Registration No. 333-___________

 

 

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

 

WASHINGTON, D.C. 20549

 

 

 

FORM S-8

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

 

INNOVATIVE INDUSTRIAL PROPERTIES, INC.

(Exact name of registrant as specified in its charter)

 

Maryland   81-2963381
(State or other jurisdiction of
incorporation or organization)
  (I.R.S. Employer Identification No.)
     

17190 Bernardo Center Drive

San Diego, California

  92128
(Address of Principal Executive Offices)   (Zip Code)

 

 

  

Innovative Industrial Properties, Inc. 2016 Omnibus Incentive Plan

(Full title of the plan)

 

 

 

Paul E. Smithers

President and Chief Executive Officer

Innovative Industrial Properties, Inc.

17190 Bernardo Center Drive

San Diego, California 92128

(858) 997-3332

(Name, address and telephone number, including area

code, of agent for service)

  

 

  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company x

(Do not check if smaller reporting company)

 

 

  

CALCULATION OF REGISTRATION FEE

 

Title of

Securities to be

Registered

Amount

to be

Registered (1)

Proposed Maximum Offering Price Per Share (2)

Proposed Maximum

Aggregate Offering

Price (3)

Amount of

Registration

Fee (3)

Class A common stock,

$0.001 par value

1,000,000 shares $16.56 $16,560,000 $1,920

 

(1) Represents the aggregate number of shares of Class A common stock (“Common Stock”) of Innovative Industrial Properties, Inc. (the “Company”) reserved for issuance under the Innovative Industrial Properties, Inc. 2016 Omnibus Incentive Plan (the “Plan”). Pursuant to Rule 416(a) under the Securities Act of 1933, as amended (“Securities Act”) this registration statement also covers an indeterminate number of additional shares of Common Stock that may become issuable in accordance with the adjustment and anti-dilution provisions of the Plan.
(2) Represents the average of the high and the low prices per share of Common Stock of the Company as reported on the New York Stock Exchange on December 5, 2016.
(3) Computed in accordance with Rule 457(c) and (h) under the Securities Act. The Company previously filed a Registration Statement on Form S-11 on October 17, 2016 (File No. 333-214148) and paid a filing fee of $23,325 (the “IPO Registration Statement”). The Company did not sell an aggregate of $201,250,000 of securities pursuant to the IPO Registration Statement. Pursuant to Rule 457(p) under the Securities Act, the Company is offsetting the entire registration fee of $1,920 due under this Registration Statement against the $14,394 that is remaining from the registration fees paid in connection with the IPO Registration Statement (assuming the underwriters’ over-allotment option is exercised in full).

  

 

 

 

 

 

PART I

 

INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

 

The documents containing the information specified in this Part I will be sent or given to the persons participating in the Plan, as specified by Rule 428(b)(1) under the Securities Act. In accordance with the instructions to Part I of Form S-8, such documents need not be filed with the Securities and Exchange Commission (the “Commission”) either as part of this registration statement or as prospectuses or prospectus supplements pursuant to Rule 424 promulgated under the Securities Act. These documents and the documents incorporated by reference in this registration statement pursuant to Item 3 of Part II of this registration statement, taken together, constitute a prospectus that meets the requirements of Section 10(a) of the Securities Act.

 

PART II

 

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

 

Item 3.     Incorporation of Documents by Reference .

 

The following documents, which the Company has previously filed with the Commission, are hereby incorporated by reference into this registration statement.

 

  (1) The Company’s final prospectus, dated November 30, 2016, filed with the Commission pursuant to Rule 424(b), relating to the Registration Statement on Form S-11, as amended (File No. 333-214148), which contains the audited consolidated balance sheet of the Company as of September 30, 2016 and the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for the period from June 15, 2016 (date of incorporation) through September 30, 2016; and

 

  (2) The description of the Company’s Class A common stock contained in the Company’s Registration Statement on Form 8-A (File No. 001-37949) filed with the Commission on November 17, 2016, pursuant to Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including any amendment or report filed for the purpose of updating such description.

 

In addition, all documents and reports subsequently filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities remaining unsold, shall be deemed to be incorporated by reference in this registration statement and to be part hereof from the date of filing of such documents or reports. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this registration statement to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this registration statement.

  

Item 4. Description of Securities .

 

Not applicable.

 

Item 5. Interests of Named Experts and Counsel .

 

None.

 

Item 6.   Indemnification of Directors and Officers .

 

Maryland law permits a Maryland corporation to include in its charter a provision eliminating the liability of its directors and officers to the corporation and its stockholders for money damages except for liability resulting from actual receipt of an improper benefit or profit in money, property or services or active and deliberate dishonesty that was established by a final judgment and was material to the cause of action. The Company’s charter contains a provision that eliminates the liability of its directors and officers to the maximum extent permitted by Maryland law.

 

  1  

 

 

The Maryland General Corporation Law (“MGCL”) requires the Company (unless the Company’s charter provides otherwise, which its charter does not) to indemnify a director or officer who has been successful, on the merits or otherwise, in the defense of any proceeding to which he or she is made a party by reason of his or her service in that capacity. The MGCL permits the Company to indemnify its present and former directors and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to which they may be made or threatened to be made a party by reason of their service in those or other capacities unless it is established that:

 

  The act or omission of the director or officer was material to the matter giving rise to the proceeding and (i) was committed in bad faith or (ii) was the result of active and deliberate dishonesty;

 

  the director or officer actually received an improper personal benefit in money, property or services; or

 

  in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful.

 

Under the MGCL, the Company may not indemnify a director or officer in a suit by the Company or in the Company’s right in which the director or officer was adjudged liable to the Company or in a suit in which the director or officer was adjudged liable on the basis that personal benefit was improperly received. Nevertheless, a court may order indemnification if it determines that the director or officer is fairly and reasonably entitled to indemnification, even though the director or officer did not meet the prescribed standard of conduct or was adjudged liable on the basis that personal benefit was improperly received. However, indemnification for an adverse judgment in a suit by the Company or in the Company’s right, or for a judgment of liability on the basis that personal benefit was improperly received, is limited to expenses.

 

In addition, the MGCL permits the Company to advance reasonable expenses to a director or officer upon the Company’s receipt of:

 

  written affirmation by the director or officer of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification by the Company; and

 

  a written undertaking by the director or officer or on the director’s or officer’s behalf to repay the amount paid or reimbursed by the Company if it is ultimately determined that the director or officer did not meet the standard of conduct.

 

The Company’s charter authorizes it to obligate the Company and the Company’s bylaws obligate the Company, to the fullest extent permitted by Maryland law in effect from time to time, to indemnify and, without requiring a preliminary determination of the ultimate entitlement to indemnification, pay or reimburse reasonable expenses in advance of final disposition of a proceeding to:

 

  any present or former director or officer who is made or threatened to be made a party to or witness in the proceeding by reason of his or her service in that capacity; or

 

  any individual who, while a director or officer of the Company and at the Company’s request, serves or has served as a director, officer, partner, manager, member or trustee of another corporation, REIT, partnership, limited liability company, joint venture, trust, employee benefit plan or any other enterprise and who is made or threatened to be made a party to or witness in the proceeding by reason of his or her service in that capacity.

 

The Company’s charter and bylaws also permit the Company to indemnify and advance expenses to any individual who served any predecessor of the Company, in any of the capacities described above and any employee or agent of the Company or a predecessor of the Company.

 

  2  

 

 

The Company has entered into indemnification agreements with each of its executive officers and directors, and expects to enter into indemnification agreements with future executive officers and directors, that provide for indemnification to the maximum extent permitted by Maryland law.

 

Insofar as the foregoing provisions permit indemnification of directors, officers or persons controlling the Company for liability arising under the Securities Act, the Company has been informed that, in the opinion of the Commission, this indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

 

Item 7. Exemption from Registration Claimed .

 

Not applicable.

 

Item 8. Exhibits .

 

The exhibits filed herewith or incorporated herein by reference are set forth in the attached Exhibit Index.

 

Item 9. Undertakings .

 

(a)       The undersigned Registrant hereby undertakes:

 

(1)       To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:

 

(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

 

(ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement;

 

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement;

 

provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Securities and Exchange Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Registration Statement.

 

  3  

 

 

(2)       That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

(3)       To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

 

(b)       The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

(c)       Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

 

  4  

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Diego, State of California, on December 6, 2016.

 

  INNOVATIVE INDUSTRIAL PROPERTIES, INC.
     
     
  By:  /s/ Paul E. Smithers
    Paul E. Smithers
    Chief Executive Officer

 

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities indicated on December 6, 2016. Each person whose signature appears below constitutes and appoints Paul E. Smithers and Brian Wolfe, and each of them, his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto each said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

 

Signature   Title
/s/ Alan D. Gold   Executive Chairman
Alan D. Gold    
     
/s/ Paul E. Smithers   President, Chief Executive Officer and Director (Principal Executive Officer)
Paul E. Smithers    
     
/s/ Robert M. Sistek   Chief Financial Officer and Executive Vice President, Investments  (Principal Financial Officer)
Robert M. Sistek    
     
/s/ Gregory J. Fahey   Chief Accounting Officer and Treasurer (Principal Accounting Officer)
Gregory J. Fahey    
     
/s/ Gary A. Kreitzer   Director
Gary A. Kreitzer    
     
/s/ Gary M. Malino   Director
Gary M. Malino    
     
/s/ Scott Shoemaker   Director
Scott Shoemaker    
     
/s/ David Stecher   Director
David Stecher    

 

  S- 1  

 

  

EXHIBIT INDEX

 

Exhibit
Number
Exhibit Description
   
(4.1) Amended and Restated Articles of Incorporation of Innovative Industrial Properties, Inc. [Incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-11 filed October 17, 2016 (File No. 333-214148)].
(4.2) Amended and Restated Bylaws of Innovative Industrial Properties, Inc. [Incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-11 filed October 17, 2016 (File No. 333-214148)].
(4.3) Specimen Class A common stock certificate [Incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-11 filed November 17, 2016 (File No. 333-214148)]
(5) Opinion of Foley & Lardner LLP (including consent of counsel).*
(10.1) Innovative Industrial Properties, Inc. 2016 Omnibus Incentive Plan [Incorporated by reference to Exhibit 10.1 to the Company’s Form S-11 filed October 17, 2016 (File No. 333-214148)].
(10.2) Form of Restricted Stock Award Agreement for Officers.*
(10.3) Form of Restricted Stock Award Agreement for Directors.*
(23.1) Consent of BDO USA, LLP.*
(23.2) Consent of Foley & Lardner LLP (filed as part of Exhibit (5)).*
(24) Powers of Attorney (included on the signature page to this Registration Statement).*

* Filed herewith.

 

  E- 1  

 

Exhibit 5

 

 

 

ATTORNEYS AT LAW

 

100 North Tampa Street, Suite 2700
Tampa, FL 33602-5810
P.O. Box 3391

Tampa, FL 33601-3391

813.229.2300 TEL

813.221.4210 FAX

www.foley.com

 

December 6, 2016

 

Innovative Industrial Properties, Inc.

17190 Bernardo Center Drive

San Diego, California 92128

 

 

Ladies and Gentlemen:

 

We have acted as counsel to Innovative Industrial Properties, Inc., a Maryland corporation (the “Company”), in connection with the preparation of a Registration Statement on Form S-8 (the “Registration Statement”) to be filed with the Securities and Exchange Commission on or about December 6, 2016, under the Securities Act of 1933, as amended (the “Securities Act”), registering 1,000,000 shares of the Company’s Class A common stock, $0.001 par value (the “Shares”), issuable pursuant to the Innovative Industrial Properties, Inc. Omnibus Incentive Plan (the “Plan”).

 

As counsel to the Company, we have examined originals or copies, certified or otherwise identified to our satisfaction, of such documents, corporate records, certificates of public officials and other instruments as we have deemed necessary for the purposes of rendering this opinion, and we are familiar with the proceedings taken and proposed to be taken by the Company in connection with the authorization, issuance and sale of the Shares. In our examination, we have assumed the genuineness of all signatures, the legal capacity and competency of all natural persons, the authenticity of all documents submitted to us as originals and the conformity to original documents of all documents submitted to us as copies. We have also assumed the accuracy of all other information provided to us by the Company during the course of our investigations, on which we have relied in issuing the opinion expressed below.

 

For the purpose of the opinion rendered below, we have assumed that in connection with the issuance of the Shares under the Plan, the Company will receive consideration in an amount not less than the aggregate par value of the Shares covered by each such issuance, and that any certificates representing any of the Shares that are covered by the Registration Statement will conform to the Form of Class A Common Stock Certificate included as Exhibit 4.3 to the Registration Statement.

 

It is understood that this opinion is to be used only in connection with the offer and sale of the Shares while the Registration Statement is effective.

 

We express no opinion herein as to the laws of any state or jurisdiction other than the General Corporation Law of the State of Delaware and the federal laws of the United States of America.

 

Based upon the foregoing, we are of the opinion that each of the Shares, when issued by the Company pursuant to the terms and conditions of the Plan, will be validly issued, fully paid and nonassessable.

 

 

Boston

Brussels

CHICAGO

Detroit

JACKSONVILLE

LOS ANGELES

MADISON

MIAMI

MILWAUKEE

NEW YORK

ORLANDO

SACRAMENTO

SAN DIEGO

SAN FRANCISCO

SHANGHAI

SILICON VALLEY

TALLAHASSEE

TAMPA

TOKYO

WASHINGTON, D.C.

 

 

 

 

December 6, 2016

Page 2

 

 

We consent to the use of this opinion as an exhibit to the Registration Statement. In giving our consent, we do not admit that we are “experts” within the meaning of Section 11 of the Securities Act or within the category of persons whose consent is required by Section 7 of the Securities Act.

 

  Very truly yours,
   
  /s/ Foley & Lardner LLP
   
  Foley & Lardner LLP

 

 

 

 

 

 

Exhibit 10.2

 

INNOVATIVE INDUSTRIAL PROPERTIES, INC.

 


2016 OMNIBUS INCENTIVE PLAN

 

RESTRICTED STOCK AWARD GRANT NOTICE AND
RESTRICTED STOCK AWARD AGREEMENT

 

Innovative Industrial Properties, Inc., a Maryland corporation (the “ Company ”), pursuant to its 2016 Omnibus Incentive Plan (the “ Plan ”), hereby grants to the individual listed below (“ Participant ”) the number of shares of Class A common stock of the Company (the “ Shares ”) set forth below. This Restricted Stock award is subject to all of the terms and conditions as set forth herein, in the Restricted Stock Award Agreement attached hereto as Exhibit A (the “ Restricted Stock Agreement ”) and the Plan, which are incorporated herein by reference. Unless otherwise defined herein, the terms defined in this Grant Notice and the Restricted Stock Agreement shall have the same defined meanings specified in the Plan.

 

Participant:  
Grant Date:  
Total Number of Shares of Restricted Stock:

 

 

Vesting Schedule:

________ (____) of the Shares granted hereunder shall be released from the Forfeiture Restriction on each of the first ____ (__) anniversaries of the Grant Date, provided that the Participant continues to an employee of the Company or a Non-Employee Director on each such date. 

 

By his or her signature, Participant agrees to be bound by the terms and conditions of the Plan, the Restricted Stock Agreement and this Grant Notice. Participant has reviewed the Restricted Stock Agreement, the Plan and this Grant Notice in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of this Grant Notice, the Restricted Stock Agreement and the Plan. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator of the Plan upon any questions arising under the Plan, this Grant Notice or the Restricted Stock Agreement.

 

INNOVATIVE INDUSTRIAL PROPERTIES, INC.   PARTICIPANT
     
By:     By:  
Print Name:     Print Name:  
Title:        
         
Address:     Address:  
         

 

 

 

 

CONSENT OF SPOUSE

 

I, ____________________, spouse of______________, have read and approve this Grant Notice, and the attached Restricted Stock Agreement. In consideration of issuing to my spouse the shares of the Class A common stock of Innovative Industrial Properties, Inc. set forth in this Grant Notice, I hereby appoint my spouse as my attorney-in-fact in respect to the exercise of any rights under this Grant Notice and agree to be bound by the provisions of this Grant Notice insofar as I may have any rights in said Grant Notice or any shares of the Class A common stock of Innovative Industrial Properties, Inc. issued pursuant thereto under the community property laws or similar laws relating to marital property in effect in the state of our residence as of the date of the signing of the foregoing Grant Notice.

 

 

Dated: _______________, 20__  
  Signature of Spouse

 

 

 

 

EXHIBIT A

 

TO RESTRICTED STOCK AWARD GRANT NOTICE

 

RESTRICTED STOCK AWARD AGREEMENT

 

Pursuant to the Restricted Stock Award Grant Notice (“ Grant Notice ”) to which this Restricted Stock Award Agreement (this “ Agreement ”) is attached, Innovative Industrial Properties, Inc., a Maryland corporation (the “ Company ”), has granted to Participant the number of shares of Class A common stock of the Company (the “ Stock ”) under the Company’s 2016 Omnibus Incentive Plan (the “ Plan ”) indicated in the Grant Notice. The Shares are subject to the terms and conditions of the Plan which are incorporated herein by reference. Capitalized terms not specifically defined herein shall have the meanings specified in the Plan and the Grant Notice.


ARTICLE I

ISSUANCE OF SHARES

 

1.1        Issuance of Shares . Pursuant to the Plan and subject to the terms and conditions of this Agreement, effective on the Grant Date, the Company irrevocably grants to Participant the number of shares of Stock set forth in the Grant Notice (the “ Shares ”), in consideration of Participant’s employment with or service to the Company or one of its Subsidiaries on or before the Grant Date, for which the Administrator has determined Participant has not been fully compensated, and the Administrator has determined that the benefit received by the Company as a result of such employment or service has a value that exceeds the aggregate par value of the Shares, which Shares, when issued in accordance with the terms hereof, shall be fully paid and nonassessable.

 

1.2        Issuance Mechanics . On the Grant Date, the Company shall issue the Shares to Participant and shall, at the Company’s election, (a) cause a stock certificate or certificates representing the Shares to be registered in the name of Participant, or (b) cause such Shares to be held in book entry form. If a stock certificate is issued, it shall be delivered to and held in custody by the Company and shall bear the restrictive legends required by Section 4.1 below. If the Shares are held in book entry form, then such entry will reflect that the Shares are subject to the restrictions of this Agreement. Participant’s execution of a stock assignment in the form attached as Exhibit B to the Grant Notice (the “ Stock Assignment ”) shall be a condition to the issuance of the Shares.

 

ARTICLE II

FORFEITURE AND TRANSFER RESTRICTIONS

 

2.1        Forfeiture Restriction . Subject to the provisions of Section 2.2 below and Section 17(b) of the Plan, in the event of Participant’s cessation of employment with or service to the Company for any reason, including as a result of Participant’s death or Disability, all of the Unreleased Shares (as defined below) shall thereupon be forfeited immediately and without any further action by the Company (the “ Forfeiture Restriction ”). Upon the occurrence of such a forfeiture, the Company shall become the legal and beneficial owner of the Unreleased Shares and all rights and interests therein or relating thereto, and the Company shall have the right to retain and transfer to its own name the number of Unreleased Shares being forfeited by Participant. The Unreleased Shares and Participant’s executed stock assignment in the form attached as Exhibit B to the Grant Notice shall be held by the Company in accordance with Section 2.4 until the Shares are forfeited as provided in this Section 2.1, until such Unreleased Shares are fully released from the Forfeiture Restriction, or until such time as this Agreement no longer is in effect. Participant hereby authorizes and directs the Secretary of the Company, or such other person designated by the Committee, to transfer the Unreleased Shares which have been forfeited pursuant to this Section 2.1 from Participant to the Company.

 

A- 1  

 

 

2.2        Release of Shares from Forfeiture Restriction . The Shares shall be released from the Forfeiture Restriction in accordance with the vesting schedule set forth in the Grant Notice. Any of the Shares which, from time to time, have not yet been released from the Forfeiture Restriction are referred to herein as “ Unreleased Shares .” In the event any of the Shares are released from the Forfeiture Restriction, any dividends or other distributions paid on such Shares and held by the Company pursuant to Section 2.4 shall be promptly paid by the Company to Participant. As soon as administratively practicable following the release of any Shares from the Forfeiture Restriction, the Company shall, as applicable, either deliver to Participant the certificate or certificates representing such Shares in the Company’s possession belonging to Participant, or, if the Shares are held in book entry form, then the Company shall remove the notations on the book form. Participant (or the beneficiary or personal representative of Participant in the event of Participant’s death or incapacity, as the case may be) shall deliver to the Company any representations or other documents or assurances as the Company or its representatives deem necessary or advisable in connection with any such delivery.

 

2.3        Transfer Restriction . No Unreleased Shares or any interest or right therein or part thereof shall be liable for the debts, contracts or engagements of the Participant or his successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect.

 

2.4        Escrow . The Unreleased Shares and Participant’s executed Stock Assignment shall be held by the Company until the Shares are forfeited as provided in Section 2.1, until such Unreleased Shares are fully released from the Forfeiture Restriction, or until such time as this Agreement no longer is in effect. In such event, Participant shall not retain physical custody of any certificates representing Unreleased Shares (as defined below) issued to Participant. Participant, by acceptance of this Award, shall be deemed to appoint, and does so appoint, the Company and each of its authorized representatives as Participant’s attorney(s)-in-fact to effect any transfer of forfeited Unreleased Shares (and any dividends or other distributions paid on such Shares) to the Company as may be required pursuant to the Plan or this Agreement, and to execute such representations or other documents or assurances as the Company or such representatives deem necessary or advisable in connection with any such transfer. The Company, or its designee, shall not be liable for any act it may do or omit to do with respect to holding the Shares in escrow and while acting in good faith and in the exercise of its judgment.

 

2.5        Rights as Stockholder . Except as otherwise provided herein, upon issuance of the Shares by the Company, Participant shall have all the rights of a stockholder with respect to said Shares, subject to the restrictions herein, including the right to vote the Shares and to receive all dividends or other distributions paid or made with respect to the Shares.

 

2.6        Ownership Limit and REIT Status . The Forfeiture Restriction on the Shares shall not lapse if the lapsing of such restrictions would likely result in any of the following:

 

(a) a violation of the restrictions or limitations on ownership provided for from time to time under the terms of the organizational documents of the Company; or

 

(b) income to the Company that could impair the Company’s status as a real estate investment trust, within the meaning of Sections 856 through 860 of the Code.

 

A- 2  

 

 

ARTICLE III

TAXATION REPRESENTATIONS

 

Participant represents to the Company the following:

 

(a)       Participant has reviewed with his or her own tax advisors the federal, state, local and foreign tax consequences of this investment and the transactions contemplated by this Agreement. Participant is relying solely on such advisors and not on any statements or representations of the Company or any of its agents. Participant understands that Participant (and not the Company) shall be responsible for his or her own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement.

 

(b)       Notwithstanding anything to the contrary in this Agreement, the Company shall be entitled to require payment (which payment may be made in cash, by deduction from other compensation payable to Participant or in any form of consideration permitted by the Plan) of any sums required by federal, state or local tax law to be withheld with respect to the issuance, lapsing of restrictions on or sale of the Shares. The Company shall not be obligated to deliver any stock certificate representing vested Shares to Participant or Participant’s legal representative, or, if the Shares are held in book entry form, to remove the notations on the book form, unless and until Participant or Participant’s legal representative shall have paid or otherwise satisfied in full the amount of all federal, state and local taxes applicable to the taxable income of Participant resulting from the issuance, lapsing of restrictions on or sale of the Shares.

 

(c)       Participant covenants that he or she will not make an election under Section 83(b) of the Code with respect to the receipt of any of the Shares without the consent of the Administrator, which the Administrator may grant or withhold in its sole discretion.

 

ARTICLE IV

Restrictive Legends and Stop-Transfer Orders

 

4.1        Legends . The certificate or certificates representing the Shares, if any, shall bear the following legend (as well as any legends required by applicable state and federal corporate and securities laws):

 

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO FORFEITURE IN FAVOR OF THE COMPANY AND MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF A RESTRICTED STOCK AWARD AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY .

 

4.2        Refusal to Transfer; Stop-Transfer Notices . The Company shall not be required (a) to transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the provisions of this Agreement or (b) to treat as owner of such Shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such Shares shall have been so transferred. Participant agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records.

 

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4.3        Removal of Legend . After such time as the Forfeiture Restriction shall have lapsed with respect to the Shares, and upon Participant’s request, a new certificate or certificates representing such Shares shall be issued without the legend referred to in Section 4.1, and delivered to Participant. If the Shares are held in book entry form, the Company shall cause any restrictions noted on the book form to be removed.

 

ARTICLE V

Miscellaneous

 

5.1        Governing Law; Limitation on Actions . This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of Maryland, without giving effect to principles of conflicts of law. Any legal action or proceeding with respect to this Agreement and all acts and transactions pursuant hereto may only be brought and determined in (i) a court sitting in the State of California, and (ii) a “bench” trial, and any party to such action or proceeding shall agree to waive its right to a jury trial. In accordance with Section 17(g) of the Plan, any legal action or proceeding with respect to this Agreement and all acts and transactions pursuant hereto, must be brought within one year (365 days) after the day the complaining party first knew or should have known of the events giving rise to the complaint.

 

5.2        Entire Agreement; Enforcement of Rights . This Agreement and the Plan set forth the entire agreement and understanding of the parties relating to the subject matter herein and merge all prior discussions between them. Subject to Section 14(c) of the Plan, no modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, shall be effective unless in writing signed by the parties to this Agreement.

 

5.3        Bound by Plan; Interpretation . Participant hereby acknowledges receipt of a copy of the Plan and agrees to be bound by all of the terms and provisions therein. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan (as such may be amended from time to time in accordance with the terms of the Plan), the applicable terms and provisions of the Plan will govern.

 

5.4        Severability . If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (a) such provision shall be excluded from this Agreement, (b) the balance of the Agreement shall be interpreted as if such provision were so excluded and (c) the balance of the Agreement shall be enforceable in accordance with its terms.

 

5.5        Notices . Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient when delivered personally or sent by electronic mail (with return receipt requested and received) or fax or forty-eight (48) hours after being deposited in the U.S. mail, as certified or registered mail, with postage prepaid, and addressed to the party to be notified, if to the Company, at its principal offices, and if to Participant, at Participant’s address, electronic mail address or fax number in the Company’s employee records or as subsequently modified by written notice.

 

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

 

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5.7        Successors and Assigns . The rights and benefits of this Agreement shall inure to the benefit of, and be enforceable by the Company’s successors and assigns. The Company may assign its rights under this Agreement to any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company without the prior written consent of Participant. The rights and obligations of Participant under this Agreement may only be assigned with the prior written consent of the Company.

 

5.8        Conformity to Securities Laws . Participant acknowledges that the Plan is intended to conform to the extent necessary with all provisions of the Securities Act and the Exchange Act and any and all regulations and rules promulgated by the Securities and Exchange Commission thereunder, and state securities laws and regulations. Notwithstanding anything herein to the contrary, the Plan shall be administered, and the Shares are to be issued, only in such a manner as to conform to such laws, rules and regulations. To the extent permitted by applicable law, the Plan and this Agreement shall be deemed amended to the extent necessary to conform to such laws, rules and regulations.

 

5.9        No Right to Continued Service . EXCEPT AS MAY BE PROVIDED IN ANY EMPLOYMENT AGREEMENT WITH THE PARTICIPANT, THE PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE LAPSING OF THE FORFEITURE RESTRICTION PURSUANT TO SECTION 2.1 HEREOF IS EARNED ONLY BY CONTINUING SERVICE TO THE COMPANY, OR ONE OF ITS SUBSIDIARIES AS AN “AT WILL” EMPLOYEE OR CONSULTANT OF THE COMPANY, OR ONE OF ITS SUBSIDIARIES OR A NON-EMPLOYEE DIRECTOR OF THE COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED OR ACQUIRING SHARES HEREUNDER). THE PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE FORFEITURE RESTRICTION SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS AN EMPLOYEE, CONSULTANT OR NON-EMPLOYEE DIRECTOR FOR SUCH PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH THE COMPANY’S, OR ANY OF ITS SUBSIDIARIES’ RIGHT TO TERMINATE THE PARTICIPANT’S EMPLOYMENT OR SERVICE TO THE COMPANY AT ANY TIME, WITH OR WITHOUT CAUSE.

 

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EXHIBIT B

 

TO RESTRICTED STOCK AWARD GRANT NOTICE

 

STOCK ASSIGNMENT

 

 

 

FOR VALUE RECEIVED, the undersigned, ______________, hereby sells, assigns and transfers unto INNOVATIVE INDUSTRIAL PROPERTIES, INC., a Maryland corporation, _________ shares of the Class A common stock of INNOVATIVE INDUSTRIAL PROPERTIES, INC., a Maryland corporation, standing in its name of the books of said corporation represented by Certificate No. _____ herewith and do hereby irrevocably constitute and appoint ___________________ to transfer the said stock on the books of the within named corporation with full power of substitution in the premises.

 

This Stock Assignment may be used only in accordance with the Restricted Stock Award Grant Notice and Restricted Stock Award Agreement between INNOVATIVE INDUSTRIAL PROPERTIES, INC. and the undersigned dated __________ __ , 20__.

 

 

 

Dated: _______________, _______  

 

 

 

 

 

INSTRUCTIONS : Please do not fill in the blanks other than the signature line. The purpose of this assignment is to enable the Company to enforce the Forfeiture Restriction as set forth in the Restricted Stock Award Grant Notice and Restricted Stock Award Agreement, without requiring additional signatures on the part of the Participant.

 

B- 1  

 

Exhibit 10.3

 

INNOVATIVE INDUSTRIAL PROPERTIES, INC.

 

2016 OMNIBUS INCENTIVE PLAN

 

RESTRICTED STOCK AWARD GRANT NOTICE AND
RESTRICTED STOCK AWARD AGREEMENT

 

Innovative Industrial Properties, Inc., a Maryland corporation (the “ Company ”), pursuant to its 2016 Omnibus Incentive Plan (the “ Plan ”), hereby grants to the individual listed below (“ Participant ”) the number of shares of Class A common stock of the Company (the “ Shares ”) set forth below. This Restricted Stock award is subject to all of the terms and conditions as set forth herein, in the Restricted Stock Award Agreement attached hereto as Exhibit A (the “ Restricted Stock Agreement ”) and the Plan, which are incorporated herein by reference. Unless otherwise defined herein, the terms defined in this Grant Notice and the Restricted Stock Agreement shall have the same defined meanings specified in the Plan.

 

Participant:  
Grant Date:  
Total Number of Shares of Restricted Stock:

Vesting Schedule: One-third (1/3) of the Shares granted hereunder shall be released from the Forfeiture Restriction on each of the first three (3) anniversaries of the Grant Date, provided that the Participant continues to be a Non-Employee Director or employee of the Company on each such date.

 

By his or her signature, Participant agrees to be bound by the terms and conditions of the Plan, the Restricted Stock Agreement and this Grant Notice. Participant has reviewed the Restricted Stock Agreement, the Plan and this Grant Notice in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of this Grant Notice, the Restricted Stock Agreement and the Plan. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator of the Plan upon any questions arising under the Plan, this Grant Notice or the Restricted Stock Agreement.

 

INNOVATIVE INDUSTRIAL PROPERTIES, INC.   PARTICIPANT
     
By:     By:  
Print Name:     Print Name:  
Title:        
         
Address:     Address:  
         

 

 

 

 

CONSENT OF SPOUSE

 

I, ____________________, spouse of______________, have read and approve this Grant Notice, and the attached Restricted Stock Agreement. In consideration of issuing to my spouse the shares of the Class A common stock of Innovative Industrial Properties, Inc. set forth in this Grant Notice, I hereby appoint my spouse as my attorney-in-fact in respect to the exercise of any rights under this Grant Notice and agree to be bound by the provisions of this Grant Notice insofar as I may have any rights in said Grant Notice or any shares of the Class A common stock of Innovative Industrial Properties, Inc. issued pursuant thereto under the community property laws or similar laws relating to marital property in effect in the state of our residence as of the date of the signing of the foregoing Grant Notice.

 

 

Dated: _______________, 20__  
  Signature of Spouse

 

 

 

 

EXHIBIT A

 

TO RESTRICTED STOCK AWARD GRANT NOTICE

 

RESTRICTED STOCK AWARD AGREEMENT

 

Pursuant to the Restricted Stock Award Grant Notice (“ Grant Notice ”) to which this Restricted Stock Award Agreement (this “ Agreement ”) is attached, Innovative Industrial Properties, Inc., a Maryland corporation (the “ Company ”), has granted to Participant the number of shares of Class A common stock of the Company (the “ Stock ”) under the Company’s 2016 Omnibus Incentive Plan (the “ Plan ”) indicated in the Grant Notice. The Shares are subject to the terms and conditions of the Plan which are incorporated herein by reference. Capitalized terms not specifically defined herein shall have the meanings specified in the Plan and the Grant Notice.

 

ARTICLE I

ISSUANCE OF SHARES

 

1.1        Issuance of Shares . Pursuant to the Plan and subject to the terms and conditions of this Agreement, effective on the Grant Date, the Company irrevocably grants to Participant the number of shares of Stock set forth in the Grant Notice (the “ Shares ”), in consideration of Participant’s employment with or service to the Company or one of its Subsidiaries on or before the Grant Date, for which the Administrator has determined Participant has not been fully compensated, and the Administrator has determined that the benefit received by the Company as a result of such employment or service has a value that exceeds the aggregate par value of the Shares, which Shares, when issued in accordance with the terms hereof, shall be fully paid and nonassessable.

 

1.2        Issuance Mechanics . On the Grant Date, the Company shall issue the Shares to Participant and shall, at the Company’s election, (a) cause a stock certificate or certificates representing the Shares to be registered in the name of Participant, or (b) cause such Shares to be held in book entry form. If a stock certificate is issued, it shall be delivered to and held in custody by the Company and shall bear the restrictive legends required by Section 4.1 below. If the Shares are held in book entry form, then such entry will reflect that the Shares are subject to the restrictions of this Agreement. Participant’s execution of a stock assignment in the form attached as Exhibit B to the Grant Notice (the “ Stock Assignment ”) shall be a condition to the issuance of the Shares.

 

ARTICLE II

FORFEITURE AND TRANSFER RESTRICTIONS

 

2.1        Forfeiture Restriction . Subject to the provisions of Section 2.2 below and Section 17(b) of the Plan, in the event of Participant’s cessation of employment with or service to the Company for any reason, including as a result of Participant’s death or Disability, all of the Unreleased Shares (as defined below) shall thereupon be forfeited immediately and without any further action by the Company (the “ Forfeiture Restriction ”). Upon the occurrence of such a forfeiture, the Company shall become the legal and beneficial owner of the Unreleased Shares and all rights and interests therein or relating thereto, and the Company shall have the right to retain and transfer to its own name the number of Unreleased Shares being forfeited by Participant. The Unreleased Shares and Participant’s executed stock assignment in the form attached as Exhibit B to the Grant Notice shall be held by the Company in accordance with Section 2.4 until the Shares are forfeited as provided in this Section 2.1, until such Unreleased Shares are fully released from the Forfeiture Restriction, or until such time as this Agreement no longer is in effect. Participant hereby authorizes and directs the Secretary of the Company, or such other person designated by the Committee, to transfer the Unreleased Shares which have been forfeited pursuant to this Section 2.1 from Participant to the Company.

 

A- 1  

 

 

2.2        Release of Shares from Forfeiture Restriction . The Shares shall be released from the Forfeiture Restriction in accordance with the vesting schedule set forth in the Grant Notice. Any of the Shares which, from time to time, have not yet been released from the Forfeiture Restriction are referred to herein as “ Unreleased Shares .” In the event any of the Shares are released from the Forfeiture Restriction, any dividends or other distributions paid on such Shares and held by the Company pursuant to Section 2.4 shall be promptly paid by the Company to Participant. As soon as administratively practicable following the release of any Shares from the Forfeiture Restriction, the Company shall, as applicable, either deliver to Participant the certificate or certificates representing such Shares in the Company’s possession belonging to Participant, or, if the Shares are held in book entry form, then the Company shall remove the notations on the book form. Participant (or the beneficiary or personal representative of Participant in the event of Participant’s death or incapacity, as the case may be) shall deliver to the Company any representations or other documents or assurances as the Company or its representatives deem necessary or advisable in connection with any such delivery.

 

2.3        Transfer Restriction . No Unreleased Shares or any interest or right therein or part thereof shall be liable for the debts, contracts or engagements of the Participant or his successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect.

 

2.4        Escrow . The Unreleased Shares and Participant’s executed Stock Assignment shall be held by the Company until the Shares are forfeited as provided in Section 2.1, until such Unreleased Shares are fully released from the Forfeiture Restriction, or until such time as this Agreement no longer is in effect. In such event, Participant shall not retain physical custody of any certificates representing Unreleased Shares (as defined below) issued to Participant. Participant, by acceptance of this Award, shall be deemed to appoint, and does so appoint, the Company and each of its authorized representatives as Participant’s attorney(s)-in-fact to effect any transfer of forfeited Unreleased Shares (and any dividends or other distributions paid on such Shares) to the Company as may be required pursuant to the Plan or this Agreement, and to execute such representations or other documents or assurances as the Company or such representatives deem necessary or advisable in connection with any such transfer. The Company, or its designee, shall not be liable for any act it may do or omit to do with respect to holding the Shares in escrow and while acting in good faith and in the exercise of its judgment.

 

2.5        Rights as Stockholder . Except as otherwise provided herein, upon issuance of the Shares by the Company, Participant shall have all the rights of a stockholder with respect to said Shares, subject to the restrictions herein, including the right to vote the Shares and to receive all dividends or other distributions paid or made with respect to the Shares.

 

2.6        Ownership Limit and REIT Status . The Forfeiture Restriction on the Shares shall not lapse if the lapsing of such restrictions would likely result in any of the following:

 

(a) a violation of the restrictions or limitations on ownership provided for from time to time under the terms of the organizational documents of the Company; or

 

(b) income to the Company that could impair the Company’s status as a real estate investment trust, within the meaning of Sections 856 through 860 of the Code.

 

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ARTICLE III

TAXATION REPRESENTATIONS

 

Participant represents to the Company the following:

 

(a)       Participant has reviewed with his or her own tax advisors the federal, state, local and foreign tax consequences of this investment and the transactions contemplated by this Agreement. Participant is relying solely on such advisors and not on any statements or representations of the Company or any of its agents. Participant understands that Participant (and not the Company) shall be responsible for his or her own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement.

 

(b)       Notwithstanding anything to the contrary in this Agreement, the Company shall be entitled to require payment (which payment may be made in cash, by deduction from other compensation payable to Participant or in any form of consideration permitted by the Plan) of any sums required by federal, state or local tax law to be withheld with respect to the issuance, lapsing of restrictions on or sale of the Shares. The Company shall not be obligated to deliver any stock certificate representing vested Shares to Participant or Participant’s legal representative, or, if the Shares are held in book entry form, to remove the notations on the book form, unless and until Participant or Participant’s legal representative shall have paid or otherwise satisfied in full the amount of all federal, state and local taxes applicable to the taxable income of Participant resulting from the issuance, lapsing of restrictions on or sale of the Shares.

 

(c)       Participant covenants that he or she will not make an election under Section 83(b) of the Code with respect to the receipt of any of the Shares without the consent of the Administrator, which the Administrator may grant or withhold in its sole discretion.

 

ARTICLE IV

Restrictive Legends and Stop-Transfer Orders

 

4.1        Legends . The certificate or certificates representing the Shares, if any, shall bear the following legend (as well as any legends required by applicable state and federal corporate and securities laws):

 

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO FORFEITURE IN FAVOR OF THE COMPANY AND MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF A RESTRICTED STOCK AWARD AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY .

 

4.2        Refusal to Transfer; Stop-Transfer Notices . The Company shall not be required (a) to transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the provisions of this Agreement or (b) to treat as owner of such Shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such Shares shall have been so transferred. Participant agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records.

 

A- 3  

 

 

4.3        Removal of Legend . After such time as the Forfeiture Restriction shall have lapsed with respect to the Shares, and upon Participant’s request, a new certificate or certificates representing such Shares shall be issued without the legend referred to in Section 4.1, and delivered to Participant. If the Shares are held in book entry form, the Company shall cause any restrictions noted on the book form to be removed.

 

ARTICLE V

Miscellaneous

 

5.1        Governing Law; Limitation on Actions . This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of Maryland, without giving effect to principles of conflicts of law. Any legal action or proceeding with respect to this Agreement and all acts and transactions pursuant hereto may only be brought and determined in (i) a court sitting in the State of California, and (ii) a “bench” trial, and any party to such action or proceeding shall agree to waive its right to a jury trial. In accordance with Section 17(g) of the Plan, any legal action or proceeding with respect to this Agreement and all acts and transactions pursuant hereto, must be brought within one year (365 days) after the day the complaining party first knew or should have known of the events giving rise to the complaint.

 

5.2        Entire Agreement; Enforcement of Rights . This Agreement and the Plan set forth the entire agreement and understanding of the parties relating to the subject matter herein and merge all prior discussions between them. Subject to Section 14(c) of the Plan, no modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, shall be effective unless in writing signed by the parties to this Agreement.

 

5.3        Bound by Plan; Interpretation . Participant hereby acknowledges receipt of a copy of the Plan and agrees to be bound by all of the terms and provisions therein. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan (as such may be amended from time to time in accordance with the terms of the Plan), the applicable terms and provisions of the Plan will govern.

 

5.4        Severability . If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (a) such provision shall be excluded from this Agreement, (b) the balance of the Agreement shall be interpreted as if such provision were so excluded and (c) the balance of the Agreement shall be enforceable in accordance with its terms.

 

5.5        Notices . Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient when delivered personally or sent by electronic mail (with return receipt requested and received) or fax or forty-eight (48) hours after being deposited in the U.S. mail, as certified or registered mail, with postage prepaid, and addressed to the party to be notified, if to the Company, at its principal offices, and if to Participant, at Participant’s address, electronic mail address or fax number in the Company’s employee records or as subsequently modified by written notice.

 

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

 

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5.7        Successors and Assigns . The rights and benefits of this Agreement shall inure to the benefit of, and be enforceable by the Company’s successors and assigns. The Company may assign its rights under this Agreement to any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company without the prior written consent of Participant. The rights and obligations of Participant under this Agreement may only be assigned with the prior written consent of the Company.

 

5.8        Conformity to Securities Laws . Participant acknowledges that the Plan is intended to conform to the extent necessary with all provisions of the Securities Act and the Exchange Act and any and all regulations and rules promulgated by the Securities and Exchange Commission thereunder, and state securities laws and regulations. Notwithstanding anything herein to the contrary, the Plan shall be administered, and the Shares are to be issued, only in such a manner as to conform to such laws, rules and regulations. To the extent permitted by applicable law, the Plan and this Agreement shall be deemed amended to the extent necessary to conform to such laws, rules and regulations.

 

5.9        No Right to Continued Service . EXCEPT AS MAY BE PROVIDED IN ANY EMPLOYMENT AGREEMENT WITH THE PARTICIPANT, THE PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE LAPSING OF THE FORFEITURE RESTRICTION PURSUANT TO SECTION 2.1 HEREOF IS EARNED ONLY BY CONTINUING SERVICE TO THE COMPANY, OR ONE OF ITS SUBSIDIARIES AS AN “AT WILL” EMPLOYEE OR CONSULTANT OF THE COMPANY, OR ONE OF ITS SUBSIDIARIES OR A NON-EMPLOYEE DIRECTOR OF THE COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED OR ACQUIRING SHARES HEREUNDER). THE PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE FORFEITURE RESTRICTION SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS AN EMPLOYEE, CONSULTANT OR NON-EMPLOYEE DIRECTOR FOR SUCH PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH THE COMPANY’S, OR ANY OF ITS SUBSIDIARIES’ RIGHT TO TERMINATE THE PARTICIPANT’S EMPLOYMENT OR SERVICE TO THE COMPANY AT ANY TIME, WITH OR WITHOUT CAUSE.

  

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EXHIBIT B

 

TO RESTRICTED STOCK AWARD GRANT NOTICE

 

STOCK ASSIGNMENT

 

 

FOR VALUE RECEIVED, the undersigned, ______________, hereby sells, assigns and transfers unto INNOVATIVE INDUSTRIAL PROPERTIES, INC., a Maryland corporation, _________ shares of the Class A common stock of INNOVATIVE INDUSTRIAL PROPERTIES, INC., a Maryland corporation, standing in its name of the books of said corporation represented by Certificate No. _____ herewith and do hereby irrevocably constitute and appoint ___________________ to transfer the said stock on the books of the within named corporation with full power of substitution in the premises.

 

This Stock Assignment may be used only in accordance with the Restricted Stock Award Grant Notice and Restricted Stock Award Agreement between INNOVATIVE INDUSTRIAL PROPERTIES, INC. and the undersigned dated __________ __ , 20__.

 

 

 

Dated: _______________, _______  

 

 

 

 

 

INSTRUCTIONS : Please do not fill in the blanks other than the signature line. The purpose of this assignment is to enable the Company to enforce the Forfeiture Restriction as set forth in the Restricted Stock Award Grant Notice and Restricted Stock Award Agreement, without requiring additional signatures on the part of the Participant.

 

B- 1  

 

Exhibit 23.1

 

Consent of Independent Registered Public Accounting Firm

 

Innovative Industrial Properties, Inc.

San Diego, California

 

We hereby consent to the incorporation by reference in the Prospectus constituting a part of this Registration Statement of our report dated November 4, 2016, relating to the consolidated financial statements as of September 30, 2016 and for the period from June 15, 2016 (date of incorporation) through September 30, 2016 of Innovative Industrial Properties, Inc. appearing in the Company’s final prospectus, dated November 30, 2016, relating to the Registration Statement on Form S-11, as amended (File No. 333-214148).

 

 

/s/ BDO USA, LLP

 

Costa Mesa, California

December 6, 2016