MEDICAL PROPERTIES TRUST, INC. 2007 MULTI-YEAR INCENTIVE PLAN AWARD AGREEMENT FOR RESTRICTED STOCK
Exhibit 10.3
MEDICAL PROPERTIES TRUST, INC.
2007 MULTI-YEAR INCENTIVE PLAN
2007 MULTI-YEAR INCENTIVE PLAN
THIS MULTI-YEAR INCENTIVE PLAN AWARD AGREEMENT (this “Agreement” or “Award Agreement”) is made and
entered into as of ___by and between MEDICAL PROPERTIES TRUST, INC., a Maryland
corporation (the “Company”), and ___(the “Participant”) pursuant to the Second
Amended and Restated Medical Properties Trust, Inc. 2004 Equity Incentive Plan (the “Plan”).
Capitalized terms used but not defined herein shall have the same meanings set forth in the Plan.
W I T N E S S E T H:
WHEREAS, the Participant is a key employee of the Company or one of its Subsidiaries or affiliates;
WHEREAS, the Company has adopted the 2007 Multi-Year Incentive Plan (the “MIP”) pursuant to the
Plan to provide executive officers of the Company or its Subsidiaries and affiliates, including the
Participant, in connection with their employment with the long-term incentive compensation
described in this Agreement, and thereby provide additional incentive for them to promote the
progress and success of the business of the Company and its Subsidiaries and affiliates, while
increasing the total return to the Company’s shareholders . The MIP consists of three
separate components, all covered by this Agreement, designed collectively to reward the Participant
for his contribution to the Company’s past superior performance, in terms of both total return to
shareholders and funds from operations, and to incentivize the Participant to contribute to
superior performance for the benefit of the Company’s shareholders over the next several years as
follows: (i) a time-based restricted equity award (the “TBRE Award”); (ii) a core performance
restricted equity award (the “CPRE Award”); and (iii) a superior performance restricted equity
award (the “SPRE Award”);
WHEREAS, the MIP was adopted by the Compensation Committee (the “Committee”) of the Board of
Directors of the Company (the “Board”) pursuant to authority delegated to it by the Board as set
forth in the Committee’s charter. This Agreement evidences an award to the Participant under the
MIP (this “Award”), which is subject to the terms and conditions set forth herein; and
WHEREAS, the Participant was selected by the Committee to receive this Award as one of a select
group of highly compensated or management employees who, through the effective execution of their
assigned duties and responsibilities, are in a position to have a direct and measurable impact on
the Company’s long-term financial results. Effective as of the grant date specified in Exhibit A
hereto, but conditional upon the execution of this Agreement, the Committee awarded to the
Participant the number of shares of Restricted Common Stock set forth in Exhibit A.
NOW, THEREFORE, for and in consideration of the premises, the mutual promises and
covenants herein contained, and other good and valuable consideration, the receipt, adequacy and
sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows:
1. AWARD OF RESTRICTED STOCK. On the date specified on Exhibit A attached hereto (the
“Date of Award”) and conditional upon the execution of this Agreement, the Committee awarded to the
Participant this Award which entitles the Participant to receive the number of shares of Restricted
Common Stock (the “Shares”) as is set forth on Exhibit A from the authorized and unissued or
treasury Common Stock and in accordance with the provisions set forth herein. The Shares for the
TBRE Award component of this Award will be immediately issued and the Participant shall enter into
a Restricted Stock Award Agreement with the Company. No Shares shall be issued for the CPRE Award
and the SPRE Award components of this Award unless the provisions of Section 2 are satisfied.
2. ISSUANCE OF RESTRICTED STOCK. The actual number of shares of Restricted Common Stock to
be issued to the Participant for the CPRE Award and the SPRE Award components of this Award will
vary depending upon the achievement of specific performance thresholds as follows:
(a) CPRE Award. As soon as practicable following the end of each calendar year
beginning on March 1, 2007 (the “Effective Date”) through December 31, 2013, the Committee will
determine (x) the Total Return (as defined herein) of the Company for the applicable calendar year
and (y) the Total Return of the Company from the Effective Date through the end of the applicable
calendar year on a cumulative basis, and then perform the following calculations with respect to
the number of shares to be issued under the CPRE Award:
(A) if both (I) the Company’s Total Return for the applicable calendar year is below 9%
(pro-rated to 7.5% for March 1, 2007 through December 31, 2007) and (II) the Company’s Total Return
from the Effective Date through the end of the applicable calendar year on a cumulative basis is
below a simple 9% per year (pro-rated to 7.5% for March 1, 2007 through December 31, 2007), then
none of the Participant’s target shares under the CPRE Award will be issued;
(B) if for the applicable calendar year the Company’s Total Return is 9% (pro-rated to 7.5%
for March 1, 2007 through December 31, 2007) or higher, then 14.286% of the number of target shares
under the CPRE Award will be issued as of the end of the applicable calendar year and such shares
will be fully vested and nonforfeitable upon grant;
(C) if the Company’s Total Return from the Effective Date through the end of the applicable
calendar year on a cumulative basis is equal to or greater than a simple 9% per year (pro-rated to
7.5% for March 1, 2007 through December 31, 2007), then the sum of (I) 14.286% of the Participant’s
target shares granted under the CPRE Award (but without duplication of the issuing percentage set
forth in Section 2(a)(B)) and (II) any portion of the Participant’s target shares under the CPRE
Award that failed to be issued for prior calendar years will be issued as of the end of the
applicable calendar year and such shares will be fully vested and nonforfeitable upon grant.
(b) SPRE Award. With respect to the issuance of the number of target shares granted
under the SPRE Award:
(A) If after January 1, 2009, but before December 31, 2010, the Average Stock Price (as
defined herein) is at or above $26.00 on each trading day in a period of thirty (30) consecutive
trading days, then 100.000% of the target shares under the SPRE Award will be issued based on
performance (subject to further time vesting as provided in Exhibit A) as of the last trading day
in such 30-trading day period;
(B) If as of December 31, 2010 the target shares under the SPRE Award have not been issued
based on performance pursuant to Section 2(b)(A), as soon as practicable following December 31,
2010 the Company will calculate the Average Stock Price as of December 31, 2010 and the target
shares under the SPRE Award will be issued based on performance (subject to further time vesting as
provided in Exhibit A) as follows:
| Average Stock Price | Percentage Earned | ||||||
Less than $20.00
|
0.000% | ||||||
Equal to or greater than $20.00 and less than $22.00
|
33.334 | % | |||||
Equal to or greater than $22.00 and less than $24.00
|
58.334 | % | |||||
Equal to or greater than $24.00 and less than $26.00
|
75.000 | % | |||||
Equal to or greater than $26.00
|
100.000 | % | |||||
(C) Notwithstanding Section 2(b)(B), if as of December 31, 2010 the target shares under the
SPRE Award have not been issued based on performance pursuant to Section 2(b)(A) or Section
2(b)(B), and the Average Stock Price is less than $20, as soon as practicable following December
31, 2010:
(i) the Committee will determine the Total Return of the Company from the Effective Date
through December 31, 2010;
(ii) the Committee will determine the Total Return of the real estate investment trusts (the
“REITs”) included in the Xxxxxx Xxxxxxx XXXX Index from the Effective Date through December 31,
2010; and
(iii) if the Company’s Total Return calculated pursuant to clause (i) above is at or above the
50th percentile of the Total Return of the REITs included in the Xxxxxx Xxxxxxx XXXX
Index calculated pursuant to clause (ii) above, then 33.334% of the target shares under the SPRE
Award will be issued based on performance (subject to further time vesting as provided in Exhibit
A) as of December 31, 2010.
“Average Stock Price” means, as of any date, the average of the Fair Market Value of a share of
Common Stock over the thirty (30) consecutive trading days immediately preceding such date.
“Total Return” means, with respect to a REIT included in the Xxxxxx Xxxxxxx XXXX Index or the
Company, as applicable, the total percentage return per share achieved by the common shares of such
REIT or the Company’s Common Stock, as applicable, assuming contemporaneous reinvestment in such
common shares or Common Stock of all dividends and other distributions, in each case measured
following the end of each calendar year for the applicable calendar year or from the Effective Date
through the end of the applicable calendar year, as the case may be.
3. DIVIDENDS. The Participant shall be entitled to receive dividends with respect
to the Shares as provided in the Plan. In addition:
(a) For Shares granted as part of the TBRE Award and the CPRE
Award, to the extent Shares are not issued until after the Effective Date, the Participant
shall be entitled to the full dividend paid on shares of the Company’s Common Stock
outstanding as of the record dates for the first and second 2007 quarterly distributions
and periods thereafter, even though such Shares were not outstanding for some or all of
such period. An amount equal to such dividends shall be paid to the Participant in cash
promptly following the date of issuance of the applicable Shares.
(b) For Shares granted as part of the SPRE Award, then (i) from
the Effective Date until the earlier of (x) the date on which such Shares are issued based
on performance as provided in Section 2 hereof or (y) the date on which such
Shares have become fully vested upon a Change of Control or qualified termination as
provided in Section 4, the Participant shall be entitled to 20% of the dividend
paid/payable on shares of the Company’s Common Stock outstanding as of the record dates
for the first and second 2007 quarterly distributions and periods thereafter, even though
such Shares were not outstanding for some or all of such period; and (ii) thereafter, the
Participant shall be entitled to the full dividend paid on shares of the Company’s Common
Stock outstanding as of the applicable record dates, even though such Shares were not
outstanding for some or all of such period. In the case of (i) or (ii) above, an amount
equal to such dividends shall be paid to the Participant in cash promptly following the
date of issuance of the applicable Shares.
(c) All dividends and equivalent cash amounts paid with respect
to the Shares hereunder shall be fully vested and non-forfeitable when paid, whether or
not the underlying Shares have been earned based on performance or have become vested
based on the passage of time.
4. RESTRICTIONS. Immediately before the earliest of (A) the occurrence of a Change of
Control; (B) a termination of such Participant’s employment by the Company without Cause (as
defined in such Participant’s employment agreement with the Company); (C) a resignation by the
Participant for Good Reason (as defined in such Participant’s employment agreement with the
Company); (D) the Participant’s death or (E) the Participant becoming Permanently Disabled (as
defined in such Participant’s employment agreement with the Company) ((A) through (E) collectively,
the “Qualified Events”), all target shares under the CPRE Award that had not previously been issued
pursuant to Section 2 shall be issued and such shares will be fully vested and nonforfeitable upon
grant. For the avoidance of doubt, all Shares except for those that had previously been issued
pursuant to Section 1, Section 2 or Section 4 hereof shall automatically and immediately be
forfeited by the Participant upon the Participant’s Termination of Employment and thereafter no
further calculations pursuant to Section 2 shall be performed with respect to the Participant’s
target shares under the CPRE Award or the SPRE Award. The Shares as to which the restrictions
shall not have lapsed and which are not vested shall be forfeited upon the Participant’s
Termination of Employment; provided, however, that all unvested Shares actually issued shall be
100% vested and no longer subject to forfeiture immediately before the earliest of any of the
Qualified Events. The Shares may not be sold, transferred, pledged, assigned or otherwise
alienated or hypothecated until such restrictions lapse and the Shares vest. During the period
prior to the lapse of such restrictions and the vesting of such Shares, any stock dividends paid
with respect to the Shares shall be subject to the same restrictions and vesting period as the
Shares with respect to which they are paid.
5. CERTIFICATES FOR SHARES OF RESTRICTED COMMON STOCK. Certificates respecting the Shares
shall be registered in the Participant’s name or the Shares shall be issued to the Participant
through the book-entry system, as determined by the Company.
6. NO RIGHT TO CONTINUED EMPLOYMENT. Neither the Plan nor this Agreement shall give the
Participant the right to continued employment by the Company or by any Subsidiary or shall
adversely affect the right of the Company or any Subsidiary to terminate the Participant’s
employment with or without cause at any time.
7. SECURITIES LAW RESTRICTIONS. Acceptance of this Agreement shall be deemed to constitute
the Participant’s acknowledgement that the Shares shall be subject to such restrictions and
conditions on any resale and on any other disposition as the Company shall deem necessary under any
applicable laws or regulations or in light of any stock exchange requirements.
8. LEGEND. In order to enforce the restrictions imposed on the Shares, the certificates
representing such Shares shall bear the following legend:
THESE SHARES ARE HELD SUBJECT TO THE TERMS OF THE SECOND AMENDED AND RESTATED 2004
EQUITY INCENTIVE PLAN (THE “PLAN”) AND SUCH SHARES MAY ONLY BE TRANSFERRED IN
ACCORDANCE WITH THE TERMS THEREOF. A COPY OF THE PLAN IS AVAILABLE AT THE OFFICE OF
THE COMPANY.
Such legend shall be removed as the restrictions lapse with respect to such Shares and the Shares
vest.
9. MISCELLANEOUS.
(a) The Participant’s rights under this Agreement can be modified, suspended or canceled only
in accordance with the terms of the Plan. This Agreement may not be changed orally, but may be
changed only by an agreement in writing signed by the party against whom enforcement of any waiver,
change, modification or discharge is sought.
(b) The invalidity or unenforceability of any provision hereof shall in no way affect the
validity of enforceability of any other provision of this Agreement.
(c) This Agreement shall bind all parties, their respective heirs, executors, administrators
and assigns. Nothing contained herein shall be construed as an authorization or right of any party
to assign their respective rights or obligations hereunder and the Participant shall have no right
to assign this Agreement, and any such attempted assignment shall be ineffective. This Agreement
shall be binding upon the Company and its successors or assigns.
(d) This Agreement shall be subject to the applicable provisions, definitions, terms and
conditions set forth in the Plan, all of which are incorporated by this reference in this Agreement
and the terms of the Plan shall govern in the event of any inconsistency between the Plan and this
Agreement.
(e) This Agreement shall be interpreted and construed according to and governed by the laws of
the State of Alabama.
[Signatures appear on the following page.]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.
| MEDICAL PROPERTIES TRUST, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
|
[PARTICIPANT] |
||||
EXHIBIT A
TO
2007 MULTI-YEAR INCENTIVE PLAN AWARD AGREEMENT FOR RESTRICTED STOCK dated as of ___
between Medical Properties Trust, Inc. and ___.
1.
|
Date of Award: | |||||
| 2. | Number of Target Shares of Restricted Common Stock: | |||||
| The TBRE Award: | ||||||
| The CPRE Award: | ||||||
| The SPRE Award: | ||||||
3.
|
Vesting Schedule | |||||
The TBRE Award:
| Date Restrictions Lapse | ||||||||
| Number of Target Shares Becoming Vested | and Shares Vest | |||||||
| (14.286 | %) | December 31, 2007 | ||||||
| (14.286 | %) | December 31, 2008 | ||||||
| (14.286 | %) | December 31, 2009 | ||||||
| (14.286 | %) | December 31, 2010 | ||||||
| (14.286 | %) | December 31, 2011 | ||||||
| (14.286 | %) | December 31, 2012 | ||||||
| (14.286 | %) | December 31, 2013 | ||||||
With respect to the shares actually issued as part of the SPRE Award on December 31, 2010:
| Date Restrictions Lapse | ||
| Percentage of Issued Shares Becoming Vested | and Shares Vest | |
33.33%
|
December 31, 2011 | |
33.33%
|
December 31, 2012 | |
33.34%
|
December 31, 2013 |
