Paul S. Fisher Employment Agreement Term Sheet
Exhibit 99.2
Xxxx
X. Xxxxxx
Employment Agreement Term Sheet
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Parties: |
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CenterPoint Properties Trust (the “Company”) will, at the effective time (referred to herein either as the “Effective Time” or the “Effective Date”) of the transactions (the “Merger”) contemplated by the Agreement and Plan of Merger dated December 7, 2005 by and among CalEast Industrial Investors, LLC (“Moon”), Solstice Merger Trust and the Company (the “Merger Agreement”), be wholly owned by Solstice Holdings LLC (“Moon Sub”), a subsidiary of Moon. Moon Sub will, immediately prior to the Effective Date of the Merger, be the sole shareholder of Solstice Merger Trust. |
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Moon Sub and Xxxx X. Xxxxxx (the “Executive”) are the parties to this Employment Agreement Term Sheet as of the date hereof, and agree that the Company at the Effective Date will join in this Employment Agreement Term Sheet and the Employment Agreement (as defined below). |
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Prior Agreement: |
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The parties
shall enter into an employment agreement (the “Employment Agreement”) that
shall supersede and replace the Executive’s existing employment and severance
agreement, if any, by and between the Company and the Executive (the “Prior
Employment Agreement”). |
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Employment Period: |
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Five (5) years commencing on the Effective Date (the “Initial Term”), subject to year-to-year evergreen extension upon expiration of the Initial Term, unless the Company or the Executive provides written notice of non-renewal of the Executive’s Employment Agreement at least 90 days prior to the expiration of the Initial Term or any annual extension thereof (the Initial Term and any annual extension thereof collectively, the “Employment Term”). |
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Position, Duties and Reporting Responsibilities: |
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As set forth on Exhibit A, attached hereto, with duties commensurate with such position; reporting to the position set forth on Exhibit A. |
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Base Salary: |
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During the
Employment Term, the Executive shall be paid an annual base salary of not
less than the Executive’s base salary immediately prior to the Effective
Date, subject to review at least annually by the Board. |
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on Exhibit A. |
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Target Annual Cash Bonus: |
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During the
Employment Term, the Executive’s target annual cash bonus award shall not be
less than the Executive’s target annual cash bonus award immediately prior to
the Effective Date. |
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Required Investment: |
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The Executive shall, at the Effective Date, contribute/exchange his existing shares and/or invest cash in Moon Sub as set forth on Exhibit A and further described in the Management Equity Investment and Incentive Compensation Program attached hereto as Exhibit B (the “Incentive Program”). |
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Initial Incentive Award: |
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Moon Sub shall
grant the Executive shares of restricted and unvested common equity interests
(“Equity Interests”) in Moon Sub (the “Initial Incentive Award”) as described
in the Incentive Program in lieu of the share options, restricted shares
and/or performance units that the Company would have awarded the Executive in
early 2006 in the ordinary course, consistent with past practice. |
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New Equity-Based Awards Under the Incentive Program: |
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The Executive shall be eligible to receive awards of MIP Units pursuant to the terms of Section II of the Incentive Program (Section II specifically referred to as the “MIP”). |
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Equity Interests Available Under the RECP: |
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Key employees of the Company (other than the CEO and CFO) who are selected by the CEO and CFO of the Company and are approved by the Board shall be eligible to participate in the Retention Equity Compensation Plan (the “RECP”) as further described in the Incentive Program. |
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Employee Benefits and Perquisites: |
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No change to the terms of the Executive’s Prior Employment Agreement. To the extent the Executive does not have a Prior Employment Agreement, such provisions will be on the same terms as those for Executives with Prior Employment Agreements. |
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Restrictive Covenants: |
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No change to the Executive’s Non-Competition, Non-Solicitation and Confidentiality Agreement, except to conform to and reflect the provisions set forth herein, as applicable. |
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To the extent the Executive does not have a Prior Employment Agreement, such provisions will be on the same terms as those for Executives with Prior Employment Agreements and Non-Competition, Non-Solicitation and Confidentiality Agreements. |
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Termination of Employment without Cause/Voluntary Termination with Good Reason: |
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Upon the
termination of the Executive’s employment without Cause (as defined below),
or if the Executive terminates employment with Good Reason, the Executive’s
MIP Units shall be subject to the vesting and forfeiture provisions as
described in the Incentive Program. |
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Voluntary Termination of Employment without Good Reason: |
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If the Executive
terminates employment without Good Reason (as defined below) the Executive’s
MIP Units shall be subject to the vesting and forfeiture provisions as
described in the MIP. |
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Death/Disability: |
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In the case of the
Executive’s death or disability, the Executive’s MIP Units shall be subject
to the vesting and forfeiture provisions as described in the MIP. |
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Executive (or Executive’s estate in the event of the Executive’s death) shall fully vest in any unvested Equity Interests. All Equity Interests held by the Executive shall be subject to the Equity Sales provision as described in the Required Investment Program. |
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Change in Control: |
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The Executive
agrees that the Merger will not constitute a Change in Control for purposes
of the provisions of the Prior Employment Agreement, the Non-Competition,
Non-Solicitation and Confidentiality Agreement, the Employment Agreement and
any other agreements between the Company and the Executive. |
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Severance Compensation and Benefits: |
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The Executive agrees that, if the Executive’s employment is terminated as a result of non-renewal of the Executive’s Employment Agreement, the Executive shall be entitled to no more than 12 months of severance compensation and will be subject to a one-year non-compete. The Executive further agrees that if he continues his employment following such non-renewal, the Executive shall not be entitled to any payments under the Employment Agreement as a result of such non-renewal. |
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Severance Compensation and Benefits Following a Qualifying Termination of Employment: |
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The Executive agrees that the Merger constitutes neither a Change in Control nor a Qualifying Termination under the Prior Employment Agreement or the Employment Agreement. |
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Definition of Cause: |
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No change to the terms of the Executive’s Prior Employment Agreement. To the extent the Executive does not have a Prior Employment Agreement, such provisions will be on the same terms as those for Executives with Prior Employment Agreements. |
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Definition of Change in Control: |
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A “Change in Control” means the first to occur of any one or more of the following: |
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(i) Any individual, entity or group, other than Moon and its affiliates (the “Moon Stockholders”), acquires beneficial |
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ownership of
more than fifty percent (50%) of the combined voting power of the then
outstanding Voting Securities of the Company or Moon Sub or of more than
fifty percent (50%) of the total equity securities of the Company or Moon Sub
having pari passu economic and other rights and privileges (but not voting
power), as the equity securities beneficially owned by Moon and members of
the Key Management Team immediately after completion of the Merger; provided,
however, that any acquisition of securities by any employee benefit plan (or
related trust) sponsored or maintained by the Company or Moon Sub shall not
constitute a Change in Control; or |
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(A) upon
consummation of the Merger; |
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Definition of Good Reason: |
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“Good Reason”
shall mean the occurrence, without Executive’s prior written consent, of any
one or more of the following: |
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Definition of Qualifying Termination: |
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No change to the terms of the Executive’s Prior Employment Agreement. To the extent the Executive does not have a Prior Employment Agreement, such provisions will be on the same terms as those for Executives with Prior Employment Agreements. |
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Key Management Team Employment Agreements |
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The CEO and CFO are entering in to this Employment Agreement Term Sheet with the intention that Moon Sub will offer Employment Agreement Term Sheets on these terms (as modified to reflect Exhibit A applicable data) to up to ten other employees who are members of the Key Management Team and listed on the Schedule attached hereto and Moon Sub agrees to proceed in good faith to enter into such agreements. |
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Governing Law: |
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Illinois. |
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Section 409A
Compliance: |
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The Employment
Agreement is intended to comply and shall be administered in a manner that is
intended to comply with Section 409A of the Code and shall be construed
and interpreted in accordance with such intent; to the extent that a payment
and/or benefit is subject to Section 409A of the Code, it shall be paid
in a manner that will comply with Section 409A of the Code, including
proposed, temporary or final regulations or any other guidance issued by the
Secretary of the Treasury and the Internal Revenue Service with respect
thereto (the “Guidance”). |
The Executive acknowledges, consents to and agrees to the joinder of the Company as a party to this Employment Agreement Term Sheet at the Effective Date. The undersigned parties hereby agree that this Employment Agreement Term Sheet, including the exhibits hereto, constitute a legally binding commitment of the parties hereto to negotiate in good faith definitive documentation containing terms that are consistent with the provisions set forth herein as soon as reasonably practicable after the date hereof. The Executive agrees that the terms of his Prior Employment Agreement, if any, that will be included in the Employment Agreement shall be re-written, for purposes of clarity, consistent with the provisions set forth herein, and to the extent the Executive does not have a Prior Employment Agreement the terms will be the same as the terms for Executives with Prior Employment Agreements; provided, however, that if an employment agreement is not entered into between the parties as set forth above, this Term Sheet shall continue in full force and effect until such time that an employment agreement is entered into between the parties consistent with the provisions set forth herein; provided further, that if the Merger Agreement is terminated this Term Sheet shall be void ab initio and shall have no further force or effect. The existence of this Term Sheet shall in no way prevent the Executive from fulfilling his
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existing fiduciary and employment obligations to the Company pending the Effective Date.
Prior to the Effective Date, Moon Sub and the Executive will not amend or modify this Term Sheet, or enter into an employment agreement which amends or modifies the terms and conditions of this Term Sheet, or waive any rights of any party hereunder, without the prior consent of Moon. Moon is intended to be, and shall be, a third-party beneficiary of this provision, with full rights of enforcement.
This Employment Agreement Term Sheet may be executed in counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party. Facsimile transmission of any signed original document shall be deemed the same as delivery of an original. At the request of any party, the parties will confirm facsimile transmission by signing a duplicate original document.
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Dated December 7, 2005
Solstice Holdings LLC
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By: |
/s/ Xxxxx X. Xxxxxx |
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Its: Manager and Chief Executive Officer |
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Executive
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/s/ Xxxx X. Xxxxxx |
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Xxxx X. Xxxxxx |
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CenterPoint Properties Trust hereby acknowledges, consents and agrees that the foregoing provisions and execution of this Employment Agreement Term Sheet by the Executive and Solstice Holdings LLC shall not constitute a violation of any of the terms and conditions of the Prior Employment Agreement, any other agreement or otherwise between the Executive and CenterPoint Properties Trust in effect as of the date hereof. CalEast Industrial Investors, LLC, the Company at the Effective Time and Solstice Holdings LLC may rely on the foregoing acknowledgement, consent and agreement.
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By: |
/s/ Xxxxxx Xxxxxx |
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Its: General Counsel |
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Signature Page to Xxxx X. Xxxxxx Employment Agreement Term Sheet
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Exhibit A
Certain Terms and Conditions of Employment
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Name: |
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Xxxx X. Xxxxxx |
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Position: |
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President and Chief Financial Officer |
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Reporting
Duties: |
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Board |
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Annual Base Salary: |
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$337,500 |
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Target Annual Bonus: |
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135% of Annual Base Salary |
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Rollover/Investment: |
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No less than $7
million of Moon Sub equity interests will be invested in by
contribution/exchange of Company common stock, Initial Incentive Award and/or
cash. |
A-1
Exhibit B
Management Equity Investment and Incentive Compensation Program
I. Required Management Equity Investment
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Parties: |
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CenterPoint Properties
Trust (the “Company”) will, at the effective time (the “Effective Time”) of
the transactions (the “Merger”) contemplated by the Agreement and Plan of
Merger dated December 7, 2005 by and among CalEast Industrial Investors,
LLC (‘Moon”), Solstice Merger Trust and the Company (the “Merger Agreement”),
be wholly owned (except for any outstanding Series B and Series D
preferred shares) by Solstice Holdings LLC, a subsidiary of Moon. Solstice
Holdings LLC is hereinafter referred to as “Moon Sub” and will, immediately
prior to the Effective Time of the Merger, be the sole shareholder of
Solstice Merger Trust. |
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Required Investment by Key Management Team: |
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The Key Management Team and the Additional Employees will, at or immediately prior to the Effective Time, contribute/exchange certain of their existing Company common shares to Moon Sub at a price per share equal to the Company Common Share Cash Merger Consideration (as defined in the Merger Agreement), invest their Initial Incentive Awards (as defined below) and/or invest cash in Moon Sub aggregating at least $20 million (the “Required Investment”). |
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A minimum of $14 million of the Required Investment will be invested by the CEO and CFO (the “Minimum Investment”) plus the difference, if any, between the Required Investment and the sum of (i) the Minimum |
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Investment and (ii) the
aggregate value of existing shares in the Company contributed/exchanged, and
the Initial Incentive Awards and/or cash invested by the members of the Key
Management Team and the Additional Employees other than the CEO and CFO. |
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Required Investment by Moon: |
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Moon will invest cash in Moon Sub in the amount required to close the acquisition of the Company less the cash amount invested by the Key Management Team and the Additional Employees. |
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Initial Incentive Award: |
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Moon Sub shall grant
the Key Management Team and the Additional Employees at the Effective Time
restricted Equity Interests in Moon Sub (the “Initial Incentive Award”) in an
amount not to exceed their share of a total pool which will not exceed
$12 million in lieu of the share options, restricted shares and/or
performance units that the Company would have awarded to the Key Management
Team and other Company employees in early 2006 in the ordinary course,
consistent with past practices. |
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Right of First Refusal: |
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The Key Management Team
shall have a right of refusal (the “Right of First Refusal”) which shall
entitle them as a group to elect to purchase any Equity Interests of a member
of the Key Management Team and any of the Additional Employees that would
otherwise be purchased by Moon pursuant to the terms hereof. |
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Distributions: |
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Cash distributions made
by Moon Sub to holders of Equity Interests shall be made on a pro rata basis
based on the ratio of a holder’s total investment in Moon Sub to the total
investment of all holders of Equity Interests during any period all holders
of Equity Interests have achieved an IRR less than or equal to 9%. |
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Tax Distributions: |
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Unless otherwise prohibited by the terms of the Company’s debt obligations, in each fiscal year or within 90 days thereafter, Moon Sub shall distribute cash to the holders of Equity Interests in an amount at least equal to the federal income tax liability that would be payable with respect to Moon Sub’s taxable income in respect of such fiscal year if all members of Moon Sub were individuals and based on the marginal tax rate in the highest income bracket, as may be determined from time to time under applicable tax law, as determined in good faith by the Board of Moon Sub in its sole discretion. |
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Scheduled Liquidity Events: |
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Moon will provide liquidity to the holders of Equity Interests as follows: |
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• on the 5th anniversary of the Effective Time (the “Initial Payout Date”), each member of the Key Management Team and each of the Additional Employees will be entitled at any time during the following 60-day period (the “Initial Payout Period”) by notice to Moon to sell up to 50% of his Equity Interests in the Company, including any |
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RECP Equity Interests (as defined below) awarded under the Retention Equity Compensation Plan (collectively, the “Put Interests”) to Moon at a purchase price equal to Fair Market Value; |
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• on the 7.5-year anniversary of the Effective Time (the “Second Payout Date”), each member of the Key Management Team and each of the Additional Employees will be entitled at any time during the following 60-day period by notice to Moon to sell up to such portion of the Put Interests that, when added to the Put Interests sold prior to the expiration of the Initial Payout Period, equals 75% of his Put Interests (i.e., such member will retain at least 25% of his Put Interests) to Moon at a purchase price equal to Fair Market Value; and |
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• on the 10th anniversary of the Effective Time (the “Final Payout Date”), each member of the Key Management Team and each of the Additional Employees will be entitled at any time during the following 60-day period by notice to Moon to sell all of the member’s remaining Put Interests, to Moon at a purchase price equal to Fair Market Value. |
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IRR: |
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Calculated based on the aggregate equity capital invested (including transaction costs) in the Company and actual cash distributed by the Company, determined on a quarterly compounded basis. |
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Fair Market Value: |
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Fair Market Value will be determined by the Board calculated on a going concern basis based upon an independent valuation report obtained by the Board (which report the CEO and CFO will have an opportunity to review and comment on before such report becomes final) and taking into account prior valuations provided to the equity holders of Moon Sub and such other factors as the Board determines to be appropriate; provided, however, that with respect to a Scheduled Liquidity Event on the Second Payout Date or Final Payout Date, the Key Management Team shall be entitled to choose a second valuation firm to prepare an independent valuation report for purposes of determining Fair Market Value. The governing documents of Moon Sub will set forth the process for determining Fair Market Value in the event the second valuation firm does not agree with the Fair Market Value as determined by the Board. |
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Board Composition: |
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Moon Sub and the
Company will have the same board of directors or equivalent body (the “Board”).
The Board will consist of seven members, each with one vote on all matters
considered. The Board will govern the activities of Moon Sub and the Company. |
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up to two observers entitled to attend all Board meetings. |
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Moon has the right to
replace any Board member, including X. Xxxxxx and X. Xxxxxx in the event
their employment is terminated; provided, however, that any
board replacement for X. Xxxxxx and/or X. Xxxxxx shall be a member of the
Company’s senior management team. Moon’s right to designate Board members is
transferable, in whole or in proportionate part, to “affiliated entities” and
to entities acquiring at least 20% of Moon Sub’s equity interest. |
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Board Committees: |
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The Board will have an
investment committee (currently known as the Asset Allocation Committee)
comprised of X. Xxxxxx and X. Xxxxxx (to the extent they serve on the full
Board) and three Moon designees. All investment committee action will require
approval of a majority of the committee members. |
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Exclusivity: |
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Moon and its affiliates will be permitted to engage in and own interests in other business ventures of any type or description, individually or with others, including business ventures in competition with the Company and will have no obligation to present corporate opportunities to the Company, notwithstanding any fiduciary or other obligations that would otherwise apply. |
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Restrictions on Transfer: |
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Except as expressly set forth herein and in the Employment Agreement Term Sheet, management equity holders are not permitted to transfer any Equity Interest in Moon Sub other than customary permitted transfers upon |
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death or for estate planning purposes. |
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Moon is permitted to transfer all or a portion of its Equity Interests at any time. |
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Drag-Along: |
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If Moon proposes to sell all or a portion of its Equity Interests in Moon Sub to an unaffiliated third party resulting in a Change in Control (as defined in the Employment Agreement Term Sheet), it will have the right to drag along any other members of Moon Sub in the transaction. The non-dragging member or members will be dragged along in the same proportion and on the same terms as those applicable to Equity Interests held by the dragging member or group of members (including proportionate responsibility for customary indemnities made or other customary liabilities reasonably incurred in connection with any such sale). |
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Tag-Along: |
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If Moon, together with any of its affiliates, proposes to transfer all or a portion of its Equity Interest in Moon Sub to an unaffiliated third party resulting in a Change in Control and Moon has not exercised its drag-along right, the management equity holders will have tag along rights. The tagging equity holders will tag-along in the same proportion and on the same terms as those applicable to Equity Interests held by Moon (including proportionate responsibility for any indemnities or other liabilities reasonably incurred in connection with any such sale). |
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Equity Sales: |
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In the event that any
management member’s employment with the Company is terminated by the Company
for Cause (as defined in the Employment Agreement Term Sheet as applicable),
such member will be required to sell and Moon Sub will be required to
purchase all, but not less than all, of the vested Equity Interests in Moon
Sub held by such management member, including vested equity interests
acquired through the Retention Equity Compensation Plan, at the lesser of
Fair Market Value and the purchase price paid for such Equity Interest payable
within 60 days of such termination, with Fair Market Value based on the most
recent Fair Market Value determination made by the Board. |
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made by the Board if the most recent determination was made more than 6 months preceding such termination or non-renewal) and if such put option is not exercised then Moon Sub will have a call option to purchase on the next Scheduled Liquidity Event all, but not less than all, of the vested Equity Interests in Moon Sub held by such management member, including vested Equity Interests acquired through the Retention Equity Compensation Plan, at Fair Market Value determined at the next Scheduled Liquidity Event. |
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In the event that any management member’s employment is terminated by such member without Good Reason or as a result of such management member’s death or disability, such member will be required to sell and Moon Sub will be required to purchase all, but not less than all, of the vested Equity Interests in Moon Sub held by such management member, including vested Equity Interests acquired through the Retention Equity Compensation Plan, at Fair Market Value based on the most recent Fair Market Value determination made by the Board if made within the preceding six months (or such purchase will be made promptly after and based upon the next Fair Market Value determination made by the Board if the most recent determination was made more than six months preceding such termination, death or disability). |
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Additional Capital: |
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In the event the Board determines that additional equity is necessary to fund Moon Sub and the Company, Moon Sub will offer the right to acquire such additional equity to all of the members on a pari passu basis, prior to issuing any additional equity to any person, and such additional offered equity shall be membership interests having rights that are pari passu with the rights of the Equity Interests. In the event any member elects not to participate in such equity raising event at all or up to such member’s pro rata allocation, for any reason, such member will be diluted on a pro rata and not punitive basis. If none of the existing members elects to make an additional equity investment in Moon Sub, or if certain, but not all, existing members of Moon Sub electing to participate in an additional equity investment do not contribute sufficient additional equity beyond their original pro rata shares (subject, in the case of unexercised pro rata shares of Key Management, to the Right of First Refusal) to satisfy Moon Sub’s total equity requirements as determined by the Board, the Board will have the authority to seek investment from an unaffiliated third party to fulfill such unfunded equity requirements on such terms as the Board determines are reasonably acceptable and all members will be diluted on a pari passu basis as a result of the unaffiliated third-party equity investment. There will be no other anti-dilution protection provided to the members of Moon Sub. |
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Voting: |
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Holders of Equity Interests will not have voting rights on any matters other than to approve a merger or consolidation of Moon Sub and with respect to other matters required by law. All such matters shall be approved by a |
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majority-in-interest of the members of Moon Sub. Amendment of the Operating Agreement of Moon Sub will require unanimous approval of the Board and approval of a majority-in-interest of the members except that without the approval of the affected member, no amendment may increase the liability of such member beyond the liability expressly set forth in the operating agreement, decrease the percentage interest of the member (except as provided by the terms set forth herein), obligate the member to make any additional capital contribution, change the method of allocations or distributions payable to the member or otherwise materially change the rights or obligations of such member. |
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REIT Status: |
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The parties contemplate that the Company may elect to “de-REIT” and elect to be taxed as a partnership under the Internal Revenue Code. Any such decision will be subject to Board approval. If the Company does not elect to de-REIT immediately following the closing of the acquisition of the Company by Moon Sub, the Company will issue equity interests to employees of the Company and/or an affiliate of Moon to satisfy the 100 shareholder requirement applicable to real estate investment trusts under the Internal Revenue Code. |
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Termination: |
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The provisions set forth in this Section I will terminate (i) upon the written consent of all of the members of Moon Sub, (ii) at such time as Moon Sub has only one member or (iii) upon a public offering of Moon Sub’s or the Company’s equity interests; provided, however, that the provisions set forth above under “Distributions” will not terminate in the event of a public offering of Moon Sub’s or the Company’s equity interests unless such public offering results in a Change in Control. |
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II. Management Incentive Plan (“MIP”)
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Purpose: |
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To assist the Company in attracting and retaining key employees and to provide such persons with long-term incentives and rewards for superior performance and maximizing shareholder value. |
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Participants: |
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The participants (the “Participants”)
in the MIP as of the Effective Time (the “Effective Date”) shall be: (i) members
of the Key Management Team, and (ii) such other key employees of the
Company who are selected from time to time by the CEO and CFO of the Company
to participate in the MIP, are awarded MIP Units and are approved by the
Board or an authorized committee thereof (the “Board”). |
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MIP Units Available Under the MIP: |
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Prior to closing, the
Board will determine the total number of MIP Units available for allocation
under the MIP. |
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and the denominator of which is the total MIP Units awarded under the MIP as of such date. |
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Unawarded MIP Units Payment: |
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To the extent that there are any MIP Units that have not been awarded as of the Distribution Date of any MIP Distribution, Participants will be eligible to receive an additional payment equal to the portion of the product of (i) the MIP Distribution attributable to such unawarded MIP Units times (ii) a ratio of (x) a Participant’s total MIP Units awarded as of such Distribution Date and (y) the total number of MIP Units awarded under the MIP as of such Distribution Date. |
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Scheduled MIP Distributions: |
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The Company will provide liquidity to holders of MIP Units as follows: |
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• on the Initial Payout Date, Participants will be entitled to receive a payout by the Company pursuant to the terms of the MIP equal to 50% of the MIP Distribution (if any) that would be payable with respect to a Participant’s MIP Units upon a hypothetical sale of the Company at Fair Market Value, provided, that the Target IRR were achieved upon such hypothetical sale and, provided further, that the MIP Distribution shall be calculated based solely on the 15% MIP Distribution; |
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• on the Second Payout Date, Participants will be entitled to receive a payout by the Company pursuant to the terms of the MIP equal to 62.5% of the MIP Distribution (if any) that would be payable with respect to a Participant’s MIP Units upon a hypothetical sale of the Company at Fair Market Value, provided, that the Target IRR were achieved upon such hypothetical sale and taking into account any and all prior payments made under the MIP and, provided further, that the MIP Distribution shall be calculated based solely on the 15% MIP Distribution; and |
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• on the Final Payout Date, Participants will be entitled to receive payout by the Company pursuant to the terms of the MIP equal to 100% of the MIP Distribution (if any) that would be payable with respect to a Participant’s MIP Units upon a hypothetical sale of the Company at Fair Market Value, provided, that the Target IRR were achieved upon such hypothetical sale and taking into account any and all prior payments made under the MIP and, provided further, that the MIP Distribution shall be calculated based solely on the 15% MIP Distribution. |
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Participants may also be entitled to receive an Unawarded MIP Units Payment as of the Initial Payout Date, Second Payout Date or Final Payout Date, as applicable. |
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Voting Rights: |
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A Participant will have no rights of ownership (e. g, voting, inspection or standard member/shareholder rights, etc.) with respect to the equity |
B-10
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of the Company. |
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Forfeited MIP Units: |
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As provided in the MIP,
any or all of a Participant’s MIP Units may be subject to forfeiture upon
termination of employment, and effective as of such termination date, the
Participant will have no further rights under the MIP with respect to such
forfeited MIP Units. |
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Termination of Employment Without Cause or for Good Reason: |
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Upon termination of a
Participant’s employment without Cause or for Good Reason, subject to the
Participant’s execution and non-revocation of a release in a form reasonably
satisfactory to the Company with all periods for revocation expired, the
Participant shall vest in the Participant’s MIP Units in an amount equal to (i) the
number of MIP Units awarded times (ii) a ratio (not to exceed one (1))
of (x) the number of years of employment following the Effective Time to (y)
five (5) years and all remaining MIP Units (and fractional portions
thereof) will be forfeited. |
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Voluntary Termination of Employment without Good Reason: |
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If a Participant
terminates employment without Good Reason prior to the Initial
Payout Date, the Participant will forfeit all of the Participant’s MIP Units
and will have no further rights under the MIP. |
B-11
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Following such payment, in accordance with the terms of the MIP, the Participant will not be entitled to any further payments and will have no further rights under the MIP. |
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Death/Disability: |
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In the case of a
Participant’s death or Disability, the Participant (or Participant’s estate
in the event of the Participant’s death) shall vest at the next vesting
level, and all remaining unvested MIP Units (and fractional portions thereof)
will be forfeited. |
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Change in Control: |
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Participants will fully vest in all MIP Units awarded. |
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Termination of Employment for Cause: |
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In the case of termination of a Participant’s employment for Cause, all MIP Units held by the Participant will be immediately forfeited, and the Participant will have no further rights under the MIP. |
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Administration/Governance: |
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The MIP shall be
administered by the Board or delegated committee thereof; all decisions will
be in made in the sole and final discretion of the Board. Notwithstanding
anything in the MIP to the contrary, the Board or delegated committee may
accelerated the vesting of a Participant’s unvested MIP Units following
termination of the Participant’s employment. |
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Plan Term: |
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10 years from the Effective Date. |
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Withholding: |
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The Company may withhold from any payment due to or transfer made under any compensation or other amount owing to a Participant the amount of any applicable withholding taxes in respect of the MIP Units. |
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Definition of Cause: |
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“Cause” shall have the
meaning set forth in a Participant’s Employment Agreement Term Sheet. |
B-12
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Change in Control: |
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“Change in Control”
shall have the meaning set forth in a Participant’s Employment Agreement Term
Sheet. |
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Definition of Good Reason: |
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“Good Reason” shall
have the meaning set forth in a Participant’s Employment Agreement Term
Sheet. |
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Section 409A Compliance: |
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The MIP is intended to
comply and shall be administered in a manner that is intended to comply with Section 409A
of the Code and shall be construed and interpreted in accordance with such
intent; to the extent that a payment and/or benefit is subject to Section 409A
of the Code, it shall be paid in a manner that will comply with Section 409A
of the Code, including proposed, temporary or final regulations or any other
guidance issued by the Secretary of the Treasury and the Internal Revenue
Service with respect thereto (the “Guidance”). |
B-13
III. Retention Equity Compensation Plan
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Key employees of the Company (other than the CEO and CFO) who are selected by the CEO and CFO of the Company and are approved by the Board to participate in the Retention Equity Compensation Plan (the “RECP). |
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Equity Interests Available Under the RECP: |
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Restricted shares of Equity Interests of Moon Sub or restricted equity-based interests of the Company as mutually agreed to by the CEO, CFO and Moon (“RECP Equity Interests”) valued at $10 million as of the Effective Time will be reserved for issuance under the RECP to Participants, as determined by the Board after receiving recommendations from the CEO and CFO of the Company. |
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Vesting Schedule: |
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Awards of RECP Equity Interests may be subject to forfeiture provisions and other conditions as set forth in the RECP. |
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Termination of Employment: |
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In the case of termination of a Participant’s
employment for Cause, all RECP Equity Interests held by the Participant will
be immediately forfeited, and the Participant will have no further rights
under the RECP. |
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Administration: |
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The RECP shall be administered by the Board; all decisions will be in made in the sole and final discretion of the Board. |
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Plan Term: |
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10 years from the Effective Time. |
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Withholding: |
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The Company may withhold from any payment due to or transfer made under any compensation or other amount owing to a Participant the amount of any applicable withholding taxes in respect of the RECP Equity Interests. |
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Definition of Cause: |
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“Cause” has the meaning set forth in such
Participant’s Employment Agreement Term Sheet, as applicable. |
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Section 409A Compliance: |
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The RECP is intended to comply and shall be administered in a manner that is intended to comply with Section 409A of the Code and shall be construed and interpreted in accordance with such intent; to the extent that a payment and/or benefit is subject to Section 409A of the Code, it shall be paid in a manner that will comply with Section 409A of the Code, including proposed, temporary or final regulations or any other guidance |
B-14
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issued by the Secretary of the Treasury and the Internal Revenue Service with respect thereto (the “Guidance”). |
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Any provision of the RECP that would cause a payment and/or benefit to fail to satisfy Section 409A of the Code shall have no force and effect until amended to comply with Code Section 409A (which amendment may be retroactive to the extent permitted by the Guidance). |
B-15
Exhibit C
Job Description
President and Chief Financial Officer
POSITION SUMMARY:
Evaluates and implements all company business strategies, policies and practices to maximize share value, including the active collaboration in the planning, negotiation, and reporting of all significant investment, disposition and capital transactions.
RESPONSIBILITIES: (include but are not limited to)
• Directs the strategic analysis of all proposed company activity, including investment, disposition, operating and capital plans
• Participates with real estate transactions in soliciting, planning, and completing material investments and dispositions
• Initiates and directs the execution of all capital transactions
• Directs the finance, accounting, legal, and administrative functions of the company
• Accountability for corporate governance with statutory personal liability for financial reporting
• Chief Executive with administrative responsibility for all company affiliates, including investment joint ventures
• Develops and maintains the company’s relationship with existing or potential capital sources
• Develops and maintains the company’s relationship with investment analysts
• Develops and maintains the company’s relationship with the rating agencies
• Other duties as assigned
C-1
Key
Management Team
Schedule
to Xxxxxxx X. Xxxxxx and Xxxx X. Xxxxxx Employment Agreement Term Sheets
Xxx Xxxxxxx
Xxxx Xxxxx
Xxx Xxxxxx
Rockford Xxxxxx
Xxxx Xxxxx
Xxxx Xxxxx
Xxxx Xxxxxx
Xxxx Xxxxxxxx
Xxxxx Xxxxxxxx
Xxxxx Xxxxxxxx
S-1
