Document:

Exhibit 10.7

 

FORM OF EMPLOYEE PROTECTION AND NONCOMPETITION AGREEMENT

 

This EMPLOYEE PROTECTION AND NONCOMPETITION AGREEMENT (“Agreement”), by and between Care Capital Properties, Inc. (the “Company”), Kristen M. Benson (“Employee”), and solely for the limited purposes set forth in Section 13 hereof, Ventas, Inc. (“Ventas”), is entered into as of the      day of          , 2015, and effective as of the date (the “Effective Date”) of consummation of the distribution (the “Spinoff”) of the shares of the Company to the shareholders of Ventas.

 

WHEREAS, the Company desires to employ Employee as its Executive Vice President and General Counsel effective on the Effective Date on the terms and conditions, and for the consideration hereinafter set forth, and Employee desires to be employed by the Company on and following the Effective Date, on such terms and conditions and for such consideration.

 

WHEREAS, this Agreement provides Employee with severance if Employee’s employment is terminated in certain circumstances and provides the Company with certain protections regarding Employee’s actions including after termination of employment; and

 

WHEREAS, this Agreement shall become effective on the Effective Date; however, if Ventas decides, and publicly announces, that it will not be consummating the Spinoff, or if the Effective Date has not occurred as of June 30, 2016, this Agreement shall become null and void ab initio, and neither the Company nor Employee shall have any rights hereunder.

 

NOW, THEREFORE, in consideration of the promises and the respective covenants and agreements contained herein, and intending to be legally bound hereby, the Company and Employee agree as follows:

 

1.                                      Obligations of the Company upon Termination.  Following any termination of Employee’s employment by the Company without Cause (as defined below) or by Employee with Good Reason (as defined below) hereunder, the Company shall pay Employee’s Base Salary (as defined below) through the Date of Termination (as defined below), any earned but unpaid Annual Bonus for periods ending on or prior to the Date of Termination, and all amounts earned and owed (but yet unpaid) to Employee pursuant to the terms and conditions of the employee benefit plans and programs of the Company in effect at the time such payments are due, including accrued and unpaid vacation (the “Accrued Obligations”).  The term “Base Salary” for purposes of this Agreement shall refer to Employee’s base salary annualized, as most recently increased prior to the Date of Termination.  The term “Annual Bonus” for purposes of this Agreement shall refer to Employee’s annual cash bonus pursuant to the terms of the Company’s annual incentive plan, as in effect from time to time.  In addition, except for a termination in connection with a Change of Control (as defined below) covered by Section 2 hereof or a termination due to Employee’s death, subject to Employee’s execution of a general release of claims in form substantially similar to the form attached hereto as Appendix A (the “Release”), Employee shall be entitled to the following additional payments and/or benefits:

 

(a)                                 Other than for Cause, or for Good Reason.  If the Company shall terminate Employee’s employment other than for Cause or if Employee shall terminate Employee’s employment for Good Reason:

 

 

(i)                                     The Company shall pay Employee within 30 days of the Date of Termination (but not earlier than the date on which the Release becomes irrevocable) a lump sum payment equal to 1.5 times the sum of (A) Employee’s Base Salary and (B) the Annual Bonus that Employee would receive for the year of termination of employment assuming target individual and Company performance (the “Target Annual Bonus”).

 

(ii)                                  The Company shall pay Employee a prorated Annual Bonus for the fiscal year during which the Date of Termination occurs, with the amount of such prorated Annual Bonus based on actual performance and equal to the product of such Annual Bonus multiplied by a fraction, the numerator of which is the number of days in the year of the termination of employment during which Employee was employed by the Company and the denominator of which is 365, with such prorated Annual Bonus to be payable at the same time that annual bonuses are payable to Company executives generally.

 

(iii)                               Subject to Section 10, the Company shall, at the Company’s election, either (A) provide during the one-year period beginning on the Date of Termination (the “Medical Benefit Severance Period”) Employee with continued medical, dental and vision benefits (but no other benefits) at the same level as if Employee remained actively employed during the Medical Benefit Severance Period, or (B) pay to Employee a cash lump sum payment equal to (1) 12 multiplied by (2) the excess of the monthly COBRA (as defined below) premium as of Employee’s Date of Termination for the medical, dental and vision coverage Employee had immediately prior to Employee’s Date of Termination over the monthly dollar amount Employee would have paid to the Company for such medical, dental and vision coverage if Employee remained employed during the Medical Benefit Severance Period.  If the Company elects pursuant to the preceding sentence to provide medical, dental and vision benefits during the Medical Benefit Severance Period, Employee shall pay the Company on a monthly basis the portion of the periodic cost of such continued coverage equal to the dollar amount of such periodic cost as if Employee remained employed during the Medical Benefit Severance Period and such medical, dental and vision benefits shall terminate at the earlier of (A) the end of the Medical Benefit Severance Period or (B) the time they would be permitted to terminate under Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”).  As and to the extent provided by COBRA, Employee will be eligible to continue Employee’s health insurance benefits at Employee’s own expense for the statutory period prescribed by COBRA, treating Employee’s termination of employment as the “qualifying event” (as defined in COBRA) (the “Severance Medical Benefits”).

 

(b)                                 Cause; Employee Resignation.  If Employee’s employment shall be terminated by the Company for Cause or by Employee other than for Good Reason, this Agreement shall terminate without further additional obligations to Employee under this Agreement.

 

 

(c)                                  Death or Disability.  If Employee’s employment shall be terminated due to Employee’s death or Disability, this Agreement shall terminate without further additional obligations to Employee under this Agreement, except that the Company shall pay or provide to the Employee or the Employee’s estate, as applicable, the Accrued Obligations.  For purposes of this Agreement, “Disability” shall have the meaning set forth in the Company’s 2015 Incentive Plan as in effect on the Effective Date.

 

(d)                                 Death after Termination.  In the event of the death of Employee during the period Employee is receiving payments pursuant to this Agreement, Employee’s designated beneficiary shall be entitled to receive the balance of the payments, or in the event of no designated beneficiary, the remaining payments shall be made to Employee’s estate.

 

2.                                      Occurrence of a Change of Control.

 

(a)                                 Termination Other than for Cause, or for Good Reason.  If a Change of Control (as defined below) shall occur and within one year after the date of the occurrence of such Change of Control, the Company shall terminate Employee’s employment other than for Cause or Employee shall terminate Employee’s employment for Good Reason, subject to Employee’s execution of the Release and in lieu of the benefits under Section 1 hereof:

 

(i)                                     The Company shall pay Employee within 30 days of the Date of Termination (but not earlier than the date on which the Release becomes irrevocable) a lump sum payment equal to two times the sum of (A) Employee’s Base Salary, plus (B) the Target Annual Bonus.

 

(ii)                                  The Company shall pay Employee within 30 days of the Date of Termination (but not earlier than the date on which the Release becomes irrevocable), a prorated Target Annual Bonus equal to the product of such Target Annual Bonus multiplied by a fraction, the numerator of which is the number of days in the year of the termination of employment during which Employee was employed by the Company and the denominator of which is 365.

 

(iii)                               Subject to Section 10, Employee shall be entitled to the Severance Medical Benefits; provided, however, that, the Medical Benefits Severance Period for purposes of this Section 2(a) shall be the 24-month period beginning on the Date of Termination and the reference to “12” in Section 1(a)(iii)(B)(1) shall be deemed to refer to “24.”

 

(b)                                 Definition of Change of Control.   For purposes of this Agreement, “Change of Control” shall mean the occurrence of any of the following events:

 

(i)                                     An acquisition (other than directly from the Company) of any voting securities of the Company (the “Voting Securities”) by any “Person” (having the meaning ascribed to such term in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended (the “1934 Act”), and as used in Section 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d)) immediately

 

 

after which such Person has beneficial ownership (within the meaning of Rule 13d-3 promulgated under the 1934 Act) (“Beneficial Ownership” and/or “Beneficially Owned”) of 35% or more of the combined voting power of the Company’s then-outstanding Voting Securities; provided, however, that in determining whether a Change of Control has occurred, Voting Securities which are acquired in a Non-Control Acquisition (as hereinafter defined) shall not constitute an acquisition which would cause a Change of Control. A Non-Control Acquisition shall mean an acquisition by (A) the Company or any company, corporation, partnership, limited liability company or other Person in which the Company directly or indirectly owns a majority interest (“Subsidiary”), (B) an employee benefit plan (or a trust forming a part thereof) maintained by the Company or any Subsidiary, or (C) any Person in connection with a Non-Control Transaction (as hereinafter defined);

 

(ii)                                  The individuals who, as of the Effective Date, are members of the Board of Directors of the Company (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that if the election, or nomination for election by the Company’s stockholders, of any new director was approved by a vote of at least a majority of the Incumbent Board, such new director shall, for purposes of this Section 2(b), be considered a member of the Incumbent Board; and provided, further, however, that no individual shall be considered a member of the Incumbent Board if such individual initially assumed office as a result of either an actual or threatened election contest (as described in former Rule 14a-11 promulgated under the 1934 Act) (“Election Contest”) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board of Directors of the Company (a “Proxy Contest”), including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest;

 

(iii)                               Consummation of a merger, consolidation or reorganization involving the Company, unless such transaction is a Non-Control Transaction. For purposes of this Agreement, the term “Non-Control Transaction” shall mean a merger, consolidation or reorganization of the Company in which:

 

(A)                               The stockholders of the Company, immediately before such merger, consolidation or reorganization, own, directly or indirectly immediately following such merger, consolidation or reorganization, at least 45% of the combined voting power of the voting securities of the corporation or entity resulting from such merger, consolidation or reorganization (the “Surviving Company”) over which any Person has Beneficial Ownership in substantially the same proportion as their Beneficial Ownership of the Voting Securities immediately before such merger, consolidation or reorganization;

 

(B)                               The individuals who were members of the Incumbent Board immediately prior to the execution of the agreement providing for such merger, consolidation or reorganization constitute at least a majority

 

 

of the members of the board of directors or equivalent body of the Surviving Company; and

 

(C)                               No Person (other than the Company, any Subsidiary, any employee benefit plan (or any trust forming a part thereof) maintained by the Company, the Surviving Company or any Person who, immediately prior to such merger, consolidation or reorganization, had Beneficial Ownership of 35% or more of the then-outstanding Voting Securities) has Beneficial Ownership of 35% or more of the combined voting power of the Surviving Company’s then-outstanding voting securities;

 

(iv)                              A complete liquidation or dissolution of the Company; or

 

(v)                                 The sale or other disposition of all or substantially all of the assets of the Company to any Person (other than a transfer to a Subsidiary).

 

Notwithstanding the foregoing, a Change of Control shall not be deemed to occur solely because any Person (the “Subject Person”) acquired Beneficial Ownership of more than the permitted amount of the outstanding Voting Securities as a result of the acquisition of Voting Securities by the Company which, by reducing the number of Voting Securities outstanding, increases the proportional number of shares Beneficially Owned by the Subject Person; provided, however, that if a Change of Control would occur (but for the operation of this sentence) as a result of the acquisition of Voting Securities by the Company, and after such share acquisition by the Company, the Subject Person becomes the Beneficial Owner of any additional Voting Securities which increases the percentage of the then-outstanding Voting Securities Beneficially Owned by the Subject Person, then a Change of Control shall occur.

 

Notwithstanding anything herein to the contrary, with respect to any compensation hereunder that is “nonqualified deferred compensation” for purposes of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), only to the extent necessary to comply with Section 409A of the Code, a Change of Control must constitute a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Company, within the meaning of Section 409A(a)(2)(A)(v) of the Code.

 

3.                                      Restrictive Covenants.

 

(a)                                 Confidentiality.

 

(i)                                     Employee shall not, unless written permission is granted by the Company, disclose to or communicate in any manner with the press or any other media about Employee’s employment with the Company, the terms of this Agreement, the termination of Employee’s employment with the Company, the Company’s businesses or affairs, the Company’s officers, directors, employees and/or consultants, or any matter related to any of the foregoing.

 

(ii)                                  Employee acknowledges that it is the policy of the Company and its Subsidiaries to maintain as secret and confidential all information and techniques acquired, developed, possessed or used by the Company and its

 

 

Subsidiaries relating to their business, operations, actual or potential products, strategies, assets, liabilities, potential assets and liabilities, employees, customers, tenants, operators, borrowers, managers, proposed or prospective customers, tenants, operators, borrowers and managers, business partners, communities, buildings and facilities (including, without limitation: information protected by the Company’s attorney/client, work product, or tax advisor/audit privileges; tax matters and information; financial analysis and models; the Company’s strategic plans; negotiations with third parties; methods, policies, processes, formulas, techniques, know-how and other knowledge; trade practices, trade secrets, or financial matters; lists of customers or customers’ purchases; lists of suppliers, representatives, or other distributors; lists of and information (business, financial and otherwise) about tenants, operators, borrowers, managers and customers and their respective businesses and operations; requirements for systems, programs, machines, or their equipment; information regarding the Company’s bank accounts, credit agreement or financial projections, results or information; information regarding the Company’s directors or officers or their personal affairs), whether or not any such information or any of the material described above is explicitly designated or marked as “confidential” (“Confidential Information”).  “Confidential Information” shall not include information that (A) is or becomes generally available to the public other than as a result of a disclosure by Employee in violation of this Agreement, (B) was available to Employee on a non-confidential basis prior to Employee’s employment with the Company, or (C) is compelled to be disclosed by any law, regulation or order of a court or governmental agency, provided that prior written notice is given to the Company and Employee cooperates with the Company in any efforts by the Company to limit the scope of such obligation and/or to obtain confidential treatment of any material disclosed pursuant to such obligation.  Employee recognizes that all such Confidential Information is the sole and exclusive property of the Company and its Subsidiaries, and that disclosure of Confidential Information would cause damage to the Company and its Subsidiaries.  Employee shall not disclose, directly or indirectly, any Confidential Information obtained during Employee’s employment with the Company, and will take all necessary precautions to prevent disclosure, to any unauthorized individual or entity inside or outside the Company, and will not use the Confidential Information or permit its use for the benefit of Employee or other third party other than the Company.  These obligations shall continue for so long as the Confidential Information remains Confidential Information.

 

(b)                                 Noncompetition, Nonsolicitation, Noninterference.  Employee shall not during Employee’s employment with the Company and during the one-year period after the termination of Employee’s employment with the Company for any reason (the “Restricted Period”), either directly or indirectly (through another business or person) engage in or facilitate any of the following activities anywhere in the United States:

 

(i)                                     Hiring, recruiting, engaging as a consultant or adviser, employing or attempting or soliciting to hire, recruit or employ any person employed by the Company or any Subsidiary or affiliate, or causing or attempting to cause any

 

 

third party to do any of the foregoing; nothing in this Section 3(b)(i) shall, however, restrict Employee from general employment advertising on a broad basis not targeted at or designed for any such employee;

 

(ii)                                  Causing or attempting to cause any person employed at any time during the Restricted Period by the Company or any Subsidiary or affiliate to terminate his or her relationship with the Company or any Subsidiary or affiliate;

 

(iii)                               Soliciting, enticing away, or endeavoring to entice away, or otherwise interfering with any employee, customer, tenant, operator, manager or any proposed employee, customer, tenant, operator or manager with whom the Company or any Subsidiary or affiliate has ongoing contact, financial partner or proposed financial partner with whom the Company or any Subsidiary or affiliate has ongoing contact, vendor, supplier or other similar business relation, who at any time during the Restricted Period or who at any time during the period commencing one year prior to the Date of Termination, to Employee’s knowledge, maintained a material business relationship with the Company or any Subsidiary or affiliate or with whom the Company or any Subsidiary or affiliate is targeting for a material business relationship or is engaged in discussions with to commence a material business relationship at the time of termination of Employee’s employment with the Company; or

 

(iv)                              Performing services as an employee, director, officer, consultant, independent contractor or advisor of, or investing in, whether in the form of equity or debt, owning any interest or otherwise having an ownership or other interest in or a connection to any Prohibited Entity (as defined below); or performing services as an employee, director, officer, consultant, independent contractor or advisor of any other company, entity or person if those services relate directly to a business or businesses that directly and materially compete with the Company anywhere in the United States.  Nothing in this Section 3(b)(iv) shall, however, restrict Employee from (A) making an investment in and owning up to 2% of the common stock of any company whose stock is listed on a national exchange, provided that such investment does not give Employee the right or ability to control or influence the policy decisions of any direct competitor, or (B) except as provided in Section 3(c) below, performing services as an employee, director, officer, consultant, independent contractor or advisor of an operating company that provides healthcare goods or services other than leasing or financing of real property (for example, a hospital or nursing facility).  For purposes of this Agreement, a “Prohibited Entity” is any company, entity or person that derives more than 20% of its consolidated gross revenues from a business or businesses that directly and materially compete with the Company.

 

(c)                                  Other Prohibited Activities.  Employee acknowledges that Employee’s position at the Company provides Employee with access to highly sensitive information concerning the Company’s lessees, managers, borrowers and operators and their affiliates and leases, operating agreements, management agreements and other contractual agreements with such lessees, managers, borrowers and operators and their affiliates

 

 

which are critical to the Company’s ability to effectively function and to the properties to be purchased by the Company, and that if Employee were to provide services for such lessees, managers, borrowers and operators and/or their affiliates such services would cause irreparable damages to the Company.  Employee shall not during Employee’s employment and the Restricted Period, either directly or indirectly (through another business or person), engage in or facilitate any of the following activities anywhere in the United States or in any location outside the United States where the Company conducts or plans to conduct business: performing services as an employee, director, officer, consultant, independent contractor or advisor of, or investing in, whether in the form of equity or debt, owning any interest or otherwise having an ownership or other interest in any of the Company’s then-current lessees, managers, borrowers or operators or any of their respective parent, sister, subsidiary or affiliated entities (other than any such lessee, manager, borrower or operator that, together with its parent, sister, subsidiary and affiliated entities, contributes less than 5% of the Company’s consolidated net operating income (NOI), computed on a pro forma annualized basis consistent with the Company’s most recent supplemental disclosure, and is not in default under any of its agreements with the Company nor has an ongoing dispute with the Company) in any manner, including, without limitation, as an owner, principal, partner, officer, director, stockholder, employee, consultant, contractor, agent, broker, representative or otherwise.  Nothing in this Section 3(c) shall, however, restrict Employee from making an investment in and owning, directly or indirectly, up to 2% of the common stock of any company whose stock is listed on a national exchange; provided that such investment does not give Employee the right or ability to control or influence the policy decisions of any lessee, manager, borrower or operator or any of its parent, sister, subsidiary or affiliated entities.

 

(d)                                 Non-Disparagement.

 

(i)                                     Employee agrees not to make, or cause to be made, any statement, observation or opinion, or communicate any information (whether oral or written, directly or indirectly) that (A) accuses or implies that the Company and/or any of its affiliates, together with their respective present or former officers, directors, partners, stockholders, employees and agents, and each of their predecessors, successors and assigns, engaged in any wrongful, unlawful, unethical or improper conduct, whether relating to Employee’s employment (or termination thereof), the business or operations of the Company, or otherwise; or (B) disparages, impugns or in any way reflects adversely upon the business, good will, products, business opportunities, competency, character, behavior or reputation of the Company and/or any of its affiliates, together with their respective present or former officers, directors, partners, stockholders, employees and agents, and each of their predecessors, successors and assigns.

 

(ii)                                  Nothing herein shall be deemed to preclude Employee or the Company from providing truthful testimony or information pursuant to subpoena, court or other similar legal process or proceedings or to report to or cooperate with any governmental, regulatory or self-regulatory body with jurisdiction over

 

 

the Company, and to make disclosures that are protected under whistleblower or other provisions of applicable law or regulation.

 

(e)                                  New Employer.  Employee shall provide the terms and conditions of this Section 3 to any prospective new employer or new employer and shall permit the Company to contact any such company, entity or individual to confirm Employee’s compliance with this Section 3 and shall provide the Company with such information as it requests to allow such inquiry.

 

(f)                                   Reasonableness of Restrictive Covenants.

 

(i)                                     Employee acknowledges that the covenants contained in this Section 3 are reasonable in the scope of the activities restricted, the geographic area covered by the restrictions, and the duration of the restrictions, and that such covenants are reasonably necessary to protect the Company’s legitimate interests in its Confidential Information, its reputation, and in its relationships with its employees, customers, and suppliers.

 

(ii)                                  The Company has consulted, and Employee has had an opportunity to consult, with their respective legal counsel and to be advised concerning the reasonableness and propriety of such covenants.  Employee acknowledges that Employee’s observance of the covenants contained herein will not deprive Employee of the ability to earn a livelihood or to support Employee’s dependents.

 

(iii)                               If any provision or portion of Section 3 of this Agreement is held to be unenforceable because of the scope, duration, territory, or terms thereof, Employee agrees that the court making such determination shall have the power to and shall reduce the scope, duration, territory and/or terms of such provision, so that the provision is enforceable by the court to afford the maximum protection to the Company under the law, and such provision as amended shall be enforced by the court.

 

(g)                                  Right to Injunction.  In recognition of the confidential nature of the Confidential Information, and in recognition of the necessity of the limited restrictions imposed by Section 3, Employee and the Company agree that it would be impossible to measure solely in money the damages which the Company would suffer if Employee were to breach any of Employee’s obligations hereunder.  Employee acknowledges that any breach of any provision of this Agreement would irreparably injure the Company.  Accordingly, Employee agrees that if Employee breaches any of the provisions of Section 3, the Company shall be entitled, in addition to any other remedies to which the Company may be entitled under this Agreement or otherwise, to an injunction to be issued without bond by a court of competent jurisdiction, to restrain any breach, or threatened breach, of any provision of Section 3, and Employee hereby waives any right to assert any claim or defense that the Company has an adequate remedy at law for any such breach or to require the Company to post bond or other security during the pendency of such injunction.

 

 

(h)                                 Assistance.  During the one-year period following a termination of Employee’s employment with the Company, Employee shall from time to time provide the Company with such reasonable assistance and cooperation as the Company may reasonably from time to time request in connection with any investigation, claim, dispute, judicial, legislative, administrative or arbitral proceeding, or litigation (any of the foregoing, a “Proceeding”) arising out of matters within the knowledge of Employee and related to Employee’s position as an employee of the Company.  Such assistance and cooperation shall include providing information, declarations or statements to the Company, signing documents, meeting with attorneys or other representatives of the Company, and preparing for and giving truthful testimony in connection with any Proceeding or related deposition.  In any such instance, Employee shall provide such assistance and cooperation at times and in places mutually convenient for the Company and Employee and which do not unreasonably interfere with Employee’s business or personal activities.  The Company shall reimburse Employee’s reasonable out-of-pocket costs and expenses in connection with such assistance and cooperation upon Employee’s written request in such form and containing such information as the Company shall reasonably request.

 

4.                                      Termination of Employment.  Subject to the provisions of this Agreement, the Company may terminate Employee’s employment at any time for any reason whatsoever or for no reason and with or without Cause.  Employee acknowledges and agrees that Employee’s employment with the Company is terminable at the will of the Company without any obligation, except as may be expressly provided in Section 1 or Section 2.

 

(a)                                 Cause.  For purposes of this Agreement, “Cause” shall mean (i) Employee’s indictment for, conviction of, or plea of nolo contendere to, any felony or a misdemeanor involving fraud, dishonesty or moral turpitude; (ii) the willful or intentional material breach by Employee of Employee’s duties and responsibilities; (iii) the willful or intentional material misconduct by Employee in the performance of Employee’s duties; or (iv) the willful or intentional failure by Employee to comply with any lawful instruction or directive of the Chief Executive Officer of the Company.

 

(b)                                 Good Reason.  Employee may terminate Employee’s employment for Good Reason or without Good Reason.  For purposes of this Agreement, “Good Reason” shall mean any of the following occurring on or after the Effective Date and to the extent not consented to, or suggested, by Employee:

 

(i)                                     A material diminution in Employee’s position, authority or duties (including the assignment to Employee of any duties materially and adversely inconsistent with Employee’s position, authority or duties);

 

(ii)                                  The Company shall materially reduce (other than pursuant to a uniform reduction applicable to other similarly situated executives of the Company) the Base Salary or annual target bonus opportunity of Employee;

 

 

(iii)                               The Company shall require Employee to relocate Employee’s principal business office to any location more than 30 miles from its location on the Effective Date; or

 

(iv)                              The failure of the Company to obtain the assumption of this Agreement as contemplated by Section 6(c);

 

which in each case is not cured within 30 days after written notice from Employee to the Company setting forth in reasonable detail the facts and circumstances claimed to constitute Good Reason and affording an opportunity to cure.  Any termination of employment by Employee for Good Reason shall be communicated to the Company by written notice in accordance with this Agreement.  Employee must deliver to the Company the Notice of Termination (as defined below) not later than 90 days after Employee has actual knowledge of an act or omission which constitutes Good Reason.  In the event that the Company fails to remedy the condition constituting Good Reason during the applicable cure period, the Separation from Service (as defined below) must occur, if at all, within six months following the end of such cure period in order for such termination as a result of such condition to constitute a termination for Good Reason.

 

(c)                                  Notice of Termination.  Any termination by the Company for Cause or by Employee for Good Reason shall be communicated by notice (a “Notice of Termination”) given in accordance with this Agreement.  For purposes of this Agreement, a Notice of Termination means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination by the Company (for Cause) or by Employee (with Good Reason) of Employee’s employment under the provision so indicated, and (iii) specifies the intended termination date.  The failure by the Company or Employee to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause or Good Reason shall not waive any right of the Company or Employee, respectively, hereunder or preclude the Company or Employee, respectively, from asserting such fact or circumstance in enforcing their respective rights hereunder.

 

(d)                                 Date of Termination.  “Date of Termination” means (i) if Employee’s employment is terminated by the Company for Cause or by Employee for Good Reason, the date specified in the Notice of Termination, (ii) if Employee’s employment is terminated by the Company other than for Cause, the date on which the Company notified Employee of such termination, (iii) the date of Employee’s death, or (iv) the 30th day after receipt of notice by Employee from the Company that Employee has incurred a Disability as defined in this Agreement.  To the extent necessary to have payments and benefits under this Agreement be exempt from the requirements of Section 409A of the Code, or comply with the requirements of Section 409A of the Code, the Company and Employee agree to cooperate in a reasonable manner (including with regard to any post-termination services by Employee) such that the Date of Termination as defined in this Agreement shall constitute a “separation from service” pursuant to Section 409A of the Code (“Separation from Service”).  Notwithstanding anything contained in this Agreement to the contrary, the date on which a Separation from Service occurs shall be

 

 

the “Date of Termination” or termination of employment for purposes of determining the timing of payments under this Agreement to the extent necessary to have such payments and benefits under this Agreement be exempt from the requirements of Section 409A of the Code or comply with the requirements of Section 409A of the Code.

 

5.                                      Disputes.  Any dispute or controversy arising under, out of, or in connection with this Agreement shall, at the election and upon written demand of the Company, be finally determined and settled by binding arbitration in the City of Chicago, Illinois, in accordance with the commercial arbitration rules and procedures of JAMS, and judgment upon the award may be entered in any court having jurisdiction thereof.  Each party shall bear its own costs, legal fees and other expenses respecting such arbitration; provided, however, if one party shall prevail in the claims in such arbitration as determined by the arbitrator, the non-prevailing party shall pay the prevailing party’s costs, legal fees and other expenses respecting such arbitration.  The parties agree that for any dispute for which the Company does not make the arbitration election and demand, the exclusive jurisdiction and venue will be in the federal or state courts located in Cook County, Illinois.

 

6.                                      Successors.

 

(a)                                 This Agreement is personal to Employee and without the prior written consent of the Company shall not be assignable by Employee otherwise than by will or the laws of descent and distribution.  This Agreement shall inure to the benefit of and be enforceable by Employee’s legal representatives.

 

(b)                                 This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.  This Agreement shall not be terminated by the voluntary or involuntary dissolution of the Company or by any merger or consolidation where the Company is not the surviving corporation, or upon any transfer of all or substantially all of the Company’s stock or assets.  In the event of such merger, consolidation or transfer, the provisions of this Agreement shall be binding upon and shall inure to the benefit of the surviving corporation or corporation to which such stock or assets of the Company shall be transferred.

 

(c)                                  The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, or any business of the Company for which Employee’s services are principally performed, to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.  As used in this Agreement, “Company” shall mean the Company as herein before defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.

 

7.                                      Other Severance Benefits.  Employee hereby agrees that in consideration for the payments to be received under Section 1 or Section 2 of this Agreement, Employee waives any and all rights to any payments or benefits under any plans, programs, contracts or arrangements of the Company or its affiliates that provide for severance payments or benefits upon a

 

 

termination of employment, and acknowledges that no severance is due (from the Company or Ventas) to Employee in connection with the Spinoff or any related transaction(s).

 

8.                                      Payment Cutback.  Notwithstanding any provision of this Agreement to the contrary, if any payments or benefits to which Employee becomes entitled, whether pursuant to the terms of or by reason of this Agreement or any other plan, arrangement, agreement, policy or program (including without limitation any restricted stock, stock option, stock appreciation right or similar right, or the lapse or termination of any restriction on the vesting or exercisability of any of the foregoing) with the Company, any successor to the Company or to all or a part of the business or assets of the Company (whether direct or indirect, by purchase, merger, consolidation, spin-off, or otherwise and regardless of whether such payment is made by or on behalf of the Company or such successor) or any person whose actions result in a Change of Control or any person affiliated with the Company or such persons (in the aggregate, “Total Payments”), constitute “parachute payments” within the meaning of Section 280G of the Code, and but for this Section 8, would be subject to the excise tax imposed by Section 4999 of the Code, then Employee will be entitled to receive either (a) the full amount of the Total Payments or (b) a portion of the Total Payments having a value equal to $1 less than three (3) times such individual’s “base amount” (as such term is defined in Section 280G(b)(3)(A) of the Code), whichever of (a) and (b), after taking into account applicable federal, state, and local income and employment taxes and the excise tax imposed by Section 4999 of the Code or any successor provision of the Code or any similar state or local tax, results in the receipt by Employee on an after-tax basis, of the greatest portion of the Total Payments.

 

All determinations required to be made under this Section 8 shall be made by the accountant or tax counsel or other similar expert advisor selected by Employee (such advisor, the “Tax Advisor”), which shall, if requested, provide detailed supporting calculations both to the Company and Employee within 15 business days of the receipt of notice from the Company or Employee that there has been Total Payments, or such earlier time as is requested by the Company or Employee, and if requested, a written opinion.  All fees, costs and expenses (including, but not limited to, the costs of retaining experts) of the Tax Advisor shall be borne by the Company.  The determination by the Tax Advisor shall be binding upon the Company and Employee.

 

9.                                      Withholding.  The Company may withhold all applicable required federal, state, local and other employment, income and other taxes from any and all payments to be made pursuant to this Agreement.

 

10.                               No Mitigation.  Employee shall have no duty to mitigate Employee’s damages by seeking other employment and, should Employee actually receive compensation from any such other employment, the payments required hereunder shall not be reduced or offset by any such compensation, except that the medical benefits provided pursuant to Section 1(a)(ii) or Section 2(a)(ii) may be terminated as provided by Section 1(a)(ii) or Section 2(a)(ii) if Employee receives benefits from a subsequent employer.

 

11.                               Notices.  Any notice required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given and effective when delivered or sent 

 

 

by telephone facsimile transmission, personal or overnight couriers, or registered mail, in each case with confirmation of receipt, addressed as follows:

 

If to Employee:  at the most recent address on file with the Company.

 

If to Company:

 

Care Capital Properties, Inc.
 353 N. Clark Street, Suite 2900
 Chicago, IL 60654

Attn.:  General Counsel

 

Either party may change its specified address by giving notice in writing to the other in accordance with the foregoing method.

 

12.                               Waiver of Breach and Severability.  The waiver by either party of a breach of any provision of this Agreement by the other party shall not operate or be construed as a waiver of any subsequent breach by either party.  The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision, which other provision shall remain in full force and effect.  In the event any provision of this Agreement is found to be invalid or unenforceable, it may be severed from the Agreement and the remaining provisions of the Agreement shall continue to be binding and effective.

 

13.                               Entire Agreement; Amendment.  This Agreement contains the entire agreement of the parties with respect to the subject matter hereof and, as of the Effective Date, supersedes all prior agreements (including the Employee Protection and Noncompetition Agreement between Employee and Ventas, dated as of December 17, 2014 (the “Existing Agreement”)), promises, covenants, arrangements, communications, representations and warranties between them, whether written or oral, with respect to the subject matter hereof; provided, however, that, notwithstanding the foregoing, if Ventas decides, and publicly announces, that it will not be consummating the Spinoff, or if the Effective Date has not occurred as of June 30, 2016, this Agreement shall become null and void ab initio, and neither the Company nor Employee shall have any rights hereunder.  Notwithstanding the foregoing, the restrictive covenants in the Existing Agreement shall remain in effect, and Ventas may continue to enforce such covenants following the Effective Date; provided, however, that (a) the Effective Date shall be treated as the date of termination of employment for purposes of the duration of any such restrictive covenants, and (b)  in no event may Ventas enforce any such restrictive covenant against Employee for actions taken in Employee’s capacity as an employee of the Company that are reasonably related to the operations of the Company or one of its affiliates, and in no event shall service to the Company or one of its affiliates be deemed to violate any non-competition covenants in the Existing Agreement.  No provisions of this Agreement may be modified, waived or discharged unless such modification, waiver or discharge is agreed to in writing signed by Employee and the Company.

 

14.                               Agreement Does Not Grant Employment Rights.  This Agreement shall not be construed as granting to Employee any right to employment by the Company.  The right of the 

 

 

Company to terminate Employee’s employment at any time, with or without Cause, is specifically reserved.

 

15.                               Compliance with Code Section 409A.  All payments pursuant to this Agreement shall be subject to the provisions of this Section 15.  Notwithstanding anything herein to the contrary, this Agreement is intended to be interpreted and operated to the fullest extent possible so that the payments and benefits under this Agreement either shall be exempt from the requirements of Section 409A of the Code or shall comply with the requirements of such provision; provided, however, that notwithstanding anything to the contrary in this Agreement in no event shall the Company be liable to Employee for or with respect to any taxes, penalties or interest which may be imposed upon Employee pursuant to Section 409A of the Code.

 

(a)                                 Payments to Specified Employees.  To the extent that any payment or benefit pursuant to this Agreement constitutes a “deferral of compensation” subject to Section 409A of the Code (after taking into account to the maximum extent possible any applicable exemptions) (a “409A Payment”) treated as payable upon a Separation from Service, then, if on the date of Employee’s Separation from Service, Employee is a Specified Employee (as defined below), then to the extent required for Employee not to incur additional taxes pursuant to Section 409A of the Code, no such 409A Payment shall be made to Employee before the earlier of (i) six months after Employee’s Separation from Service; or (ii) the date of Employee’s death.  Should this Section 15 otherwise result in the delay of in-kind benefits (for example, health benefits), any such benefit shall be made available to Employee by the Company during such delay period at Employee’s expense.  Should this Section 15 result in payments or benefits to Employee at a later time than otherwise would have been made under this Agreement, on the first day any such payments or benefits may be made without incurring additional tax pursuant to Code Section 409A (the “409A Payment Date”), the Company shall make such payments and provide such benefits as stipulated in this Agreement, provided, however, that any amounts that would have been payable earlier but for the application of this Section 15, as well as reimbursement of the amount Employee paid for benefits pursuant to the preceding sentence, shall be paid in lump sum on the 409A Payment Date along with accrued interest at the rate of interest published in the Wall Street Journal as the “prime rate” (or equivalent) on the date that payments or benefits, as applicable, to Employee should have been made under this Agreement.  For purposes of this Section 15, the term “Specified Employee” shall have the meaning set forth in Section 409A of the Code, as determined in accordance with the methodology established by the Company.  For purposes of determining whether a Separation from Service has occurred for purposes of Section 409A of the Code, to the extent permissible under Section 409A of the Code, subsidiaries and affiliates of the Company are those included by using a 20% standard to define the controlled group under Code Section 1563(a) in lieu of the 50% default rule.  In addition, for purposes of determining whether a Separation from Service has occurred for purposes of Section 409A of the Code, a Separation from Service is deemed to include a reasonably anticipated permanent reduction in the level of services performed by Employee to less than 50% of the average level of services performed by Employee during the immediately preceding 12-month period.

 

 

(b)                                 Reimbursements.  For purposes of complying with Section 409A of the Code and without extending the payment timing otherwise provided in this Agreement, taxable reimbursements under this Agreement, subject to the following sentence and to the extent required to comply with Section 409A of the Code, will be made no later than the end of the calendar year following the calendar year in which the expense was incurred.  To the extent required to comply with Section 409A of the Code, any taxable reimbursements and any in-kind benefits under this Agreement will be subject to the following: (a) payment of such reimbursements or in-kind benefits during one calendar year will not affect the amount of such reimbursement or in-kind benefits provided during any other calendar year (other than for medical reimbursement arrangements as excepted under Treasury Regulations §1.409A-3(i)(1)(iv)(B) solely because the arrangement provides for a limit on the amount of expenses that may be reimbursed under such arrangement over some or all of the period the arrangement remains in effect); (b) such right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another form of compensation to Employee and (c) the right to reimbursements under this Agreement will be in effect for the lesser of the time specified in this Agreement or 10 years plus the lifetime of Employee.  Any taxable reimbursements or in-kind benefits shall be treated as not subject to Section 409A of the Code to the maximum extent provided by Treasury Regulations §1.409A-1(b)(9)(v) or otherwise under Section 409A of the Code.

 

(c)                                  Release.  To the extent that Employee is required to execute and deliver a Release to receive a 409A Payment, and this Agreement provides for such 409A Payment to be provided prior to the 55th day following Employee’s Separation from Service, such 409A Payment will be provided upon the 55th day following Employee’s Separation from Service provided the Release in the form substantially similar to the form attached hereto as Appendix A has been executed, delivered and effective prior to such time.  To the extent a 409A Payment is made at a later time than otherwise would have been made under this Agreement because of the provisions of the preceding sentence of this Section 15(c), interest for the delay and the opportunity for Employee to pay for benefits in the interim with subsequent reimbursement from the Company shall be provided in a manner consistent with that set forth in Section 15(a).  To the extent that Employee is required to execute and deliver a Release to receive a 409A Payment and this Agreement provides for such 409A Payment to be provided in accordance with Section 15(a), such 409A Payment will be provided as set forth in Section 15(a) provided the Release in the form mutually agreed upon between Employee and the Company or in the form set forth in Appendix A has been executed, delivered and effective prior to such time.  If a Release is required for a 409A Payment and such Release is not executed, delivered and effective by the date six months after Employee’s Separation from Service if such 409A Payment is subject to the limitations set forth in Section 15(a) or the 55th day following Employee’s Separation from Service if such 409A Payment is not subject to the limitations set forth in Section 15(a), such 409A Payment shall not be provided to Employee to the extent that providing such 409A Payment would cause such 409A Payment to fail to comply with Section 409A of the Code.  To the extent that any payments or benefits under this Agreement are intended to be exempt from Section 409A of the Code as a short-term deferral pursuant to Treasury Regulations Section 1.409A-1(b)(4) or any successor thereto and require Employee to provide a Release to the 

 

 

Company to obtain such payments or benefits, any Release required for such payment or benefit must be provided in the form substantially similar to the form attached hereto as Appendix A no later than March 7th of the calendar year following the calendar year of Employee’s Separation from Service.

 

(d)                                 No Acceleration; Separate Payments; Termination of Employment.  No 409A Payment payable under this Agreement shall be subject to acceleration or to any change in the specified time or method of payment, except as otherwise provided under this Agreement and consistent with Section 409A of the Code.  If under this Agreement, a 409A Payment is to be paid in two or more installments, for purposes of Section 409A of the Code, each installment shall be treated as a separate payment.  Notwithstanding anything contained in this Agreement to the contrary, the date on which a Separation from Service occurs shall be treated as the termination of employment date for purposes of determining the timing of payments under this Agreement to the extent necessary to have such payments and benefits under this Agreement be exempt from the requirements of Section 409A of the Code or comply with the requirements of Section 409A of the Code.

 

(e)                                  Cooperation.  If the Company or Employee determines that any provision of this Agreement is or might be inconsistent with the requirements of Section 409A of the Code, the parties shall attempt in good faith to agree on such amendments to this Agreement as may be necessary or appropriate to avoid subjecting Employee to the imposition of any additional tax under Section 409A of the Code without changing the basic economic terms of this Agreement.  Notwithstanding the foregoing, no provision of this Agreement shall be interpreted or construed to transfer any liability for failure to comply with Section 409A of the Code from Employee or any other individual to the Company.  This Section 15 is not intended to impose any restrictions on payments or benefits to Employee other than those otherwise set forth in this Agreement or required for Employee not to incur additional tax under Section 409A of the Code and shall be interpreted and operated accordingly.  The Company to the extent reasonably requested by Employee shall modify this Agreement to effectuate the intention set forth in the preceding sentence.

 

16.                               Recoupment.  Employee acknowledges that he or she will be subject to recoupment policies adopted by the Company pursuant to the requirements of Dodd-Frank Wall Street Reform and Consumer Protection Act or other law or the listing requirements of any national securities exchange on which the common stock of the Company is listed.

 

17.                               Governing Law.  This Agreement shall be construed in accordance with and governed by the laws of the State of Delaware without regard to its choice of law principles.

 

18.                               Headings.  The headings in this Agreement are for convenience only and shall not be used to interpret or construe its provisions.

 

19.                               Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

 

	
 
    	
CARE   CAPITAL PROPERTIES, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
T.   Richard Riney
    
	
 
    	
 
    	
Title:
    	
Vice   President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Kristen   M. Benson
    
	
 
    	
Employee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Solely   for purposes of Section 13 hereof:
    
	
 
    	
VENTAS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
Debra   Cafaro
    
	
 
    	
 
    	
Title:
    	
Chief   Executive Officer
    

 

 

APPENDIX A

 

RELEASE AND WAIVER OF CLAIMS

 

This Release and Waiver of Claims (“Release”) is made as of this        day of               ,       by and between Care Capital Properties, Inc. (the “Company”) and Kristen M. Benson (“Employee”).

 

WHEREAS, the Company and Employee entered into an Employee Protection and Noncompetition Agreement, dated as of               , 2015 (the “Agreement”);

 

WHEREAS, Employee’s employment with the Company has terminated; and

 

WHEREAS, in connection with the termination of Employee’s employment, under the Agreement, Employee is entitled to certain payments and other benefits.

 

NOW, THEREFORE, in consideration of the payments and other benefits, if any, due Employee under the Agreement (“Severance Payments”), the Company and Employee hereby agree as follows:

 

1.                                      Except as specifically provided herein, Employee, for Employee and Employee’s heirs, agents, executors, successors, assigns, legal representatives, personal representatives, and administrators (collectively, the “Related Parties”), intending to be legally bound, does hereby RELEASE AND FOREVER DISCHARGE the Company, its agents, affiliates, subsidiaries, parents, joint ventures, and its and their respective officers, directors, shareholders, employees, predecessors, and partners, and its and their respective successors and assigns, heirs, executors, and administrators (collectively, “Releasees”) from all causes of action, suits, debts, claims obligations, and demands of every kind and nature whatsoever in law or in equity, known or unknown, which Employee ever had, now has, or hereafter may have, or which the Related Parties may have, by reason of any matter, cause or thing whatsoever, at any time prior to the execution of this Release and particularly, but without limitation of the foregoing general terms, any claims arising from or relating in any way to the Agreement, Employee’s employment relationship with Company, the terms and conditions of that employment relationship, and the termination of that employment relationship, including, but not limited to the following: claims or demands related to salary, bonuses, commissions, stock, stock options, any other ownership interests in the Company, paid time off, fringe benefits, expense reimbursements, sabbatical benefits, severance benefits, or any other form of compensation or equity; any claims arising under the Age Discrimination in Employment Act (“ADEA”), as amended, 29 U.S.C. § 621 et seq., the Older Worker’s Benefit Protection Act, 29 U.S.C. § 626(0(1), Title VII of The Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et seq., the Civil Rights Act of 1871, the Civil Rights Act of 1991, the Americans with Disabilities Act, 42 U.S.C. § 12101-12213, the Rehabilitation Act, the Family and Medical Leave Act of 1993 (“FMLA”), 29 U.S.C. § 2601 et seq., the Fair Labor Standards Act; any other claims under any federal, state or local common law, statutory, or regulatory provision, now or hereafter recognized; claims for wrongful discharge, discrimination, fraud, defamation, harassment, emotional distress, or breach of the implied covenant of good faith and fair dealing; and any claims for attorneys’ fees and costs.  This Release does not apply to any claims that cannot be released or waived by law or to claims

 

A-1

 

for the following: payments and benefits to Employee provided for under the Agreement or any employee benefit plan or equity plan of the Company in which Employee is a participant, including, without limitation, any options, stock or other equity awards that are vested (including those that vested as a result of Employee’s termination of employment), or payment of any benefits to which Employee may be entitled under a Company-sponsored tax-qualified retirement or savings plan; any rights of Employee to indemnification under the Certificate of Incorporation or by-laws of the Company, the Agreement or other agreement between Employee and the Company; or any rights of Employee under any directors’ and officers’ liability insurance policy maintained by the Company.  Except as specifically provided herein, it is expressly understood and agreed that this Release shall operate as a clear and unequivocal waiver by Employee of any claim for accrued or unpaid wages, benefits or any other type of payment other than as provided to Employee under the Agreement or any employee benefit plan or equity plan of the Company in which Employee is a participant.  It is the intention of the parties to make this Release as broad and as general as the law permits as to the claims released hereunder.

 

2.                                      Employee further agrees and recognizes that Employee has permanently and irrevocably severed Employee’s employment relationship with the Company, that Employee shall not seek employment at any time in the future with the Company or any entity with which the Company is consolidated for financial reporting purposes, and that the Company has no obligation to employ Employee in the future.

 

3.                                      Employee agrees that no promise or inducement to enter into this Release has been offered or made except as set forth herein and that Employee is entering into this Release without any threat or coercion and without reliance on any statement or representation made on behalf of the Company or by any person employed by or representing the Company, except for the written provisions and promises contained in this Release.

 

4.                                      The parties agree that damages incurred as a result of a breach of this Release will be difficult to measure.  It is, therefore, further agreed that, in addition to the remedy set forth in Section 6(h) or any other remedies, equitable relief will be available in the case of a breach of this Release.  It also is agreed that, in the event Employee files a claim against the Company (other than a charge before the EEOC) with respect to a claim released by Employee herein, the Company may withhold, retain, or require reimbursement of the Severance Payments.

 

5.                                      The parties agree and acknowledge that this Release, and the settlement and termination of any asserted or unasserted claims against the Releasees pursuant to the Release, are not and shall not be construed to be an admission of any violation of any federal, state or local statute or regulation, or of any duty owed by any of the Releasees to Employee.

 

6.                                      Employee certifies and acknowledges:

 

(a)                                 Employee has read the terms of this Release, and Employee understands its terms and effects, including the fact that Employee has agreed to RELEASE AND FOREVER DISCHARGE all Releasees from any legal action or other liability of any type related in any way to the matters released pursuant to this Release other than as provided in the Agreement and in this Release;

 

A-2

 

(b)                                 Employee has signed this Release voluntarily and knowingly in exchange for the Severance Payments and other consideration described herein, which Employee acknowledges is adequate and satisfactory to Employee and which Employee acknowledges is in addition to any other benefits to which Employee is otherwise entitled;

 

(c)                                  Employee has been and is hereby advised in writing to consult with an attorney prior to signing this Release and Employee has had the opportunity to seek legal counsel in connection with this Release;

 

(d)                                 Employee does not waive rights or claims that may arise after the date this Release is executed;

 

(e)                                  Employee has been informed that Employee has the right to consider this Release for a period of [21] [45] days from receipt, and Employee has signed on the date indicated below after concluding that this Release is satisfactory to Employee;

 

(f)                                   Neither the Company, nor any of its directors, employees, or attorneys, has made any representations to Employee concerning the terms or effects of this Release other than those contained herein;

 

(g)                                  Employee has not filed a charge, lawsuit or any other claim (and will not hereafter file a charge, lawsuit or any other claim (other than a charge before the EEOC)) against the Company relating to Employee’s employment and/or cessation of employment with the Company or otherwise involving facts that occurred on or prior to the date that Employee has signed this Release, other than a lawsuit or claim that the Company has failed to pay Employee the Severance Payments or benefits due under any employee benefit plan or equity plan of the Company in which Employee is a participant; and

 

(h)                                 If Employee commences, continues, joins in, or in any other manner attempts to pursue a recovery for any claim released herein against any of the Releasees, or otherwise violates the terms of this Release, (i) Employee will cease to have any further rights to Severance Payments from the Company, and (ii) Employee shall be required to return any Severance Payments made to Employee by the Company (together with interest thereon).  A claim that would be expressly permitted by the terms of this Release were it successful will not be deemed a violation of this Release even if such claim is unsuccessful, provided that such claim is made in good faith.  In addition, this Release is not intended and does not limit Employee’s right to file a charge with or participate in an investigative proceeding of the EEOC.

 

7.                                      Employee acknowledges that Employee may later discover facts different from or in addition to those which Employee knows or believes to be true now, and Employee agrees that, in such event, this Release shall nevertheless remain effective in all respects, notwithstanding such different or additional facts or the discovery of those facts.

 

8.                                      This Release may not be introduced in any legal or administrative proceeding, or other similar forum, except one concerning a breach of this Release.

 

A-3

 

9.                                      If all or any part of this Release is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity shall not invalidate any other portion of this Release.  Any section or a part of a section declared to be unlawful or invalid shall, if possible, be construed in a manner which will give effect to the terms of the section to the fullest extent possible while remaining lawful and valid.

 

10.                               This Release shall not be altered, amended, or modified except by written instrument executed by the Company and Employee.  A waiver of any portion of this Release shall not be deemed a waiver of any other portion of this Release.

 

11.                               This Release may be executed in several counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same instrument.

 

12.                               This Release shall be governed by and construed and interpreted in accordance with the laws of the State of Illinois without regard to its choice of law principles.

 

13.                               Employee also understands that Employee has the right to revoke this Release within seven days after execution, and that this Release will not become effective or enforceable until the revocation period has expired, by giving written notice as provided in Section 11 of the Agreement.

 

(Signature Page to Follow)

 

A-4

 

IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties execute the foregoing Release and Waiver of Claims.

 

	
 
    	
EMPLOYEE
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Date:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
CARE   CAPITAL PROPERTIES, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Date:
    	
 
    

 

A-5Exhibit 10.8

 

FORM OF

 

CARE CAPITAL PROPERTIES, INC.

 

2015 INCENTIVE PLAN

 

I.                                        Purpose

 

The purpose of the Care Capital Properties, Inc. 2015 Incentive Plan (“Plan”) is to promote the growth and profitability of Care Capital Properties, Inc., a Delaware corporation (“Company”), and its subsidiaries, and to increase stockholder value by providing officers, key employees, non-employee directors, and consultants with incentives to achieve long-term objectives of the Company.  The Plan is also intended to help attract and retain officers, key employees, non-employee directors, and consultants to advance the interests of the Company by giving officers, key employees, non-employee directors, and consultants a stake in the Company’s future growth and success, and to strengthen the alignment of interests of officers, key employees, non-employee directors, and consultants with those of the Company’s stockholders.

 

II.                                   Definitions and Construction

 

2.1.                            Definitions.  Unless otherwise defined herein, capitalized terms used herein shall have the respective meanings set forth in Appendix I (and such terms shall apply equally to both the singular and plural forms of the terms defined).

 

2.2.                            Gender and Number.  Except where otherwise indicated by the context, reference to the masculine gender shall include the feminine gender, the plural shall include the singular and the singular shall include the plural.

 

2.3.                            Severability.  In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.

 

III.                              Plan Administration

 

3.1.                            The Committee.  The Plan shall be administered, and all Awards under the Plan shall be authorized, by the Committee.  The “Committee” means one or more committees appointed by the Board to administer all or certain aspects of the Plan.  Any such committee shall consist of one or more directors of the Company and shall serve at the discretion of the Board.  To the extent deemed appropriate by the Board, members of the Committee shall be “outside directors” within the meaning of Section 162(m) of the Code (or any successor provision thereto) and “non-employee directors” within the meaning of Rule 16b-3 under the Exchange Act.  Subject to Section 16.1 hereof, and unless it would cause an Award intended to qualify for the exemption from the limitation on deductibility imposed by Section 162(m) of the Code that is set forth in Section 162(m)(4)(C) of the Code to not so qualify, any authority granted to the Committee may be exercised by the full Board.  To the extent that any permitted

 

 

action taken by the Board conflicts with action taken by the Committee, the Board action shall control.

 

3.2.                            Delegation.  Notwithstanding the foregoing, the Committee may delegate some or all of its responsibility for granting Awards and otherwise administering the Plan with respect to Nonemployee Directors or designated classes of Employees or designated Consultants to one or more different committees consisting of one or more members of the Board, subject to such limitations as the Committee deems appropriate.  To the extent consistent with applicable law, the Committee may authorize one or more officers of the Company to grant Awards to designated classes of Employees or designated Consultants, within limits specifically prescribed by the Committee.  Limited authority to grant Awards to Nonexecutive Employees and Consultants is hereby delegated to a Board committee comprised of the Chief Executive Officer, subject to the parameters of the remainder of this Section 3.2.  Each year the Committee shall establish an annual allotment of Shares with respect to which such Board committee may grant Awards to designated classes of Employees and designated Consultants.  Unless another amount shall otherwise be determined by the Committee by authorized action, an annual allotment of           Shares is hereby established which such Board committee is authorized pursuant to this paragraph to grant.  Any Shares within such annual allotment with respect to which Awards are not granted during such year shall be automatically added to the annual allotment available pursuant to this paragraph in each succeeding year for Awards to designated classes of Employees or designated Consultants until such Shares are used for Awards pursuant to the delegation set forth in this paragraph.  If and to the extent an Award granted pursuant to the delegation set forth in this paragraph shall expire or terminate for any reason without having been exercised in full, or shall be forfeited, the Shares associated with such Award shall again become available for Awards pursuant to such delegation.

 

3.3.                            Authority of the Committee.  Subject to the provisions of the Plan, the Committee shall have full authority to do all things and make all determinations necessary or advisable in connection with the administration of the Plan, including without limitation the authority to:

 

(a)                                 select Participants to whom Awards are granted;

 

(b)                                 determine the types, amounts and frequency of Awards granted under the Plan;

 

(c)                                  determine the terms and conditions of Awards, including, without limitation, the treatment of an Award upon a Participant’s termination of employment or cessation of service or any limitations, restrictions or conditions upon Awards, which need not be identical;

 

(d)                                 accelerate or extend the vesting or exercisability of any Award, for any reason, including, without limitation, a Corporate Transaction or Change in Control;

 

(e)                                  construe and interpret the Plan and any agreement or instrument entered into under the Plan; and

 

(f)                                   establish, amend and rescind rules and regulations relating to administration of the Plan.

 

2

 

The Committee may delegate its authority as identified hereunder; provided, that such delegation is permitted by law.  The Committee shall have the discretion to determine for purposes of the Plan whether any Participant (i) is or remains (or is not or does not remain) an employee or service provider of the Company, and (ii) shall have incurred (or shall not have incurred) a termination of employment or cessation of service.

 

3.4.                            Decisions Binding.  All actions taken and all determinations and decisions made by the Committee pursuant to the provisions of the Plan shall be final, conclusive and binding upon all persons, including the Company, its stockholders, Employees, Nonemployee Directors, Consultants, Participants and their estates and beneficiaries.

 

IV.                               Shares Subject to the Plan and Maximum Awards

 

4.1.                            Shares Available.  Subject to adjustment as provided in Section 4.3, and subject to Section 4.5(d), the number of Shares available for issuance under the Plan shall equal        . Any Shares issued under the Plan may be, in whole or in part, of original issuance or held in treasury.  If and to the extent an Award shall expire or terminate for any reason without having been exercised in full, or shall be forfeited, the Shares associated with such Awards shall again become available for Awards under the Plan.  Shares that are exchanged by a Participant or withheld by the Company as full or partial payment in connection with any Award or to satisfy tax withholding obligations related to any Award shall not be available for subsequent Awards under the Plan.

 

4.2.                            Maximum Awards.  Subject to adjustment as provided in Section 4.3, and subject to Section 4.5(d), the maximum number of Shares with respect to which Awards (or any type of Award) may be granted in any calendar year to any Participant under the Plan shall be          , the maximum number of ISOs that may be granted to any Participant under the Plan shall be        , and the maximum grant date value of Awards granted to any Nonemployee Director in any calendar year shall be $          (for the avoidance of doubt, the foregoing limitation shall not apply to cash-based director fees that a Nonemployee Director elects to receive in the form of Shares or Share equivalents equal in value to such cash-based director fees pursuant to another plan or policy of the Company).

 

4.3.                            Adjustments in Authorized Shares and Outstanding Awards.(1)

 

(a)                                 In the event of a Corporate Transaction, the Committee may in its discretion make such substitutions or adjustments as it deems appropriate and equitable to (i) the aggregate number and kind of Shares or other securities reserved for issuance under the Plan, (ii) the various maximum limitations set forth in Sections 4.1 and 4.2 upon certain types of Awards and upon the grants to Participants of certain types of Awards, (iii) the number and kind of Shares or other securities subject to outstanding Awards, (iv) the exercise price of outstanding Awards, and (v) such other terms and conditions of Awards as may be determined by the Committee.

 

(b)                                 In the event of a stock dividend, stock split, reverse stock split, reorganization, share combination, or recapitalization or similar event affecting the

 

(1)  Note to Draft:  Adjustment and Corporate Transaction treatment to be confirmed with accountants.

 

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capital structure of the Company or an OP, or a separation or spinoff, or other extraordinary dividend of cash or other property to the Company’s stockholders or an OP’s unitholders, the Committee shall make such substitutions or adjustments as it deems appropriate and equitable to (i) the aggregate number and kind of Shares or other securities reserved for issuance under the Plan, (ii) the various maximum limitations set forth in Sections 4.1 and 4.2 upon certain types of Awards and upon the grants to Participants of certain types of Awards, (iii) the number and kind of Shares or other securities subject to outstanding Awards, (iv) the exercise price of outstanding Awards, and (v) such other terms and conditions of Awards as may be determined by the Committee.

 

(c)                                  In the case of a Change in Control, the Committee shall, in its sole discretion, determine the appropriate adjustment, if any, to be effected.  In addition, in the event of a Change in Control, the Committee existing prior to such Change in Control may provide for:  (i) the acceleration of the time or times at which any Award may be exercised or the waiver of any forfeiture conditions or restrictions applicable to an Award (ii) the cancellation of any accelerated Awards that are not exercised within a time period prescribed by the Committee in its sole discretion, (iii) the cancellation of outstanding Awards in exchange for payments of cash, property or a combination thereof having an aggregate value equal to the value of such Awards, as determined by the Committee or in its sole discretion (it being understood that any such determination by the Committee that the value of an Option or an SAR shall for this purpose be deemed to equal the excess, if any, of the value of the consideration being paid for each Share pursuant to the Change in Control over the exercise price of such Option or SAR shall conclusively be deemed valid), (iv) the substitution of other property (including, without limitation, cash or other securities of the Company and securities of entities other than the Company) for the Shares subject to outstanding Awards or the replacement of Awards with equivalent (in value and terms) replacement awards based on other property or other securities (including, without limitation, other securities of the Company and securities of entities other than the Company); provided, that the number of Shares subject to any Award shall always be a whole number; and provided, further, that in the case of ISOs, any such adjustments shall be made in such a manner so as not to constitute a “modification” within the meaning of Section 424(h)(3) of the Code and only to the extent otherwise permitted by Sections 422 and 424 of the Code.  The Committee may specify in an Award Agreement such provisions as it deems appropriate to provide for the treatment of an Award upon a Change in Control.

 

(d)                                 The Committee in its sole discretion may adjust the Performance Goals applicable to any Awards to reflect any unusual or non-recurring events and other extraordinary items, impact of charges for restructurings, discontinued operations, and the cumulative effects of accounting or tax changes, each as defined by U.S. generally accepted accounting principles or as identified in the Company’s financial statements, notes to the financial statements, management’s discussion and analysis or other Company filings with the United States Securities and Exchange Commission (the “Commission”); provided, that in the case of Performance Goals applicable to any Award intended to qualify for the exemption from the limitation on deductibility imposed by

 

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Section 162(m) of the Code that is set forth in Section 162(m)(4)(C) of the Code, such discretion does not cause any such Award to not so qualify.

 

(e)                                  Any adjustments pursuant to this Section 4.3 to Awards that are considered 409A Awards are intended to be made only if permitted by Section 409A of the Code and only in a manner that complies with the requirements of Section 409A of the Code, and any adjustments made pursuant to this Section 4.3 to Awards that are not considered 409A Awards are intended to be made only if and in such a manner that after such adjustment the Awards either continue not to be 409A Awards or comply with the requirements of Section 409A of the Code.

 

Any adjustment under this Section 4.3 need not be the same for all Participants.

 

4.4.                            LTIP Units.  Each Share into which an Award of LTIP Units may become convertible shall be treated as one Share for purposes of this Article IV.

 

4.5.                            Adjusted and Substitute Awards.

 

(a)                                 Notwithstanding any terms or conditions of the Plan to the contrary, (i) Substitute Awards may have substantially the same terms and conditions, including without limitation provisions relating to vesting, exercise periods, expiration, payment, forfeiture, and the consequences of termination of service, as the Awards that they replace, or such other terms as are determined to be appropriate by the Committee, all as determined by the Committee in its sole discretion, and (ii) Adjusted Awards shall have terms consistent with those set forth in the Employee Matters Agreement, which generally provides that the Adjusted Awards will have substantially the same terms and conditions, including without limitation provisions relating to vesting, exercise periods, expiration, payment, forfeiture, and the consequences of termination of employment or service, as the awards that they replace under the applicable Predecessor Plan.

 

(b)                                 In the case of a Substitute Award, the date of grant may be treated as the effective date of the grant of such Award under the original plan under which the Award was authorized, and in the case of an Adjusted Award, the date of grant shall be the effective date of the grant under the Predecessor Plan.

 

(c)                                  The per Share exercise price of an Option that is a Substitute Award or Adjusted Award may be less than 100% of the Fair Market Value of a Share on the date of grant; provided, that such substitution or adjustment complies with applicable laws and regulations, including the listing requirements of the New York Stock Exchange or any national securities exchange or system on which the Shares are then listed or reported and Section 409A or Section 424 of the Code, as applicable.  The per Share exercise price of an SAR that is a Substitute Award or an Adjusted Award may be less than 100% of the Fair Market Value of a Share on the date of grant; provided, that such substitution or adjustment complies with applicable laws and regulations, including the listing requirements of the New York Stock Exchange or any national securities exchange or system on which the Shares are then listed or reported and Section 409A of the Code, as applicable.

 

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(d)                                 Anything to the contrary in the Plan notwithstanding, any Shares underlying Substitute Awards or Adjusted Awards shall not be counted against the limits set forth in Sections 4.1 or 4.2.  Anything to the contrary in the Plan notwithstanding, any Shares underlying Substitute Awards shall not be counted against the maximum number of Shares which may be issued under ISOs, and the lapse, expiration, termination, forfeiture or cancellation of any Substitute Award without the issuance of Shares or payment of cash thereunder shall not result in an increase the number of Shares available for issuance under the Plan.  For the avoidance of doubt, Adjusted Awards shall be treated as Awards generally (and not as Substitute Awards) for purposes of the preceding sentence.

 

V.                                    Eligibility and Participation

 

All Employees and Consultants are eligible to receive Awards under the Plan.   In selecting Employees or Consultants to receive Awards under the Plan, as well as in determining the number of Shares subject to, and the other terms and conditions applicable to, each Award, the Committee shall take into consideration such factors as it deems relevant in promoting the purposes of the Plan, including the duties of the Employees or Consultants, and their present and potential contribution to the success of the Company.  All Nonemployee Directors are eligible to receive Awards under the Plan.  Subject to the limitations of the Plan (including Section 4.2), the Committee may grant Awards to Nonemployee Directors on terms as the Committee shall from time to time determine.

 

VI.                               Stock Options

 

6.1.                            Grant of Options.  Subject to the terms and provisions of the Plan, the Committee may grant Options to Participants at any time and from time to time, in the form of Options which are intended to qualify as incentive stock options within the meaning of Section 422 of the Code (“ISOs”), Options which are not intended to so qualify (“NQSOs”) or a combination thereof.  All ISOs must be granted within ten years from the date on which the Plan was adopted by the Board, and may only be granted to employees of the Company or any subsidiary corporation (within the meaning of Section 424(f)) and may not exceed the maximum limit set forth in Section 4.2.  The Option Exercise Price shall not be less than the Fair Market Value of a Share on the date of grant (110% of Fair Market Value in the case of an ISO granted to a Ten Percent Shareholder).

 

6.2.                            Option Agreement.  Each Option shall be evidenced by an Option Agreement that shall specify the Option Exercise Price, the duration of the Option, the number of Shares to which the Option relates and such other provisions as the Committee may determine or which are required by the Plan.  The Option Agreement shall also specify whether the Option is intended to be an ISO or an NQSO and shall include such provisions applicable to the particular type of Option granted.

 

6.3.                            Duration of Options.  Each Option shall expire at such time as is determined by the Committee at the time of grant; provided, that no Option shall be exercised later than the tenth anniversary of the date of its grant (or fifth anniversary of the date of its grant, in the case

 

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of an ISO granted to a Ten Percent Shareholder), and the Option Agreement shall control as to such exercisability.

 

6.4.                            Exercise of Options.  Options shall be exercisable at such times and be subject to such restrictions and conditions as the Committee shall approve at the time of grant, which need not be the same for each grant or for each Participant.  The Committee may accelerate the exercisability of any Option.  Options shall be exercised, in whole or in part, by delivery to the Company of a written notice of exercise, setting forth the number of Shares with respect to which the Option is to be exercised and accompanied by full payment of the Option Exercise Price and all applicable withholding taxes.

 

6.5.                            Payment of Option Exercise Price.  The Option Exercise Price for Shares as to which an Option is exercised shall be paid to the Company in full at the time of exercise by one or a combination of the following methods:

 

(a)                                 cash in the form of currency or other cash equivalent acceptable to the Company;

 

(b)                                 the tender of Shares (by either actual delivery or by attestation) having a Fair Market Value (determined as of the close of the business day immediately preceding the day on which the Option is exercised) equal to the Option Exercise Price;

 

(c)                                  a reduction in the number of Shares otherwise deliverable pursuant to the Award; or

 

(d)                                 any other reasonable consideration that the Committee may deem appropriate.

 

The Committee may permit the cashless exercise of Options as described in Regulation T promulgated by the Federal Reserve Board, subject to applicable securities law restrictions, or by any other means which the Committee determines to be consistent with the Plan’s purpose and applicable law.

 

6.6.                            Transferable Options.  The Committee may, in its discretion by appropriate provision in the Participant’s Option Agreement, authorize all or a portion of any NQSOs granted to a Participant to be on terms which permit transfer by such Participant to (i) the Participant’s child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law, including adoptive relationships, or any person sharing the Participant’s household (other than a tenant or employee) (“Family Members”), (ii) a trust or trusts in which the Participant and/or his Family Members have more than 50% of the beneficial interest, or (iii) a partnership, limited liability company or other entity in which the Participant and/or his Family Members own more than 50% of the voting interests in exchange for an interest in the entity; provided, that (a) there may be no consideration for any such transfer (other than interests in such partnership, limited liability company or other entity), (b) the Option Agreement must expressly provide for transferability in a manner consistent with this Section 6.6, and (c) subsequent transfers of transferable NQSOs shall be prohibited except by will or the laws of descent and distribution.  Following transfer, any such NQSOs shall continue to be subject to the

 

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same terms and conditions as were applicable immediately prior to transfer; provided, that for purposes of this Article VI (excluding as set forth in the following sentence), the term “Participant” shall be deemed to refer to the transferee.  The events of termination of employment or cessation of service shall continue to be applied with respect to the original Participant.  Any transferred NQSOs shall be exercisable by the transferee only to the extent, and for the periods, specified in the Option Agreement.

 

6.7.                            Legend.  For any Shares issued upon exercise of or in connection with an Award, the Company may legend such Shares as it deems appropriate.

 

VII.                          Restricted Stock and Restricted Stock Units

 

7.1.                            Grant of Restricted Stock and Restricted Stock Units.  Subject to the terms and provisions of the Plan, the Committee may grant Restricted Stock or Restricted Stock Units to Participants at any time and from time to time and upon such terms and conditions as it may determine.

 

7.2.                            Restricted Award Agreement.  Each grant of Restricted Stock or Restricted Stock Unit shall be evidenced by a Restricted Award Agreement that shall specify the Restriction Period, the number of shares of Restricted Stock or Restricted Stock Units granted, the payment date for Restricted Stock Units, and such other provisions as the Committee may determine and which are required by the Plan.

 

7.3.                            Non-Transferability of Restricted Stock and Restricted Stock Units.  Except as provided in this Article VII, shares of Restricted Stock and Restricted Stock Units may not be sold, transferred, pledged, assigned or otherwise alienated or hypothecated until the end of the applicable Restriction Period or later as specified in the Restricted Award Agreement, or upon earlier satisfaction of any other conditions determined at the time of grant specified in the Restricted Award Agreement.

 

7.4.                            Other Restrictions.  The Committee may impose such other restrictions on any shares of Restricted Stock or any Restricted Stock Units as it may deem advisable, including without limitation restrictions based upon the achievement of Performance Goals, years of service and/or restrictions under applicable federal or state securities laws.  The Committee may provide that any share of Restricted Stock, if certificated, shall be held (together with a stock power executed in blank by the Participant) in custody by the Company until any or all restrictions thereon shall have lapsed.

 

7.5.                            Reacquisition of Restricted Stock and Forfeiture of Restricted Stock Units.  The Committee shall determine and set forth in a Participant’s Restricted Award Agreement such events upon which a Participant’s shares of Restricted Stock shall be reacquired by the Company or Restricted Stock Units shall be forfeited, which may include without limitation a Participant’s termination of employment or cessation of service during the Restriction Period or the nonachievement of Performance Goals.  Any such forfeited shares of Restricted Stock held by a Participant which are to be reacquired by the Company shall be immediately returned to the Company by the Participant, and the Participant shall only receive the amount, if any, paid by the Participant for such Restricted Stock.

 

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7.6.                            Certificate Legend.  In addition to any legends placed on certificates pursuant to Section 7.4, each certificate, if any, representing shares of Restricted Stock shall bear the following legend:

 

“The sale or other transfer of the shares represented by this Certificate, whether voluntary, involuntary or by operation of law, is subject to certain restrictions on transfer as set forth in the Care Capital Properties, Inc. 2015 Incentive Plan, and in the related Restricted Stock Agreement.  A copy of the Plan and such Restricted Stock Agreement may be obtained from the Secretary of Care Capital Properties, Inc.”

 

7.7.                            Lapse of Restrictions Generally.  Except as otherwise provided in this Article VII, shares of Restricted Stock shall be delivered to the Participant and no longer subject to reacquisition after the last day of the Restriction Period and Restricted Stock Units shall be fully vested after the last day of the Restriction Period and shall be paid as set forth in the Restricted Award Agreement; provided, that if the restriction relates to the achievement of a Performance Goal, the Restriction Period shall not end until the Committee has certified in writing that the Performance Goal has been met.  Once the shares of Restricted Stock are released from their restrictions, the Participant shall be entitled to have the legend required by Section 7.6 removed from the Participant’s share certificate, if any, which certificate shall thereafter represent Shares free from any and all restrictions under the Plan.

 

7.8.                            Voting Rights; Dividends and Other Distributions.

 

(a)                                 During the Restriction Period, Participants holding shares of Restricted Stock may exercise full voting rights and, if the Committee so determines as provided in the Award Agreement, shall be entitled to receive all dividends and other distributions paid, with respect to such Restricted Stock; provided, that if any dividends or distributions are paid in Shares, the Shares shall be subject to the same restrictions as the shares of Restricted Stock with respect to which they were paid; and, provided, further, that receipt of any dividends or distributions on Restricted Stock, the vesting of which is subject to achievement of Performance Goals, shall be held subject to achievement of such Performance Goals.

 

(b)                                 If the Committee so determines as provided in the Award Agreement, on each dividend or other distribution date with respect to Shares, (i) as determined by the Committee, (x) a cash dollar amount equal to the amount of cash dividends or the fair market value of property other than Shares that would have been paid or distributed on a number of Shares equal to the number of Restricted Stock Units held by Participants as of the close of business on the record date for such dividend or distribution shall be paid in cash to such Participants (provided that receipt of any dividends or distributions on Awards, the vesting of which is subject to achievement of Performance Goals, shall be held subject to achievement of such Performance Goals) or (y) an additional number of Restricted Stock Units equal to the product of the number of Restricted Stock Units held by such Participants on the record date for such dividend or distribution multiplied by the per Share cash amount of such dividend or distribution shall be credited to the Participant, and (ii) if such dividend or distribution is payable in Shares, Participants shall

 

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be credited with an additional number of Restricted Stock Units equal to the product of the number of Restricted Stock Units held by such Participants on the record date for such dividend or distribution multiplied by the number of Shares (including fractions thereof) distributable as a dividend or distribution on a Share.  Restricted Stock Units which are credited to Participants pursuant to the preceding sentence shall be subject to the same terms (including vesting terms) and conditions of the Plan, the Restricted Award Agreement and elections applicable with respect to such Restricted Stock Units with respect to which they relate.

 

VIII.                     LTIP Units

 

8.1.                            Grant of LTIP Units.  Subject to the terms and provisions of the Plan, the Committee may grant LTIP Units to Participants at any time and from time to time and upon such terms and conditions as it may determine, including without limitation as an alternative to other Awards.  Each LTIP Unit under the Plan shall relate to a specified number of OP Units.  LTIP Units shall be convertible into OP Units once vested and in accordance with the other terms and conditions set forth in the applicable Partnership Agreement.  OP Units into which LTIP Units are converted shall be exchangeable, in whole or in part, for Shares on a one-for-one basis, or cash, as selected by the General Partner (or such other form of consideration equivalent in value thereto as may be determined by the Committee in its sole discretion) at such time and on such terms as may be established by the Committee and in accordance with the applicable Partnership Agreement.

 

8.2.                            LTIP Unit Award Agreement.  Each grant of LTIP Units shall be evidenced by an LTIP Unit Award Agreement that shall specify the Restriction Period, the number of LTIP Units granted and such other provisions as the Committee may determine and which are required by the Plan.

 

8.3.                            Non-Transferability of LTIP Units.  Except as provided in this Article VIII, LTIP Units may not be sold, transferred, pledged, assigned or otherwise alienated or hypothecated until the end of the applicable Restriction Period or later as specified in the LTIP Unit Award Agreement or Partnership Agreement, or upon earlier satisfaction of any other conditions determined at the time of grant specified in the LTIP Unit Award Agreement.

 

8.4.                            Other Restrictions.  The Committee may impose such other restrictions on any LTIP Units as it may deem advisable, including without limitation restrictions based upon the achievement of Performance Goals, years of service and/or restrictions under applicable federal or state securities laws.

 

8.5.                            Reacquisition or Forfeiture of LTIP Units.  The Committee shall determine and set forth in a Participant’s LTIP Unit Award Agreement such events upon which a Participant’s LTIP Units shall be reacquired by the Company or shall be forfeited, which may include without limitation the Participant’s termination of employment or cessation of service during the Restriction Period or the nonachievement of Performance Goals.

 

8.6.                            Rights of a Shareholder or Unitholder.  A Participant to whom LTIP Units are awarded shall have no rights as a holder of OP Units until such LTIP Units are converted into OP

 

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Units, and shall have no rights as a shareholder with respect to the Shares for which such OP Units may be exchanged unless and until so exchanged and Shares are actually delivered to the Participant in settlement thereof.  The right to distributions with respect to the LTIP Units shall be determined as set forth in the LTIP Unit Award Agreement and the applicable Partnership Agreement.

 

IX.                              Performance Units

 

9.1.                            Grant of Performance Units.  The Committee may, from time to time and upon such terms and conditions as it may determine, grant Performance Units which will become payable to a Participant upon certification in writing by the Committee that the Performance Goals related thereto have been achieved.  If the Performance Goals are achieved in full, and the Participant remains employed with the Company or a Subsidiary as of the end of the relevant Performance Period, the Participant will be allocated Shares equal to the number of Performance Units initially awarded to the Participant for the relevant Performance Period.  Each award of Performance Units may provide for the allocation of fewer Performance Units in the event of partial fulfillment of Performance Goals.

 

9.2.                            Performance Unit Agreement.  Each Performance Unit grant shall be evidenced by a Performance Unit Agreement that shall specify the Performance Goals, the Performance Period and the number of Performance Units to which it pertains.

 

9.3.                            Performance Period.  The period of performance (“Performance Period”) with respect to each Performance Unit shall be such period of time, which shall not be less than six months, nor more than five years, as determined by the Committee, for the measurement of the extent to which Performance Goals are attained.

 

9.4.                            Performance Goals.  The goals (“Performance Goals”) that are to be achieved with respect to each Performance Unit (or Restricted Stock, Restricted Stock Unit, LTIP Unit, stock award or cash award subject to a requirement that Performance Goals be achieved), shall be those objectives established by the Committee as it deems appropriate, and which may be expressed in terms of (a) earnings per Share, (b) Share price, (c) pre-tax profit, (d) net earnings, (e) earnings before interest, taxes, depreciation and amortization, (f) return on equity or assets, (g) revenues, (h) normalized or other adjusted funds from operations in the aggregate or per Share, (i) relative or absolute total stockholder return, (j) diversification, balance sheet or credit metrics or ratings, (k) a growth rate in any of the foregoing, (l) any combination of the foregoing, or (m) such other goals as the Committee may determine.  Performance Goals may be in respect of the performance of the Company and its Subsidiaries (which may be on a consolidated basis), a Subsidiary, a division or other operating unit of the Company.  Performance Goals may be absolute or relative and may be expressed in terms of a progression within a specified range.  To the extent deemed appropriate by the Committee, the Performance Goals with respect to a Performance Period shall be established by the Committee in order to comply with Section 162(m) of the Code.  In establishing a Performance Goal, the Committee may elect to apply any of the foregoing measures to the Company as a whole or to any Subsidiary or division or other unit of the Company, and may provide that achievement of the applicable Performance Goal shall be determined without regard to the effect of any or all unusual or non-recurring events and other extraordinary items, impact for charges for restructurings discontinued operations, and the

 

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cumulative effects of accounting or tax changes, each as defined by U.S. generally accepted accounting principles or as identified in the Company’s financial statements, notes to the financial statements, management’s discussion and analysis or other Company filings with the Commission, in all cases as determined by the Committee in connection with the timely establishment of such Performance Goal. The Committee shall determine the target levels of performance that must be achieved with respect to each criterion that is identified in a Performance Goal in order for a Performance Goal to be treated as attained in whole or in part.  In the event that the Performance Goals are based on more than one business criteria, the Committee may determine to make a grant of an Award upon attainment of the Performance Goal relating to any one or more of such criteria.

 

9.5.                            Payment of Performance Units.  Subject to such terms and conditions as the Committee may impose, and unless otherwise provided in the Performance Unit Agreement, the Committee, in its discretion, may determine at the time of payment required in connection with a Performance Unit whether such payment shall be made (a) solely in cash, (b) solely in Shares (valued at the Fair Market Value of the Shares on the date of payment), or (c) a combination of cash and Shares.

 

9.6.                            No Rights as Stockholder.  The award of Performance Units to a Participant shall not create any rights in such Participant as a stockholder of the Company, until the payment of any Shares associated with such Performance Units.

 

X.                                   Stock Appreciation Rights

 

10.1.                     Grant of Stock Appreciation Rights.  An SAR is a right to receive, without payment to the Company, a number of Shares, cash or any combination thereof, the amount of which is determined pursuant to the formula set forth in Section 10.5.  An SAR may be granted (a) with respect to any Option granted under the Plan, either concurrently with the grant of such Option or at such later time as determined by the Committee (as to all or any portion of the Shares subject to the Option) or (b) alone, without reference to any Option.

 

10.2.                     Number of SARs.  Each SAR granted to any Participant shall relate to such number of Shares as the Committee shall determine, subject to adjustment as provided in Section 4.3.  If an SAR is granted in conjunction with an Option, the number of Shares to which the SAR pertains shall be reduced by the same number of Shares for which the holder of the Option exercises the related Option.

 

10.3.                     Duration.  Subject to early termination as herein provided, the term of each SAR shall be as determined by the Committee, but shall not exceed ten years from the date of grant.  Unless otherwise determined by the Committee and provided in the SAR Agreement, each SAR shall become exercisable at such time or times, to such extent and upon such conditions as the Option, if any, to which it relates is exercisable.  The Committee may, in its discretion, accelerate the exercisability of any SAR.

 

10.4.                     Exercise.  A holder may exercise an SAR, in whole or in part, by giving written notice to the Company, specifying the number of SARs which such Participant wishes to exercise.  Upon receipt of such written notice, the Company shall deliver to the exercising

 

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holder, the Shares, cash, or both, as determined by the Committee, to which the Participant is entitled pursuant to Section 10.5.

 

10.5.                     Payment.

 

(a)                                 Number of Shares.  Subject to the right of the Committee to deliver cash in lieu of Shares (which, as it pertains to officers and directors of the Company, shall comply with all requirements of the Exchange Act and regulations adopted thereunder), the number of Shares which shall be issuable upon the exercise of an SAR shall be determined by dividing (i) the number of Shares to which the SAR is exercised multiplied by the amount of the appreciation in such Shares (for this purpose, the “appreciation” shall be the amount by which the Fair Market Value of the Shares subject to the SAR on the date of exercise exceeds (x) in the case of an SAR related to an Option, the Option Exercise Price of the Shares under the Option or (y) in the case of an SAR granted alone without reference to a related Option, an amount that the Committee determined at the time of grant to be the Fair Market Value of a Share, subject to adjustment as provided in Section 4.3) by (ii) the Fair Market Value of a Share on the exercise date.

 

(b)                                 Cash.  In lieu of issuing Shares upon the exercise of an SAR, the Committee may elect, in its sole discretion, to pay the holder of the SAR cash equal to the Fair Market Value on the exercise date of any or all of the Shares which would otherwise be issuable.  No fractional Shares shall be issued upon exercise of an SAR; instead, the holder of the SAR shall be entitled to receive a cash adjustment equal to the same fraction of the Fair Market Value of a Share on the exercise date or to purchase the portion necessary to make a whole Share at its Fair Market Value on the date of exercise.

 

10.6.                     SAR Agreement.  Each SAR shall be evidenced by an SAR Agreement that shall further specify the terms and conditions of such Award.  Any terms and conditions of the Award shall be consistent with the terms of the Plan.

 

XI.                              Stock and Cash Awards

 

A stock award consists of the transfer by the Company to a Participant of Shares, without other payment therefor, as additional compensation for services to the Company.  A cash award consists of a monetary payment made by the Company to a Participant as additional compensation for services to the Company.  The Committee shall determine, in its sole discretion, the amount of any stock or cash award.  Stock and cash awards may be subject to the terms and conditions, which may vary from time to time and among Participants, as the Committee deems appropriate.  The maximum amount of a cash award which may be granted to a Participant during any calendar year under the Plan shall not be greater than $         .  Payment of a stock or cash award can depend on meeting Performance Goals.  Each award of stock or cash may provide for lesser payment in the event of partial fulfillment of Performance Goals.

 

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XII.                         Amendment, Modification and Termination

 

12.1.                     Effective Date.  Subject to approval by the Board and a subsidiary of Ventas, Inc., as the Company’s sole shareholder, the Plan shall become effective as of           (“Effective Date”).

 

12.2.                     Termination Date.  The Plan shall terminate on the earliest to occur of (a) the tenth anniversary of the Effective Date, (b) the date when all Shares available under the Plan shall have been acquired pursuant to the exercise of Awards and the payment of all benefits in connection with Awards has been made, or (c) such other date as the Board may determine in accordance with Section 12.3.

 

12.3.                     Amendment, Modification and Termination.  The Board may, at any time, amend, modify or terminate the Plan.  However, no such amendment or modification may make a material revision to the Plan without the approval of the stockholders of the Company if such stockholder approval is required by the Code and the rules promulgated thereunder, any national securities exchange or system on which the Shares are then listed or reported or a regulatory body having jurisdiction with respect hereto.  Without limitation on the preceding sentence, no amendment may increase the number of Shares available under the Plan without the approval of the stockholders of the Company.

 

12.4.                     Awards Previously Granted.  No amendment, modification or termination of the Plan shall in any manner adversely affect any outstanding Award without the written consent of the Participant holding such Award; provided, that no such consent shall be required with respect to any amendment, modification or termination if the Committee determines in its reasonable discretion that such amendment, modification or termination is required or advisable in order for the Company, the Plan or the Award to satisfy or conform to any law or regulation or to meet the requirements of any accounting standard.

 

12.5.                     No Repricing.  Except for the adjustments set forth in Section 4.3 or otherwise in connection with a corporate transaction involving the Company (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, or exchange of shares), no outstanding Options or SARs shall be amended to reduce their exercise price or base price, and no outstanding Options or SARs with an exercise price or base price less than current Fair Market Value shall be cancelled in exchange for cash, other Awards or Options or SARs with an exercise price or base price that is less than the exercise price or base price of the original Options or SARs without the approval of the stockholders of the Company.

 

XIII.                    Non-Transferability

 

Except as expressly provided in the Plan, a Participant’s rights under the Plan may not be assigned, pledged or otherwise transferred other than by will or the laws of descent and distribution.  Except as expressly provided in the Plan, during a Participant’s lifetime, an Award may be exercised only by such Participant.  In the event of the death of a Participant, the Award may be exercised by the person or persons to whom rights pass by will or by the laws of descent and distribution or, if appropriate, the legal representative of the deceased Participant’s estate.  In

 

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the event of the Disability of a Participant, the Award may be exercised by the Participant or, if such Participant is incapable of exercising the Award, by such Participant’s legal representative.

 

XIV.                     No Employment or Reelection Rights

 

Neither the Plan, nor any action taken under the Plan, shall be construed as giving any Employee, Consultant or Nonemployee Director the right to become a Participant, nor shall an Award under the Plan be construed as giving a Participant any right with respect to continuance of employment by, or service with, the Company or any right to be re-nominated by the Board or reelected by the stockholders of the Company as a director.  The Company expressly reserves the right to terminate, whether by dismissal, discharge, removal or otherwise, a Participant’s employment or service at any time, with or without Cause, except as may otherwise be provided by any written agreement between the Company and the Participant or applicable law.

 

XV.                          Withholding

 

15.1.                     Tax Withholding.  No later than the date as of which an amount first becomes includible in the gross income of a Participant for federal, state local, or foreign income or employment or other tax purposes with respect to any Award under the Plan, such Participant shall pay to the Company, or make arrangements satisfactory to the Company regarding the payment of, any federal, state, local or foreign taxes of any kind required by law to be withheld with respect to any such Award under the Plan.  The obligations of the Company under the Plan shall be conditioned on such payment or arrangements, and the Company and its Affiliates shall, to the extent permitted by law, have the right to deduct any such taxes from any payment otherwise due to such Participant.

 

15.2.                     Share Withholding.  A Participant may, subject to the prior approval of the Committee in its sole discretion, elect to satisfy a withholding requirement, in whole or in part, by having the Company withhold Shares having a Fair Market Value on the date the withholding tax is to be determined equal only to the minimum amount required to be withheld under applicable law, all in accordance with such procedures as the Committee establishes, including making irrevocable elections; provided, that if Share withholding in excess of such minimum amount can be effectuated without adverse accounting consequences, the Committee may elect to authorize such additional Share withholding.

 

XVI.                     Section 16 and 409A Compliance

 

16.1.                     Plan Administration.  It is the intention of the Company that the Plan and the administration of the Plan comply in all respects with Section 16(b) of the Exchange Act and Section 409A of the Code and the rules and regulations promulgated thereunder to the extent deemed appropriate by the Committee.  If any Plan provision, or any aspect of the administration of the Plan, is found not to be in compliance with Section 16(b) of the Exchange Act or Section 409A of the Code, the provision or administration shall be deemed null and void to the extent deemed appropriate by the Committee, and the Plan shall be construed in favor of its meeting the requirements of Rule 16b-3 promulgated under the Exchange Act and Section 409A of the Code to the extent deemed appropriate by the Committee.  Notwithstanding anything in the Plan to the contrary, the Committee, in its discretion, may bifurcate the Plan so as to restrict, limit or

 

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condition the use of any provision of the Plan to Participants who are subject to Section 16 of the Exchange Act without so restricting, limiting or conditioning the Plan with respect to other Participants.

 

16.2.                     Plan Awards.  Notwithstanding anything contained in the Plan to the contrary, the Company intends that Awards payable under the Plan shall satisfy the requirements for exemption from, or compliance with, Section 409A of the Code and that all terms and provisions shall be interpreted, operated and administered to satisfy such requirements.  To the extent Section 409A of the Code is applicable to any Award, it is intended that such 409A Award complies with the deferral, payout and other limitations and restrictions imposed under Section 409A of the Code.

 

16.3.                     Specified Employees.  Regardless of what may be contained in any Award Agreement, to the extent that any 409A Award is treated as payable upon a “separation from service” pursuant to Section 409A of the Code (as determined, and in accordance with the methodology selected by the Company, consistent with Section 409A of the Code) (“Separation from Service”), then, if payment is triggered by reason of the Separation from Service, and on the date of the Participant’s Separation from Service the Participant is a Specified Employee, to the extent required for the Participant not to incur additional taxes pursuant to Section 409A of the Code, no payment with respect to the 409A Award shall be made to the Participant prior to the earlier of (i) six months after the Participant’s Separation from Service; or (ii) the date of the Participant’s death. Should the limitation set forth in the preceding sentence result in payment later than otherwise provided in the Plan or 409A Award, on the first day any such payment may be made without incurring additional tax pursuant to Section 409A of the Code, such payment shall be made to the Participant in a lump sum.  Notwithstanding anything contained in the Plan or Award to the contrary, the date on which a Participant’s Separation from Service occurs shall be treated as the Participant’s termination of employment or cessation of service date or comparable concept for purposes of determining the timing of payments under the Plan and Award to the extent necessary to have such payments under the Plan and Award be exempt from or comply with the requirements of Section 409A of the Code; provided, that this sentence shall have no impact on whether or not an Award becomes vested.  No 409A Award shall be subject to acceleration or to any change in the specified time or method of payment, except as permitted by Section 409A of the Code or as otherwise provided under the Plan or Award and consistent with Section 409A of the Code.

 

16.4.                     No Representation.  The provisions of this Article XVI are not intended to impose any restrictions on Awards, other than those required for the Participant not to incur additional tax under Code Section 409A, and shall be interpreted and operated accordingly.  Notwithstanding any other provision in the Plan, the Committee makes no representations that Awards granted under the Plan shall be exempt from, or comply with, Section 409A of the Code and makes no undertaking to preclude Section 409A of the Code from applying to Awards granted under the Plan.  No provision of the Plan shall be interpreted or construed to transfer any liability for failure to comply with Section 409A from the Participant or any other individual to the Company.

 

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XVII.                Indemnification

 

No member of the Board or the Committee, nor any officer or Employee acting on behalf of the Board or the Committee, shall be personally liable for any action, determination or interpretation taken or made with respect to the Plan, and all members of the Board, the Committee and each officer or Employee of the Company acting on their behalf shall, to the extent permitted by law, be fully indemnified and protected by the Company with respect to any such action, determination or interpretation.

 

XVIII.           Successors

 

All obligations of the Company with respect to Awards granted under the Plan shall be binding on any successor to the Company, whether the existence of such successor is a result of a direct or indirect purchase, merger, consolidation or otherwise, of all or substantially all of the business and/or assets of the Company.

 

XIX.                    Participants in Other Countries or Jurisdictions

 

Without amending the Plan, the Committee may grant Awards to Employees, Consultants or Nonemployee Directors who are foreign nationals on such terms and conditions different from those specified in the Plan, as may, in the judgment of the Committee, be necessary or desirable to foster and promote achievement of the purposes of the Plan, and the Committee shall have the authority to adopt such modifications, procedures, subplans and the like as may be necessary or desirable to comply with provisions of the laws or regulations of other countries or jurisdictions in which the Company or any Subsidiary may operate or have employees to ensure the viability of the benefits from Awards granted to Participants employed in such countries or jurisdictions, meet the requirements that permit the Plan to operate in a qualified or tax efficient manner, comply with applicable foreign laws or regulations and meet the objectives of the Plan.

 

XX.                         No Trust or Fund

 

The Plan is intended to constitute an “unfunded” plan.  Nothing contained herein shall require the Company to segregate any monies or other property, or Shares, or to create any trusts, or to make any special deposits for any immediate or deferred amounts payable to any Participant, and no Participant shall have any rights that are greater than those of a general unsecured creditor of the Company.

 

XXI.                    Governing Law

 

To the extent not preempted by federal law, the Plan and all agreements and instruments entered into under the Plan shall be governed by, and construed in accordance with, the laws of the State of Delaware without regard to its conflict of laws rules.  Participants irrevocably consent to the personal jurisdiction and exclusive venue of the state and federal courts in Illinois.  Furthermore, the Plan and all Option Agreements relating to ISOs shall be interpreted to the extent deemed appropriate by the Committee so as to qualify as incentive stock options under the Code.

 

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APPENDIX I
 Definitions

 

“409A Award” shall mean an Award that constitutes a “deferral of compensation” subject to the requirements of Section 409A of the Code.

 

“Adjusted Awards” shall mean Awards granted under the Predecessor Plans that are converted into Awards in respect of Shares pursuant to the Employee Matters Agreement.

 

“Affiliate” shall mean any entity which, at the time of reference, directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, the Company.

 

“Award” shall mean, individually or collectively, a grant under the Plan of Options, Restricted Stock, Restricted Stock Units, LTIP Units, SARs, Performance Units, stock awards and cash awards.

 

“Award Agreement” shall mean an Option Agreement, Restricted Award Agreement, LTIP Unit Award Agreement, SAR Agreement, Performance Unit Agreement or other agreement evidencing an Award as described in the Plan.

 

“Board” shall mean the Board of Directors of the Company.

 

“Cause” shall have the same meaning as provided in an employment, employee protection and noncompetition, consulting or similar agreement between a Participant and the Company or an Affiliate, or if no such agreement exists, unless otherwise defined in an agreement evidencing an Award, (i) a Participant’s indictment for, conviction of, or plea of nolo contendere to, any felony or a misdemeanor involving fraud, dishonesty or moral turpitude, (ii) a Participant’s willful or intentional material breach of the Participant’s duties and responsibilities, (iii) a Participant’s willful or intentional material misconduct in the performance of the Participant’s duties, or (iv) the willful or intentional failure by the Participant to comply with any lawful instruction or directive of the Person to whom the Participant reports.

 

“Certificate of Designation” shall mean a certificate of designation establishing the powers, preferences, economic rights and conditions to vesting of a series of LTIP Units.

 

“Change in Control” shall mean the occurrence of any of the following events:

 

(a)                                 An acquisition (other than directly from the Company) of any voting securities of the Company (the “Voting Securities”) by any “Person” (having the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act, and as used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d)) immediately after which such Person has beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) (“Beneficial Ownership” and/or “Beneficially Owned”) of 35% or more of the combined voting power of the Company’s then outstanding Voting Securities; provided, that in determining whether a Change in Control has occurred, Voting Securities which are acquired in a Non-Control Acquisition shall not constitute an acquisition which would cause a Change in Control.  For purposes of the

 

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Plan, the term “Non-Control Acquisition” shall mean an acquisition by (i) the Company or any Subsidiary, (ii) an employee benefit plan (or a trust forming a part thereof) maintained by the Company or any Subsidiary, or (iii) any Person in connection with a Non-Control Transaction (as hereinafter defined);

 

(b)                                 The individuals who, as of the Effective Date, are members of the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, that if the election, or nomination for election by the Company’s stockholders, of any new director was approved by a vote of at least a majority of the Incumbent Board, such new director shall, for purposes of this clause (b), be considered a member of the Incumbent Board; and provided, further, that no individual shall be considered a member of the Incumbent Board if such individual initially assumed office as a result of either an actual or threatened election contest (as described in former Rule 14a-11 promulgated under the Exchange Act) (“Election Contest”) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board (a “Proxy Contest”), including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest;

 

(c)                                  Consummation of a merger, consolidation or reorganization involving the Company, unless such transaction is a Non-Control Transaction.  For purposes of the Plan, the term “Non-Control Transaction” shall mean a merger, consolidation or reorganization of the Company in which:  (i) the stockholders of the Company, immediately before such merger, consolidation or reorganization, own, directly or indirectly immediately following such merger, consolidation or reorganization, at least 45% of the combined voting power of the voting securities of the corporation or entity resulting from such merger, consolidation or reorganization (the “Surviving Company”) over which any Person has Beneficial Ownership in substantially the same proportion as their Beneficial Ownership of the Voting Securities immediately before such merger, consolidation or reorganization, (ii) the individuals who were members of the Incumbent Board immediately prior to the execution of the agreement providing for such merger, consolidation or reorganization constitute at least a majority of the members of the board of directors or equivalent body of the Surviving Company; and (iii) no Person (other than the Company, any Subsidiary, any employee benefit plan (or any trust forming a part thereof) maintained by the Company, the Surviving Company or any Person who, immediately prior to such merger, consolidation or reorganization, had Beneficial Ownership of 35% or more of the then outstanding Voting Securities) has Beneficial Ownership of 35% or more of the combined voting power of the Surviving Company’s then outstanding voting securities;

 

(d)                                 A complete liquidation or dissolution of the Company; or

 

(e)                                  The sale or other disposition of all or substantially all of the assets of the Company to any Person (other than a transfer to a Subsidiary).

 

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because any Person (the “Subject Person”) acquired Beneficial Ownership of more than the permitted amount of the outstanding Voting Securities as a result of the acquisition of Voting

 

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Securities by the Company which, by reducing the number of Voting Securities outstanding, increases the proportional number of shares Beneficially Owned by the Subject Person; provided, that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition of Voting Securities by the Company, and after such share acquisition by the Company, the Subject Person becomes the Beneficial Owner of any additional Voting Securities which increases the percentage of the then outstanding Voting Securities Beneficially Owned by the Subject Person, then a Change in Control shall occur.

 

Notwithstanding anything in the Plan to the contrary, with respect to any 409A Award, only to the extent necessary for such 409A Award to comply with Section 409A of the Code, a Change in Control must constitute a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Company, within the meaning of Section 409A(a)(2)(A)(v) of the Code.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, or any successor thereto.

 

“Commission” shall have the meaning given such term in Section 4.3(d).

 

“Committee” shall mean the committee described in Section 3.1 or, as applicable, any other committee or any officer to whom the Board or the Committee, as applicable, has delegated authority in accordance with Section 3.2.

 

“Consultant” shall mean an individual who is a consultant or independent contractor of the Company or a Subsidiary.

 

“Corporate Transaction” shall mean a merger, consolidation, acquisition of property or shares, stock rights offering, liquidation, disposition for consideration of the Company’s direct or indirect ownership of a Subsidiary or Affiliate, or similar event affecting the Company or any of its Subsidiaries.

 

“Disability” shall have the same meaning as provided in an employment, employee protection and noncompetition, consulting or similar agreement between a Participant and the Company or an Affiliate, or if no such agreement exists, unless otherwise defined in an agreement evidencing an Award, shall mean permanent and total disability as determined by the Committee in accordance with standards and procedures similar to those under the Company’s long-term disability plan, or, if none, a medically determinable physical or mental infirmity which the Committee determines impairs the Participant’s ability to perform substantially his or her duties for a period of 180 consecutive days.

 

“Employee” shall mean an individual who is an employee of the Company or a Subsidiary.

 

“Employee Matters Agreement” shall mean the Employee Matters Agreement, dated          , by and between the Company and Ventas, Inc..

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.

 

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“Fair Market Value” of the Shares shall mean, as of any applicable date, the closing sale price of the Shares on the New York Stock Exchange or any national or regional stock exchange on which the Shares are traded, or if no such reported sale of the Shares shall have occurred on such date, on the next preceding date on which there was such a reported sale.  If there shall be any material alteration in the present system of reporting sale prices of the Shares, or if the Shares shall no longer be listed on the New York Stock Exchange or a national or regional stock exchange, the fair market value of the Shares as of a particular date shall be determined by such method as shall be determined by the Committee.

 

“General Partner” means the general partner of the applicable OP.

 

“ISOs” shall have the meaning given such term in Section 6.1.

 

“LTIP Unit” shall mean a long-term incentive plan interest in an OP created under an applicable Partnership Agreement and granted pursuant to Section 8.1 which, under certain conditions, is convertible into OP Units.

 

“LTIP Unit Award Agreement” shall mean an agreement evidencing an Award of LTIP Units, as described in Section 8.2.

 

“Nonexecutive Employees” shall mean Employees who are not executive officers of the Company.

 

“Nonemployee Director” shall mean an individual who is a member of the Board but is not an Employee.

 

“NQSOs” shall have the meaning given such term in Section 6.1.

 

“OP” means an operating partnership of the Company.

 

“Option” shall mean an option to purchase Shares granted pursuant to Article VI.

 

“Option Agreement” shall mean an agreement evidencing the grant of an Option as described in Section 6.2.

 

“Option Exercise Price” shall mean the purchase price per Share subject to an Option, which shall not be less than the Fair Market Value of the Share on the date of grant (110% of Fair Market Value in the case of an ISO granted to a Ten Percent Shareholder).

 

“OP Unit” shall mean a unit of partnership interest in an OP.

 

“Participant” shall mean any Employee, Nonemployee Director, or Consultant selected by the Committee to receive an Award under the Plan.

 

“Partnership Agreement” shall mean the Partnership Agreement from the applicable OP, as same may be amended or restated from time to time, including any Certificate of Designation establishing the powers, preferences, economic rights and conditions to vesting of a series of LTIP Units.

 

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“Performance Goals” shall have the meaning given such term in Section 9.4.

 

“Performance Period” shall have the meaning given such term in Section 9.3.

 

“Performance Unit” shall mean the right to receive a payment from the Company upon the achievement of specified Performance Goals as set forth in a Performance Unit Agreement.

 

“Performance Unit Agreement” shall mean an agreement evidencing a Performance Unit Award, as described in Section 9.2.

 

“Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and as used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d).

 

“Plan” shall mean this Care Capital Properties, Inc. 2015 Incentive Plan, as the same may be amended from time to time.

 

“Predecessor Plans” shall mean the Ventas, Inc. 2012 Incentive Plan, the Ventas, Inc. 2006 Incentive Plan, the Ventas, Inc. 2006 Stock Plan for Directors and the Ventas, Inc. 2004 Stock Plan for Directors, in each case, as the applicable plan may have been amended from time to time.

 

“Restricted Award Agreement” shall mean an agreement evidencing an Award of Restricted Stock or Restricted Stock Units, as described in Section 7.2.

 

“Restricted Stock” shall mean Shares granted pursuant to Article VII as to which the restrictions have not expired.

 

“Restricted Stock Unit” shall mean an Award granted pursuant to Article VII denominated in units of the Company’s common stock, par value $0.01 per share.

 

“Restriction Period” shall mean the period determined by the Committee during which the transfer of Shares or LTIP Units is limited in some way or Shares or Restricted Stock Units or LTIP Units are otherwise restricted or subject to forfeiture as provided in Article VII or Article VIII.

 

“Shares” shall mean the shares of the Company’s common stock, par value $0.01 per share.

 

“Subsidiary” shall mean any company, corporation, partnership, limited liability company or other Person in which the Company directly or indirectly owns a majority interest.

 

“Substitute Awards” shall mean Awards granted in connection with a transaction in substitution, exchange, conversion, adjustment, assumption or replacement of awards previously granted by an entity acquired by the Company or a Subsidiary or with which the Company or a Subsidiary merges or otherwise combines.

 

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“Ten Percent Shareholder” shall mean an Employee who, at the time an ISO is granted, owns (within the meaning of Section 422(b)(6) of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company.

 

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