Document:

EXHIBIT 10.2

 

CONSULTING AGREEMENT 

This CONSULTING AGREEMENT (this “Agreement”), is entered into by
and between Health Care REIT, Inc., a Delaware corporation (the “Company”), on
the one hand, and Charles J. Herman, Jr. (“Consultant”), on the other hand,
effective as of July 1, 2015. 

RECITALS

WHEREAS, Consultant has been employed by the Company subject to an
employment contract dated December 29, 2008;

WHEREAS, the Consultant and the Company have agreed that the Consultant
will retire from employment with the Company effective July 1, 2015 (the
“Retirement Date”); and

WHEREAS, the Company has determined that it is in its best interests for
the Consultant to provide his continued services and expertise to the Company
in a consulting capacity following his retirement.

NOW THEREFORE, in consideration of the mutual promises
set forth herein, the Company and Consultant desire to enter into this
Agreement setting forth the terms and conditions of Consultant’s continued
service with the Company following the Retirement Date.

AGREEMENT

1.                  
AGREEMENT FOR SERVICES.  Subject to Consultant’s
execution of and continued compliance with that certain Executive Retirement
Agreement (the “Retirement Agreement”), for a period commencing on the
Retirement Date and continuing through December 31, 2015, unless amended or
terminated earlier pursuant to the terms hereof (the “Consulting Term”),
Consultant agrees to provide consulting and advisory services to the Company as
described in Section 4.

2.                  
CONSULTING FEE.  During the Consulting Term,
Consultant shall receive $25,000 per month (the “Fee”).  The Fee shall be paid
in a single lump sum on a monthly basis during the Consulting Term; provided,
however, that no Fee shall become payable prior to the effectiveness of the
Retirement Agreement. The foregoing Fee (to which Consultant would not
otherwise be entitled) to be paid during the Consulting Term constitutes
additional consideration for Consultant’s execution and delivery of this
Agreement and the Retirement Agreement, and the latter becoming effective and
irrevocable in accordance with its terms, and is subject to Consultant’s
compliance with the covenants and other obligations set forth therein and
herein, all of which must be satisfied in full in order for the Fee to be
earned.  

3.                  
TERMINATION OF CONSULTING TERM.  In the
event of Consultant’s material breach of this Agreement and/or the Retirement
Agreement, the Company may terminate the Consulting Term, and upon termination,
the Company shall have no further obligations hereunder.  Notwithstanding any
provision of this Agreement to the contrary, the Consultant may, upon 15 days
prior notice, terminate the Consulting Term and shall thereafter have no
further obligations hereunder. Thereafter, the Company shall have no further
obligation to pay the Fee.

4.                  
CONSULTING SERVICES.  During the Consulting
Period, Consultant shall render consulting and advisory services, including
working with industry trade associations, as reasonably requested by the
Company’s Chief Executive Officer or Chief Operating Officer at mutually convenient
times.  Consultant’s time rendering those services shall not exceed forty
(40) hours per month.  Neither party expects that Consultant will provide
services to the Company in the future at a level that exceeds the level set
forth in this Section 4 and it is the parties' intent that Consultant will have
experienced a "separation from service" as defined in Section 409A of
the Internal Revenue Code of 1986, as amended, no later than the Retirement
Date.

5.                  
INDEPENDENT CONTRACTOR.  Consultant shall perform
his obligations hereunder as an independent contractor and shall not be deemed
an employee of the Company or any of its subsidiaries or affiliates.  The
Company understands and agrees that that the Company has no right to direct or
control the manner in which Consultant performs Consultant’s consulting
services hereunder.  Accordingly, the Consultant will not be entitled to
receive any fringes, perquisites or retirement or welfare benefits from the
Company for his services as a Consultant under this Agreement except as
expressly provided herein or in the Retirement 

 

Agreement. 
The Company will not withhold federal or state income, social security, or
other taxes from the Fee paid under the terms of this Agreement, unless
otherwise required by law.  Consultant agrees that Consultant will be fully and
solely responsible for any income or other tax liability imposed on Consultant
in his capacity as an “independent contractor.”  It is further understood and
agreed that nothing herein shall be deemed to create a partnership, joint
venture, employment or agency relationship between Consultant and the Company
or any of its subsidiaries or affiliates at any time following the Retirement
Date.  While performing consulting services under this Agreement, Consultant will
have no authority or power to bind the Company or to represent the Company in
relation to third parties or to represent to third parties that Consultant has
authority or power to bind the Company or to represent the Company.

6.                  
ASSIGNMENT AND TRANSFER.  Consultant’s rights and
obligations under this Agreement shall not be transferable by assignment or
otherwise, and any purported assignment, transfer or delegation thereof shall
be void.  This Agreement shall inure to the benefit of, and be enforceable by,
any purchaser of all or substantially all of the Company’s assets, any
successor to the Company’s business, or any assignee of either of the
foregoing.

7.                  
MISCELLANEOUS. 

7.1    Governing
Law.  This Agreement shall be governed by and construed in accordance
with the laws of the State of Ohio.

7.2    Entire
Agreement.  This Agreement and the Retirement Agreement contain the entire
agreement and understanding between the parties hereto and supersede any prior
or contemporaneous written or oral agreements between them respecting the
subject matter hereof.  Notwithstanding any provision of this Agreement to the
contrary, the Company acknowledges and agrees that: (i) it has previously
entered into that certain indemnification agreement with the Consultant,
effective February 14, 2005 (the “Indemnification Agreement”); and (ii) the
Company’s indemnification obligations under the Indemnification Agreement shall
extend to and cover the Consultant’s services provided to, or on behalf of, the
Company under this Agreement.

7.3    Amendment.  This
Agreement may be amended only by a writing signed by Consultant and the Chief
Executive Officer or the Chief Operating Officer of the Company.

7.4    Severability.  If
any term, provision, covenant or condition of this Agreement, or the
application thereof to any person, place or circumstance, shall be held to be
invalid, unenforceable or void, the remainder of this Agreement and such term,
provision, covenant or condition as applied to other persons, places and
circumstances shall remain in full force and effect.

7.5    Construction.  The
headings and captions of this Agreement are provided for convenience only and
are intended to have no effect in construing or interpreting this Agreement. 
The language in all parts of this Agreement shall be in all cases construed according
to its fair meaning and not strictly for or against the Company or Consultant.

7.6    Rights
Cumulative.  The rights and remedies provided by this Agreement are
cumulative, and the exercise of any right or remedy by either party hereto (or
by its successor), whether pursuant to this Agreement, to any other agreement,
or to law, shall not preclude or waive its right to exercise any or all other
rights and remedies.

7.7    Nonwaiver.  No
failure or neglect of either party hereto in any instance to exercise any
right, power or privilege hereunder or under law shall constitute a waiver of
any other right, power or privilege or of the same right, power or privilege in
any other instance.  All waivers by either party hereto must be contained in a
written instrument signed by the party to be charged and, in the case of the
Company, by an executive officer of the Company.

7.8    Notices.  Any
notice, request, consent or approval required or permitted to be given under
this Agreement or pursuant to law shall be sufficient if in writing, and if and
when sent by certified or registered mail, with postage prepaid, to:

If to
the Company:

Health
Care REIT, Inc.

4500 Dorr Street

Toledo, OH 43615-4040

Attention: Chief Operating Officer

If to Consultant:

Charles
J. Herman, Jr.

2540 Falmouth Road

Ottawa Hills, OH 43615

[Signature Page Follows] 

 

IN WITNESS WHEREOF, the
parties hereto have duly executed this Agreement effective as of the first date
set forth above.

	
  THE COMPANY:

  	
  CONSULTANT:

  
	
  Health Care REIT, Inc.

   

  By: /s/ Thomas J. DeRosa 

  Name: Thomas J. DeRosa

  Title:   Chief Executive Officer

  

  

  	
   

   

  /s/ Charles J. Herman, Jr.   

  Charles J. Herman, Jr.EXHIBIT 10.3

HEALTH
CARE REIT, INC.

2015-2017 LONG-TERM INCENTIVE PROGRAM

1.                  
Purpose.  This 2015-2017 Long-Term Incentive Program (the
“Program”) is adopted pursuant to the Amended and Restated Health Care REIT,
Inc. 2005 Long-Term Incentive Plan (the “Equity Plan”) and any successor equity
plan and is intended to provide an incentive for superior work and to motivate
executives and employees of Health Care REIT, Inc. (the “Company”) toward even
higher achievement and business results, to tie their goals and interests to
those of the Company and its stockholders and to enable the Company to attract
and retain highly qualified executives and employees.  The Program is for the
benefit of Participants (as defined below).  

2.                  
Definitions.  Capitalized terms used herein without definitions
shall have the meanings given to those terms in the Equity Plan.  In addition,
as used herein:

“All REIT Index” means the MSCI US REIT Index

“Annualized TSR Percentage” means (1*(1 +
Cumulative TSR))^(1/3) - 1.

“Average Same-Store Cash NOI Growth” means the
average same-store cash net operating income growth for the period January 1,
2015 through September 30, 2018, as calculated in accordance with generally
acceptable accounting standards.

“Award”
means a grant to a Participant hereunder.

“Award Notice” means the restricted stock unit
award agreement with a Participant that sets forth the terms, conditions and
limitations of the Participant’s participation in this Program, including,
without limitation, the Participant’s Target Award.

“Cause” for termination of the Participant’s
employment for purposes of Section 6 means (a) if the Participant is a party to
an employment agreement with the Company immediately prior to such termination,
and “Cause” is defined therein, then “Cause” shall have the meaning set forth
in such employment agreement, or (b) if the Participant is not party to an
employment agreement with the Company immediately prior to such termination or
the Participant’s employment agreement does not define “Cause,” then “Cause”
shall mean: (i) gross negligence or willful misconduct by the Participant in
connection with the performance of his or her material duties as an employee of
the Company or any Subsidiary; (ii) a breach by the Participant of any of his
or her material duties as an employee of the Company or any Subsidiary and the
failure of the Participant to cure such breach within 30 days after written
notice thereof by the Company or any Subsidiary; (iii) conduct by the
Participant against the material best interests of the Company or any
Subsidiary or a material act of statutory or common law fraud against the
Company, any Subsidiary or the employees of either the Company or any
Subsidiary; or (iv) indictment of the Participant of a felony or a misdemeanor
involving moral turpitude and such indictment has a material adverse effect on
the interests or reputation of the Company or any Subsidiary.

“Change in Corporate Control” shall have the
same meaning as set forth in Section 10.1(a) (but substituting “fifty percent
(50%)” for “twenty percent (20%)”) and Section 10.1(c) of the Equity Plan.

“Code” means the
Internal Revenue Code of 1986, as amended.

“Common Stock” means the Company’s common
stock, par value $1.00 per share, either currently existing or authorized hereafter.

“Common Stock Price” means, as of a particular
date, the average of the Fair Market Value of one share of Common Stock over
the 20 consecutive trading days ending on, and including such date (or if such
date is not a trading day, the most recent trading day immediately preceding
such date); provided that, if such date is the date upon which a Transactional
Change of Control occurs, the Common Stock Price as of such date shall be equal
to the fair value, as determined by the Committee, of 

the
total consideration paid or payable in the transaction resulting in the
Transactional Change of Control for one share of Common Stock.

“Cumulative TSR” means ((1*(1 + TSR Year 1)*(1
+ TSR Year 2)*(1 + TSR Year 3)) ‐ 1.

“Disability” for termination of the Participant’s
employment for purposes of Section 6 means (a) if the Participant is a party to
an employment agreement with the Company immediately prior to such termination,
and “Disability” is defined therein, then “Disability” shall have the meaning
set forth in such employment agreement, or (b) if the Participant is not party
to an employment agreement with the Company that defines “Disability,” then
“Disability” shall have the same meaning as defined in the Equity Plan.

“Dividend Value” means the aggregate amount of
dividends and other distributions paid on one Share for which the record date
occurred on or after the first day of the Performance Period and prior to the
Issuance Date for the Performance Period (excluding dividends and distributions
paid in the form of additional Shares).

“Earned Award” means,
with respect to a Participant, the actual number of shares of Restricted Stock
that were earned by such Participant pursuant to this Program at the end of the
Performance Period.

“Equity
Plan” means the Amended and Restated Health Care REIT, Inc. 2005 Long-Term
Incentive Plan, as amended from time to time.

“Fair Market Value” means, as of any given
date, the fair market value of a security which shall be the closing sale price
reported for such security on the principal stock exchange or, if applicable,
any other national exchange on which the security is traded or admitted to
trading on such date on which a sale was reported.  If there are no market
quotations for such date, the determination shall be made by reference to the
last date preceding such date for which  there are market quotations.

“Fixed Charge Coverage” means the Company’s
fixed charge coverage, as calculated in accordance with generally acceptable
accounting standards and measured as of the last quarter of the Performance
Period annualized.

“Good Reason” for termination of the
Participant’s employment for purposes of Section 6 means (a) if the
Participant is a party to an employment agreement with the Company immediately
prior to such termination, and “good reason” is defined therein, then “Good
Reason” shall have the meaning set forth in such employment agreement, or (b)
if the Participant is not party to an employment agreement with the Company
immediately prior to such termination and/or the Participant’s employment
agreement does not define “Good Reason”:  (i) a substantial adverse change, not
consented to by the Participant, in the nature or scope of the Participant’s
responsibilities, authorities, powers, functions, or duties; (ii) a breach by
the Company of any of its material obligations hereunder; or (iii) a material
change in the geographic location at which the Participant must perform his or
her services.  Unless otherwise provided in an employment agreement to which
the Participant is a party immediately prior to such termination, to constitute
“good reason termination,” the Participant must:  (1) provide written notice to
the Company within 90 days of the initial existence of the event constituting
“Good Reason;” (2) may not terminate his or her employment unless the Company
fails to remedy the event constituting “Good Reason” within 30 days after such
notice has been given; and (3) the Participant must terminate employment with
the Company no later than 30 days after the end of the 30-day period in which
the Company fails to remedy the event constituting “Good Reason.”

“Health Care REIT Index” means the NAREIT
Health Care REIT Index comprising of Ventas, Inc, HCP, Inc., Omega Healthcare
Investors, Senior Housing Properties Trust, Healthcare Trust of America, Inc.,
Healthcare Realty Trust, National Health Investors, Medical Properties Trust,
America Realty Capital Healthcare Trust, Sabra Health Care REIT, LTC
Properties, New Senior Investment Group, Physicians Realty Trust, Universal Health
Realty Income and Care Trust REIT, but specifically excluding the Company.  Any
health care REIT organization that is not in existence for the entire
Performance Period shall be omitted from this index.

“Index Return” means, with respect to the Performance
Period, the compounded annualized return of the either the Health Care REIT
Index, or the All REIT Index, as applicable, over the Performance Period
expressed as a percentage.  For the avoidance of doubt, the intent of the
Committee is that Index Return over the Performance Period be calculated in a
manner designed to produce a fair comparison between the Company’s Annualized
TSR Percentage and the Index Return for the purpose of determining Relative
Performance.  In the case of the Health Care REIT Index, the Index Return shall
be 

calculated by a non-weighted comparison of all the
companies that comprise the Health Care REIT Index as of program commencement.

“Participant” means an executive or employee of
the Company or any Subsidiary selected by the Compensation Committee to
participate in the Program.

“Performance Peers” means HCP, Inc., Ventas,
Inc., Healthcare Trust of America, Inc., Healthcare Realty Trust Incorporated
and Sabra Health Care REIT, Inc.

“Performance Period”
means the period commencing on January 1, 2015 and concluding on the
earlier of (i) December 31, 2017, or (ii) a Change in Corporate Control.

“Program” means this
Health Care REIT, Inc. 2015-2017 Long-Term Incentive Program, as amended from
time to time.

“Qualified Termination”
means termination of a Participant’s employment for Good Reason, by reason of
the Participant’s death, Disability, by the Company without Cause, Retirement
and in the case of a Participant who is party to an employment agreement with
the Company, a non‐renewal by the Company of the term of such agreement.

“Relative Performance” means the Annualized TSR
Percentage relative to the applicable Index Return.

“Relative Same-Store Cash NOI Growth” means the
differential between the Company’s Average Same-Store Cash NOI Growth and the
Performance Peer Group’s Average Same-Store Cash NOI Growth for the same
period.

“Retirement” means the voluntary termination of
employment by a Participant after attaining age 55, completing ten consecutive
years of service and if the sum of the Participant’s age and years of service
to the Company is equal to 70 or more; provided that the Participant (a)
delivers to the Company, at least six months prior to the date of his or her
retirement, written notice specifying such retirement date and the Participant
remains in the continuous service of the Company from the date the notice is
provided until his or her retirement date, and (b) enters into a retirement
agreement with the Company that includes (i) a customary release of claims against
the Company and its affiliates and (ii) non-competition, non-solicitation,
non-disparagement and non-disclosure covenants in favor of the Company.

“Target Award” means a Participant’s target
award, expressed in numbers of Restricted Stock Units, for the Performance
Period, as set forth in the Participant’s Award Notice.

“Total Shareholder Return” or “TSR” means the
compounded annual growth rate, expressed as a percentage (rounded to the
nearest tenth of a percent (0.1%)), in the value per share of Common Stock
during the Performance Period due to the appreciation in the price per share of
Common Stock and dividends paid during the Performance Period, assuming
dividends are reinvested.  Total Shareholder Return or TSR for any 12-month
period shall be calculated as follows:  (i) the Common Stock Price at the end
of the period plus dividends paid during the 12-month period divided by (ii)
the Fair Market Value of the Common Stock at the beginning of the period, minus
(iii) 1.  As set forth in, and pursuant to, Section 8 of this Agreement,
appropriate adjustments to the Total Shareholder Return shall be made to take
into account all stock dividends, stock splits, reverse stock splits and the
other events set forth in Section 8 that occur during the Performance Period.

“Transactional
Change of Control” means a Change in Corporate Control resulting from any
person or group making a tender offer for Common Stock, a merger or
consolidation where the Company is not the acquirer or surviving entity or
consisting of a sale, lease, exchange or other transfer to an unrelated party
of all or substantially all of the assets of the Company.  

“Valuation Date” means the earlier of (a)
December 31, 2017, or (b) the date upon which a Change of Control shall occur.

3.                  
Administration 

(a)                
The Program shall be administered
by the Compensation Committee in accordance with the Equity Plan.  The
Compensation Committee shall have the discretionary authority to make all
determinations (including, without limitation, the interpretation and
construction of the Program and the determination of relevant facts) regarding
the entitlement to any Award hereunder and the amount of any Award to be paid
under the Program (including the number of shares of Restricted Stock issuable
to any Participant), provided such determinations are made in good faith and
are consistent with the terms, purpose and intent of the Program.  In
particular, but without limitation and subject to the foregoing, the
Compensation Committee shall have the authority:

 

(i)                
to select Participants under the
Program;

(ii)              
to determine the Target Award and
any formula or criteria for the determination of the Target Award for each
Participant and to determine the Earned Award;

(iii)            
to determine the terms and
conditions, consistent with the terms of this Program, which shall govern Award
Notices and all other written instruments evidencing an Award hereunder,
including the waiver or modification of any such conditions;

(iv)            
to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Program as it
shall from time to time deem advisable; and

(v)              
to interpret the terms and
provisions of the Program and any Award granted under the Program (and any
Award Notices or other agreements relating thereto) and to otherwise supervise the
administration of the Program.

(b)                
Subject to the terms hereof, all
decisions made by the Compensation Committee in good faith pursuant to the
Program shall be final, conclusive and binding on all persons, including the
Company and the Participants.  No member of the Compensation Committee, nor any
officer or employee of the Company acting on behalf of the Compensation
Committee, shall be personally liable for any action, determination, or
interpretation taken or made in good faith with respect to this Program, and
all members of the Compensation Committee and each and any 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 in respect of any such action,
determination or interpretation.

4.                  
Determination of Awards

(a)                
Each Participant’s Award Notice
shall specify such Participant’s Target Award.

(b)                
The percentage of a Participant’s
Target Award that may be earned for the Performance Period shall be determined
as follows:  35 percent of the Target Award shall be earned based on the
Company’s Relative Performance to the Health Care REIT Index; 15 percent of the
Target Award shall be earned based on the Company’s Relative Performance to the
All REIT Index; 15 percent of the Target Award shall be earned based on the
Company’s Annualized TSR Percentage; 20 percent of the Target Award shall be
earned based on the Company’s Fixed Charge Coverage; and 15 percent of the
Target Award shall be earned based on the Company’s Relative Same-Store Cash
NOI Growth; and as further set forth on Exhibit A.

(c)                
Depending on the weighted average
score for the Company’s performance during the Performance Period as determined
pursuant to Exhibit A, the percentage of a Participant’s Target Award that may
be earned for the Performance Period shall be determined as follows:

	
  Threshold

  	
  Target

  	
  High

  	
  Extraordinary

  
	
  50%

  	
  100%

  	
  125%

  	
  150%

  

 

For
performance between two different tiers, the percentage payable shall be
calculated using interpolation between tiers.

Except
as otherwise provided herein, the Earned Award shall be settled in shares of
Restricted Stock subject to additional vesting requirements as set forth in
Section 7. 

5.                  
Change in Corporate Control.  In the event that prior to the end of the Performance Period, a
Change in Corporate Control occurs, then each outstanding Award will be deemed
earned as of the date of such Change in Corporate Control in accordance with
the computation described in Section 4(b) as if the Performance Period ended on
the day prior to the consummation of the Change in Corporate Control except
that corporate metrics not tied to TSR shall be calculated based on the results
through the most recent quarter, but each Award shall further be multiplied by
a fraction, the numerator of which shall be the number of full and partial 

months from the beginning of the Performance Period
through the Change in Corporate Control and the denominator of which shall be
36.  Any shares of Common Stock issued to satisfy outstanding Earned Awards
shall be fully vested and nonforfeitable. 

6.                  
Termination of Participant’s
Employment.

(a)                
If a Participant’s employment with
the Company terminates, the provision of this Section 6 shall govern the
treatment of the Participant’s Award exclusively, regardless of the provision
of any employment, change in control or other agreement or arrangement to which
the Participant is a party, or any termination or severance policies of the
Company then in effect, which shall be superseded by this Program.

(b)                
In the event of termination of a
Participant’s employment by reason of a Qualified Termination prior to the end
of the Performance Period, then the Compensation Committee shall determine the
Participant’s outstanding Award in accordance with the computation described in
Section 4(b) as if the Performance Period ended on the calendar quarter end
immediately preceding the date of the Participant’s Qualified Termination;
provided, however, that the Earned Award of such terminated Participant for the
Performance Period shall be multiplied by a fraction, the numerator of which
shall be the number of full and partial months in which the Participant was
employed by the Company in the Performance Period and the denominator of which
shall be 36.  The pro-rated Earned Award shall be paid out in shares of Common
Stock that are not subject to any risk of forfeiture.  Such terminated
Participant shall also receive a cash payment in an amount determined pursuant
to the provisions of Section 7(b) but taken into account only dividends paid
through the date of the Qualified Termination. 

(c)                
In the event of termination of a
Participant’s employment by reason of a Qualified Termination after the end of
the Performance Period, any Restricted Stock granted to the Participant under
this Program shall become fully vested and nonforfeitable.

(d)                
In the event of a termination of a
Participant’s employment for any reason other than a Qualified Termination
prior to the end of the Performance Period, except as otherwise set forth in
the Participant’s Award Notice, the Award held by the Participant for the
Performance Period shall, without payment of any consideration by the Company,
automatically and without notice terminate, be forfeited and be and become null
and void, and neither the Participant nor any of his or her successors, heirs,
assigns, or personal representatives will thereafter have any further rights or
interests in such Award.  In the event of a termination of a Participant’s
employment for any reason other than a Qualified Termination after the end of
the Performance Period, any shares of Restricted Stock granted under Section 7
that remain subject to risk of forfeiture shall be forfeited.

7.                  
Payment of Awards.

(a)                
As soon as practicable following
the end of the Performance Period, the Compensation Committee shall determine
the size of each Participant’s Earned Award, if any, with respect to the
Performance Period (with the date of such determination being referred to as
the “Issuance Date”).  In no event shall the Issuance Date with respect
to the Performance Period be later than 74 days after the end of the
Performance Period; provided that (i) in the case of the Performance Period
that ends upon a Change in Corporate Control, the Issuance Date shall be no
later than immediately prior to the consummation of the Change in Corporate
Control, and (ii) in the case of a determination required by Section 6(b), the
Issuance Date shall be no later than 74 days after the date of the
Participant’s Qualified Termination. 

(b)                
On the Issuance Date, the Company
shall issue to each Participant (or such Participant’s estate or beneficiary,
if applicable) a number of shares of Restricted Stock equal to the Earned
Award.  Except as otherwise provided in Sections 5 and 6, one-third of such
shares shall be immediately vested and nonforfeitable, one-third of such shares
shall become fully vested and nonforfeitable on December 31, 2018, and
one-third of such shares shall become fully vested and nonforfeitable on
December 31, 2019, subject to continued employment of the Participant through each
such date.  On the Issuance Date for the Performance Period, the Company shall
also pay in cash to each Participant (or such Participant’s estate or
beneficiary, if applicable) an amount equal to the Dividend Value for the
Performance Period multiplied by the number of shares issued pursuant to this
Section 7(b).

8.                  
Adjustments.  Without duplication with the provisions of Section
3 of the Equity Plan, if (i) the Company shall at any time be involved in a
merger, consolidation, dissolution, liquidation, reorganization, exchange of
Shares, sale of all or substantially all of the assets or Shares of the Company
or a transaction similar thereto, (ii) any stock dividend, stock split, reverse
stock split, stock combination, reclassification, recapitalization, or other
similar change in the capital structure of the Company, or any distribution to
holders of Shares other than ordinary cash dividends, shall occur or (iii) any
other event shall occur which in the judgment of the Compensation Committee
necessitates action by way of adjusting the terms of the Program, then and in
that event, the 

Compensation Committee shall take such
action as shall be necessary to maintain the Participants’ rights hereunder so
that they are substantially the same rights existing under this Program prior
to such event.

9.                  
Restrictions and Conditions.  Subject to the provisions of the Equity Plan and
this Program, except as may otherwise be permitted by the Compensation
Committee, a Participant shall not be permitted voluntarily or involuntarily to
sell, assign, transfer, or otherwise encumber or dispose of the Restricted
Stock or an Award; provided that the foregoing restriction shall not apply to
Shares actually issued to a Participant pursuant to Section 7 above that are no
longer subject to a risk of forfeiture.

10.               
Withholding of Tax.  Each Participant shall, not later than the date as
of which vesting or payment in respect of an Award becomes a taxable event for
Federal income tax purposes, pay to the Company or make arrangements
satisfactory to the Company for payment of any Federal, state and local taxes
required by law to be withheld on account of such taxable event.  The Company
shall have the authority to cause the required minimum tax withholding
obligation to be satisfied by withholding a number of Shares to be issued to a
Participant with an aggregate Fair Market Value that would satisfy the
withholding amount due.  The Company’s obligation to deliver stock certificates
(or evidence of book entry) to any Participant is subject to and conditioned on
tax withholding obligations being satisfied by such Participant.

11.               
Miscellaneous. 

(a)                
Amendment and Termination.  The Company reserves the right to amend or
terminate the Program at any time in its discretion without the consent of any
Participant, but no such amendment shall adversely affect the rights of the
Participants with regard to outstanding Awards.

(b)                
No Contract for Continuing
Services.  This Program shall not be
construed as creating any contract for continued services between the Company
or any of its Subsidiaries and any Participant and nothing herein contained
shall give any Participant the right to be retained as an employee or
consultant of the Company or any of its Subsidiaries.

(c)                
Governing Law.  The Program and each Award Notice awarded under the
Program shall be construed in accordance with and governed the laws of the
State of Ohio, without regard to principles of conflict of laws of such state.

(d)                
Construction.  Wherever appropriate, the use of the masculine
gender shall be extended to include the feminine and/or neuter or vice versa;
and the singular form of words shall be extended to include the plural; and the
plural shall be restricted to mean the singular.

(e)                
Headings.  The Section headings and Section numbers are
included solely for ease of reference.  If there is any conflict between such
headings or numbers and the text of this Program, the text shall control.

(f)                 
Effect on Other Plans.  Nothing in this Program shall be construed to limit
the rights of Participants under the Company’s or its Subsidiaries’ benefit
plans, programs or policies.

(g)                
Clawback Policy.  All Awards granted under this Program shall be
subject to forfeiture (as determined by the Compensation Committee) in
accordance with the terms of the Company’s clawback or recoupment policy (as in
effect from time to time).

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