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Exhibit 10.5
STOCK PLAN FOR NON-EMPLOYEE DIRECTORS
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1. PURPOSE OF THE PLAN. Health Care REIT, Inc., a Delaware corporation,
hereby adopts this Stock Plan for Non-Employee Directors providing for the
granting of stock options to directors of the Company who are not employees of
the Company. The general purpose of the Plan is to secure for the Company and
its stockholders the benefits of the incentive inherent in increased ownership
of Common Stock of the Company by members of the Board of Directors of the
Company who are not employees of the Company. It is also expected that the Plan
will encourage qualified persons to become directors of the Company.
The Stock Plan for Non-Employee Directors has been approved by the Board of
Directors effective as of January 20, 1997, subject to approval by the Company's
stockholders at the annual meeting of the stockholders.
2. CERTAIN DEFINITIONS. In addition to the words and terms elsewhere
defined in this Plan, certain capitalized words and terms used in this Plan
shall have the meanings given to them by the definitions and descriptions in
this Section 2. Unless the context or use indicates another or different meaning
or intent, then such definition shall be equally applicable to both the singular
and plural forms of any of the capitalized words and terms herein defined. The
following words and terms are defined terms under this Plan:
2.1 Award means the grant of an Option or Restricted Stock under this
Plan.
2.2 Board of Directors means the Board of Directors of the Company.
2.3 Code means the Internal Revenue Code of 1986, as the same shall be
amended from time to time.
2.4 Common Stock means the Common Stock, par value $1.00 per share, of
the Company.
2.6 Company means Health Care REIT, Inc., a Delaware corporation.
2.7 Effective Date means January 20, 1997, the date the adoption of
the Plan was approved by the Board of Directors.
2.8 Fair Market Value means the fair market value of a share of Common
Stock as determined by the Board of Directors by reference to the closing
price for shares of Common Stock for the most recent available date, as
reported on the New York Stock Exchange.
2.9 Holder means a Non-Employee Director who has received an Award of
Options or Restricted Stock under this Plan.
2.10 Non-Employee Director means a member of the Board of Directors
who is not an employee of the Company.
2.11 Nonstatutory Stock Option means a stock option that does not
qualify as an incentive stock option within the meaning of Section 422 of
the Code.
2.12 Option means a right granted to a Non-Employee Director pursuant
to the Plan to purchase a specified number of shares of Common Stock at a
specified Option Price during a
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specified period and on such other terms and conditions as may be specified
pursuant to the Plan. All Options granted under this Plan shall be
Nonstatutory Stock Options.
2.13 Option Price means, with respect to any Option, the price per
share the Holder will be required to pay to the Company to exercise the
Option and acquire the shares of Common Stock subject to the Option.
2.14 Plan means this Stock Plan for Non-Employee Directors.
2.15 Restricted Stock means shares of Common Stock issued to an
eligible Non-Employee Director, subject to such transfer restrictions and
other conditions as may be specified in accordance with Section 7 of the
Plan.
2.16 Stock Option Agreement means the agreement specified in Section
10 hereof.
3. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 12
hereof, the number of shares of Common Stock which may be issued upon exercise
of Options or as Awards of Restricted Stock under the Plan shall be 100,000
shares of the Common Stock. On January 1 of each year subsequent to the
Effective Date, the aggregate number of shares of Common Stock available for
issuance under this Plan shall be increased by an additional 42,000 shares. Such
shares may be, in whole or in part, authorized and unissued shares of Common
Stock or treasury shares which have been reacquired by the Company. If any
Option shall expire or terminate for any reason without having been exercised in
full, the unexercised shares subject thereto shall again be available for
purposes of the Plan. If any Shares of Restricted Stock are forfeited, the
forfeited shares again be available for purposes of the Plan.
4. ADMINISTRATION.
4.1 Powers. The Plan shall be administered by the Board of Directors,
which shall have all of the powers vested in it by the terms of the Plan, such
powers to include authority (within the limitations described herein) to
prescribe the form of the agreement embodying Awards made under the Plan.
Subject to the express provisions of the Plan, the Board of Directors shall have
plenary authority to interpret the Plan, to adopt, amend and rescind the rules
and regulations relating to the Plan and to make all other determinations and to
take all other actions deemed necessary or advisable for the administration of
the Plan. Any decision of the Board of Directors in the administration of the
Plan, as described herein, shall be final and conclusive.
4.2 Delegation to Committee Permitted. Notwithstanding anything to the
contrary contained herein, the Board of Directors may at any time, or from time
to time, appoint a Committee of at least two members, who shall be members of
the Compensation Committee of the Board of Directors (or such other persons as
the Board of Directors may designate), and delegate to the Committee the
authority of the Board of Directors to administer the Plan. Upon such
appointment and delegation, the Committee shall have all the powers, privileges
and duties of the Board of Directors, and shall be substituted for the Board of
Directors in the administration of the Plan, except the power to appoint members
of the Committee and to terminate, modify or amend the Plan. The Board of
Directors may from time to time appoint members of the Committee in substitution
for or in addition to members previously appointed, may fill vacancies in the
Committee and may discharge the Committee. The Committee shall select one of its
members as its chairman and shall hold its meetings at such times and places as
its shall deem advisable. A majority of its members shall constitute a quorum
and all determinations shall be made by a majority of such quorum. Any
determination reduced to writing and signed by a majority of the members shall
be fully as effective as if it had been made by a majority vote at a meeting
duly called and held.
5. ELIGIBILITY. Options and Restricted Stock Awards under this Plan shall
be granted only to Non-Employee Directors.
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6. OPTIONS.
6.1 Grant of Options.
(a) As of the Effective Date, each Non-Employee
Director serving on the Board of Directors automatically shall
be granted an Option to purchase 10,000 shares of Common
Stock, effective as of January 20, 1997, subject to approval
of the Plan by the stockholders of the Company as required
under Section 14 hereof.
(b) Each new Non-Employee Director who is first
appointed or elected to the Board of Directors after the
Effective Date automatically shall be granted an Option to
purchase 10,000 shares of Common Stock on the day he or she is
first appointed or elected to the Board of Directors.
(c) Each Non-Employee Director who has been granted
Options under paragraph (a) or (b) automatically shall be
granted an additional Option to purchase 5,000 shares of
Common Stock on January 15 of each subsequent year (or, if
January 15 is not a business day, on the first business day
following January 15) during the term of this Plan.
6.2 Option Prices. The purchase price of the Common Stock
under each Option shall be equal to the Fair Market Value of the Common Stock on
the grant date (subject to adjustment as provided in Section 12 hereof).
6.3 Term of Options; Limitations on Exercise. The term of each
Option shall be for ten years from the date of grant, and, except as set forth
in Section 8 hereof, shall expire six months after the cessation of the Holder's
status as a Non-Employee Director or upon the earlier expiration at the end of
its ten year term. Each Option granted pursuant to Section 6.1(a) shall become
exercisable on the first anniversary of the date of grant of such Option.
One-third of the shares of Common Stock subject to each Option granted pursuant
to Section 6.1(b) or Section 6.1(c) shall become exercisable on a cumulative
basis on each of the first three anniversaries of the date of the grant of such
Option.
6.4 Exercise of Options. Any part of an Option granted and
presently exercisable under the Plan shall be exercisable in whole, or in part,
at any time during the term of the Option. Payment shall be made in cash, in
whole shares of Common Stock already owned by the Holder of the Option, partly
in cash and partly in such Common Stock, or in any other manner acceptable to
the Company. Such notice shall state that the Holder of the Option elects to
exercise the Option, the number of shares in respect of which it is being
exercised and the manner of payment for such shares, and shall either (i) be
accompanied by payment of the full Option Price of such shares, or (ii) provide
for such arrangements for the payment of the full Option Price of such shares as
may be satisfactory to the Company.
The Non-Employee Director shall be deemed to have paid the
full optimum price due upon exercise of his Options, if his irrevocable notice
of exercise to the Corporation is accompanied by an irrevocable instruction to
the Corporation to deliver the shares of Common Stock issuable upon exercise of
the Options promptly to a broker-dealer designated by Non-Employee Director
(which may include the Corporation's transfer agent) for the Non-Employee
Director's account, together with an irrevocable instruction to such
broker-dealer to sell at least that portion of the shares necessary to pay the
option price (and any related expenses specified by the parties), and such
portion of the sale proceeds is delivered directly to the Corporation no later
than the settlement date This cashless exercise alternative shall not be
available if, at the time of such exercise, the Corporation determines that this
procedure would subject the Non-Employee Director to liability under Section
16(b) of the Securities Exchange Act of 1934.
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6.5 Nontransferability of Options. No Options shall be
transferable otherwise than by will or the laws of descent and distribution, and
an Option may be exercised during the lifetime of the Holder thereof only by
such Holder.
Notwithstanding the foregoing, the Board of Directors may, in
its discretion, permit a Holder to transfer all or a portion of his or her
Options to members of his or her immediate family, to trusts for the benefit of
members of his immediate family, or to family limited partnerships in which
immediate family members are the only partners, provided that the Holder may
receive no consideration for such transfers, and that such Options shall still
be subject to termination in accordance with Section 6.3 and Section 9 in the
hands of the transferee.
6.6 Modifications. The Board of Directors shall have the
authority to modify, in any manner it deems desirable or appropriate, the terms
of the Option Awards to be made to one or more classifications of Non-Employee
Directors in equivalent circumstances (for example, by age or length of service)
under this Section 7, including the size or vesting schedules of such Option
Awards; PROVIDED that, any modification shall be applied uniformly to all
Non-Employee Directors in equivalent circumstances, and FURTHER PROVIDED, that
the modification shall not increase the number of shares available under the
Plan in any one calendar year beyond the aggregate limit set forth in Section 3.
7. RESTRICTED STOCK.
7.1 Annual Grants of Restricted Stock. On January 20, 1997,
and on January 15 of each subsequent year (or, if January 15 is not a business
day, on the first business day following January 15), each Non-Employee Director
shall be granted an Award consisting of 250 shares of Restricted Stock; provided
that, such an Award shall not be effective unless the Non-Employee has agreed
and acknowledged in writing in such form as may be requested by the Company that
he or she holds such Restricted Stock subject to the transfer restrictions and
other conditions set forth in this Section 7 of the Plan.
7.2 Issuance of Restricted Stock. When a Non-Employee Director
is granted shares of Restricted Stock, the Company shall issue the shares
immediately, and shall register the stock certificates or certificates
representing such shares in the name of the Non-Employee Director. Each such
stock certificate shall bear an appropriate legend referring to the transfer
restrictions and other conditions applicable to such shares of Restricted Stock
under the terms of the Plan. The Company shall deliver the stock certificates
for each Restricted Stock Award to a custodian or an escrow agent designated by
the Board, to be held in escrow until the latest of the following dates:
(a) the date the Plan has been approved by the
stockholders of the Company, as specified in Section 14
below;
(b) six months after the date the Restricted
Stock was granted to the Non-Employee Director; or
(c) if later, the date on which the transfer
restrictions imposed on the Restricted Stock Award by Section
7.3 have expired or been waived.
The Board may designate an executive officer of the Company to act as the
custodian or escrow agent for such stock certificates.
Non-Employee Directors will not be required to make any
payment or provide consideration to the Company for the issuance of Restricted
Stock Awards, other than providing services to the Company as members of the
Board of Directors.
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7.3 Rights As A Stockholder. A Non-Employee Director granted a
Restricted Stock Award shall have all of the rights of a stockholder of the
Company with respect to the shares of Restricted Stock included in the Award,
including the right to vote the shares and receive all dividends and other
distributions declared with respect to such shares, but the shares of Restricted
Stock held by the Non-Employee Director shall be subject to the following terms
and conditions:
(a) During a period set by the Board of Directors of
not less than six (6) months, commencing with the date on
which the Restricted Stock Award was granted (the "Restriction
Period"), the Non-Employee Director will not be permitted to
sell, transfer, pledge or assign the shares of Restricted
Stock awarded to him or her.
(b) If, at any time during the Restriction Period set
by the Board for the Restricted Stock Award, the Non-Employee
Director's service on the Board of Directors terminates for
any reason other than death, disability or retirement at or
after age 65, the shares of Restricted Stock included in that
Award shall be forfeited, unless the Board of Directors
determines that a waiver of such forfeiture would be
appropriate, desirable and in the best interests of the
Company. A Non-Employee Director shall not forfeit any shares
of Restricted Stock if his or her service as a director
terminates as a result of death, disability or retirement.
(c) Notwithstanding the other provisions of this
Section 7.3, the Board of Directors may adopt rules which
would permit a gift by a Non-Employee Director of shares of
Restricted Stock to a spouse, child, stepchild, grandchild or
a family limited partnership or a transfer to a trust the
beneficiary or beneficiaries of which shall be either such a
relative or persons or the Non-Employee Director, provided
that the Restricted Stock so transferred shall remain subject
to the restrictions in paragraphs (a) and (b).
7.4 Modifications. The Board of Directors shall have the
authority to modify, in any manner it deems desirable or appropriate, the terms
of the Restricted Stock Awards to be made to one or more classifications of
Non-Employee Directors in equivalent circumstances (for example, by age or
length of service) under this Section 7, including the size or Restriction
Periods of such Restricted Stock Awards; PROVIDED that, any modification shall
be applied uniformly to all Non-Employee Directors in equivalent circumstances,
and FURTHER PROVIDED that the modification shall not cause the number of shares
available under the Plan in any one calendar year beyond the aggregate limit set
forth in Section 3.
8. ACCELERATION ON CHANGE IN CORPORATE CONTROL. Notwithstanding any
contrary waiting period set forth herein, each outstanding Option granted under
the Plan shall become exercisable in full for the aggregate number of shares
covered thereby, and all transfer restrictions and forfeiture conditions imposed
on Awards of Restricted Stock shall be waived, in the event of a Change in
Corporate Control. The acceleration of the exercise of Options or the waiver of
restrictions on Restricted Stock as provided in this Section 8 may be limited as
the Board of Directors deems appropriate to ensure that the penalty provisions
of Section 4999 of the Code will not apply to any stock received by the Holder
from the Company.
For purposes of this Plan, a "Change in Corporate Control" shall include any of
the following events:
(1) The acquisition in one or more transactions of more than twenty
percent (20%) of the Company's outstanding Common Stock (or the
equivalent in voting power of any classes or classes of securities of
the
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Company entitled to vote in elections of directors) by any corporation,
or other person or group (within the meaning of Section 14(d)(3) of the
Securities Exchange Act of 1934, as amended);
(2) Any transfer or sale of substantially all of the assets of the
Company, or any merger or consolidation of the Company into or with
another corporation in which the Company is not the surviving entity;
(3) Any election of persons to the Board of Directors which causes a
majority of the Board of Directors to consist of persons other than
"Continuing Directors". For this purpose, those persons who were
members of the Board of Directors on January 20, 1997, shall be
"Continuing Directors". Any person who is nominated for election as a
member of the Board after January 20, 1997, shall also be considered a
"Continuing Director" for this purpose if, and only if, his or her
nomination for election to the Board of Directors is approved or
recommended by a majority of the members of the Board (or of the
relevant Nominating Committee) and at least five (5) members of the
Board are themselves Continuing Directors at the time of such
nomination; or
(4) Any person, or group of persons, announces a tender offer for at
least twenty percent (20%) of the Company's Common Stock.
9. CESSATION OF SERVICE AS A NON-EMPLOYEE DIRECTOR.
9.1 Death of Holder. If any Non-Employee Director shall
die prior to the end of his or her service as a member of the Board of
Directors, then:
(a) Each outstanding but unexercised Option granted
to him or her under the Plan shall become exercisable in full
for the aggregate number of shares covered thereby and each
Option may be exercised by the legatee(s) or personal
representative(s) of such Holder at any time within twelve
months after such Holder's death; PROVIDED, HOWEVER, that no
Option may be exercised after the expiration date of such
Option.
(b) Any transfer restrictions and conditions of
forfeiture applicable to his or her shares of Restricted
Stock shall be waived by the Company.
9.2 Total Disability. If a Non-Employee Director ceases
to serve as a member of the Board of Directors prior to the end of his or her
term as a result of Total Disability, then:
(a) Each outstanding but unexercised Option granted
under the Plan shall become exercisable in full for the
aggregate number of shares covered thereby from and after the
date of such cessation of service and such Option may be
exercised by such Holder (or his or her guardian(s) or
personal representative(s)) at any time within twelve months
after such cessation of service; PROVIDED, HOWEVER, that no
Option may be exercised after the expiration date of such
Option; and
(b) Any transfer restrictions and conditions of
forfeiture applicable to his or her shares of Restricted
Stock shall be waived by the Company.
9.3 Retirement; Failure to be Nominated for Reelection;
Failure to be Reelected. If a Non-Employee Director shall cease to serve as a
member of the Board of Directors as a result of such Holder's
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resignation from the Board (other than as a result of Total Disability) or such
Holder's decision not to stand for reelection at the expiration of his or her
term of office, or such Holder is not nominated by the Board to stand for
election at the Annual Stockholders' Meeting at which his or her term of office
expires, or, if nominated, such person is not reelected, then all Options held
by such Holder may be exercised at any time within six months after the date of
such cessation of service; PROVIDED, HOWEVER, (i) only Options exercisable by
the Holder at the time of the cessation of service as a Non-Employee Director
may be exercised after such cessation, and (ii) no Option may be exercised after
the expiration date of such Option. Further, any shares of Restricted Stock held
by that Non-Employee Director subject to forfeiture under Section 7.3 shall be
forfeited.
9.4 Removal by the Stockholders for Cause. If a Holder is
removed from the Board by the stockholders of the Company for cause (for these
purposes, cause shall include, but not be limited to, dishonesty, incompetence,
moral turpitude, other misconduct of any kind and the refusal to perform his or
her duties and responsibilities for any reason other than illness or
incapacity), then (a) all unexercised Options held by such Holder shall
immediately be cancelled and terminate, and (b) any shares of Restricted Stock
subject to forfeiture under Section 7.3 shall be forfeited.
10. NONALIENATION OF BENEFITS. No right or benefit under the Plan shall
be subject to anticipation, alienation, sale, assignment, hypothecation, pledge,
exchange, transfer, encumbrance or charge, and any attempt to anticipate, sell,
assign, hypothecate, pledge, exchange, transfer, encumber or charge the same
shall be void. No right or benefit hereunder shall in any manner be liable for
or subject to the debts, contracts, liabilities or torts of the person entitled
to such benefit.
11. WRITTEN AGREEMENTS. Each grant of an Option hereunder shall be
evidenced by a Stock Option Agreement, and each Restricted Stock Award shall be
evidenced by a Restricted Stock Agreement, each in such form and containing such
terms and provisions not inconsistent with the provisions of the Plan as the
Board of Directors from time to time shall approve.
12. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the event of any
change or changes in the outstanding Common Stock of the Company by reason of
any stock dividend, recapitalization, reorganization, merger, consolidation,
split-up, combination or any similar transaction, the Board of Directors shall
adjust the number of shares of Common Stock which may be issued under this Plan,
the number of shares of Common Stock subject to Options theretofore granted
under this Plan, the Option Price of such Options, the number of shares of
Restricted Stock and make any and all other adjustments deemed appropriate by
the Board of Directors in such manner as the Board of Directors deems
appropriate to prevent substantial dilution or enlargement of the rights granted
to a participating Non-Employee Director.
13. TERMINATION AND AMENDMENT. Unless the Plan shall theretofore have
been terminated as hereinafter provided, the Plan shall expire on January 20,
2007. The Board of Directors may terminate the Plan at any time, and the Board
of Directors at any time also may modify or amend the Plan in such respects as
it shall deem advisable. No termination, modification or amendment of the Plan
or any outstanding Stock Option Agreement may, without the consent of the Holder
to whom any Award shall theretofore have been granted, adversely affect the
rights of such Holder with respect to such Award. The Plan automatically shall
terminate in the event that it is not approved by the stockholders of the
Company as required under Section 14 hereof.
14. EFFECTIVENESS OF THE PLAN. The Plan shall become effective as of
January 20, 1997, provided, that the Plan is approved at the 1997 Annual
Stockholders' Meeting of the Company by the holders of a majority of the shares
of Common Stock represented at the meeting (in person or by proxy) and entitled
to vote thereon. If the Plan is not so approved it shall terminate
automatically, and all Options shall automatically be cancelled and be of no
further force or effect.
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15. RIGHTS OF A HOLDER AS A STOCKHOLDER. The Holder of an Option shall
have none of the rights of a stockholder with respect to the shares subject to
the Option until such shares shall be transferred to the Holder upon the
exercise of the Option.
16. GOVERNMENT AND OTHER REGULATIONS. The obligation of the Company with
respect to Awards shall be subject to (i) all applicable laws, rules and
regulations and such approvals by any governmental agencies as may be required,
including, without limitation, the effectiveness of a registration statement
under the Securities Act of 1933, as amended, and (ii) the rules and regulations
of any securities exchange or securities market on which the Common Stock may be
listed or traded. Any Option or Restricted Stock award granted under this Plan
shall be subject to the requirement that, if at any time the Board of Directors
shall determine that any registration of the shares of Common Stock, or any
consent or approval of any governmental body, or any other agreement or consent,
is necessary as a condition of the granting of an Option or other Award, or the
issuance of Common Stock in satisfaction thereof, such Common Stock will not be
issued or delivered until such requirement is satisfied in a manner acceptable
to the Board of Directors.
17. WITHHOLDING. The Company's obligation to deliver shares of Common
Stock upon the exercise of any Option granted under the Plan shall be subject to
applicable Federal, state and local tax withholding requirements. Federal, state
and local withholding tax due upon the exercise of any Option may be paid in
shares of Common Stock upon such terms and conditions as the Board shall
determine; PROVIDED, HOWEVER, that the Board in its sole discretion may
disapprove such payment and require that such taxes be paid in cash.
18. SEVERABILITY. If any of the terms or provisions of this Plan conflict
with these requirements of Rule 16b-3 under the Exchange Act (as the same shall
be amended from time to time), then such terms or provisions shall be deemed
inoperative to the extent they so conflict with the requirements of said Rule
16b-3.
19. NON-EXCLUSIVITY OF THE PLAN. Neither the adoption of the Plan by the
Board nor the submission of the Plan to the stockholders of the Company for
approval shall be construed as creating any limitations on the power of the
Board to adopt such other incentive arrangements as it may deem desirable,
including, without limitation, the granting of stock options and the awarding of
stock and cash otherwise than under the Plan, and such arrangements may be
either generally applicable or applicable only in specific cases.
20. GOVERNING LAW. The Plan shall be governed by, and construed in
accordance with, the laws of the State of Delaware.
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