EXHIBIT 10.3
AMENDED AND RESTATED
RESTRICTED SHARE AGREEMENT
THIS AMENDED AND RESTATED RESTRICTED SHARE AGREEMENT made as of the 12th
day of September, 2002 between Corporate Office Properties Trust, a Maryland
business trust (the "Company"), and Xxxxx X. Xxxxxxx, Xx. ("Employee").
RECITALS
A. The Company and the Employee entered into a Restricted Share Agreement
on December 16, 1999 (the "Prior Agreement") providing for the issuance of
78,125 common shares (the "Restricted Shares") of beneficial interest, $0.01 par
value per share, of the Company pursuant to the Corporate Office Properties
Trust 1998 Long Term Incentive Plan (the "Plan").
B. The Restricted Shares were subject to certain restrictions on the
beneficial ownership of the shares as specified in the Prior Agreement.
C. Pursuant to Paragraph 8(d) of the Plan, the terms of an award of
Restricted Shares under the Plan may be amended with the consent of the
Employee.
D. The Employee and the Company wish to amend the Prior Agreement as
hereinafter provided in connection with a renegotiation of an employment
agreement between the Company and the Employee.
NOW, THEREFORE, in consideration of the foregoing, the Company and the
Employee agree as follows:
1. AMENDMENT OF PRIOR AGREEMENT. The Prior Agreement is hereby amended
and superseded by this Agreement. This Agreement shall become effective
September 12, 2002,.
2. AWARD.
(a) SHARES. Pursuant to the Corporate Office Properties Trust 1998
Long Term Incentive Plan (the "Plan"), 78,125 common shares (the "Restricted
Shares") of beneficial interest, $0.01 par value per share, of the Company, were
previously issued in Employee's name subject to certain restrictions thereon as
provided in the Prior Agreement.
(b) ISSUANCE OF RESTRICTED SHARES. The Restricted Shares were issued
upon acceptance of the Prior Agreement by Employee and are subject to
satisfaction of the conditions of this Agreement.
(c) PLAN INCORPORATED. Employee acknowledges receipt of a copy of the
Plan, and agrees that the award of Restricted Shares is 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.
3. RESTRICTED SHARES. Employee 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 the
Prior Agreement through December 31, 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
Forfeiture Restrictions have not lapsed at the end of the Restricted Period as
provided in subparagraph (b) of this Paragraph 3, 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 of 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 the Prior Agreement through the lapse
date; provided, however, that on January 3, 2000 the Forfeiture Restrictions
lapsed as to 5% of the Restricted Shares without regard to any performance
target criteria set forth in the Prior Agreements.
Percentage of Total
Number of Restricted
Shares as to Which
Year Forfeiture Restrictions Lapse
---- -----------------------------
2000 10%
2001 15%
2002 7%
2003 21%
2004 21%
2005 21%
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The following schedule sets forth by year the number of Restricted Shares as to
which performance target achievement described in the Prior Agreement applies:
Total Number of
Restricted Shares
As to Which Performance
Year Target Achievement Applies
---- --------------------------
2000 7,813
2001 11,719
2002 11,719
2003 19,531
2004 23,437
Notwithstanding the foregoing, or any contrary provisions of the Prior
Agreements, it is understood between the Company and Employee, and the Company
acknowledges, that as of December 31, 2001, the annual performance targets were
achieved for all years through 2003, and that as of May 1, 2002, the performance
targets that would have otherwise been applicable to the remainder of the
Restricted Period have been and will thereafter be deemed to have been fully
achieved.
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.
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(c) DIVIDENDS AND VOTING RIGHTS. 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 specified in the Prior Agreement, 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 specified in the Prior Agreement, 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.
4. 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
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Employee any tax required to be withheld by reason of such resulting
compensation income.
5. 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.
6. 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.
7. 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.
8. 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.
9. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of
Maryland.
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IN WITNESS WHEREOF, the Company has caused this Amended and Restated
Restricted Share 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, III
------------------------------ ---------------------------------
Xxxxx X. Xxxxxxx, Xx. Xxxx X. Xxxxxx, III
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