EXHIBIT 10.10
XXXX-XXXX REALTY CORPORATION
RESTRICTED SHARE AWARD AGREEMENT
XXXXX X. XXXXXX
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AGREEMENT EVIDENCING THE GRANT
OF A RESTRICTED SHARE AWARD PURSUANT
TO THE EMPLOYEE STOCK OPTION PLAN
OF XXXX-XXXX REALTY CORPORATION
AGREEMENT ("Agreement") effective as of March 12, 2001, ("Grant
Date") by and between Xxxx-Xxxx Realty Corporation (the "Company") and Xxxxx X.
Xxxxxx ("Recipient").
WHEREAS, pursuant to the 2000 Employee Stock Option Plan of
Xxxx-Xxxx Realty Corporation (the "Plan"), the Company wishes to award shares of
the Company's common stock, par value $.01 per share ("Common Stock") to the
Recipient subject to such terms, conditions, and restrictions (hereinafter,
"Restricted Share Award") as set forth in the Plan, this Agreement, and the
Second Amended and Restated Employment Agreement dated as of July 1, 1999 by and
between the Company and the Recipient (the "Employment Agreement"), and
WHEREAS, upon the vesting of Restricted Shares, Recipient is also
entitled to receive a tax gross-up from the Company under the Tax Gross Up
Agreement between the Recipient and the Company dated March 12, 2001 (the "Tax
Gross Up Agreement") to enable the Recipient to retain as many shares of Common
Stock as possible,
NOW THEREFORE, the parties hereto hereby agree as follows:
1. AWARD OF SHARES OF RESTRICTED STOCK.
(a) Award. Pursuant to the Plan, the Committee hereby awards
to the Recipient, effective as of the Grant Date, a Restricted Share Award
representing the
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conditional receipt of 1,000 shares of Common Stock ("Restricted Shares") at no
out-of-pocket cost to the Recipient subject to the terms, conditions and
restrictions set forth herein. Except for the defined terms set forth in Section
4 below, capitalized terms not otherwise defined in this Agreement shall be as
defined in the Plan.
(b) Employment Agreement. The provisions of the Plan and this
Agreement are subject to the terms of the Recipient's Employment Agreement.
2. AWARD RESTRICTIONS.
(a) GENERAL RULES. Ownership of Restricted Shares shall not
vest in the Recipient, and shall be subject to forfeiture until the conditions
of Section 2(b) and (c) or Section 4 are fully satisfied. For purposes of this
Agreement, the following concepts shall be defined as follows: (i) the lapse of
restrictions on the Recipient's rights with respect to the Restricted Shares
granted hereunder shall be referred to as "Vesting"; (ii) the period between the
Grant Date and the date of Vesting shall be referred to as the "Vesting Period";
and (iii) the date Vesting occurs shall be referred to as the "Vesting Date."
(b) VESTING. An aggregate of 1,000 Restricted Shares may vest
in the Recipient and vest on either a year by year basis approximately over a
three year Vesting Period or on a cumulative basis approximately over a five
year maximum Vesting Period. The number of Restricted Shares scheduled to be
vested and earned on each Vesting Date on a year by year basis provided the
Performance Goals specified in Section 2(c) below are satisfied is as follows:
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RESTRICTED SHARES VESTING DATE
300 January 1, 2002
350 January 1, 2003
350 January 1, 2004
The Vesting Date for this Agreement shall be each January 1st
through and including January 1, 2006. In determining the number of Restricted
Shares which are earned and vested, if applicable, fractional shares shall be
rounded down to the nearest whole number and shall be aggregated and earned on
the next Vesting Date.
(c) PERFORMANCE GOALS. (i) The Restricted Shares shall vest on
the applicable Vesting Date on a year by year basis provided one of the
following financial tests ("Financial Tests") is met for the measurement period
ending on the last day of the Company's fiscal year immediately preceding such
Vesting Date: (A) the Company achieves an eight percent (8%) funds from
operations per common share ("FFO") increase, or (B) shareholders receive a
twelve and three quarters percent (12.75%) total return (dividends, assuming
reinvestment upon applicable payment date, plus stock appreciation per share of
Common Stock). For purposes of this Agreement, FFO shall mean (i) net income
(loss) before minority interest of unit holders, computed in accordance with
generally accepted accounting principles ("GAAP"), excluding the effect of
straight lining of rents, gains (or losses) from debt restructuring, other
extraordinary and significant non-recurring items, and gains (or losses) on sale
of property and other property-related valuation allowances, plus real estate
related depreciation and amortization, as calculated in accordance with the
National
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Association of Real Estate Investment Trusts definition published in March 1995
after adjustment for straight lining of rents and as applied in accordance with
the accounting practices and policies of the Company in effect from time to time
on a consistent basis to the entire Vesting Period, divided by (ii) the sum of
(A) the diluted weighted average number of outstanding shares of Common Stock
and (B) the diluted weighted average number of outstanding common limited
partnership units of Xxxx-Xxxx Realty, L.P., a Delaware limited partnership of
which the Company is the sole general partner, for the applicable period with
such calculations being made all before the effect on FFO and diluted common
shares/common limited partnership units resulting from certain non-recurring
cash payments made pursuant to certain written employment agreements and from
the vesting of restricted share awards and other similar plans or compensation
arrangements for the applicable period.
(ii) In the event that neither of the
Financial Tests above is satisfied for the fiscal year of the Company
corresponding to the applicable Vesting Date ("Non-Achievement Year"), any
Restricted Shares that failed to vest under the annual performance goal criteria
on such Date may vest on such Date or on a subsequent Vesting Date provided the
test described below is satisfied (the "Cumulative Test"). The Cumulative Test
shall be applied at the end of the Non-Achievement Year or any subsequent fiscal
year ("Catch-Up Year") with respect to any Non-Achievement Year PROVIDED a
Financial Test was satisfied in a prior fiscal year or is satisfied in a
Catch-Up Year, by applying the aggregate Financial Test percentages
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and the performance goal requirement on a cumulative basis beginning with the
first fiscal year of the Vesting Period and ENDING with the Non-Achievement Year
or the Catch-Up Year, as applicable. In the event the Cumulative Test is
satisfied (I.E., the aggregate increase in FFO or aggregate total return is not
less than the minimum percentage required to satisfy the Financial Test after
taking into account the applicable Non-Achievement Year), the Restricted Shares
that failed to vest in the Non-Achievement Year shall automatically vest on the
Vesting Date applicable to the Non-Achievement Year or the Catch-Up Year, as the
case may be. For example, if vesting occurred in years one (1) and two (2), year
three (3) is a Non-Achievement Year, and the Cumulative Test is met for the
Non-Achievement Year (I.E., either the aggregate increase in FFO is not less
than twenty-four (24%) percent or the aggregate total return is not less than
thirty-eight and one-quarter (38.25%) percent) vesting would occur on the
Vesting Date applicable to the Non-Achievement Year. In the event the Cumulative
Test is not met in the Non-Achievement Year (year (3)) and one of the Financial
Tests is met in year four (4), the Cumulative Test may be used in year four (4).
Under this scenario, vesting in that portion of the Restricted Stock Award
scheduled to vest in year three (3) will occur in year four (4) if either the
aggregate increase in FFO is not less than thirty-two percent (32%) or the
aggregate total return is not less than fifty-one percent (51%) at the end of
the fourth (4th) fiscal year. RULES FOR APPLICATION OF THE CUMULATIVE TEST: (a)
the Cumulative Test will be applied first at the end of any Non-Achievement
Year, (b) it is not necessary for any Catch-Up Year to immediately succeed a
Non-Achievement Year in order for the Cumulative Test to be applicable as
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long as the Catch-Up Year occurs during the Vesting Period, (c) if two (2) or
more Non-Achievement Years have occurred during the Vesting Period and
Restricted Shares that failed to vest in the Non-Achievement Years remain
non-vested, then in the event that the Cumulative Test is met on a partial basis
so that at least one (1) full year's vesting may occur, the Restricted Share
Award granted with respect to the last Non-Achievement Year that has occurred,
shall vest first and any excess shall be credited to another Non-Achievement
Year and (d) the Cumulative Test may be met on a partial basis by aggregating
percentages in excess of the minimum annual requirement from more than one (1)
fiscal year in the Vesting Period. For example, if vesting occurred in year one
(1) and the FFO is sixteen (16%) percent, years two (2) and three (3) are
Non-Achievement Years with a loss in year two (2) of two (2%) percent and year
three (3) the FFO is four (4%) percent, the Restricted Shares awarded with
respect to year three (3) would vest under the Cumulative Test and two (2%)
percent of the remaining FFO would be available to be used in year two (2) or
any other year (E.G., in the event that FFO were fourteen (14%) percent in year
four (4), the Restricted Shares applicable to year two (2) would also vest. In
the alternative, if FFO were six (6%) percent in year four (4), year four (4)
would vest and year two (2) would remain a Non-Achievement Year).
Notwithstanding any contrary provisions contained in this Section 2(c) and
subject to Section 4 below, any Restricted Shares that have not been earned and
vested by January 1, 2004 on a year by year basis or by January 1, 2006 pursuant
to the Cumulative Test shall automatically be canceled and forfeited.
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(d) LAPSE OF RESTRICTIONS. Upon the Vesting of Restricted
Shares, the Recipient shall own the Shares free and clear of all restrictions
imposed by this Agreement and the Recipient shall be free to hold or dispose of
such Shares in his discretion, subject to applicable federal and state law or
regulations.
(e) PROHIBITION AGAINST ASSIGNMENT. During the Vesting Period,
the Restricted Shares may not be transferred or encumbered by the Recipient by
means of sale, assignment, mortgage, transfer, exchange, pledge, or otherwise.
The levy of any execution, attachment, or similar process upon the Restricted
Shares shall be null and void.
3. STOCK CERTIFICATES.
(a) CERTIFICATES. Restricted Shares shall be evidenced by one
or more stock certificates registered in the name of the Recipient or a nominee
or nominees therefor. As soon as practicable following the date hereof, the
Company shall prepare and issue separate certificates for the Restricted Shares
scheduled to vest in each year (the "Share Certificates"), which shall be
registered in the name of the Recipient or a nominee and which shall bear such
restrictive legend or legends (if any) as the Company may deem necessary or
desirable under any applicable law.
(b) STOCK POWERS. The Recipient shall execute and deliver to
the designee of the Company (the "Designee") stock powers corresponding to the
Share Certificates designating the Company as the transferee of an unspecified
number of Shares, which stock powers may be completed by the Designee as
specified herein. The Recipient and the Company each waive the requirement that
the signature
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of the Recipient on the stock powers be guaranteed. Upon receipt of a copy of
this Agreement and the stock powers, each signed by the Recipient, the Designee
shall promptly notify the proper officers of the Company and the Share
Certificates and stock powers shall be held by the Company in accordance with
the terms of this Agreement.
(c) EFFECT OF VESTING. Upon Vesting, the Company shall cause
to be delivered to the Recipient (i) a certificate for the Shares which have
vested free and clear of restrictive legends and (ii) any stock powers signed
hereunder by the Recipient remaining in its possession related to the vested
shares. In the event that the Recipient dies after shares are vested but before
delivery of the certificate for the vested shares, such certificate shall be
delivered to, and registered in the name of, the Recipient's beneficiary or
estate, as the case may be.
(d) RIGHTS OF STOCKHOLDER. Except as otherwise provided in
Section 2 and this Section 3, during the Vesting Period and after the
certificates for the Restricted Shares have been issued, the Recipient shall be
entitled to all rights of a stockholder of the Company, including the right to
vote and the right to receive dividends, with respect to the Restricted Shares
subject to this Agreement. Subject to applicable withholding requirements, if
any, dividends on the Restricted Shares shall be paid to the Recipient when
earned and payable.
(e) POWER OF DESIGNEE. The Designee is hereby authorized by
the Recipient to utilize the stock power delivered by the Recipient to transfer
all forfeited Shares to the Company upon receipt of instructions from a duly
authorized
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representative of the Company.
4. TERMINATION OF EMPLOYMENT; CHANGE IN CONTROL.
(a) TERMINATION DUE TO DISABILITY, DEATH OR FOR GOOD
REASON; CHANGE IN CONTROL. Unless otherwise provided in the Employment Agreement
and notwithstanding any provision of the Plan to the contrary, if the Recipient
terminates employment with the Company due to Disability, death, for Good Reason
or a termination initiated by the Company without Cause, all Restricted Shares
subject to this Agreement and held by, or on behalf of, the Recipient shall be
deemed earned and vested as of the Recipient's last day of employment with the
Company. In addition, unless otherwise provided in the Employment Agreement and
notwithstanding any provision of the Plan to the contrary, all Restricted Shares
subject to this Agreement and held by the Recipient on the date a Change in
Control occurs shall be deemed earned and vested as of such date.
(b) TERMINATION FOR ANY OTHER REASON. Unless otherwise
provided in the Employment Agreement, if the Recipient's employment with the
Company terminates prior to January 1, 2006 for reasons other than Disability,
death, a termination initiated by the Company without Cause or by Recipient for
Good Reason or as a result of a Change in Control, any Restricted Shares subject
to this Agreement that have not been earned and vested prior to the Recipient's
termination of employment shall be immediately forfeited on the last day of the
Recipient's employment with the Company.
5. WITHHOLDING.
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In connection with the delivery of any stock certificates, or the
making of any payment in accordance with the provisions of this Agreement, the
Company shall withhold Shares or cash amounts (for fractional Shares) equal to
the taxes then required by applicable federal, state and local law to be so
withheld.
6. ADJUSTMENTS FOR CAPITAL CHANGES.
In the event of any change in the outstanding shares of Common Stock
of the Company by reason of any stock dividend or split, recapitalization,
merger, consolidation, spin-off, reorganization, combination or exchange of
shares, or other similar corporate change, or other increase or decrease in such
shares effected without receipt or payment of consideration by the Company, a
duly authorized representative of the Company shall adjust the number of
Restricted Shares granted pursuant to the Plan and this Agreement to prevent
dilution or enlargement of the rights granted to the Recipient.
7. NO RIGHT TO CONTINUED EMPLOYMENT.
Nothing in this Agreement shall confer on the Recipient any right to
continue as an employee of the Company or in any way affect the Company's or any
subsidiary's right to terminate the Recipient's employment at any time.
8. NOTICE.
Any notice to the Company hereunder shall be in writing addressed
to:
Xxxx-Xxxx Realty Corporation
00 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxxxx X. Xxxxx
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CHIEF EXECUTIVE OFFICER
Any notice to the Recipient hereunder shall be in writing addressed
to:
Xx. Xxxxx X. Xxxxxx
00 Xxxxxxx Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
or such other address as the Recipient shall notify the Company
in writing.
9. ENTIRE AGREEMENT; EFFECT OF EMPLOYMENT AGREEMENT.
(a) ENTIRE AGREEMENT. This Agreement together with the
Tax Gross Up Agreement and the Employment Agreement contain the entire
understanding of the parties and this Agreement shall not be modified or amended
except in writing and duly signed by each of the parties hereto. No waiver by
either party of any default under this Agreement shall be deemed a waiver of any
later default thereof.
(b) EFFECT OF EMPLOYMENT AGREEMENT. In the event either the
Employment Agreement or the Tax Gross Up Agreement with the Company contain
additional rights, duties and/or obligations with respect to the Recipient, such
terms and conditions shall govern the Recipient's Restricted Share Award AS IF
such terms and conditions had been set forth herein; and in the event of any
conflict or inconsistency between the terms of the Employment Agreement or this
Agreement, the terms and conditions of the Employment Agreement shall control.
10. CONSTRUCTION.
The various provisions of this Agreement are severable in their
entirety. Any determination of invalidity or unenforceability of any one
provision shall have no effect on the continuing force and effect of the
remaining provisions.
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11. GOVERNING LAW.
This Agreement shall be governed by the laws of the State of New
Jersey applicable to contracts made, and to be enforced, within the State of New
Jersey.
12. SUCCESSORS.
This Agreement shall be binding upon and inure to the benefit of the
successors, assigns and heirs of the respective parties.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
to be effective on the date first above written.
XXXX-XXXX REALTY CORPORATION
BY: /s/ Xxxxxxxx X. Xxxxx
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XXXXXXXX X. XXXXX
CHIEF EXECUTIVE OFFICER
RECIPIENT
/s/ Xxxxx X. Xxxxxx
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XXXXX X. XXXXXX
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