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Exhibit 10.1
 
OMEGA HEALTHCARE INVESTORS, INC.

DEFERRED STOCK PLAN
 
 
 

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TABLE OF CONTENTS

OMEGA HEALTHCARE INVESTORS, INC. DEFERRED STOCK PLAN

         
SECTION
 
PAGE NUMBER
           
1.
BACKGROUND AND INTERPRETATION
 
1
           
2.
ELIGIBILITY
 
1
           
3.
DEFERRAL ELECTIONS
 
1
           
4.
TIMING OF ELECTIONS
 
1
           
5.
TERMS AND CONDITIONS OF DEFERRED STOCK GRANTS
 
3
           
6.
SOURCE OF SHARES UNDER PLAN
 
4
           
7.
CHANGE IN CAPITALIZATION
 
4
           
8.
ADMINISTRATION
 
5
           
9.
UNFUNDED PLAN
 
6
           
10
PARTICIPATION VOLUNTARY
 
6
           
11.
AMENDMENT AND TERMINATION
 
6
           
12.
GOVERNING LAW
 
6
           
13.
DEFINITIONS
 
6
           
14.
CLAIMS PROCEDURES FOR EMPLOYEES
 
8

 
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OMEGA HEALTHCARE INVESTORS, INC.
DEFERRED STOCK PLAN
 
1.              BACKGROUND AND INTERPRETATION
 
(a)           Background and ERISA.  This document constitutes an amendment and
restatement of the Plan.  The Plan has been amended and restated primarily to
allow participation by officers and to add ERISA claims procedures that shall
apply to claims by employees.  For purposes of ERISA, the Plan shall be deemed
to constitute two separate plans, one of which applies to directors of the
Company and is wholly exempt from ERISA, and one of which applies to officers of
the Company and is an unfunded plan maintained by the Company primarily for the
purpose of providing deferred compensation for a select group of management or
highly compensated employees pursuant to Sections 201(2), 301(a)(3) and
401(a)(1) of ERISA.
 
(b)           Section 409A.  The Plan is intended to comply with Section 409A of
the Internal Revenue Code and the regulations thereunder (“Section
409A.”)  Therefore, all provisions of the Plan and any deferral agreements under
or subject to the Plan shall be interpreted consistently with this intent.  To
that end, all provisions of the Plan and the deferral agreements shall be
subject to the requirements of Section 409A, and to the extent permissible under
Section 409A, any provisions that are inconsistent with such requirements shall
be deemed to be excised and inoperable.
 
2.
ELIGIBILITY

 
Directors of the Company who are not employees of the Company are eligible to
participate in the Plan.  In addition, effective October 16, 2012, officers of
the Company shall be eligible to participate.
 
3.
DEFERRAL ELECTIONS

 
Each Participant may elect, in the manner prescribed herein, to defer receipt of
any Stock Grant, and if desired, the Dividend Equivalents attributable to the
deferred Stock Grant, unless otherwise determined by the Committee.
 
4.
TIMING OF ELECTIONS

 
(a)           First Year of Eligibility.  Each Participant may elect, within
thirty (30) days after the later of the Effective Date or the date the
Participant first becomes eligible to participate in the Plan, to defer receipt
of any Stock Grant that is made after the date of the election and represents
compensation for services rendered by the Participant after the election.
 
 
 

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(b)           Initial Deferral Election with respect to Forfeitable
Rights.  Each Participant may elect to defer receipt of any Stock Grant, the
terms of which require the Participant to continue to provide services to the
Company for at least twelve (12) months from the date of grant to avoid
forfeiture, if the election is made within thirty (30) days of the date of
grant. For purposes of this Subsection (b), a Stock Grant will not be treated as
failing to require the Participant to perform services for at least twelve (12)
months from the date of grant merely because the risk of forfeiture lapses upon
the Participant’s death or Disability, or a Change in Control, provided that if
the Participant’s death or Disability or a Change in Control occurs and the risk
of forfeiture lapses within such twelve (12) month period, the deferral election
will be given effect only if it is permitted under this Section without regard
to this Subsection.
 
(c)           Initial Deferral Election with respect to Performance-Based
Compensation.  Each Participant may elect to defer receipt of any
Performance-Based Stock Grant within six (6) months before the end of the
applicable performance period, provided that the Participant continuously
performs services for the Company from the later of the beginning of the
performance period or the date the performance criteria are established through
the date an election is made under this Subsection, provided that no such
election may be made after the compensation underlying the Performance-Based
Stock Grant has become readily ascertainable.
 
(d)           Initial Deferral Election with respect to Short-Term
Deferrals.  Each Participant may elect to defer receipt of any Stock Grant that,
absent the deferral election, would be treated as a “short-term deferral” within
the meaning of Treas. Reg. Section 1.409A-1, in accordance with the requirements
of Section 5(e) below, applied as if the Stock Grant were a deferral of
compensation and the scheduled payment date were the date the risk of forfeiture
lapses; provided, however, that such election may require payment upon a Change
in Control without regard to the five-year additional deferral requirement in
Section 5(e).
 
(e)           General Rule.  Except as otherwise provided in this Section, each
Participant may elect to defer receipt of any Stock Grant that represents
compensation for services for a calendar year only if the election is made not
later than the last day of the immediately preceding calendar year.
 
(f)            Standing Election.  Notwithstanding any other provision hereof,
the Committee may provide that a deferral election made in a given year will
apply also to future Stock Grants made in future years, unless and until the
Participant revokes or modifies the deferral election.  In such case, the
Participant must submit a written modification or revocation in such form as the
Committee may require before the latest permissible date for making a deferral
election in accordance with the other subsections of this Section.
 
(g)           Subsequent Changes in Deferral Elections.  Once a Participant
makes a deferral election, the Participant may change his deferral election at
any time before the last permissible date for making a deferral election as set
forth above in this Section.
 
(h)           Dividend Equivalents.  The Committee shall specify in the
applicable Agreement when Dividend Equivalents will be paid, which may be at the
same date the Shares subject to the deferred Stock Grant are issued or may be
subject to an election by the Participant subject to the same timing rules as
apply in this Section, to the extent provided in the applicable Agreement.
 
 
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(i)            Other Restrictions.  The Committee may provide other restrictions
on the timing or revocation of deferral elections, and all such elections will
be limited as the Committee may provide in the applicable Agreement.
 
5.
TERMS AND CONDITIONS OF DEFERRED STOCK GRANTS

 
(a)           Terms of Deferred Stock Grants and Dividend Equivalent
Rights.  The Committee shall have the sole authority and discretion in
determining the terms and conditions with respect to each deferred Stock Grant
and Dividend Equivalents, which shall be reflected in the applicable Agreement.
 
(b)           Deferred Stock Grants.  The Committee may provide in the
applicable Agreement that all or a portion of the deferred Stock Grant will be
forfeited under specified terms and conditions.
 
(c)           Dividend Equivalents.  Stock Grants that are deferred shall accrue
Dividend Equivalents, unless otherwise determined by the Committee.  The
Committee may provide in the applicable Agreement that all or a portion of the
Dividend Equivalents will be forfeited under specified terms and
conditions.  The Committee may specify, or allow the Participant to specify, in
the applicable Agreement that Dividend Equivalents will be paid when earned,
that Dividend Equivalents will earn interest at a specified interest rate and
paid at a date or event specified, or converted into the right to receive Shares
at a specified date or event under a specified conversion formula.
 
(d)           Manner of Deferral Election and Timing of Payment.  A Participant
may elect to defer receipt of a Stock Grant and Dividend Equivalents by entering
into an Agreement provided by the Company for this purpose which shall contain
such terms and conditions as may be established by the Committee.  If a
Participant makes a deferral election, the issuance of Shares and Dividend
Equivalents shall be delayed until the date or event specified in the Agreement
at the date the Participant’s deferral election in Section 3 is made.  Except as
otherwise provided in an Agreement, Shares attributable to a Stock Grant that is
deferred shall be issued, and Dividend Equivalents that are deferred will be
paid only upon an event or date set forth below:
 
(i)           a specified date;
 
(ii)          the date of the Participant’s Separation from Service if the
Participant is not a Specified Employee;
 
(iii)         six (6) months after the date of the Participant’s Separation from
Service if the Participant is a Specified Employee;
 
(iv)         the date of the Participant’s death;
 
(v)          the date the Participant becomes subject to a Disability;
 
(vi)         the date of a Change in Control; or
 
(vii)        the date the Participant is subject to an Unforeseeable Emergency;
 
provided, however, that such further terms, conditions, and restrictions as set
forth in the applicable Agreement shall apply.
 
 
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(e)           Subsequent Changes in Time of Payment.  If a Participant is
permitted to elect the timing of payment pursuant to subsection (d), the
Participant may change the timing of payment of Stock Grants and Dividend
Equivalents at any time before the last permissible date for making a deferral
election as to such Stock Grants and Dividend Equivalents as set forth in
Section 3, or if after such last permissible date, only in accordance with the
following rules:
 
(i)            the election shall not take effect until at least twelve (12)
months after the date on which the election is made;
 
(ii)           in the case of an election related to a payment that is not on
account of the Participant’s Disability or death, or the occurrence of an
Unforeseeable Emergency, the payment with respect to which the election is made
must be deferred for a period of at least five (5) years from the date that such
payment would have been made; and
 
(iii)          any election related to a payment to be paid at a specified time
or pursuant to a fixed schedule must be made at least twelve (12) months before
the date the payment was previously scheduled to be paid.
 
(f)           Non-Transferability.  The rights and interests of a Participant in
respect of the deferred Stock Grant and Dividend Equivalents shall not be
transferable or assignable other than by will or the laws of succession to the
legal representative of the Participant; provided, however, that the Committee
may allow a Participant to designate a person to receive the benefits payable
under the Plan on the Participant’s death or alter or revoke such designation
from time to time, subject to the provisions of any applicable law.
 
(g)           Deferred Stock Grants are not Shares.  Deferred Stock Grants are
not Shares, and do not entitle any Participant to the exercise of voting rights,
the receipt of dividends, or the exercise of any other rights attaching to
ownership of Shares.
 
6.
SOURCE OF SHARES UNDER PLAN

 
No Shares are reserved for issuance under the Plan.  The Plan is merely a
vehicle under which Stock Grants that are made by the Company can be
deferred.  Sources of Stock Grants may include, but not be limited to, the Omega
Healthcare Investors, Inc. 2004 Stock Incentive Plan.
 
7.
CHANGE IN CAPITALIZATION

 
(a)           The number and kind of Shares shall be proportionately adjusted
for any nonreciprocal transaction between the Company and holders of capital
stock of the Company that causes the per share value of the Shares underlying
the Stock Grants to change, such as a stock dividend, stock split, spin-off,
rights offering, or recapitalization through a large, non-recurring cash
dividend (each, an “Equity Restructuring”).
 
 
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(b)           In the event of a merger, consolidation, extraordinary dividend,
sale of substantially all of the Company’s assets or other material change in
the capital structure of the Company, or a tender offer for shares of Common
Stock, or other reorganization of the Company, that in each case is not an
Equity Restructuring, the Committee shall take such action and make such
adjustments with respect to the Shares or the terms of this Plan as the
Committee, in its sole discretion, determines in good faith is necessary or
appropriate, including, without limitation, adjusting the number and class of
securities subject to the Plan, or substituting cash, other securities, or other
property to replace the award payable under the Plan, or terminating awards
under the Plan in exchange for their cash value (as determined by the
Committee).
 
(c)           All determinations and adjustments made by the Committee pursuant
to this Section will be final and binding on the Participant.  Any action taken
by the Committee need not treat all Participants under the Plan equally.
 
(d)           The existence of the Plan and any deferred Stock Grants and
Dividend Equivalents thereunder shall not affect the right or power of the
Company to make or authorize any adjustment, reclassification, reorganization or
other change in its capital or business structure, any merger or consolidation
of the Company, any issue of debt or equity securities having preferences or
priorities as to the Common Stock or the rights thereof, the dissolution or
liquidation of the Company, any sale or transfer of all or part of its business
or assets, or any other corporate act or proceeding.
 
8.
ADMINISTRATION

 
The Committee shall administer the Plan in accordance with its terms. The
Committee may, subject to the terms of the Plan, delegate duties relating to the
administration of the Plan and will determine the scope of such delegation. Any
decision made by the Committee in carrying out its responsibilities with respect
to the administration of the Plan will be final and binding on the Participants.
 
In addition to the other powers granted to the Committee under the Plan and
subject to the terms of the Plan, the Committee will have full and complete
authority to interpret the Plan. The Committee may from time to time prescribe
such rules and regulations and make all determinations necessary or desirable
for the administration of the Plan.  Any such interpretation, rule,
determination or other act of the Committee will be conclusively binding upon
all persons, including the Participants and their legal representatives and
beneficiaries.  Notwithstanding the foregoing, the Committee shall not make any
determinations as to whether a Participant is subject to a Disability.
 
No member of the Committee will be liable for any action or determination made
in good faith pursuant to the Plan. To the full extent permitted by law, the
Company will indemnify and save harmless each person made, or threatened to be
made, a party to any action or proceeding by reason of the fact that such person
is or was a member of the Committee or is or was a member of the Committee and,
as such, is or was required or entitled to take action pursuant to the terms of
the Plan.
 
 
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9.
UNFUNDED PLAN

 
The Plan is unfunded.  The Company’s obligations hereunder will constitute
general, unsecured obligations, payable solely out of its general assets, and no
Participant or other person has any right to any specific assets of the
Company.  The Company will not segregate any assets for the purpose of funding
its obligations with respect to Shares credited hereunder.  The Company will not
be deemed to be a trustee of any amounts to be distributed or paid pursuant to
the Plan.  No liability or obligation of the Company pursuant to the Plan will
be deemed to be secured by any pledge of, or encumbrance on, any property of the
Company.
 
10.
PARTICIPATION VOLUNTARY

 
Participation in the Plan by Participants is voluntary.  The issuance of
Agreements under the Plan will not be construed as giving a Participant any
right to continue in the service of the Company or any of its
Affiliates.  Participation in the Plan by any Participant will constitute
acceptance of the terms and conditions of the Plan by the Participant and as to
the Participant’s agreement to be bound thereby.
 
11.
AMENDMENT AND TERMINATION

 
The Board of Directors may from time to time amend, suspend or terminate the
Plan in whole or in part.  No amendment or termination of the Plan will take
away any rights that the Participant has under the terms of any applicable
Agreement.
 
12.
GOVERNING LAW

 
The Plan will be governed by the laws of the State of Maryland, to the extent
not pre-empted by Federal law, without reference to principles of conflicts of
laws.
 
13.
DEFINITIONS

 
For purposes of the Plan, the terms contained in this Plan have the following
meanings.
 
(a)           “Affiliate” means:
 
(i)            any Subsidiary or Parent;
 
(ii)           any entity that directly or through one or more intermediaries
controls, is controlled by, or is under common control with the Company, as
determined by the Committee; or
 
 
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(iii)          any entity in which the Company has such a significant interest
that the Company determines it should be deemed an “Affiliate,” as determined in
the sole discretion of the Committee.
 
(b)           “Agreement” means an agreement approved by the Committee which
sets forth the terms and conditions of the Participant’s deferred Stock Grant
and Dividend Equivalents.
 
(c)           “Board of Directors” means the board of directors of the Company.
 
(d)           “Change in Control” means a “change in the ownership of the
corporation, a change in the effective control of the corporation, or a change
in the ownership of a substantial portion of the assets of the corporation,” in
each case within the meaning of Treas. Reg. Section 1.409A-3; provided that the
term “corporation” in this definition shall refer to the Company.
 
(e)           “Committee” means the Compensation Committee of the Board of
Directors.
 
(f)           “Company” means Omega Healthcare Investors, Inc., a Maryland
corporation.
 
(g)           “Common Stock” means the Company’s common stock.
 
(h)           “Disability” means any condition that constitutes a “disability”
under Treas. Reg. Section 1.409A-3; provided, however, that the determination of
whether a Participant is subject to a Disability shall not be made by the Plan,
the Company or the Committee but shall be made (i) by the Social Security
Administration, (ii) in accordance with the requirements of the Company’s
long-term disability insurance plan (provided that the definition of disability
applied complies with the requirements of this definition), (iii) by a qualified
physician that is acceptable to the Committee, or (iv) by any other qualified
party that is independent of the Plan, the Company and the Committee and that is
acceptable to the Committee.
 
(i)           “Dividend Equivalents” means an amount equal to the dividends per
Share payable to shareholders of record on or after the date of grant of the
deferred Stock Grant through the day before the date the Shares attributable to
the deferred Stock Grant are issued.
 
(j)           “Effective Date” means January 20, 2009.
 
(k)           “ERISA” means the Employee Retirement Income Security Act of 1974,
as amended, and the regulations issued thereunder.
 
(l)           “Parent” means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company if each of the
corporations other than the Company owns stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.  A “Parent” may include any entity other than
a corporation to the extent permissible under Section 424(e) of the Internal
Revenue Code or regulations and rulings thereunder.
 
 
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(m)           “Participant” means any individual who participates in the Plan
pursuant to Section 1.
 
(n)           “Performance-Based Stock Grant” means a Stock Grant, the
entitlement to which is contingent on the satisfaction of preestablished
organizational or individual performance criteria relating to a performance
period of at least twelve (12) consecutive months.  Organizational or individual
performance criteria are considered preestablished if established in writing
within ninety (90) days after the commencement of the period of service to which
the criteria relates, provided that the outcome is substantially uncertain at
the time the criteria are established.  Compensation may be performance-based
compensation if the amount will be paid regardless of satisfaction of the
performance criteria due to the Participant’s death or Disability, or a Change
in Control, provided that payment made under such circumstances without regard
to the satisfaction of the performance criteria will not constitute a
Performance-Based Stock Grant.
 
(o)           “Plan” means the Omega Healthcare Investors, Inc. Deferred Stock
Plan, as it may be amended from time to time.
 
(p)           “Separation from Service” means a “separation from service” within
the meaning of Treas. Reg. Section 1.409A-1.
 
(q)           “Share” means a share of Common Stock.
 
(r)           “Specified Employee” means a “specified employee” within the
meaning of Treas. Reg. Section 1.409A-1.
 
(s)           “Stock Grant” means a grant of Shares or the grant of the right to
receive Shares in the future, whether contingent or absolute.
 
(t)           “Subsidiary” means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in the chain.  A “Subsidiary”
shall include any entity other than a corporation to the extent permissible
under Section 424(f) of the Internal Revenue Code or regulations and rulings
thereunder.
 
(u)           “Unforeseeable Emergency” means an “unforeseeable emergency”
within the meaning of Treas. Reg. Section 1.409A-3.
 
14.           CLAIMS PROCEDURES FOR EMPLOYEES
 
This Section applies only to Participants who are employees of the Company,
former employees of the Company who are Participants as a result of having been
employed as executive officers of the Company, beneficiaries of either of the
foregoing categories of Participants, or any other person entitled to file a
claim under the Plan pursuant to ERISA, but shall not apply to Participants who
are directors of the Company, former directors of the Company who are
Participants as a result of having been directors of the Company, or
beneficiaries of either of the foregoing categories of Participants.
 
 
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(a)           Notice of Denial.  If a Participant (or other person entitled to
file a claim for benefits under ERISA) (a “claimant”) is denied a claim for
benefits under the Plan, the Committee shall provide to the claimant written
notice of the denial within ninety (90) days after the Committee receives the
claim, unless special circumstances require an extension of time for processing
the claim.  If such an extension of time is required, written notice of the
extension shall be furnished to the claimant prior to the termination of the
initial 90-day period.  In no event shall the extension exceed a period of
ninety (90) days  from the end of such initial period.  Any extension notice
shall indicate the special circumstances requiring the extension of time, the
date by which the Committee expects to render the final decision, the standards
on which entitlement to benefits are based, the unresolved issues that prevent a
decision on the claim and the additional information needed to resolve those
issues.
 
(b)           Contents of Notice of Denial.  If a claimant is denied a claim for
benefits under a Plan, the Committee shall provide to such claimant written
notice of the denial which shall set forth, in language calculated to be
understood by the claimant:
 
(i)             the specific reasons for the denial;
 
(ii)           specific references to the pertinent provisions of the Plan on
which the denial is based;
 
(iii)          a description of any additional material or information necessary
for the claimant to perfect the claim and an explanation of why such material or
information is necessary; and
 
(iv)          an explanation of the Plan’s claim review procedures, and the time
limits applicable to such procedures, including a statement of the claimant’s
right to bring a civil action under Section 502(a) of ERISA following an adverse
benefit determination on review.
 
(c)           Right to Review.  After receiving written notice of the denial of
a claim, a claimant or his representative shall be entitled to:
 
(i)             request a full and fair review of the denial of the claim by
written application to the Committee;
 
(ii)            request, free of charge, reasonable access to, and copies of,
all documents, records, and other information relevant to the claim;
 
(iii)          submit written comments, documents, records, and other
information relating to the denied claim to the Committee; and
 
(iv)          a review that takes into account all comments, documents, records,
and other information submitted by the claimant relating to the claim, without
regard to whether such information was submitted or considered in the initial
benefit determination.
 
 
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(d)           Application for Review.  If a claimant wishes a review of the
decision denying his claim to benefits under the Plan, he must submit the
written application to the Committee within sixty (60) days after receiving
written notice of the denial.
 
(e)           Hearing.  Upon receiving such written application for review, the
Committee or Appeals Fiduciary, as applicable, may schedule a hearing for
purposes of reviewing the claimant’s claim, which hearing shall take place not
more than thirty (30) days from the date on which the Committee received such
written application for review.
 
(f)           Notice of Hearing.  At least ten (10) days prior to the scheduled
hearing, the claimant and his representative designated in writing by him, if
any, shall receive written notice of the date, time, and place of such scheduled
hearing.  The claimant or his representative, if any, may request that the
hearing be rescheduled, for his convenience, on another reasonable date or at
another reasonable time or place.
 
(g)           Counsel.  All claimants requesting a review of the decision
denying their claim for benefits may employ counsel for purposes of the hearing.
 
(h)           Decision on Review.  No later than sixty (60) days following the
receipt of the written application for review, the Committee shall submit its
decision on the review in writing to the claimant involved and to his
representative, if any, unless the Committee determines that special
circumstances (such as the need to hold a hearing) require an extension of time,
to a day no later than one hundred twenty (120) days after the date of receipt
of the written application for review.  If the Committee determines that the
extension of time is required, the Committee shall furnish to the claimant
written notice of the extension before the expiration of the initial sixty (60)
day period.  The extension notice shall indicate the special circumstances
requiring an extension of time and the date by which the Committee expects to
render its decision on review.  In the case of a decision adverse to the
claimant, the Committee shall provide to the claimant written notice of the
denial which shall include:
 
(i)             the specific reasons for the decision;
 
(ii)           specific references to the pertinent provisions of the Plan on
which the decision is based;
 
(iii)          a statement that the claimant is entitled to receive, upon
request and free of charge, reasonable access to, and copies of, all documents,
records, and other information relevant to the claimant’s claim for benefits;
and
 
(iv)          an explanation of the Plan’s claim review procedures, and the time
limits applicable to such procedures, including a statement of the claimant’s
right to bring an action under Section 502(a) of ERISA following the denial of
the claim upon review.
 
 
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IN WITNESS WHEREOF, the Company has adopted the Plan, as amended and restated
herein, effective October 16, 2012.

           
OMEGA HEALTHCARE INVESTORS, INC.
                                By:           Title:    

 
 
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FOR EXECUTIVE OFFICER
 
GRANTS
 
DEFERRED ___________ RESTRICTED STOCK UNIT AGREEMENT
 
PURSUANT TO THE OMEGA HEALTHCARE INVESTORS, INC.
 
2004 STOCK INCENTIVE PLAN
 
 
THIS AGREEMENT (this “Agreement”) is made as of                           ,
20             (the “Effective Date”), by Omega Healthcare Investors, Inc. (the
“Company”) and                                                             
 (the “Officer”).
 
This Agreement includes the Terms and Conditions, which are part of this
Agreement.
 

 
A.
Effect of Agreement: This Agreement relates to the grants
of                             restricted stock units specified in paragraph D
below.
              This election will be given effect only to the extent that the
compensation to be deferred satisfies the
requirements                                   under Treas. Reg. Section
1.409A-                                                                            .
            If the Officer wishes to revoke or modify this election, he may
submit a written election to do so to the Company’s Chief Financial Officer by
                       ,
20    ,                                                                                                                                                                              .
       
B.
“Plan”: (under which the “Shares” (as defined below) will be issued) Omega
Healthcare Investors, Inc.                                              Plan.
 

 
 
 

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C.
“Deferred Stock Plan”:  Omega Healthcare Investors, Inc. Deferred Stock Plan, to
which this Agreement is also subject.

 
D.
“Stock Units”:  This Agreement relates to the grants of ___________ restricted
stock units with respect to the Company’s common stock specified below.  (You
must check the box(es) that apply):

 
[
]   ____________________________________________________________________________________________________________________.
 
[
]   ____________________________________________________________________________________________________________________.
 
In lieu of receiving payment for such Stock Units according to the terms of the
applicable original agreement providing for such grants (the “Original
Agreement”), the Officer will be credited on the date that payment would
otherwise have been made under the Original Agreement (the “Original Payment
Date”) with a number of Stock Units that is equal to the number of Shares that
would otherwise have been paid to the Officer as of such date (the “Applicable
Payment Date”).  The number of Stock Units will be increased by the number of
Stock Units attributable to the Converted Dividend Equivalents if the Officer
elects paragraph E.1. below.  Each Stock Unit represents the Company’s unsecured
obligation to issue one share of Stock and the related Deferred Dividend
Equivalents or Current Dividend Equivalents (if selected in paragraph E) in
accordance with this Agreement.  The shares of Stock represented by the Stock
Units shall be referred to as the “Shares.”
 
E.
“Dividend Equivalents”:  Each Stock Unit shall accrue an amount equal to the
dividends per share payable on Common Stock to shareholders of record in
accordance with the terms of the Original Agreement through the Original Payment
Date and thereafter through the day before the date the Shares are issued.

 
(2)

--------------------------------------------------------------------------------

 
 
You must check either paragraph 1, 2 or 3 below:
 
 
1.
[ ]
“Converted Dividend Equivalents”:  The Dividend Equivalents will be converted
into a number of Stock Units equal to (a) the amount of the Dividend Equivalents
that are accrued under the Original Agreement as of the date that payment would
otherwise have been made under the Original Agreement, divided by the closing
price per share of Stock on such date, plus (b) the amount of the Dividend
Equivalents that are accrued thereafter as of each dividend payment date,
divided by the closing price per share of Stock on such date.  Such Stock Units
shall also accrue future Dividend Equivalents that shall be converted into Stock
Units in accordance with the preceding formula in subparagraph (b).  The Stock
Units under this paragraph shall be paid on the date the Shares are payable to
the Officer; or

 
 
2.
[ ]
“Deferred Dividend Equivalents”:  The Dividend Equivalents shall be paid to the
Officer, with interest accrued on a quarterly basis from the Original Payment
Date at a rate equal to the Company’s average borrowing rate for the preceding
calendar quarter, as determined in the sole discretion of the Committee, on the
date the Shares are payable to the Officer; or

 
 
3.
[ ]
“Current Dividend Equivalents”:  The Dividend Equivalents that are accrued as of
the Original Payment Date shall be paid to the Officer on the Original Payment
Date and the Dividend Equivalents thereafter will be paid on the same date that
the dividends per share are paid to shareholders.

 
 
(3)

--------------------------------------------------------------------------------

 
F.
“Deferral Period”:  The Officer has elected to defer receipt of the Shares (and
Converted Dividend Equivalents or Deferred Dividend Equivalents if paragraph
E.1. or E.2. was elected) until the dates or events set forth below:

 
You must complete either paragraph 1 or 2 below, but you may complete other
paragraphs as well.
 
1.
If you complete this paragraph 1, you must complete A or B below:

 
A.
  [ ]     in one lump sum in the month of ___________, 20___ (specify month and
year); or

 
 
B.
  [ ]     in annual ratable installments over __ calendar years (specify number
of calendar years) with the first payment being made in the month of
___________, 20___ (specify month and year) and each subsequent payment being
made in the month of _________ (specify month) of each calendar year thereafter.

 
2.
If you complete this paragraph 2, you must check A or B below, but not both:

 
A.
     [ ]     upon the date that is six(6) months following the Officer’s
Separation from Service; or

 
B.
      [ ]     in the month of _____________ (specify month) of the __________
(specify number, first, second, etc.) calendar year following the calendar year
of the Officer’s Separation from Service (but not earlier than six (6) months
following the Officer’s Separation from Service.

 
The balance in paragraph 2A or 2B will be paid (check (i) or (ii) but not both):
 
(i)
[ ]    in one lump sum; or

 
 
(4)

--------------------------------------------------------------------------------

 
 
 
 
  (ii)
[ ]  in annual ratable installments over __ calendar years (specify number of
calendar years), with each payment after the first payment being made in the
month of ____________ (specify month) of each calendar year.

 
3.
[ ]   the earlier of paragraph 1 or 2 above.

 
4.
[ ]   the later of paragraph 1 or 2 above.

 
5.
[ ]   If a Change in Control occurs before the date payment is required to be
made pursuant to the elections above, payment shall be made in one lump sum upon
the Change in Control.

 
6.
[ ]   If the Officer becomes subject to a Disability before the date payment is
required to be made pursuant to the elections above, payment shall be made in
one lump sum upon the Disability.

 
The Officer may elect to change the timing of payment in paragraph F only under
the following conditions:
 
(i)
the election shall not take effect until twelve (12) months after the date the
written election is submitted to the Company;

 
(ii)
in the case of an election related to a payment date or event other than
Disability, the election must defer payment for at least five (5) years from the
date payment would otherwise have been made  under this Agreement (i.e., date of
lump sum or first installment payment); and

 
(iii)
in the case of a payment at a specified date, the election must be submitted at
least twelve (12) months before the date payment (i.e. lump sum or first
installment payment) was previously scheduled to be made under this Agreement.

 
 
(5)

--------------------------------------------------------------------------------

 
 
Notwithstanding the foregoing, the Shares (and Converted Dividend Equivalents or
Deferred Dividend Equivalents if paragraph E.1. or E.2. was elected) shall be
payable upon the Officer’s death.
 
IN WITNESS WHEREOF, the Company and the Officer have executed this Agreement as
of the Effective Date set forth above.

OFFICER OMEGA HEALTHCARE INVESTORS, INC.                          
 
By:
                        [Signature] Title:    

 
 
(6)

--------------------------------------------------------------------------------

 
 
TERMS AND CONDITIONS TO THE
 
DEFERRED ___________ RESTRICTED STOCK UNIT AGREEMENT
 
PURSUANT TO THE OMEGA HEALTHCARE INVESTORS, INC.
 
_________________________ PLAN
 
 
1.           Payment for Stock Units. The Company shall deliver a share
certificate representing the number of Shares attributable to the Stock Units
(and the amount of the Deferred Dividend Equivalents, if applicable) to the
Officer within sixty (60) days following the date(s) specified in paragraph F.
 
2.           Unforeseeable Emergency. In the event of an Unforeseeable
Emergency, the Officer may terminate the Deferral Period but only to the extent
of the number of Shares (and Deferred Dividend Equivalents, if applicable)
necessary to meet the emergency (which may include amounts necessary to pay
Federal, state, local, or foreign taxes or penalties reasonably anticipated to
result from the distribution), and only to the extent that the hardship is not
or cannot be relieved through reimbursement or compensation by insurance or
otherwise, or by liquidation of the Officer’s assets to the extent such
liquidation would not itself cause severe financial hardship, or by cessation of
future deferrals.
 
3.           Restrictions on Transfer of Stock Units and Shares.  Except for the
transfer by bequest or inheritance, the Officer shall not have the right to make
or permit to exist any transfer or hypothecation, whether outright or as
security, with or without consideration, voluntary or involuntary, of all or any
part of any right, title or interest in or to any Stock Units or Shares until
issued.  Any such disposition not made in accordance with this Agreement shall
be deemed null and void.  Any permitted transferee under this Section shall be
bound by the terms of this Agreement.
 
4.           Legend on Stock Certificates.  If certificates evidencing the
Shares are issued, the certificates shall have noted conspicuously any legends
required when applicable securities laws are otherwise determined by the Company
to be appropriate, such as:
 
TRANSFER IS RESTRICTED
 
 
Exhibit 1

--------------------------------------------------------------------------------

 
 
THE SECURITIES EVIDENCED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED, OR HYPOTHECATED UNLESS (1) THERE IS AN EFFECTIVE REGISTRATION UNDER
SUCH ACT COVERING SUCH SECURITIES, (2) THE TRANSFER IS MADE IN COMPLIANCE WITH
RULE 144 PROMULGATED UNDER SUCH ACT, OR (3) THE ISSUER RECEIVES AN OPINION OF
COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE,
TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF SUCH ACT.
 
5.           Change in Capitalization.
 
(a)           The number and kind of Shares shall be proportionately adjusted
for any nonreciprocal transaction between the Company and holders of capital
stock of the Company that causes the per share value of the Shares underlying
the Restricted Units to change, such as a stock dividend, stock split, spin-off,
rights offering, or recapitalization through a large, non-recurring cash
dividend (each, an “Equity Restructuring”).
 
(b)           In the event of a merger, consolidation, extraordinary dividend,
sale of substantially all of the Company’s assets or other material change in
the capital structure of the Company, or a tender offer for shares of Common
Stock, or other reorganization of the Company, that in each case is not an
Equity Restructuring, the Committee shall take such action and make such
adjustments with respect to the Shares or the terms of this Agreement as the
Committee, in its sole discretion, determines in good faith is necessary or
appropriate, including, without limitation, adjusting the number and class of
securities subject to the Agreement, or substituting cash, other securities, or
other property to replace the award payable under the Agreement, or terminating
the Agreement in exchange for the cash value (as determined by the Committee) of
the Shares (and the Deferred Dividend Equivalents, if applicable).
 
(c)           Notwithstanding the foregoing or any other provisions of this
Agreement, if a Change in Control of the type described in Section 15(a)(i)
occurs and if the Officer has not elected to end the Deferral Period as of the
date of the Change in Control, the Company shall pay the Deferred Dividend
Equivalents, if applicable, to the Officer within ninety (90) days following the
date of the Change in Control subject to the requirements of paragraph F and
Treas. Reg. Section 1.409A-2(b), and shall pay the same amount of consideration
per Share attributable to the Stock Units as is paid to each holder of a share
of Common Stock in connection with the Change in Control and on the same
schedule and under the same terms and conditions, provided that payment must be
completed within five (5) years after the Change in Control.
 
 
Exhibit 1

--------------------------------------------------------------------------------

 
 
(d)           All determinations and adjustments made by the Committee pursuant
to this Section will be final and binding on the Officer. Any action taken by
the Committee need not treat all recipients of awards under the Plan or the
Deferred Stock Plan equally.
 
(e)           The existence of the Plan, the Deferred Stock Plan, and this
Agreement shall not affect the right or power of the Company to make or
authorize any adjustment, reclassification, reorganization or other change in
its capital or business structure, any merger or consolidation of the Company,
any issue of debt or equity securities having preferences or priorities as to
the Common Stock or the rights thereof, the dissolution or liquidation of the
Company, any sale or transfer of all or part of its business or assets, or any
other corporate act or proceeding.
 
6.           Governing Laws.  This Agreement shall be construed, administered
and enforced according to the laws of the State of Maryland; provided, however,
no Shares shall be issued except, in the reasonable judgment of the Committee,
in compliance with exemptions under applicable state securities laws of the
state in which the Officer resides, and/or any other applicable securities laws.
 
7.           Successors.  This Agreement shall be binding upon and inure to the
benefit of the heirs, legal representatives, successors, and permitted assigns
of the parties.
 
8.           Notice.  Except as otherwise specified herein, all notices and
other communications under this Agreement shall be in writing and shall be
deemed to have been given if personally delivered or if sent by registered or
certified United States mail, return receipt requested, postage prepaid,
addressed to the proposed party at the last known address of the party.  Any
party may designate any other address to which notices shall be sent by giving
notice of the address to the other parties in the same manner as provided
herein.
 
9.           Severability.  In the event that any one or more of the provisions
or portion thereof contained in this Agreement shall for any reason be held to
be invalid, illegal, or unenforceable in any respect, the same shall not
invalidate or otherwise affect any other provisions of this Agreement, and this
Agreement shall be construed as if the invalid, illegal or unenforceable
provision or portion thereof had never been contained herein.
 
 
Exhibit 1

--------------------------------------------------------------------------------

 
 
10.           Entire Agreement.  This Agreement is subject to the terms and
conditions of the Plan and the Deferred Stock Plan, and in the event of a
conflict, such plans shall control.  Subject to the terms and conditions of the
Plan and the Deferred Stock Plan, this Agreement expresses the entire
understanding and agreement of the parties with respect to the subject
matter.  This Agreement supersedes any inconsistent terms of the Original
Agreement.
 
11.           Interpretation.  Paragraph headings used herein are for
convenience of reference only and shall not be considered in construing this
Agreement.  This Agreement is intended to comply with Section 409A of the
Internal Revenue Code and the regulations thereunder (“Section
409A.”)  Therefore, all provisions of this Agreement shall be interpreted
consistently with this intent.  To that end, all provisions of this Agreement
shall be subject to the requirements of Section 409A, and to the extent
permissible under Section 409A, any provisions that are inconsistent with such
requirements shall be deemed to be excised and inoperable.
 
12.           Specific Performance.  In the event of any actual or threatened
default in, or breach of, any of the terms, conditions and provisions of this
Agreement, the party or parties who are thereby aggrieved shall have the right
to specific performance and injunction in addition to any and all other rights
and remedies at law or in equity, and all such rights and remedies shall be
cumulative.
 
13.           No Right to Continued Retention.  Neither the establishment of the
Plan, nor the Deferred Stock Plan, nor this Agreement shall be construed as
giving the Officer the right to continued service with the Company or an
Affiliate.
 
14.           Termination of Agreement.  The Company reserves the right to
accelerate the time of payment under this Agreement pursuant to a termination
and liquidation of the award under this Agreement, to the extent permitted under
Treas. Reg. Section 1.409A-3, notwithstanding any election made by the Officer
or any other provisions of this Agreement.
 
 
Exhibit 1

--------------------------------------------------------------------------------

 
 
15.           Definitions.  Capitalized terms used, but not defined, in this
Agreement shall be given the meaning ascribed to them in the Deferred Stock
Plan, or if not defined there in the Plan.  When used in this Agreement, the
following terms have the meanings set forth below:
 
 
(a)
“Change in Control” means:

 
 
(i)
“A change in the ownership of the corporation,”

 
 
(ii)
“A change in the effective control of the corporation,” or

 
 
(iii)
“A change in the ownership of a substantial portion of the assets of the
corporation,”

 
in each case within the meaning of Treas. Reg. Section 1.409A-3; provided,
however, that for purposes of determining a “substantial portion of the assets
of the corporation” “eighty-five percent (85%)” shall be used instead of “forty
percent (40%).”  For purposes of this subsection (a), the “corporation” refers
to the Company.  Notwithstanding the foregoing, in the event of a merger,
consolidation, reorganization, share exchange or other transaction as to which
the holders of the capital stock of the Company before the transaction continue
after the transaction to hold, directly or indirectly, shares of capital stock
of the Company  (or other surviving company) representing more than fifty
percent (50%) of the value or ordinary voting power to elect directors of the
capital stock of the Company (or other surviving company), such transaction
shall not constitute a Change in Control.
 
 
(b)
“Disability” means any condition that would constitute a “disability” under the
Deferred Stock Plan.

 
 
(c)
“Separation from Service” means a “separation from service” within the meaning
of Treas. Reg. Section 1.409A-1.

 
 
(d)
“Unforeseeable Emergency” means an “unforeseeable emergency” within the meaning
of Treas. Reg. Section 1.409A-3.

 
 
Exhibit 1

--------------------------------------------------------------------------------

 
 
RE-DEFERRAL AGREEMENT FOR DEFERRED STOCK
 
PURSUANT TO THE OMEGA HEALTHCARE INVESTORS, INC.
 
________________________ PLAN
 
 
THIS AGREEMENT (this “Agreement”) is made as of _________________, 20____ (the
“Effective Date”), by Omega Healthcare Investors, Inc. (the “Company”) and
____________________________________ (the “Director”).
 
This Agreement includes the Terms and Conditions, which are part of this
Agreement.
 
 
A.
Effect of Agreement:  This Agreement relates to the quarterly grants of Stock to
the Director scheduled to be made for the years 20__ through 20__ (specify
years) and that were previously deferred by the Director pursuant to a Deferred
Stock Agreement dated ____________, 20___ (the “Original Deferral Agreement”).

 
If the Director wishes to revoke or modify this election, he must submit a
written election to do so to the Company’s Chief Financial Officer at least
twelve (12) months before the last permissible date for making an additional
deferral election pursuant to this Agreement (see paragraph F), and unless
revoked or modified by that date, the election shall become irrevocable at that
date.
 
 
B.
“Plan”: (under which the “Shares” (as defined below) will be issued) Omega
Healthcare Investors, Inc.__________________________ Plan.

 
 
-1-

--------------------------------------------------------------------------------

 
 
 
C.
“Deferred Stock Plan”:  Omega Healthcare Investors, Inc. Deferred Stock Plan, to
which this Agreement is also subject.

 
 
D.
“Stock Units”:  This Agreement relates to the quarterly grants of Stock to the
Director as specified in paragraph A above.

 
In lieu of receiving such quarterly Stock grants, the Director was credited on
each quarterly date that the Stock grants would otherwise have been made with a
number of Stock Units that is equal to the number of Shares that would otherwise
have been granted to the Director as of such quarterly date (the “Applicable
Quarterly Grant Date”).  The number of Stock Units was previously and will
continue to be increased by the number of Stock Units attributable to the
Converted Dividend Equivalents if the Director previously elected.  Each Stock
Unit represents the Company’s unsecured obligation to issue one share of Stock
and the related Deferred Dividend Equivalents or Current Dividend Equivalents
(if the Director previously elected).  The shares of Stock represented by the
Stock Units shall be referred to as the “Shares.”
 
 
E.
“Dividend Equivalents”:  Each Stock Unit shall accrue an amount equal to the
dividends per share payable on Stock to shareholders of record on or after the
Applicable Quarterly Grant Date and through the day before the date the Shares
are issued.

 
Please check which form you previously elected for the Divided Equivalents to be
paid pursuant to the Original Deferral Agreement (either paragraph 1, 2 or 3
below).  You cannot now change your election:
 
 
-2-

--------------------------------------------------------------------------------

 
 
 
1.
[ ]
“Converted Dividend Equivalents”:  The Dividend Equivalents will be converted
into a number of Stock Units equal to the amount of the Dividend Equivalents
that are accrued as of the dividend payment date, divided by the closing price
per share of Stock on the dividend payment date.  Such Stock Units shall also
accrue future Dividend Equivalents that shall be converted into Stock Units in
accordance with the preceding formula.  The Stock Units under this paragraph
shall be paid on the date the Shares are payable to the Director; or

 
 
2.
[ ]
“Deferred Dividend Equivalents”:  The Dividend Equivalents shall be paid to the
Director, with interest accrued on a quarterly basis at a rate equal to the
Company’s average borrowing rate for the preceding calendar quarter, as
determined in the sole discretion of the Committee, on the date the Shares are
payable to the Director; or

 
 
3.
[ ]
“Current Dividend Equivalents”:  The Dividend Equivalents shall be paid to the
Director on the same date that the dividends per share are paid to shareholders.

 

 
F.
“Deferral Period”:  The Director is now electing to defer receipt of the Shares
(and Converted Dividend Equivalents or Deferred Dividend Equivalents if
paragraph E.1. or E.2. was elected) until the dates or events set forth below:

 
You must complete either paragraph 1 or 2 below, but you may complete other
paragraphs as well.
 
1.
[ ]
If you complete this paragraph 1, you must complete A or B below:

 
 
-3-

--------------------------------------------------------------------------------

 
 
 
A.
[ ]
in one lump sum in the month of ___________, 20___ (specify month and year); or

 
 
B.
[ ]
in annual ratable installments over __ calendar years (specify number of
calendar years) with the first payment being made in the month of ___________,
20___ (specify month and year) and each subsequent payment being made in the
month of _________ (specify month) of each calendar year thereafter.

 
 
 2.
If you complete this paragraph 2, you must check A or B below, but not both:

 
 
A.
[ ]
upon the Director’s Separation from Service; or

 
 
B.
[ ]
in the month of the __________ (specify month) of the ___________ (specify
number, first, second, etc.) calendar year following the calendar year of the
Director’s Separation from Service.

 
 
 
The balance in paragraph 2A or 2B will be paid (check (i) or (ii) but not both):
 

 
 
(i)
[ ]
in one lump sum; or

 
 
(ii)
[ ]
in annual ratable installments over ___ calendar years (specify number of
calendar years), with each payment after the first payment being made in the
month of ____________ (specify month) of each calendar year.

 

 
3.
 [ ]
the earlier of paragraph 1 or 2 above.

 

 
4.
 [ ]
the later of paragraph 1 or 2 above.

 
 
-4-

--------------------------------------------------------------------------------

 
 
5.
[ ]
If a Change in Control occurs before the date payment is required to be made
pursuant to the elections above, payment shall be made in one lump sum upon the
Change in Control (subject to five (5) year additional deferral period described
below).

 
6.
[ ]
If the Director becomes subject to a Disability before the date payment is
required to be made pursuant to the elections above, payment shall be made in
one lump sum upon the Disability.

 
 The Director’s election made above in paragraph F to change the timing of
payments that the Director previously elected in the Original Deferral Agreement
is subject to the following conditions:
 
 
(iv)
the election shall not take effect until twelve (12) months after the date the
written election is submitted to the Company;

 
 
(v)
in the case of an election related to a payment date or event other than
Disability, the election must defer payment for at least five (5) years from the
date such payment would otherwise have been made (i.e., date of lump sum or
first installment payment) pursuant to the Original Deferral Agreement, and the
election shall be construed and given effect in such manner to require such
minimum additional deferral period; and

 
 
(vi)
in the case of a payment at a specified date, the election must be submitted at
least twelve (12) months before the date payment (i.e., lump sum or first
installment payment) was previously scheduled to be made.

 
 Further, once this Agreement becomes irrevocable, the Director may elect to
change the timing of payment specified above in paragraph F only under the
following conditions:
 
 
-5-

--------------------------------------------------------------------------------

 
 
 
(i)
the election shall not take effect until twelve (12) months after the date the
written election is submitted to the Company;

 
 
(ii)
in the case of an election related to a payment date or event other than
Disability, the election must defer payment for at least five (5) years from the
date payment would otherwise have been made (i.e., date of lump sum or first
installment payment); and

 
 
(iii)
in the case of a payment at a specified date, the election must be submitted at
least twelve (12) months before the date payment (i.e., lump sum or first
installment payment) was previously scheduled to be made.

 
Notwithstanding the foregoing, the Shares (and Converted Dividend Equivalents or
Deferred Dividend Equivalents if paragraph E.1. or E.2. was elected) shall be
payable upon the Director’s death.
 
 
-6-

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, the Company and the Director have executed this Agreement as
of the Effective Date set forth above.

DIRECTOR  OMEGA HEALTHCARE INVESTORS, INC.                          
 
By:
                      [Signature] Title:    

 
 
-7-

--------------------------------------------------------------------------------

 
 
TERMS AND CONDITIONS TO THE
 
RE-DEFERRAL AGREEMENT FOR DEFERRED STOCK
 
PURSUANT TO THE OMEGA HEALTHCARE INVESTORS, INC.
 
_____________________________ PLAN
 
 
1.           Payment for Stock Units. The Company shall deliver a share
certificate representing the number of Shares attributable to the Stock Units
(and the amount of the Deferred Dividend Equivalents, if applicable) to the
Director within sixty (60) days following the date(s) specified in paragraph F.
 
2.           Unforeseeable Emergency. In the event of an Unforeseeable
Emergency, the Director may terminate the Deferral Period but only to the extent
of the number of Shares necessary to meet the emergency (which may include
amounts necessary to pay Federal, state, local, or foreign taxes or penalties
reasonably anticipated to result from the distribution), and only to the extent
that the hardship is not or cannot be relieved through reimbursement or
compensation by insurance or otherwise, or by liquidation of the Director’s
assets to the extent such liquidation would not itself cause severe financial
hardship, or by cessation of future deferrals.
 
3.           Restrictions on Transfer of Stock Units and Shares.  Except for the
transfer by bequest or inheritance, the Director shall not have the right to
make or permit to exist any transfer or hypothecation, whether outright or as
security, with or without consideration, voluntary or involuntary, of all or any
part of any right, title or interest in or to any Stock Units or Shares until
issued.  Any such disposition not made in accordance with this Agreement shall
be deemed null and void.  Any permitted transferee under this Section shall be
bound by the terms of this Agreement.
 
4.           Legend on Stock Certificates.  If certificates evidencing the
Shares are issued, the certificates shall have noted conspicuously any legends
required when applicable securities laws are otherwise determined by the Company
to be appropriate, such as:
 
TRANSFER IS RESTRICTED
 
 
1

--------------------------------------------------------------------------------

 
 
THE SECURITIES EVIDENCED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED, OR HYPOTHECATED UNLESS (1) THERE IS AN EFFECTIVE REGISTRATION UNDER
SUCH ACT COVERING SUCH SECURITIES, (2) THE TRANSFER IS MADE IN COMPLIANCE WITH
RULE 144 PROMULGATED UNDER SUCH ACT, OR (3) THE ISSUER RECEIVES AN OPINION OF
COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE,
TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF SUCH ACT.
 
5.             Change in Capitalization.
 
(a)           The number and kind of Shares shall be proportionately adjusted
for any nonreciprocal transaction between the Company and holders of capital
stock of the Company that causes the per share value of the Shares underlying
the Stock Units to change, such as a stock dividend, stock split, spin-off,
rights offering, or recapitalization through a large, non-recurring cash
dividend (each, an “Equity Restructuring”).
 
(b)           In the event of a merger, consolidation, extraordinary dividend,
sale of substantially all of the Company’s assets or other material change in
the capital structure of the Company, or a tender offer for shares of Common
Stock, or other reorganization of the Company, that in each case is not an
Equity Restructuring, the Committee shall take such action and make such
adjustments with respect to the Shares or the terms of this Agreement as the
Committee, in its sole discretion, determines in good faith is necessary or
appropriate, including, without limitation, adjusting the number and class of
securities subject to the Agreement, or substituting cash, other securities, or
other property to replace the award payable under the Agreement, or terminating
the Agreement in exchange for the cash value (as determined by the Committee) of
the Shares (and the Deferred Dividend Equivalents, if applicable).
 
(c)           Notwithstanding the foregoing or any other provisions of this
Agreement, if a Change in Control of the type described in Section 15(a)(i)
occurs and if the Director has not elected to end the Deferral Period as of the
date of the Change in Control, the Company shall pay the Deferred Dividend
Equivalents, if applicable, to the Director within ninety (90) days following
the date of the Change in Control subject to the requirements of paragraph F and
Treas. Reg. Section 1.409A-2(b), and shall pay the same amount of consideration
per Share attributable to the Stock Units as is paid to each holder of a share
of Common Stock in connection with the Change in Control and on the same
schedule and under the same terms and conditions, provided that payment must be
completed within five (5) years after the Change in Control.
 
 
2

--------------------------------------------------------------------------------

 
 
(d)           All determinations and adjustments made by the Committee pursuant
to this Section will be final and binding on the Director. Any action taken by
the Committee need not treat all recipients of awards under the Plan or the
Deferred Stock Plan equally.
 
(e)           The existence of the Plan, the Deferred Stock Plan, and this
Agreement shall not affect the right or power of the Company to make or
authorize any adjustment, reclassification, reorganization or other change in
its capital or business structure, any merger or consolidation of the Company,
any issue of debt or equity securities having preferences or priorities as to
the Common Stock or the rights thereof, the dissolution or liquidation of the
Company, any sale or transfer of all or part of its business or assets, or any
other corporate act or proceeding.
 
6.           Governing Laws.  This Agreement shall be construed, administered
and enforced according to the laws of the State of Maryland; provided, however,
no Shares shall be issued except, in the reasonable judgment of the Committee,
in compliance with exemptions under applicable state securities laws of the
state in which Director resides, and/or any other applicable securities laws.
 
7.           Successors.  This Agreement shall be binding upon and inure to the
benefit of the heirs, legal representatives, successors, and permitted assigns
of the parties.
 
8.           Notice.  Except as otherwise specified herein, all notices and
other communications under this Agreement shall be in writing and shall be
deemed to have been given if personally delivered or if sent by registered or
certified United States mail, return receipt requested, postage prepaid,
addressed to the proposed party at the last known address of the party.  Any
party may designate any other address to which notices shall be sent by giving
notice of the address to the other parties in the same manner as provided
herein.
 
9.           Severability.  In the event that any one or more of the provisions
or portion thereof contained in this Agreement shall for any reason be held to
be invalid, illegal, or unenforceable in any respect, the same shall not
invalidate or otherwise affect any other provisions of this Agreement, and this
Agreement shall be construed as if the invalid, illegal or unenforceable
provision or portion thereof had never been contained herein.
 
 
3

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10.           Entire Agreement.  This Agreement is subject to the terms and
conditions of the Plan and the Deferred Stock Plan, and in the event of a
conflict, such plans shall control.  Subject to the terms and conditions of the
Plan and the Deferred Stock Plan, this Agreement expresses the entire
understanding and agreement of the parties with respect to the subject matter.
 
11.           Interpretation.  Paragraph headings used herein are for
convenience of reference only and shall not be considered in construing this
Agreement.  This Agreement is intended to comply with Section 409A of the
Internal Revenue Code and the regulations thereunder (“Section
409A.”)  Therefore, all provisions of this Agreement shall be interpreted
consistently with this intent.  To that end, all provisions of this Agreement
shall be subject to the requirements of Section 409A, and to the extent
permissible under Section 409A, any provisions that are inconsistent with such
requirements shall be deemed to be excised and inoperable.
 
12.           Specific Performance.  In the event of any actual or threatened
default in, or breach of, any of the terms, conditions and provisions of this
Agreement, the party or parties who are thereby aggrieved shall have the right
to specific performance and injunction in addition to any and all other rights
and remedies at law or in equity, and all such rights and remedies shall be
cumulative.
 
13.           No Right to Continued Retention.  Neither the establishment of the
Plan, nor the Deferred Stock Plan, nor this Agreement, shall be construed as
giving Director the right to continued service with the Company or an Affiliate.
 
14.           Termination of Agreement.  The Company reserves the right to
accelerate the time of payment under this Agreement pursuant to a termination
and liquidation of the award under this Agreement, to the extent permitted under
Treas. Reg. Section 1.409A-3, notwithstanding any election made by the Director
or any other provisions of this Agreement.
 
 
4

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15.           Definitions.  Capitalized terms used, but not defined, in this
Agreement shall be given the meaning ascribed to them in the Deferred Stock
Plan, or if not defined there in the Plan.  When used in this Agreement, the
following terms have the meanings set forth below:
 
 
(e)
“Change in Control” means:

 
 
(iv)
“A change in the ownership of the corporation,”

 
 
(v)
“A change in the effective control of the corporation,” or

 
 
(vi)
“A change in the ownership of a substantial portion of the assets of the
corporation,”

 
in each case within the meaning of Treas. Reg. Section 1.409A-3; provided,
however, that for purposes of determining a “substantial portion of the assets
of the corporation” “eighty-five percent (85%)” shall be used instead of “forty
percent (40%).”  For purposes of this subsection (a), the “corporation” refers
to the Company.  Notwithstanding the foregoing, in the event of a merger,
consolidation, reorganization, share exchange or other transaction as to which
the holders of the capital stock of the Company before the transaction continue
after the transaction to hold, directly or indirectly, shares of capital stock
of the Company  (or other surviving company) representing more than fifty
percent (50%) of the value or ordinary voting power to elect directors of the
capital stock of the Company (or other surviving company), such transaction
shall not constitute a Change in Control.
 
 
(f)
“Disability” means any condition that would constitute a “disability” under the
Deferred Stock Plan.

 
 
(g)
“Separation from Service” means a “separation from service” within the meaning
of Treas. Reg. Section 1.409A-1.

 
 
(h)
“Unforeseeable Emergency” means an “unforeseeable emergency” within the meaning
of Treas. Reg. Section 1.409A-3.

 
 
5

--------------------------------------------------------------------------------

 
 
FOR DIRECTOR ANNUAL
 
GRANTS SUBJECT TO VESTING
 
RE-DEFERRAL AGREEMENT FOR DEFERRED RESTRICTED STOCK
 
PURSUANT TO THE OMEGA HEALTHCARE INVESTORS, INC.
 
____________________________ PLAN
 
 
 THIS AGREEMENT (this “Agreement”) is made as of _________________, 20____ (the
“Effective Date”), by Omega Healthcare Investors, Inc. (the “Company”) and
____________________________________ (the “Director”).
 
This Agreement includes the Terms and Conditions, which are part of this
Agreement.
 
 
A.
Effect of Agreement:  This Agreement relates to the annual grants of Stock to
the Director scheduled to be made for the years 20____ through 20__ (specify
years) and that were previously deferred by the Director pursuant to a Deferred
Restricted Stock Agreement dated _________________, 20____ (the “Original
Deferral Agreement”).

 
 
 
If the Director wishes to revoke or modify this election, he must submit a
written election to do so to the Company’s Chief Financial Officer at least
twelve (12) months before the last permissible date for making an additional
deferral election pursuant to this Agreement (see paragraph F) , and unless
revoked or modified by that date, the election shall become irrevocable at that
date.

 
 
B.
“Plan”: (under which the “Shares” (as defined below) will be issued) Omega
Healthcare Investors, Inc.________________ Plan.

 
 
C.
“Deferred Stock Plan”:  Omega Healthcare Investors, Inc. Deferred Stock Plan, to
which this Agreement is also subject.

 
 
1

--------------------------------------------------------------------------------

 
 
 
D.
“Stock Units”:  This Agreement relates to the annual grants of Stock to the
Director as specified in paragraph A above.

 
 
 
In lieu of receiving such annual Stock grants, the Director was credited on each
annual date that the annual Stock grant would otherwise have been made with a
number of Stock Units that is equal to the number of Shares that would otherwise
have been granted to the Director as of such annual date (the “Applicable Annual
Grant Date”).  The number of Stock Units was previously and will continue to be
increased by the number of Stock Units attributable to the Converted Dividend
Equivalents if the Director previously elected.  Each Stock Unit represents the
Company’s unsecured obligation to issue one share of Stock and the related
Deferred Dividend Equivalents or Current Dividend Equivalents (if the Director
previously elected).  The shares of Stock represented by the Stock Units shall
be referred to as the “Shares.”

 
 
E.
“Dividend Equivalents”:  Each Stock Unit shall accrue an amount equal to the
dividends per share payable on Common Stock to shareholders of record on or
after the Applicable Annual Grant Date and through the day before the date the
Shares are issued (or until the Stock Units are forfeited, if earlier).

 
 
 
Please check which form you previously elected for the Dividend Equivalents to
be paid pursuant to the Original Deferral Agreement (either paragraph 1, 2 or 3
below).  You cannot now change your election:

 
 
1.
[ ]
“Converted Dividend Equivalents”:  The Dividend Equivalents will be converted
into a number of Vested Stock Units equal to the amount of the Dividend
Equivalents that are accrued as of the dividend payment date, divided by the
closing price per share of Stock on the dividend payment date.  Such Vested
Stock Units shall also accrue future Dividend Equivalents that shall be
converted into Vested Stock Units in accordance with the preceding formula.  The
Stock Units under this paragraph shall be paid on the date the Shares are
payable to the Director; or

 
 
(2)

--------------------------------------------------------------------------------

 
 
 
2.
[ ]
“Deferred Dividend Equivalents”:  The Dividend Equivalents shall be paid to the
Director, with interest accrued on a quarterly basis at a rate equal to the
Company’s average borrowing rate for the preceding calendar quarter, as
determined in the sole discretion of the Committee, on the date the Shares are
payable to the Director; or

 
 
3.
[ ]
“Current Dividend Equivalents”:  The Dividend Equivalents shall be paid to the
Director on the same date that the dividends per share are paid to shareholders.

 
 
F.
“Deferral Period”:  The Director is now electing to defer receipt of the Vested
Shares (and Converted Dividend Equivalents or Deferred Dividend Equivalents if
paragraph E.1. or E.2. was elected) until the dates or events set forth below:

 
You must complete either paragraph 1 or 2 below, but you may complete other
paragraphs as well.
 
 
1.
If you complete this paragraph 1, you must complete A or B below:

 
 
A.
[ ]
in one lump sum in the month of ___________, 20___ (specify month and year); or

 
 
B.
[ ]
in annual ratable installments over __ calendar years (specify number of
calendar years) with the first payment being made in the month of ___________,
20___ (specify month and year) and each subsequent payment being made in the
month of _________ (specify month) of each calendar year thereafter.

 
 
(3)

--------------------------------------------------------------------------------

 
 
 
2.
If you complete this paragraph 2, you must check A or B below, but not both:

 
A.           [ ]           upon the Director’s Separation from Service; or
 
 
B.
[ ]
in the month of _____________ (specify month) of the __________ (specify number,
first, second, etc.) calendar year following the calendar year of the Director’s
Separation from Service.

 
The balance in paragraph 2A or 2B will be paid (check (i) or (ii) but not both):
 
 
(i)
[ ]
in one lump sum; or

 
 
(ii)
[ ]
in annual ratable installments over __ calendar years (specify number of
calendar years), with each payment after the first payment being made in the
month of ____________ (specify month) of each calendar year.

 
 
3.
[ ]
the earlier of paragraph 1 or 2 above

 
 
4.
[ ]
the later of paragraph 1 or 2 above.

 
 
5.
[ ]
If a Change in Control occurs before the date payment is required to be made
pursuant to the elections above, payment shall be made in one lump sum upon the
Change in Control (subject to five (5) year additional deferral period described
below).

 
 
6.
[ ]
If the Director becomes subject to a Disability before the date payment is
required to be made pursuant to the elections above, payment shall be made in
one lump sum upon the Disability.

 
 
(4)

--------------------------------------------------------------------------------

 
 
 The Director’s election made above in paragraph F to change the timing of
payment that the Director previously elected in the Original Deferral Agreement
is subject to the following conditions:
 
 
(iv)
the election shall not take effect until twelve (12) months after the date the
written election is submitted to the Company;

 
 
(v)
in the case of an election related to a payment date or event other than
Disability, the election must defer payment for at least five (5) years from the
date such payment would otherwise have been made (i.e., date of lump sum or
first installment payment) pursuant to the Original Deferral Agreement, and the
election shall be construed and given effect in such manner to require such
minimum additional deferral period; and

 
 
(vi)
in the case of a payment at a specified date, the election must be submitted at
least twelve (12) months before the date payment (i.e., lump sum or first
installment payment) was previously scheduled to be made.

 
 Further, once this Agreement becomes irrevocable, the Director may elect to
change the timing of payment specified above in paragraph F only under the
following conditions:
 
 
(vii)
the election shall not take effect until twelve (12) months after the date the
written election is submitted to the Company;

 
 
(viii)
in the case of an election related to a payment date or event other than
Disability, the election must defer payment for at least five (5) years from the
date payment would otherwise have been made (i.e., date of lump sum or first
installment payment); and

 
 
(ix)
in the case of a payment at a specified date, the election must be submitted at
least twelve (12) months before the date payment (i.e., lump sum or first
installment payment) was previously scheduled to be made.

 
 
(5)

--------------------------------------------------------------------------------

 
 
 Notwithstanding the foregoing, the Vested Shares (and Converted Dividend
Equivalents or Deferred Dividend Equivalents if paragraph E.1. or E.2. was
elected) shall be payable upon the Director’s death.
 
 
G.
“Vesting Schedule”: Except as provided in paragraph E.1., the Stock Units and
Shares shall vest according to the Vesting Schedule attached hereto as Exhibit 1
(the “Vesting Schedule”).  The Stock Units and Shares which have become vested
are herein referred to as the “Vested Stock Units” and “Vested Shares,”
respectively.

 
IN WITNESS WHEREOF, the Company and the Director have executed this Agreement as
of the Effective Date set forth above.
 
                                                              

  DIRECTOR     OMEGA HEALTHCARE INVESTORS, INC.                                
            By:      

 

            [Signature]   Title:    

 
 
(6)

--------------------------------------------------------------------------------

 
 
TERMS AND CONDITIONS TO THE
 
RE-DEFERRAL AGREEMENT FOR DEFERRED RESTRICTED STOCK
 
PURSUANT TO THE OMEGA HEALTHCARE INVESTORS, INC.
 
_____________________________________ PLAN
 
 
1.           Payment for Vested Stock Units. The Company shall deliver a share
certificate representing the number of Shares attributable to the Vested Stock
Units (and the amount of the Deferred Dividend Equivalents, if applicable) to
the Director within sixty (60) days following the date(s) specified in paragraph
F.
 
2.           Unforeseeable Emergency. In the event of an Unforeseeable
Emergency, the Director may terminate the Deferral Period but only to the extent
of the number of Vested Shares (and Deferred Dividend Equivalents, if
applicable) necessary to meet the emergency (which may include amounts necessary
to pay Federal, state, local, or foreign taxes or penalties reasonably
anticipated to result from the distribution), and only to the extent that the
hardship is not or cannot be relieved through reimbursement or compensation by
insurance or otherwise, or by liquidation of the Director’s assets to the extent
such liquidation would not itself cause severe financial hardship, or by
cessation of future deferrals.
 
3.           Restrictions on Transfer of Stock Units and Shares.  Except for the
transfer by bequest or inheritance, the Director shall not have the right to
make or permit to exist any transfer or hypothecation, whether outright or as
security, with or without consideration, voluntary or involuntary, of all or any
part of any right, title or interest in or to any Stock Units or Shares until
issued.  Any such disposition not made in accordance with this Agreement shall
be deemed null and void.  Any permitted transferee under this Section shall be
bound by the terms of this Agreement.
 
4.           Legend on Stock Certificates.  Certificates evidencing the Shares
shall have noted conspicuously on the certificates any legends required when
applicable securities laws are otherwise determined by the Company to be
appropriate, such as:
 
TRANSFER IS RESTRICTED
 
 
1

--------------------------------------------------------------------------------

 
 
THE SECURITIES EVIDENCED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED, OR HYPOTHECATED UNLESS (1) THERE IS AN EFFECTIVE REGISTRATION UNDER
SUCH ACT COVERING SUCH SECURITIES, (2) THE TRANSFER IS MADE IN COMPLIANCE WITH
RULE 144 PROMULGATED UNDER SUCH ACT, OR (3) THE ISSUER RECEIVES AN OPINION OF
COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE,
TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF SUCH ACT.
 
5.             Change in Capitalization.
 
(a)           The number and kind of Shares shall be proportionately adjusted
for any nonreciprocal transaction between the Company and holders of capital
stock of the Company that causes the per share value of the Shares underlying
the Restricted Units to change, such as a stock dividend, stock split, spin-off,
rights offering, or recapitalization through a large, non-recurring cash
dividend (each, an “Equity Restructuring”).
 
(b)           In the event of a merger, consolidation, extraordinary dividend,
sale of substantially all of the Company’s assets or other material change in
the capital structure of the Company, or a tender offer for shares of Common
Stock, or other reorganization of the Company, that in each case is not an
Equity Restructuring, the Committee shall take such action and make such
adjustments with respect to the Shares or the terms of this Agreement as the
Committee, in its sole discretion, determines in good faith is necessary or
appropriate, including, without limitation, adjusting the number and class of
securities subject to the Agreement, or substituting cash, other securities, or
other property to replace the award payable under the Agreement, or terminating
the Agreement in exchange for the cash value (as determined by the Committee) of
the Shares (and the Deferred Dividend Equivalents, if applicable).
 
(c)           Notwithstanding the foregoing or any other provisions of this
Agreement, if a Change in Control of the type described in Section 15(a)(i)
occurs and if the Director has not elected to end the Deferral Period as of the
date of the Change in Control, the Company shall pay the Deferred Dividend
Equivalents, if applicable, to the Director within ninety (90) days following
the date of the Change in Control subject to the requirements of paragraph F and
Treas. Reg. Section 1.409A-2(b), and shall pay the same amount of consideration
per Share attributable to the Stock Units as is paid to each holder of a share
of Common Stock in connection with the Change in Control and on the same
schedule and under the same terms and conditions, provided that payment must be
completed within five (5) years after the Change in Control.
 
 
2

--------------------------------------------------------------------------------

 
 
(d)           All determinations and adjustments made by the Committee pursuant
to this Section will be final and binding on the Director. Any action taken by
the Committee need not treat all recipients of awards under the Plan or the
Deferred Stock Plan equally.
 
(e)           The existence of the Plan, the Deferred Stock Plan, and this
Agreement shall not affect the right or power of the Company to make or
authorize any adjustment, reclassification, reorganization or other change in
its capital or business structure, any merger or consolidation of the Company,
any issue of debt or equity securities having preferences or priorities as to
the Common Stock or the rights thereof, the dissolution or liquidation of the
Company, any sale or transfer of all or part of its business or assets, or any
other corporate act or proceeding.
 
6.            Governing Laws.  This Agreement shall be construed, administered
and enforced according to the laws of the State of Maryland; provided, however,
no Shares shall be issued except, in the reasonable judgment of the Committee,
in compliance with exemptions under applicable state securities laws of the
state in which Director resides, and/or any other applicable securities laws.
 
7.             Successors.  This Agreement shall be binding upon and inure to
the benefit of the heirs, legal representatives, successors, and permitted
assigns of the parties.
 
8.            Notice.  Except as otherwise specified herein, all notices and
other communications under this Agreement shall be in writing and shall be
deemed to have been given if personally delivered or if sent by registered or
certified United States mail, return receipt requested, postage prepaid,
addressed to the proposed party at the last known address of the party.  Any
party may designate any other address to which notices shall be sent by giving
notice of the address to the other parties in the same manner as provided
herein.
 
9.            Severability.  In the event that any one or more of the provisions
or portion thereof contained in this Agreement shall for any reason be held to
be invalid, illegal, or unenforceable in any respect, the same shall not
invalidate or otherwise affect any other provisions of this Agreement, and this
Agreement shall be construed as if the invalid, illegal or unenforceable
provision or portion thereof had never been contained herein.
 
 
3

--------------------------------------------------------------------------------

 
 
10.           Entire Agreement.  This Agreement is subject to the terms and
conditions of the Plan and the Deferred Stock Plan, and in the event of a
conflict, such plans shall control.  Subject to the terms and conditions of the
Plan and the Deferred Stock Plan, this Agreement expresses the entire
understanding and agreement of the parties with respect to the subject matter.
 
11.           Interpretation.  Paragraph headings used herein are for
convenience of reference only and shall not be considered in construing this
Agreement.  This Agreement is intended to comply with Section 409A of the
Internal Revenue Code and the regulations thereunder (“Section
409A.”)  Therefore, all provisions of this Agreement shall be interpreted
consistently with this intent.  To that end, all provisions of this Agreement
shall be subject to the requirements of Section 409A, and to the extent
permissible under Section 409A, any provisions that are inconsistent with such
requirements shall be deemed to be excised and inoperable.
 
12.           Specific Performance.  In the event of any actual or threatened
default in, or breach of, any of the terms, conditions and provisions of this
Agreement, the party or parties who are thereby aggrieved shall have the right
to specific performance and injunction in addition to any and all other rights
and remedies at law or in equity, and all such rights and remedies shall be
cumulative.
 
13.           No Right to Continued Retention.  Neither the establishment of the
Plan, nor the Deferred Stock Plan, nor this Agreement shall be construed as
giving Director the right to continued service with the Company or an Affiliate.
 
14.           Termination of Agreement.  The Company reserves the right to
accelerate the time of payment under this Agreement pursuant to a termination
and liquidation of the award under this Agreement, to the extent permitted under
Treas. Reg. Section 1.409A-3, notwithstanding any election made by the Director
or any other provisions of this Agreement.
 
 
4

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15.           Definitions.  Capitalized terms used, but not defined, in this
Agreement shall be given the meaning ascribed to them in the Deferred Stock
Plan, or if not defined there in the Plan.  When used in this Agreement, the
following terms have the meanings set forth below:
 
 
 
(i)
“Change in Control” means:

 
 
(vii)
“A change in the ownership of the corporation,”

 
 
(viii)
“A change in the effective control of the corporation,” or

 
 
(ix)
“A change in the ownership of a substantial portion of the assets of the
corporation,”

 
in each case within the meaning of Treas. Reg. Section 1.409A-3; provided,
however, that for purposes of determining a “substantial portion of the assets
of the corporation” “eighty-five percent (85%)” shall be used instead of “forty
percent (40%).”  For purposes of this subsection (a), the “corporation” refers
to the Company.  Notwithstanding the foregoing, in the event of a merger,
consolidation, reorganization, share exchange or other transaction as to which
the holders of the capital stock of the Company before the transaction continue
after the transaction to hold, directly or indirectly, shares of capital stock
of the Company  (or other surviving company) representing more than fifty
percent (50%) of the value or ordinary voting power to elect directors of the
capital stock of the Company (or other surviving company), such transaction
shall not constitute a Change in Control.
 
 
(j)
“Disability” means any condition that would constitute a “disability” under  the
Deferred Stock Plan.

 
 
(k)
“Separation from Service” means a “separation from service” within the meaning
of Treas. Reg. Section 1.409A-1.

 
 
(l)
“Unforeseeable Emergency” means an “unforeseeable emergency” within the meaning
of Treas. Reg. Section 1.409A-3.

 
 
5

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Exhibit 1 to Deferred Restricted Stock Agreement
Vesting Schedule
 
The Stock Units and the Shares shall become vested as follows:
 

 
 Percentage
 
Vesting Date
             
33-1/3%
 
First anniversary of
the Grant Date
             
66-2/3%
 
Second anniversary
of the Grant Date
             
100%
 
Third anniversary
of the Grant Date
 

 
For purposes of the above schedule, Stock Units and Shares shall become vested
as indicated in the above schedule on each Vesting Date if the Director remains
at all times a director, employee, or consultant of the Company or an Affiliate
from the Grant Date to such Vesting Date.  Stock Units and Shares which are not
vested shall become fully vested (1) at the date the Director mandatorily
retires as a director of the Company, (2) at the date that the Director ceases
to be a director, employee, or consultant of the Company due to death or
Disability, or (3) upon a Change in Control that occurs while the Director
remains a director, employee, or consultant of the Company or an Affiliate.  The
Director will be deemed to have mandatorily retired as a director of the Company
only if (i) the Director reaches the mandatory retirement date under the
Company’s mandatory retirement policy for directors, unless the Company’s Board
of Directors waives the application of the mandatory retirement policy to the
Director, and (ii) the Director ceases to be a director of the Company on such
mandatory retirement date.  Notwithstanding the foregoing, Stock Units and
Shares which are not vested at the time that the Director ceases to be a
director, employee, or consultant of the Company or an Affiliate for any reason
other than mandatory retirement as a director, death or Disability shall be
forfeited to the Company.
 
 
Exhibit 1

--------------------------------------------------------------------------------

 
 
DEFERRED STOCK AGREEMENT
 
PURSUANT TO THE OMEGA HEALTHCARE INVESTORS, INC.
 
___________________________ PLAN
 
 
 
 
THIS AGREEMENT (this “Agreement”) is made as of _________________, 20____ (the
“Effective Date”), by Omega Healthcare Investors, Inc. (the “Company”) and
____________________________________ (the “Director”).

 
This Agreement includes the Terms and Conditions, which are part of this
Agreement.
 
 
A.
Effect of Agreement:  This Agreement relates to the quarterly grants of Stock to
the Director that are scheduled to be made after the Effective Date (including
each future year) as of the quarterly dates set forth in paragraph D
below.  Therefore, this Agreement shall constitute a standing election to defer
such future quarterly Stock grants and shall remain in place until revoked or
modified by the Director.

 
 
 
If the Director is making a deferral election within thirty (30) days after the
date he first becomes eligible under the Deferred Stock Plan, he may revoke or
modify this election for the current year, only if he submits a written election
to do so to the Company’s Chief Financial Officer within that same thirty (30)
day period and before the date the first quarterly Stock grant is deferred under
this Agreement.

 
 
-1-

--------------------------------------------------------------------------------

 
 
 
 
If the Director wishes to revoke or modify this election as to quarterly Stock
grants to be made in a future year, he must submit a written election to do so
to the Company’s Chief Financial Officer by December 31 of the preceding
year.  (So, for example, if the Director elects in January 20__ to defer
quarterly Stock grants, if he wishes to elect not to defer quarterly Stock
grants in 20__, he must submit a new election by December 31, 20__.)  The only
exception to the foregoing rules is that if the Director becomes subject to an
Unforeseeable Emergency, he may elect to immediately revoke his election to
defer future quarterly Stock grants for the current year.

 
 
B.
“Plan”: (under which the “Shares” (as defined below) will be issued) Omega
Healthcare Investors, Inc. ____________________ Plan.

 
 
C.
“Deferred Stock Plan”:  Omega Healthcare Investors, Inc. Deferred Stock Plan, to
which this Agreement is also subject.

 
 
D.
“Stock Units”:  This Agreement relates to the quarterly grants of Stock to the
Director that are scheduled to be made after the Effective Date (including each
future year) as of the quarterly dates set forth below.

 
 
The Director should check all of the following quarterly Stock grants which the
Director is electing to defer:

 
 
-2-

--------------------------------------------------------------------------------

 
 
[ ]            February 15;
 
[ ]    May 15;
 
[ ]    August 15;
 
[ ]    November 15.
 
 
 
In lieu of receiving such quarterly Stock grants, the Director will be credited
on each quarterly date selected above with a number of Stock Units that is equal
to the number of Shares that would otherwise have been granted to the Director
as of such quarterly date (the “Applicable Quarterly Grant Date”).  The number
of Stock Units will be increased by the number of Stock Units attributable to
the Converted Dividend Equivalents if the Director elects paragraph E.1.
below.  Each Stock Unit represents the Company’s unsecured obligation to issue
one share of Stock and the related Deferred Dividend Equivalents or Current
Dividend Equivalents (if selected in paragraph E) in accordance with this
Agreement.  The shares of Stock represented by the Stock Units shall be referred
to as the “Shares.”

 
 
E.
“Dividend Equivalents”:  Each Stock Unit shall accrue an amount equal to the
dividends per share payable on Stock to shareholders of record on or after the
Applicable Quarterly Grant Date and through the day before the date the Shares
are issued.

 
 
-3-

--------------------------------------------------------------------------------

 
 
 
 
You must check either paragraph 1, 2 or 3 below:
 

 
 
1.
[ ]
“Converted Dividend Equivalents”:  The Dividend Equivalents will be converted
into a number of Stock Units equal to the amount of the Dividend Equivalents
that are accrued as of the dividend payment date, divided by the closing price
per share of Stock on the dividend payment date.  Such Stock Units shall also
accrue future Dividend Equivalents that shall be converted into Stock Units in
accordance with the preceding formula.  The Stock Units under this paragraph
shall be paid on the date the Shares are payable to the Director; or

 
 
2.
[ ]
“Deferred Dividend Equivalents”:  The Dividend Equivalents shall be paid to the
Director, with interest accrued on a quarterly basis at a rate equal to the
Company’s average borrowing rate for the preceding calendar quarter, as
determined in the sole discretion of the Committee, on the date the Shares are
payable to the Director; or

 
 
3.
[ ]
“Current Dividend Equivalents”:  The Dividend Equivalents shall be paid to the
Director on the same date that the dividends per share are paid to shareholders.

 
 
F.
“Deferral Period”:  The Director has elected to defer receipt of the Shares (and
Converted Dividend Equivalents or Deferred Dividend Equivalents if paragraph
E.1. or E.2. was elected) until the dates or events set forth below:

 
 
-4-

--------------------------------------------------------------------------------

 
 
 
 
 You must complete either paragraph 1 or 2 below, but you may complete other
paragraphs as well.
 

 

 
1.
If you complete this paragraph 1, you must complete A or B below:

 

 
A.
[ ] in one lump sum in the month of ___________, 20___ (specify month and year);
or

 

 
B.
in annual ratable installments over __ calendar years (specify number of
calendar years) with the first payment being made in the month of ___________,
20___ (specify month and year) and each subsequent payment being made in the
month of _________ (specify month) of each calendar year thereafter.

 

 
2.
If you complete this paragraph 2, you must check A or B below, but not both:

 
 
A.
[ ]
upon the Director’s Separation from Service; or

 
 
B.
[ ]
in the month of _____________ (specify month) of the __________ (specify number,
first, second, etc.) calendar year following the calendar year of the Director's
Separation from Service.

 

 
 
The balance in paragraph 2A or 2B will be paid (check (i) or (ii) but not both):

 
 
(i)
[ ]
in one lump sum; or

 
 
(ii)
[ ]
in annual ratable installments over __ calendar years (specify number of
calendar years), with each payment after the first payment being made in the
month of ____________ (specify month) of each calendar year.

 
 
3.
[ ]
the earlier of paragraph 1 or 2 above.

 
 
-5-

--------------------------------------------------------------------------------

 
 
 
4.
[ ]
the later of paragraph 1 or 2 above.

 
 
5.
[ ]
If a Change in Control occurs before the date payment is required to be made
pursuant to the elections above, payment shall be made in one lump sum upon the
Change in Control.

 
 
6.
[ ]
If the Director becomes subject to a Disability before the date payment is
required to be made pursuant to the elections above, payment shall be made in
one lump sum upon the Disability.

 
 
Notwithstanding the foregoing, the Shares (and Converted Dividend Equivalents or
Deferred Dividend Equivalents if paragraph E.1. or E.2. was elected) shall be
payable upon the Director’s death.

 
The Director may elect to change the timing of payment in paragraph F only under
the following conditions:
 
     
(x)
the election shall not take effect until twelve (12) months after the date the
written election is submitted to the Company;

 
 
(xi)
in the case of an election related to a payment date or event other than
Disability, the election must defer payment for at least five (5) years from the
date payment would otherwise have been made (i.e., date of lump sum or first
installment payment); and

 
 
(xii)
in the case of a payment at a specified date, the election must be submitted at
least twelve (12) months before the date payment (i.e., lump sum or first
installment payment) was previously scheduled to be made.

 
 
-6-

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, the Company and the Director have executed this Agreement as
of the Effective Date set forth above.
 
DIRECTOR
OMEGA HEALTHCARE INVESTORS, INC.                            
By:
                        [Signature] Title:        

 
 
-7-

--------------------------------------------------------------------------------

 
 
TERMS AND CONDITIONS TO THE
 
DEFERRED STOCK AGREEMENT
 
PURSUANT TO THE OMEGA HEALTHCARE INVESTORS, INC.
 
___________________________ PLAN
 
 
1.           Payment for Stock Units. The Company shall deliver a share
certificate representing the number of Shares attributable to the Stock Units
(and the amount of the Deferred Dividend Equivalents, if applicable) to the
Director within sixty (60) days following the date(s) specified in paragraph F.
 
2.           Unforeseeable Emergency. In the event of an Unforeseeable
Emergency, the Director may terminate the Deferral Period but only to the extent
of the number of Shares necessary to meet the emergency (which may include
amounts necessary to pay Federal, state, local, or foreign taxes or penalties
reasonably anticipated to result from the distribution), and only to the extent
that the hardship is not or cannot be relieved through reimbursement or
compensation by insurance or otherwise, or by liquidation of the Director’s
assets to the extent such liquidation would not itself cause severe financial
hardship, or by cessation of future deferrals.
 
3.           Restrictions on Transfer of Stock Units and Shares.  Except for the
transfer by bequest or inheritance, the Director shall not have the right to
make or permit to exist any transfer or hypothecation, whether outright or as
security, with or without consideration, voluntary or involuntary, of all or any
part of any right, title or interest in or to any Stock Units or Shares until
issued.  Any such disposition not made in accordance with this Agreement shall
be deemed null and void.  Any permitted transferee under this Section shall be
bound by the terms of this Agreement.
 
4.           Legend on Stock Certificates.  If certificates evidencing the
Shares are issued, the certificates shall have noted conspicuously any legends
required when applicable securities laws are otherwise determined by the Company
to be appropriate, such as:
 
TRANSFER IS RESTRICTED
 
 
1

--------------------------------------------------------------------------------

 
 
THE SECURITIES EVIDENCED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED, OR HYPOTHECATED UNLESS (1) THERE IS AN EFFECTIVE REGISTRATION UNDER
SUCH ACT COVERING SUCH SECURITIES, (2) THE TRANSFER IS MADE IN COMPLIANCE WITH
RULE 144 PROMULGATED UNDER SUCH ACT, OR (3) THE ISSUER RECEIVES AN OPINION OF
COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE,
TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF SUCH ACT.
 
5.             Change in Capitalization.
 
(a)           The number and kind of Shares shall be proportionately adjusted
for any nonreciprocal transaction between the Company and holders of capital
stock of the Company that causes the per share value of the Shares underlying
the Stock Units to change, such as a stock dividend, stock split, spin-off,
rights offering, or recapitalization through a large, non-recurring cash
dividend (each, an “Equity Restructuring”).
 
(b)           In the event of a merger, consolidation, extraordinary dividend,
sale of substantially all of the Company’s assets or other material change in
the capital structure of the Company, or a tender offer for shares of Common
Stock, or other reorganization of the Company, that in each case is not an
Equity Restructuring, the Committee shall take such action and make such
adjustments with respect to the Shares or the terms of this Agreement as the
Committee, in its sole discretion, determines in good faith is necessary or
appropriate, including, without limitation, adjusting the number and class of
securities subject to the Agreement, or substituting cash, other securities, or
other property to replace the award payable under the Agreement, or terminating
the Agreement in exchange for the cash value (as determined by the Committee) of
the Shares (and the Deferred Dividend Equivalents, if applicable).
 
(c)           Notwithstanding the foregoing or any other provisions of this
Agreement, if a Change in Control of the type described in Section 15(a)(i)
occurs and if the Director has not elected to end the Deferral Period as of the
date of the Change in Control, the Company shall pay the Deferred Dividend
Equivalents, if applicable, to the Director within ninety (90) days following
the date of the Change in Control subject to the requirements of paragraph F and
Treas. Reg. Section 1.409A-2(b), and shall pay the same amount of consideration
per Share attributable to the Stock Units as is paid to each holder of a share
of Common Stock in connection with the Change in Control and on the same
schedule and under the same terms and conditions, provided that payment must be
completed within five (5) years after the Change in Control.
 
 
2

--------------------------------------------------------------------------------

 
 
(d)           All determinations and adjustments made by the Committee pursuant
to this Section will be final and binding on the Director. Any action taken by
the Committee need not treat all recipients of awards under the Plan or the
Deferred Stock Plan equally.
 
(e)           The existence of the Plan, the Deferred Stock Plan, and this
Agreement shall not affect the right or power of the Company to make or
authorize any adjustment, reclassification, reorganization or other change in
its capital or business structure, any merger or consolidation of the Company,
any issue of debt or equity securities having preferences or priorities as to
the Common Stock or the rights thereof, the dissolution or liquidation of the
Company, any sale or transfer of all or part of its business or assets, or any
other corporate act or proceeding.
 
6.           Governing Laws.  This Agreement shall be construed, administered
and enforced according to the laws of the State of Maryland; provided, however,
no Shares shall be issued except, in the reasonable judgment of the Committee,
in compliance with exemptions under applicable state securities laws of the
state in which Director resides, and/or any other applicable securities laws.
 
7.           Successors.  This Agreement shall be binding upon and inure to the
benefit of the heirs, legal representatives, successors, and permitted assigns
of the parties.
 
8.           Notice.  Except as otherwise specified herein, all notices and
other communications under this Agreement shall be in writing and shall be
deemed to have been given if personally delivered or if sent by registered or
certified United States mail, return receipt requested, postage prepaid,
addressed to the proposed party at the last known address of the party.  Any
party may designate any other address to which notices shall be sent by giving
notice of the address to the other parties in the same manner as provided
herein.
 
9.           Severability.  In the event that any one or more of the provisions
or portion thereof contained in this Agreement shall for any reason be held to
be invalid, illegal, or unenforceable in any respect, the same shall not
invalidate or otherwise affect any other provisions of this Agreement, and this
Agreement shall be construed as if the invalid, illegal or unenforceable
provision or portion thereof had never been contained herein.
 
 
3

--------------------------------------------------------------------------------

 
 
10.           Entire Agreement.  This Agreement is subject to the terms and
conditions of the Plan and the Deferred Stock Plan, and in the event of a
conflict, such plans shall control.  Subject to the terms and conditions of the
Plan and the Deferred Stock Plan, this Agreement expresses the entire
understanding and agreement of the parties with respect to the subject matter.
 
11.           Interpretation.  Paragraph headings used herein are for
convenience of reference only and shall not be considered in construing this
Agreement.  This Agreement is intended to comply with Section 409A of the
Internal Revenue Code and the regulations thereunder (“Section
409A.”)  Therefore, all provisions of this Agreement shall be interpreted
consistently with this intent.  To that end, all provisions of this Agreement
shall be subject to the requirements of Section 409A, and to the extent
permissible under Section 409A, any provisions that are inconsistent with such
requirements shall be deemed to be excised and inoperable.
 
12.           Specific Performance.  In the event of any actual or threatened
default in, or breach of, any of the terms, conditions and provisions of this
Agreement, the party or parties who are thereby aggrieved shall have the right
to specific performance and injunction in addition to any and all other rights
and remedies at law or in equity, and all such rights and remedies shall be
cumulative.
 
13.           No Right to Continued Retention.  Neither the establishment of the
Plan, nor the Deferred Stock Plan, nor this Agreement, shall be construed as
giving Director the right to continued service with the Company or an Affiliate.
 
14.           Termination of Agreement.  The Company reserves the right to
accelerate the time of payment under this Agreement pursuant to a termination
and liquidation of the award under this Agreement, to the extent permitted under
Treas. Reg. Section 1.409A-3, notwithstanding any election made by the Director
or any other provisions of this Agreement.
 
 
4

--------------------------------------------------------------------------------

 
 
15.           Definitions.  Capitalized terms used, but not defined, in this
Agreement shall be given the meaning ascribed to them in the Deferred Stock
Plan, or if not defined there in the Plan.  When used in this Agreement, the
following terms have the meanings set forth below:
 
 
(m)
“Change in Control” means:

 
 
(x)
“A change in the ownership of the corporation,”

 
 
(xi)
“A change in the effective control of the corporation,” or

 
 
(xii)
“A change in the ownership of a substantial portion of the assets of the
corporation,”

 
in each case within the meaning of Treas. Reg. Section 1.409A-3; provided,
however, that for purposes of determining a “substantial portion of the assets
of the corporation” “eighty-five percent (85%)” shall be used instead of “forty
percent (40%).”  For purposes of this subsection (a), the “corporation” refers
to the Company.  Notwithstanding the foregoing, in the event of a merger,
consolidation, reorganization, share exchange or other transaction as to which
the holders of the capital stock of the Company before the transaction continue
after the transaction to hold, directly or indirectly, shares of capital stock
of the Company  (or other surviving company) representing more than fifty
percent (50%) of the value or ordinary voting power to elect directors of the
capital stock of the Company (or other surviving company), such transaction
shall not constitute a Change in Control.
 
 
(n)
“Disability” means any condition that would constitute a “disability” under the
Deferred Stock Plan.

 
 
(o)
“Separation from Service” means a “separation from service” within the meaning
of Treas. Reg. Section 1.409A-1.

 
 
(p)
“Unforeseeable Emergency” means an “unforeseeable emergency” within the meaning
of Treas. Reg. Section 1.409A-3.

 
 
5

--------------------------------------------------------------------------------

 
 
FOR DIRECTOR ANNUAL
 
GRANTS SUBJECT TO VESTING
 
DEFERRED RESTRICTED STOCK AGREEMENT
 
PURSUANT TO THE OMEGA HEALTHCARE INVESTORS, INC.
 
_________________________________ PLAN
 
 
THIS AGREEMENT (this “Agreement”) is made as of _________________, 20____ (the
“Effective Date”), by Omega Healthcare Investors, Inc. (the “Company”) and
____________________________________ (the “Director”).
 
This Agreement includes the Terms and Conditions, which are part of this
Agreement.
 
 
A.
Effect of Agreement:  This Agreement relates to the annual grants of Stock to
the Director that are scheduled to be made after the Effective Date (including
each future year).  Therefore, this Agreement shall constitute a standing
election to defer such annual Stock grants and shall remain in place until
revoked or modified by the Director.

 
If the Director is making a deferral election within thirty (30) days after the
date he first becomes eligible under the Deferred Stock Plan, he may revoke or
modify this election for the current year, only if he submits a written election
to do so to the Company’s Chief Financial Officer within that same thirty (30)
day period and before the date the first annual Stock grant is deferred under
this Agreement.
 
If the Director wishes to revoke or modify this election as to annual Stock
grants to be made in a future year, he must submit a written election to do so
to the Company’s Chief Financial Officer by December 31 of the preceding
year.  (So, for example, if the Director elects in January 20__ to defer annual
Stock grants, if he wishes to elect not to defer the annual Stock grant in 20__,
he must submit a new election by December 31, 20__.)
 
 
1

--------------------------------------------------------------------------------

 
 
 
B.
“Plan”: (under which the “Shares” (as defined below) will be issued) Omega
Healthcare Investors, Inc. _____________________ Plan.

 
 
C.
“Deferred Stock Plan”:  Omega Healthcare Investors, Inc. Deferred Stock Plan, to
which this Agreement is also subject.

 
 
D.
“Stock Units”:  This Agreement relates to the annual grants of Stock to the
Director that are scheduled to be made after the Effective Date (including each
future year).

 
In lieu of receiving such annual Stock grants, the Director will be credited on
each annual date that the annual Stock grant would otherwise have been made with
a number of Stock Units that is equal to the number of Shares that would
otherwise have been granted to the Director as of such annual date (the
“Applicable Annual Grant Date”).  The number of Stock Units will be increased by
the number of Stock Units attributable to the Converted Dividend Equivalents if
the Director elects paragraph E.1. below.  Each Stock Unit represents the
Company’s unsecured obligation to issue one share of Stock and the related
Deferred Dividend Equivalents or Current Dividend Equivalents (if selected in
paragraph E) in accordance with this Agreement.  The shares of Stock represented
by the Stock Units shall be referred to as the “Shares.”
 
 
E.
“Dividend Equivalents”:  Each Stock Unit shall accrue an amount equal to the
dividends per share payable on Common Stock to shareholders of record on or
after the Applicable Annual Grant Date and through the day before the date the
Shares are issued (or until the Stock Units are forfeited, if earlier).

 
 
(2)

--------------------------------------------------------------------------------

 
 
 
 
You must check either paragraph 1, 2 or 3 below:
 

 
 
1.
[ ]
“Converted Dividend Equivalents”:  The Dividend Equivalents will be converted
into a number of Vested Stock Units equal to the amount of the Dividend
Equivalents that are accrued as of the dividend payment date, divided by the
closing price per share of Stock on the dividend payment date.  Such Vested
Stock Units shall also accrue future Dividend Equivalents that shall be
converted into Vested Stock Units in accordance with the preceding formula.  The
Stock Units under this paragraph shall be paid on the date the Shares are
payable to the Director; or

 
 
2.
[ ]
“Deferred Dividend Equivalents”:  The Dividend Equivalents shall be paid to the
Director, with interest accrued on a quarterly basis at a rate equal to the
Company’s average borrowing rate for the preceding calendar quarter, as
determined in the sole discretion of the Committee, on the date the Shares are
payable to the Director; or

 
 
3.
[ ]
“Current Dividend Equivalents”:  The Dividend Equivalents shall be paid to the
Director on the same date that the dividends per share are paid to shareholders.

 
 
F.
“Deferral Period”:  The Director has elected to defer receipt of the Vested
Shares (and Converted Dividend Equivalents or Deferred Dividend Equivalents if
paragraph E.1. or E.2. was elected) until the dates or events set forth below:

 
 
(3)

--------------------------------------------------------------------------------

 
 
  You must complete either paragraph 1 or 2 below, but you may complete other
paragraphs as well.
 

 
1.
If you complete this paragraph 1, you must complete A or B below:

 

 
A.
[ ] in one lump sum in the month of ___________, 20___ (specify month and year);
or

 

 
B.
in annual ratable installments over __ calendar years (specify number of
calendar years) with the first payment being made in the month of ___________,
20___ (specify month and year) and each subsequent payment being made in the
month of _________ (specify month) of each calendar year thereafter.

 

 
2.
If you complete this paragraph 2, you must check A or B below, but not both:

 
 
A.
[ ]
upon the Director’s Separation from Service; or

 
 
B.
[ ]
in the month of _____________ (specify month) of the __________ (specify number,
first, second, etc.) calendar year following the calendar year of the Director's
Separation from Service.

 

 
 
The balance in paragraph 2A or 2B will be paid (check (i) or (ii) but not both):

 
 
(i)
[ ]
in one lump sum; or

 
 
(ii)
[ ]
in annual ratable installments over __ calendar years (specify number of
calendar years), with each payment after the first payment being made in the
month of ____________ (specify month) of each calendar year.

 
 
3.
[ ]
the earlier of paragraph 1 or 2 above.

 
 
4.
[ ]
the later of paragraph 1 or 2 above.

 
 
5.
[ ]
If a Change in Control occurs before the date payment is required to be made
pursuant to the elections above, payment shall be made in one lump sum upon the
Change in Control.

 
 
(4)

--------------------------------------------------------------------------------

 
 
 
6.
[ ]
If the Officer becomes subject to a Disability before the date payment is
required to be made pursuant to the elections above, payment shall be made in
one lump sum upon the Disability.

 
The Director may elect to change the timing of payment in paragraph F only under
the following conditions:
 
 
(xiii)
the election shall not take effect until twelve (12) months after the date the
written election is submitted to the Company;

 
 
(xiv)
in the case of an election related to a payment date or event other than
Disability, the election must defer payment for at least five (5) years from the
date payment would otherwise have been made (i.e., date of lump sum or first
installment payment); and

 
 
(xv)
in the case of a payment at a specified date, the election must be submitted at
least twelve (12) months before the date payment (i.e. lump sum or first
installment payment) was previously scheduled to be made.

 
 
 
Notwithstanding the foregoing, the Vested Shares (and Converted Dividend
Equivalents or Deferred Dividend Equivalents if paragraph E.1. or E.2. was
elected) shall be payable upon the Director’s death.

 
 
G.
“Vesting Schedule”: Except as provided in paragraph E.1., the Stock Units and
Shares shall vest according to the Vesting Schedule attached hereto as Exhibit 1
(the “Vesting Schedule”).  The Stock Units and Shares which have become vested
are herein referred to as the “Vested Stock Units” and “Vested Shares,”
respectively.

 
 
(5)

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, the Company and the Director have executed this Agreement as
of the Effective Date set forth above.
 
DIRECTOR                                                                
OMEGA HEALTHCARE INVESTORS, INC.                            
By:  
 
 
                            [Signature] Title:    

 
 
(6)

--------------------------------------------------------------------------------

 
 
TERMS AND CONDITIONS TO THE
 
DEFERRED RESTRICTED STOCK AGREEMENT
 
PURSUANT TO THE OMEGA HEALTHCARE INVESTORS, INC.
 
___________________________ PLAN
 
 
1.           Payment for Vested Stock Units. The Company shall deliver a share
certificate representing the number of Shares attributable to the Vested Stock
Units (and the amount of the Deferred Dividend Equivalents, if applicable) to
the Director within sixty (60) days following the date(s) specified in paragraph
F.
 
2.           Unforeseeable Emergency. In the event of an Unforeseeable
Emergency, the Director may terminate the Deferral Period but only to the extent
of the number of Vested Shares (and Deferred Dividend Equivalents, if
applicable) necessary to meet the emergency (which may include amounts necessary
to pay Federal, state, local, or foreign taxes or penalties reasonably
anticipated to result from the distribution), and only to the extent that the
hardship is not or cannot be relieved through reimbursement or compensation by
insurance or otherwise, or by liquidation of the Director’s assets to the extent
such liquidation would not itself cause severe financial hardship, or by
cessation of future deferrals.
 
3.           Restrictions on Transfer of Stock Units and Shares.  Except for the
transfer by bequest or inheritance, the Director shall not have the right to
make or permit to exist any transfer or hypothecation, whether outright or as
security, with or without consideration, voluntary or involuntary, of all or any
part of any right, title or interest in or to any Stock Units or Shares until
issued.  Any such disposition not made in accordance with this Agreement shall
be deemed null and void.  Any permitted transferee under this Section shall be
bound by the terms of this Agreement.
 
4.           Legend on Stock Certificates.  If certificates evidencing the
Shares are issued, the certificates shall have noted conspicuously any legends
required when applicable securities laws are otherwise determined by the Company
to be appropriate, such as:
 
TRANSFER IS RESTRICTED
 
 
1

--------------------------------------------------------------------------------

 
 
THE SECURITIES EVIDENCED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED, OR HYPOTHECATED UNLESS (1) THERE IS AN EFFECTIVE REGISTRATION UNDER
SUCH ACT COVERING SUCH SECURITIES, (2) THE TRANSFER IS MADE IN COMPLIANCE WITH
RULE 144 PROMULGATED UNDER SUCH ACT, OR (3) THE ISSUER RECEIVES AN OPINION OF
COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE,
TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF SUCH ACT.
 
5.           Change in Capitalization.
 
(a)           The number and kind of Shares shall be proportionately adjusted
for any nonreciprocal transaction between the Company and holders of capital
stock of the Company that causes the per share value of the Shares underlying
the Restricted Units to change, such as a stock dividend, stock split, spin-off,
rights offering, or recapitalization through a large, non-recurring cash
dividend (each, an “Equity Restructuring”).
 
(b)           In the event of a merger, consolidation, extraordinary dividend,
sale of substantially all of the Company’s assets or other material change in
the capital structure of the Company, or a tender offer for shares of Common
Stock, or other reorganization of the Company, that in each case is not an
Equity Restructuring, the Committee shall take such action and make such
adjustments with respect to the Shares or the terms of this Agreement as the
Committee, in its sole discretion, determines in good faith is necessary or
appropriate, including, without limitation, adjusting the number and class of
securities subject to the Agreement, or substituting cash, other securities, or
other property to replace the award payable under the Agreement, or terminating
the Agreement in exchange for the cash value (as determined by the Committee) of
the Shares (and the Deferred Dividend Equivalents, if applicable).
 
(c)           Notwithstanding the foregoing or any other provisions of this
Agreement, if a Change in Control of the type described in Section 15(a)(i)
occurs and if the Director has not elected to end the Deferral Period as of the
date of the Change in Control, the Company shall pay the Deferred Dividend
Equivalents, if applicable, to the Director within ninety (90) days following
the date of the Change in Control subject to the requirements of paragraph F and
Treas. Reg. Section 1.409A-2(b), and shall pay the same amount of consideration
per Share attributable to the Stock Units as is paid to each holder of a share
of Common Stock in connection with the Change in Control and on the same
schedule and under the same terms and conditions, provided that payment must be
completed within five (5) years after the Change in Control.
 
 
2

--------------------------------------------------------------------------------

 
 
(d)           All determinations and adjustments made by the Committee pursuant
to this Section will be final and binding on the Director. Any action taken by
the Committee need not treat all recipients of awards under the Plan or the
Deferred Stock Plan equally.
 
(e)           The existence of the Plan, the Deferred Stock Plan, and this
Agreement shall not affect the right or power of the Company to make or
authorize any adjustment, reclassification, reorganization or other change in
its capital or business structure, any merger or consolidation of the Company,
any issue of debt or equity securities having preferences or priorities as to
the Common Stock or the rights thereof, the dissolution or liquidation of the
Company, any sale or transfer of all or part of its business or assets, or any
other corporate act or proceeding.
 
6.           Governing Laws.  This Agreement shall be construed, administered
and enforced according to the laws of the State of Maryland; provided, however,
no Shares shall be issued except, in the reasonable judgment of the Committee,
in compliance with exemptions under applicable state securities laws of the
state in which Director resides, and/or any other applicable securities laws.
 
7.           Successors.  This Agreement shall be binding upon and inure to the
benefit of the heirs, legal representatives, successors, and permitted assigns
of the parties.
 
8.           Notice.  Except as otherwise specified herein, all notices and
other communications under this Agreement shall be in writing and shall be
deemed to have been given if personally delivered or if sent by registered or
certified United States mail, return receipt requested, postage prepaid,
addressed to the proposed party at the last known address of the party.  Any
party may designate any other address to which notices shall be sent by giving
notice of the address to the other parties in the same manner as provided
herein.
 
 
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9.           Severability.  In the event that any one or more of the provisions
or portion thereof contained in this Agreement shall for any reason be held to
be invalid, illegal, or unenforceable in any respect, the same shall not
invalidate or otherwise affect any other provisions of this Agreement, and this
Agreement shall be construed as if the invalid, illegal or unenforceable
provision or portion thereof had never been contained herein.
 
10.           Entire Agreement.  This Agreement is subject to the terms and
conditions of the Plan and the Deferred Stock Plan, and in the event of a
conflict, such plans shall control.  Subject to the terms and conditions of the
Plan and the Deferred Stock Plan, this Agreement expresses the entire
understanding and agreement of the parties with respect to the subject matter.
 
11.           Interpretation.  Paragraph headings used herein are for
convenience of reference only and shall not be considered in construing this
Agreement.  This Agreement is intended to comply with Section 409A of the
Internal Revenue Code and the regulations thereunder (“Section
409A.”)  Therefore, all provisions of this Agreement shall be interpreted
consistently with this intent.  To that end, all provisions of this Agreement
shall be subject to the requirements of Section 409A, and to the extent
permissible under Section 409A, any provisions that are inconsistent with such
requirements shall be deemed to be excised and inoperable.
 
12.           Specific Performance.  In the event of any actual or threatened
default in, or breach of, any of the terms, conditions and provisions of this
Agreement, the party or parties who are thereby aggrieved shall have the right
to specific performance and injunction in addition to any and all other rights
and remedies at law or in equity, and all such rights and remedies shall be
cumulative.
 
13.           No Right to Continued Retention.  Neither the establishment of the
Plan, nor the Deferred Stock Plan, nor this Agreement shall be construed as
giving Director the right to continued service with the Company or an Affiliate.
 
14.           Termination of Agreement.  The Company reserves the right to
accelerate the time of payment under this Agreement pursuant to a termination
and liquidation of the award under this Agreement, to the extent permitted under
Treas. Reg. Section 1.409A-3, notwithstanding any election made by the Director
or any other provisions of this Agreement.
 
 
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15.           Definitions.  Capitalized terms used, but not defined, in this
Agreement shall be given the meaning ascribed to them in the Deferred Stock
Plan, or if not defined there in the Plan.  When used in this Agreement, the
following terms have the meanings set forth below:
 
 
(q)
“Change in Control” means:

 
 
(xiii)
“A change in the ownership of the corporation,”

 
 
(xiv)
“A change in the effective control of the corporation,” or

 
 
(xv)
“A change in the ownership of a substantial portion of the assets of the
corporation,”

 
in each case within the meaning of Treas. Reg. Section 1.409A-3; provided,
however, that for purposes of determining a “substantial portion of the assets
of the corporation” “eighty-five percent (85%)” shall be used instead of “forty
percent (40%).”  For purposes of this subsection (a), the “corporation” refers
to the Company.  Notwithstanding the foregoing, in the event of a merger,
consolidation, reorganization, share exchange or other transaction as to which
the holders of the capital stock of the Company before the transaction continue
after the transaction to hold, directly or indirectly, shares of capital stock
of the Company  (or other surviving company) representing more than fifty
percent (50%) of the value or ordinary voting power to elect directors of the
capital stock of the Company (or other surviving company), such transaction
shall not constitute a Change in Control.
 
 
(r)
“Disability” means any condition that would constitute a “disability” under the
Deferred Stock Plan.

 
 
(s)
“Separation from Service” means a “separation from service” within the meaning
of Treas. Reg. Section 1.409A-1.

 
 
(t)
“Unforeseeable Emergency” means an “unforeseeable emergency” within the meaning
of Treas. Reg. Section 1.409A-3.

 
 
5

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Exhibit 1 to Deferred Restricted Stock Agreement
Vesting Schedule
 
The Stock Units and the Shares shall become vested as follows:
 

 
 Percentage
 
Vesting Date
             
33-1/3%
 
First anniversary of
the Grant Date
             
66-2/3%
 
Second anniversary
of the Grant Date
             
100%
 
Third anniversary
of the Grant Date
 

 
For purposes of the above schedule, Stock Units and Shares shall become vested
as indicated in the above schedule on each Vesting Date if the Director remains
at all times a director, employee, or consultant of the Company or an Affiliate
from the Grant Date to such Vesting Date.  Stock Units and Shares which are not
vested shall become fully vested (1) at the date the Director mandatorily
retires as a director of the Company, (2) at the date that the Director ceases
to be a director, employee, or consultant of the Company due to death or
Disability, or (3) upon a Change in Control that occurs while the Director
remains a director, employee, or consultant of the Company or an Affiliate.  The
Director will be deemed to have mandatorily retired as a director of the Company
only if (i) the Director reaches the mandatory retirement date under the
Company’s mandatory retirement policy for directors, unless the Company’s Board
of Directors waives the application of the mandatory retirement policy to the
Director, and (ii) the Director ceases to be a director of the Company on such
mandatory retirement date.  Notwithstanding the foregoing, Stock Units and
Shares which are not vested at the time that the Director ceases to be a
director, employee, or consultant of the Company or an Affiliate for any reason
other than mandatory retirement as a director, death or Disability shall be
forfeited to the Company.
 
 
 

--------------------------------------------------------------------------------

 
 
PERFORMANCE RESTRICTED STOCK UNIT AGREEMENT
PURSUANT TO THE OMEGA HEALTHCARE INVESTORS, INC.
2004 STOCK INCENTIVE PLAN
 
 
The grant pursuant to this agreement (this “Agreement”) is made as of the Grant
Date, by Omega Healthcare Investors, Inc. (the “Company”) to ______________ (the
“Recipient”).
 
Upon and subject to this Agreement (which shall include the Terms and Conditions
and Exhibits appended to the execution page), the Company hereby awards as of
the Grant Date to the Recipient, the opportunity to earn Vested Restricted Units
(the “Restricted Unit Grant” or the “Award”).  Underlined and capitalized terms
in Items A through F below shall have the meanings there ascribed to them.
 
A.
Grant Date:  January 1, 201__.

 
B.
Plan (under which Restricted Unit Grant is granted): Omega Healthcare Investors,
Inc. 2004 Stock Incentive Plan.

 
C.
Vested Restricted Units: The Recipient shall earn a number of Vested Restricted
Units determined pursuant to Exhibit 1.  Each Vested Restricted Unit represents
the Company’s unsecured obligation to issue one share of the Company’s common
stock (“Common Stock”) and related Dividend Equivalents (as defined below) in
accordance with this Agreement.

 
D.
Dividends Equivalents.  Each Vested Restricted Unit shall accrue Dividend
Equivalents, an amount equal to the dividends per share paid on one share of
Common Stock to a shareholder of record on or after the Grant Date and until the
date that the Vested Shares (as defined below) are issued.

 
E.
Distribution Date of Vested Shares.  Shares of Common Stock attributable to
Vested Restricted Units (“Vested Shares”) shall be issued and distributed upon
the earlier of the dates listed below, subject to receipt from the Recipient of
the required tax withholding:

 
 
ii

--------------------------------------------------------------------------------

 
 
 
a.
within ten (10) business days following December 31, 201__; or

 
 
b.
the date of a Change in Control.

 
Notwithstanding the foregoing, distribution shall be delayed to the extent
provided in any deferral agreement between the Recipient and the Company,
whether executed before or after this Agreement.
 
F.
Distribution Date of Dividend Equivalents.  Dividend Equivalents attributable to
Vested Restricted Units shall be distributed to the Recipient on the same date
as Vested Shares are distributable to the Recipient under Item E above, subject
to the provisions of any deferral agreement between the Recipient and the
Company, whether executed before or after this Agreement.

 
IN WITNESS WHEREOF, the Company has executed this Agreement to be effective as
of the Grant Date set forth above.
 
 
 

  OMEGA HEALTHCARE INVESTORS, INC.                             By:              
        Title:    

 
 
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TERMS AND CONDITIONS TO THE
 
PERFORMANCE RESTRICTED STOCK UNIT AGREEMENT
 
PURSUANT TO THE OMEGA HEALTHCARE INVESTORS, INC.
 
2004 STOCK INCENTIVE PLAN
 
 
1.           Payment for Vested Restricted Units.  The Company shall issue in
book entry form in the name of the Recipient, or issue and deliver to the
Recipient a share certificate representing, the Vested Shares on the
Distribution Date of Vested Shares.
 
2.           Dividends Equivalents.  The Company shall pay Dividend Equivalents
attributable to Vested Restricted Units on the Distribution Date of Dividend
Equivalents, subject to required tax withholding.
 
3.           Tax Withholding.
 
(a)           The Recipient must deliver to the Company, within ten (10) days
after written notification from the Company as to the amount of the tax
withholding that is due, either (i) cash, or (ii) a check payable to the
Company, in the amount of all tax withholding obligations imposed on the Company
as a result of the issuance of the Vested Shares, except as provided in Section
3(b).  If the Recipient does not timely satisfy payment of the tax withholding
obligation, the Recipient will be deemed to have made an election to satisfy tax
withholding in the manner provided in Section 3(b).
 
(b)           In lieu of paying the tax withholding obligation described in
Section 3(a), the Recipient may elect to have the number of Vested Shares
reduced by the number of whole shares of Common Stock which, when multiplied by
the Fair Market Value of the Common Stock on the Distribution Date of the Vested
Shares, together with cash or a check in lieu of any fractional Vested Share, is
sufficient to satisfy the minimum amount of the required tax obligations imposed
on the Company as a result of the issuance of the Vested Shares (the
“Withholding Election”).  The Recipient may make a Withholding Election only if
all of the following conditions are met:
 
 
 

--------------------------------------------------------------------------------

 
 
(i)           The Withholding Election must be made within ten (10) days after
the Recipient receives written notification from the Company as to the amount of
the tax withholding that is due (the “Tax Notice Date”), by executing and
delivering to the Company a properly completed Notice of Withholding Election,
in substantially the form of Exhibit 2 attached hereto; and
 
(ii)           Any Withholding Election made will be irrevocable; however, the
Committee may, in its sole discretion, disapprove and give no effect to any
Withholding Election, by giving written notice to the Recipient no later than
ten (10) days after the Company’s receipt of the Notice of Withholding Election,
in which event the Recipient must deliver to the Company, within ten (10) days
after receiving such notice, the amount of the tax withholding pursuant to
Section 3(a).  If the Recipient does not timely deliver the amount of the tax
withholding, the Recipient will forfeit the Vested Shares.
 
4.           Restrictions on Transfer.  Except for the transfer by bequest or
inheritance, the Recipient shall not have the right to make or permit to exist
any transfer or hypothecation, whether outright or as security, with or without
consideration, voluntary or involuntary, of all or any part of any right, title
or interest in or to this Award.  Any such disposition not made in accordance
with this Agreement shall be deemed null and void.  Any permitted transferee
under this Section shall be bound by the terms of this Agreement.
 
 
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5.           Change in Capitalization.
 
(xvi)      The number and kind of shares issuable under this Agreement shall be
proportionately adjusted for any non-reciprocal transaction between the Company
and the holders of capital stock of the Company that causes the per share value
of the shares of Common Stock subject to the Award to change, such as a stock
dividend, stock split, spinoff, rights offering, or recapitalization through a
large, non-recurring cash dividend (each, an “Equity Restructuring”).  No
fractional shares shall be issued in making such adjustment.
 
(xvii)     In the event of a merger, consolidation, reorganization,
extraordinary dividend, sale of substantially all of the Company’s assets, other
material change in the capital structure of the Company, or a tender offer for
shares of Common Stock, in each case that does not constitute an Equity
Restructuring, the Committee shall take such action to make such adjustments
with respect to the shares of Common Stock issuable hereunder or the terms of
this Agreement as the Committee, in its sole discretion, determines in good
faith is necessary or appropriate, including, without limitation, adjusting the
number and class of securities subject to the Award, substituting cash, other
securities, or other property to replace the Award, or removing of restrictions.
 
(xviii)    All determinations and adjustments made by the Committee pursuant to
this Section will be final and binding on the Recipient. Any action taken by the
Committee need not treat all recipients of awards under the Plan equally.
 
(xix)      The existence of the Plan and the Restricted Unit Grant shall not
affect the right or power of the Company to make or authorize any adjustment,
reclassification, reorganization or other change in its capital or business
structure, any merger or consolidation of the Company, any issue of debt or
equity securities having preferences or priorities as to the Common Stock or the
rights thereof, the dissolution or liquidation of the Company, any sale or
transfer of all or part of its business or assets, or any other corporate act or
proceeding.
 
6.           Governing Laws.  This Award shall be construed, administered and
enforced according to the laws of the State of Maryland; provided, however, no
Vested Shares shall be issued except, in the reasonable judgment of the
Committee, in compliance with exemptions under applicable state securities laws
of the state in which Recipient resides, and/or any other applicable securities
laws.
 
 
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7.           Successors.  This Agreement shall be binding upon and inure to the
benefit of the heirs, legal representatives, successors, and permitted assigns
of the parties.
 
8.           Notice.  Except as otherwise specified herein, all notices and
other communications under this Agreement shall be in writing and shall be
deemed to have been given if personally delivered or if sent by registered or
certified United States mail, return receipt requested, postage prepaid,
addressed to the proposed recipient at the last known address of the
recipient.  Any party may designate any other address to which notices shall be
sent by giving notice of the address to the other parties in the same manner as
provided herein.
 
9.           Severability.  In the event that any one or more of the provisions
or portion thereof contained in this Agreement shall for any reason be held to
be invalid, illegal, or unenforceable in any respect, the same shall not
invalidate or otherwise affect any other provisions of this Agreement, and this
Agreement shall be construed as if the invalid, illegal or unenforceable
provision or portion thereof had never been contained herein.
 
10.           Entire Agreement.  Subject to the terms and conditions of the
Plan, this Agreement expresses the entire understanding and agreement of the
parties with respect to the subject matter; provided, however, that certain
provisions of this Agreement may be subject to a deferral agreement between the
Recipient and the Company, whether executed before or after this Agreement.
 
11.           Specific Performance.  In the event of any actual or threatened
default in, or breach of, any of the terms, conditions and provisions of this
Agreement, the party or parties who are thereby aggrieved shall have the right
to specific performance and injunction in addition to any and all other rights
and remedies at law or in equity, and all such rights and remedies shall be
cumulative.
 
12.           No Right to Continued Retention.  Neither the establishment of the
Plan nor the Award hereunder shall be construed as giving Recipient the right to
continued service with the Company or an Affiliate.
 
13.           Headings and Capitalized Terms.  Paragraph headings used herein
are for convenience of reference only and shall not be considered in construing
this Agreement.  Capitalized terms used, but not defined, in this Agreement
shall be given the meaning ascribed to them in the Plan.
 
 
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14.           Definitions.  As used in this Agreement:
 
“Beginning Stock Price” means the volume-weighted average price per share of
Common Stock for the month of December 201__ on the exchange on which Common
Stock is traded.
 
“Below Threshold Performance” means the Company has achieved Total Shareholder
Return of less than eight percent (8%).
 
“Cause” shall have the meaning set forth in the employment agreement then in
effect between the Recipient and the Company, or, if there is none, then Cause
shall mean the occurrence of any of the following events:
 
(a)           willful refusal by the Recipient to follow a lawful direction of
the person to whom the Recipient reports or the Board of Directors of the
Company (the “Board”), provided the direction is not materially inconsistent
with the duties or responsibilities of the Recipient’s position with the
Company, which refusal continues after the Board has again given the direction
in writing;
 
(b)           willful misconduct or reckless disregard by the Recipient of his
duties or with respect to the interest or material property of the Company;
 
(c)           intentional disclosure by the Recipient to an unauthorized person
of Confidential Information or Trade Secrets, which causes material harm to the
Company;
 
(d)           any act by the Recipient of fraud against, material
misappropriation from or significant dishonesty to either the Company or an
Affiliate, or any other party, but in the latter case only if in the reasonable
opinion of at least two-thirds of the members of the Board (excluding the
Recipient), such fraud, material misappropriation, or significant dishonesty
could reasonably be expected to have a material adverse impact on the Company or
its Affiliates; or
 
(e)           commission by the Recipient of a felony as reasonably determined
by at least two-thirds of the members of the Board (excluding the Recipient).
 
 
5

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“Change in Control” means any one of the following events which occurs following
the Grant Date:
 
(a)           the acquisition within a twelve (12) month period, directly or
indirectly, by any “person” or “persons” (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), other than
the Company or any employee benefit plan of the Company or an Affiliate, or any
corporation pursuant to a reorganization, merger or consolidation, of equity
securities of the Company that in the aggregate represent thirty percent (30%)
or more of the total voting power of the Company’s then outstanding equity
securities;
 
(b)           the acquisition, directly or indirectly, by any “person” or
“persons” (as such terms are used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended), other than the Company or any employee
benefit plan of the Company or an Affiliate, or any corporation pursuant to a
reorganization, merger or consolidation of equity securities of the Company,
resulting in such person or persons holding equity securities of the Company
that, together with equity securities already held by such person or persons, in
the aggregate represent more than fifty percent (50%) of the total fair market
value or total voting power of the Company’s then outstanding equity securities;
 
(c)           individuals who as of the date hereof, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to
the date hereof whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least two-thirds of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a person other than the Board;
 
(d)           a reorganization, merger or consolidation, with respect to which
persons who were the holders of equity securities of the Company immediately
prior to such reorganization, merger or consolidation, immediately thereafter,
own equity securities of the surviving entity representing less than fifty
percent (50%) of the combined ordinary voting power of the then outstanding
voting securities of the surviving entity; or
 
 
6

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(e)           the acquisition within a twelve (12) month period, directly or
indirectly, by any “person” or “persons” (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), other than
any corporation pursuant to a reorganization, merger or consolidation, of assets
of the Company that have a total gross fair market value equal to or more than
eighty-five percent (85%) of the total gross fair market value of all of the
assets of the Company immediately before such acquisition.
 
Notwithstanding the foregoing, no Change in Control shall be deemed to have
occurred for purposes of this Award (a) unless the event also constitutes a
“change in the ownership or effective control of the corporation or in the
ownership of a substantial portion of the assets of the corporation” within the
meaning of Code Section 409A(a)(2)(v), or (b) by reason of any actions or events
in which the Recipient participates in a capacity other than in his capacity as
an officer, employee, or director of the Company or an Affiliate.
 
“Confidential Information” means data and information relating to the business
of the Company or an Affiliate (which does not rise to the status of a Trade
Secret) which is or has been disclosed to the Recipient or of which the
Recipient became aware as a consequence of or through his relationship to the
Company or an Affiliate and which has value to the Company or an Affiliate and
is not generally known to its competitors.  Confidential Information shall not
include any data or information that has been voluntarily disclosed to the
public by the Company or an Affiliate (except where such public disclosure has
been made by the Recipient without authorization) or that has been independently
developed and disclosed by others, or that otherwise enters the public domain
through lawful means without breach of any obligations of confidentiality owed
to the Company or any of its Affiliates.
 
“Ending Stock Price” means the volume-weighted average price per share of Common
Stock for the month of December 201__ on the exchange on which Common Stock is
traded, unless a Change in Control occurs before December 31, 201__, in which
case the term means the value per share determined as of the date of the Change
in Control, such value to be determined by the Compensation Committee in its
reasonable discretion based on the actual or implied price per share paid in the
Change in Control transaction.
 
 
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“Good Reason” shall have the meaning set forth in the employment agreement then
in effect between the Recipient and the Company, or, if there is none, then Good
Reason shall mean the occurrence of all of the events listed in either (a) or
(b) below:
 
(a)           (i)           the Recipient experiences a material diminution of
the Recipient’s responsibilities of his position, as reasonably modified by the
person to whom the Recipient reports or the Board from time to time, such that
the Recipient would no longer have responsibilities substantially equivalent to
those of other executives holding equivalent positions at companies with similar
revenues and market capitalization;
 
(ii)           the Recipient gives written notice to the Company of the facts
and circumstances constituting the material diminution in responsibilities
within ten (10) days following the occurrence of such material diminution;
 
(iii)           the Company fails to remedy the material diminution in
responsibilities within ten (10) days following the Recipient’s written notice
of the material diminution in responsibilities; and
 
(iv)           the Recipient terminates his employment and this Agreement within
thirty (30) days following the Company’s failure to remedy the material
diminution in responsibilities.
 
(b)           (i)           the Company requires the Recipient to relocate the
Recipient’s primary place of employment to a new location that is more than
fifty (50) miles from its current location (determined using the most direct
driving route), without the Recipient’s consent;
 
(ii)           the Recipient gives written notice to the Company within ten (10)
days following receipt of notice of relocation of his objection to the
relocation;
 
(iii)           the Company fails to rescind the notice of relocation within ten
(10) days following the Recipient’s written notice; and
 
(iv)           the Recipient terminates his employment within thirty (30) days
following the Company’s failure to rescind the notice.
 
“High Performance” means the Company has achieved Total Shareholder Return of at
least twelve percent (12%).
 
“Performance Period” means the period from and including January 1, 201__
through the earlier of December 31, 201__ or the date of a Change in Control.
 
“Target Performance” means the Company has achieved Total Shareholder Return of
ten percent (10%).
 
 
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“Threshold Performance” means that the Company has achieved Total Shareholder
Return of eight percent (8%).
 
“Total Shareholder Return” means the sum of the total change in the Ending Stock
Price as compared to the Beginning Stock Price, plus any dividends paid to a
shareholder of record with respect to one share of Common Stock during the
Performance Period.
 
“Trade Secrets” means information including, but not limited to, technical or
nontechnical data, formulae, patterns, compilations, programs, devices, methods,
techniques, drawings, processes, financial data, financial plans, product plans
or lists of actual or potential customers or suppliers which (i) derives
economic value, actual or potential, from not being generally known to, and not
being readily ascertainable by proper means by, other persons who can obtain
economic value from its disclosure or use, and (ii) is the subject of efforts
that are reasonable under the circumstances to maintain its secrecy.
 
 
9

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EXHIBIT 1
 
A.
The number of Vested Restricted Units earned is determined as of the last day of
the Performance Period pursuant to the following chart; provided that the
Recipient must remain an employee, director or consultant of the Company or an
Affiliate during the entire Performance Period to earn the number of Vested
Restricted Units determined in the chart below.

 
Below
 
Threshold
 
Performance
 
*Threshold
Performance
*Target
 
Performance
*High
 
Performance
Zero
 
Vested
 
Units
 
     

 
*
If Total Shareholder Return falls between Threshold Performance and Target
Performance or between Target Performance and High Performance, the number of
Vested Restricted Units shall be determined by rounding actual Total Shareholder
Return to the closest 0.5% percentage points and then applying linear
interpolation based on the percentage points by which Threshold Performance or
Target Performance, respectively, as so adjusted, is exceeded.

 
B.
Notwithstanding the foregoing, if during the Performance Period and more than
sixty (60) days before a Change in Control, the Recipient dies or becomes
subject to a Disability while an employee, director or consultant of the Company
or an Affiliate, the Recipient resigns from the Company for Good Reason, or the
Company terminates the Recipient’s employment without Cause (each such event
referred to as a “Qualifying Termination”), the Recipient shall earn a number of
Vested Restricted Units equal to the number of Vested Restricted Units
determined in the chart above as of the completion of the Performance Period,
multiplied by a fraction, the numerator of which is the number of days elapsed
in the Performance Period through the date of such event and the denominator of
which is 365.

 
 
 

--------------------------------------------------------------------------------

 
 
C.
Notwithstanding the foregoing, if a Change in Control occurs on or after the
Grant Date and before December 31, 201__ and (i) while the Recipient remains an
employee, director or consultant of the Company or an Affiliate, or (ii) within
sixty (60) days before the Change in Control, the Recipient incurs a Qualifying
Termination, the Recipient shall earn a number of Vested Restricted Units
determined in the chart above based on the level of Total Shareholder Return
through the date of the Change in Control relative to the level required for the
full Performance Period (determined without regard to the shortening of the
period as a result of the Change in Control), and shall not thereafter earn any
additional Vested Restricted Units.

 
D.
The portion of the Restricted Unit Grant that has not become earned Vested
Restricted Units as of the earlier of the last day of the Performance Period,
or, except as provided in Item C above, as of the date the Recipient ceases to
be an employee, director, or consultant of the Company or an Affiliate shall be
forfeited.

 
 
2

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EXHIBIT 2
 
NOTICE OF WITHHOLDING ELECTION
PURSUANT TO OMEGA HEALTHCARE INVESTORS, INC.
2004 STOCK INCENTIVE PLAN
 
 
TO:
Omega Healthcare Investors, Inc.

 
Attention: Chief Financial Officer

 
 

FROM:
 
 

 
RE:                      Withholding Election
 
This election relates to the Restricted Unit Grant identified in Paragraph 3
below.  I hereby certify that:
 
(1)         My correct name and social security number and my current address
are set forth at the end of this document.
 
(2)          I am (check one, whichever is applicable).
 
[ ]           the original recipient of the Restricted Unit Grant.
 
 
[ ]
the legal representative of the estate of the original recipient of the
Restricted Unit Grant.

 
 
[ ]
a legatee of the original recipient of the Restricted Unit Grant.

 
 
[ ]
the legal guardian of the original recipient of the Restricted Unit Grant.

 
(3)          The Restricted Unit Grant pursuant to which this election relates
was issued with a Grant Date of __________________ under the Omega Healthcare
Investors, Inc. 2004 Stock Incentive Plan (the “Plan”) in the name of
___________________.  This election relates to ______ shares of Common Stock
issuable pursuant to the Restricted Unit Grant.
 
 
Exhibit 2

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(4)           I hereby elect to have certain of the shares of Common Stock
withheld by the Company for the purpose of having the value of the shares
applied to pay federal, state and local, if any, taxes arising from the
exercise.
 
The fair market value of the shares of Common Stock to be withheld in addition
to $_________ in cash to be tendered to the Company by the recipient of the
Restricted Unit Grant shall be equal to the minimum statutory tax withholding
requirement under federal, state and local law in connection with the exercise.
 
(5)           This Withholding Election is made no later than ten (10) days
after the Tax Notice Date and is otherwise timely made pursuant to the Plan.
 
(6)           I further understand that, if this Withholding Election is not
disapproved by the Committee, the Company shall withhold from the Common Stock
issuable to me a whole number of shares of Common Stock having the value
specified in Paragraph 4 above.
 
(7)           The Plan has been made available to me by the Company, I have read
and understand the Plan and I have no reason to believe that any of the
conditions therein to the making of this Withholding Election have not been
met.  Capitalized terms used in this Notice of Withholding Election without
definition shall have the meanings given to them in the Plan.
 
 
Exhibit 2

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Dated:
               
Signature: 
               
 
 
Name (Printed) 
          Street Address          
City, State, Zip Code
 

 
 
Exhibit 2