UNIT AWARD AGREEMENT
Exhibit 10.20
EXECUTION COPY
This Unit Award Agreement (this “Agreement”), is made effective as of October 5, 2007,
(hereinafter referred to as the “Date of Grant”), between Tishman Speyer Archstone-Xxxxx
Multifamily Junior Mezz Borrower, L.P., a limited partnership organized under the laws of the State
of Delaware (the “Company”), and R. Xxxxx Xxxxxxx (“Sellers”). Capitalized terms
not defined in this Agreement shall have the meaning given to them in the Limited Partnership
Agreement of the Company, dated as of October 5, 2007 (the “LP Agreement”).
RECITALS:
WHEREAS, Sellers is employed by Archstone-Xxxxx Communities L.L.C. or any of its affiliates
(the “Employer”) and, through such employment, provides services to the Company and its
affiliates;
WHEREAS, the Board of Directors of Tishman Speyer U.S. Value Added Associates VII, L.L.C. (the
“Board”), which is the general partner of Tishman Speyer Real Estate Venture VII
(Governance), L.P., which in turn is the general partner of Tishman Speyer Archstone-Xxxxx
Multifamily (GP), L.P., which in turn is the general partner of Tishman Speyer Archstone-Xxxxx
Multifamily JV, L.P., which in turn owns 100% of the membership interests of Tishman Speyer
Archstone-Xxxxx Multifamily Junior Mezz Borrower (GP), L.L.C., the general partner of the Company
has determined that it would be in the best interests of the Company and its affiliates to make the
award of Class B Units provided for herein to Sellers pursuant to the terms set forth herein.
NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties
hereto agree as follows:
1. Award of Class B Units.
(a) Class B Units. Subject to the terms and conditions of this Agreement, the Company
hereby grants to Sellers an award of 100 Class B Units of the Company (such 100 units, hereinafter
called the “Class B Units”). The Class B Units shall vest in accordance with Section 2 of
this Agreement.
(b) Adjustment.
(i) In the event that there shall be any sale or other extraordinary distribution (whether in
the form of cash, membership units of the Company or other property), recapitalization, split or
reverse split of equity, reorganization, merger, consolidation, spin-off, combination, repurchase,
or unit exchange, or other similar transaction or event affecting the Class B Units, the Board
shall cause to be made such equitable adjustments as it, in good faith, deems necessary or
appropriate to the number and kind of units issued pursuant to this Agreement to prevent
inappropriate dilution or enlargement of the economic interest represented by such units.
(ii) In the event that securities of the Company are redeemed in connection with the
establishment of a new Affiliate or Affiliates, the Company may cancel all or a portion of such
Class B Units and issue or cause to be issued to Sellers economically equivalent equity interests
in such new Affiliate(s) (a “Reapportionment”), containing terms and conditions that are no
less favorable than the terms and conditions set forth herein (including, but not limited to,
vesting conditions), to appropriately apportion the incentive compensation element of the Class B
Units amongst such Affiliate(s). In the event that a Reapportionment results in any negative
impact on Sellers (including, without limitation, any adverse tax impact such as the loss of
long-term capital gains treatment, the inclusion of income on the date of such Reapportionment or
the loss of basis), the Company shall indemnify and hold Sellers harmless with respect to all
economic loss associated with the transfer of the interests and shall gross-up all such payments so
that the indemnification is tax neutral to Sellers; provided, however, that Sellers shall cooperate
with the Company to minimize the extent of any adverse tax impact to the extent permissible under
applicable law.
2. Vesting. Subject to Sellers’s continued employment with the Employer, the Class B
Units will vest and become non-forfeitable (such non-forfeitable Class B Units, the “Vested
Units,” and Class B Units prior to becoming Vested Units, “Unvested Units”) on the
three-year anniversary of the Date of Grant; provided, however, that all Class B
Units shall become Vested Units upon the earlier to occur of (i) a termination of Sellers’s
employment with the Employer by the Employer without “Cause” or by Sellers for “Good Reason” (each
as defined in, and in accordance with the terms and conditions of, the employment agreement by and
between Sellers and Archstone-Xxxxx Communities L.L.C., dated as of October 5, 2007 (the
“Employment Agreement”)) and (ii) the date on which there is a liquidation or dissolution
of the Company if and only if the Unvested Units effectively lose any portion of their value in
connection with such liquidation or dissolution and such lost value is not replaced upon or
promptly following such liquidation or dissolution through the grant to Sellers of economically
equivalent units or interests in an Affiliate (without any negative impact to Sellers associated
with such replacement). Any Class B Units which remain Unvested Units after the application of the
preceding sentence shall be forfeited upon a termination of Sellers’s employment with the Employer.
3. Distributions.
(a) Vested Units. Distributions in respect of Vested Units shall be made to Sellers
in accordance with the provisions of Section 14 of the LP Agreement.
(b) Unvested Units. Sellers shall not be entitled to any distributions in respect of
Unvested Units until and unless such Unvested Units have become Vested Units. Any amounts which
would have been distributed to Sellers pursuant to the terms of the LP Agreement in respect of
Unvested Units but for the application of the preceding sentence (the “Unvested
Allocations”) shall be distributed to Sellers as soon as practicable after such Class B Units
become Vested Units, without interest. The Company shall set aside all Unvested Allocations until
such time as the Unvested Allocations are either forfeited pursuant to Section 2 above or
distributed pursuant to this Section 3(b) as provided for in Section 14 of the LP Agreement.
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4. Rights as Holder of Class B Units. Sellers shall be the record owner of the Class
B Units unless and until such Class B Units are forfeited pursuant to Section 2 hereof or
transferred in accordance with Section 6 hereof and, except as provided in this Agreement, as
record owner shall be entitled to all rights of a holder of Class B Units of the Company;
provided, that the Class B Units shall be subject to the limitations on transfer
and encumbrance set forth in this Agreement and the LP Agreement.
5. Representations in the LP Agreement; Purchase for Investment; Other Representations of
Sellers.
(a) Representations in LP Agreement. Sellers hereby represents and warrants that all
representations and warranties made by Sellers in the LP Agreement are true and correct.
(b) Investment Intent. Sellers hereby represents and warrants that the Class B Units
are being acquired for investment and not with a view to distribution thereof, and to make such
other reasonable and customary representations regarding matters relevant to compliance with
applicable securities laws as are deemed necessary by counsel to the Company.
(c) Other Representations. Sellers hereby represents and warrants to the Company as
follows:
(i) Access to Information. Because of Sellers’s business relationship with the
Company and with the management of the Company, Sellers has had access to all material and relevant
information concerning the Company, thereby enabling Sellers to make an informed investment
decision with respect to his investment in the Company, and all pertinent data and information
requested by Sellers from the Company or its representatives concerning the business and financial
condition of the Company and the terms and conditions of this Agreement have been furnished to
Sellers. Sellers acknowledges that he has had the opportunity to ask questions of and receive
answers and obtain additional information from the Company and its representatives concerning the
present and proposed business and financial conditions of the Company.
(ii) Financial Sophistication. Sellers has such knowledge and experience in financial
and business matters that Sellers is capable of evaluating the merits and risks of investing in the
Class B Units.
(iii) Understanding the Investment Risks. Sellers understands that:
(A) An investment in the Class B Units represents a highly speculative
investment, and there can be no assurance as to the success of the Company
in its business;
(B) There is at present no market for the Class B Units and there can
be no assurance that a market will develop in the future;
(C) The Class B Units may be worthless; and
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(D) Ownership of the Class B Units may result in taxable income to
Sellers without a corresponding cash or in-kind distribution.
(iv) Understanding the Nature of the Class B Units. Sellers understands and agrees
that:
(A) There can be no assurance that the Class B Units will be registered
under the Securities Act of 1933, as amended (the “Securities Act”),
or any applicable state securities laws and, if they are not so registered,
they will only be issued and sold in reliance upon certain exemptions
contained in the Securities Act and applicable state securities laws, and
the representations and warranties of Sellers contained herein are essential
to any claim of exemption by the Company under the Securities Act and such
state laws;
(B) If the Class B Units are not so registered, the Class B Units will
be “restricted securities” as that term is defined in Rule 144 promulgated
under the Securities Act;
(C) Sellers may not sell, transfer, assign, pledge or otherwise dispose
of or encumber the Class B Units without registration under the Securities
Act and applicable state securities laws unless the Company receives an
option of counsel acceptable to it (as to both counsel and the opinion) that
such registration is not required;
(D) Only the Company can register the Class B Units under the
Securities Act and applicable state securities laws;
(E) The Company has not made any representations to Sellers that the
Company will register the Class B Units under the Securities Act or any
applicable state securities laws, or with respect to compliance with any
exemption therefrom;
(F) Sellers is aware of the conditions for his obtaining an exemption
from the sale or transfer of the Class B Units under the Securities Act and
any applicable state securities laws; and
(G) The Company may, from time to time, make stop transfer notations in
its transfer record to ensure compliance with the Securities Act and any
applicable state securities laws, and any additional restrictions imposed by
state securities administrators.
(v) Investment Intent. Sellers acknowledges that:
(A) Neither Sellers nor anyone acting on his behalf has paid or will
pay a commission or other remuneration to any person in connection with the
acquisition of the Class B Units; and
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(B) At the time and as a condition of delivery of documents evidencing
the Class B Units, Sellers will be deemed to have made all the
representations and warranties contained in this Section 5 with respect to
such Class B Units and may be required to make other representations
concerning investment intent as condition of the delivery of such Class B
Units by the Company.
6. Restriction on Transfer/LP Agreement. Unvested Units may not be transferred,
pledged, assigned, hypothecated or otherwise disposed of in any way by Sellers. Vested Units may
not be transferred, pledged, assigned, hypothecated or otherwise disposed of in any way by Sellers,
except (a) if and as permitted by the LP Agreement, (b) by will or the laws of descent and
distribution, (c) to or for the benefit of any spouse, child or grandchild of Sellers, or to a
trust or partnership for the benefit of any of the foregoing individuals, or (d) if and as
permitted by the Board. The Class B Units shall not be subject to execution, attachment or similar
process. Any attempted assignment, transfer, pledge, hypothecation or other disposition of the
Class B Units contrary to the provisions of this Agreement or the LP Agreement shall be null and
void and without effect.
7. Designation of Beneficiary. Sellers may appoint any individual or legal entity in
writing as his beneficiary to receive any Class B Unit (to the extent not previously terminated or
forfeited) under this Agreement upon Sellers’s death or Disability (as defined in the Employment
Agreement). Sellers may revoke his designation of a beneficiary at any time and appoint a new
beneficiary in writing. To be effective, Sellers must complete the designation of a beneficiary or
revocation of a beneficiary by written notice to the Company under Section 8 of this Agreement
before the date of Sellers’s death. In the absence of a beneficiary designation, the legal
representative of Sellers’s estate shall be deemed the beneficiary. Notwithstanding the foregoing,
in the event that any beneficiary appointed by Sellers (or deemed to be as such pursuant to the
preceding sentence) does not expressly become party to the LP Agreement and expressly assume all
restrictions on the Class B Units to which Sellers was subject at the time of his death or
Disability, such appointment (and any purported transfer of Class B Units thereunder) shall be null
and void and without effect.
8. Notices. Any notice necessary under this Agreement shall be addressed to the
Company at the principal executive office of the Employer and to Sellers at the address appearing
in the personnel records of the Employer for Sellers or to either party at such other address as
either party hereto may hereafter designate in writing to the other. Any such notice shall be
deemed effective upon receipt thereof by the addressee.
9. Tax Withholding. The Company and Sellers acknowledge and agree that Sellers is an
employee of the Company for all purposes hereunder, including, without limitation, for purposes of
calculating the Company’s withholding tax obligations in connection with any Class B Units becoming
Vested Units. The Company shall reasonably determine the amount of any Federal, state, local or
other income, employment, or other taxes which the Company or any of its subsidiaries or affiliates
may reasonably be obligated to withhold (giving effect to the immediately preceding sentence) with
respect to the grant, vesting or other event with respect to the Class B Units. In connection with
any Class B Units becoming Vested Units, the Company shall withhold from delivery to Sellers a
number of Class B Units that are otherwise becoming
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Vested Units having a fair market value equal to the taxes payable by Sellers in connection
with such vesting; provided, however, that the foregoing shall only apply as to any
amounts in excess of the minimum withholding required by applicable law (after giving effect to the
first sentence of this Section 9) only to the extent such withholding would not result in
accounting charges to the Company or any of its affiliates in excess of the accounting charges
which would have applied in the absence of such withholding.
10. Choice of Law; Forum. This Agreement will be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to any choice of law or
conflicting provision or rule (whether of the State of Delaware or any other jurisdiction) that
would cause the laws of any jurisdiction other than the State of Delaware to be applied. In
furtherance of the foregoing, the internal law of the State of Delaware will control the
interpretation and construction of this Agreement, even if under such jurisdiction’s choice of law
or conflict of law analysis, the substantive law of some other jurisdiction would ordinarily apply.
Any proceeding arising out of or relating to this Agreement shall be adjudicated in accordance
with the procedures described in Section 11(g) of the Employment Agreement.
11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.
12. Class B Units Subject to LP Agreement. By entering into this Agreement Sellers
agrees and acknowledges that (i) Sellers has received and read a copy of the LP Agreement and (ii)
the Class B Units are subject to the LP Agreement, the terms and provisions of which are hereby
incorporated herein by reference. In the event of a conflict between any term or provision
contained herein and a term or provision of the LP Agreement, the applicable terms and provisions
of this Agreement will govern and prevail. The grant of Class B Units pursuant to this Agreement
shall not restrict in any way the adoption of any amendment to the LP Agreement in accordance with
the terms of such agreement. Notwithstanding anything herein to the contrary, the grant of Class B
Units pursuant to this Agreement is subject to Sellers taking actions required by the Company to
become a party to the LP Agreement.
13. No Right to Continued Service. This Agreement shall not be construed as giving
Sellers the right to be retained in the employ of, or in any other continuing relationship with,
the Employer or any of its affiliates.
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14. Cooperation. The parties shall cooperate to resolve any disputes as to the
interpretation of this Agreement and the dispute resolution mechanisms set forth in Section 11(g)
of the Employment Agreement shall remain applicable.
15. No Limit on Other Compensation Arrangements. Nothing contained in this Agreement
shall prevent the Company, the Employer or any of their affiliates from adopting or continuing in
effect other compensation arrangements, which may, but need not, provide for the award of Class B
Units, securities and other types of awards, and such arrangements may be either generally
applicable or applicable only in specific cases.
16. Amendments. The provisions of this Agreement may not be amended, modified or
supplemented unless consented to in writing by the Company and Sellers.
17. Signature in Counterparts. This Agreement may be signed in counterparts, each of
which shall be an original, with the same effect as if the signatures thereto and hereto were upon
the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
/s/ R. Xxxxx Xxxxxxx
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R. Xxxxx Xxxxxxx |
TISHMAN SPEYER ARCHSTONE-XXXXX
MULTIFAMILY JUNIOR MEZZ BORROWER, L.P., a Delaware limited partnership
MULTIFAMILY JUNIOR MEZZ BORROWER, L.P., a Delaware limited partnership
| By: | TISHMAN SPEYER ARCHSTONE-XXXXX MULTIFAMILY JUNIOR MEZZ BORROWER (GP), L.L.C., a Delaware limited liability company, its sole general partner |
| /s/ Xxxxxxx X. Xxxxxx | ||||
By:
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Xxxxxxx X. Xxxxxx | |||
Title:
|
Authorized Signatory |
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