RESTRICTED SHARE AGREEMENT
AGREEMENT made as of the 2nd day of July, 2001, between Corporate Office
Properties Trust, a Maryland business trust (the "Company"),and Xxxxx X.
Xxxxxxx, Xx. ("Employee").
1. AWARD.
(a) SHARES. Pursuant to the Corporate Office Properties Trust 1998 Long Term
Incentive Plan (the "Plan"), 23,000 common shares (the "Restricted Shares") of
beneficial interest, $0.01 par value per share, of the Company, shall be issued
as hereinafter provided in Employee's name subject to certain restrictions
thereon. The date of this award shall be July 2, 2001 (the "Grant Date").
(b) ISSUANCE OF RESTRICTED SHARES. The Restricted Shares shall be issued upon
acceptance hereof by Employee and upon satisfaction of the conditions of this
Agreement.
(c) PLAN INCORPORATED. Employee acknowledges receipt of a copy of the Plan, and
agrees that this award of Restricted Shares shall be subject to all of the terms
and conditions set forth in the Plan, including future amendments thereto, if
any, pursuant to the terms thereof, which Plan is incorporated herein by
reference as a part of this Agreement.
2. RESTRICTED SHARES. Employee hereby accepts the Restricted Shares when
issued and agrees with respect thereto as follows:
(a) FORFEITURE RESTRICTIONS. The Restricted Shares shall be subject to the
Forfeiture Restrictions (as hereinafter defined) from the date of this Agreement
through July 2, 2005 (the "Restricted Period"). The Restricted Shares may not be
sold, assigned, pledged, exchanged, hypothecated or otherwise transferred,
encumbered or disposed of during the Restricted Period to the extent then
subject to the Forfeiture Restrictions. To the extent the Forfeitures
Restrictions have not lapsed at the end of the Restricted Period as provided in
subparagraph (b) of this Paragraph 2, Employee shall, for no consideration,
forfeit to the Company all Restricted Shares to the extent then subject to the
Forfeiture Restrictions. The prohibition against transfer and the obligation for
forfeit and surrender Restricted Shares to the Company are herein referred to as
"Forfeiture Restrictions." The Forfeiture Restrictions shall be binding upon and
enforceable against any transferee of Restricted Shares.
(b) LAPSE OF FORFEITURE RESTRICTIONS. The Forfeiture Restrictions shall lapse as
to the Restricted Shares in accordance with the following schedule provided that
Employee has been continuously employed by the Company or a Subsidiary or
Affiliate from the date of this Agreement through the lapse date.
Percentage of Total Amount of Total
Number of Restricted Number of Restricted
Shares as to Which Shares as to Which
Date Forfeiture Restricted Lapse Forfeiture Restrictions Lapse
---- --------------------------- -----------------------------
July 2, 2002 25% 5,750
July 2, 2003 25% 5,750
July 2, 2004 25% 5,750
July 2, 2005 25% 5,750
Notwithstanding the foregoing, the Forfeiture Restrictions shall lapse as to all
of the Restricted Shares on the earlier of (i) the occurrence of a Change of
Control (as such term is defined in the Plan), or (ii) the date Employee's
employment with the Company, its Subsidiaries and Affiliates is terminated for
any reason other than a termination by the Employee's employer for "Cause" or a
voluntary termination by the Employee. In the event Employee's employment is
terminated for any reason, the Compensation Committee of the Board (the
"Committee"), may, in the Committee's sole discretion, approve the lapse of
Forfeiture Restrictions as to any or all Restricted Shares still subject to such
restrictions, such lapse to be effective on the date of such approval or
Employee's termination date, if later.
To the extent that any Restricted Shares are vested solely as a result of the
Employee's termination of employment pursuant to the foregoing, such shares
shall be subject to a right of first refusal in favor of the Company with
respect to all (but not less than all) of such shares in the event the Employee
proposes to sell or otherwise transfer such shares to any other person. The
Employee shall notify the Company prior to any such transfer (and in the absence
of such prior notice any such transfer shall be void). The Company's right of
repurchase shall be exercisable with respect to such shares within the thirty
(30) day period following the date the Employee gives notice to the Company of
the proposed transfer. The purchase price of the shares repurchased by the
Company hereunder shall be "Fair Market Value" (as defined in the Plan). If the
Company exercises its right of first refusal, the sale shall be consummated
within five (5) days of the date the Company elects to exercise its right.
(c) DIVIDENDS AND VOTING RIGHTS. All dividends applicable to the restricted
portion of the Restricted Shares are to be escrowed into the
Corporate Office
Properties Trust Dividend Reinvestment Plan in
Corporate Office Properties
Trust's name for the benefit of Xxxxx X. Xxxxxxx, Xx. The Employee shall be
entitled to receive any dividends paid with respect to shares of Restricted
Shares that become payable during the Restricted Period; provided however, that
no dividends shall be payable to or for the benefit of the Employee with respect
to record dates occurring prior to the Grant Date, or with respect to record
dates occurring on or after the date, if any, on which the Employee has
forfeited the Restricted Shares. The Employee shall be entitled to vote the
Restricted Shares during the Restricted Period to the same extent as would have
been applicable to the Employee if the Employee was then vested in the shares;
provided, however, that the
Employee shall not be entitled to vote the shares with respect to record dates
for such voting rights arising prior to the Grant Date, or with respect to
record dates occurring on or after the date, if any, on which the Employee has
forfeited the Restricted Shares.
(d) CERTIFICATES. A certificate evidencing the Restricted Shares shall be issued
by the Company in Employee's name, or at the option of the Company, in the name
of a nominee of the Company, pursuant to which Employee shall have voting rights
and shall be entitled to receive all dividends as hereinabove stated unless and
until the Restricted Shares are forfeited pursuant to the provisions of this
Agreement. The certificate shall bear a legend evidencing the nature of the
Restricted Shares, and the Company may cause the certificate to be delivered
upon issuance to the Secretary of the Company or to such other depository as may
be designated by the Company as depository for safekeeping until the forfeiture
occurs or the Forfeiture Restrictions lapse pursuant to the terms of the Plan
and this award. Upon request of the Committee or its delegate, Employee shall
deliver to the Company a stock power, endorsed in blank, relating to the
Restricted Shares then subject to the Forfeiture Restrictions. Upon the lapse of
the Forfeiture Restrictions without forfeiture, the Company shall cause a new
certificate or certificates to be issued without legend in the name of Employee
for the shares upon which forfeiture Restrictions lapsed. Notwithstanding any
other provisions of this Agreement, the issuance or delivery of any shares of
Stock (whether subject to restrictions or unrestricted) may be postponed for
such period as may be required to comply with applicable requirements of any
national securities exchange or any requirements under any law or regulation
applicable to the issuance or delivery of such shares. The Company shall not be
obligated to issue or deliver any shares of Stock if the issuance or delivery
thereof shall constitute a violation of any provision of any law or of any
regulation of any governmental authority or any national securities exchange.
3. WITHHOLDING OF TAX. To the extent that the receipt of the Restricted Shares
or the lapse of any Forfeiture Restrictions results in income to Employee for
federal or state income tax purposes, Employee shall deliver to the Company at
the time of such receipt or lapse, as the case may be, such amount of money or
shares of unrestricted Shares as the Company may require to meet its withholding
obligation under applicable tax laws or regulations, and, if Employee fails to
do so, the Company is authorized to withhold from any cash or Share remuneration
then or thereafter payable to Employee any tax required to be withheld by reason
of such resulting compensation income.
4. STATUS OF SHARES. Employee agrees that the Restricted Shares will not be sold
or otherwise disposed of in any manner which could constitute a violation of any
applicable federal or state securities laws. Employee also agrees (i) that the
certificates representing the Restricted Shares may bear such legend or legends
as the Company deems appropriate in order to assure compliance with applicable
securities laws, (ii) that the Company may refuse to register the transfer of
the Restricted Shares on the share transfer records of the Company if such
proposed transfer would be in the opinion of counsel satisfactory to the Company
constitute a violation of any applicable securities law and (iii) that the
Company may give related instructions to is transfer agent, if any, to stop
registration of the transfer of the Restricted Shares.
5. EMPLOYMENT RELATIONSHIP. For purposes of this Agreement, Employee shall be
considered to be in the employment of the Company as long as Employee remains an
employee of either the Company, any successor entity or a Subsidiary or
Affiliate as defined in the Plan) of the Company or any successor. Any question
as to whether and when there has been a termination of such employment, and the
cause of such termination, shall be determined by the Committee, or its
delegate, as appropriate, and its determination shall be final.
6. COMMITTEE'S POWERS. No provision contained in this Agreement shall in any way
terminate, modify or alter, or be construed or interpreted as terminating,
modifying or altering any of the powers, rights or authority vested in the
Committee or, to the extent delegated, in its delegate pursuant to the terms of
the Plan or resolutions adopted in furtherance of the Plan, including, without
limitation, the right to make certain determinations and elections with respect
to the Restricted Shares.
7. BINDING EFFECT. This Agreement shall be binding upon and inure to the benefit
of any successors to the Company and all persons lawfully claiming under
Employee.
8. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of
Maryland.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by
an officer thereunto duly authorized, and Employee has executed this Agreement,
all as of the date first above written.
EMPLOYEE
CORPORATE OFFICE PROPERTIES TRUST
/s/ Xxxxx X. Xxxxxxx, Xx. By: /s/ Xxxx X. Xxxxxx
--------------------------- ---------------------------
Xxxxx X. Xxxxxxx, Xx. Xxxx X. Xxxxxx
Senior Vice President and General Counsel
