EMPLOYMENT AGREEMENT
Exhibit
10.1
THIS
EMPLOYMENT AGREEMENT (this “Agreement”),
effective as of June 30, 2006 (the “Effective
Date”),
is
entered into by and between Xxxxxxx Properties, Inc., a Maryland corporation
(the “REIT”),
Xxxxxxx Properties, L.P., a Maryland limited partnership (the “Operating
Partnership”)
and
Xxxxxx Xxxxxxxxx (the “Executive”).
WHEREAS,
the REIT and the Operating Partnership (collectively, the “Company”)
desire
to employ the Executive and to enter into an agreement embodying the terms
of
such employment; and
WHEREAS,
the Executive desires to accept employment with the Company, subject to the
terms and conditions of this Agreement.
NOW,
THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Employment
Period.
Subject
to the provisions for earlier termination hereinafter provided, the Executive’s
employment hereunder shall be for a term (the “Employment
Period”)
commencing on the Effective Date and ending on the fifth anniversary of the
Effective Date (the “Initial
Termination Date”);
provided,
however,
that
this Agreement shall be automatically extended for one additional year on the
Initial Termination Date and on each subsequent anniversary of the Initial
Termination Date, unless either the Executive or the Company elects not to
so
extend the term of the Agreement by notifying the other party, in writing,
of
such election not less than sixty (60) days prior to the last day of the term
as
then in effect.
2. Terms
of Employment.
(a) Position
and Duties.
(i) During
the Employment Period, the Executive shall serve as Executive Vice-President,
Operations of the REIT and the Operating Partnership and shall perform such
employment duties as are usual and customary for such positions. During the
Employment Period, the Executive shall be a member of the Executive Management
Committee of the Company, which shall consist of the approximately 5 or 6 most
senior executives in the Company, and the Executive shall report directly at
all
times to Xxxxxx X. Xxxxxxx III. The Executive Management Committee shall, as
a
group, consider, determine and direct all major policies, strategies and
initiatives of the Company and its affiliates. The Executive shall have
significant interface with the Board of Directors of the REIT (the “Board”),
investors, analysts, lenders and other major stakeholders in the Company. At
the
Company’s request, the Executive shall serve the Company and/or its subsidiaries
and affiliates in other offices and capacities in addition to the foregoing.
In
the event that the Executive, during the Employment Period, serves in any one
or
more of such additional capacities, the Executive’s compensation shall not be
increased beyond that specified in Section 2(b) of this Agreement. In addition,
in the event the Executive’s service in one or more of such additional
capacities is terminated, the Executive’s compensation, as specified in Section
2(b) of this Agreement, shall not be
diminished
or reduced in any manner as a result of such termination for so long as the
Executive otherwise remains employed under the terms of this
Agreement.
(ii) During
the Employment Period, and excluding any periods of vacation and sick leave
to
which the Executive is entitled, the Executive agrees to devote substantially
full-time attention and time during normal business hours to the business and
affairs of the Company. During the Employment Period it shall not be a violation
of this Agreement for the Executive to (A) serve on corporate, civic or
charitable boards or committees, (B) deliver lectures, fulfill speaking
engagements or teach at educational institutions or (C) manage his personal
investments, so long as such activities do not significantly interfere with
the
performance of the Executive’s responsibilities as an employee of the Company in
accordance with this Agreement. It is expressly understood and agreed that
to
the extent that any such activities have been conducted by the Executive prior
to the Effective Date, the continued conduct of such activities (or the conduct
of activities similar in nature and scope thereto) subsequent to the Effective
Date shall not thereafter be deemed to interfere with the performance of the
Executive’s responsibilities to the Company; provided that no such activity that
violates any written non-competition agreement between the parties shall be
permitted.
(b) Compensation,
Benefits, Etc.
(i) Base
Salary.
During
the Employment Period, the Executive shall receive a base salary (the
“Base
Salary”)
of
$450,000 per annum, as the same may be increased thereafter pursuant to the
Company’s normal practices for its executives. The Base Salary shall be paid at
such intervals as the Company pays executive salaries generally. During the
Employment Period, the Base Salary shall be reviewed at least annually for
possible increase in the Company’s discretion. Any increase in Base Salary shall
not serve to limit or reduce any other obligation to the Executive under this
Agreement. The Base Salary shall not be reduced after any such increase and
the
term “Base Salary” as utilized in this Agreement shall refer to Base Salary as
so increased.
(ii) Annual
Bonus.
In
addition to the Base Salary, the Executive shall be eligible to earn, for each
fiscal year of the Company ending during the Employment Period, an annual cash
performance bonus (an “Annual
Bonus”)
under
the Company’s bonus plan or plans applicable to senior executives; provided,
however,
that
any Annual Bonus payable with respect to the partial fiscal year in which the
Effective Date occurs shall be pro rated based on the number of days of the
Executive’s employment with the Company during such year. The Executive’s target
Annual Bonus shall be 100% of his Base Salary actually paid for such year and
his maximum Annual Bonus shall be 200% of his Base Salary actually paid for
such
year, but the actual Annual Bonus shall be determined on the basis of the
Executive’s and/or the Company’s attainment of objective financial or other
operating criteria established in accordance with the terms and conditions
applicable to similarly-situated executives of the Company under such bonus
plan(s); provided,
however,
that
notwithstanding the foregoing, the Annual Bonus payable to the Executive for
the
Company’s first full fiscal year during the Employment Period shall not be less
than 100% of the Base Salary actually paid for such year.
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(iii) Common
Stock Award.
Subject
to approval by the Compensation Committee of the Board, the REIT shall, as
of
the Effective Date, grant the Executive a number of shares of the REIT’s common
stock (the “Common
Stock Award”)
equal
to the quotient obtained by dividing (x) $500,000 by (y) the closing
trading
price of a share of the REIT’s
common
stock on the New York Stock Exchange on the Effective Date. The Common Stock
Award shall be granted to the Executive under the Amended
and Restated 2003 Incentive Award Plan of Xxxxxxx Properties, Inc., Xxxxxxx
Properties Services, Inc. and Xxxxxxx Properties, L.P. (the “Incentive
Plan”)
at a
purchase price of $0.01 per share. The Common Stock Award shall be fully vested
as of the date of grant. Consistent
with the foregoing, the
terms
and conditions of the Common Stock Award shall be set forth in an award
agreement (the “Common
Stock Award Agreement”),
substantially in the form attached hereto as Exhibit
A,
to be
entered into by the Company and the Executive which shall evidence the grant
of
the Common Stock Award.
(iv) Restricted
Stock Award.
Subject
to approval by the Compensation Committee of the Board, the REIT shall, as
of
the Effective Date, grant the Executive a number of restricted shares of the
REIT’s common stock (the “Restricted
Stock”)
equal
to the quotient obtained by dividing (x) $5,000,000 by (y) the closing
trading
price of a share of the REIT’s
common
stock on the New York Stock Exchange on the Effective Date. The Restricted
Stock
shall be granted to the Executive under the Incentive
Plan at a purchase price of $0.01 per share. Subject to the Executive’s
continued employment with the Company, the Restricted Stock shall vest in five
equal annual installments on each of the first, second, third, fourth and fifth
anniversaries of the Effective Date. Consistent
with the foregoing, the
terms
and conditions of the Restricted Stock shall be set forth in a restricted stock
agreement (the “Restricted
Stock Agreement”),
substantially in the form attached hereto as Exhibit
B,
to be
entered into by the Company and the Executive which shall evidence the grant
of
the Restricted Stock.
(v) Performance
Award.
Subject
to approval by the Compensation Committee of the Board, the REIT shall, as
of
the Effective Date, grant the Executive a performance award on the terms and
conditions set forth in a Performance Award Agreement substantially in the
form
attached hereto as Exhibit
C.
The
Executive’s Performance Award Percentage (as defined in the Performance Award
Agreement) with respect to such award shall be equal to 8%.
(vi) Incentive,
Savings and Retirement Plans.
During
the Employment Period, the Executive shall be entitled to participate in all
other incentive plans, practices, policies and programs, and all savings and
retirement plans, practices, policies and programs, in each case that are
applicable generally to senior executives of the Company.
(vii) Welfare
Benefit Plans.
During
the Employment Period, the Executive and the Executive’s eligible family members
shall be eligible for participation in the welfare benefit plans, practices,
policies and programs (including, if applicable, medical, dental, disability,
employee life, group life and accidental death insurance plans and programs)
maintained by the Company for its senior executives.
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(viii)
Expenses.
During
the Employment Period, the Executive shall be entitled to receive prompt
reimbursement for all reasonable business expenses incurred by the Executive
in
accordance with the policies, practices and procedures of the Company provided
to senior executives of the Company.
(ix) Fringe
Benefits.
During
the Employment Period, the Executive shall be entitled to such fringe benefits
and perquisites as are provided by the Company to its senior executives from
time to time, in accordance with the policies, practices and procedures of
the
Company.
(x) Vacation.
During
the Employment Period, the Executive shall be entitled to paid vacation in
accordance with the plans, policies, programs and practices of the Company
applicable to its senior executives.
(xi) Compensation
Gross-Up.
The
amount of compensation payable to the Executive pursuant to Sections 2(b)(i),
(ii), (iii) and (iv) above shall be “grossed up” as necessary (on an after-tax
basis) to compensate for any additional social security withholding taxes due
as
a result of Executive’s shared employment by the Operating Partnership, the REIT
and, if applicable, any subsidiary and/or affiliate thereof.
(xii) Indemnification
Agreement.
The
parties hereby acknowledge that in connection with the execution of this
Agreement, they are entering into an Indemnification Agreement (the
“Indemnification
Agreement”)
which shall
become effective as of the Effective Date.
3. Termination
of Employment.
(a)
Death
or Disability.
The
Executive’s employment shall terminate automatically upon the Executive’s death
or Disability during the Employment Period. For purposes of this Agreement,
“Disability”
shall
mean the absence of the Executive from the Executive’s duties with the Company
on a full-time basis for 90 consecutive days or on a total of 180 days in any
12-month period, in either case as a result of incapacity due to mental or
physical illness which is determined to be total and permanent by a physician
selected by the Company or its insurers and acceptable to the Executive or
the
Executive’s legal representative.
(b) Cause.
The
Company may terminate the Executive’s employment during the Employment Period
for Cause or without Cause. For purposes of this Agreement, “Cause”
shall
mean the occurrence of any one or more of the following events unless the
Executive fully corrects the circumstances constituting Cause within a
reasonable period of time after receipt of the Notice of Termination (as defined
below):
(i) the
Executive’s willful and continued failure to substantially perform his duties
with the Company (other than any such failure resulting from the Executive’s
incapacity due to physical or mental illness or any such actual or anticipated
failure after his issuance of a Notice of Termination for Good Reason), after
a
written demand for substantial performance is delivered to the Executive by
the
Board, which
4
demand
specifically identifies the manner in which the Board believes that the
Executive has not substantially performed his duties;
(ii) the
Executive’s willful commission of an act of fraud or dishonesty resulting in
economic or financial injury to the Company;
(iii) the
Executive’s conviction of, or entry by the Executive of a guilty or no contest
plea to, the commission of a felony or a crime involving moral turpitude;
(iv) a
willful
breach by the Executive of his fiduciary duty to the Company which results
in
economic or other injury to the Company; or
(v) the
Executive’s willful and material breach of the Executive’s covenants set forth
in Section 9(a) or 9(b) hereof.
For
purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered “willful” unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive’s action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution
duly
adopted by the Board or based upon the advice of counsel for the Company shall
be conclusively presumed to be done, or omitted to be done, by the Executive
in
good faith and in the best interests of the Company. The
cessation of employment of the Executive shall not be deemed to be for Cause
unless and until there shall have been delivered to the Executive a copy of
a
resolution duly adopted by the affirmative vote of not less than two-thirds
of
the entire membership of the Board
at a
meeting of the Board called and held for such purpose (after reasonable notice
is provided to the Executive and the Executive is given an opportunity, together
with counsel for the Executive, to be heard before the Board),
finding that, in the good faith opinion of the Board,
the
Executive is guilty of any of the conduct described in Section 3(b) hereof,
and
specifying the particulars thereof in detail; provided,
that if
the Executive is a member of the Board,
the Executive shall not vote on such resolution nor shall the Executive be
counted in determining the “entire membership” of the Board.
(c) Good
Reason.
The
Executive’s employment may be terminated by the Executive for Good Reason or by
the Executive without Good Reason. For purposes of this Agreement, “Good
Reason”
shall
mean the occurrence of any one or more of the following events without the
Executive’s prior written consent, unless the Company fully corrects the
circumstances constituting Good Reason (provided such circumstances are capable
of correction) prior to the Date of Termination (as defined below):
(i) the
assignment to the Executive of any duties materially inconsistent in any respect
with the Executive’s position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as contemplated by Section
2(a) of this Agreement, or any other action by the Company which results in
a
material diminution in such position, authority, duties or responsibilities,
excluding for this purpose an isolated, insubstantial and inadvertent action
not
taken in bad faith and
5
which
is
remedied by the Company promptly after receipt of notice thereof given by the
Executive;
(ii) the
Company’s reduction of the Executive’s Base Salary or Annual Bonus opportunity,
each as in effect on the date hereof or as the same may be increased from time
to time;
(iii) the
relocation of the Company’s offices at which the Executive is principally
employed (the “Principal
Location”)
to a
location more than thirty (30) miles from such location, or the Company’s
requiring the Executive to be based at a location more than thirty (30) miles
from the Principal Location, except for required travel on the Company’s
business to an extent substantially consistent with the Executive’s present
business travel obligations;
(iv) the
Company’s failure to obtain a satisfactory agreement from any successor to
assume and agree to perform this Agreement, as contemplated in Section 10
hereof; or
(v) the
Company’s failure to cure a material breach of its obligations under the
Agreement after written notice is delivered to the Board by the Executive which
specifically identifies the manner in which the Executive believes that the
Company has breached its obligations under the Agreement and the Company is
given a reasonable opportunity to cure any such breach.
(d) Notice
of Termination.
Any
termination by the Company for Cause, or by the Executive for Good Reason,
shall
be communicated by Notice of Termination to the other parties hereto given
in
accordance with Section 12(c) of this Agreement. For purposes of this Agreement,
a “Notice
of Termination”
means
a
written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination
of
the Executive’s employment under the provision so indicated and (iii) if the
Date of Termination (as defined below) is other than the date of receipt of
such
notice, specifies the termination date (which date shall be not more than thirty
days after the giving of such notice). The failure by the Executive or the
Company to set forth in the Notice of Termination any fact or circumstance
which
contributes to a showing of Good Reason or Cause shall not waive any right
of
the Executive or the Company, respectively, hereunder or preclude the Executive
or the Company, respectively, from asserting such fact or circumstance in
enforcing the Executive’s or the Company’s rights hereunder.
(e) Date
of Termination.
“Date
of Termination”
means
(i) if the Executive’s employment is terminated by the Company for Cause, or by
the Executive for Good Reason, the date of receipt of the Notice of Termination
or any later date specified therein (which date shall not be more than 30 days
after the giving of such notice), as the case may be, (ii) if the Executive’s
employment is terminated by the Company other than for Cause or Disability,
the
Date of Termination shall be the date on which the Company notifies the
Executive of such termination, (iii) if the Executive’s employment is terminated
by the Executive without Good
6
Reason,
the Date of Termination shall be the tenth day after the date on which the
Executive notifies the Company of such termination, unless otherwise agreed
by
the Company and the Executive, and (iv) if the Executive’s employment is
terminated by reason of death or Disability, the Date of Termination shall
be
the date of death or Disability of the Executive, as the case may
be.
4. Obligations
of the Company upon Termination.
(a) Without
Cause or For Good Reason.
If,
during the Employment Period, the Company shall terminate the Executive’s
employment without Cause or the Executive shall terminate his employment for
Good Reason:
(i)
The
Executive shall be paid, in a single lump sum payment within 60 days after
the
Date of Termination, the aggregate amount of (A) the Executive’s earned but
unpaid Base Salary and accrued but unpaid vacation pay through the Date of
Termination, and any Annual Bonus required to be paid to the Executive pursuant
to Section 2(b)(ii) above for any fiscal year of the Company that ends on
or
before the Date of Termination to the extent not previously paid (the
“Accrued Obligations”), and (B) one and one-half (1.5) (the “Severance
Multiple”) times the sum of (x) the Base Salary in effect on the Termination
Date plus (y) the average Annual Bonus received by the Executive for the
three
complete fiscal years (or such lesser number of years as the Executive has
been
employed by the Company) of the Company immediately prior to the Termination
Date (the “Severance Amount”);
(ii) At
the
time when annual bonuses are paid to the Company’s other senior executives for
the fiscal year of the Company in which the Date of Termination occurs,
but
in no
event later than the later of (a) the 15th
day of
the third month following the Executive’s taxable year which includes the Date
of Termination, and (b) the 15th
day of
the third month following the Company’s taxable year which includes the Date of
Termination, the
Executive shall be paid an Annual Bonus in an amount equal to the product of
(x)
the amount of the Annual Bonus to which the Executive would have been entitled
if the Executive’s employment had not been terminated, and (y) a fraction, the
numerator of which is the number of days in such fiscal year through the Date
of
Termination and the denominator of which is the total number of days in such
fiscal year (a “Pro-Rated
Annual Bonus”);
(iii)
Any
unvested shares of the Restricted Stock shall become immediately vested in
full;
(iv) For
a
period of years equal to the Severance Multiple, the Company shall continue
to
provide the Executive and the Executive’s eligible family members with group
health insurance coverage at least equal to that which would have been provided
to them if the Executive’s employment had not been terminated; provided,
however,
that if
the Executive becomes re-employed with another employer and is eligible to
receive group health insurance coverage under another employer’s plans, the
Company’s obligations under this Section 4(a)(iv) shall be reduced to the extent
7
comparable
coverage is actually provided to the Executive and the Executive’s eligible
family members, and any such coverage shall be reported by the Executive to
the
Company.
(v) For
a
period of not more than one year following the Date of Termination, the Company
shall, at its sole expense and on an as-incurred basis, provide the Executive
with outplacement services the scope and provider of which shall be reasonable
and consistent with industry practice for similarly situated executives;
and
(vi) To
the
extent not theretofore paid or provided, the Company shall timely pay or provide
to the Executive any vested benefits and other amounts or benefits required
to
be paid or provided or which the Executive is eligible to receive under any
plan, program, policy or practice or contract or agreement of the Company and
its affiliates (such other amounts and benefits shall be hereinafter referred
to
as the “Other
Benefits”).
Notwithstanding
the foregoing, it shall be a condition to the Executive’s right to receive the
amounts provided for in Sections 4(a)(i)(B) and 4(a)(ii), (iii), (iv) and (v)
above that the Executive execute, deliver to the Company and not revoke a
release of claims in substantially the form attached hereto as Exhibit
D.
(b) For
Cause or Without Good Reason.
If the
Executive’s employment shall be terminated by the Company for Cause or by the
Executive without Good Reason during the Employment Period, the Company shall
have no further obligations to the Executive under this Agreement other than
pursuant to Sections 7 and 8 hereof, and the obligation to pay to the Executive
the Accrued Obligations.
(c) Death
or Disability.
If the
Executive’s employment is terminated by reason of the Executive’s death or
Disability during the Employment Period:
(i) The
Accrued Obligations shall be paid to the Executive’s estate or beneficiaries or
to the Executive, as applicable, in cash within 30 days of the Date of
Termination;
(ii) 100%
of
the Executive’s annual Base Salary, as in effect on the Date of Termination,
shall be paid to the Executive’s estate or beneficiaries or to the Executive, as
applicable, in cash within 30 days following the Date of
Termination;
(iii) The
Pro-Rated Annual Bonus shall be paid to the Executive’s estate or beneficiaries
or to the Executive, as applicable, at the time when annual bonuses are paid
to
the Company’s other senior executives for the fiscal year of the Company in
which the Date of Termination occurs, but
in no
event later than the later of (a) the 15th
day of
the third month following the Executive’s taxable year which includes the Date
of Termination, and (b) the 15th
day of
the third month following the Company’s taxable year which includes the Date of
Termination;
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(iv) For
a
period of twelve months following the Date of Termination, the Executive and
the
Executive’s eligible family members shall continue to be provided with group
health insurance coverage at least equal to that which would have been provided
to them if the Executive’s employment had not been terminated; provided,
however,
that if
the Executive becomes re-employed with another employer and is eligible to
receive group health insurance coverage under another employer’s plans, the
Company’s obligations under this Section 4(c)(iv) shall be reduced to the extent
comparable coverage is actually provided to the Executive and the Executive’s
eligible family members, and any such coverage shall be reported by the
Executive to the Company; and
(v) The
Other
Benefits shall be paid or provided to the Executive on a timely
basis.
(d)
Six-Month
Delay.
Notwithstanding anything to the contrary in this Agreement, no compensation
or
benefits, including without limitation any severance payments or benefits
payable under Section 4 or 5 hereof, shall be paid to the Executive during
the
6-month period following the Executive’s “separation from service” (within the
meaning of Section 409A(a)(2)(A)(i) of the Internal Revenue Code of 1986, as
amended (the “Code”))
if
the Company determines that paying such amounts at the time or times indicated
in this Agreement would cause Executive to incur additional taxes under Section
409A of the Code. If the payment of any such amounts is delayed as a result
of
the previous sentence, then on the first day following the end of such 6-month
period, the Company shall pay the Executive a lump-sum amount equal to the
cumulative amount that would have otherwise been payable to the Executive during
such 6-month period.
5. Termination
Upon a Change in Control.
If a
Change in Control (as defined herein) occurs during the Employment Period and
the Executive’s employment is terminated (a) by the Company without Cause or by
the Executive for Good Reason, in each case within two (2) years after the
effective date of the Change in Control or (b) provided that the Executive
remains continuously employed by the Company through the one year anniversary
of
the effective date of the Change in Control (the “CIC
Anniversary Date”),
by
the Executive for any reason on or within 30 days after the CIC Anniversary
Date
(a “Change
in Control Resignation”),
then
the Executive shall be entitled to the payments and benefits provided in Section
4(a) hereof, subject to the terms and conditions thereof, except that for
purposes of this Section 5, the Severance Multiple shall equal two (2), and,
in
the event of a Change in Control Resignation, the Severance Amount and the
Pro-Rated Annual Bonus
shall be
paid to the Executive no later
than the later of (a) the 15th
day of
the third month following the Executive’s taxable year in which the
CIC
Anniversary Date occurs,
and (b)
the 15th
day of
the third month following the Company’s taxable year in which the CIC
Anniversary
Date occurs. In addition, in the event of such a termination of the Executive’s
employment, all outstanding stock options, restricted stock and other equity
awards granted to the Executive under any of the Company’s equity incentive
plans (or awards substituted therefore covering the securities of a successor
company), other than the Performance Award, shall become immediately vested
and
exercisable in full. For purposes of this Agreement, “Change
in Control”
shall
mean the occurrence of any of the following events:
9
(i) the
acquisition, directly or indirectly, by any “person” or “group” (as those terms
are defined in Sections 3(a)(9), 13(d), and 14(d) of the
Securities Exchange Act of 1934 (the “Exchange
Act”)
and
the
rules thereunder) of “beneficial ownership” (as determined pursuant to Rule
13d-3 under the Exchange Act) of securities entitled to vote generally in the
election of directors (“voting
securities”)
of the
REIT that represent 35% or more of the combined voting power of the REIT’s then
outstanding voting securities, other than
(A) an
acquisition of securities by a trustee or other fiduciary holding securities
under any employee benefit plan (or related trust) sponsored or maintained
by
the REIT or any person controlled by the REIT or by any employee benefit plan
(or related trust) sponsored or maintained by the REIT or any person controlled
by the REIT, or
(B) an
acquisition of securities by the REIT or a corporation owned, directly or
indirectly, by the stockholders of the REIT in substantially the same
proportions as their ownership of the stock of the REIT, or
(C) an
acquisition of securities pursuant to a transaction described in clause (iii)
below that would not be a Change in Control under clause (iii), or
(D) any
direct or indirect acquisition of securities by Xxxxxx X. Xxxxxxx III or his
family, or any entity controlled thereby;
Notwithstanding
the foregoing, the following event shall not constitute an “acquisition” by any
person or group for purposes of this clause (i): an acquisition of the REIT’s
securities by the REIT which causes the REIT’s voting securities beneficially
owned by a person or group to represent 35% or more of the combined voting
power
of the REIT’s then outstanding voting securities; provided,
however,
that if
a person or group shall become the beneficial owner of 35% or more of the
combined voting power of the REIT’s then outstanding voting securities by reason
of share acquisitions by the REIT as described above and shall, after such
share
acquisitions by the REIT, become the beneficial owner of any additional voting
securities of the REIT, then such acquisition shall constitute a Change in
Control;
(ii) individuals
who, as of the Effective Date, constitute the Board (the “Incumbent
Board”)
cease
for any reason to constitute at least a majority of the Board; provided,
however,
that any
individual becoming a director subsequent to the date hereof whose election
by
the REIT’s shareholders, or nomination for election by the Board, was approved
by a vote of at least a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an election contest with
respect to the election or removal of directors or other solicitation of proxies
or consents by or on behalf of a person other than the Board;
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(iii) the
consummation by the REIT (whether directly involving the REIT or indirectly
involving the REIT through one or more intermediaries) of (x) a merger,
consolidation, reorganization, or business combination or (y) a sale or
other disposition of all or substantially all of the REIT’s assets or
(z) the acquisition of assets or stock of another entity, in each case,
other than a transaction
(A) which
results in the REIT’s voting securities outstanding immediately before the
transaction continuing to represent (either by remaining outstanding or by
being
converted into voting securities of the REIT or the person that, as a result
of
the transaction, controls, directly or indirectly, the REIT or owns, directly
or
indirectly, all or substantially all of the REIT’s assets or otherwise succeeds
to the business of the REIT (the REIT or such person, the “Successor
Entity”))
directly or indirectly, at least 50% of the combined voting power of the
Successor Entity’s outstanding voting securities immediately after the
transaction, and
(B) after
which no person or group beneficially owns voting securities representing 35%
or
more of the combined voting power of the Successor Entity; provided,
however,
that no
person or group shall be treated for purposes of this clause (B) as beneficially
owning 35% or more of combined voting power of the Successor Entity solely
as a
result of the voting power held in the REIT prior to the consummation of the
transaction; or
(iv) approval
by the REIT’s shareholders of a liquidation or dissolution of the
REIT.
For
purposes of clause (i) above, the calculation of voting power shall be made
as
if the date of the acquisition were a record date for a vote of the REIT’s
shareholders, and for purposes of clause (iii) above, the calculation of voting
power shall be made as if the date of the consummation of the transaction were
a
record date for a vote of the REIT’s shareholders.
6. Non-exclusivity
of Rights.
Nothing
in this Agreement shall prevent or limit the Executive’s continuing or future
participation in any plan, program, policy or practice provided by the Company
and for which the Executive may qualify, nor shall anything herein limit or
otherwise affect such rights as the Executive may have under any contract or
agreement with the Company. Amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any plan, policy, practice
or
program of or any contract or agreement with the Company at or subsequent to
the
Date of Termination shall be payable in accordance with such plan, policy,
practice or program or contract or agreement except as explicitly modified
by
this Agreement.
7. Full
Settlement.
The
Company’s obligation to make the payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right or action
which
the Company may have against the Executive or others. In no event shall the
Executive be obligated to seek other employment or take any other action by
way
of mitigation of the
11
amounts
payable to the Executive under any of the provisions of this Agreement and
except as expressly provided, such amounts shall not be reduced whether or
not
the Executive obtains other employment. The Company agrees to pay as incurred
(within 30 days following the Company’s receipt of an invoice from the
Executive), to the full extent permitted by law, all reasonable legal fees
and
expenses which the Executive or his beneficiaries may reasonably incur as a
result of any contest (regardless of the outcome thereof) by the Company, the
Executive or others of the validity or enforceability of, or liability under,
any provision of this Agreement or any guarantee of performance thereof
(including as a result of any contest by the Executive or his beneficiaries
about the amount of any payment pursuant to this Agreement), plus in each case
interest on any delayed payment at the applicable Federal rate provided for
in
Section 7872(f)(2)(A) of the Code.
The
preceding sentence shall not apply with respect to any such contest if the
court
having jurisdiction over such contest determines that the Executive’s claim in
such contest is frivolous or maintained in bad faith.
8. Certain
Additional Payments by the Company.
(a) Anything
in this Agreement to the contrary notwithstanding and except as set forth below,
in the event it shall be determined that any Payment (as defined below) would
be
subject to the Excise Tax (as defined below), then the Executive shall be
entitled to receive an additional payment (the “Excise
Tax Gross-Up Payment”)
in an
amount such that, after payment by the Executive of all taxes (and any interest
or penalties imposed with respect to such taxes), including, without limitation,
any income taxes (and any interest and penalties imposed with respect thereto)
and Excise Tax imposed upon the Excise Tax Gross-Up Payment, the Executive
retains an amount of the Excise Tax Gross-Up Payment equal to the Excise Tax
imposed upon the Payments. Notwithstanding the foregoing provisions of this
Section 8(a), if it shall be determined that the Executive is entitled to the
Excise Tax Gross-Up Payment, but that the Parachute Value (as defined below)
of
all Payments does not exceed 110% of the Safe Harbor Amount (as defined below),
then no Excise Tax Gross-Up Payment shall be made to the Executive and the
amounts payable under this Agreement shall be reduced so that the Parachute
Value of all Payments, in the aggregate, equals the Safe Harbor Amount. The
reduction of the amounts payable hereunder, if applicable, shall be made by
first reducing the payments under Section 4(a)(i) hereof, unless an alternative
method of reduction is elected by the Executive, and in any event shall be
made
in such a manner as to maximize the Value (as defined below) of all Payments
actually made to the Executive. For purposes of reducing the Payments to the
Safe Harbor Amount, only amounts payable under this Agreement (and no other
Payments) shall be reduced. If the reduction of the amount payable under this
Agreement would not result in a reduction of the Parachute Value of all Payments
to the Safe Harbor Amount, no amounts payable under the Agreement shall be
reduced pursuant to this Section 8(a). The Company’s obligation to make Excise
Tax Gross-Up Payments under this Section 8 shall not be conditioned upon the
Executive’s termination of employment.
(b) Subject
to the provisions of Section 8(c) hereof, all determinations required to be
made under this Section 8, including whether and when an Excise Tax Gross-Up
Payment is required, the amount of such Excise Tax Gross-Up Payment and the
assumptions to be utilized in arriving at such determination, shall be made
by
such nationally recognized accounting firm as may be selected by the Company
and
reasonably acceptable to the Executive
12
(the
“Accounting
Firm”);
provided,
that
the Accounting Firm’s determination shall be made based upon “substantial
authority” within the meaning of Section 6662 of the Code. The Accounting Firm
shall provide detailed supporting calculations both to the Company and the
Executive within 15 business days of the receipt of notice from the Executive
that there has been a Payment or such earlier time as is requested by the
Company. All fees and expenses of the Accounting Firm shall be borne solely
by
the Company. Any Excise Tax Gross-Up Payment, as determined pursuant to this
Section 8, shall be paid by the Company to the Executive within five days of
the
receipt of the Accounting Firm’s determination. Any determination by the
Accounting Firm shall be binding upon the Company and the Executive, unless
the
Company obtains an opinion of outside legal counsel, based upon at least
“substantial authority” within the meaning of Section 6662 of the Code, reaching
a different determination, in which event such legal opinion shall be binding
upon the Company and the Executive. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the initial determination
by the Accounting Firm hereunder, it is possible that Excise Tax Gross-Up
Payments that will not have been made by the Company should have been made
(the
“Underpayment”),
consistent with the calculations required to be made hereunder. In the event
the
Company exhausts its remedies pursuant to Section 8(c) hereof and the Executive
thereafter is required to make a payment of any Excise Tax, the Accounting
Firm
shall determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the benefit of
the
Executive.
(c) The
Executive shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by the Company
of
the Excise Tax Gross-Up Payment. Such notification shall be given as soon as
practicable, but no later than 10 business days after the Executive is informed
in writing of such claim. The Executive shall apprise the Company of the nature
of such claim and the date on which such claim is requested to be paid. The
Executive shall not pay such claim prior to the expiration of the 30-day period
following the date on which the Executive gives such notice to the Company
(or
such shorter period ending on the date that any payment of taxes with respect
to
such claim is due). If the Company notifies the Executive in writing prior
to
the expiration of such period that the Company desires to contest such claim,
the Executive shall:
(i) give
the
Company any information reasonably requested by the Company relating to such
claim,
(ii) take
such
action in connection with contesting such claim as the Company shall reasonably
request in writing from time to time, including, without limitation, accepting
legal representation with respect to such claim by an attorney reasonably
selected by the Company,
(iii) cooperate
with the Company in good faith in order effectively to contest such claim,
and
(iv) permit
the Company to participate in any proceedings relating to such
claim;
13
provided,
however,
that
the Company shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest,
and
shall indemnify and hold the Executive harmless, on an after-tax basis, for
any
Excise Tax or income tax (including interest and penalties) imposed as a result
of such representation and payment of costs and expenses. Without limitation
on
the foregoing provisions of this Section 8(c), the Company shall control all
proceedings taken in connection with such contest, and, at its sole discretion,
may pursue or forgo any and all administrative appeals, proceedings, hearings
and conferences with the applicable taxing authority in respect of such claim
and may, at its sole discretion, either direct the Executive to pay the tax
claimed and xxx for a refund or contest the claim in any permissible manner,
and
the Executive agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided,
however,
that
any extension of the statute of limitations relating to payment of taxes for
the
taxable year of the Executive with respect to which such contested amount is
claimed to be due is limited solely to such contested amount. Furthermore,
the
Company’s control of the contest shall be limited to issues with respect to
which the Excise Tax Gross-Up Payment would be payable hereunder, and the
Executive shall be entitled to settle or contest, as the case may be, any other
issue raised by the Internal Revenue Service or any other taxing
authority.
(d) If,
after
the receipt by the Executive of an Excise Tax Gross-Up Payment, the Executive
becomes entitled to receive any refund with respect to the Excise Tax to which
such Excise Tax Gross-Up Payment relates, the Executive shall (subject to the
Company’s complying with the requirements of Section 8(c) hereof, if
applicable) promptly pay to the Company the amount of such refund (together
with
any interest paid or credited thereon after taxes applicable thereto).
(e) Notwithstanding
any other provision of this Section 8, the Company may, in its sole discretion,
withhold and pay over to the Internal Revenue Service or any other applicable
taxing authority, for the benefit of the Executive, all or any portion of any
Excise Tax Gross-Up Payment, and the Executive hereby consents to such
withholding.
(f) Any
other
liability for unpaid or unwithheld Excise Taxes shall be borne exclusively
by
the Company, in accordance with Section 3403 of the Code. The foregoing sentence
shall not in any manner relieve the Company of any of its obligations under
this
Employment Agreement.
(g) Definitions.
The
following terms shall have the following meanings for purposes of this Section
8:
(i) “Excise
Tax”
shall
mean the excise tax imposed by Section 4999 of the Code, together with any
interest or penalties imposed with respect to such excise tax.
(ii) “Parachute
Value”
of
a
Payment shall mean the present value as of the date of the change of control
for
purposes of Section 280G of the Code of the portion of such Payment that
constitutes a “parachute payment” under Section 280G(b)(2) of the
14
Code,
as
determined by the Accounting Firm for purposes of determining whether and to
what extent the Excise Tax will apply to such Payment.
(iii) A
“Payment”
shall
mean any payment or distribution in the nature of compensation (within the
meaning of Section 280G(b)(2) of the Code) to or for the benefit of the
Executive, whether paid or payable pursuant to this Agreement or
otherwise.
(iv) The
“Safe
Harbor Amount”
shall
mean 2.99 times the Executive’s “base amount,” within the meaning of Section
280G(b)(3) of the Code.
(v) “Value”
of
a
Payment shall mean the economic present value of a Payment as of the date of
the
change of control for purposes of Section 280G of the Code, as determined by
the
Accounting Firm using the discount rate required by Section 280G(d)(4) of the
Code.
9. Confidential
Information and Non-Solicitation.
(a) The
Executive shall hold in a fiduciary capacity for the benefit of the Company
all
secret or confidential information, knowledge or data relating to the REIT,
the
Operating Partnership, Xxxxxxx Services, Inc., a Maryland corporation, and
their
respective subsidiaries and affiliates (collectively, the “Xxxxxxx
Group”),
and
each of their respective businesses, which shall have been obtained by the
Executive during the Executive’s employment by the Company and which shall not
be or become public knowledge (other than by acts by the Executive or
representatives of the Executive in violation of this Agreement). After
termination of the Executive’s employment with the Company, the Executive shall
not, without the prior written consent of the Company or as may otherwise be
required by law or legal process, communicate or divulge any such information,
knowledge or data to anyone other than the Company and those designated by
it;
provided,
that if
the Executive receives actual notice that the Executive is or may be required
by
law or legal process to communicate or divulge any such information, knowledge
or data, the Executive shall promptly so notify the Company.
(b) While
employed by the Company and, for two (2) years after the Termination Date,
the
Executive shall not directly or indirectly solicit, induce, or encourage any
employee, consultant, agent, customer, vendor, or other parties doing business
with any member of the Xxxxxxx Group to terminate their employment, agency,
or
other relationship with the Xxxxxxx Group or such member or to render services
for or transfer their business from the Xxxxxxx Group or such member and the
Executive shall not initiate discussion with any such person for any such
purpose or authorize or knowingly cooperate with the taking of any such actions
by any other individual or entity.
(c) In
no
event shall an asserted violation of the provisions of this Section 9 constitute
a basis for deferring or withholding any amounts otherwise payable to the
Executive under this Agreement. However, in recognition of the facts that
irreparable injury will result to the Company in the event of a breach by the
Executive of his obligations under Sections 9(a) and (b) of this Agreement,
that
monetary damages for such breach would not be readily calculable,
15
and
that
the Company would not have an adequate remedy at law therefor, the Executive
acknowledges, consents and agrees that in the event of such breach, or the
threat thereof, the Company shall be entitled, in addition to any other legal
remedies and damages available, to specific performance thereof and to temporary
and permanent injunctive relief (without the necessity of posting a bond) to
restrain the violation or threatened violation of such obligations by the
Executive.
10. Successors.
(a) This
Agreement is personal to the Executive and without the prior written consent
of
the Company shall not be assignable by the Executive otherwise than by will
or
the laws of descent and distribution. This Agreement shall inure to the benefit
of and be enforceable by the Executive’s legal representatives.
(b) This
Agreement shall inure to the benefit of and be binding upon the Company and
its
successors and assigns.
(c) The
Company will require 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 to assume and agree to perform this Agreement
in
the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place. As used in this Agreement,
“Company”
shall
mean the Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid which assumes and agrees to perform this Agreement
by
operation of law, or otherwise.
11. Payment
of Financial Obligations.
The
payment or provision to the Executive by the Company of any remuneration,
benefits or other financial obligations pursuant to this Agreement shall be
allocated to the Operating Partnership, the REIT and, if applicable, any
subsidiary and/or affiliate thereof in accordance with the Employee Sharing
and
Expense Allocation Agreement, by and between the REIT, the Operating
Partnership, and Xxxxxxx Services, Inc., as in effect from time to
time.
12. Miscellaneous.
(a) Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of California, without reference to principles of conflict of laws. The
captions of this Agreement are not part of the provisions hereof and shall
have
no force or effect. This Agreement may not be amended or modified otherwise
than
by a written agreement executed by the parties hereto or their respective
successors and legal representatives.
(b) Arbitration.
Except
as set forth in Section 9(c) above, any disagreement, dispute, controversy
or
claim arising out of or relating to this Agreement or the interpretation of
this
Agreement or any arrangements relating to this Agreement or contemplated in
this
Agreement or the breach, termination or invalidity thereof shall be settled
by
final and binding arbitration administered by JAMS/Endispute in Los Angeles,
California in accordance with the then existing JAMS/Endispute Arbitration
Rules
and Procedures for Employment Disputes. In
16
the
event
of such an arbitration proceeding, the Executive and the Company shall select
a
mutually acceptable neutral arbitrator from among the JAMS/Endispute panel
of
arbitrators. In the event the Executive and the Company cannot agree on an
arbitrator, the Administrator of JAMS/Endispute will appoint an arbitrator.
Neither the Executive nor the Company nor the arbitrator shall disclose the
existence, content, or results of any arbitration hereunder without the prior
written consent of all parties. Except as provided herein, the Federal
Arbitration Act shall govern the interpretation, enforcement and all
proceedings. The arbitrator shall apply the substantive law (and the law of
remedies, if applicable) of the state of California, or federal law, or both,
as
applicable, and the arbitrator is without jurisdiction to apply any different
substantive law. The arbitrator shall have the authority to entertain a motion
to dismiss and/or a motion for summary judgment by any party and shall apply
the
standards governing such motions under the Federal Rules of Civil Procedure.
The
arbitrator shall render an award and a written, reasoned opinion in support
thereof. Judgment upon the award may be entered in any court having jurisdiction
thereof.
(c) Notices.
All
notices and other communications hereunder shall be in writing and shall be
given by hand delivery to the other party or by registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:
If
to
the Executive:
at the
Executive’s most recent address on the records of the Company,
If
to
the REIT or the Operating Partnership:
Xxxxxxx
Properties, Inc.
1700
Xxxxx Xxxxxx, Xxxxx 000
Xxxxx
Xxxxxx, XX 00000
Attn:
Chief Executive Officer
with
a
copy to:
Xxxxxx
& Xxxxxxx
630
Xxxx
Xxxxx Xxxxxx, Xxxxx 0000
Xxx
Xxxxxxx, XX 00000
Attn:
Xxxxxx X. Xxxxxx, Esq.
or
to
such other address as either party shall have furnished to the other in writing
in accordance herewith. Notice and communications shall be effective when
actually received by the addressee.
(d) Xxxxxxxx-Xxxxx
Act of 2002.
Notwithstanding anything herein to the contrary, if the Company determines,
in
its good faith judgment, that any transfer or deemed transfer of funds hereunder
is likely to be construed as a personal loan prohibited by Section 13(k) of
the
Exchange Act and the rules and regulations promulgated thereunder, then such
transfer or deemed transfer shall not be made to the extent necessary or
appropriate so as not to violate the Exchange Act and the rules and regulations
promulgated thereunder.
17
(e)
Section
409A of the Code.
The
compensation and benefits payable under this Agreement are not intended to
constitute “nonqualified deferred compensation” within the meaning of Section
409A of the Code. However, notwithstanding any provision of this Agreement
to
the contrary, if at any time the Company determines that any such compensation
or benefits payable under this Agreement may be subject to Section 409A of
the
Code, this Agreement shall be deemed to incorporate the terms and conditions
required by Section 409A of the Code and Department of Treasury regulations
promulgated thereunder. To the extent applicable, this Agreement shall be
interpreted in accordance with Section 409A of the Code and Department of
Treasury regulations and other interpretive guidance issued thereunder. If
the
Company determines that any compensation or benefits payable under this
Agreement may be subject to Section 409A of the Code and related Department
of
Treasury guidance, the Company may in its sole discretion adopt such amendments
to this Agreement or adopt other policies and procedures (including amendments,
policies and procedures with retroactive effect), or take any other actions,
that the Company determines are necessary or appropriate to (i) exempt the
compensation and benefits payable under this Agreement from Section 409A of
the
Code and/or preserve the intended tax treatment of such compensation and
benefits, or (ii) comply with the requirements of Section 409A of the Code
and
related Department of Treasury guidance.
(f)
Severability.
The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this
Agreement.
(g) Withholding.
The
Company may withhold from any amounts payable under this Agreement such Federal,
state, local or foreign taxes as shall be required to be withheld pursuant
to
any applicable law or regulation. In addition, notwithstanding any other
provision of this Agreement, the Company may, in its sole discretion, withhold
and pay over to the Internal Revenue Service or any other applicable taxing
authority, for the benefit of the Executive, all or any portion of any Excise
Tax Gross-Up Payment, and the Executive hereby consents to such withholding.
(h) No
Waiver.
The
Executive’s or the Company’s failure to insist upon strict compliance with any
provision of this Agreement or the failure to assert any right the Executive
or
the Company may have hereunder, including, without limitation, the right of
the
Executive to terminate employment for Good Reason pursuant to Section 3(c)
of this Agreement, shall not be deemed to be a waiver of such provision or
right
or any other provision or right of this Agreement.
(i) Entire
Agreement.
As of
the Effective Date, this Agreement, together with the Common Stock Award
Agreement, the Restricted Stock Agreement, the Performance Award Agreement
and
the Indemnification Agreement, constitutes the final, complete and exclusive
agreement between the Executive and the Company with respect to the subject
matter hereof and replaces and supersedes any and all other agreements, offers
or promises, whether oral or written, between the parties concerning the subject
matter hereof.
(j) Counterparts.
This
Agreement may be executed simultaneously in two counterparts, each of which
shall be deemed an original but which together shall constitute one and the
same
instrument.
[SIGNATURE
PAGE FOLLOWS]
18
IN
WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and,
pursuant to the authorization from the Board, the Company has caused these
presents to be executed in its name on its behalf, all as of the day and year
first above written.
XXXXXXX
PROPERTIES, INC.,
a
Maryland corporation
By:/s/
Xxxxxx X. Xxxxxxx III
Name:
Xxxxxx X. Xxxxxxx III
Title:
Chief Executive Officer
XXXXXXX
PROPERTIES, L.P.,
a
Maryland limited partnership
By:
Xxxxxxx Properties, Inc.
Its:
General Partner
By:/s/
Xxxxxx X. Xxxxxxx III
Name:
Xxxxxx X. Xxxxxxx III
Title:
Chief Executive Officer
“EXECUTIVE”
/s/
Xxxxxx Xxxxxxxxx
Xxxxxx
Xxxxxxxxx
Exhibit
A
COMMON
STOCK AWARD AGREEMENT
STOCK
AWARD AGREEMENT
THIS
STOCK AWARD AGREEMENT (this “Agreement”) is made effective as of ___________,
2006, between Xxxxxxx Properties, Inc., a Maryland corporation (the “Company”),
Xxxxxxx Properties, L.P., a Maryland limited partnership (the “Employer”), and
Xxxxxx Xxxxxxxxx (the “Stockholder”).
WHEREAS,
the Company has established the Amended and Restated 2003 Incentive Award Plan
of Xxxxxxx Properties, Inc., Xxxxxxx Properties Services, Inc. and Xxxxxxx
Properties, L.P. (the “Plan”);
WHEREAS,
the Company wishes to carry out the Plan (the terms of which are hereby
incorporated by reference and made a part of this Agreement);
WHEREAS,
the Plan provides for the issuance of shares of the Company’s common stock, par
value $.01 per share (the “Common Stock”), subject to the terms therein;
WHEREAS,
the Committee, appointed to administer the Plan, has determined that it would
be
to the advantage and in the best interest of the Company and its stockholders
to
issue the Common Stock provided for herein to the Stockholder (the “Stock
Award”) as an inducement to enter into or remain in the service of the Employer,
the Company, Xxxxxxx Properties Services, Inc. (the “Services Company”), or any
Subsidiary, and as an incentive for increased efforts during such service,
and
has advised the Company thereof and instructed the undersigned officer to issue
said Common Stock; and
WHEREAS,
all capitalized terms used herein without definition shall have the meanings
ascribed to such terms in the Plan.
NOW,
THEREFORE, in consideration of the mutual covenants herein contained and for
other good and valuable consideration, receipt of which is hereby acknowledged,
the parties hereto do hereby agree as follows:
ARTICLE
I.
AWARD
OF COMMON STOCK
Section
1.1 -
Award
of Common Stock
For
good
and valuable consideration, on the date hereof the Company hereby issues to
the
Stockholder, and the Stockholder hereby purchases from the Company, ____________
shares of Common Stock upon the terms and conditions set forth in this
Agreement. The purchase price of the shares of Common Stock to be purchased
by
the Stockholder pursuant to this Agreement shall be $0.01 per share without
commission or other charge.
Notwithstanding
anything to the contrary anywhere else in this Agreement, the Stock Award is
subject to the terms, definitions and provisions of the Plan, which is
incorporated herein by reference.
Section
1.2 - Consideration to Company
In
consideration for the issuance of the Stock Award by the Company, the
Stockholder agrees to render faithful and efficient services to the Employer,
the Company, the Services Company, or any Subsidiary (as applicable), with
such
duties and responsibilities as shall from time to time be prescribed. Nothing
in
this Agreement or in the Plan shall confer upon the Stockholder any right to
continue in the service of the Employer, the Company, the Services Company,
or
any Subsidiary or shall interfere with or restrict in any way the rights of
the
Employer, the Company, the Services Company, or any Subsidiary, which are hereby
expressly reserved, to discharge the Stockholder at any time for any reason
whatsoever, with or without cause.
ARTICLE
II.
FULLY
VESTED AWARD
Section
2.1 - Fully Vested Award
The
Stock
Award shall be fully vested with respect to all shares of Common Stock subject
thereto as of the date hereof.
ARTICLE
III.
MISCELLANEOUS
Section
3.1 - Holding Period and
Additional Restrictions as to Ownership and
Transfer
(a) Notwithstanding
any provision of this Agreement to the contrary, in the event that the purchase
of the Common Stock subject to the Stock Award is not exempt under Section
16 of
the Exchange Act on the date on which such Common Stock is purchased, such
Common Stock may not be sold, assigned or otherwise transferred or exchanged
until at least six months and one day have elapsed from the date on which such
Common Stock was purchased.
(b) The
Common Stock subject to the Stock Award shall be subject to the restrictions
on
ownership and transfer set forth in the Articles of Incorporation of the
Company.
Section
3.2 - Conditions to Issuance of Stock Certificates
The
Common Stock subject to the Stock Award may be either previously authorized
but
unissued shares or issued shares which have then been reacquired by the Company.
Such shares shall be fully paid and nonassessable. Neither the Company nor
the
Employer shall be required to issue or deliver any certificate or certificates
for shares of stock pursuant to this Agreement prior to fulfillment of all
of
the following conditions:
(a) The
admission of such shares to listing on all stock exchanges on which such class
of stock is then listed;
(b) The
completion of any registration or other qualification of such shares under
any
state or federal law or under rulings or regulations of the Securities and
Exchange Commission or of any other governmental regulatory body, which the
Committee shall, in its absolute discretion, deem necessary or
advisable;
(c) The
obtaining of any approval or other clearance from any state or federal
governmental agency which the Committee shall, in its absolute discretion,
determine to be necessary or advisable;
(d) The
lapse
of such reasonable period of time as the Committee may from time to time
establish for reasons of administrative convenience; and
(e) The
receipt by the Company of full payment for such shares, including payment of
any
applicable withholding tax to the Company or the Employer, as
applicable.
Section
3.3 - Ownership Limit and REIT Status.
Notwithstanding
anything contained herein, the shares of Common Stock subject to the Stock
Award
shall not be issued to the Stockholder:
(a) to
the
extent such issuance could cause the Stockholder to be in violation of the
Ownership Limit; or
(b) if,
in
the discretion of the Administrator, such issuance could impair the Company’s
status as a REIT.
Section
3.4 - Notices
Any
notice to be given by the Stockholder under the terms of this Agreement shall
be
addressed to the Secretary of the Company. Any notice to be given to the
Stockholder shall be addressed to him or her at the address given beneath his
or
her signature hereto. By a notice given pursuant to this Section 3.4,
either party may hereafter designate a different address for notices to be
given
to him. Any notice which is required to be given to the Stockholder shall,
if
the Stockholder is then deceased, be given to the Stockholder’s personal
representative if such representative has previously informed the Company of
his
or her status and address by written notice under this Section 3.4. Any
notice required or permitted hereunder shall be given in writing and shall
be
deemed effectively given upon personal delivery or upon deposit in the United
States mail by certified mail, with postage and fees prepaid, addressed as
set
forth above.
Section
3.5 - Rights as Stockholder
The
Stockholder shall have all the rights of a stockholder with respect to the
Common Stock subject to the Stock Award, including the right to vote such Common
Stock and
the
right
to receive all dividends or other distributions paid or made with respect to
such Common Stock.
Section
3.6 - Conformity to Securities Laws
The
Stockholder acknowledges that the Plan and this Agreement are intended to
conform to the extent necessary with all provisions of all applicable federal
and state laws, rules and regulations (including, but not limited to the
Securities Act and the Exchange Act and any and all regulations and rules
promulgated by the Securities and Exchange Commission thereunder, including
without limitation the applicable exemptive conditions of Rule 16b-3) and to
such approvals by any listing, regulatory or other governmental authority as
may, in the opinion of counsel for the Company, be necessary or advisable in
connection therewith. Notwithstanding anything herein to the contrary, the
Plan
shall be administered, and the Stock Award is granted, 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.
Section
3.7 - Amendments
This
Agreement and the Plan may be amended without the consent of the Stockholder;
provided,
however,
that no
such amendment shall, without the consent of the Stockholder, impair any rights
of the Stockholder under this Agreement.
Section
3.8 - Tax Withholding
The
Company or the Employer, as applicable, shall be entitled to require payment
in
cash or deduction from other compensation payable to the Stockholder of any
sums
required by federal, state or local tax law to be withheld with respect to
the
issuance or payment of the Common Stock subject to the Stock Award. The
Committee may in its discretion and in satisfaction of the foregoing requirement
allow the Stockholder to elect to have the Company or the Employer, as
applicable, withhold shares of Common Stock otherwise issuable under the Stock
Award (or allow the return of shares of Common Stock) having a Fair Market
Value
equal to the sums required to be withheld. Notwithstanding any other provision
of the Plan or this Agreement, the number of shares of Common Stock which may
be
withheld with respect to the issuance or payment of the Common Stock subject
to
the Stock Award in order to satisfy the Stockholder’s federal and state income
and payroll tax liabilities with respect to the issuance or payment of such
Common Stock shall be limited to the number of shares which have a fair market
value on the date of withholding or repurchase equal to the aggregate amount
of
such liabilities based on the minimum statutory withholding rates for federal
and state tax income and payroll tax purposes that are applicable to such
supplemental taxable income.
Section
3.9 - Governing Law
This
Agreement shall be administered, interpreted and enforced under the internal
laws of the State of California without regard to conflicts of laws
thereof.
[SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF, this Agreement has been executed and delivered by the parties
hereto.
XXXXXXX
PROPERTIES, INC.,
a
Maryland corporation
By:
/s/ Xxxxxx X. Xxxxxxx
III
Name:
Xxxxxx X. Xxxxxxx III
Title:
Chairman and Chief Executive Officer
XXXXXXX
PROPERTIES, L.P.,
a
Maryland limited partnership
By: Xxxxxxx
Properties, Inc., a Maryland corporation
Its: General
Partner
By: /s/
Xxxxxx X. Xxxxxxx
III
Name:
Xxxxxx X. Xxxxxxx III
Title:Chairman
and Chief Executive Officer
STOCKHOLDER
/s/ Xxxxxx
Xxxxxxxxx
Xxxxxx
Xxxxxxxxx
Address:
Taxpayer
Identification Number: _______________
Exhibit
B
RESTRICTED
STOCK AGREEMENT
RESTRICTED
STOCK AGREEMENT
THIS
RESTRICTED STOCK AGREEMENT (this “Agreement”) is made effective as of
__________, 2006, between Xxxxxxx Properties, Inc., a Maryland corporation
(the
“Company”), Xxxxxxx Properties, L.P., a Maryland limited partnership (the
“Employer”), and Xxxxxx Xxxxxxxxx (the “Restricted Stockholder”).
WHEREAS,
the Company has established the Amended and Restated 2003 Incentive Award Plan
of Xxxxxxx Properties, Inc., Xxxxxxx Properties Services, Inc. and Xxxxxxx
Properties, L.P. (the “Plan”);
WHEREAS,
the Company wishes to carry out the Plan (the terms of which are hereby
incorporated by reference and made a part of this Agreement);
WHEREAS,
the Plan provides for the issuance of shares of the Company’s common stock, par
value $.01 per share (the “Common Stock”), subject to certain restrictions
thereon (“Restricted Stock”);
WHEREAS,
the Committee, appointed to administer the Plan, has determined that it would
be
to the advantage and in the best interest of the Company and its stockholders
to
issue the Restricted Stock provided for herein to the Restricted Stockholder
as
an inducement to enter into or remain in the service of the Employer, the
Company, Xxxxxxx Properties Services, Inc. (the “Services Company”), or any
Subsidiary, and as an incentive for increased efforts during such service,
and
has advised the Company thereof and instructed the undersigned officer to issue
said Restricted Stock; and
WHEREAS,
all capitalized terms used herein without definition shall have the meanings
ascribed to such terms in the Plan.
NOW,
THEREFORE, in consideration of the mutual covenants herein contained and for
other good and valuable consideration, receipt of which is hereby acknowledged,
the parties hereto do hereby agree as follows:
ARTICLE
I.
AWARD
OF RESTRICTED STOCK
Section
1.2 - Award of Restricted Stock
For
good
and valuable consideration, on the date hereof the Company hereby issues to
the
Restricted Stockholder, and the Restricted Stockholder hereby purchases from
the
Company, ____________ shares of Common Stock upon the terms and conditions
set
forth in this Agreement. The purchase price of the shares of Common Stock to
be
purchased by the Restricted Stockholder pursuant to this Agreement shall be
$0.01 per share without commission or other charge.
Notwithstanding
anything to the contrary anywhere else in this Agreement, the Restricted Stock
is subject to the terms, definitions and provisions of the Plan, which is
incorporated herein by reference.
Section
1.2 - Consideration to Company
In
consideration for the issuance of Restricted Stock by the Company, the
Restricted Stockholder agrees to render faithful and efficient services to
the
Employer, the Company, the Services Company, or any Subsidiary (as applicable),
with such duties and responsibilities as shall from time to time be prescribed.
Nothing in this Agreement or in the Plan shall confer upon the Restricted
Stockholder any right to continue in the service of the Employer, the Company,
the Services Company, or any Subsidiary or shall interfere with or restrict
in
any way the rights of the Employer, the Company, the Services Company, or any
Subsidiary, which are hereby expressly reserved, to discharge the Restricted
Stockholder at any time for any reason whatsoever, with or without
cause.
ARTICLE
II.
RESTRICTIONS
Section
2.1 - Repurchase of Restricted Stock
Immediately
upon the Restricted Stockholder’s Termination of Employment, Termination of
Directorship or Termination of Consultancy (as applicable) for any reason,
the
Company or the Employer shall have the right to repurchase from the Restricted
Stockholder any or all shares of Restricted Stock then subject to Restrictions
at a cash price per share equal to the price paid by the Restricted Stockholder
for such Restricted Stock; provided,
however,
that
provision may be made by the Committee in its sole and absolute discretion
that
no such right of repurchase shall exist in the event of:
(a) The
Restricted Stockholder’s Termination of Employment, Termination of Directorship
or Termination of Consultancy without cause or because of the Restricted
Stockholder’s death, disability or retirement; or
(b) The
Restricted Stockholder’s Termination of Employment, Termination of Directorship
or Termination of Consultancy following a Change in Control.
Section
2.2 - Forfeiture of Restricted Stock
If
no
consideration was paid by the Restricted Stockholder upon issuance of the
Restricted Stock, immediately upon the Restricted Stockholder’s Termination of
Employment, Termination of Directorship or Termination of Consultancy, the
Restricted Stockholder shall forfeit any and all shares of Restricted Stock
then
subject to Restrictions and the Restricted Stockholder’s rights in any
Restricted Stock then subject to Restrictions shall lapse; provided,
however,
that
provision may be made by the Committee in its sole and absolute discretion
that
no such forfeiture shall exist in the event of:
(a) The
Restricted Stockholder’s Termination of Employment, Termination of Directorship
or Termination of Consultancy without cause or because of the Restricted
Stockholder’s death, disability or retirement; or
(b) The
Restricted Stockholder’s Termination of Employment, Termination of Directorship
or Termination of Consultancy following a Change in Control.
For
purposes of this Agreement, the term “Restrictions” shall mean the exposure to
repurchase set forth in Section 2.1 hereof and to forfeiture set forth in this
Section 2.2 and the restrictions on sale or other transfer set forth in Sections
2.5 and 2.6.
Section
2.3 - Legend
Certificates
representing shares of Restricted Stock issued pursuant to this Agreement shall,
until all Restrictions lapse and new certificates are issued pursuant to
Section 2.4(c) hereof, bear the following legend or legend substantially
similar thereto:
|
“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO FORFEITURE,
REACQUISITION AND CERTAIN RESTRICTIONS ON TRANSFERABILITY UNDER THE
TERMS
OF THAT CERTAIN RESTRICTED STOCK AGREEMENT BY AND BETWEEN XXXXXXX
PROPERTIES, INC., XXXXXXX PROPERTIES, L.P. AND THE REGISTERED OWNER
OF
SUCH SECURITIES, AND SUCH SECURITIES MAY NOT BE, DIRECTLY OR INDIRECTLY,
OFFERED, TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF UNDER ANY CIRCUMSTANCES, EXCEPT PURSUANT TO THE PROVISIONS
OF
SUCH AGREEMENT.”
|
Section
2.4 - Lapse of Restrictions
(a) Subject
to paragraph (b) below and to Sections 2.1, 2.2 and 3.4 hereof, the
Restrictions shall lapse in cumulative installments as follows (each such date,
a “Vesting Date”):
(i) The
Restrictions shall lapse with respect to twenty percent (20%) of the shares
of
the Restricted Stock on the first anniversary of the date hereof;
(ii) The
Restrictions shall lapse with respect to twenty percent (20%) of the shares
of
the Restricted Stock on the second anniversary of the date hereof;
(iii) The
Restrictions shall lapse with respect to twenty percent (20%) of the shares
of
the Restricted Stock on the third anniversary of the date hereof;
(iv) The
Restrictions shall lapse with respect to twenty percent (20%) of the shares
of
the Restricted Stock on the fourth anniversary of the date hereof;
and
(v) The
Restrictions shall lapse with respect to twenty percent (20%) of the shares
of
the Restricted Stock on the fifth anniversary of the date hereof.
(b) Notwithstanding
the foregoing, in the event of the Restricted Stockholder’s Termination of
Employment by the Company without Cause or by the Restricted Stockholder for
Good Reason or pursuant to a Change in Control Resignation (each as defined
in
that certain Employment Agreement, dated as of __________, 2006, between the
Company and the Restricted Stockholder, as amended from time to time, and
referred to hereinafter as the “Employment Agreement”), the Restrictions shall
thereupon lapse with respect to all of the shares of the Restricted Stock.
(c) Upon
the
lapse of the Restrictions, the Company shall cause new certificates to be issued
with respect to such shares and delivered to the Restricted Stockholder or
his
or her legal representative, free from the legend provided for in
Section 2.3 hereof and any of the other Restrictions. Notwithstanding the
foregoing, no such new certificate shall be delivered to the Restricted
Stockholder or his or her legal representative unless and until the Restricted
Stockholder or his or her legal representative shall have paid to the Company
or
the Employer, as applicable, in cash the full amount of all federal and state
withholding or other employment taxes applicable to the taxable income of the
Restricted Stockholder resulting from the grant of Restricted Stock or the
lapse
of the Restrictions.
Section
2.5 - Restricted Stock Not Transferable
Until
the
Restrictions hereunder lapse or expire pursuant to this Agreement, neither
the
Restricted Stock (including any shares received by holders thereof with respect
to shares of Restricted Stock as a result of stock dividends, stock splits
or
any other form of recapitalization) nor any interest or right therein or part
thereof shall be liable for the debts, contracts, or engagements of the
Restricted Stockholder or his or her 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;
provided,
however,
that,
subject to the Ownership Limit (as defined in the Articles of Incorporation
of
the Company), this Section 2.5 shall not prevent transfers by will or by the
applicable laws of descent and distribution or pursuant to a domestic relations
order as defined by the Code or Title I of the Employee Retirement Income
Security Act of 1974, as amended, or the rules thereunder.
Section
2.6 - Restrictions on New Shares
In
the
event that the outstanding shares of Common Stock are changed into or exchanged
for a different number or kind of capital stock or other securities of the
Company or of another corporation by reason of merger, consolidation,
recapitalization, reclassification, stock split, stock dividend or combination
of shares, such new or additional or different shares or securities which are
issued upon conversion of or in exchange or substitution for shares of
Restricted Stock which are then subject to Restrictions shall be considered
to
be Restricted Stock and shall be subject to all of the Restrictions, unless
the
Committee provides for the expiration of the Restrictions on the shares of
Restricted Stock underlying the distribution of the new or additional or
different shares or securities.
Section
2.7 - Section 83(b)
The
Restricted Stockholder covenants that he or she will not make an election under
Section 83(b) of the Code with respect to the receipt of any share of
Restricted Stock without the consent of the Company, which the Company may
grant
or withhold in its sole discretion.
ARTICLE
III.
MISCELLANEOUS
Section
3.1 - Holding Period and
Additional Restrictions as to Ownership and
Transfer
(a) Notwithstanding
any provision of this Agreement to the contrary, in the event that the purchase
of the Restricted Stock is not exempt under Section 16 of the Exchange Act
on
the date on which the Restricted Stock is granted, the Restricted Stock may
not
be sold, assigned or otherwise transferred or exchanged until at least six
months and one day have elapsed from the date on which the Restricted Stock
was
granted.
(b) The
Restricted Stock (whether or not the Restrictions have lapsed with respect
to
such Restricted Stock) shall be subject to the restrictions on ownership and
transfer set forth in the Articles of Incorporation of the Company.
Section
3.2 - Conditions to Issuance of Stock Certificates
Shares
of
Restricted Stock may be either previously authorized but unissued shares or
issued shares which have then been reacquired by the Company. Such shares shall
be fully paid and nonassessable. Neither the Company nor the Employer shall
be
required to issue or deliver any certificate or certificates for shares of
stock
pursuant to this Agreement prior to fulfillment of all of the following
conditions:
(a) The
admission of such shares to listing on all stock exchanges on which such class
of stock is then listed;
(b) The
completion of any registration or other qualification of such shares under
any
state or federal law or under rulings or regulations of the Securities and
Exchange Commission or of any other governmental regulatory body, which the
Committee shall, in its absolute discretion, deem necessary or
advisable;
(c) The
obtaining of any approval or other clearance from any state or federal
governmental agency which the Committee shall, in its absolute discretion,
determine to be necessary or advisable;
(d) The
lapse
of such reasonable period of time as the Committee may from time to time
establish for reasons of administrative convenience; and
(e) The
receipt by the Company of full payment for such shares, including payment of
any
applicable withholding tax to the Company or the Employer, as
applicable.
Section
3.3 - Escrow
(a) The
Restricted Stockholder hereby authorizes and directs the Secretary of the
Company, or such other person designated by the Company, to transfer the shares
of Restricted Stock which are subject to the Restrictions from the Restricted
Stockholder to the Company or the Employer, as applicable, in the event of
repurchase of such shares by the Company or the Employer pursuant to Section
2.1
or forfeiture of such shares pursuant to Section 2.2.
(b) To
insure
the availability for delivery of the Restricted Stock upon repurchase pursuant
to Section 2.1 or forfeiture pursuant to Section 2.2, the Restricted Stockholder
hereby appoints the Secretary, or any other person designated by the Company
as
escrow agent, as its attorney-in-fact to sell, assign and transfer unto the
Company, such shares, if any, repurchased or forfeited pursuant to this
Agreement and shall, upon execution of this Agreement, deliver and deposit
with
the Secretary of the Company, or such other person designated by the Company,
the share certificates representing the Restricted Stock, together with the
stock assignment duly endorsed in blank, attached hereto as Exhibit
A.
The
Restricted Stock and stock assignment shall be held by the Secretary in escrow,
pursuant to the Joint Escrow Instructions of the Company and the Restricted
Stockholder attached hereto as Exhibit B,
until
all of the Restrictions expire or shall have been removed. As a further
condition to the Company’s and the Employer’s obligations under this Agreement,
the spouse of the Restricted Stockholder, if any, shall execute and deliver
to
the Company the Consent of Spouse attached hereto as Exhibit
C.
Upon
the lapse of the Restrictions on the Restricted Stock, the escrow agent shall
promptly deliver to the Restricted Stockholder the certificate or certificates
representing such shares in the escrow agent’s possession belonging to the
Restricted Stockholder, and the escrow agent shall be discharged of all further
obligations hereunder; provided,
however,
that
the escrow agent shall nevertheless retain such certificate or certificates
as
escrow agent if so required pursuant to other restrictions imposed pursuant
to
this Agreement.
(c) The
Company, or its designee, shall not be liable for any act it may do or omit
to
do with respect to holding the Restricted Stock in escrow and while acting
in
good faith and in the exercise of its judgment.
Section
3.4 - Ownership Limit and REIT Status.
Notwithstanding
anything contained herein, the Restrictions on the Restricted Stock shall not
lapse:
(a) to
the
extent the lapsing of such Restrictions could cause the Restricted Stockholder
to be in violation of the Ownership Limit; or
(b) if,
in
the discretion of the Administrator, the lapsing of such Restrictions could
impair the Company’s status as a REIT.
Section
3.5 - Notices
Any
notice to be given by the Restricted Stockholder under the terms of this
Agreement shall be addressed to the Secretary of the Company. Any notice to
be
given to the Restricted Stockholder shall be addressed to him or her at the
address given beneath his or her signature hereto. By a notice given pursuant
to
this Section 3.5, either party may hereafter
designate
a different address for notices to be given to him. Any notice which is required
to be given to the Restricted Stockholder shall, if Restricted Stockholder
is
then deceased, be given to the Restricted Stockholder’s personal representative
if such representative has previously informed the Company of his or her status
and address by written notice under this Section 3.5. Any notice required
or permitted hereunder shall be given in writing and shall be deemed effectively
given upon personal delivery or upon deposit in the United States mail by
certified mail, with postage and fees prepaid, addressed as set forth
above.
Section
3.6 - Rights as Stockholder
Except
as
otherwise provided herein, upon the delivery of Restricted Stock to the escrow
holder pursuant to Section 3.3 hereof, the holder of the Restricted Stock shall
have all the rights of a stockholder with respect to the Restricted Stock,
including the right to vote the Restricted Stock and the right to receive all
dividends or other distributions paid or made with respect to the Restricted
Stock; provided,
however,
that in
the discretion of the Committee, any extraordinary distributions with respect
to
the Restricted Stock that is subject to the Restrictions shall also be subject
to the Restrictions.
Section
3.7 - Conformity to Securities Laws
The
Restricted Stockholder acknowledges that the Plan and this Agreement are
intended to conform to the extent necessary with all provisions of all
applicable federal and state laws, rules and regulations (including, but not
limited to the Securities Act and the Exchange Act and any and all regulations
and rules promulgated by the Securities and Exchange Commission thereunder,
including without limitation the applicable exemptive conditions of Rule 16b-3)
and to such approvals by any listing, regulatory or other governmental authority
as may, in the opinion of counsel for the Company, be necessary or advisable
in
connection therewith. Notwithstanding anything herein to the contrary, the
Plan
shall be administered, and the Restricted Stock is granted, only in such a
manner as to conform to such laws, rules and regulations. To the extent
permitted by applicable law, the Plan, this Agreement and the Restricted Stock
shall be deemed amended to the extent necessary to conform to such laws, rules
and regulations.
Section
3.8 - Amendments
This
Agreement and the Plan may be amended without the consent of the Restricted
Stockholder; provided,
however,
that no
such amendment shall, without the consent of the Restricted Stockholder, impair
any rights of the Restricted Stockholder under this Agreement.
Section
3.9 - Tax Withholding
The
Company or the Employer, as applicable, shall be entitled to require payment
in
cash or deduction from other compensation payable to the Restricted Stockholder
of any sums required by federal, state or local tax law to be withheld with
respect to the issuance, vesting, exercise or payment of the Restricted Stock.
The Committee may in its discretion and in satisfaction of the foregoing
requirement allow the Restricted Stockholder to elect to have the Company or
the
Employer, as applicable, withhold shares of Common Stock otherwise issuable
under
such award (or allow the return of shares of Common Stock) having a Fair Market
Value equal to the sums required to be withheld. Notwithstanding any other
provision of the Plan or this Agreement, the number of shares of Common Stock
which may be withheld with respect to the issuance, vesting or payment of the
Restricted Stock (or which may be repurchased from the Restricted Stockholder
within six months after such shares of Common Stock were acquired by the
Restricted Stockholder from the Company or the Employer) in order to satisfy
the
Restricted Stockholder’s federal and state income and payroll tax liabilities
with respect to the issuance, vesting or payment of the Restricted Stock shall
be limited to the number of shares which have a fair market value on the date
of
withholding or repurchase equal to the aggregate amount of such liabilities
based on the minimum statutory withholding rates for federal and state tax
income and payroll tax purposes that are applicable to such supplemental taxable
income.
Section
3.10 - Governing Law
This
Agreement shall be administered, interpreted and enforced under the internal
laws of the State of California without regard to conflicts of laws
thereof.
Section
3.11 - Stop Transfer Instructions
To
ensure
compliance with the Restrictions, the Company may issue appropriate “stop
transfer” instructions to its transfer agent with respect to the Restricted
Stock.
[SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF, this Agreement has been executed and delivered by the parties
hereto.
XXXXXXX
PROPERTIES, INC.,
a
Maryland corporation
By:
______________________________________
Name:
Title:
XXXXXXX
PROPERTIES, L.P.,
a
Maryland limited partnership
By: Xxxxxxx
Properties, Inc., a Maryland corporation
Its: General
Partner
By:
______________________________________
Name:
Title:
RESTRICTED
STOCKHOLDER
______________________________________
Xxxxxx
Xxxxxxxxx
Address:
EXHIBIT
A TO RESTRICTED STOCK AGREEMENT
STOCK
ASSIGNMENT SEPARATE FROM CERTIFICATE(S)
FOR
VALUE
RECEIVED, __________________________ hereby sells, assigns and transfers unto
Xxxxxxx Properties, Inc., a Maryland corporation (the “Company”), pursuant to
the repurchase right under that certain Restricted Stock Agreement, dated
_______________ by and between the undersigned, the Company and Xxxxxxx
Properties, L.P., a Maryland limited partnership (the “Agreement”),
_______________ (_______________) shares of Common Stock of the Company standing
in the undersigned’s name on the books of the Company represented by Certificate
No(s). _______________ and does hereby irrevocably constitute and appoint the
Company’s Secretary to transfer said Common Stock on the books of the Company
with full power of substitution in the premises.
This
Stock Assignment Separate from Certificate(s) may be used only in accordance
with and subject to the terms and conditions of the Agreement, in connection
with the repurchase of shares of Common Stock issued to the undersigned pursuant
to the Agreement, and only to the extent that such shares remain subject to
the
Company’s repurchase option under the Agreement.
Dated:
__________________ ______________________________________
(Signature)
______________________________________
(Print
Name)
(Instruction:
Please
do not fill in any blanks other than the “Signature” line and the “Print Name”
line.)
EXHIBIT
B TO RESTRICTED STOCK AGREEMENT
JOINT
ESCROW INSTRUCTIONS
Xxxxxxx
Properties, Inc.
000
Xxxx
Xxxxx Xxxxxx, Xxxxx 0000
Xxx
Xxxxxxx, XX 00000-0000
Attn:
____________
Dear
____________:
As
Escrow
Agent for Xxxxxxx Properties, Inc. (the “Company”) and the undersigned purchaser
of Common Stock of the Company (the “Purchaser”), you are hereby authorized and
directed to hold the documents delivered to you pursuant to the terms of that
certain Restricted Stock Agreement (“Agreement”), dated ________, to which a
copy of these Joint Escrow Instructions is attached as Exhibit B,
in
accordance with the following instructions:
1. In
the
event of repurchase of any shares by the Company or the Purchaser’s employer
pursuant to Section 2.1 of the Agreement or forfeiture of such shares pursuant
to Section 2.2 of the Agreement, the Company or its assignee will give to
Purchaser and you a written notice specifying the number of shares of Common
Stock to be purchased, the purchase price, and the time for a closing hereunder
at the principal office of the Company. Purchaser and the Company hereby
irrevocably authorize and direct you to close the transaction contemplated
by
such notice in accordance with the terms of said notice.
2. At
the
closing you are directed (a) to date any stock assignments necessary for
the transfer in question, (b) to fill in the number of shares being
transferred, and (c) to deliver same, together with the certificate
evidencing the shares of Common Stock to be transferred, to the Company against
the simultaneous delivery to you of the purchase price (which may include
suitable acknowledgment of cancellation of indebtedness) of the number of shares
of Common Stock being purchased or forfeited.
3. Purchaser
irrevocably authorizes the Company to deposit with you any certificates
evidencing shares of Common Stock to be held by you hereunder and any additions
and substitutions to said shares as specified in the Agreement. Purchaser does
hereby irrevocably constitute and appoint you as the Purchaser’s
attorney-in-fact and agent for the term of this escrow to execute with respect
to such securities and other property all documents of assignment and/or
transfer and all stock certificates necessary or appropriate to make all
securities negotiable and complete any transaction herein
contemplated.
4. This
escrow shall terminate upon expiration or exercise in full of the Restrictions
described in the Agreement, whichever occurs first.
5. If
at the
time of termination of this escrow you should have in your possession any
documents, securities, or other property belonging to Purchaser, you shall
deliver all of same to Purchaser and shall be discharged of all further
obligations hereunder; provided,
however,
that if
at
the
time of termination of this escrow you are advised by the Company that the
property subject to this escrow is the subject of a pledge or other security
agreement, you shall deliver all such property to the pledgeholder or other
person designated by the Company.
6. Except
as
otherwise provided in these Joint Escrow Instructions, your duties hereunder
may
be altered, amended, modified or revoked only by a writing signed by all of
the
parties hereto.
7. You
shall
be obligated only for the performance of such duties as are specifically set
forth herein and may rely and shall be protected in relying or refraining from
acting on any instrument reasonably believed by you to be genuine and to have
been signed or presented by the proper party or parties or their assignees.
You
shall not be personally liable for any act you may do or omit to do hereunder
as
Escrow Agent or as attorney-in-fact for Purchaser while acting in good faith
and
any act done or omitted by you pursuant to the advice of your own attorneys
shall be conclusive evidence of such good faith.
8. You
are
hereby expressly authorized to disregard any and all warnings given by any
of
the parties hereto or by any other person or corporation, excepting only orders
or process of courts of law, and are hereby expressly authorized to comply
with
and obey orders, judgments or decrees of any court. In case you obey or comply
with any such order, judgment or decree of any court, you shall not be liable
to
any of the parties hereto or to any other person, firm or corporation by reason
of such compliance, notwithstanding any such order, judgment or decree being
subsequently reversed, modified, annulled, set aside, vacated or found to have
been entered without jurisdiction.
9. You
shall
not be liable in any respect on account of the identity, authority or rights
of
the parties executing or delivering or purporting to execute or deliver the
Agreement or any documents or papers deposited or called for
hereunder.
10. You
shall
not be liable for the outlawing of any rights under any statute of limitations
with respect to these Joint Escrow Instructions or any documents deposited
with
you.
11. Your
responsibilities as Escrow Agent hereunder shall terminate if you shall cease
to
be Secretary of the Company or if you shall resign by written notice to each
party. In the event of any such termination, the Company may appoint any officer
or assistant officer of the Company as successor Escrow Agent and Purchaser
hereby confirms the appointment of such successor or successors as the
Purchaser’s attorney-in-fact and agent to the full extent of your
appointment.
12. If
you
reasonably require other or further instruments in connection with these Joint
Escrow Instructions or obligations in respect hereto, the necessary parties
hereto shall join in furnishing such instruments.
13. It
is
understood and agreed that should any dispute arise with respect to the delivery
and/or ownership or right of possession of the securities, you are authorized
and directed to retain in your possession without liability to anyone all or
any
part of said securities until such dispute shall have been settled either by
mutual written agreement of the parties concerned or by
a
final
order, decree or judgment of a court of competent jurisdiction after the time
for appeal has expired and no appeal has been perfected, but you shall be under
no duty whatsoever to institute or defend any such proceedings.
14. Any
notice required or permitted hereunder shall be given in writing and shall
be
deemed effectively given upon personal delivery or sent by telegram or fax
or
upon deposit in the United States Post Office, by registered or certified mail
with postage and fees prepaid, addressed to the other party at the addresses
set
forth on the signature pages hereto or at such other address as such party
may
designate by ten (10) days’ advance written notice to the other party
hereto.
15. By
signing these Joint Escrow Instructions you become a party hereto only for
the
purpose of said Joint Escrow Instructions; you do not become a party to the
Agreement.
16. You
shall
be entitled to employ such legal counsel and other experts (including without
limitation the firm of Xxxxxx & Xxxxxxx LLP) as you may deem necessary
properly to advise you in connection with your obligations hereunder. You may
rely upon the advice of such counsel, and may pay such counsel reasonable
compensation therefor. The Company shall be responsible for all fees generated
by such legal counsel in connection with your obligations
hereunder.
17. These
Joint Escrow Instructions shall be binding upon and inure to the benefit of
the
parties hereto and their respective successors and permitted assigns. It is
understood and agreed that references to “you” or “your” herein refer to the
original Escrow Agent and to any and all successor Escrow Agents. It is
understood and agreed that the Company may at any time or from time to time
assign its rights under the Agreement and these Joint Escrow Instructions in
whole or in part.
18. These
Joint Escrow Instructions shall be governed by and interpreted and determined
in
accordance with the laws of the State of California, as such laws are applied
by
California courts to contracts made and to be performed entirely in California
by residents of that state.
[SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF, these Joint Escrow Instructions have been executed and
delivered by the parties hereto.
XXXXXXX
PROPERTIES, INC.,
a
Maryland corporation
By:
______________________________________
Name:
Title:
Address:
000
Xxxx
Xxxxx Xxxxxx, Xxxxx 0000
Xxx
Xxxxxxx, XX 00000-0000
PURCHASER
By:
______________________________________
[name]
Address:
______________________________
______________________________
ACKNOWLEDGED
AND AGREED:
ESCROW
AGENT
By:
______________________________________
Print
Name:
Title:
Address:
______________________________
______________________________
EXHIBIT
C TO RESTRICTED STOCK AGREEMENT
CONSENT
OF SPOUSE
I,
____________________, spouse of ____________, have read and approve the
foregoing Agreement. In consideration of granting of the right to my spouse
to
purchase shares of Xxxxxxx Properties, Inc. as set forth in the Restricted
Stock
Agreement (the “Agreement”), I hereby appoint my spouse as my attorney-in-fact
in respect to the exercise of any rights under the Agreement and agree to be
bound by the provisions of the Agreement insofar as I may have any rights in
said Agreement or any shares issued pursuant thereto under the community
property laws or similar laws relating to marital prop-erty in effect in the
state of our residence as of the date of the signing of the foregoing
Agreement.
Dated:
___________________
By:
______________________________________
Print
Name: ______________________________________
Exhibit
C
PERFORMANCE
AWARD AGREEMENT
PERFORMANCE
AWARD AGREEMENT
THIS
PERFORMANCE AWARD AGREEMENT (this “Agreement”)
is
made effective as of _____________, 2006, between Xxxxxxx Properties, Inc.,
a
Maryland corporation (the “Company”),
Xxxxxxx Properties, L.P., a Maryland limited partnership (the “Partnership”)
and
Xxxxxx Xxxxxxxxx (the “Grantee”).
WHEREAS,
the Company maintains the Amended and Restated 2003 Incentive Award Plan of
Xxxxxxx Properties, Inc., Xxxxxxx Properties Services, Inc. and Xxxxxxx
Properties, L.P. (the “Plan”);
WHEREAS,
the Company wishes to carry out the Plan (the terms of which are hereby
incorporated by reference and made a part of this Agreement);
WHEREAS,
the Plan provides for the issuance of performance or incentive awards that
may
be paid in cash, Common Stock or a combination of both (a “Performance
Award”);
WHEREAS,
the Committee, appointed to administer the Plan, has determined that it would
be
to the advantage and in the best interest of the Company and its stockholders
to
issue the Performance Award provided for herein to the Grantee as an inducement
to enter into or remain in the service of the Company, the Partnership, the
Services Company or any Subsidiary, and as an incentive for increased efforts
during such service, and has advised the Company thereof and instructed the
undersigned officer to issue said Performance Award;
WHEREAS,
certain capitalized terms used herein are defined in Section 12 below; and
WHEREAS,
all capitalized terms used herein without definition shall have the meanings
ascribed to such terms in the Plan.
NOW,
THEREFORE, in consideration of the mutual covenants herein contained and for
other good and valuable consideration, receipt of which is hereby acknowledged,
the parties hereto do hereby agree as follows:
1.
Grant
of Performance Award.
(a) For
good
and valuable consideration, effective as of the date hereof (the “Grant
Date”),
the
Company hereby grants to the Grantee the Performance Award upon the terms and
conditions set forth in this Agreement. Notwithstanding anything to the contrary
anywhere else in this Agreement, the Performance Award is subject to the terms,
definitions and provisions of the Plan, which is incorporated herein by
reference.
(b) The
Performance Award represents a potential incentive bonus that may become vested
and earned based upon the Grantee’s continued employment and the achievement of
the performance goals set forth in Section 2 hereof. The actual amount of the
Performance Award, if any, will be based on the Grantee’s vested interest in a
portion of the Performance Award Pool. The Grantee’s right in the Performance
Award represents a mere unfunded and
unsecured
contingent promise to pay by the Company or the Partnership, as applicable.
Neither the Performance Award nor any interest therein may be transferred,
assigned, alienated or anticipated.
2.
Vesting
of Performance Award.
(a)
Provided that the Grantee remains continuously employed by the Company, the
Partnership, the Services Company or any Subsidiary until the applicable vesting
date set forth below (each, a “Vesting
Date”),
the
Performance Award shall become vested and payable as follows:
(i)
In
the event that the Company achieves a compound annual Total Shareholder Return
equivalent to at least 15% during the period commencing on April 1, 2005 and
ending on March 31, 2008 (the “Three
Year TSR Target”),
the
Performance Award shall become vested as of March 31, 2008 with respect to
a
dollar amount equal the product of (x) the amount of the Performance Award
Pool,
calculated as of such date, multiplied by (y) the Grantee’s Performance Award
Percentage;
(ii)
In
the event that the Company does not achieve the Three Year TSR Target but
achieves a compound annual Total Shareholder Return equivalent to at least
12%
during the period commencing on April 1, 2005 and ending on March 31, 2009
(the
“Four
Year TSR Target”),
the
Performance Award shall become vested as of March 31, 2009 with respect to
a
dollar amount equal the product of (x) the amount of the Performance Award
Pool,
calculated as of such date, multiplied by (y) the Grantee’s Performance Award
Percentage; and
(iii)
In
the event that the Company does not achieve the Three Year TSR Target or the
Four Year TSR Target but achieves a compound annual Total Shareholder Return
equivalent to at least 9% during the period commencing on April 1, 2005 and
ending on March 31, 2010 (the “Five
Year TSR Target”),
the
Performance Award shall become vested as of March 31, 2010 with respect to
a
dollar amount equal the product of (x) the amount of the Performance Award
Pool,
calculated as of such date, multiplied by (y) the Grantee’s Performance Award
Percentage.
(iv)
Notwithstanding the foregoing, in the event that the Company achieves the Three
Year TSR Target and/or the Four Year TSR Target, and the Company subsequently
achieves the Four Year TSR Target and/or the Five Year TSR Target, as
applicable, the Performance Award shall become vested as of the applicable
subsequent Vesting Date with respect to an additional amount equal to the
excess, if any, between (x) the dollar amount of the Performance Award that
would have become vested as of such subsequent Vesting Date pursuant to
paragraph (ii) or (iii) above had the Three Year TSR Target and the Four Year
TSR Target, as applicable, not previously been achieved, and (y) the dollar
amount of the Performance Award that has previously become vested pursuant
to
paragraph (i) and/or (ii) above, as applicable.
(b)
Notwithstanding the foregoing, if (1) a Change in Control occurs prior to March
31, 2010 and the Grantee remains continuously employed by the Company, the
Partnership,
the Services Company or any Subsidiary until the date of such Change in Control
(the “Change
in Control Date”),
and
(2) the Company achieves a compound annual Total Shareholder Return equivalent
to at least 9% during the period commencing on April 1, 2005 and ending on
the
Change in Control Date, the Performance Award (determined as set forth below)
shall become vested as of the Change in Control Date, and all obligations to
the
Grantee in respect of the Performance Award shall be satisfied in full upon
payment thereof. The dollar amount of the Performance Award that shall become
vested as of such date shall equal the product of (x) the amount of the
Performance Award Pool, calculated as of such date, multiplied by (y) the
Grantee’s Performance Award Percentage, less the dollar amount of any portion of
the Performance Award that has previously become vested pursuant to Section
2(a)
above. In determining the dollar amount of the Performance Award that shall
become vested upon a Change in Control, the actual compound annual Total
Shareholder Return greater than 9% for the period ending on the Change in
Control Date shall be considered and not a hypothetical Three Year TSR Target,
Four Year TSR Target, or Five Year TSR Target, even if the Change in Control
occurs on or after the first, second, or third Vesting Date.
(c)
Notwithstanding the foregoing, in the event of the Grantee’s Termination of
Employment for any reason, then, to the extent the Performance Award (or a
portion thereof) has not yet become vested under Section 2(a) or (b) above,
the
Grantee’s right to receive any portion of the Performance Award will thereupon
be forfeited by the Grantee, and the Company will have no obligations to the
Grantee with respect thereto.
3.
Payment
of Performance Award.
Not
later than 30 days after the applicable Vesting Date (or Change in Control
Date,
if applicable) with respect to which the Performance Award (or any portion
thereof) has become vested, the Company or the Partnership will distribute
the
amount or value of such vested Performance Award (as determined under Section
2)
to the Grantee in the form of shares of Common Stock, subject to the limits
set
forth in Article II of the Plan; provided,
however,
that in
no event shall the number of shares of Common Stock distributed with respect
to
the Performance Award, when combined with the number of shares of Common Stock
distributed with respect to all other similar Performance Awards granted under
the Plan, exceed 3,000,000 shares (subject to adjustment as provided in Section
11.3 of the Plan); provided,
further,
that the
Administrator, in its sole and absolute discretion, may elect to distribute
some
or all of such vested Performance Award in cash, and any portion of the
Performance Award that is not distributed in the form of shares of Common Stock
by reason of the limit set forth in this Section 3 or the limits set forth
in
Article II of the Plan shall be distributed in cash. With respect to any portion
of the Performance Award that is satisfied by the distribution of shares of
Common Stock, the value of such shares shall be equal to the Fair Market Value
(as defined in the Plan) on the date the Performance Award (or portion thereof)
became vested.
4.
Determinations
by Administrator.
Notwithstanding anything contained herein, all determinations, interpretations
and assumptions relating to the vesting and calculation of the Performance
Award
(including, without limitation, determinations, interpretations and assumptions
with respect to shareholder value, shareholder return and the Performance Award
Pool) shall be made by the Administrator. In making such determinations, the
Administrator may employ attorneys, consultants, accountants, appraisers,
brokers, or other persons, and the Administrator, the Board, the Company, the
Partnership and their officers and directors shall be
entitled
to rely upon the advice, opinions or valuations of any such persons. All actions
taken and all interpretations and determinations made by the Administrator
or
the Board in good faith and absent manifest error shall be final and binding
upon the Grantee, the Company and all other interested persons. In addition,
the
Administrator, in its discretion, may adjust or modify the methodology for
calculating of the Performance Award (including, without limitation, the
methodology for calculating shareholder value, shareholder return and the
Performance Award Pool), other than the Performance Award Percentage, as
necessary or desirable to account for events affecting the value of the Common
Stock which, in the discretion of the Administrator, are not considered
indicative of Company performance, such as the issuance of new Common Stock,
stock repurchases, stock splits, issuances and/or exercises of stock grants
or
stock options, and similar events, all in order to properly reflect the
Company’s intent with respect to the performance objectives underlying the
Performance Award or to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available with respect to the Performance
Award.
5.
No
Rights as Stockholder.
Provided that any portion of the Performance Award that becomes vested and
payable is timely distributed in accordance with Section 3 above, the Grantee
shall not be, nor have any of the rights or privileges of, a stockholder of
the
Company in respect of any shares issued upon payment of the Performance Award
(or any portion thereof) unless and until certificates representing such shares
shall have been issued by the Company or the Partnership, as applicable, to
the
Grantee or unless and until such stock ownership is properly entered on the
records of the duly authorized transfer agent of the Company.
6.
Compliance
With Law.
The
Grantee acknowledges that the Plan and this Agreement are intended to conform
to
the extent necessary with all provisions of all applicable federal and state
laws, rules and regulations (including, but not limited to the Securities Act
and the Exchange Act and any and all regulations and rules promulgated by the
Securities and Exchange Commission thereunder, including without limitation
the
applicable exemptive conditions of Rule 16b-3) and to such approvals by any
listing, regulatory or other governmental authority as may, in the opinion
of
counsel for the Company or the Partnership, be necessary or advisable in
connection therewith. Notwithstanding anything herein to the contrary, the
Plan
shall be administered, and the Performance Award is granted, only in such a
manner as to conform to such laws, rules and regulations. To the extent
permitted by applicable law, the Plan, this Agreement and the Performance Award
shall be deemed amended to the extent necessary to conform to such laws, rules
and regulations.
7.
Amendment.
This
Agreement and the Plan may be amended without the consent of the Grantee;
provided,
however,
that no
amendment to this Agreement shall, without the consent of the Grantee, adversely
affect or impair any rights of the Grantee under this Agreement
8.
Severability.
In the
event that one or more of the provisions of this Agreement may be invalidated
for any reason by a court, any provision so invalidated will be deemed to be
separable from the other provisions hereof, and the remaining provisions hereof
will continue to be valid and fully enforceable.
9.
Governing
Law.
This
Agreement shall be administered, interpreted and enforced under the internal
laws of the State of California without regard to conflicts of laws
thereof.
10.
Tax
Withholding.
The
Company or the Partnership, as applicable, shall be entitled to require payment
in cash or deduction from compensation (including the Performance Award) payable
to the Grantee of any sums required by federal, state or local tax law to be
withheld with respect to the issuance, vesting, or payment of the Performance
Award. The Administrator may in its discretion and in satisfaction of the
foregoing requirement allow the Grantee to elect to have the Company or the
Partnership, as applicable, withhold shares of Common Stock otherwise issuable
under the Performance Award (or allow the return of shares of Common Stock)
having a Fair Market Value equal to the sums required to be withheld.
Notwithstanding any other provision of the Plan or this Agreement, the number
of
shares of Common Stock which may be withheld with respect to the issuance,
vesting or payment of the Performance Award in order to satisfy the Grantee’s
federal and state income and payroll tax liabilities with respect to the
issuance, vesting or payment of the Performance Award shall be limited to the
number of shares which have a Fair Market Value on the date of withholding
or
repurchase equal to the aggregate amount of such liabilities based on the
minimum statutory withholding rates for federal and state tax income and payroll
tax purposes that are applicable to such supplemental taxable
income
11.
No
Tax
Advice.
Neither
the Company nor the Partnership has made any warranty or representation to
the
Grantee with respect to the income tax consequences of the transactions
contemplated by this Agreement, and the Grantee is in no manner relying on
the
Company, the Partnership or any of their representatives for an assessment
of
such tax consequences. The Grantee is advised to consult with his or her own
tax
advisor with respect to such tax consequences and the issuance, vesting and
payment of the Performance Award.
12.
Certain
Definitions.
As used
herein, the following terms shall have the meanings specified below, unless
the
context clearly indicates otherwise.
(a)
“Base
Price”
means
$23.91, which represents the average of the closing trading prices of a share
of
Common Stock on the New York Stock Exchange during the ten consecutive trading
days ending on March 31, 2005.
(b)
“Excess
Shareholder Value”
means
the sum of (x) 50% of the Xxxxxxx Excess Shareholder Value, plus (y) 50% of
the
NAREIT Excess Shareholder Value.
(c)
“Xxxxxxx
Excess Shareholder Value”
means,
with respect to the total number of shares of Common Stock and limited
partnership units of the Partnership outstanding as of the applicable Valuation
Date, the aggregate positive dollar value, if any, of the compound annual Total
Shareholder Return (as applied to such stock and units) for the applicable
Performance Period in excess of a compound annual Total Shareholder Return
equivalent to 9% for such Performance Period. A negative Xxxxxxx Excess
Shareholder Value shall be disregarded for purposes of computing Excess
Shareholder Value.
(d)
“NAREIT
Excess Shareholder Value”
means,
with respect to the total number of shares of Common Stock and limited
partnership units of the Partnership outstanding as of the
applicable
Valuation Date, the aggregate positive dollar value, if any, of the compound
annual Total Shareholder Return (as applied to such stock and units) for the
applicable Performance Period in excess of the greater of (i) the corresponding
compound annual shareholder return of the market-value weighted NAREIT Office
Index for such Performance Period, assuming the reinvestment of dividends from
the date of issue through the applicable Valuation Date, and (ii) a compound
annual Total Shareholder Return equivalent to 9% for such Performance Period.
A
negative NAREIT Excess Shareholder Value shall be disregarded for purposes
of
computing Excess Shareholder Value.
(e)
“NAREIT
Office Index”
means
the composite of the stock price performance, including the reinvestment of
dividends, of office real estate investment trusts as complied by the National
Association of Real Estate Investment Trusts; provided,
however,
that the
NAREIT Office Index shall not include the Company.
(f)
“Performance Award Percentage” means 8%.
(g)
“Performance Award Pool” means:
(i)
10%
of the Excess Shareholder Value if the compound annual Total Shareholder Return
for the applicable Performance Period equals or exceeds 15%;
(ii)
5%
of the Excess Shareholder Value if the compound annual Total Shareholder Return
for the applicable Performance Period is equal to or greater than 12% but less
than 15%; and
(iii)
2.5% of the Excess Shareholder Value if the compound annual Total Shareholder
Return for the applicable Performance Period is equal to or greater than 9%
but
less than 12%;
provided,
however,
that in
no event shall the aggregate amount of the Performance Award Pool
exceed
$50,000,000
(or, in
the event that more than one Performance Award payment becomes payable pursuant
to Section 2 above, then in no event shall the sum of all Performance Award
Pools exceed $50,000,000).
(h)
“Performance
Period”
means
the period beginning on April 1, 2005 and ending on the applicable Valuation
Date.
(i)
“Total
Shareholder Return”
means
the percentage by which the Trailing Average Fair Market Value, as of the
applicable Valuation Date, of a share of Common Stock outstanding as of April
1,
2005, increased or decreased, as applicable, by an amount that would be realized
if all cash dividends paid on a share of Common Stock during the applicable
Performance Period were reinvested in Common Stock
on the
applicable dividend payment date, exceeds the Base Price; provided,
however,
that for
purposes of calculating the Total Shareholder Return in the event of a Change
in
Control under Section 2(b) above, Total Shareholder Return shall mean the
percentage by which the price per share of Common Stock paid in connection
with
such Change in Control, increased by an amount that would be realized if all
cash dividends paid on a share of Common Stock during the applicable Performance
Period were reinvested in Common Stock on the applicable dividend payment date,
exceeds the Base Price.
(j)
“Trailing
Average Fair Market Value”
means
the average of the closing trading prices of a share of Common Stock on the
principal exchange on which such shares are then traded during the ten
consecutive trading days ending on the applicable Valuation Date (or ending
on
the last trading day preceding such Valuation Date if the Valuation Date does
not fall on a trading day).
(k)
“Valuation
Date”
means,
with respect to a given Performance Period, March 31, 2008, March 31, 2009,
or
March 31, 2010, as applicable; provided,
however,
that in
the event of a Change in Control that occurs prior to March 31, 2010, the
Valuation Date shall mean the Change in Control Date.
[SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF, this Agreement has been executed and delivered by the parties
hereto.
XXXXXXX
PROPERTIES, INC.,
a
Maryland corporation
By:
______________________________________
Name:
Title:
XXXXXXX
PROPERTIES, L.P.,
a
Maryland limited partnership
By: Xxxxxxx
Properties, Inc., a Maryland corporation
Its: General
Partner
By:
______________________________________
Name:
Title:
GRANTEE
______________________________________
Xxxxxx
Xxxxxxxxx
Exhibit
D
GENERAL
RELEASE
For
a
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the undersigned does hereby release and forever discharge the
“Releasees”
hereunder, consisting of Xxxxxxx Properties, Inc., a Maryland corporation,
Xxxxxxx Properties, L.P., a Maryland limited partnership, Xxxxxxx Services,
Inc., a Maryland corporation, and each of their partners, subsidiaries,
associates, affiliates, successors, heirs, assigns, agents, directors, officers,
employees, representatives, lawyers, insurers, and all persons acting by,
through, under or in concert with them, or any of them, of and from any and
all
manner of action or actions, cause or causes of action, in law or in equity,
suits, debts, liens, contracts, agreements, promises, liability, claims,
demands, damages, losses, costs, attorneys’ fees or expenses, of any nature
whatsoever, known or unknown, fixed or contingent (hereinafter called
“Claims”),
which
the undersigned now has or may hereafter have against the Releasees, or any
of
them, by reason of any matter, cause, or thing whatsoever from the beginning
of
time to the date hereof. The Claims released herein include, without
limiting the generality of the foregoing, any Claims in any way arising out
of,
based upon, or related to the employment or termination of employment of the
undersigned by the Releasees, or any of them; any alleged breach of any express
or implied contract of employment; any alleged torts or other alleged legal
restrictions on Releasee’s right to terminate the employment of the undersigned;
and any alleged violation of any federal, state or local statute or ordinance
including, without limitation, Title VII of the Civil Rights Act of 1964, the
Age Discrimination In Employment Act, the Americans With Disabilities Act,
and
the California Fair Employment and Housing Act.
THE
UNDERSIGNED ACKNOWLEDGES THAT HE HAS BEEN ADVISED BY LEGAL COUNSEL AND IS
FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH
PROVIDES AS FOLLOWS:
“A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW
OR
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR.”
THE
UNDERSIGNED, BEING AWARE OF SAID CODE SECTION, HEREBY EXPRESSLY WAIVES ANY
RIGHTS HE MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON
LAW
PRINCIPLES OF SIMILAR EFFECT.
IN
ACCORDANCE WITH THE OLDER WORKERS BENEFIT PROTECTION ACT OF 1990, THE
UNDERSIGNED IS HEREBY ADVISED AS FOLLOWS:
(A) HE
HAS
THE RIGHT TO CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS RELEASE;
(B) HE
HAS
TWENTY-ONE (21) DAYS TO CONSIDER THIS RELEASE BEFORE SIGNING IT;
AND
(C) HE
HAS
SEVEN (7) DAYS AFTER SIGNING THIS RELEASE TO REVOKE THIS RELEASE, AND THIS
RELEASE WILL BECOME EFFECTIVE UPON THE EXPIRATION OF THAT REVOCATION
PERIOD.
The
undersigned represents and warrants that there has been no assignment or other
transfer of any interest in any Claim which he may have against Releasees,
or
any of them, and the undersigned agrees to indemnify and hold Releasees, and
each of them, harmless from any liability, Claims, demands, damages, costs,
expenses and attorneys’ fees incurred by Releasees, or any of them, as the
result of any such assignment or transfer or any rights or Claims under any
such
assignment or transfer. It is the intention of the parties that this
indemnity does not require payment as a condition precedent to recovery by
the
Releasees against the undersigned under this indemnity.
The
undersigned agrees that if he hereafter commences any suit arising out of,
based
upon, or relating to any of the Claims released hereunder or in any manner
asserts against Releasees, or any of them, any of the Claims released hereunder,
then the undersigned agrees to pay to Releasees, and each of them, in addition
to any other damages caused to Releasees thereby, all attorneys’ fees incurred
by Releasees in defending or otherwise responding to said suit or
Claim.
The
undersigned further understands and agrees that neither the payment of any
sum
of money nor the execution of this Release shall constitute or be construed
as
an admission of any liability whatsoever by the Releasees, or any of them,
who
have consistently taken the position that they have no liability whatsoever
to
the undersigned.
IN
WITNESS WHEREOF, the undersigned has executed this Release this ____ day of
___________, ____.
______________________________________
Xxxxxx
Xxxxxxxxx
