Exhibit 10.3

 

NORTHSTAR HEALTHCARE INCOME, INC.

 

AMENDED AND RESTATED

INDEPENDENT DIRECTORS COMPENSATION PLAN

 

ARTICLE 1

PURPOSE

 

1.1.  PURPOSE.  The purpose of the Plan is to attract, retain and compensate
highly-qualified individuals who are not employees of NorthStar Healthcare
Income, Inc. or any of its subsidiaries or affiliates for service as members of
the Board by providing them with competitive compensation and an ownership
interest in the Stock of the Company.  The Company intends that the Plan will
benefit the Company and its stockholders by allowing Independent Directors to
have a personal financial stake in the Company through an ownership interest in
the Stock and will closely associate the interests of Independent Directors with
that of the Company’s stockholders.

 

1.2.  ELIGIBILITY.  Independent Directors of the Company who are Eligible
Participants, as defined below, shall automatically be participants in the Plan.

 

ARTICLE 2

DEFINITIONS

 

2.1.  DEFINITIONS.  Capitalized terms used herein and not otherwise defined
shall have the meanings given such terms in the Incentive Plan.  Unless the
context clearly indicates otherwise, the following terms shall have the
following meanings:

 

“Base Annual Retainer” means the annual retainer payable by the Company to an
Independent Director pursuant to Section 5.1 hereof for service as a director of
the Company (i.e., excluding any Supplemental Annual Retainer), as such amount
may be changed from time to time.

 

“Eligible Participant” means any person who is an Independent Director on the
Plan Effective Date or becomes an Independent Director while this Plan is in
effect; except that during any period a director is prohibited from
participating in the Plan by his or her employer or otherwise waives
participation in the Plan, such director shall not be an Eligible Participant.

 

“Incentive Plan” means the NorthStar Healthcare Income, Inc.  Amended and
Restated Long Term Incentive Plan, or any subsequent equity compensation plan
approved by the Board and designated as the Incentive Plan for purposes of this
Plan.

 

“Plan” means this NorthStar Healthcare Income, Inc.  Amended and Restated
Independent Directors Compensation Plan, as amended from time to time.

 

“Plan Effective Date” of the Plan has the meaning set forth in Section 9.4 of
the Plan.

 

“Plan Year(s)” means the approximate twelve-month period beginning with the
annual stockholders meeting and ending at the next annual stockholders meeting;
provided that the first Plan Year shall begin on the Plan Effective Date and
extend until the first annual stockholders meeting.

 

“Supplemental Annual Retainer” means the annual retainer payable by the Company
to an Independent Director pursuant to Section 5.2 hereof for service as the
chair of the Audit Committee of the Board, as such amount may be changed from
time to time.

 

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ARTICLE 3

ADMINISTRATION

 

3.1.  ADMINISTRATION.  The Plan shall be administered by the Board.  Subject to
the provisions of the Plan, the Board shall be authorized to interpret the Plan,
to establish, amend and rescind any rules and regulations relating to the Plan,
and to make all other determinations necessary or advisable for the
administration of the Plan.  The Board’s interpretation of the Plan, and all
actions taken and determinations made by the Board pursuant to the powers vested
in it hereunder, shall be conclusive and binding upon all parties concerned,
including the Company, its stockholders and persons granted awards under the
Plan.  The Board may appoint a plan administrator to carry out the ministerial
functions of the Plan, but the administrator shall have no other authority or
powers of the Board.

 

3.2.  RELIANCE.  In administering the Plan, the Board may rely upon any
information furnished by the Company, its public accountants and other experts. 
No individual will have personal liability by reason of anything done or omitted
to be done by the Company or the Board in connection with the Plan.  This
limitation of liability shall not be exclusive of any other limitation of
liability to which any such person may be entitled under the Company’s
certificate of incorporation or otherwise.

 

ARTICLE 4

SHARES

 

4.1.  SOURCE OF SHARES FOR THE PLAN.  The shares of Stock that may be issued
pursuant to the Plan shall be issued under the Incentive Plan, subject to all of
the terms and conditions of the Incentive Plan.  The terms contained in the
Incentive Plan are incorporated into and made a part of this Plan with respect
to shares of Stock, Restricted Stock and any other equity granted pursuant
hereto and any such grant shall be governed by and construed in accordance with
the Incentive Plan.  In the event of any actual or alleged conflict between the
provisions of the Incentive Plan and the provisions of this Plan, the provisions
of the Incentive Plan shall be controlling and determinative.  This Plan does
not constitute a separate source of shares for the grant of Restricted Stock or
shares of Stock described herein.

 

ARTICLE 5

RETAINERS AND EXPENSES

 

5.1.  BASE ANNUAL RETAINER.  Each Eligible Participant shall be paid a Base
Annual Retainer for service as a director during each Plan Year, payable in such
form as shall be elected by the Eligible Participant in accordance with
Section 6.1.  The amount of the Base Annual Retainer shall be established from
time to time by the Board.  Until changed by the Board, the Base Annual Retainer
for a full Plan Year shall be $65,000.  The Base Annual Retainer shall be
payable in approximately equal quarterly installments in advance, beginning on
the date of the annual stockholders meeting; provided, however, that for the
first Plan Year, the first installment shall begin on the Plan Effective Date
and be prorated based on the number of full months in such quarter after the
Plan Effective Date and, provided, further, that for purposes of this Article 5,
the month in which the Plan Effective Date occurs shall be considered a “full
month.”  Each person who first becomes an Eligible Participant on a date other
than the Plan Effective Date or an annual meeting date shall be paid a retainer
equal to the quarterly installment of the Base Annual Retainer for the first
quarter of eligibility, based on the number of full months he or she serves as
an Independent Director during such quarter.  Payment of such prorated Base
Annual Retainer shall begin on the date that the person first becomes an
Eligible Participant, and shall resume on a quarterly basis thereafter.  In no
event shall any installment of the Base Annual Retainer be paid later than
March 15 of the year following the year to which such installment relates.

 

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5.2.  AUDIT COMMITTEE CHAIRPERSON SUPPLEMENTAL ANNUAL RETAINER.  The chairperson
of the Audit Committee of the Board shall be paid a Supplemental Annual Retainer
for his or her service as such chairperson during a Plan Year, payable at the
same times as installments of the Base Annual Retainer are paid and in such form
as shall be elected by such chairperson in accordance with Section 6.1.  The
amount of the Supplemental Annual Retainer for the chairperson of the Audit
Committee shall be established from time to time by the Board.  Until changed by
the Board, the Supplemental Annual Retainer for a full Plan Year for the
chairperson of the Audit Committee shall be $10,000.  A pro rata Supplemental
Annual Retainer will be paid to any Eligible Participant who becomes the
chairperson of the Audit Committee of the Board on a date other than the
beginning of a Plan Year, based on the number of full months he or she serves as
a chairperson of the Audit Committee of the Board during the Plan Year.  Payment
of such prorated Supplemental Annual Retainer shall begin on the date that the
person first becomes chairperson of the Audit Committee, and shall resume on a
quarterly basis thereafter.  In no event shall any installment of the
Supplemental Annual Retainer be paid later than March 15 following the year to
which such installment relates.

 

5.3.  TRAVEL EXPENSE REIMBURSEMENT.  All Eligible Participants shall be
reimbursed for reasonable travel expenses in connection with attendance at
meetings of the Board and its committees, or other Company functions at which
the Chief Executive Officer or Chair of the Board requests the Independent
Director to participate.  Notwithstanding the foregoing, the Company’s
reimbursement obligations pursuant to this Section 5.3 shall be limited to
expenses incurred during such director’s service as an Independent Director. 
Such payments will be made within 30 days after delivery of the Independent
Director’s written requests for payment, accompanied by such evidence of
expenses incurred as the Company may reasonably require, but in no event later
than the last day of the Independent Director’s tax year following the tax year
in which the expense was incurred.  The amount reimbursable in any one tax year
shall not affect the amount reimbursable in any other tax year.  Independent
Directors’ right to reimbursement pursuant to this Section 5.3 shall not be
subject to liquidation or exchange for another benefit.

 

ARTICLE 6

ALTERNATIVE FORM OF PAYMENT FOR BASE ANNUAL RETAINER AND
SUPPLEMENTAL ANNUAL RETAINER

 

6.1.  PAYMENT OF BASE ANNUAL RETAINER AND SUPPLEMENTAL ANNUAL RETAINER.  At the
election of each Eligible Participant, in accordance with Section 6.2, the Base
Annual Retainer or the Supplemental Annual Retainer for a given Plan Year shall
be either: (i) payable in cash in approximately equal quarterly installments in
arrears, beginning on the date of the annual stockholders meeting; or
(ii) subject to share availability under the Incentive Plan, payable by a grant
on the day an installment of the Base Annual Retainer or Supplemental Annual
Retainer is normally paid (the “Stock Grant Date”) of that number of shares of
Stock (rounded up to the nearest whole share) determined by dividing the Base
Annual Retainer or Supplemental Annual Retainer installment otherwise payable
by: (a) if the Stock Grant Date occurs during any “best efforts” public offering
of the Company’s Stock prior to the date to the Stock is listed on a national
securities exchange, the offering price of the Stock, net of dealer manager fees
and selling commissions; or (b) if the Stock Grant Date occurs after the
termination of any public offering of the Company’s Stock, the per share
estimated value of the Stock disclosed in the Company’s most recent annual
report distributed to investors pursuant to Section 13(a) of the 1934 Act, or
(c) in any case, the Fair Market Value as otherwise determined by the
Committee.  Any shares of Stock granted under the Plan as the Base Annual
Retainer or Supplemental Annual Retainer under clause (ii) above will be 100%
vested and nonforfeitable as of the Stock Grant Date, and the Eligible
Participant receiving such shares of Stock (or his or her custodian, if any)
will have immediate rights of ownership in the shares of Stock, including the
right to vote the shares of Stock and the right to receive dividends or other
distributions thereon.

 

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6.2.  TIMING AND MANNER OF PAYMENT ELECTION.  Eligible Participants may make an
election pursuant to this Section 6.2 for the first full Plan Year following the
date that the Company’s initial public offering of its common stock is declared
effective by the Securities and Exchange Commission (the “IPO Effective Date”). 
Each Eligible Participant shall elect the form of payment desired for his or her
Base Annual Retainer and Supplemental Annual Retainer (if applicable) for a Plan
Year by delivering a valid election form in such form as the Board or the plan
administrator shall prescribe (the “Election Form”) to the Board or the plan
administrator prior to the beginning of such Plan Year, which will be effective
as of the first day of the Plan Year beginning after the Board or the plan
administrator receives the Eligible Participant’s Election Form.  The Election
Form signed by the Eligible Participant prior to the Plan Year will be
irrevocable for the coming Plan Year.  However, prior to the commencement of the
following Plan Year, an Eligible Participant may change his or her election for
future Plan Years by executing and delivering a new Election Form indicating
different choices.  If an Eligible Participant fails to deliver a new Election
Form prior to the commencement of the new Plan Year, his or her Election Form in
effect during the previous Plan Year shall continue in effect during the new
Plan Year.  If no Election Form is filed or effective, or if there are
insufficient shares of Stock in the Incentive Plan, the Base Annual Retainer and
Supplemental Annual Retainer (if applicable) will be paid in cash.

 

ARTICLE 7

EQUITY COMPENSATION

 

7.1.  INITIAL RESTRICTED STOCK GRANT.  Provided that the Company has raised at
least $2,000,000 in gross offering proceeds, on the first date that an
Independent Director is initially elected or appointed to the Board, he or she
shall receive an award of 5,000 shares of Restricted Stock, subject to share
availability under the Incentive Plan and the terms of this Section 7.1. 
Notwithstanding the foregoing, each Independent Director elected or appointed to
the Board prior to the date that the Company has raised $2,000,000 in gross
offering proceeds (the “Minimum Offering Date”), and who remains an Independent
Director as of the Minimum Offering Date, shall receive such initial Restricted
Stock grant on the Minimum Offering Date. Such shares of Restricted Stock shall
be subject to the terms and restrictions described below in Section 7.3 and
shall be in addition to any otherwise applicable annual grant of Restricted
Stock granted to such Independent Director under Section 7.2.

 

7.2.  SUBSEQUENT RESTRICTED STOCK GRANT.  Subject to share availability under
the Incentive Plan and the additional restrictions provided in this Section 7.2,
on the date following an Independent Director’s subsequent re-election to the
Board, such director shall receive 2,500 shares of Restricted Stock.  Such
shares of Restricted Stock shall be subject to the terms and restrictions
described below in Section 7.3.  Notwithstanding anything herein to the
contrary, no Restricted Stock shall be granted pursuant to this Section 7.2 on a
given date if, as a result of such grant, the total number of Shares subject to
outstanding Awards (as defined in the Incentive Plan) granted under the
Incentive Plan as of such date would exceed five percent (5%) of the number of
Shares outstanding as of such date.  In such event, the grant of such Restricted
Stock shall be delayed until such time as the grant would not violate the
provisions of this Section 7.2 (the “Delayed Grant Date”). The grant of the
delayed Restricted Stock shall be subject to the approval of the Board and shall
be limited to Independent Directors who (a) otherwise would have received a
grant on the original date under this Section 7.2, and (b) remain Independent
Directors as of the Delayed Grant Date.  For all purposes, the grant date of the
delayed Restricted Stock shall be the Delayed Grant Date and not the original
date provided in this Section 7.2.

 

7.3.  TERMS AND CONDITIONS OF RESTRICTED STOCK.  Shares of Restricted Stock
shall be evidenced by a written Award Certificate, and shall be subject to such
restrictions and risk of forfeiture as determined by the Board, and shall be
granted under and pursuant to the terms of the Incentive Plan. 

 

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Unless and until provided otherwise by the Board, the Restricted Stock granted
pursuant to Section 7.1 and Section 7.2 herein shall vest and become
non-forfeitable over four (4) years in equal quarterly installments beginning on
the first day of the first quarter following the Restricted Stock grant date. 
Notwithstanding the foregoing vesting schedule, the shares of Restricted Stock
shall become fully vested on the earlier occurrence of: (i) the termination of
the Independent Director’s service as a director of the Company due to his or
her death or Disability; or (ii) a Change in Control of the Company.  If the
Independent Director’s service as a director of the Company terminates other
than as described in clause (i) of the foregoing sentence, then the Independent
Director shall forfeit all of his or her right, title and interest in and to any
unvested shares of Restricted Stock as of the date of such termination from the
Board and such Restricted Stock shall be reconveyed to the Company without
further consideration or any act or action by the Independent Director.

 

ARTICLE 8

AMENDMENT, MODIFICATION AND TERMINATION

 

8.1.  AMENDMENT, MODIFICATION AND TERMINATION.  The Board may, at any time and
from time to time, amend, modify or terminate the Plan without stockholder
approval; provided, however, that if an amendment to the Plan would, in the
reasonable opinion of the Board, require stockholder approval under applicable
laws, policies or regulations or the applicable listing or other requirements of
a securities exchange on which the Stock is listed or traded, then such
amendment shall be subject to stockholder approval; and provided, further, that
the Board may condition any other amendment or modification on the approval of
stockholders of the Company for any reason.

 

ARTICLE 9

GENERAL PROVISIONS

 

9.1.  ADJUSTMENTS.  The adjustment provisions of the Incentive Plan shall apply
with respect to Restricted Stock or other equity awards outstanding or to be
granted pursuant to this Plan.

 

9.2.  DURATION OF THE PLAN.  The Plan shall remain in effect until terminated by
the Board.

 

9.3.  EXPENSES OF THE PLAN.  The expenses of administering the Plan shall be
borne by the Company.

 

9.4.  PLAN EFFECTIVE DATE.  The Plan originally became effective on June 22,
2011 (the “Plan Effective Date”).  The Plan was amended and restated by the
Board on February 4, 2013.

 

*****

 

The foregoing is hereby acknowledged as being the NorthStar Healthcare Income,
Inc. Independent Directors Compensation Plan as adopted by the Board.

 

 

NORTHSTAR HEALTHCARE INCOME, INC.

 

 

 

 

 

 

 

By:

/s/ Ronald J. Lieberman

 

 

Name:

Ronald J. Lieberman

 

 

Title:

Executive Vice President, General Counsel and Secretary

 

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