Company and its
subsidiaries (determined on a consolidated basis).
ARTICLE III.
SHARES SUBJECT TO THE PLAN
3.1 The aggregate number of shares of Common Stock that may be issued or
transferred pursuant to the Plan is the number equal to twelve and one-half
percent (12.5%) of the number of shares of Common Stock outstanding immediately
following the Merger, excluding any shares granted under this Plan. Such shares
may be authorized and unissued, or treasury shares, or any combination thereof.
Any shares subject to an Award which for any reason are forfeited, cancelled or
terminated, may be subject to a new Award.
ARTICLE IV.
ELIGIBILITY AND PARTICIPATION
4.1 Any officer or other key employee of the Company or one of its
subsidiaries, shall be eligible to receive an Award. The individuals set forth
on Schedule A hereto shall be participants as of the effective date of this plan
(the "Initial Participants").
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ARTICLE V.
TERMS AND CONDITIONS OF AWARDS
5.1 Award of Restricted Stock. The Committee shall from time to time, in
its discretion, award shares of Restricted Stock to any key employee, upon such
terms and conditions, consistent with the provisions of this Plan, as it may
determine.
5.2 Issuance of Restricted Shares. Upon the Award of Restricted Stock, the
Committee shall promptly notify each Participant of such Award, including the
Date of Grant thereof, and a Restricted Stock Agreement shall promptly be
executed and delivered by and on behalf of the Company. Such Restricted Stock
Agreement may provide that the Restricted Stock is subject to such restrictions
as the Committee may provide, including, but not limited to, restrictions
concerning voting rights and transferability. The Committee also may require
that an appropriate legend be placed on stock certificates with respect to the
restrictions imposed thereon. Shares of Restricted Stock granted pursuant to an
Award hereunder shall be issued in the name of the Participant as soon as
reasonably practicable after the Award is granted, provided that the Participant
has executed the Restricted Stock Agreement. Restricted Stock may not be sold,
assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed
of while any such restriction is in effect.
5.3 Vesting. The Committee shall have the discretion to determine the
period and the conditions, if any, upon which an Award shall vest and become
nonforfeitable. Notwithstanding the foregoing, each Initial Participant shall
vest in twenty-five percent (25%) of his shares on the Date of Grant and in an
additional twenty-five percent (25%) on each of the first three anniversaries of
the date on which the Merger is consummated. Except as otherwise provided herein
or in a Restricted Stock Agreement, any nonvested Restricted Stock Awarded to a
Participant shall be immediately forfeited if such Participant ceases to be an
employee of or consultant to the Company or one of its subsidiaries for any
reason, and such Participant shall have no further rights to or with respect to
such shares.
5.4 Rights as a Shareholder. Notwithstanding anything herein to the
contrary, unless otherwise provided in a Restricted Stock Agreement, a
Participant shall have, subject to the restrictions set forth in this Article V,
all of the rights of a shareholder with respect to such Restricted Stock,
including the right to receive all dividends paid thereon.
5.5 Lapse of Restrictions. Unless otherwise provided in a Restricted Stock
Agreement, in the event of a Sale of the Company, all restrictions on the
Participant's Restricted Stock shall lapse immediately prior to (but subject to)
consummation of such transaction and such Restricted Stock shall no longer be
subject to forfeiture.
5.6 Lapse at Discretion of the Committee. The Committee may at any time, in
its sole discretion, accelerate the time at which any or all restrictions will
lapse or remove any or all of such restrictions with respect to Restricted Stock
awarded hereunder.
5.7 Restricted Stock Agreements. Each Award of Restricted Stock under this
Plan shall be evidenced by a Restricted Stock Agreement which shall contain such
terms and conditions as the Committee shall determine, consistent with this
Plan.
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ARTICLE VI.
DILUTION AND OTHER ADJUSTMENTS
6.1 Merger, Consolidation, etc. In the event of any change in the
outstanding Common Stock as a result of a dissolution or liquidation of the
Company, sale of all or substantially all of the assets of the Company and its
subsidiaries, merger or consolidation of the Company with or into any other
corporation, statutory share exchange involving capital stock of the Company,
reorganization, recapitalization, reclassification, stock dividend,
extraordinary dividend, stock split, reverse stock split, stock combination,
rights offering, spin-off or other relevant change that does not in any such
case constitute a Sale of the Company, the Committee may adjust the aggregate
number of shares of Common Stock available for Awards under the Plan, and any or
all other matters deemed appropriate by the Committee, including, without
limitation, (i) the continuation of this Plan and/or the assumption of the
Awards granted hereunder by a successor corporation (or a parent or subsidiary
thereof) or (ii) the substitution for such Awards of new awards covering the
stock of a successor corporation (or a parent or subsidiary thereof), with
appropriate adjustments as to the number and kind of shares and exercise prices.
In the event of any continuation, assumption or substitution contemplated by the
foregoing clauses, this Plan and/or such Awards shall continue in the manner and
under the terms so provided.
6.2 Change in Capitalization. If, by reason of a change in capitalization
described in this Article VI, a Participant shall be entitled to new, additional
or different shares of stock or securities of the Company or any other
corporation in respect of his or her Award, in the event that this Plan
continues, such new, additional or different shares shall thereupon be subject
to all of the conditions, restrictions and performance criteria which were
applicable to the shares of Common Stock subject to the Award, as the case may
be, prior to such change in capitalization.
ARTICLE VII.
PLAN ADMINISTRATION
7.1 Committee Membership. The Plan shall be administered by a committee of
directors appointed by the Board to administer this Plan, which shall consist of
at least three members, each of whom is not a Participant herein.
7.2 Authority and Discretion. The Committee shall administer this Plan and,
subject to the limitations set forth herein, shall have absolute discretion and
authority to: (i) grant awards hereunder; (ii) determine when and to which key
employees and directors such awards will be granted; (iii) determine the form,
amount and other terms and conditions of each such Award; (iv) interpret this
Plan and any Award or agreement made thereunder; (v) establish, amend, waive and
rescind any rules and regulations relating to the administration of this Plan;
(vi) determine the terms and provisions of any Restricted Stock Agreement
entered into hereunder; and (vii) make all other determinations necessary or
advisable for the administration of this Plan. The Committee may correct any
defect, supply any omission or reconcile any inconsistency in this Plan or in
any agreement in the manner and to the extent it shall deem desirable. All
determinations of the Committee in the administration of this Plan, as described
herein, shall be final, binding and conclusive, including, without limitation,
as to any adjustments pursuant to
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Article VI. A majority of the members of the Committee shall constitute a quorum
for any meeting of the Committee and a majority of a quorum may authorize any
action.
ARTICLE VIII.
AMENDMENT AND TERMINATION OF THE PLAN
8.1 Amendment, Modification and Termination of this Plan. Except as
provided in this Article VIII, (i) the Committee may at any time amend, modify,
terminate or suspend this Plan and (ii) the Committee may at any time alter or
amend any or all agreements evidencing Awards hereunder to the extent permitted
by law. This Plan shall terminate upon a Sale of the Company. No termination,
suspension, modification or amendment of this Plan or any agreement evidencing
an Award shall impair or adversely affect any right acquired by any Participant
or such Participant's permitted transferee under an Award granted before the
date of termination, suspension, modification or amendment unless the consent of
such Participant or transferee is obtained.
ARTICLE IX.
MISCELLANEOUS
9.1 Effective Date. The Plan shall become effective as of the effective
time of the Merger.
9.2 Rights as an Employee. Nothing in the Plan, the grant or holding of an
Award, or in any Restricted Stock Agreement shall confer to any holder of an
Award any right to continue in the employ of the Company or any of its
subsidiaries or as a member of the Board, or interfere in any way with the right
of the Company or any parent or subsidiary of the Company to terminate a
Participant's employment or directorship at any time.
9.3 Withholding. It shall be a condition to the performance of the
Company's obligation with respect to any Award that a Participant pay, or make
provision satisfactory to the Company for the payment of, any taxes which the
Company is obligated to collect with respect to the issuance, vesting or
exercise of any Plan Award, including any Federal, state, or local withholding
taxes.
9.4 Non-Assignability of Plan Awards. Except as otherwise set forth herein,
no Award shall be sold, pledged, assigned or transferred by the recipient,
except by will or by the laws of descent and distribution or pursuant to a
"qualified domestic relations order," as such term is defined in the Code or
Title I of the Employee Retirement Income Security Act of 1974, as amended or to
a Qualified Trust. The Company may require as a condition to a transfer to a
Qualified Trust that the Qualified Trust enter into agreements satisfactory to
the Company with respect to the Qualified Trust's compliance with this Plan and
the applicable Restricted Stock Agreement. No Award or interest therein may be
sold, pledged, attached, or otherwise encumbered other than in favor of the
Company, and no Award shall be liable for the debts, contracts or engagements of
the holder of an Award or his or her successors in interest or shall be subject
to disposition by transfer, alienation, anticipation, encumbrance, assignment or
any other means whether such disposition may be voluntary or involuntary or by
operation of law or
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judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy) and any attempt to do so shall be null and
void and of no force or effect.
9.5 Other Restrictions. Each Plan Award shall be subject to the requirement
that, if at any time the Board or the Committee shall determine, in its
discretion, that the listing, registration, or qualification of the shares
issuable or transferable upon exercise thereof upon any securities exchange or
under any state or Federal law, or the consent or approval of any governmental
regulatory body is necessary or desirable as a condition of, or in connection
with, the lapsing of any restriction with respect to such Award or the issue,
transfer, or purchase of shares thereunder, the restrictions with respect to
such Award shall not lapse, and such issue, transfer or purchase shall not
occur, in whole or in part unless such listing, registration, qualification,
consent, or approval shall have been effected or obtained free of any conditions
not acceptable to the Board. The Company shall not be obligated to sell or issue
any shares of Common Stock in any manner in contravention of the Securities Act
of 1933, as amended, or any state securities law.
9.6 Governing Law. This Plan and any agreements hereunder shall be
interpreted and enforced under the internal laws of the State of Delaware
without regard to the conflicts of law principles thereof.
9.7 No Waiver. No modification or waiver of any of the provisions of this
Plan shall be effective unless in writing and signed by the party against whom
it is sought to be enforced.
9.8 Severability. In the event any provision of this Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of this Plan, and this Plan shall be construed and enforced
as if the illegal or invalid provision had not been included.
9.9 Binding Nature. This Plan and the agreements evidencing Awards
hereunder shall be binding upon and inure to the benefit of the successors
(including by way of merger), assigns and heirs of the respective parties.
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SCHEDULE A
Initial Participants
Boyd Hendrickson
Jose Lynch
Roland Rapp
Mark Wortley
John King
Kelly Atkins
Eddie Parades
Paul Sumorow
Carl Seaburn
Kathy Mahon
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