LONG TERM INCENTIVE PLAN UNIT VESTING AGREEMENT Under the Asset Capital Corporation, Inc. 2005 Equity Incentive Plan (Officers and Employees)
Exhibit 10.7
LONG TERM INCENTIVE PLAN
UNIT VESTING AGREEMENT
UNIT VESTING AGREEMENT
| Name of Grantee: | ||||||
| No. of LTIP Units: | ||||||
| Grant Date: | , 200 | |||||
| Final Acceptance Date: |
Pursuant to the Asset Capital Corporation, Inc. 2005 Equity Incentive Plan (the “Plan”) as
amended through the date hereof and the First Amended and Restated Agreement of Limited
Partnership, to be dated as of the Closing Date (as defined below) (the “Partnership Agreement”),
of Asset Capital Partners, L.P., a Delaware limited partnership (the “Partnership”), Asset Capital
Corporation, Inc., a Maryland corporation (the “Company”), through its wholly owned subsidiary ACC
GP, LLC, a Delaware limited liability company and the general partner of the Partnership, for the
provision of services to or for the benefit of the Partnership in a partner capacity or in
anticipation of being a partner, hereby grants to the Grantee named above an Other Equity-Based
Award (an “Award”) in the form of, and by causing the Partnership to issue to the Grantee named
above, a Partnership Interest (as defined in the Partnership Agreement, as amended) having the
rights, voting powers, restrictions, limitations as to distributions, qualifications and terms and
conditions of redemption and conversion set forth herein and in the Partnership Agreement, such
Partnership Interest to be expressed as a number of Partnership Units (as defined in the
Partnership Agreement) which shall be referred to as Long Term Incentive Plan Units (“LTIP Units”).
Upon acceptance of this Long Term Incentive Plan (“LTIP”) Unit Vesting Agreement (this
“Agreement”), the Grantee shall receive, effective as of the Closing Date, the number of LTIP Units
specified above, subject to the restrictions and conditions set forth herein and in the Partnership
Agreement.
1. Acceptance of Agreement. The Grantee shall have no rights with respect to this
Agreement unless he or she shall have accepted this Agreement prior to the close of business on the
Final Acceptance Date specified above by (i) signing and delivering to the Partnership a copy of
this Agreement and (ii) unless the Grantee is already a Limited Partner (as defined in the
Partnership Agreement), signing, as a Limited Partner, and delivering to the Partnership a
counterpart signature page to the Partnership Agreement (attached hereto as Annex A). Upon
acceptance of this Agreement by the Grantee, the Partnership Agreement shall be amended to reflect
the issuance to the Grantee of the LTIP Units so accepted, effective as of the Closing Date.
Thereupon, the Grantee shall have all the rights of a Limited Partner of the Partnership with
respect to the number of LTIP Units specified above, as set forth in the Partnership Agreement,
subject, however, to the restrictions and conditions specified in Section 2 below.
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2. Restrictions and Conditions.
(a) The records of the Partnership evidencing the LTIP Units granted herein shall bear an
appropriate legend, as determined by the Partnership in its sole discretion, to the effect that
such LTIP Units are subject to restrictions as set forth herein and in the Partnership Agreement.
(b) LTIP Units granted herein may not be sold, assigned, transferred, pledged or otherwise
encumbered or disposed of by the Grantee prior to vesting.
(c) If the Grantee’s employment with the Company is voluntarily or involuntarily terminated
for any reason prior to vesting of the LTIP Units granted herein, the Partnership shall have the
right, at the discretion of the Committee, to forfeit such LTIP Units from the Grantee or the
Grantee’s legal representative. The Partnership must exercise such right of forfeiture by written
notice to the Grantee or the Grantee’s legal representative not later than 90 days following such
termination of employment.
3. Vesting of LTIP Units. The restrictions and conditions in Section 2 of
this Agreement shall lapse on the Vesting Date or Dates specified in the following schedule, so
long as the Grantee remains an employee of the Company or an affiliate of the Company from the
Grant Date until such Vesting Date or Dates. If a series of Vesting Dates is specified, then the
restrictions and conditions in Section 2 shall lapse only with respect to the percentage of
LTIP Units accepted by the Grantee hereunder that is specified as vested on such date.
| Fraction of | ||||
| LTIP Units Vested | Vesting Date | |||
1/3 |
________ ___, 200_ | |||
1/3 |
________ ___, 200_ | |||
1/3 |
________ ___, 200_ | |||
Subsequent to such Vesting Date or Dates, the LTIP Units on which all restrictions and conditions
have lapsed shall no longer be deemed restricted.
4. Acceleration of Vesting in Special Circumstances. If (i) the Grantee ceases to be
an employee of the Company or an affiliate of the Company by reason of death, or incapacity due to
physical or mental illness or disability which qualifies the Grantee to receive benefits under the
Company’s long-term disability plan or (ii) a Change of Control (as defined in Section 1.06
of the Plan) occurs, any restrictions and conditions on all LTIP Units subject to this Award shall
be deemed waived by the Committee and all LTIP Units granted hereby shall automatically become
fully vested.
5. Merger-Related Action. In contemplation of and subject to the consummation of a
consolidation or merger or sale of all or substantially all of the assets of the Company in
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which outstanding shares of common stock are exchanged for securities, cash, or other property of
an unrelated corporation or business entity or in the event of a liquidation of the Company (in
each case, a “Transaction”), the Board of Directors of the Company, or the board of directors of
any corporation assuming the obligations of the Company (the “Acquiror”), may, in its discretion,
take any one or more of the following actions, as to the outstanding LTIP Units subject to this
Award: (i) provide that such LTIP Units shall be assumed or equivalent awards shall be
substituted, by the acquiring or succeeding corporation (or an affiliate thereof), and/or (ii) upon
prior written notice to the LTIP Unitholders (as defined in the Partnership Agreement) of not less
than ___, provide that such LTIP Units shall terminate immediately prior to the
consummation of the Transaction. The right to take such actions (each, a “Merger-Related Action”)
shall be subject to the following limitations and qualifications:
(a) if all LTIP Units awarded to the Grantee hereunder are eligible, as of the time of the
Merger-Related Action (and giving effect to the anticipated consummation of the OP Unit Transaction
as provided in Section 4.05 of the Partnership Agreement), for conversion into OP Units (as
defined in the Partnership Agreement) and the Grantee is afforded the opportunity to effect such
conversion and receive, in consideration for the OP Units into which his or her LTIP Units shall
have been converted, the same kind and amount of consideration as other holders of OP Units in
connection with the Transaction, then Merger-Related Action of the kind specified in (i) or (ii)
above shall be permitted and available to the Company and the Acquiror;
(b) if some or all of the LTIP Units awarded to the Grantee hereunder are not, as of the time
of the Merger-Related Action, so eligible for conversion into OP Units, and the acquiring or
succeeding entity is itself, or has a subsidiary which is organized as a partnership or limited
liability company (consisting of a so-called “UPREIT” or other structure substantially similar in
purpose or effect to that of the Company and the Partnership), then Merger-Related Action of the
kind specified in (i) above must be taken by the Acquiror with respect to all LTIP Units subject to
this Award which are not so convertible at the time, whereby all such LTIP Units covered by this
Award shall be assumed by the acquiring or succeeding entity, or equivalent awards shall be
substituted by the acquiring or succeeding entity, and the acquiring or succeeding entity shall
preserve with respect to the assumed LTIP Units or any securities to be substituted for such LTIP
Units, as far as reasonably possible under the circumstances, the distribution, special allocation,
conversion and other rights set forth in the Partnership Agreement for the benefit of the holders
of LTIP Units; and
(c) if some or all of the LTIP Units awarded to the Grantee hereunder are not, as of the time
of the Merger-Related Action, so eligible for conversion into OP Units, and after exercise of
reasonable commercial efforts the Company or the Acquiror is unable to treat the LTIP Units in
accordance with Section 5(b), then Merger-Related Action of the kind specified in (ii)
above must be taken by the Company or the Acquiror, in which case such action shall be subject to a
provision that the settlement of the terminated award of LTIP Units which are not convertible into
OP Units requires a payment of the same kind and amount of consideration payable in connection with
the Transaction to a holder of the number of OP Units into which the LTIP Units to be terminated
could be converted (including the right to make elections as to the type of consideration) if the
Transaction were of a nature that permitted a revaluation of the
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Grantee’s capital account balance under the terms of the Partnership Agreement, as determined by
the Committee in good faith in accordance with the Plan.
6. Distributions. Distributions on the LTIP Units shall be paid currently to the
Grantee in accordance with the terms of the Partnership Agreement. The right to distributions set
forth in this Section 6 shall be deemed a Dividend Equivalent Right for purposes of the
Plan.
7. Incorporation of Plan. Notwithstanding anything herein to the contrary, this
Agreement shall be subject to and governed by all the terms and conditions of the Plan.
Capitalized terms used in this Agreement shall have the meaning specified in the Plan, unless a
different meaning is specified herein.
8. Covenants. The Grantee hereby covenants as follows:
(a) So long as the Grantee holds any LTIP Units, the Grantee shall disclose to the
Partnership in writing such information as may be reasonably requested with respect to ownership of
LTIP Units as the Partnership may deem reasonably necessary to ascertain and to establish
compliance with provisions of the Internal Revenue Code of 1986, as amended (the “Code”),
applicable to the Partnership or to comply with requirements of any other appropriate taxing
authority.
(b) The Grantee hereby agrees to make an election under Section 83(b) of the Code with
respect to the LTIP Units awarded hereunder, and has delivered with this Agreement a completed,
executed copy of the election form attached hereto as Annex B. The Grantee agrees to file
the election (or to permit the Partnership to file such election on the Grantee’s behalf) within
thirty (30) days after the Closing Date with the IRS Service Center at which such Grantee files his
or her personal income tax returns, and to file a copy of such election with the Grantee’s U.S.
federal income tax return for the taxable year in which the LTIP Units are awarded to the Grantee.
(c) The Grantee hereby agrees not to dispose of the LTIP Units subject to this Award within
two years of receipt of such LTIP Units. The Partnership and the Grantee hereby agree to treat the
Grantee as the owner of the LTIP Units from the Grant Date. The Grantee hereby agrees to take into
account the distributive share of Partnership income, gain, loss, deduction, and credit associated
with the LTIP Units in computing the Grantee’s income tax liability for the entire period during
which the Grantee has the LTIP Units.
(d) The Grantee hereby recognizes that the IRS has proposed regulations under Sections 83 and
704 of the Internal Revenue Code that may affect the proper treatment of the LTIP Units for federal
tax purposes. In the event that those proposed regulations are finalized, the Grantee hereby
agrees to cooperate with the Partnership in amending this Agreement and the Partnership Agreement,
and to take such other action as may be required, to conform to such regulations.
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9. Transferability. This Agreement is personal to the Grantee, is non-assignable and
is not transferable in any manner, by operation of law or otherwise, other than by will or the laws
of descent and distribution.
10. Amendment. The Grantee acknowledges that the Plan may be amended or terminated in
accordance with Article XV thereof and that this Agreement may be amended or canceled by
the Committee, on behalf of the Partnership, for the purpose of satisfying changes in law or for
any other lawful purpose, provided that no such action shall adversely affect the Grantee’s rights
under this Agreement without the Grantee’s written consent. The provisions of Section 5 of
this Agreement applicable to the termination of the LTIP Units covered by this Award in connection
with a Transaction (as defined in Section 5 of this Agreement) shall apply, mutatis mutandi
to amendments, discontinuance or cancellation pursuant to this Section 10 or Article
XV of the Plan.
11. No Obligation to Continue Employment. Neither the Company nor any affiliate of
the Company is obligated by or as a result of the Plan or this Agreement to continue the Grantee in
employment and neither the Plan nor this Agreement shall interfere in any way with the right of the
Company or any affiliate of the Company to terminate the employment of the Grantee at any time.
12. Notices. Notices hereunder shall be mailed or delivered to the Partnership at its
principal place of business and shall be mailed or delivered to the Grantee at the address on file
with the Partnership or, in either case, at such other address as one party may subsequently
furnish to the other party in writing.
13. Governing Law. This Agreement shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Virginia, applied without regard to conflict of law
principles. The parties agree that any action or proceeding arising directly, indirectly or
otherwise in connection with, out of, related to or from this Agreement, any breach hereof or any
action covered hereby, shall be resolved within the Commonwealth of Virginia and the parties hereto
consent and submit to the jurisdiction of the federal and state courts located within the Eastern
District of Virginia. The parties hereto further agree that any such action or proceeding brought
by either party to enforce any right, assert any claim, obtain any relief whatsoever in connection
with this Agreement shall be brought by such party exclusively in federal or state courts located
within the Eastern District of Virginia.
14. Closing Date. As used herein, “Closing Date” shall mean the date of closing of
the Rule 144/Regulation S offering of common stock of Asset Capital Corporation, Inc.
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| ASSET CAPITAL CORPORATION, INC. a Maryland corporation |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| Date: | ||||
| ASSET CAPITAL PARTNERS, L.P. a Delaware limited partnership |
||||
| By: | ACC GP, LLC | |||
| a Delaware limited liability company | ||||
| and general partner of Asset Capital Partners, L.P. | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| Date: | ||||
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The foregoing agreement is hereby accepted and the terms and conditions thereof hereby agreed to by
the Grantee.
| Date: | ||||
Grantee’s Signature |
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Grantee’s name and address: |
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