EXHIBIT 10.3
DEFERRED STOCK UNIT
GRANT AGREEMENT
FOR NON-EMPLOYEE DIRECTOR
     THIS DEFERRED STOCK UNIT GRANT AGREEMENT (the “Agreement”), made this
___day of                     , 20___(the “Grant Date”), between Health Care
REIT, Inc., a Delaware corporation (the “Corporation”), and
                                        (the “Director”).
WITNESSETH:
     WHEREAS, the Director serves as a member of the Board of Directors of the
Corporation;
     WHEREAS, the Corporation maintains the Health Care REIT, Inc. 2005
Long-Term Incentive Plan (the “Plan”) in order to promote the growth and
profitability of the Corporation by providing officers, key employees and
non-employee directors with incentives to achieve long-term corporate
objectives, to assist the Corporation in attracting and retaining officers, key
employees and non-employee directors of outstanding competence, and to provide
such individuals with an opportunity to acquire an equity interest in the
Corporation;
     WHEREAS, the Plan authorize awards under the Plan to be made to
non-employee directors with the approval of the Board of Directors; and
     WHEREAS, the Board has determined that each non-employee director of the
Corporation shall be granted Deferred Stock Units with respect to shares of the
Corporation’s common stock on the terms and conditions set forth below.
     NOW, THEREFORE, in consideration of the past and future services the
Director has provided to the Corporation as a member of the Board, and the
various covenants and agreements herein contained, and intending to be legally
bound hereby, the parties hereto agree as follows:
     1. Grant of Deferred Stock Units.
          The Corporation hereby grants to the Director Deferred Stock Units
with respect to a total of                      (___) shares of the common
stock, $1.00 par value per share, of the Corporation (the “Common Stock”),
subject to satisfaction of the vesting conditions and other terms set forth in
this Agreement. The Director shall not be required to make any payment to the
Corporation (other than his or her services as a director) in exchange for such
Deferred Stock Units or in exchange for the issuance of shares of Common Stock
upon vesting of Deferred Stock Units.
2. Deferred Delivery of Shares
          The Director shall not be entitled to the issuance of shares of Common
Stock or to receive any distributions with respect to the Deferred Stock Units
except as provided in Section 9 below, until such time as the Deferred Stock
Units may vest under Section 3 below. Further,

 

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except as provided in Section 9 below, the Director shall not have any of the
rights and privileges of a stockholder of the Corporation (including voting
rights and the right to receive dividends) with respect to the shares of Common
Stock to be issued pursuant to the Deferred Stock Units until such time as the
Deferred Stock Units vest and the shares of Common Stock are issued to the
Director.
     3. Vesting; When Deferred Stock Units Vest.
          Subject to the terms and conditions of this Agreement, the Deferred
Stock Units shall vest in three annual installments, on the first three
anniversaries of the Grant Date, subject to the Director’s continued service as
a member of the Board of Directors through such dates, or at such earlier time
as the Deferred Stock Units may vest pursuant to Sections 7 or 8 of this
Agreement. In the absence of any accelerated vesting under Sections 7 or 8, the
Deferred Stock Units granted under this Agreement shall vest with respect to the
following numbers of shares on the following vesting dates:

          VESTING   NUMBER OF DSUs   DATES   THAT BECOME VESTED  
_________, 20__
  _____ shares
 
       
_________, 20__
  _____ shares
 
       
_________, 20__
  _____ shares

The Deferred Stock Units may not be sold, transferred, assigned, pledged or
otherwise encumbered or disposed of by the Director, and the shares of Common
Stock potentially issuable to the Director pursuant to these Deferred Stock
Units may not be sold, transferred, assigned, pledged or otherwise encumbered by
the Director until such shares are so issued.
          Any attempt to dispose of the Deferred Stock Units in a manner
contrary to the restrictions set forth in this Agreement shall be ineffective.
     4. Issuance of Stock Certificates for Shares.
          Whenever any or all of the Deferred Stock Units granted to the
Director under this Agreement become vested pursuant to Section 3 or Sections 7
or 8 below, the Corporation shall cause a number of shares of Common Stock equal
to the number of newly vested Deferred Stock Units to be issued to the Director
and a stock certificate or certificates representing these shares of Common
Stock to be registered in the name of the Director. The stock certificate or
stock certificates representing such shares of Common Stock shall be delivered
to the Director (or to his or her designated nominee) upon the vesting date (or
as soon as practicable after the vesting date, but in no event later than
December 31 of the year containing the vesting date or, if later, by the 15th
day of the third calendar month following the vesting date). Once shares of
Common Stock have been issued as a result of the vesting of Deferred Stock
Units, the corresponding

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vested Deferred Stock Unit shall be considered cancelled and shall be of no
further force or effect.
     5. No Tax Withholding.
          Whenever some or all of the Deferred Stock Units vest under Section 3
(or on an accelerated basis pursuant to Sections 7 or 8 of this Agreement), the
Corporation shall notify the Director of the amount of tax which the Director
incurs under applicable federal, state and local tax laws. The Corporation will
not withhold such taxes, and the Director acknowledges that the Director may
need to adjust his or her estimated tax payments to take the additional taxable
income into account.
     6. Termination of Service on the Board.
          (a) Except as provided in Sections 6(b), 7 or 8 below, if the Director
resigns from service as a member of the Board of Directors, decides not to stand
for reelection at the expiration of the Director’s term of office, is not
nominated by the Board to stand for election at the Annual Stockholders’ Meeting
at which the Director’s term of office expires, or, if nominated, is not
reelected, then any Deferred Stock Units held by the Director which have not yet
vested shall not be forfeited, but shall remain unvested until such time as such
Deferred Stock Units would otherwise have become vested as provided in
Section 3.
          (b) Notwithstanding the foregoing, if the Director is removed from the
Board by the stockholders of the Corporation for cause, or the Director resigns
or decides not to stand for reelection following delivery of notice to the
stockholders of a proposal to remove the Director 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 the
Director’s duties and responsibilities for any reason other than illness or
incapacity), then all Deferred Stock Units which have not previously become
vested shall immediately be forfeited. A Director shall have total disability
only if he is “disabled” within the meaning of Section 409A of the Internal
Revenue code of 1986, as amended (the “Code”).
          (c) Any stock certificates deliverable under Sections 7(a) or 7(b)
shall be delivered immediately upon the Director’s death or disability as
applicable (or as soon as practicable thereafter, but in no event later than
December 31 of the year in which the applicable event occurred or, if later, by
the 15th day of the third calendar month following the event).
     7. Effect of Death or Disability.
          (a) If the Director ceases to serve as a member of the Board as a
result of the Director’s death before the Deferred Stock Units granted under
this Agreement have become vested, vesting of any unvested Deferred Stock Units
granted to the Director under this Agreement shall be accelerated, and stock
certificates for the number of shares of Common Stock equal to the number of
newly vested Deferred Stock Units shall be delivered to the Director’s executor,
administrator, or any person to whom the Director’s rights with respect to the
Deferred Stock Units may be transferred by the Director’s will or by the laws of
descent.

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          (b) If the Director ceases to serve as a member of the Board as a
result of the Director’s total disability before the Deferred Stock Units
granted under this Agreement have become vested, vesting of any unvested
Deferred Stock Units granted to the Director under this Agreement shall be
accelerated, and stock certificates for the number of shares of Common Stock
equal to the number of newly vested Deferred Stock Units shall be delivered to
the Director pursuant to Section 4, free of any restrictions. A Director shall
have total disability only if he or she is “disabled” within the meaning of
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).
          (c) Any stock certificates deliverable under Sections 7(a) or 7(b)
shall be delivered immediately upon the Director’s death or total disability, as
applicable (or as soon as practicable thereafter, but in no event later than
December 31 of the year in which the applicable event occurred or, if later, by
the 15th day of the third calendar month following the event).
     8. Effect of Change in Corporate Control.
          Notwithstanding the other terms of this Agreement, in the event of a
Change in Corporate Control (as defined below), the vesting of the Deferred
Stock Units granted under this Agreement shall be accelerated, any previously
unvested Deferred Stock Units shall vest immediately, and the Director shall
become entitled to immediately receive a number of shares of Common Stock equal
to the number of previously unvested Deferred Stock Units. Any stock
certificates deliverable under this Section 8 shall be delivered immediately
upon the Change in Corporate Control (or as soon as practicable thereafter, but
in no event later than December 31 of the year in which the Change in Corporate
Control occurs or, if later, the 15th day of the third month following the
Change in Corporate Control).
          For purposes of this Section 8, a “Change in Corporate Control” shall
mean a “change in ownership or effective control” in respect of the Corporation
within the meaning of Section 409A of the Code.
     9. Dividend Equivalent Rights.
          During such time as any Deferred Stock Units remain outstanding and
unvested, whenever the Corporation pays dividends on the Common Stock, the
Director will have the right to receive a cash payment from the Corporation with
respect to each Deferred Stock Unit in an amount equal to any dividends paid on
a share of Common Stock (a “Dividend Equivalent Right”). The Director will have
a Dividend Equivalent Right with respect to each Deferred Stock Unit that is
outstanding on the dividend record date. The Director will have no Dividend
Equivalent Rights as of the dividend record date in respect of any Deferred
Stock Units that have vested and been exchanged for Common Stock; provided that
the Director is the record holder of such Common Stock on or before such
dividend record date. In all events, each Dividend Equivalent Right shall be
paid not later than the 15th day of the third month following the calendar year
in which the applicable dividend record date occurs.

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     10. Securities Laws.
          The Corporation may from time to time impose such conditions on the
vesting of the Deferred Stock Units, and/or the issuance of shares of Common
Stock upon vesting of the Deferred Stock Units, as it deems reasonably necessary
to ensure that any grant of the Deferred Stock Units and issuance of shares
under this Agreement will satisfy the applicable requirements of federal and
state securities laws. Such conditions may include, without limitation, the
partial or complete suspension of the right to receive shares of Common Stock
upon the vesting of the Deferred Stock Units until the Deferred Stock Units have
been registered under the Securities Act of 1933, as amended. In all events, if
the issuance of any shares of Common Stock is delayed by application of this
Section 10, such issuance shall occur on the earliest date on which it would not
violate applicable law.
     11. Grant Not to Affect Status as Director.
          Neither this Agreement nor the Deferred Stock Units granted hereunder
shall confer upon the Director any right to continue the Director’s service as a
member of the Board of Directors of the Corporation.
     12. Adjustments to Deferred Stock Units.
          In the event of any change or changes in the outstanding Common Stock
by reason of any stock dividend, recapitalization, reorganization, merger,
consolidation, split-up, combination or any similar transaction, the number of
Deferred Stock Units granted to the Director under this Agreement shall be
adjusted by the Compensation Committee pursuant to Section 11.2 of the Plan in
such manner as the Committee deems appropriate to prevent substantial dilution
or enlargement of the rights granted to the Director.
     13. Miscellaneous.
          (a) This Agreement may be executed in one or more counterparts, all of
which taken together will constitute one and the same instrument.
          (b) The terms of this Agreement may only be amended, modified or
waived by a written agreement executed by both of the parties hereto.
          (c) The provisions of the Plan are hereby made a part of this
Agreement. In the event of any conflict between the provisions of this Agreement
and those of the Plan, the provisions of this Agreement shall control.
          (d) The Deferred Stock Units under this Agreement are deferred
compensation subject to Section 409A of the Code. This Agreement is intended to
satisfy the requirements of Section 409A of the Code and shall be interpreted in
a manner consistent with such requirements. To the extent that changes are
necessary to ensure that the Deferred Stock Units comply with any additional
requirements imposed by future IRS guidance on the application of Section 409A
of

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the Code, the Director and the Corporation agree to cooperate and work together
in good faith to timely amend this Agreement to comply with Section 409A of the
Code.
          (e) The validity, performance, construction and effect of this
Agreement shall be governed by the laws of the State of Ohio, without giving
effect to principles of conflicts of law; provided, however, that matters of
corporate law, including the issuance of shares of Common Stock, shall be
governed by the Delaware General Corporation Law.
     IN WITNESS WHEREOF, the parties have executed this Deferred Stock Unit
Grant Agreement on the date and year first above written.

              ATTEST:   HEALTH CARE REIT, INC.    
 
           
 
  By:        
 
  Name:
 
   
 
  Its:  
 
   
 
     
 
   
 
           
 
  DIRECTOR:    
 
                     
 
  Name:    
 
     
 
   

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