Document:

ltc_Ex_108

		
			EXHIBIT 10.8
		

		
			EMPLOYMENT AGREEMENT

		

		
			This Employment Agreement (the “Agreement”), effective as of June 10, 2013 (the “Effective Date”), is by and between LTC Properties, Inc., a corporation organized under the laws of the State of Maryland (“LTC” or the “Company”), and Brent Chappell (“Executive”).
		

		
			NOW THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
		

			
	
			
				 1.
			Appointment, Title and Duties.  LTC hereby employs Executive to serve as its Vice President, Investment and Portfolio Management.  In such capacity, Executive shall report to the Chief Investment Officer of the Company, and shall have such duties, powers and responsibilities as are customarily assigned to a Vice President, Investment and Portfolio Management of a publicly held corporation, but shall also be responsible to the Board of Directors and to any committee thereof.  In addition, Executive shall have such other duties and responsibilities as the Chief Investment Officer may assign him, with his consent, including serving with the consent or at the request of the Chief Investment Officer as an officer or on the board of directors of affiliated corporations.

			
	
			
				 2.
			Term of Agreement.  Unless earlier terminated pursuant to the provisions of this Agreement, the initial term of employment of Executive under this Agreement is for a period of one (1) year, commencing on the Effective Date.  On the first anniversary of the Effective Date, and on each anniversary thereafter, the Agreement shall be renewed for a one (1) year period (both the initial one-year period under the Agreement and each one-year renewal period thereafter is referred to as the “Term”) unless (i) earlier terminated pursuant to the provisions of this Agreement, or (ii) written notice of non-renewal is given by either party to the other at least 60 days prior to the anniversary of the Effective Date occurring in any given year, in which case this Agreement  ends on the last day of the one-year Term in which such notice of non-renewal is given.

			
	
			
				 3.
			Acceptance of Position.  Executive accepts the position of Vice President, Investment and Portfolio Management of LTC, and agrees that during the term of this Agreement he will faithfully perform his duties and, except as expressly approved by the Board of Directors of LTC, will devote substantially all of his business time to the business and affairs of LTC, and will not engage, for his own account or for the account of any other person or entity, in a business which competes with LTC.  It is acknowledged and agreed that Executive may serve as an officer and/or director of companies in which LTC owns voting or non-voting stock.  In addition, it is acknowledged and agreed that Executive may, from time to time, serve as a member of the board of directors of other companies, in which event the Board of Directors of LTC must expressly approve such service pursuant to a Board resolution maintained in the Company’s minute books.  Any compensation or remuneration which Executive receives in consideration of his service on the board of directors of other companies shall be the sole and exclusive property of Executive, and LTC shall have no right or entitlement at any time to any such compensation or remuneration.

		 

		

			 

		

 

			
	
			
				 4.
			Salary and Benefits.  During the term of this Agreement:

			
	
			
				 (a)
			LTC shall pay to Executive a base salary at an annual rate of not less than two hundred five thousand dollars ($205,000) per annum (“Base Salary”), paid in approximately equal installments at intervals based on any reasonable Company policy.  LTC agrees from time to time to consider increases in such base salary in the discretion of the Board of Directors.  Any increase, once granted, shall automatically amend this Agreement to provide that thereafter Executive’s base salary shall not be less than the annual amount to which such base salary has been increased.

			
	
			
				 (b)
			Executive shall participate in all health, retirement, Company-paid insurance, sick leave, disability, expense reimbursement and other benefit programs which LTC makes available to any of its senior executives, and shall be eligible for bonuses in the discretion of the Board of Directors.  In the event the Company adopts and institutes a target bonus program, Executive will be entitled to participate in such program as it applies to his position with the Company.

			
	
			
				 (c)
			Executive shall be entitled to reasonable vacation time, not less than four (4) weeks per year.

			
	
			
				 5.
			Certain Terms Defined.  For purposes of this Agreement:

			
	
			
				 (a)
			Executive shall be deemed to be “disabled” if a physical or mental condition or illness shall occur and persist which, in the written opinion of a licensed physician selected by the Board of Directors in good faith, has rendered Executive unable to perform the duties set forth in Section 1 hereof in any material respect for a period of one hundred twenty (120) days or more and, in the written opinion of such physician, the condition will continue for an indefinite period of time, rendering Executive unable to return to his duties;

			
	
			
				 (b)
			A termination of Executive’s employment by LTC shall be deemed for “Cause” if, and only if, it is based upon:

			
	
			
				 (i)
			Any felony criminal conviction (including conviction pursuant to a nolo contendere plea) under the laws of the United States or any state or other political subdivision thereof which, in the sole discretion of the Chief Executive Officer or Chief Investment Officer, renders Executive unsuitable for the position of Vice President, Investment and Portfolio Management;  

			
	
			
				 (ii)
			Any act of financial malfeasance or financial impropriety, as determined by the Chief Executive Officer or Chief Investment Officer in good faith;

			
	
			
				 (iii)
			Executive’s continued willful failure to perform the duties reasonably requested by the Chief Executive Officer, Chief Investment Officer or other executive of the Company to whom Executive reports and commensurate with his position as Vice President, Investment and Portfolio Management (other than any such failure resulting from Executive’s incapacity due to his physical or mental condition) after a written demand for substantial performance is delivered to him by the Chief Executive Officer or Chief Investment Officer, which 
		

		 

		

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			demand specifically identifies the manner in which the Chief Executive Officer or Chief Investment Officer believes that Executive has not substantially performed his duties, and which performance is not substantially corrected by Executive, in the determination of the Chief Executive Officer or Chief Investment Officer made in good faith, within ten (10) days of receipt of such demand;

			
	
			
				 (iv)
			Any material workplace misconduct or willful failure to comply with the Company’s general policies and procedures as they may exist from time to time by Executive which, in the good faith determination of the Chief Executive Officer or Chief Investment Officer, renders Executive unsuitable for the position of Vice President, Investment and Portfolio Management;

			
	
			
				 (v)
			Any material breach by Executive of the provisions of this Agreement which has not been cured by Executive, in the good faith determination of the Chief Executive Officer or Chief Investment Officer, within thirty (30) days following delivery of notice to Executive specifying such material breach, or the repetition of any such material breach after it has been cured; or

			
	
			
				 (vi)
			Any act of moral turpitude, as determined by the Chief Executive Officer or Chief Investment Officer in good faith.

			
	
			
				 (vii)
			The Company shall have the right to suspend Executive, without pay, for a reasonable period to investigate allegations of conduct which, if proven, would establish a right to terminate this Agreement for Cause, or to permit a felony charge to be tried (and such suspension shall not constitute Good Reason (as defined below) for purposes of this Agreement).  Immediately upon the conclusion of such temporary period, unless Cause to terminate this Agreement has been established,  Executive shall be restored to all duties and responsibilities as if such suspension had never occurred and shall receive all back pay which may have been suspended during such temporary period;

			
	
			
				 (c)
			A resignation by Executive shall not be deemed to be voluntary and shall be deemed to be a resignation with “Good Reason” if it is based upon (i) a material diminution in Executive’s title, duties, or salary; (ii) a material reduction in benefits which is not part of an across-the-board reduction in benefits of all executive personnel; (iii) a direction by the Board of Directors, The Chief Executive Officer of Chief Investment Officer that Executive report to any person or group other than the Chief Executive Officer, the Chief Investment Officer or the Board of Directors,  (iv) in the case of a Change in Control (as defined below), a material diminution of Executive’s cash bonus, if any, as an average of cash bonus paid over the prior three (3) years  (or any lesser period, if Executive has been employed fewer than three years), with any partial year cash bonus paid in the applicable three (3) year period (or less) to be prorated to calculate a full year’s bonus, or (v) a geographic relocation of Executive’s place of work a distance for more than fifty (50) miles from LTC’s offices located at 2829 Townsgate Road, Westlake Village, CA 91361.  To constitute a “Good Reason” termination, Executive must provide written notice (“Notice”) to the Company of his intention to resign for Good Reason within sixty (60) days following the initial existence of the particular event or condition that constitutes Good Reason, following which the Company shall have a period of no more than thirty (30) days to remedy the condition.  If the 
		

		 

		

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			Company fails to so remedy the condition to the reasonable satisfaction of the Executive, his or her resignation for Good Reason shall be effective as of the date provided by Executive in the Notice;

			
	
			
				 (d)
			“Affiliate” means with respect to any Person, a Person who, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control, with the Person specified;

			
	
			
				 (e)
			“Base Salary” means, as of any date of termination of employment, the highest base salary of Executive in the then current fiscal year or in any of the last four fiscal years immediately preceding such date of termination of employment;

			
	
			
				 (f)
			“Beneficial Owner” shall have the meaning given to such term in Rule 13d‐3 under the Exchange Act;

			
	
			
				 (g)
			A “Change in Control” occurs if:

			
	
			
				 (i)
			Any Person or related group of Persons (other than Executive and his Related Persons, the Company or a Person that directly or indirectly controls, is controlled by, or is under common control with, the Company) is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing 30% or more of the combined voting power of the Company’s then outstanding securities; or

			
	
			
				 (ii)
			The stockholders of the Company approve a merger or consolidation of the Company with any other corporation (or other entity), other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 66-2/3% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; provided, however, that a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person acquires 30% or more of the combined voting power of the Company’s then outstanding securities shall not constitute a Change in Control; or

			
	
			
				 (iii)
			The Stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets; or

			
	
			
				 (iv)
			A majority of the members of the Board of Directors of the Company cease to be Continuing Directors;

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

			
	
			
				 (i)
			“Continuing Directors” means, as of any date of determination, any member of the Board of Directors who (i) was a member of such Board of Directors on the date of the Agreement or (ii) was nominated for election or elected to such Board of Directors with the approval of a majority of the Continuing Directors who were members of such Board of Directors at the time of such nomination or election.

		 

		

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				 (j)
			“Exchange Act” means the Exchange Act of 1934, as amended.

			
	
			
				 (k)
			“Person” means any individual, corporation, partnership, limited liability company, trust, association or other entity.

			
	
			
				 (l)
			“Related Person” means any immediate family member (spouse, partner, parent, sibling or child whether by birth or adoption) of the Executive and any trust, estate or foundation, the beneficiary of which is the Executive and/or an immediate family member of the Executive.

			
	
			
				 (m)
			“Severance Date” means the date on which the Executive’s employment is terminated.

			
	
			
				 6.
			Certain Benefits Upon Termination.  Executive’s employment shall be terminated upon the earliest of (i) the voluntary resignation of Executive with or without Good Reason; (ii) Executive’s death or permanent disability; (iii) the expiration of this Agreement without renewal as provided for in Section 2; or (iv) upon the termination of Executive’s employment by LTC for any reason at any time.  In the event of such termination, the below provisions of this Section 6 shall apply, and in the event of a Change in Control following which, within two  (2) years thereafter, Executive’s employment is terminated (other than for Cause) or Executive voluntarily resigns with Good Reason, Section 6(b) shall apply.

			
	
			
				 (a)
			If Executive’s employment by LTC terminates for any reason other than as a result of (i) a termination for Cause, or (ii) a voluntary resignation by Executive without a Good Reason, or (iii) termination within two  (2) years following a Change in Control of the Company, then all stock options, and/or restricted stock shall automatically vest concurrently upon such termination of employment, notwithstanding any prior existing vesting schedule and LTC (or its successor) shall pay Executive a lump sum severance payment equal to his Base Salary; provided that if employment terminates by reason of Executive’s death or disability, then such lump sum payment shall be paid only to the extent the Company (or its successor) has available “key man” life, disability or similar insurance relating to the death or disability of Executive.  LTC or its successor shall pay such lump sum payment within sixty (60) days of Executive’s termination of employment.

			
	
			
				 (b)
			In the event Executive’s employment is terminated (by the Company other than for Cause or by the Executive with Good Reason) within two (2) years following a Change in Control, in lieu of the severance payment described in Section 6(a) above, LTC shall pay Executive a lump sum severance payment in cash equal to two times his Base Salary,  and all stock options and/or restricted stock shall automatically vest concurrently upon such termination of employment, notwithstanding any prior existing vesting schedule.  LTC shall make such lump sum payment (less required withholdings) within seven (7) days of Executive’s termination of employment.    

			
	
			
				 (c)
			Executive’s participation in any other retirement and benefit plans and perquisites shall cease as of the Severance Date, except LTC shall pay premiums pursuant to COBRA for continuing coverage under LTC’s health plans for Executive and his eligible dependents (as determined under LTC’s health plans), or, at Executive’s option (which shall be communicated by written notice to LTC prior to the month such election is to take effect), provide a separate cash 
		

		 

		

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			payment monthly equal to the amount of the COBRA premium until the earlier of (i) the eighteen-month anniversary (or, in the case of a Change of Control termination referred to in Section 6(b) above, the twenty-four month anniversary) of the last day of the month in which the Severance Date occurs or (ii) the date the Executive becomes eligible to participate in a plan of another employer; provided, however, that LTC may cease making such payments with respect to any of Executive’s eligible dependents as and when such dependent becomes eligible to participate in a plan of another employer.  Any cash payment due to Executive pursuant to this Section 6(c) shall be paid by LTC not later than the end of the month in which such payment relates.

			
	
			
				 (d)
			In the event that Executive’s employment terminates by reason of his death, all benefits provided in Section 6 subsections (a) and (b)  shall be paid to his estate or as his executor shall direct, but payment may be deferred until Executive’s executor or personal representative has been appointed and qualified pursuant to the laws in effect in Executive’s jurisdiction of residence at the time of his death.

			
	
			
				 (e)
			Notwithstanding the foregoing, Executive’s right to receive the severance payments described in this Section 6 shall be and is conditioned upon his execution and delivery (and not revoking) a general release in favor of LTC, which shall not be inconsistent with the terms of this Agreement, and such other documents and instruments as are reasonably required by LTC, each of which Executive shall deliver to LTC within twenty-one (21) days following the Severance Date.

			
	
			
				 7.
			Indemnification.  LTC shall indemnify Executive and hold him harmless from and against all claims, actions, losses, damages, expense or liabilities (including expenses of defense and settlement) (“Claim”) based upon or in any way arising from or connected with his employment by LTC, to the maximum extent permitted by law.  To the extent permitted by law, LTC shall advance to Executive any expenses necessary in connection with the defense of any Claim which is brought if indemnification cannot be determined to be available prior to the conclusion of, or the investigation of, such Claim.  The parties hereto agree that each understands and has understood that notwithstanding the above-stated provisions, nothing herein shall require LTC to hold harmless or indemnify Executive with respect to any Claim which is brought or asserted against Executive by LTC.  LTC shall investigate in good faith the availability and cost of directors’ and officers’ insurance and shall include Executive as an insured in any directors and officers insurance policy of such insurance it maintains.

			
	
			
				 8.
			Attorney Fees.  In the event that any action or proceeding is brought to enforce the terms and provisions of this Agreement, the prevailing party shall be entitled to recover reasonable attorney fees.

			
	
			
				 9.
			Notices.  All notices and other communications provided to either party hereto under this Agreement shall be in writing and delivered by certified or registered mail to such party at its/his address set forth below its/his signature hereto, or at such other address as may be designated with postage prepaid, shall be deemed given when received.

		 

		

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				 10.
			Construction.  

			
	
			
				 (a)
			In constructing this Agreement, if any portion of this Agreement shall be found to be invalid or unenforceable, the remaining terms and provisions of this Agreement shall be given effect to the maximum extent permitted without considering the void, invalid or unenforceable provisions.  In construing this Agreement, the singular shall include the plural, the masculine shall include the feminine and neuter genders as appropriate, and no meaning in effect shall be given to the captions of the sections in this Agreement, which are inserted for convenience of reference only.

			
	
			
				 (b)
			Notwithstanding any other provision of the Agreement, to the extent that (i) any amount paid pursuant to the Agreement is treated as nonqualified deferred compensation pursuant to Section 409A of the Internal Revenue Code of 1986 (the “Code”) and (ii) the Executive is a “specified employee” pursuant to Section 409A(2)(B) of the Code, then such payments shall be made on the date which is six (6) months after the date of the Executive’s separation from service.  In connection with the payment of any obligation that is delayed pursuant to this paragraph, the Company shall establish an irrevocable trust to hold funds to be used for payment of such obligations.  Upon the date that such amount would otherwise be payable, the Company shall deposit into such irrevocable trust an amount equal to the obligation.  However, notwithstanding the establishment of the irrevocable trust, the Company’s obligations under the Agreement upon the Executive’s termination of employment shall constitute a general, unsecured obligation of the Company and any amount payable to the Executive shall be paid solely out of the Company’s general assets, and the Executive shall have no right to any specific assets of the Company.  The funds, if any, contained or contributed to the irrevocable trust shall remain available for the claims of the Company’s general creditors.

			
	
			
				 (c)
			The payments upon termination of employment described in Sections 6(a) and 6(b) shall be paid following Executive’s “separation from service” as that term is defined in Treas. Reg. § 1.409A-1(h).

			
	
			
				 11.
			Headings.    The section headings hereof have been inserted for convenience of reference only and shall not be construed to affect the meaning, construction or effect of this Agreement.

			
	
			
				 12.
			Successors and Assigns.  This Agreement shall be binding upon and shall inure to the benefit of the successors and assigns of LTC and the personal or legal representatives, executors, administrators, successors, distributees, devisees and legatees of Executive.

			
	
			
				 13.
			Governing Law.  The provisions of this Agreement shall be construed and interpreted in accordance with the internal laws of the State of California as at the time in effect.

			
	
			
				 14.
			Entire Agreement.  This Agreement, together with the offer letter dated May 24, 2013 setting forth additional terms and conditions of employment, constitute the entire agreement and supersede all other prior agreements and undertakings, both written and oral, among Executive and the Company, with respect to the subject matter hereof.

		

		

		 

		

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		IN WITNESS WHEREOF, this Agreement shall be effective as of the date specified in the first paragraph of this Agreement.
		

		
			 
		

			
					
						 

					
					
						 

				
	
					
						 

					
					
						LTC PROPERTIES, INC., 
a Maryland corporation

				
	
					
						Address:2829 Townsgate Road

					
						Suite #350

					
						Westlake Village, CA  91361

					
					
						 

					
						 

					
						/s/ Wendy Simpson

					
						Wendy L. Simpson
President and Chief Executive Officer

					
						 

					
						 

				
	
					
						 

					
					
						By:/s/ Timothy Triche

					
						      Compensation Committee Representative

					
						 

				
	
					
						Address:

					
					
						 

					
						/s/ Brent Chappell

					
						Brent Chappell

				

		
			 
		

		 

		

			8ltc_Ex_109

		
			EXHIBIT 10.9
		

		
			Annual Cash Bonus Incentive Plan
		

		
			OF
		

		
			LTC Properties, INC.
		

		
			LTC Properties, Inc. (the “Company”) hereby establishes the Annual Cash Bonus Incentive Plan of LTC Properties, Inc. (the “Plan”) to provide for incentive compensation to designated employees.  The Company’s objectives in maintaining the Plan are to (i) attract, retain and motivate the executives required to manage the Company and (ii) promote the achievement of rigorous but realistic financial goals and encourage intensive fact-based business planning.  The Plan closely aligns employee financial rewards with the achievement of specific business objectives and individual performance.
		

			
	
			
				 SECTION 1. 
			

			
	
			
			DEFINITIONS

		
			As used in the Plan, the following terms have the following meanings:
		

			
	
			
				 1.01
			“Award” shall mean the compensation granted to a Participant by the Committee for a Performance Period pursuant to the Plan.     

			
	
			
				 1.02
			“Award Payment Date” shall mean the date that an Award shall be paid to the Participant under the Plan.

			
	
			
				 1.03
			“Beneficiary” shall mean the person (or persons) who are designated by the Participant to receive benefits payable upon the Participant’s death. Such designation shall be made by the Participant on a form prescribed by the Company. The Participant may at any time change or revoke such designation by written notice to the Company. If the Participant has no living designated beneficiary on the date of Participant’s death, then the benefits otherwise payable to the designated beneficiary under this Plan shall be paid to the Participant’s estate.

			
	
			
				 1.04
			“Board” shall mean the Board of Directors of the Company.

			
	
			
				 1.05
			“Cause”  Except if Participant is a party to any effective employment agreement or offer letter with the Company which defines or specifies “Cause” or its equivalent, “Cause”  shall mean (a) a conviction of a felony; (b) material disloyalty to the Company or a Subsidiary, as applicable, such as embezzlement, misappropriation of corporate assets or, except as permitted pursuant to a Participant’s employment agreement or offer letter with the Company or a Subsidiary, breach of such employment agreement or offer letter not to engage in business for another enterprise of the type engaged in by the Company or a Subsidiary, as applicable; or (c) the engaging in unethical or illegal behavior which is of a public nature, brings the Company or a Subsidiary, as applicable, into disrepute, and result in material damage to the Company or a Subsidiary, as applicable. Provided, however, that if the Participant is a party to any effective employment agreement or offer letter with the Company which defines or specifies “Cause” for termination, then the provisions of such employment agreement or offer letter shall supersede and control for purposes of Participant’s rights with respect to the Plan.

			
	
			
				 1.06
			“Change in Control” shall mean, a change in ownership or control of the Company effected through any of the following transactions: (a) any person or related group of persons (other 
		

		 

		

			

		

 

			than the Company or a person that directly or indirectly controls, is controlled by, or is under common control with, the Company) directly or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company representing thirty percent (30%) or more of the total combined voting power of the Company’s then outstanding securities; (b) the stockholders of the Company approve a merger or consolidation of the Company with any other company (or other entity), other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 66 2/3 % of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; provided, however, that a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no person acquires more than 30% of the combined voting power of the Company’s then outstanding securities shall not constitute a Change in Control; (c) the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, or (d) a majority of the members of the Board cease to be, as of any date of determination, members of the Board who were members of the Board as of the date the Plan was approved by the stockholders of the Company or were nominated for election or elected to the Board with the approval of a majority of the members of the Board at the time of such nomination or election.

			
	
			
				 1.07
			“Code” shall mean the Internal Revenue Code of 1986, as amended.

			
	
			
				 1.08
			“Committee” shall mean the Compensation Committee of the Board, or another committee or subcommittee of the Board.

			
	
			
				 1.09
			“Company” shall mean LTC Properties, Inc., a Maryland corporation.

			
	
			
				 1.10
			“Covered Employee” shall mean a Participant who is either a “Covered Employee” within the meaning of Section 162(m) of the Code or a Participant who the Committee has identified as a potential Covered Employee within the meaning of Section 162(m) of the Code.

			
	
			
				 1.11
			“Director” shall mean a member of the Board

			
	
			
				 1.12
			“Disability” shall mean a physical or mental disability or infirmity, which at least 26 weeks after its commencement, is determined to be total and permanent by a physician selected by the Company or its insurers and acceptable to the Participant or the Participant’s legal representative (such agreement as to acceptability not be withheld unreasonably).

			
	
			
				 1.13
			“Exchange Act or Act” shall mean the Securities Exchange Act of 1934, as amended.

			
	
			
				 1.14
			“Good Reason” Except if Participant is a party to any effective employment agreement or offer letter with the Company which defines or specifies “Good reason” or its equivalent, “Good Reason”  shall mean (a) a diminution in a Participant’s title, duties, or salary; (b) a material reduction in benefits; or (c) a geographic relocation of a Participant’s place of work a distance for more than seventy-five (75) miles from the offices of the Company or a Subsidiary, as applicable.  Notwithstanding the foregoing, Good Reason shall not be deemed to exist unless a  Participant gives 
		

		 

		

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			the Company or a Subsidiary, as applicable, written notice within thirty (30) days after the occurrence of the event which the Participant believes constitutes the basis for Good Reason, specifying the particular act or failure to act which the Participant believes constitutes the basis for Good Reason.  If the Company or a Subsidiary, as applicable,  fails to cure such act or failure to act, if curable, within thirty (30) days after receipt of such notice, the Participant may terminate his or her employment for Good Reason.  For the avoidance of doubt, if such act is not curable, the Participant may terminate his or her employment for Good Reason upon providing such notice. Provided, however, that if the Participant is a party to any effective employment agreement or offer letter with the Company which defines or specifies “Good Reason” for termination, then the provisions of such employment agreement or offer letter with respect to the definition of “Good Reason” shall supersede and control for purposes of Participant’s rights with respect to the Plan.

			
	
			
				 1.15
			“Outside Directors” shall have the meaning ascribed to it in Section 162(m) of the Code (“Section 162(m)”) and the regulations proposed or adopted thereunder.

			
	
			
				 1.16
			“Negative Discretion” shall mean the discretion granted to the Committee to reduce or eliminate an Award to a Covered Employee.

			
	
			
				 1.17
			“Non-Performance Based Compensation Award” shall mean an Award or sub-Award that is not designated by the Committee as a Performance Based Compensation Award.   

			
	
			
				 1.18
			“Participant” shall mean the employees of the Company who are identified to be executive officers and selected by the Committee to participate in the Plan.

			
	
			
				 1.19
			“Performance Based Compensation Award” shall mean an Award or sub-Award designated by the Committee that is intended to qualify as “Performance-Based Compensation” under Section 162(m).  

			
	
			
				 1.20
			“Performance Criteria” shall mean the following business criteria with respect to the Company or any Subsidiary: (a) net income;  (b) performance of investments;  (c) cash flow;  (d) earnings per share;  (e) return on equity;  (f) return on invested capital or assets;  (g) cost reductions or savings;  (h) funds from operations; (i) adjusted funds from operations; (j) funds available for distribution; (k) appreciation in the fair market value of the Company common stock;  (l) earnings before any one or more of the following items: interest, depreciation or amortization; (m) new investments; and (n) credit metrics.  In addition, to the degree consistent with the Code, the performance criteria may be calculated without regard to extraordinary, unusual and/or non-recurring items.

			
	
			
				 1.21
			“Performance Goals” shall mean the one or more goals for the Performance Period established by the Committee.  The Committee shall establish the Performance Goals for Performance Based Compensation Awards within the first 90 days of the Performance Period (or if longer, within the maximum period allowed pursuant to Section 162(m)) based upon the Performance Criteria.

			
	
			
				 1.22
			“Performance Period” shall mean the Company’s fiscal year.

		 

		

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				 1.23
			“Plan” shall mean the Annual Cash Bonus Incentive Plan of LTC Properties, Inc., as set forth herein and as amended from time to time.

			
	
			
				 1.24
			“Subsidiary” shall mean any corporation in an unbroken chain of corporations beginning with the Company if each of the corporations other than the last corporation in the unbroken chain then owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

			
	
			
				 1.25
			  “Target Awards” shall mean the award established for a Performance Period by the Committee expressed as a percentage of base salary as in effect on the first day of the Performance Period. Target Awards shall serve only as a guideline in making Awards.

			
	
			
				 SECTION 2. 
			

			
	
			
			ADMINISTRATION

			
	
			
				 2.01
			In General. The Plan shall be administered by the Committee, which may delegate its duties and powers in whole or in part to any subcommittee thereof; it is expected that such subcommittee shall consist solely of at least two individuals who are intended to qualify as “Non-Employee Directors” within the meaning of Rule 16b-3 under the Act (or any successor rule thereto) and “outside directors” within the meaning of Section 162(m) (or any successor section thereto); provided, however, that the failure of the subcommittee to be so constituted shall not impair the validity of any Award made by such subcommittee. Subject to the provisions of the Plan, the Committee shall have exclusive power to select the Participants, to determine the Target Award and the amount of, or method of determining, the Awards and, designate whether an Award is a Performance Based Compensation Award.  The Committee is authorized to interpret the Plan, to establish, amend or rescind any rules and regulations relating to the Plan and to make any other determinations that it deems necessary or desirable for the administration of the Plan. The Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan in the manner and to the extent the Committee deems necessary or desirable. Any decision of the Committee in the interpretation and administration of the Plan, as described herein, shall lie within its sole and absolute discretion and shall be final, conclusive and binding on all parties concerned (including, but not limited to, Participants and their beneficiaries or successors). The Committee shall have the full power and authority, consistent with the provisions of the Plan, to establish the terms and conditions of any Award and to waive any such terms or conditions at any time (including, without limitation, accelerating or waiving any vesting conditions).

			
	
			
				 2.02
			Adjustment to Performance Goals. The Committee is specifically authorized at any time during the first 90 days of the Performance Period, or at any time thereafter in its sole and absolute discretion, to adjust or modify the calculation of a Performance Goal for such Performance Period to prevent the dilution or enlargement of the rights of Participants (a) in the event of, or in anticipation of, any unusual or extraordinary corporate item, transaction, event or development; (b) in recognition of, or in anticipation of, any other unusual or nonrecurring events affecting the Company, or the financial statements of the Company, or in response to, or in anticipation of changes in applicable law, regulations, accounting principles, or business conditions; and (c) in view of the Committee’s assessment of the business strategy of the Company, performance of comparable organizations, economic and business conditions, and any other circumstances deemed relevant.  However, to the extent the exercise of such authority after the first 90 days of the Performance Period would cause the 
		

		 

		

			4

		

 

			Awards granted to Covered Employees for the Performance Period to fail to qualify as “Performance Based Compensation” under Section 162(m), then only (a) Awards to Participants who are not Covered Employees and (b) Awards of Non-Performance Based Compensation shall be adjusted.  

			
	
			
				 2.03
			Section 162(m) of the Code.  For all Covered Employees, to the extent that an Award is designated as a Performance Based Compensation Award, then the Plan and such Award shall for all purposes be interpreted and construed in accordance with Section 162(m).  

			
	
			
				 SECTION 3. 
			

			
	
			
			PARTICIPATION AND ELIGIBILITY

		
			The Committee shall, in its sole discretion, designate the executive officers of the Company, or of any corporation which is a Subsidiary,  who will be Participants for such Performance Period. 
		

			
	
			
				 SECTION 4. 
			

			
	
			
			AWARD DETERMINATION

			
	
			
				 4.01
			Certification.  As soon as practical following the availability of performance results for the completed Performance Period, the Committee shall determine whether, and to what extent, the Performance Goals  have been satisfied.

			
	
			
				 4.02
			Attainment of Performance Goal.  If the Committee certifies that the Performance Goals for a Performance Period were satisfied, the Awards shall be paid out pursuant to Section 5. To the extent that an Award is designated as a Performance Based Compensation Award, if the Committee certifies that the Performance Goals for a Covered Employee for a Performance Period have not been satisfied then the Covered Employee shall not receive an the Performance Based Compensation Award for the Performance Period. 

			
	
			
				 4.03
			Committee Determinations. The Committee shall, in its sole and absolute discretion, determine for each Participant the amount of the Award for the Performance Period.  To the extent that an Award is designated as a Performance Based Compensation Award, the Committee shall have no discretion to increase the amount of any Award to a Covered Employee, but may through its Negative Discretion reduce the amount of or totally eliminate an Award to a Covered Employee if it determines, in its sole and absolute discretion, that such a reduction or elimination is appropriate.

			
	
			
				 SECTION 5. 
			

			
	
			
			TIME AND FORM OF PAYMENT

			
	
			
				 5.01
			Payment. Except as provided below, Awards will be distributed in a lump sum cash payment as soon as practicable following the Committee’s determination described in Section 4,  but not later than December 31st of the year following the applicable Performance Period. 

			
	
			
				 SECTION 6. 
			

			
	
			
			TERMINATION OF EMPLOYMENT

			
	
			
				 6.01
			Termination of Employment Other Than from Death or Disability. A Participant who terminates employment with the Company or any Subsidiary during the Performance Period (or after the completed Performance Period but prior to the payment of the Award) for reasons other than death or Disability shall not be eligible to receive an Award for the Performance Period which includes the Participant’s date of termination of employment.

		 

		

			5

		

 

			
	
			
				 6.02
			Termination of Employment for Good Reason or without Cause.   A Participant who terminates employment with the Company or any Subsidiary due to Good Reason or is terminated without Cause by the Company or a  Subsidiary, as applicable, during a Performance Period (or after the completed Performance Period but prior to the payment of the Award) shall be eligible to receive an Award equal to the Award which would have been earned by such Participant, pro-rated for that portion of the Performance Period during which the Participant was employed by the Company or Subsidiary.

			
	
			
				 6.03
			Termination Due to Death or Disability. A Participant who terminates employment with the Company or any Subsidiary during a Performance Period (or after the completed Performance Period but prior to the payment of the Award) due to death or Disability shall be eligible to receive an Award equal to the Award which would have been earned by such Participant, pro-rated for that portion of the Performance Period during which the Participant was employed by the Company or Subsidiary.

			
	
			
				 SECTION 7. 
			

			
	
			
			Change in Control

		
			If the Company experiences a Change in Control during a Performance Period, Participants shall be eligible to receive an Award in accordance with a Participant’s employment agreement or offer letter with the Company or a Subsidiary.  If the Participant does not have an applicable employment agreement or offer letter with the Company or a Subsidiary, or has an applicable employment agreement or offer letter which fails to address the consequences of a Change in Control, the Participant shall be eligible to receive an Award equal to the Target Award multiplied by a fraction, the numerator of which equals the number of days that have elapsed since the beginning of the Performance Period through and including the date immediately preceding the date of the Change in Control and the denominator of which equals the number of days in the Performance Period.  Notwithstanding Section 5, Awards paid in connection with a Change in Control will be paid within 30 days following the Change in Control.
		

			
	
			
				 SECTION 8. 
			

			
	
			
			SECTION 162(M) PERFORMANCE BASED COMPENSATION

			
	
			
				 8.01
			General Requirements.    Performance Based Compensation Awards must be (a) granted by the Committee;  (b)  earned based on the achievement of the Performance Goals established by the Committee no later than 90 days after the commencement of the Performance Period and not after 25% of the Performance Period has elapsed; and (c) paid only after the Committee has certified, after the completion of the Performance Period, that the Performance Goals  have been met.  

			
	
			
				 8.02
			Performance Goals.   Performance Based Compensation Awards shall be stated as specific amounts of, or specific changes in, one or more of the Performance Criteria.  The Performance Goals  need not be the same for different Performance Periods and for any Performance Period may be stated: (a) on an absolute basis or relative to the performance of other companies or of a specified index or indices, or be based on any combination of the foregoing and (b) separately for one or more of the Participants, collectively for the entire group of Participants, or in any combination of the two. 

			
	
			
				 8.03
			Committee Requirements.    Determinations by the Committee as to the establishment of Performance Goals, the amount potentially payable in respect of, the level of actual achievement of 
		

		 

		

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			the specified Performance Goals relating to the  Performance Based Compensation Award and the amount of any such final Award shall be recorded in writing. Specifically, the Committee shall certify in writing, in a manner conforming to applicable regulations under Section 162(m), prior to settlement of each such Award that the Performance Criteria relating to such Award and other material terms of such Award upon which settlement of the Award was conditioned have been satisfied.  

			
	
			
				 SECTION 9. 
			

			
	
			
			TAX CONSIDERATIONS AND WITHHOLDING

		
			Awards under the Plan will be treated as taxable income for the year in which the Participant receives the Award.  The Company will withhold appropriate amounts from all payments to satisfy all federal, state and local tax withholding requirements.  
		

		
			Neither the Participants nor any of the Participants’ creditors or beneficiaries shall have the right to subject any Award to any anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment.  
		

		
			Notwithstanding any other provisions of the Plan, if a Participant is a “specified employee” as defined in Section 409A of the Code and becomes entitled to a benefit under the Plan as a result of a “separation of service” as defined by Section 409A(a)(2)(i) of the Code, then the portion of such payment treated as “separation pay” for purposes of Section 409A of the Code shall not be paid prior to the date which is six (6) months after the date of the Participant’s separation of service with the Company if such payment would result in the imposition of an excise tax under Section 409A of the Code, provided, however, that the Company shall pay to the Participant the maximum amount payable upon termination of employment without the imposition of an excise tax under Section 409A of the Code.  Any amount described in the preceding sentence otherwise payable during the first six months following a Participant’s  separation from service shall be accumulated and paid to the Participant in a lump sum amount on the first date of the seventh month following the date of separation from service.
		

		
			Further, notwithstanding any provision of the Plan to the contrary, the Corporation reserves the right to make amendments to the Plan as the Company deems necessary or desirable to avoid the imposition of taxes or penalties under Section 409A of the Code.  In any case, each Participant shall be solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on such Participant in connection with the Plan (including any taxes and penalties under Section 409A of the Code), and the Corporation shall have no obligation to indemnify or otherwise hold such Participant harmless from any or all of such taxes or penalties.
		

			
	
			
				 SECTION 10. 
			

			
	
			
			UNFUNDED STATUS

		
			Any amount due and payable pursuant to the terms of the Plan shall be paid out of the general assets of the Company. A Participant and any Beneficiary shall not have an interest in any specific asset of the Company or any specific asset held hereunder as a result of this Agreement. The Company shall have no obligation to set aside any funds for the purpose of making any benefit payments under this Agreement. Nothing contained herein shall give a Participant or any Beneficiary any rights that are greater than those of an unsecured creditor of the Company with respect to any unpaid benefits under this Plan. No action taken pursuant to the terms of this Agreement shall be construed to create 
		

		 

		

			7

		

 

		a funded arrangement, a plan asset, or fiduciary relationship among the Company, its designee, and the Employee or any Beneficiary.
		

			
	
			
				 SECTION 11. 
			

			
	
			
			NOTICES

		
			Any notice required or permitted under this Plan shall be deemed given when delivered personally, or when deposited in a United States Post Office as registered mail, postage prepaid, addressed, as appropriate, either to the Participant at his or her address hereinabove set forth or such other address as he or she may designate in writing to the Company, or to the Company, Attention: Secretary, at 2829 Townsgate Road, Suite 350, Westlake Village, California 91361, or such other address as the Company may designate in writing to the Participant.
		

			
	
			
				 SECTION 12. 
			

			
	
			
			FAILURE TO ENFORCE NOT A WAIVER

		
			The failure of the Company to enforce at any time any provision of this Plan shall in no way be construed to be a waiver of such provision or of any other provision hereof.
		

			
	
			
				 SECTION 13. 
			

			
	
			
			NO LIMITATION ON RIGHTS OF THE COMPANY

		
			The grant of an Award shall not in any way affect the right or power of the Company to make adjustments, reclassification or changes in its capital or business structure, or to merge, consolidate, dissolve, liquidate, sell or transfer all or any part of its business or assets.
		

			
	
			
				 SECTION 14. 
			

			
	
			
			AMENDMENT AND TERMINATION OF THE PLAN

		
			The Committee may amend, modify or terminate this Plan at any time and from time to time. Notwithstanding the foregoing, no such amendment, modification or termination shall affect payment of an Award for a completed Performance Period or reduce an Award under the Plan.
		

			
	
			
				 SECTION 15. 
			

			
	
			
			NO RIGHT TO CONTINUED EMPLOYMENT

		
			Participation in the Plan shall impose no obligation on the Company, its Subsidiaries, or any affiliate to continue the employment of the Participant and shall not lessen or affect the Company’s, Subsidiary’s, or any affiliate’s right to terminate the employment of such Participant.
		

			
	
			
				 SECTION 16. 
			

			
	
			
			ASSIGNMENT

		
			The rights to an Award may not be assigned, alienated, attached, sold or transferred, pledged or otherwise disposed or encumbered by the Participant, otherwise than by will or by the laws of descent and distribution. Any attempt to assign, transfer, pledge or otherwise dispose of an Award contrary to the provisions hereof, and the levy of any execution, attachment or similar process upon any Award shall be null, void and without effect.
		

		 

		

			8

		

 

			
	
			
				 SECTION 17. 
			

			
	
			
			SUCCESSORS

		
			Except as herein provided, this Plan shall be binding upon the parties hereto, their heirs, executors, administrators, successors (including but not limited to successors resulting from any corporate merger or acquisition) or assigns.
		

			
	
			
				 SECTION 18. 
			

			
	
			
			GOVERNING LAW

		
			This Plan shall be governed by and construed according to the laws of the State of Maryland without regard to conflicts of interest principles.
		

			
	
			
				 SECTION 19. 
			

			
	
			
			EFFECTIVE DATE

		
			This Plan is effective as of October 27, 2014.
		

		
			 
		

		
			 
		

		 

		

			9

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