NORTHSTAR REALTY FINANCE CORP.
NORTHSTAR
REALTY FINANCE CORP.
2006
OUTPERFORMANCE PLAN
AWARD
AGREEMENT
Name
of
Grantee: _____________________ (“Grantee”)
Participation
Percentage: ___.__%
Grant
Date: _______ __, 2006
RECITALS
A. The
Grantee is an employee of NorthStar Realty Finance Corp. (the
“Company”)
and its
subsidiary NorthStar Realty Finance Limited Partnership, through which the
Company conducts substantially all of its operations (the “Partnership”).
B. The
Company has adopted the 2006 Outperformance Plan (the “Outperformance
Plan”)
to
provide the Company’s employees with incentive compensation.
The
Outperformance Plan was adopted by the Compensation Committee (the “Committee”)
of the
Board of Directors of the Company (the “Board”)
pursuant to authority delegated to it by the Board as set forth in the
Committee’s charter, including authority to make
grants of equity interests in the Partnership which may, under certain
circumstances, become exchangeable for shares of the Company’s common stock
reserved for issuance under the NorthStar
Realty Finance Corp. 2004 Omnibus Stock Incentive Plan, or any successor plan
(as
any
such plan may be amended, modified or supplemented from time to time,
collectively the “Stock
Plan”)).
This
award
agreement (this “Agreement”)
evidences an award to the Grantee under the Outperformance Plan (the
“Award”),
which
is subject to the terms and conditions set forth herein.
C. The
Grantee was selected by the Committee to receive this Award and the Board
effective as of the grant date specified above, awarded to the Grantee the
participation percentage in the Outperformance Pool (as defined herein) set
forth above.
NOW,
THEREFORE,
the
Company, the Partnership and the Grantee agree as follows:
1. Administration.
The
Outperformance Plan and all awards thereunder, including this Award, shall
be
administered by the
Committee, which in the administration of the Outperformance Plan shall have
the
same powers and authority it has in the administration of the Stock Plan as
set
forth in the Stock Plan.
2. Definitions.
Capitalized terms used herein without definitions shall have the meanings given
to those terms
in
the Stock Plan. In addition, as used herein:
“Additional
Share Baseline Value”
means,
with respect to an Additional Share, the gross proceeds received by the Company
or the Partnership upon the issuance of such Additional Share, which amount
shall be deemed to equal, as applicable, (A) if such Additional Share is issued
in a public offering or private placement, the gross price to the public or
to
the purchaser(s), (B) if such Additional Share is issued in exchange for assets
or upon the acquisition of another entity, the cash value imputed to such
Additional Share for purposes of such transaction by the parties thereto, as
determined by the Committee, or, if no such value can be imputed, the Common
Stock Price on the date of issuance, and (C) if such Additional Shares are
issued upon exercise of stock options or in exchange (directly or indirectly)
for LTIP Units, OPP Units or other Units issued to employees, non-employee
directors, consultants or other persons or entities as incentive compensation
or
if such Additional Shares constitute restricted shares of Common Stock issued
to
employees or other persons or entities in exchange for services provided to
the
Company, zero.
“Additional
Shares”
means
(without double-counting) the sum of (A) the number of shares of Common Stock
plus (B) the product of the Adjustment Factor then in effect multiplied by
the
number of Units (other than those issued to the Company), in the case of each
(A) and (B), to the extent issued after January 1, 2006 and on or before the
Valuation Date in a capital raising transaction, in exchange for assets or
upon
the acquisition of another entity, but specifically excluding, without
limitation, shares of Common Stock issued upon exercise of stock options or
upon
the exchange (directly or indirectly) of LTIP Units, OPP Units or other Units
issued to employees, non-employee directors, consultants or other persons or
entities as incentive compensation and restricted shares of Common Stock issued
to employees or other persons or entities in exchange for services provided
to
the Company.
“Adjustment
Factor”
has
the
meaning given to that term in the Partnership Agreement.
“Award
OPP Units”
has
the
meaning set forth in Section
3.
“Baseline”
means,
as of the Valuation Date, an amount representing (without double-counting)
the
sum of: (a) the Baseline Value multiplied by (I) the Initial Shares, and (II)
the sum of 100% plus the Target Return Percentage; plus
(b) with respect to each Additional Share, the product of (I) the
Additional Share Baseline Value of such Additional Share, multiplied by (II)
the
sum of (A) 100% plus (B) the product of the Target Return Percentage multiplied
by a fraction the numerator of which is the number of days prior to and
including the Valuation Date during which such Additional Share has been
outstanding and the denominator of which is the number of days from and
including January 1, 2006 to and including the Valuation Date; provided
that if
the Valuation Date occurs prior to December 31, 2008 as a result of a Change
in
Control, then for purposes of this definition in connection with the calculation
of the Outperformance Pool as of the Valuation Date, (i) the “Baseline” shall be
calculated as of the date that such Change of Control is consummated instead
of
December 31, 2008, except in the event of a Transactional Change of Control,
in
which case the same date used for purposes of the proviso in the definition
of
"Common Stock Price" shall be used for purposes of the calculation of the
“Baseline”, and (ii) the Target Return Percentage to be used in such calculation
shall be reduced to 30% multiplied by the Fraction.
2
“Baseline
Value”
means
$9.92, which the Committee determined was the average closing price of the
Company’s Common Stock for the twenty (20) trading days prior to the
Effective Date.
"Beneficial
Owner"
shall
have the meaning set forth in Rule 13d-3 under the Exchange Act.
“Change
of Control”
means:
(a) any
Person is or becomes Beneficial Owner, directly or indirectly, of securities
of
the Company representing thirty-five percent (35%) or more of the combined
voting power of the then outstanding securities of the Company, excluding (I)
any Person who becomes such a Beneficial Owner in connection with a transaction
described in clause (I) of paragraph (b) below, (II) any Person who becomes
such
a Beneficial Owner through the issuance of such securities with respect to
purchases made directly from the Company; and (III) NCIC or any of its
majority-owned or controlled subsidiaries; or
(b) the
consummation of a merger or consolidation of the Company with any other
corporation or the issuance of voting securities of the Company in connection
with a merger or consolidation of the Company (or any direct or indirect
subsidiary of the Company) pursuant to applicable stock exchange requirements,
other than (I) a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity or any parent
thereof) fifty percent (50%) or more of the combined voting power of the
securities of the Company or such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation, or (II) a merger
or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company representing thirty-five
percent (35%) or more of the combined voting power of the then outstanding
securities of the Company; or
3
(c)
the
consummation of an agreement for the sale or disposition by the Company of
all
or substantially all of the assets of the Company approved by the stockholders
of the Company; or
(d)
the
stockholders of the Company approve a plan of complete liquidation or
dissolution of the Company.
“Code”
means
the Internal Revenue Code of 1986, as amended.
“Common
Stock”
means
Company’s Common Stock, par value $.01 per share, either currently existing or
authorized hereafter.
“Common
Stock Price”
means,
as of a particular date, the average of the Fair Market Value of one share
of
Common Stock for the twenty (20) trading days ending on, and including, such
date (or, if such date is not a trading day, the most recent trading day
immediately preceding such date); provided,
however,
that
for purposes of determining the Common Stock Price in connection with a
Transactional Change of Control (but only if in due course such Transactional
Change of Control is actually consummated by the Company), the Common Stock
Price shall be equal to the fair market value in cash of the total consideration
per share of Common Stock to be paid or payable in the transaction resulting
in
the Transactional Change of Control, as determined by the Committee as of the
date on which the Transactional Change of Control is publicly announced (or
if
more than a single public announcement is made, as of the date of the latest
announcement or announcements setting forth the terms and conditions of such
Transactional Change of Control that are relevant to the Committee’s
determination of such fair market value).
“Disability”
means,
unless otherwise provided in the Grantee’s Service Agreement (if any), a
disability which renders the Grantee incapable of performing all of his or
her
material duties for a period of at least 180 consecutive or non-consecutive
days
during any consecutive twelve-month period.
“Dividend
Unit Equivalent”
has
the
meaning set forth in Section
3.
“Dividend
Value”
means,
as of a particular date of determination, the aggregate amount of dividends
and
other distributions paid on one share of Common Stock that was outstanding
as of
the Effective Date between January 1, 2006 and such date of determination
(excluding dividends and distributions paid in the form of additional shares
of
Common Stock).
“Effective
Date”
means
January 1, 2006.
“Exchange
Act”
means
the
Securities Exchange Act of 1934, as amended.
4
“Fair
Market Value”
has the
meaning given to that term in the Stock Plan.
“Fraction”
means
the number of calendar days that have elapsed since the Effective Date divided
by 1,096.
“Initial
Shares”
means
35,440,397 shares of Common Stock and Units outstanding to be used for purposes
of the calculation of the Baseline.
“LTIP
Units”
means
Partnership Units, as such term is defined in the Partnership Agreement, issued
as profits interests to employees, non-employee directors, consultants or other
persons or entities as incentive or other compensation for services provided
to
the Company having the rights, voting powers, restrictions, limitations as
to
distributions, qualifications and terms and conditions of redemption set forth
in the Partnership Agreement and any applicable award or similar
agreement.
“Maximum
Outperformance Pool Amount”
means
$40,000,000.
"NCIC"
means
NorthStar Capital Investment Corp., a Maryland corporation.
“OPP
Units”
means
Partnership Units, as such term is defined in the Partnership Agreement, awarded
as profits interests under the Outperformance Plan having the rights, voting
powers, restrictions, limitations as to distributions, qualifications and terms
and conditions of redemption set forth herein and in the Partnership
Agreement.
“OPP
Unit Equivalent”
has
the
meaning set forth in Section
3.
“Outperformance
Pool”
means,
as of the Valuation Date, a dollar amount calculated as follows: subtract the
Baseline from the
Total
Return, in each case as of the Valuation Date, and multiply the resulting
amount (or,
if
the resulting amount is a negative number, zero)
by 10%;
provided,
however,
that in
no event shall the Outperformance Pool as of the Valuation Date exceed the
Maximum Outperformance Pool Amount.
“Participation
Percentage”
means
the Grantee’s share of the Outperformance Pool as set forth on the first page of
this Agreement.
“Partnership
Agreement”
means
the Agreement
of
Limited Partnership of the Partnership dated as of October 19, 2004 among the
Company
and the
limited partners party thereto, as amended from time to time.
"Person"
means
an individual, corporation, partnership, limited liability company, joint
venture, association, trust, unincorporated organization, other entity or
"group" (as defined in the Exchange Act).
5
“Service
Agreement”
means,
as of a particular date, any employment, consulting or similar service
agreement(s) then in effect between the Grantee, on the one hand, and the
Company or the Partnership, on the other hand, as amended or supplemented
through such date.
“Target
Return Percentage”
means
30%,
except
as otherwise defined for purposes of the definition of Baseline in certain
circumstances, as described in such definition.
“Total
Return”
means
(without double-counting), as of a particular date, an amount equal to the
sum
of (a) the Total Shares multiplied by the Common Stock Price as of such date
plus (b) an amount equal to the sum of the total dividends and other
distributions actually paid between January 1, 2006 and such date (excluding
dividends and distributions paid in the form of additional shares of Common
Stock or Units), in respect of (I) the Initial Shares and (II) the Additional
Shares if and to the extent that shares of Common Stock included within the
definition of “Additional Shares” were outstanding on the record date with
respect to the applicable dividend or distribution so paid.
“Total
Shares”
means
(without double-counting) the algebraic sum of: (A) the number of shares of
Common Stock outstanding on the Valuation Date; plus (B) the product of the
Adjustment Factor then in effect multiplied by the number of Units (other than
those owned by the Company) outstanding on the Valuation Date; plus (C) shares
of Common Stock issuable as of the Valuation Date upon exercise of outstanding
stock options, but only if and to the extent that such options are then
exercisable and with the number of such shares being calculated on a “net” basis
after giving pro forma effect to the exercise of such options as if they were
exercised on a “cashless” basis on the Valuation Date; minus (D) the product of
the Adjustment Factor then in effect multiplied by the number of LTIP Units,
OPP
Units or other Units outstanding on the Valuation Date that were issued to
employees, non-employee directors, consultants or other persons or entities
as
incentive compensation if and to the extent that such LTIP Units, OPP Units
or
other Units as of the Valuation Date are subject to time- or performance-based
vesting restrictions or other risk of forfeiture conditions that have not been
satisfied; and minus (E) restricted shares of Common Stock or other stock-based
awards outstanding on the Valuation Date that were granted to employees or
other
persons or entities in exchange for services provided to the Company if and
to
the extent that such restricted shares or other stock-based awards as of the
Valuation Date are subject to time- or performance-based vesting restrictions
or
other risk of forfeiture conditions that have not been satisfied.
“Total
Unit Equivalent”
has
the
meaning set forth in Section
3.
“Transactional
Change of Control”
means
(a) a Change of Control described in clause (a) of the definition thereof where
the “person” or “group” makes a tender offer for Common Stock, or (b) a Change
of Control described in clauses (b) or (c) of the definition
thereof.
6
“Units”
means
all Partnership Common Units (as defined in the Partnership Agreement),
Partnership Preferred Units (as defined in the Partnership Agreement) and other
Partnership Units (as defined in the Partnership Agreement) with economic
attributes substantially similar to Partnership Common Units and Partnership
Preferred Units as determined by the Committee, outstanding or issuable upon
the
conversion, exercise, exchange or redemption of any securities of any kind
convertible, exercisable, exchangeable or redeemable for Partnership Common
Units, Partnership Preferred Units or such other Partnership Units.
“Valuation
Date”
means
the
earliest of (i) December 31, 2008, (ii) the date upon which a Change of
Control
shall occur, except in the event of a Transactional Change of Control, in which
case the same date used for purposes of the proviso in the definition of "Common
Stock Price" shall be the "Valuation Date", and (iii) the last day of a 30
consecutive calendar day period during which, on each day in that period, the
Outperformance Pool would have reached the Maximum Outperformance Pool Amount
if
such day had been the Valuation Date.
3. Outperformance
Award.
(a) Subject
to Section
8,
the
Grantee is hereby granted an Award consisting of the participation percentage
in
the Outperformance Pool set forth on the first page of this Agreement. In
approving the Outperformance Plan the Committee has resolved that the Grantee’s
Award be denominated in and settled through the issuance of OPP Units in a
number calculated to give the Grantee a value equal to the Grantee’s
participation percentage in the Outperformance Pool (“Award OPP Units”) as of
the Valuation Date. The timing of issuance of Award OPP Units to the Grantee
pursuant to this Award will be within the full and exclusive control of the
Committee, so long as it such issuance occurs on or prior to the Valuation
Date
as provided in this Section 3. Without limiting the discretion of the Committee,
Award OPP Units may be issued to the Grantee: (i) from time to time based on
a
determination by the Committee of the extent to which the performance objectives
established under the Outperformance Plan have been achieved and an estimate
of
the value of the Outperformace Pool as of such time or times; (ii) as of the
Valuation Date based on the final calculations set forth in Section 3(b) of
this
Agreement; or (iii) at any other time or times between the date hereof and
the
Valuation Date. Award OPP Units, when issued, shall constitute and be treated
as
the property of the Grantee, subject to the terms of this Agreement and the
Partnership Agreement. The issuance of Award OPP Units to the Grantee pursuant
to this Award shall be set forth in minutes of the meetings of the Committee
and
communicted to the Grantee in writing promptly after the approval thereof by
the
Committee. Award OPP Units will be: (A) subject to forfeiture or increase to
the
extent provided in this Section
3
as set
forth below; and (B) subject to vesting as provided in Sections
4
and
8
hereof.
In connection with each issuance of Award OPP Units the Grantee shall execute
and deliver to the Company and the Partnership such documents, comparable to
the
documents executed and delivered in connection with this Agreement, as the
Company and/or the Partnership reasonably request in order to comply with all
applicable legal requirements, including, without limitation, federal and state
securities laws.
7
(b) As
soon
as practicable following the Valuation Date, but as of the Valuation Date,
the
Committee will determine the Outperformance Pool (if any) and then perform
the
following calculations with respect to this Award:
(i) multiply
(w) the Outperformance Pool calculated as of the Valuation Date by (x) the
Grantee’s Participation Percentage, and then divide the result by the product of
(y) the Common Stock Price calculated as of the Valuation Date multiplied by
(z)
the Adjustment Factor on the Valuation Date; the resulting number is hereafter
referred to as the “OPP
Unit Equivalent”;
(ii) multiply
(v) the OPP Unit Equivalent by (w) the Adjustment Factor on the Valuation Date
and (x) the Dividend Value as of the Valuation Date, and then divide the result
by the product of (y) the Common Stock Price calculated as of the Valuation
Date
multiplied by (z) the Adjustment Factor on the Valuation Date; the resulting
number is hereafter referred to as the “Dividend
Unit Equivalent”;
and
(iii) add
the
OPP Unit Equivalent to the Dividend Unit Equivalent; the resulting number is
hereafter referred to as the “Total
Unit Equivalent”.
(c) If
the
Total Unit Equivalent is smaller than the number of Award OPP Units previously
issued to the Grantee pursuant to Section 3(a) hereof, then the Grantee, as
of
the Valuation Date, shall forfeit a number of Award OPP Units equal to the
difference, and thereafter the term Award OPP Units will refer only to the
remaining Award OPP Units that were not forfeited. If the Total Unit Equivalent
is greater than the number of Award OPP Units previously issued to the Grantee
pursuant to Section 3(a) hereof, then, upon the performance of the calculations
set forth in Section 3(b) hereof: (A) the Company shall cause the Partnership
to
issue to the Grantee, as of the Valuation Date, a number of additional OPP
Units
equal to the difference; (B) such additional OPP Units shall be added to the
Award OPP Units previously issued, if any, and thereby become part of this
Award; (C) the Company and the Partnership shall take such corporate or
partnership action as is necessary to accomplish the grant of such additional
OPP Units; (D) the Grantee shall execute and deliver in connection with such
grant such documents, comparable to the documents executed and delivered in
connection with this Agreement, as the Company and/or the Partnership reasonably
request in order to comply with all applicable legal requirements, including,
without limitation, federal and state securities laws; and (E) thereafter the
term Award OPP Units will refer collectively to the Award OPP Units, if any,
issued prior to such additional grant plus such additional OPP Units. If the
Total Unit Equivalent is the same as the number of Award OPP Units previously
issued to the Grantee pursuant to Section 3(a) hereof, then there will be no
change to the number of Award OPP Units under this Award pursuant to this
Section 3.
8
4. Termination
of Xxxxxxx’s Service Relationship; Vesting; Change of Control.
(a) If
at any
time prior to the Valuation Date the Grantee shall cease to be an employee
of
the
Company
for any
reason other than termination by the Company without cause (as defined in the
Service Agreement), then this Award Agreement shall automatically and
immediately be forfeited by the Grantee; provided,
however,
that in
the case of the termination by reason of death or Disability of the
Grantee,
the
provisions of Section
8 shall
apply. If at any time prior to vesting pursuant to Section 4(c) hereof the
Grantee shall cease to be an employee of the
Company
for any
reason other than termination by the Company without cause (as defined in the
Service Agreement), all Award OPP Units that remain unvested at such time shall
automatically and immediately be forfeited by the Grantee; provided,
however,
that in
the case of the termination by reason of death or Disability of the
Grantee,
the
provisions of Section
8 shall
apply. In
the
event Grantee becomes a consultant or advisor to the Company or the Partnership
or a non-employee director of the Company, such change in status shall not
be
deemed a termination of employment or service with the Company at the time
of
such change in status for purposes of this Section 4.
(b) Notwithstanding
anything to the contrary in this Section 4 or in any Service Agreement which
provides for accelerated vesting or payout of the Grantee’s bonuses and
incentive awards in the event of certain types of terminations of Grantee’s
service relationship with the Company (such as, for example, termination at
the
end of the term, termination without cause by the employer or termination for
good reason by the Grantee), the Grantee hereby agrees that the treatment of
this Award and the Grantee’s Award OPP Units shall be governed solely by this
Agreement and not by the terms of such Service Agreement. For the avoidance
of
doubt, the foregoing sentence will be deemed an amendment to any applicable
Service Agreement to the extent required to avoid application thereof to this
Award and the Grantee’s Award OPP Units, such that, by way of illustration, any
such accelerated vesting or payout pursuant to the terms of such Service
Agreement shall not be interpreted as requiring that any calculations set forth
in Section 3 hereof be performed with respect to this Award, except as
specifically provided in Section 8 hereof, prior to the date on which such
calculations would otherwise be performed pursuant to the terms of the
Outperformance Plan for all Grantees. If
at any
time prior to the Valuation Date the Grantee’s service relationship with the
Company is terminated by the Company without cause (as defined in the Service
Agreement), then this Award shall be modified as follows: (A) this Award and
any
Award OPP Units issued prior to such termination shall not be forfeited by
the
Grantee as of the date of termination;
(B) the
calculations set forth in Section 3 hereof shall be performed as of the
Valuation Date in the same manner as they would have been performed absent
such
termination, except that (I) the OPP Unit Equivalent so calculated will then
be
multiplied by a fraction the numerator of which is the number of days from
and
including January 1, 2006 to the date of such termination and the denominator
of
which is the number of days from and including January 1, 2006 to and including
the Valuation Date, (II) the Dividend Unit Equivalent shall be calculated using
the adjusted OPP Unit Equivalent calculated pursuant to the foregoing clause
(I), and (III) the Total Unit Equivalent shall be the sum of the adjusted OPP
Unit Equivalent and Dividend Unit Equivalent calculated pursuant to the
foregoing clauses (I) and (II); and (C) all of the Grantee’s Award OPP Units
issued and not forfeited pursuant to Section 3 hereof shall be automatically
and
immediately vested as of the Valuation Date without application of the vesting
provisions of Section 4(c) below.
9
(c) Subject
to Section
8 hereof,
the
Grantee’s Award OPP Units issued and not forfeited pursuant to Section 3
hereof
shall
become vested
as
follows: (i) fifty percent (50%) of such Award OPP Units shall become vested
on
the Valuation Date; and (ii) an additional twenty-five (25%) of such Award
OPP
Units shall become vested on each of the first and second anniversaries of
the
Valuation Date, provided,
however,
that
all unvested Award OPP Units that have not previously been forfeited pursuant
to
Section 3 hereof shall vest immediately upon the occurrence of a Change of
Control. For the avoidance of doubt, the vesting of the Award OPP Units pursuant
to this Section 4(c) shall be independent from, and in no way effect, the
determination of the Outperformance Pool (if any), and the corresponding
calculation of the Total Unit Equivalent (if any), pursuant to Section 3
hereof.
5. Payments
by Award Recipients. No
amount
shall be payable to the Company or the Partnership by the Grantee at any time
in
respect of this Award.
6. Distributions.
The
holder of the Award OPP Units shall be entitled to receive distributions with
respect to such Award OPP Units to the extent provided for in the Partnership
Agreement. The Distribution Participation Date (as defined in the Partnership
Agreement) with respect to Award OPP Units in an amount equal to the Total
Unit
Equivalent is the Valuation Date.
7. Restrictions
on Transfer.
None of
the Award OPP Units shall be sold, assigned, transferred, pledged, hypothecated,
given away or in any other manner disposed of, encumbered, whether voluntarily
or by operation of law (each such action a “Transfer”),
or
redeemed in accordance with the Partnership Agreement (a) prior to vesting
and
(b) unless such Transfer is in compliance with all applicable securities laws
(including, without limitation, the Securities Act of 1933, as amended (the
“Securities
Act”)),
and
such Transfer is in accordance with the applicable terms and conditions of
the
Partnership Agreement. In connection with any Transfer of Award OPP Units,
the
Partnership may require the Grantee to provide an opinion of counsel,
satisfactory to the Partnership, that such Transfer is in compliance with all
federal and state securities laws (including, without limitation, the Securities
Act). Any attempted Transfer of Award OPP Units not in accordance with the
terms
and conditions of this Section
7
shall be
null and void, and the Partnership shall not reflect on its records any change
in record ownership of any OPP Units as a result of any such Transfer, shall
otherwise refuse to recognize any such Transfer and shall not in any way give
effect to any such Transfer of any OPP Units. This Agreement is personal to
the
Grantee, is non-assignable and is not transferable in any manner, by operation
of law or otherwise, other than by will or the laws of descent and
distribution.
10
8. Death
or Disability.
(a) Notwithstanding
any other provision herein, but subject to Section 8(c) below, if, prior to
the
Valuation Date, the Grantee shall cease to be an employee, consultant or
advisor, as applicable, of the Company as a result of his death or Disability,
then (i) with respect to the Grantee the calculations provided in Section 3
hereof shall be performed with respect to this Award immediately upon such
cessation as if a Change of Control had occurred
(with respect to the Grantee only) on the date of his death or termination
by
reason of Disability and (ii) all of the Award OPP Units comprising
this Award (after giving effect to the issuance of additional OPP Units or
forfeiture of Award OPP Units pursuant to Section 3 hereof) shall automatically
and immediately vest.
(b) Notwithstanding
any other provision herein, but subject to Section 8(c) below, if, on or after
the Valuation Date, the Grantee shall cease to be an employee, consultant or
advisor, as applicable, of the Company as a result of his death or Disability,
then all of the Grantee’s Award OPP Units shall automatically and immediately
vest.
(c) Notwithstanding
Sections 8(a) and 8(b) above, the provisions of the Grantee’s Service Agreement,
if any, with respect to death or disability shall govern the treatment of the
Grantee’s Award OPP Units hereunder.
9. Changes
in Capital Structure.
If (i)
the Company shall at any time be involved in a merger, consolidation,
dissolution, liquidation, reorganization, exchange of shares, sale of all or
substantially all of the assets or stock of the Company or other transaction
similar thereto, (ii) any stock dividend, stock split, reverse stock split,
stock combination, reclassification, recapitalization, significant repurchases
of stock or other similar change in the capital structure of the Company, or
any
distribution to holders of Common Stock other than regular cash dividends,
shall
occur or (iii) any other event shall occur which in the good faith judgment
of
the Committee necessitates action by way of appropriate equitable adjustment
in
the terms of this Award, the Outperformance Plan or the OPP Units, then the
Committee may in its sole discretion take such action as it deems necessary
to
maintain the Grantee’s rights hereunder so that they are substantially
proportionate to the rights existing under this Award, the Outperformance Plan
and the terms of the OPP Units prior to such event, including, without
limitation: (A) adjustments in the Award OPP Units, Additional Shares, Baseline
Value, Dividend Value, Common Stock Price, Maximum Outperformance Pool Amount,
Total Shares and Total Return; and (B) substitution of other awards under the
Stock Plan or otherwise.
11
10. Miscellaneous.
(a) Amendments.
This
Agreement may be amended or modified only with the consent of the Partnership
acting through the Committee; provided
that any
such amendment or modification adversely affecting the rights of the Grantee
hereunder must be consented to by the Grantee to be effective
as against him.
(b) Incorporation
of Stock Plan; Committee Determinations.
The
provisions of the Stock Plan are hereby incorporated by reference as if set
forth herein. If and to the extent that any provision contained in this
Agreement is inconsistent with the Stock Plan, this Agreement shall govern.
The
Committee will make the determinations and certifications required by this
Award
as promptly as reasonably practicable following the occurrence of the event
or
events necessitating such determinations or certifications. In the event of
a
Change of Control, the Committee will make such determinations within a period
of time that enables the Company to make any payments due hereunder on or within
five business days after the consummation of the Change of Control.
(c) Status
as a Partner.
As of
the grant date set forth on the first page of this Agreement, the Grantee shall
be admitted as a partner of the Partnership with beneficial ownership of such
number of Award OPP Units as the Committee elects to issue to the Grantee as
of
such date pursuant to Section 3 hereof by: (A) signing and delivering to the
Partnership a copy of this Agreement; and (B) signing, as a Limited Partner,
and
delivering to the Partnership a counterpart signature page to the Partnership
Agreement (attached hereto as Exhibit
A).
The
Partnership Agreement shall be amended from time to time as applicable to
reflect the issuance to the Grantee of Award OPP Units pursuant to Section
3
hereof, whereupon the Grantee shall have all the rights of a Limited Partner
of
the Partnership with respect to the number of OPP Units then held by the
Grantee, as set forth in the Partnership Agreement, subject, however, to the
restrictions and conditions specified herein and in the Partnership
Agreement.
(d) Status
of OPP Units under the Stock Plan.
Award
OPP Units may, but need not, be issued as equity securities under the Stock
Plan
insofar as the Outperformance Plan has been established as an incentive program
of the Partnership. The Company will have the right, as set forth in the
Partnership Agreement, to issue shares of Common Stock in exchange for Units
into which Award OPP Units may have been converted pursuant to the Partnership
Agreement, subject to certain limitations set forth in the Partnership
Agreement, and such shares of Common Stock may be issued under the Stock Plan
if
the Committee so determines. The Grantee must be eligible to receive the Award
OPP Units in compliance with applicable federal and state securities laws and
to
that effect is required to complete, execute and deliver certain covenants,
representations and warranties (attached as Exhibit
B).
The
Committee may, in its sole and absolute discretion, determine whether and when
Award OPP Units issued pursuant to Section 3 hereof become part of the Stock
Plan, and upon and to the extent of such determination this Award will be
considered an award under the Stock Plan. The Grantee acknowledges that the
Grantee will have no right to approve or disapprove such determination by the
Committee.
12
(e) Legend.
The
records of the Partnership evidencing the Award OPP Units shall bear an
appropriate legend, as determined by the Partnership in its sole discretion,
to
the effect that such OPP Units are subject to restrictions as set forth herein
and in the Partnership Agreement.
(f) Compliance
With Law.
The
Partnership and the Grantee will make reasonable efforts to comply with all
applicable securities laws. In addition, notwithstanding any provision of this
Agreement to the contrary, no OPP Units will become vested or be paid at a
time
that such vesting or payment would result in a violation of any such
law.
(g) Investment
Representation; Registration.
The
Grantee hereby makes the covenants, representations and warranties and set
forth
on Exhibit
B
attached
hereto. All of such covenants, warranties and representations shall survive
the
execution and delivery of this Agreement by the Grantee. The Partnership will
have no obligation to register under the Securities Act any OPP Units or any
other securities issued pursuant to this Agreement or upon conversion or
exchange of OPP Units.
(h) Section
83(b) Election.
In
connection with each separate issuance of OPP Units under this Award pursuant
to
Section 3 hereof, the Grantee hereby agrees to make an election to include
in
gross income in the year of transfer the applicable Award OPP Units pursuant
to
Section 83(b) of the Code substantially in the form attached hereto as
Exhibit
C
and to
supply the necessary information in accordance with the regulations promulgated
thereunder.
(i) 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.
(j) Governing
Law.
This
Agreement is made under, and will be construed in accordance with, the laws
of
the State of New York, without giving effect to the principle of conflict of
laws of such State.
13
(k) No
Obligation to Continue Position as an Employee, Consultant or
Advisor.
Neither
the Company nor any affiliate is obligated by or as a result of this Agreement
to continue to have the Grantee as an employee, consultant or advisor and this
Agreement shall not interfere in any way with the right of the Company or any
affiliate to terminate the Grantee’s service relationship at any
time.
(l) Notices.
Notices
hereunder shall be mailed or delivered to the Partnership at its principal
place
of business and shall be mailed or delivered to the Grantee at the address
on
file with the Partnership or, in either case, at such other address as one
party
may subsequently furnish to the other party in writing.
(m) Withholding
and Taxes.
No
later than the date as of which an amount first becomes includible in the gross
income of the Grantee for income tax purposes or subject to the Federal
Insurance Contributions Act withholding with respect to this Award, the Grantee
will pay to the Company or, if appropriate, any of its affiliates, or make
arrangements satisfactory to the Committee regarding the payment of, any United
States federal, state or local or foreign taxes of any kind required by law
to
be withheld with respect to such amount. The obligations of the Company under
this Agreement will be conditional on such payment or arrangements, and the
Company and its affiliates shall, to the extent permitted by law, have the
right
to deduct any such taxes from any payment otherwise due to the
Grantee.
(n) Successors
and Assigns.
This
Agreement shall be binding upon the Partnership’s successors and assigns,
whether or not this Agreement is expressly assumed.
[signature
page follows]
14
IN
WITNESS WHEREOF, the undersigned have caused this Award Agreement to be executed
as of the __ day of __________, 2006.
| NORTHSTAR REALTY FINANCE CORP. | ||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
| NORTHSTAR REALTY FINANCE LIMITED PARTNERSHIP | ||
| By: NorthStar Realty Finance Corp., its general partner | ||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
| GRANTEE | |
|
Name: |
|
15
EXHIBIT
A
FORM
OF
LIMITED PARTNER SIGNATURE PAGE
The
Grantee, desiring to become one of the within named Limited Partners of
NorthStar Realty Finance Limited Partnership, hereby accepts all of the terms
and conditions of (including, without limitation, the provisions of Section
2.4
titled “Power of Attorney”), and becomes a party to, the Agreement of Limited
Partnership, dated as of October 19, 2004, of NorthStar Realty Finance Limited
Partnership, as amended through the date hereof (the “Partnership
Agreement”).
The
Grantee agrees that this signature page may be attached to any counterpart
of
the Partnership Agreement.
|
Signature
Line for Limited Partner:
___________________________
Name:
______________________
Date:
__________ __, 2006
Address
of Limited Partner:
___________________________
___________________________
|
EXHIBIT
B
GRANTEE’S
COVENANTS, REPRESENTATIONS AND WARRANTIES
The
Grantee hereby represents, warrants and covenants as follows:
(a) The
Grantee has received and had an opportunity to review the following documents
(the “Background
Documents”):
(i) The
Company’s latest Annual Report to Stockholders;
(ii) The
Company’s Proxy Statement for its most recent Annual Meeting of Stockholders;
(iii) The
Company’s Report on Form 10-K for the fiscal year most recently
ended;
(iv) The
Company’s Form 10-Q for the most recently ended quarter filed by the Company
with the Securities and Exchange Commission since the filing of the Form 10-K
described in clause (iii) above;
(v) Each
of
the Company’s Current Report(s) on Form 8-K, if any, filed since the end of the
fiscal year most recently ended for which a Form 10-K has been filed by the
Company;
(vi) The
Partnership Agreement;
(vii) The
Stock
Plan; and
(viii) The
Company’s Certificate of Incorporation, as amended.
The
Grantee also acknowledges that any delivery of the Background Documents and
other information relating to the Company and the Partnership prior to the
determination by the Partnership of the suitability of the Grantee as a holder
of OPP Units shall not constitute an offer of OPP Units until such determination
of suitability shall be made.
(b) The
Grantee hereby represents and warrants that
(i) The
Grantee either (A) is an “accredited investor” as defined in Rule 501(a) under
the Securities Act of 1933, as amended (the “Securities
Act”),
or
(B) by reason of the business and financial experience of the Grantee,
together with the business and financial experience of those persons, if any,
retained by the Grantee to represent or advise him with respect to the grant
to
him or her of OPP Units, the potential conversion of OPP Units into Partnership
Common Units of the Partnership and the potential redemption of such Partnership
Common Units for shares of Common Stock (“REIT
Shares”),
has
such knowledge, sophistication and experience in financial and business matters
and in making investment decisions of this type that the Grantee (I) is capable
of evaluating the merits and risks of an investment in the Partnership and
potential investment in the Company and of making an informed investment
decision, (II) is capable of protecting his own interest or has engaged
representatives or advisors to assist him in protecting his interests, and
(III)
is capable of bearing the economic risk of such investment.
(ii) The
Grantee understands that (A) the Grantee is responsible for consulting his
own
tax advisors with respect to the application of the U.S. federal income tax
laws, and the tax laws of any state, local or other taxing jurisdiction to
which
the Grantee is or by reason of the award of OPP Units may become subject, to
his
particular situation; (B) the Grantee has not received or relied upon business
or tax advice from the Company, the Partnership or any of their respective
employees, agents, consultants or advisors, in their capacity as such; (C)
the
Grantee provides services to the Partnership on a regular basis and in such
capacity has access to such information, and has such experience of and
involvement in the business and operations of the Partnership, as the Grantee
believes to be necessary and appropriate to make an informed decision to accept
this Award of OPP Units; and (D) an investment in the Partnership and/or the
Company involves substantial risks. The Grantee has been given the opportunity
to make a thorough investigation of matters relevant to the OPP Units and has
been furnished with, and has reviewed and understands, materials relating to
the
Partnership and the Company and their respective activities (including, but
not
limited to, the Background Documents). The Grantee has been afforded the
opportunity to obtain any additional information (including any exhibits to
the
Background Documents) deemed necessary by the Grantee to verify the accuracy
of
information conveyed to the Grantee. The Grantee confirms that all documents,
records, and books pertaining to his or her receipt of OPP Units which were
requested by the Grantee have been made available or delivered to the Grantee.
The Grantee has had an opportunity to ask questions of and receive answers
from
the Partnership and the Company, or from a person or persons acting on their
behalf, concerning the terms and conditions of the OPP Units. The
Grantee has relied upon, and is making its decision solely upon, the Background
Documents and other written information provided to the Grantee by the
Partnership or the Company.
(iii) The
OPP
Units to be issued, the Partnership Common Units issuable upon conversion of
the
OPP Units and any REIT Shares issued in connection with the redemption of any
such Partnership Common Units will be acquired for the account of the Grantee
for investment only and not with a current view to, or with any intention of,
a
distribution or resale thereof, in whole or in part, or the grant of any
participation therein, without prejudice, however, to the Grantee’s right
(subject to the terms of the OPP Units, the Stock Plan and this Agreement)
at
all times to sell or otherwise dispose of all or any part of his or her OPP
Units, Partnership Common Units or REIT Shares in compliance with the Securities
Act, and applicable state securities laws, and subject, nevertheless, to the
disposition of his assets being at all times within his control.
(iv) The
Grantee acknowledges that (A) neither the OPP Units to be issued, nor the
Partnership Common Units issuable upon conversion of the OPP Units, have been
registered under the Securities Act or state securities laws by reason of a
specific exemption or exemptions from registration under the Securities Act
and
applicable state securities laws and, if such OPP Units or Partnership Common
Units are represented by certificates, such certificates will bear a legend
to
such effect, (B) the reliance by the Partnership and the Company on such
exemptions is predicated in part on the accuracy and completeness of the
representations and warranties of the Grantee contained herein, (C) such OPP
Units, or Partnership Common Units, therefore, cannot be resold unless
registered under the Securities Act and applicable state securities laws, or
unless an exemption from registration is available, (D) there is no public
market for such OPP Units and Partnership Common Units and (E) neither the
Partnership nor the Company has any obligation or intention to register such
OPP
Units or the Partnership Common Units issuable upon conversion of the OPP Units
under the Securities Act or any state securities laws or to take any action
that
would make available any exemption from the registration requirements of such
laws, except, that, upon the redemption of the Partnership Common Units for
REIT
Shares, the Company may issue such REIT Shares under the Stock Plan and pursuant
to a Registration Statement on Form S-8 under the Securities Act, to the extent
that (I) the Grantee is eligible to receive such REIT Shares under the Stock
Plan at the time of such issuance, (II) the Company has filed a Form S-8
Registration Statement with the Securities and Exchange Commission registering
the issuance of such REIT Shares and (III) such Form S-8 is effective at the
time of the issuance of such REIT Shares. The Grantee hereby acknowledges that
because of the restrictions on transfer or assignment of such OPP Units acquired
hereby and the Partnership Common Units issuable upon conversion of the OPP
Units which are set forth in the Partnership Agreement or this Agreement, the
Grantee may have to bear the economic risk of his ownership of the OPP Units
acquired hereby and the Partnership Common Units issuable upon conversion of
the
OPP Units for an indefinite period of time.
(v) The
Grantee has determined that the OPP Units are a suitable investment for the
Grantee.
(vi) No
representations or warranties have been made to the Grantee by the Partnership
or the Company, or any officer, director, shareholder, agent, or affiliate
of
any of them, and the Grantee has received no information relating to an
investment in the Partnership or the OPP Units except the information specified
in Paragraph (b) above.
(c) So
long
as the Grantee holds any OPP Units, the Grantee shall disclose to the
Partnership in writing such information as may be reasonably requested with
respect to ownership of OPP Units as the Partnership may deem reasonably
necessary to ascertain and to establish compliance with provisions of the Code,
applicable to the Partnership or to comply with requirements of any other
appropriate taxing authority.
(d) The
Grantee hereby agrees to make an election under Section 83(b) of the Code
with respect to the OPP Units awarded hereunder, and has delivered with this
Agreement a completed, executed copy of the election form attached hereto as
Exhibit
C.
The
Grantee agrees to file the election (or to permit the Partnership to file such
election on the Grantee’s behalf) within thirty (30) days after the award
of the OPP Units hereunder with the IRS Service Center at which such Grantee
files his personal income tax returns, and to file a copy of such election
with
the Grantee’s U.S. federal income tax return for the taxable year in which the
OPP Units are awarded to the Grantee.
(e) The
address set forth on the signature page of this Agreement is the address of
the
Grantee’s principal residence, and the Grantee has no present intention of
becoming a resident of any country, state or jurisdiction other than the country
and state in which such residence is sited.
EXHIBIT
C
ELECTION
TO INCLUDE IN GROSS INCOME IN YEAR OF
TRANSFER
OF PROPERTY PURSUANT TO SECTION 83(B)
OF
THE INTERNAL REVENUE CODE
The
undersigned hereby makes an election pursuant to Section 83(b) of the Internal
Revenue Code with respect to the property described below and supplies the
following information in accordance with the regulations promulgated
thereunder:
|
1.
|
The
name, address and taxpayer identification number of the undersigned
are:
|
Name: _____________________________
(the “Taxpayer”)
Address:
_________________________________
_________________________________________
Social
Security No./Taxpayer Identification No.: _________________
|
2.
|
Description
of property with respect to which the election is being
made:
|
The
election is being made with respect to ____________ OPP Units in NorthStar
Realty Finance Limited Partnership (the “Partnership”).
|
3.
|
The
date on which the OPP Units were transferred is ________ __, 2006.
The
taxable year to which this election relates is calendar year
2006.
|
|
4.
|
Nature
of restrictions to which the OPP Units are
subject:
|
|
(a)
|
With
limited exceptions, until the OPP Units vest, the Taxpayer may not
transfer in any manner any portion of the OPP Units without the consent
of
the Partnership.
|
|
(b)
|
The
Taxpayer’s OPP Units vest in accordance with the vesting provisions
described in the Schedule attached hereto. Unvested OPP Units are
forfeited in accordance with the vesting provisions described in
the
Schedule attached hereto.
|
|
5.
|
The
fair market value at time of transfer (determined without regard
to any
restrictions other than restrictions which by their terms will never
lapse) of the OPP Units with respect to which this election is being
made
was $0 per OPP Unit.
|
|
6.
|
The
amount paid by the Taxpayer for the OPP Units was $0 per OPP
Unit.
|
|
7.
|
A
copy of this statement has been furnished to the Partnership and
NorthStar
Realty Finance Corp.
|
Dated:
_____________________
| _________________________________ | |
| Name: |
SCHEDULE
A
Vesting
Provisions of OPP Units
The
OPP
Units are subject to time-based and performance-based vesting with the final
vesting percentage equaling the product of the time-based vesting percentage
and
the performance-based vesting percentage. Performance-based vesting will be
from
0-100% based on NorthStar Realty Finance Corp.’s (the “Company’s”) per-share
total return to shareholders for the period from January 1, 2006 to December
31,
2008 (or earlier in certain circumstances). Under the time-based vesting
hurdles, fifty-percent (50%) of the OPP Units will vest on the last day of
the
performance period and twenty-five percent (25%) of the remaining OPP Units
will
vest on each of the first and second anniversaries thereof, provided that the
Taxpayer remains an employee of the Company through such dates, subject to
acceleration in the event of certain extraordinary transactions or termination
of the Taxpayer’s service relationship with the Company under specified
circumstances. Unvested OPP Units are subject to forfeiture in the event of
failure to vest based on the passage of time or the determination of the
performance-based percentage.
