CORNERSTONE PROPERTIES INC.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Telephone (000) 000-0000 Facsimile (000) 000-0000
[Date]
DIRECTOR SHARES
Dear ________,
This letter agreement (this "Agreement") will evidence and set
forth the terms and conditions of the grant to you of 349 shares (the "1996
Director Shares") of Common Stock of the Company in part payment for your
services as a non-employee Director of the Company in 1996, all pursuant to the
resolution relating to Board compensation adopted by the Board of Directors of
the Company on December 8, 1995. The 1996 Director Shares were determined by
dividing (i) the amount equal to 50% of the annual retainer fee otherwise
payable to non-employee Directors for 1996 by (ii) $_____, with the fractional
share resulting from such calculation to be paid in cash in an amount equal to
such fractional amount times $_____.
In future years, so long as you remain a non-employee
Director, you will automatically receive shares (the "Director Shares") of
Common Stock of the Company in part payment for your services as a non-employee
Director of the Company with the number of such Director Shares being determined
by dividing (i) the amount equal to 50% of the annual retainer fee otherwise
payable to non-employee Directors for the relevant fiscal year by (ii) the Fair
Market Value of one share of Common Stock as of the last day of the preceding
fiscal year. Any fractional shares resulting from such calculation shall not be
granted, but instead shall be paid in cash in an amount equal to such fractional
amount times the Fair Market Value of one share of Common Stock as of the last
day of the relevant preceding fiscal year.
Your grant of Director Shares is subject to the following
terms and conditions:
1. Definitions: For purposes of this Agreement, the following
terms shall have the meanings indicated:
(a) "Annual retainer fee" means only the annual fee otherwise
payable to a non-employee Director for service on the Board of
Directors (not including for service on a committee of the Board) of
the Company and no other fees or expenses; provided, that
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if you serve as a non-employee Director during only a portion of 1996
or any future fiscal year, annual retainer fee shall mean only a pro
rata portion of such annual fee.
(b) "Fair Market Value" on any day shall mean the reported
last sales price on such day or, in case no such sale takes place on
such day, the average of the reported closing bid and asked prices, in
each case on the principal securities exchange on which the Common
Stock is listed or admitted to trading on which prices are quoted in
U.S. dollars, or, if not listed or admitted to trading on any such
securities exchange, the average of the closing bid and asked prices as
furnished in U.S. dollars by any broker/dealer selected from time to
time by the Board of Directors for that purpose. If the Common Stock
was not traded on the applicable securities market on such day, Fair
Market Value shall be determined in the same way on the next preceding
day on which the Common Stock was traded.
2. Award. The Company will register in your name share
certificates representing your Director Shares, which certificates will be held
by the Company for your account. These certificates will bear a legend in
substantially the following form, as determined by the Compensation Committee:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
CONDITIONS OF A RESTRICTED SHARE AGREEMENT BETWEEN CORNERSTONE
PROPERTIES INC. AND THE BENEFICIAL OWNER HEREOF, INCLUDING RESTRICTIONS
ON SALE, TRANSFER AND ENCUMBRANCE.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED WITHOUT
REGISTRATION UNDER THE SECURITIES ACT OF 1933. UNLESS CORNERSTONE
PROPERTIES INC. DETERMINES OTHERWISE, NO TRANSFER OF SUCH SECURITIES
MAY BE MADE WITHOUT AN OPINION OF COUNSEL, SATISFACTORY TO CORNERSTONE
PROPERTIES INC., THAT SUCH TRANSFER MAY PROPERLY BE MADE WITHOUT
REGISTRATION UNDER THE SECURITIES ACT OF 1933 OR THAT SUCH SECURITIES
HAVE BEEN SO REGISTERED UNDER A REGISTRATION STATEMENT WHICH IS IN
EFFECT AT THE DATE OF SUCH TRANSFER.
COPIES OF THE RESTRICTED SHARE AGREEMENT ARE ON FILE AT THE OFFICE OF
THE SECRETARY AND MAY BE INSPECTED DURING NORMAL BUSINESS HOURS.
As soon as practicable following the earlier of:
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(a) your sale in accordance with this Agreement and applicable
Federal securities law of any Director Shares as to which the
restrictions provided for in paragraph 3 below have expired; and
(b) the third month anniversary of the date on which you cease
to be a member of the Board,
a non-legended share certificate (or certificates) will be delivered to you (or
to your estate, as the case may be) for, in the case of clause (a) above, the
number of Director Shares sold and, in the case of clause (b) above, the number
of Director Shares which have been granted to you and for which a certificate
has not previously been delivered.
3. Restrictions on Transferability of Shares. Your Director
Shares may not be sold, exchanged, transferred, assigned, pledged, or otherwise
encumbered or disposed of until the date which is one year after the date of
grant.
4. Voting and Dividend Rights During Restricted Period. After
share certificates representing your Director Shares are registered in your
name, you shall have the right to vote your Director Shares and to receive all
dividends payable with respect thereto.
5. Investment Representation - Registration. In order to
comply with any applicable securities laws, the Company may require you (i) to
furnish evidence satisfactory to the Company (including a written and signed
representation letter) to the effect that all of your Director Shares were
acquired for investment only and not for resale or distribution and (ii) to
agree that all such Director Shares shall only be sold by you following
registration under the Securities Act of 1933 or pursuant to an exemption
therefrom.
6. Compliance with Law and Regulations. Once your Restricted
Shares are no longer subject to restriction, any sale, exchange, transfer,
assignment, pledge, encumbrance or other disposition, directly or indirectly,
whether or not for value, and whether or not voluntarily, of your share
certificates shall be made in compliance with any applicable constitution, rule
or regulation of, or any applicable policy of, any of the exchanges on which the
Common Stock is listed, and any applicable law, rule or regulation of any
governmental agency having jurisdiction.
7. Designation of Beneficiary. You should designate in writing
on forms prescribed by and filed with the Secretary, a beneficiary or
beneficiaries to receive, in the event of your death, any rights to which you
are entitled hereunder. A designation of beneficiary may be replaced by a new
designation or may be revoked by you at any time on forms prescribed by and
filed with the Secretary.
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8. No Right to Reelection. Nothing in this Agreement shall be
deemed to create any obligation on the part of the Board to nominate any of its
members for reelection by the Company's stockholders, nor confer upon any
non-employee Director the right to remain a member of the Board for any period
of time, or at any particular rate of compensation.
9. Changes in Capitalization. If any change shall occur in or
affect the Common Stock on account of a merger, consolidation, reorganization,
stock dividend, stock split or combination, reclassification, recapitalization,
or distribution to holders of the Common Stock (other than regular dividends)
or, if in the opinion of the Compensation Committee, after consultation with the
Company's independent public accountants, changes in the Company's accounting
policies, acquisitions, divestitures, distributions, or other unusual or
extraordinary items have disproportionately and materially affected the value of
the Director Shares, the Committee shall make such adjustments, if any, that it
may deem, in its sole discretion, necessary or equitable in the number of shares
of Common Stock subject to your Director Share grant. In the event of any other
change affecting the Common Stock, such adjustment shall made as may be deemed
equitable by the Compensation Committee to give proper effect to such event.
10. Nontransferability of Rights. Your rights hereunder,
including the right to any amounts or Common Stock payable, may not be assigned,
pledged, or otherwise transferred except, in the event of your death, to your
designated beneficiary or, in the absence of such a designation, by will or the
laws of descent and distribution.
11. Withholding. The Company shall have the right, before any
payment is made or a certificate for any Common Stock is delivered, to deduct or
withhold from any payment to you to satisfy any Federal, state, or local taxes,
including transfer taxes, required by law to be withheld or to require you or
your beneficiary or estate, as the case may be, to pay any amount, or the
balance of any amount, required to be withheld.
12. No Trust or Fund Created. The grant made hereunder shall
not create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any of its subsidiaries and you or
any other person. Your rights hereunder shall be no greater than the rights of
any unsecured general creditor of the Company.
13. Consent Under Local Law. This award shall be conditioned
upon the making of any filing and the receipt of any consents or authorizations
required to comply with, or required to be obtained under, applicable local
laws.
14. Governing Law. This Agreement and the legal relations
between the parties shall be governed by and construed in accordance with the
laws of the State of New York.
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Please indicate your acceptance of this Agreement by signing
and returning the duplicate copy of this letter to the Secretary.
Sincerely,
By:_____________________________
By:_____________________________
ACCEPTED:________________, 1996
_______________________________
