ex10_1.htm


    
 

     

      
        

      

    

    
 

    FIRST
AMENDMENT TO THE

    OMEGA
HEALTHCARE INVESTORS, INC.

    2004
STOCK INCENTIVE PLAN

    


    This FIRST AMENDMENT is made as of this
22nd
day of May, 2008, by Omega Healthcare Investors, Inc. (the
“Company”).

    


    WITNESSETH:

    


    WHEREAS, the Company maintains the
Omega Healthcare Investors, Inc. 2004 Stock Incentive Plan (the “Plan”),
effective as of April 20, 2004; and

    


    WHEREAS, the Company now wishes to
amend the Plan primarily to allow the Compensation Committee of the Board of
Directors of the Company (the “Committee”) to grant qualified performance-based
cash bonus awards under the Plan; to expand the available performance goals for
purposes of Section 162(m) of the Internal Revenue Code; to provide for a cap on
the maximum number of shares or the dollar amount that can be paid to an
employee during a calendar year in the case of certain qualified
performance-based awards; and to revise the anti-dilution provision requiring
adjustments to outstanding awards after certain equity restructuring events to
avoid incurring a
compensation cost under FAS 123-R in connection with an award's modification
following such equity restructuring.

    


    NOW, THEREFORE, the Company does hereby
amend the Plan as follows:

    


    1.           By
adding the following Subsections after Section 1.1(a):

    


    “(a-1)                      ‘Award’ means,
individually and collectively, Dividend Equivalent Rights, Incentive Stock
Options, Non-Qualified Stock Options, Phantom Shares, Stock Appreciation Rights
and Stock Awards, Performance Awards and Restricted Stock Units.

    


    (a-2)                      ‘Award Agreement’
means an agreement between the Company and a Participant or other documentation
evidencing any Award granted under the Plan.

    


    (a-3)                      ‘Award Program’ means
a written program established by the Committee, pursuant to which Awards are
granted under the Plan under uniform terms, conditions and restrictions set
forth in such written program.”

    


    2.           By
adding the following Subsection after Section 1.1(o):

     

    
      “(o-1)                   ‘Performance Award’
refers to a performance award as described in Section 3.6.”

       

    

    


    
    

    3.           By
deleting Section 1.1(p) in its entirety and by substituting therefor the
following:

    


    “(p)           “Performance Goals”
means any one or more of the following performance goals, intended by the
Committee to constitute objective goals for purposes of Code Section 162(m),
either individually, alternatively or in any combination, applied to either the
Company as a whole or to a business unit or Affiliate, either individually,
alternatively or in combination, and measured either quarterly, annually or
cumulatively over a period of quarters or years, on an absolute basis or
relative to a pre-established target, to previous quarters’ or years’ results or
to a designated comparison group, in each case as specified by the Committee in
the Award:

     

    
      	
              (i)  

            	
              earnings
      per share;

            


    

     

    
      	
              (ii)  

            	
              operating
      cash flow;

            


    

     

    
      	
              (iii)  

            	
              cash
      available;

            


    

     

    
      	
              (iv)  

            	
              net
      income;

            


    

     

    
      	
              (v)  

            	
              revenue;

            


    

     

    
      	
              (vi)  

            	
              total
      shareholder return;

            


    

     

    
      	
              (vii)  

            	
              return
      on invested capital;

            


    

     

    
      	
              (viii)  

            	
              return
      on shareholder equity;

            


    

     

    
      	
              (ix)  

            	
              return
      on assets;

            


    

     

    
      	
              (x)  

            	
              return
      on common book equity;

            


    

     

    
      	
              (xi)  

            	
              market
      share;

            


    

     

    
      	
              (xii)  

            	
              economic
      value added;

            


    

     

    
      	
              (xiii)  

            	
              operating
      margin

            


    

     

    
      	
              (xiv)  

            	
              stock
      price;

            


    

     

    
      	
              (xv)  

            	
              operating
      income;

            


    

     

    
      	
              (xvi)  

            	
              EBIT
      or EBITDA;

            


    

     

    
      	
              (xvii)  

            	
              funds
      from operations or adjusted funds from
  operations;

            


    

     

    
      	
              (xviii)  

            	
              expenses
      or operating expenses;

            


    

     

    
      	
              (xix)  

            	
              productivity
      of employees as measured by revenues, costs, or earnings per
      employee;

            


    

     

    
      	
              (xx)  

            	
              cost
      reduction goals; or

            


    

     

    
      	
              (xxi)  

            	
              any
      combination of the foregoing.

            


    

    


    The
Committee may appropriately adjust any evaluation of performance under a
Performance Goal to remove the effect of equity compensation expense under FAS
123R, amortization of acquired technology and intangibles, asset write-downs;
litigation or claim judgments or settlements; the effect of changes in or
provisions under tax law, accounting principles or other such laws or provisions
affecting reported results; accruals for reorganization and restructuring
programs; discontinued operations; and any items that are extraordinary, unusual
in nature, non-recurring or infrequent in occurrence, except where such action
would result in the loss of the otherwise available exemption of the Award under
Section 162(m) of the Code, if applicable.”

    


    4.           By
deleting Section 1.1(r) in its entirety and by substituting therefor the
following:

    


    “(r)           Reserved.”

    


    5.           By
deleting “2000” in Section 1.1(t) and by substituting therefor
“2004”.

    


    6.           By
deleting Section 1.1(y) in its entirety and substituting therefor the
following:

    


    “(y)           Reserved.”

    


    7.           By
deleting Section 1.1(z) in its entirety and substituting therefor the
following:

    


    “(z)           Reserved.”

    


    8.           By
deleting Section 1.1(aa) in its entirety and substituting therefor the
following:

    


    “(aa)          Reserved.”

     

    9.           By
replacing the phrase “Stock Incentive” with the word “Award” in each place it
appears in the Plan except in the title of the Plan.

    


    10.           By
replacing the phrase “Performance Unit Award” with the phrase “Performance
Award” in each place it appears in the Plan.

    


    11.           By
adding the following to the end of Section 3.1(a):

    


    “The
maximum number of shares of Stock with respect to which Awards (other than
Options, Stock Appreciation Rights, or Performance Awards that are payable in
cash) may be granted during any calendar year to any employee may not exceed One
Million One Hundred Thousand (1,100,000), to the extent they are granted with
the intent that they qualify as qualified performance-based compensation under
Section 162(m) of the Code.  To the extent required under Section
162(m) of the Code and the regulations thereunder for compensation to be treated
as qualified performance-based compensation, the maximum aggregate dollar amount
that may be paid in any calendar year to an employee with respect to Performance
Awards that are payable in cash may not exceed Two Million Dollars
($2,000,000).

    


    12.           By
deleting Section 3.1(b) in its entirety and substituting therefor the
following:

    


    
      	
                                             
      “(b)

            	
              Each
      Award will either be evidenced by an Award Agreement in such form and
      containing such terms, conditions and restrictions as the Committee may
      determine to be appropriate, including without limitation, Performance
      Goals or other performance criteria, if any, that must be achieved as a
      condition to vesting or settlement of the Award, or be made subject to the
      terms of an Award Program, containing such terms, conditions and
      restrictions as the Committee may determine to be appropriate, including
      without limitation, Performance Goals or other performance criteria, if
      any, that must be achieved as a condition to vesting or settlement of the
      Award.  Performance Goals, if any, shall be established before
      twenty-five percent (25%) of the Performance Period has elapsed, but in no
      event later than within ninety (90) days after the first day of a
      Performance Period. At the time any Performance Goals are established, the
      outcome as to whether the Performance Goals will be met must be
      substantially uncertain. If any Performance Goals are established as a
      condition to vesting or settlement of an Award and such Performance Goals
      are not based solely on the increase in the Fair Market Value of the
      Stock, the Committee shall certify in writing that the applicable
      Performance Goals were in fact satisfied before such Award is vested or
      settled, as applicable. Each Award Agreement or Award Program is subject
      to the terms of the Plan and any provisions contained in the Award
      Agreement or Award Program that are inconsistent with the Plan are null
      and void.  To the extent an Award is subject to Performance
      Goals with the intent that the Award constitute performance-based
      compensation under Code Section 162(m), the Committee shall comply with
      all applicable requirements under Code Section 162(m) and the rules and
      regulations promulgated thereunder in granting, modifying, and settling
      such Award.  The Committee may, but is not required to,
      structure any Award so as to qualify as performance-based compensation
      under Code Section 162(m).”

            


    

    


    13.           By
deleting Section 3.6 in its entirety and substituting therefor the
following:

    


    “3.6           Terms and Conditions of
Performance Awards.  A Performance Award shall entitle the
Participant to receive, at a specified future date, payment of an amount equal
to all or a portion of either (i) the value of a specified or determinable
number of units (stated in terms of a designated or determinable dollar amount
per unit) granted by the Committee, or (ii) a percentage or multiple of a
specified amount determined by the Committee.  At the time of the
grant, the Committee must determine the base value of each unit; the number of
units subject to a Performance Award, the specified amount and the percentage or
multiple of the specified amount, as may be applicable; and the Performance
Goals applicable to the determination of the ultimate payment value of the
Performance Award. The Committee may provide for an alternate base value for
each unit or an alternate percentage or multiple under certain specified
conditions.

    


    (a)           Payment.  Payment
in respect of Performance Awards may be made by the Company in cash or shares of
Stock (valued at Fair Market Value as of the date payment is owed) as provided
in the applicable Award Agreement or Award Program or, in the absence of such
provision, as the Committee may determine.

    


    (b)           Conditions to
Payment.  Each Performance Award granted under the Plan shall
be payable at such time or times, or upon the occurrence of such event or
events, and in such amounts, as the Committee may specify in the applicable
Award Agreement or Award Program; provided, however, that subsequent to the
grant of a Performance Award, the Committee, at any time before complete
termination of such Performance Award, may accelerate the time or times at which
such Performance Award may be paid in whole or in part.”

    
 

    14.           By
deleting Section 5.2(a) in its entirety and substituting therefor the
following:

    


    
      	
                                               “(a)

            	
              The
      number of shares of Stock reserved for the grant of Options, Dividend
      Equivalent Rights, Performance Awards, Phantom Shares, Restricted Stock
      Units, Stock Appreciation Rights and Stock Awards; the number of shares of
      Stock reserved for issuance upon the exercise, settlement, or payment, as
      applicable, of each outstanding Option, Dividend Equivalent Right,
      Performance Award, Phantom Share, Restricted Stock Unit and Stock
      Appreciation Right and upon vesting, settlement, or grant, as applicable,
      of each Stock Award; the Exercise Price of each outstanding Option, the
      threshold price of each outstanding Stock Appreciation Right, the
      specified number of shares of Stock to which each outstanding Option,
      Dividend Equivalent Right, Performance Award, Phantom Share, Restricted
      Stock Unit, Stock Appreciation Right, and Stock Award pertains, and the
      maximum number of shares as to which Options, Stock Appreciation Rights,
      and other Awards may be granted to an employee during any calendar year,
      shall be proportionately adjusted for any nonreciprocal transaction
      between the Company and the holders of capital stock of the Company that
      causes the per share value of the shares of Stock underlying a Stock Award
      to change, such as a stock dividend, stock split, spinoff, rights
      offering, or recapitalization through a large, nonrecurring cash dividend
      (each, an “Equity Restructuring”); provided, however, that in the case of
      a Nonqualified Stock Option or a Stock Appreciation Right, the Committee
      shall consider any provisions of Code Section 409A and the regulations
      thereunder that are required to be followed as a condition of the
      Nonqualified Stock Option and the Stock Appreciation Right not being
      treated as the grant of a new Option or Stock Appreciation Right or a
      change in the form of payment.  Any adjustment described in the
      preceding sentence may include a substitution in whole or in part of other
      equity securities of the issuer and the class involved in such Equity
      Restructuring in lieu of the shares of Stock that are subject to the
      Award.”

            


    

    


    15.           By
inserting the phrase “, that in each case does not constitute an Equity
Restructuring,” before the phrase “the Committee may make” in the first sentence
of Section 5.2(b).

    


    IN
WITNESS WHEREOF, the Company has caused this First Amendment to be executed as
of the day and year first above written.

    


    


    OMEGA
HEALTHCARE INVESTORS, INC.

    


    


    By: /s/ C. Taylor
Pickett                                                                                     

    


    Name:  C. Taylor
Pickett

    Title:    President & Chief
Executive Officer