EXHIBIT 10.6
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Individual Exchange Agreement
Pertaining To
Konover Property Trust, Inc. (Formerly FAC Realty, Inc.) 1996 Restricted
Stock Plan
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This Agreement is entered into as of this [date] day of [Month], [Year] by and
between [FirstName] [Lastname] ("Recipient") and Konover Property Trust, Inc.
(formerly FAC Realty, Inc.) ("Corporation").
WHEREAS, pursuant to the Konover Property Trust, Inc. (formerly FAC Realty,
Inc.) 1996 Restricted Stock Plan, as amended ("Plan"), the Recipient has
received or will be granted shares of restricted stock as shown in Agreement
Supplement A. Under this Agreement, shares granted under the Plan shall be
referred to as "Restricted Stock."
WHEREAS, under the terms of the Plan, the Restricted Stock currently granted and
that to be granted in the future is subject to vesting provisions found in
section 6 of the Plan.
WHEREAS, Recipient desires to exchange, for the Repurchase Rights established
pursuant to the terms and conditions of this Agreement, the right to receive
(along with all other rights appurtenant thereto) the Restricted Stock reflected
in Agreement Supplement A.
WHEREAS, the Corporation desires to exchange the Repurchase Rights for the
return to the Corporation of Recipient's Restricted Stock granted pursuant to
the Plan.
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NOW, THEREFORE, in consideration of the mutual promises contained herein, and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereby agree as follows.
1. EXCHANGE RESTRICTED STOCK FOR REPURCHASE RIGHTS. Recipient hereby agrees
to exchange, for the Repurchase Rights and Dividend Equivalents described
in this Agreement, his or her Restricted Stock (including the right to
receive dividends thereon and the right to vote such shares). Corporation,
in turn, agrees to exchange the Repurchase Rights for the Restricted
Stock.
For each share of Restricted Stock granted to the Recipient and exchanged
under this Agreement, Recipient shall receive one Repurchase Right. Each
Repurchase Right shall entitle Recipient to acquire from the Corporation,
in accordance with the terms and conditions of this Agreement, a share of
Stock. For purposes of this Agreement, the terms "Shares" and "Stock"
shall refer to Konover Property Trust, Inc. (formerly FAC Realty, Inc.)
common stock granted to Recipient in the form of Restricted Stock.
A. Application to Restricted Stock Outstanding as of the Date of This
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Agreement. As of the date of this Agreement, Recipient has been
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granted Restricted Stock pursuant to the Plan. Some or all of the
Restricted Stock granted to Recipient may not currently be vested in
accordance with the terms of section 6 of the Plan. To the extent
that any of this Restricted Stock granted as of the date of this
Agreement is not currently 100% vested, then the nonvested
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Restricted Stock to which the Recipient desires this Agreement to
apply to will be reflected in Section I of Agreement Supplement A
("Supplement A"), which shall be included with and made a part of
this Agreement.
B. Application to Restricted Stock Granted After the Date of This
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Agreement. Following the date of this Agreement, Recipient may be
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granted additional Restricted Stock in accordance with the Plan.
This Agreement shall automatically apply to the grant of the
additional Restricted Stock to Recipient, and Section II of
Supplement A shall be amended to reflect the additional grant.
Recipient's acknowledgment signature shall also be obtained and
included on Section II of Supplement A with respect to such Stock.
2. CREATION AND TREATMENT OF DIVIDEND EQUIVALENTS. Whenever any cash dividend
is declared on the type and class of shares subject to Repurchase Rights,
Corporation shall calculate a Dividend Equivalent equal to the amount of
cash dividends which would have been payable to Recipient had the
Restricted Stock subject to this Agreement actually been issued and
outstanding. Such Dividend Equivalent shall be payable to Recipient on or
about the time Corporation makes its payments to holders of issued and
outstanding shares.
3. ADJUSTMENT IN NUMBER OR FORM OF REPURCHASE RIGHTS. If any of the events
enumerated in section 11(a) of the Plan occurs with respect to the type
and class of shares subject to Repurchase Rights, then Corporation may
make such adjustments in the terms, conditions or restrictions of this
Agreement (and the Repurchase Rights subject to this Agreement) as it
shall deem equitable and just.
4. EXERCISE OF REPURCHASE RIGHTS. In accordance with the provisions of this
Paragraph 4, Recipient may exercise a Repurchase Right at any time during
the period: (i) beginning the date the Restricted Stock subject to the
Repurchase Right becomes vested under section 6 of the Plan (or, if later,
on the date any restrictions on sale under Section 16(b) the 1934 Exchange
Act, as amended, expire), and (ii) ending on the date 15 years from the
date under item (i) above. This period shall be referred to in this
Agreement as the "Exercise Period".
A Repurchase Right shall expire at the end of its Exercise Period and may
not be exercised after the end of such Period. Upon expiration, the
Recipient, and any person claiming benefits through the Participant, will
lose all rights with respect to such Repurchase Right.
A. Procedure. Subject to the requirements of this Paragraph 4, a
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Recipient may exercise a Repurchase Right by giving written notice
to the Corporation (using a Repurchase Right Exercise Form supplied
by the Corporation) and tendering, on or about the Exercise Date,
full payment of the Exercise Price by check or other means
acceptable to the Corporation.
B. Minimum Repurchase Right Exercise Requirements. The minimum number
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of Repurchase Rights allowed to be exercised at any one time by
Recipient shall be equal to that vested number of shares of
Restricted Stock which are part of a single block of such Stock
granted to Recipient on a particular date under the Plan. Restricted
Stock granted for different reasons under the Plan (e.g., in lieu
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of salary increases, bonuses or as part of the Corporation's long
term incentive plan) will each be considered a separate block of
Restricted Stock for purposes of these minimum exercise
requirements.
C. Restrictions On Exercise. The following shall apply to any exercise
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by a Recipient of a Repurchase Right under this Agreement.
(1) Required Approvals. In the event that the exercise of any
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Repurchase Right requires the prior listing, registration,
qualification, consent or approval of any securities exchange,
state or federal agency or other governmental regulatory body,
then the Repurchase Right may not be exercised in whole or in
part until such approvals have been obtained or such
requirements have been met.
(2) Stock Legend. Each Recipient exercising a Repurchase Right
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under this Agreement shall represent to and agree with the
Corporation that the Recipient: (i) is acquiring such Shares
as an investment and not with a present intention of
distribution or resale, and (ii) agrees to have placed upon
the certificates representing the Shares a legend setting
forth these representations or a reference thereto. Such
Shares shall be transferable thereafter only if the proposed
transfer shall be permissible under the Plan and this
Agreement and if, in the opinion of counsel for the
Corporation, such transfer shall at such time be in compliance
with all applicable federal and state securities laws and
regulations.
D. Tender of Payment Upon Exercise of Repurchase Right. The exercise of
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any Repurchase Right shall not be deemed complete and the Recipient
shall have no rights, interests or privileges as an owner of the
Stock subject to the Repurchase Right until the Recipient tenders
payment of the Repurchase Right's Exercise Price in a manner
permitted under this Agreement.
E. Delivery of Stock. No later than ten business days after all of the
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requirements for the exercise of a Repurchase Right under the
provisions of this Paragraph have been met, Corporation shall
deliver or cause to be delivered to the Recipient the Shares to
which the exercised Repurchase Right related.
The Shares shall be delivered free and clear of all restrictions,
security interests (whether or not perfected), liens or other
possible claims upon the Shares.
F. Tax Withholding. Whenever Stock is to be delivered upon the exercise
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of a Repurchase Right, the Corporation shall require as a condition
of such delivery: (i) the cash payment by the Recipient of an amount
sufficient to satisfy all federal, state and local tax withholding
requirements related to the exercise, (ii) the withholding of such
amount through the reduction in the number of shares of Stock to be
delivered to the Recipient, or (iii) the withholding of such amount
from compensation otherwise due to the Recipient.
(1) Timing of Election. Such tax withholding election shall be
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made before the date on which the amount of tax to be withheld
is determined by the Corporation, and such election shall be
irrevocable.
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(2) Additional Withholding. With the consent of the Corporation,
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the Recipient may elect a greater amount of withholding, not
to exceed the estimated amount of the Recipient's total tax
liability with respect to the exercise of the Repurchase
Rights. Such election shall be made at the same time and in
the same manner as provided in Paragraph 4F(1) above.
G. Definitions. For purposes of this Paragraph 4, the terms below shall
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have the following meanings.
(1) Exercise Date shall mean the date upon which the Corporation
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approves the Repurchase Right Exercise Form submitted by the
Recipient with respect to the Repurchase Rights being
exercised.
(2) Exercise Price shall mean not less than 10% of the Fair Market
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Value of the Restricted Stock subject to the Repurchase Right,
determined as of: (i) the date of this Agreement for
Restricted Stock outstanding but not yet vested as of the date
of this Agreement, and (ii) the Grant Date for Restricted
Stock granted subsequent to the date of this Agreement and
which becomes subject to this Agreement.
(3) Fair Market Value Means, for the date in question, the closing
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price of a share of Konover Property Trust, Inc. (formerly FAC
Realty, Inc.) Common Stock on the New York Stock Exchange or
such other securities exchange upon which the Stock is listed;
provided, if there is no trading permitted on such date, then
the closing price on the last previous day upon which trading
is permitted.
(4) Grant Date means the date on which Restricted Stock is granted
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under the Plan.
5. MISCELLANEOUS PROVISIONS. The following provisions shall apply to the
exchange of Repurchase Rights for Restricted Shares under this Agreement.
A. Headings. The headings of Paragraphs under this Agreement are solely
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for convenience of reference. If there is any conflict between such
headings and the text of this Agreement, the text shall control.
B. Incorporation by Reference and Conflict of Language. The provisions
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of the Plan, along with their defined terms, are hereby incorporated
by reference into this Agreement. Should the provisions of this
Agreement conflict with the provisions of the Plan, then the
provisions of the Plan will control. Should the provisions of this
Agreement conflict with the terms and conditions of any employment
agreement entered into by the Recipient and the Corporation, then
the provisions of this Agreement will control.
C. Designation of Beneficiary. On or about the execution of this
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Agreement by the Recipient, the Recipient shall designate one or
more Beneficiaries to receive benefits under the Agreement in the
event of the Recipient's death while holding unexercised Repurchase
Rights. Such Beneficiaries shall be named on forms
IV
provided by the Committee, and a Recipient may change a Beneficiary
designation at any time by filing the prescribed form with the
Committee.
(1) No Consent Required to Name Beneficiary. Neither the consent
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of the Recipient's current Beneficiary nor spouse shall be
required for the naming of a Beneficiary or for a change of
Beneficiary. No Beneficiary shall have any rights under this
Agreement during the lifetime of the Recipient, except as may
otherwise be provided in this Agreement.
(2) Death Without Designation of Beneficiary. A Recipient who dies
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without having designated a Beneficiary and who is lawfully
married on the date of death shall be deemed to have named the
Recipient's surviving spouse as Beneficiary. Any other
Recipient who dies without having designated a Beneficiary
shall be deemed to have named the Recipient's estate as
Beneficiary.
D. Gender. Unless the context clearly requires a different meaning, all
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pronouns in this Agreement shall refer indifferently to persons of
any gender.
E. Singular and Plural. Unless the context clearly requires a different
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meaning, singular terms shall also include the plural and vice
versa.
F. Governing Law. Except to the extent preempted by federal law, the
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construction and operation of this Agreement shall be governed by
the laws of the State of North Carolina without regard to the choice
of law principles of such state.
G. Severability. If any provision of this Agreement is held illegal or
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invalid by any court or governmental authority for any reason, the
remaining provisions shall remain in full force and effect and shall
be construed and be enforced in accordance with the purposes of the
Agreement as if the illegal or invalid provision did not exist.
If permissible, and in lieu of such illegal, invalid or
unenforceable provision, there shall be added automatically as a
part of this Agreement, a legal, valid and enforceable provision a
similar in term to such illegal, invalid or unenforceable provision
as may be possible, and the parties hereto request the court or any
arbitrator to whom disputes relating to this Agreement are submitted
to reform the otherwise illegal, invalid or unenforceable provision
in accordance with this Paragraph 5G.
H. No Obligation to Exercise. The granting of a Repurchase Right shall
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impose no obligation upon Recipient to exercise such Repurchase
Right.
I. No Rights as Shareholder. Prior to the tender of payment of the
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Exercise Price following the exercise of a Repurchase Right,
Recipient shall have no rights, interests or other privileges of a
shareholder of the Corporation with respect to any Stock obtainable
upon the exercise of the Repurchase Right.
J. No Right to Continued Employment. Nothing contained in the Agreement
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shall be deemed to give any person the right to be retained in the
employ of the
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Corporation, or to interfere with the right of the Corporation to
discharge any person at any time without regard to the effect that
such discharge shall have upon such person's rights or potential
rights, if any, under the Agreement.
K. Notices. Any notice to be provided under the Agreement to the
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Corporation shall be mailed (by certified mail, postage prepaid) or
delivered to the Corporation personally at the Corporation's primary
executive offices. Any notice to Recipient shall be mailed (by
certified mail, postage prepaid) or delivered personally to
Recipient at the current address shown on the payroll records of the
Corporation. No notice shall be binding on the Corporation until
received by the Corporation, and no notice shall be binding on
Recipient until received by Recipient.
L. Spendthrift Provision. Subject to the exceptions below, the right of
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Recipient to receive shares of Stock under this Agreement upon the
exercise of a Repurchase Right shall not be subject in any manner to
sale, transfer, assignment, pledge, attachment, garnishment, or
other alienation or encumbrance of any kind. Nor may such right be
taken, either voluntarily or involuntarily for the satisfaction of
the debts of, or other obligations or claims against, any such
person or entity, including claims for alimony, support, separate
maintenance and claims in bankruptcy proceedings.
(1) Permitted Transfer. Notwithstanding the above provisions of
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this Xxxxxxxxx 0X, Xxxxxxxxxx Rights may by gifted by
Recipient to his or her spouse, child, stepchild, grandchild,
parent, or sibling, or legal dependent of Recipient, or to a
trust of which the beneficiary or beneficiaries of the trust
shall be either a person designated above or Recipient. In the
event of such gifting, the Shares obtainable through exercise
of the Repurchase Rights shall remain subject to the
restrictions, obligations and conditions set forth in the Plan
and in this Agreement, including the original Exercise Period.
M. Incapacity of Recipient. If any person entitled to exercise a
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Repurchase Right under the Agreement is deemed by the Corporation to
be incapable (physically or mentally) of personally receiving and
giving a valid receipt for shares of Stock acquired through the
exercise of a Repurchase Right, then, unless and until claim
therefore shall have been made by a duly appointed guardian or other
legal representative of such person, the Corporation may provide for
the transfer of such shares of Stock (or any part thereof) to be
made to any other person or institution then contributing toward or
providing for the care and maintenance of such person. Any such
transfer of Stock shall be a payment for the account of such person
and represent a complete discharge of any liability of Corporation
and the Agreement with respect to such Stock.
N. Addresses. Recipient shall keep Corporation informed of his or her
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current address and the current address of his or her Beneficiary.
Corporation shall not be obligated to search for the whereabouts of
any person.
O. Limitations on Liability. Recipient and any other person claiming
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benefits under the Agreement shall be entitled under this Agreement
only to those rights
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accompanying the exercise of a Repurchase Right ("Repurchase Right
Claims"). Neither Corporation nor any individual acting as Recipient
or agent of Corporation shall be liable to Recipient or any other
person for any other claim, loss, liability or expense under this
Agreement not directly related to a Repurchase Right Claim.
P. Forfeiture of Unexercised Repurchase Rights. Notwithstanding any
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other provision of the Agreement, should Recipient engage in theft,
fraud, embezzlement or willful misconduct causing significant
property damage to Corporation, then any issued but unexercised
Repurchase Rights then outstanding will automatically be forfeited.
The determination of theft, embezzlement or willful misconduct will
be made by the Board in good faith, but such determination does not
require an actual criminal indictment or conviction prior to or
after such decision. In any determination of forfeiture pursuant to
this Paragraph 5P, Recipient will be given the opportunity to refute
any such decision by the Board, but the Board's decision on the
matter will be considered final and binding on Recipient.
Q. Recipient's Rights Unfunded. The Agreement at all times shall be
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unfunded as defined under applicable provisions of the Internal
Revenue Code and under the Employee Retirement Income Security Act.
The right of Recipient or any Beneficiary to receive shares of Stock
subject to Repurchase Rights granted under the Agreement shall
represent an uninsured claim against the general assets of
Corporation in the event of the Corporation's insolvency or
bankruptcy.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first shown above.
RECIPIENT
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[FirstName] [Lastname]
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Date
Konover Property Trust, Inc. (formerly
FAC Realty, Inc.)
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President, Chief Executive Officer
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Date
VII
