Exhibit 10.2

 

SUMMIT HEALTHCARE REIT, INC.

 

2015 OMNIBUS INCENTIVE PLAN

 

NON-QUALIFIED STOCK OPTION AWARD AGREEMENT

(Director)

 

Summit Healthcare REIT, Inc., a Maryland corporation (the “Company”), and
_________________________________________ (the “Optionee”) hereby agree as
follows:

 

Section 1.       Grant of Option. In conformity with the Summit Healthcare REIT,
Inc. 2015 Omnibus Incentive Plan, as amended and supplemented (the “Plan”) on
__________________, 2016 (“Date of Grant”), the Company has granted to the
Optionee, subject to the conditions and limitations hereinafter stated in this
Agreement, the option to purchase at the price and according to the vesting
schedule specified in Section 2 hereof, up to ___________ shares (“Option
Shares”) of the common stock of the Company (“Common Stock”) reserved for
options under the Plan during a period commencing on the Date of Grant and
ending the day before the tenth (10th) anniversary of the Date of Grant
(“Expiration Date”). The Company grants this option as a non-qualified stock
option that does not satisfy the requirements of Section 422 of the Internal
Revenue Code of 1986, as amended (“Code”).

 

Section 2.       Price and Vesting of Option.

 

(a)       Option Price. The purchase price per Option Share shall be
_________________($______).

 

(b)       Vesting Schedule. The Option Shares shall be exercisable by Optionee
only to the extent that they have vested according to the following schedule:

 

(i)Thirty Three Percent (33%) of the Option Shares shall be vested immediately
upon the Date of Grant;

 

(ii)The remaining Sixty Seven Percent (67%) of the Option Shares shall vest in
equal monthly installments commencing with __________, 2017 and continuing on
the first day of each month thereafter over a two year period with all such
Option Shares being fully vested as of __________________.

 

Section 3.       Conditions and Limitations on Right to Exercise Option.
Notwithstanding the provisions of Section 1 hereof:

 

(a)       Latest Time for Exercise. This option may not, in any event, be
exercised after its Expiration Date.

 

(b)       Exercise if No Longer a Director.

 

 

 

 

(i)       Ceasing to serve as a Director. If the Optionee is no longer a
director or consultant to the Company, the Optionee may exercise this option to
the extent the Optionee was entitled to exercise it at the date of the
Optionee’s ceasing to serve as a director or consultant at any time within the
earlier of (a) seven (7) years from the date of such ceasing to serve as a
director or consultant; or (b) the Expiration Date.

 

(ii)       Death or Disability. If the Optionee dies or becomes disabled while
serving as a director or consultant to the Company, this option may be exercised
to the extent the Optionee was entitled to exercise it at the date of the
Optionee’s death or disability, by a legatee, legatees, representative or
representatives of the Optionee under the Optionee’s last will, by the
Optionee’s personal representatives, distributees, or otherwise at any time
within the earlier of (a) seven (7) years from the Optionee’s death or
disability; or (b) the Expiration Date.

 

Section 4.       Method of Exercise of Option. The option herein granted may be
exercised (in whole or in part) at any time or from time to time after the right
to exercise said option arises and before termination of said right, by
delivering to the Secretary of the Company or by sending by registered mail,
postage prepaid, to the Company to the attention of the Secretary (a) a written
request designating the number of shares of Common Stock to be purchased, signed
by the Optionee, or the purchaser acting under Section 3(b)(ii) hereof, and (b)
payment to the Company of the full purchase price of the shares of Common Stock
with respect to which the option is exercised. The exercise price may be
payable: (i) in cash, check, cash equivalent and/or shares of Common Stock
valued at the Fair Market Value at the time the option is exercised (including,
by means of attestation of ownership of a sufficient number of shares of Common
Stock in lieu of actual issuance of such shares to the Company); (ii) by
cashless exercise; or (iii) by net exercise. As promptly as practicable after
such exercise of the option, the Company shall issue the shares of Common Stock
to said Optionee or purchaser, as the case may be. Payment may be made in
accordance with the Plan.

 

Section 5.       Delivery of Shares. The Company shall not be required to issue
or deliver any certificates for shares of Common Stock, pursuant to the exercise
of this option, prior to (i) the admission of such shares to listing on any
stock exchange on which the Company Common Stock may then be listed, (ii) the
completion of any registration and/or qualification of such shares under any
state or federal laws or ruling or regulations of any governmental regulatory
body, which the Company shall determine to be necessary or advisable, or (iii)
if the Company so requests, the filing with the Company by the Optionee, or the
purchaser acting under Section 3(b)(ii) hereof, of a representation in writing
as provided in Section 6 hereof that at the time of such exercise it is the
Optionee’s present intention to acquire the shares being purchased for
investment and not for resale or distribution.

 

Section 6.       Conditions to Exercise of Option. Upon the acquisition of any
shares of Common Stock pursuant to the exercise of this option, the Optionee
will enter into such written representations, warranties and agreements as the
Company may reasonably request in order to comply with applicable securities
laws or with this agreement. In addition, issuance of such Common Stock may be
subject to and conditioned upon, at the Company’s option, the Optionee’s
execution of a restrictive or shareholder agreement. The certificates
representing the shares of Common Stock purchased by exercising of this option
may be stamped or otherwise imprinted with a legend in such form as the Company
or its counsel may require with respect to any applicable restrictions on sale
or transfer and the stock transfer records of the Company may reflect
stop-transfer instructions with respect to such share of Common Stock.

 

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Section 7.       Miscellaneous.

 

(a)       Rights in Shares Prior to Issuance. Prior to issuance of certificates
for shares of Common Stock, neither the Optionee nor the legatees, personal
representatives or distributees of the Optionee, shall be deemed to be a holder
of any shares of Common Stock subject to option.

 

(b)       Adjustment Upon Changes in Capitalization. In the event that each of
the outstanding shares of Common Stock of the Company shall be changed into or
exchanged for a different number or kind of shares of stock or other securities
of the Company or of another corporation, whether by reason of stock dividend,
recapitalization, merger, consolidation, spin off, split up, combination,
exchange of shares and the like, there shall be substituted for each share of
Common Stock subject to the option herein granted the number and kind of shares
of stock or other securities into which each outstanding share of Common Stock
of the Company shall be so changed or for which each such share shall be
exchanged. If the Board and Optionee determine in good faith that such change
equitably requires an adjustment in the number, or kind, or option price of the
shares covered by the option granted herein, and/or the Board and Optionee
determine in good faith that other adjustment(s) are required pursuant to
Section 12 of the Plan, an adjustment to effect such determination shall be made
by the Board and Optionee in good faith and shall only be effective with the
consent of the Optionee. The Optionee shall not be subject to Section 12(d)(B)
of the Plan.

 

(c)       Non-Assignability. This option shall not be transferable or assignable
by the Optionee otherwise than by will or by the laws of descent and
distribution. This option may be exercised, during the Optionee’s lifetime, only
by the Optionee.

 

(d)       Interpretation. This option granted herein shall in all respects be
subject to and governed by the provisions of the Plan, and capitalized terms
herein shall be given the meaning set forth in the Plan. This Agreement shall in
all respects be so interpreted and construed as to be consistent with this
intention.

 

(e)       Tax Withholding. The Company shall not be required to issue or deliver
any certificates for shares of Common Stock until the Optionee pays to the
Company in cash the amount necessary to enable the Company to remit to the
appropriate government entity or entities on behalf of the Optionee the amount
required to be withheld from wages with respect to such transaction.
Alternately, the Optionee may elect to have such withholding satisfied by a
reduction of the number of shares otherwise deliverable, with the reduction
based on the Fair Market Value of the Common Stock on the date of such notice.

 

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(f)       Detrimental Activity. Optionee shall not be subject to Section 14(w)
of the Plan.

 

(g)       Right of Offset. Optionee shall not be subject to Section 14(x) of the
Plan.

 

 

 

[The signature page follows.]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement this ____
day of ___________, 2016.

 

 

Company: SUMMIT HEALTHCARE REIT, INC.               By:           Title:  
Chairman of the Compensation Committee of the Board of Directors            
Optionee:  

 

 

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