Document:

Exhibit 10.4

 

COMMUNITY HEALTHCARE TRUST
  INCORPORATED

 

ALIGNMENT OF INTEREST PROGRAM

 

1.                                       Purpose. The Community Healthcare Trust Incorporated 2014 Incentive Plan (the “Plan”) was adopted to promote the interests of Community Healthcare Trust Incorporated (the “Company”) and its stockholders by

 

·                  strengthening the Company’s ability to attract, motivate, and retain officers upon whose judgment, initiative, and efforts the financial success and growth of the business of the Company largely depend;

 

·                  offering such officers additional incentives to put forth maximum efforts for the success of the business; and

 

·                  affording such officers an opportunity to acquire a proprietary interest in the Company through stock ownership and other performance-based rights.

 

This Alignment of Interest Program is being adopted in accordance with the Plan and is intended to further the purposes of the Plan by providing incentives to the Company’s officers and directors to receive restricted stock with long-term vesting. The Committee believes that utilizing restricted stock with long-term vesting aligns the interests of the Company’s officers and directors with those of the Company’s shareholders.

 

2.                                       Definitions. Whenever r capitalized terms are used herein, but not defined, they shall have the meanings attributed to such terms in the Plan.

 

3.                                       Participation. The Participants in this Alignment of Interest Program are the officers who have been named by the Committee to participate in this program and the directors.

 

4.                                       Awards. Each year, Participants may (i) elect to reduce Compensation that might be payable in cash the subsequent year (the “Reduction Year”) by a percentage amount to be applied to the acquisition of restricted stock (“Acquisition Shares”) and (ii) receive an Award based upon a multiple of the Acquisition Shares determined by the restriction period selected by the Participant (the “Restriction Multiple”).

 

The minimum and maximum percentage of each Compensation type that a Participant may elect to be reduced and applied to Acquisition Shares shall be determined by the Committee. See Exhibit A for the current percentages..

 

The amount of Base Salary, cash bonus, retainer, fees or other compensation applied to the acquisition of Restricted Stock shall reduce the Base Salary, cash bonus, retainer, fees or other compensation of the Participant for the Reduction Year.

 

The “Determination Date” shall be January 15 of the year following the Participant’s effective election, or, if such date is not a trading day, then the trading day immediately preceding January 15. Notwithstanding the foregoing, the following two exceptions apply:

 

(i)  for a Participant’s initial year of participation in the Program, the Determination Date shall be the date that is the fifteenth (15th) business day following the Participant’s effective election, and

 

(ii)  if the dollar amount of any reduced compensation has not been determined by January 15, then the Determination Date shall be the fifteenth (15th) business day following the date on which the amount of such compensation (e.g., bonus) is fixed and determined.

 

The number of Acquisition Shares granted to a Participant shall be determined as follows:

 

(i)  For elections made prior to the effective date of the Company’s Initial Public Offering (“IPO Effective Date”), the number of Acquisition Shares shall be determined as of the IPO Effective Date by

 

1

 

dividing the total of the Participant’s elected reduced Salary or retainer, fees for the remainder of such year by the price per share sold to the public by the underwriters of the Company’s Initial Public Offering; or

 

(ii), For all periods after the IPO Effective Date, the number of Acquisition Shares shall be determined as of the Determination Date by dividing the total of the Participant’s elected reduced Salary, cash bonus, retainer, fees or other compensation by the volume weighted average price of the common stock for the 10 trading days immediately preceding the Determination Date.

 

The Restriction Multiple and restriction period shall be established by the Committee in its sole discretion. See Exhibit A for the current multiples. The Restriction Multiple shall be determined by Participant’s selection of a restriction period.

 

Each Participant must deliver written notice of Participant’s election to obtain an Award pursuant to this Section 4 to the Director of Human Resources of CHCT, or other person appointed by the Committee, prior to the end of the last business day before the beginning of the Reduction Year. The notice shall contain the percentage reduction and the restriction period selected by the Participant. Unless otherwise approved by the Director of Human Resources of CHCT, this election shall be irrevocable by the Participant.

 

The product of the Restriction Multiple multiplied by the Acquisition Shares, rounded to the nearest share, shall be the number of shares constituting an Award (the “Award Shares”) pursuant to this Section 4. See Exhibit B for illustrative examples of the calculations. Acquisition Shares and Award Shares determined pursuant to this Section 4 shall be delivered to each Participant as soon as administratively feasible, but generally prior to the record date for payment of the dividend declared in January of the Reduction Year. Each Participant must be an Eligible Person at the date of delivery of the Award to receive the Award Shares.

 

The Committee shall have the discretion to alter the administration of awards under this Alignment of Interest Program at any time prior to the grant of any such award, in accordance with Section 4.3 of the Plan.

 

5.                                        Termination of Employment. In the event of termination of a Participant’s employment, the disposition of any unvested Awards will be determined in accordance with such Participant’s written employment agreement and Award Agreement, if applicable. If a Participant is not employed pursuant to a written employment agreement and voluntarily terminates his or her employment, or is terminated for Cause (as such term is defined in the Plan), such Participant will forfeit any unvested Awards. If a Participant is not employed pursuant to a written employment agreement and such employment is terminated by the Company without Cause, or by reason of Participant’s death, disability or retirement (upon attainment of eligibility to retire in accordance with any applicable Company policy then in effect) all unvested Awards will immediately vest. The provisions of Section 8 of the Plan will govern in the event of a Change of Control and are not intended to be altered by this Section 5. Notwithstanding the foregoing, for any Participant who is subject to Code Section 162(m) compensation restrictions, no unvested Awards which are intended to be performance-based compensation under Code Section 162(m) shall vest unless the performance goals have been satisfied on a pro rata basis by the termination date.

 

6.                                       Amendments. The Committee may from time to time amend or modify this Alignment of Interest Program, provided that no such action shall adversely affect Awards previously granted hereunder.

 

7.                                        Survival. This Alignment of Interest Program shall continue in effect as long as the Plan is in effect or until terminated by the Committee.

 

2

 

EXHIBIT A

Initial Percentages/Multiples Pursuant to

Alignment of Interest Program

 

Range of Elective Deferral Percentages

 

	
Compensation Type
    	
 
    	
Minimum
    	
 
    	
Maximum
    	
 
    
	
Base Salary
    	
 
    	
0.00
    	
%
    	
100.00
    	
%
    
	
Cash Bonus
    	
 
    	
0.00
    	
%
    	
100.00
    	
%
    
	
Other Compensation
    	
 
    	
0.00
    	
%
    	
100.00
    	
%
    

 

Employee Restriction Multiples

 

	
Compensation Type
    	
 
    	
3 Year Restriction
    	
 
    	
5 Year Restriction
    	
 
    	
8 Year Restriction
    	
 
    
	
Base Salary
    	
 
    	
0.3
    	
X
    	
0.5
    	
X
    	
1.0
    	
X
    
	
Cash Bonus
    	
 
    	
0.3
    	
X
    	
0.5
    	
X
    	
1.0
    	
X
    
	
Other Compensation
    	
 
    	
0.3
    	
X
    	
0.5
    	
X
    	
1.0
    	
X
    

 

Director Restriction Multiples

 

	
Compensation Type
    	
 
    	
1 Year Restriction
    	
 
    	
2 Year Restriction
    	
 
    	
3 Year Restriction
    	
 
    
	
Retainer
    	
 
    	
0.2
    	
X
    	
0.4
    	
X
    	
0.6
    	
X
    
	
Fees
    	
 
    	
0.2
    	
X
    	
0.4
    	
X
    	
0.6
    	
X
    
	
Other Compensation
    	
 
    	
0.2
    	
X
    	
0.4
    	
X
    	
0.6
    	
X
    

 

3

 

EXHIBIT B

Examples

 

Officer Example

 

	
 
    	
 
    	
 
    	
 
    	
Elected
    	
 
    	
 
    	
 
    	
Current
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Elected
    	
 
    	
 
    	
 
    	
Alignment
    	
 
    	
Total
    	
 
    
	
 
    	
 
    	
Initial Cash
    	
 
    	
Deferral
    	
 
    	
Deferred
    	
 
    	
Year Cash
    	
 
    	
Share
    	
 
    	
Acquisition
    	
 
    	
Deferral
    	
 
    	
Restriction
    	
 
    	
of Interest
    	
 
    	
Restricted
    	
 
    
	
 
    	
 
    	
Amounts
    	
 
    	
Percent
    	
 
    	
Amount
    	
 
    	
Received
    	
 
    	
Price
    	
 
    	
Shares
    	
 
    	
Period
    	
 
    	
Multiple
    	
 
    	
Award
    	
 
    	
Shares
    	
 
    
	
Base   Salary
    	
 
    	
150,000
    	
 
    	
25
    	
%
    	
37,500
    	
 
    	
112,500
    	
 
    	
$
    	
20.00
    	
 
    	
1,875
    	
 
    	
5 year
    	
 
    	
0.5
    	
 
    	
937.5
    	
 
    	
2,812.50
    	
 
    
	
Cash   Bonus
    	
 
    	
50,000
    	
 
    	
100
    	
%
    	
50,000
    	
 
    	
0
    	
 
    	
$
    	
20.00
    	
 
    	
2,500
    	
 
    	
3 year
    	
 
    	
0.3
    	
 
    	
750.0
    	
 
    	
3,250.00
    	
 
    
	
Other   Compensation
    	
 
    	
50,000
    	
 
    	
50
    	
%
    	
25,000
    	
 
    	
25,000
    	
 
    	
$
    	
20.00
    	
 
    	
1,250
    	
 
    	
8 year
    	
 
    	
1
    	
 
    	
1,250.0
    	
 
    	
2,500.00
    	
 
    
	
Totals
    	
 
    	
250,000
    	
 
    	
 
    	
 
    	
112,500
    	
 
    	
137,500
    	
 
    	
 
    	
 
    	
5,625
    	
 
    	
 
    	
 
    	
 
    	
 
    	
2,937.5
    	
 
    	
8,562.50
    	
 
    

 

Director Example

 

	
 
    	
 
    	
 
    	
 
    	
Elected
    	
 
    	
 
    	
 
    	
Current
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Elected
    	
 
    	
 
    	
 
    	
Alignment
    	
 
    	
Total
    	
 
    
	
 
    	
 
    	
Initial Cash
    	
 
    	
Deferral
    	
 
    	
Deferred
    	
 
    	
Year Cash
    	
 
    	
Share
    	
 
    	
Acquisition
    	
 
    	
Deferral
    	
 
    	
Restriction
    	
 
    	
of Interest
    	
 
    	
Restricted
    	
 
    
	
 
    	
 
    	
Amounts
    	
 
    	
Percent
    	
 
    	
Amount
    	
 
    	
Received
    	
 
    	
Price
    	
 
    	
Shares
    	
 
    	
Period
    	
 
    	
Multiple
    	
 
    	
Award
    	
 
    	
Shares
    	
 
    
	
Annual   Retainer
    	
 
    	
25,000
    	
 
    	
100
    	
%
    	
25,000
    	
 
    	
0
    	
 
    	
$
    	
20.00
    	
 
    	
1,250
    	
 
    	
3 year
    	
 
    	
0.6
    	
 
    	
750.0
    	
 
    	
2,000.00
    	
 
    
	
Meeting   Fees
    	
 
    	
7,500
    	
 
    	
100
    	
%
    	
7,500
    	
 
    	
0
    	
 
    	
$
    	
20.00
    	
 
    	
375
    	
 
    	
2 year
    	
 
    	
0.4
    	
 
    	
150.0
    	
 
    	
525.00
    	
 
    
	
Other   Compensation
    	
 
    	
10,000
    	
 
    	
0
    	
%
    	
0
    	
 
    	
10,000
    	
 
    	
$
    	
20.00
    	
 
    	
0
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.0
    	
 
    	
0.00
    	
 
    
	
Totals
    	
 
    	
42,500
    	
 
    	
 
    	
 
    	
32,500
    	
 
    	
10,000
    	
 
    	
 
    	
 
    	
1,625
    	
 
    	
 
    	
 
    	
 
    	
 
    	
900.0
    	
 
    	
2,525.00
    	
 
    

 

4Exhibit 10.9

 

COMMUNITY HEALTHCARE TRUST INCORPORATED

RESTRICTED STOCK AGREEMENT

PURSUANT TO THE

ALIGNMENT OF INTEREST PROGRAM

 

This RESTRICTED STOCK AGREEMENT (the “Agreement”) is made and is effective as of the              day of                         , 20    , by and between Community Healthcare Trust Incorporated (“CHCT”) and                   (the “Participant”).

 

Upon and subject to the terms of the Alignment of Interest Program, Participant’s Employment Agreement, Participants currently effective Compensation Reduction Election Form and the Additional Terms and Conditions attached hereto and incorporated herein by reference as part of this Agreement, CHCT hereby acknowledges providing to the Participant the Restricted Stock described below in consideration of the Participant’s services to CHCT and Participant’s election to participate in the Alignment of Interest Program.

 

A.                                    Vesting Period/Forfeiture:  Unless forfeited pursuant to the terms of Participant’s Employment Agreement, the Restricted Stock shall become 100% vested upon the earlier to occur of a Change in Control or the end of the Vesting Period as elected by the Participant pursuant to a valid compensation reduction election.

 

B.                                    Restricted Stock:  Pursuant to the Participant’s election to receive $                   of Compensation as                          shares of Restricted Stock (“Stock Compensation “) in accordance with Participant’s valid compensation reduction election, CHCT hereby awards Participant                            shares of Restricted Stock (“Stock Multiple Award”) as an award for Participant’s subjecting both the Stock Compensation and Stock Multiple Award to the Vesting Period set forth in the Participant’s valid compensation reduction election form .

 

C.                                    Program and Plan:  This Agreement is entered into pursuant to the Alignment of Interest Program under the Community Healthcare Trust Incorporated 2014 Incentive Plan.  The Restricted Stock which becomes vested pursuant to the Vesting Period previously elected is herein referred to as the “Vested Shares.”  Any portion of the Restricted Stock which has not become Vested Shares in accordance with the Vesting Period before or at the time of a Participant ceasing to be an Employee or Director with CHCT, other than due to death, Disability, Retirement, termination without Cause or due to Good Reason, shall be forfeited.

 

D.                                    Status as Shareholder.  Participant will be paid all dividends on all Restricted Stock in the same manner as other shareholders and shall have voting rights for all Restricted Stock.

 

IN WITNESS WHEREOF, CHCT and Participant have signed this Agreement as of the date set forth above.

 

	
Community   Healthcare Trust Incorporated
    	
 
    	
Participant
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
				

 

 

COMMUNITY HEALTHCARE TRUST INCORPORATED

ADDITIONAL TERMS AND CONDITIONS OF

RESTRICTED STOCK AGREEMENT

PURSUANT TO THE

ALIGNMENT OF INTEREST PROGRAM

 

1.                                      Issuance of Restricted Stock.

 

(a)                                 CHCT shall issue the Restricted Stock by documenting the issuance in book entry form on CHCT’s stock records.  Evidence of the Restricted Stock in book entry shall be held by CHCT until the Restricted Stock becomes Vested Shares in accordance with the Agreement.

 

(b)                                 In the event that the Participant forfeits any of the Restricted Stock, CHCT shall cancel the issuance on its stock records.

 

(c)                                  Participant hereby irrevocably appoints CHCT as the true and lawful attorney-in-fact of Participant with full power and authority to execute any stock transfer power or other instrument necessary to transfer any Restricted Stock in accordance with this Agreement, in the name, place, and stead of the Participant, by completing an irrevocable stock power in favor of CHCT in the form attached hereto as Exhibit A.  The term of such appointment shall commence on the Date of this Agreement and shall continue until the last shares of the Restricted Stock are delivered to the Participant as Vested Shares or are returned to CHCT as forfeited Restricted Stock.

 

(d)                                 In the event the number of shares of Common Stock is increased or reduced as a result of a subdivision or combination of shares of Common Stock or the payment of a stock dividend or any other increase or decrease in the number of shares of Common Stock or other transaction such as a merger, reorganization or other change in the capital structure of CHCT, the Participant agrees that any shares of Common Stock or other securities of CHCT issued as a result of any of the foregoing shall be recorded in book entry form and shall be subject to all of the provisions of this Agreement as if initially provided for hereunder.

 

2.                                      Restrictions on Transfer of Restricted Stock.

 

(a)                                 The Participant 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 Restricted Stock prior to the date the Participant becomes fully vested in such Restricted Stock as provided pursuant to this Agreement.  After all Restricted Stock has become fully vested pursuant to this Agreement there shall be no restrictions on the transfer of the Vested Shares other than those restrictions imposed by any applicable laws.

 

(b)                                 The restrictions contained herein will not apply with respect to transfers of Restricted Stock pursuant to the laws of descent and distribution governing the state in which the Participant is domiciled at the time of the Participant’s death; provided that the restrictions contained herein will continue to be applicable to the Restricted Stock after any such transfer; and provided further that the transferee(s) of such Restricted Stock must agree in writing to be bound by the provisions of this Agreement.

 

3.                                      Compliance With Laws.  The Plan, the Program, the provision and vesting of Restricted Stock under the Plan, the issuance and delivery of the Restricted Stock, and the

 

2

 

payment of money or other consideration allowable under the Plan are subject to compliance with all applicable federal and state laws, rules and regulations (including, but not limited to, state and federal securities laws and federal margin requirements) and to such approvals by any listing, regulatory or governmental authority as may, in the opinion of counsel for the Committee, the Board or CHCT, be necessary or advisable in connection therewith. Any securities delivered under the Plan shall be subject to such restrictions, and the person acquiring such securities shall, if requested by CHCT, provide such assurances and representations to CHCT as the Committee, the Board or CHCT may deem necessary or desirable to assure compliance with all applicable legal requirements.

 

To the extent permitted by applicable law, the Plan and this Agreement shall be deemed amended to the extent necessary to conform to such laws, rules and regulations. Nothing in the Plan or in this Agreement shall require CHCT to issue any Stock with respect to the Agreement if, in the opinion of counsel for CHCT, that issuance could constitute a violation of any applicable laws. To the extent that CHCT determines it cannot provide the Restricted Stock pursuant to the Agreement, then CHCT must return the Participants compensation it elected to reduce and take all other measures required to ensure that the Participant is not harmed due to CHCT’s inability to provide the Restricted Stock.

 

As a condition to the provision of the Restricted Stock, CHCT may require the Participant (or, in the event of the Participant’s death, the Participant’s legal representatives, heirs, legatees or distributees) to provide written representations concerning the Participant’s (or such other person’s) intentions with regard to the retention or disposition of the Restricted Stock and written covenants as to the manner of disposal of such Restricted Stock as may be necessary or useful to ensure that the provision of or disposition thereof will not violate the Securities Act, any other law or any rule of any applicable securities exchange or securities association then in effect. CHCT shall not be required to register any Stock under the Securities Act or register or qualify any Stock under any state or other securities laws.

 

3

 

EXHIBIT A

 

IRREVOCABLE STOCK POWER

 

The undersigned hereby assigns and transfers to Community Healthcare Trust Incorporated (“CHCT”),                          shares of the Common Stock of CHCT registered in the name of the undersigned on the stock transfer records of CHCT; and the undersigned does hereby irrevocably constitute and appoint                                     , his attorney-in-fact, to transfer the aforesaid shares on the books of CHCT, with full power of substitution; and the undersigned does hereby ratify and confirm all that said attorney-in-fact lawfully shall do by virtue hereof.

 

 

	
Date:
    	
 
    	
 
    	
Signed:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Print   Name:
    	
 
    
						

 

IN THE PRESENCE OF:

 

 

	
 
    	
 
    
	
(Print Name)
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
(Signature)
    	
 
    

 

4

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