Name of Executive] CORPORATE OBJECTIVES AND NAREIT TSR RESTRICTED STOCK UNIT AGREEMENT
Exhibit 10.14
FORM FOR 2020 ANNUAL AWARDS
[Name of Executive]
CORPORATE OBJECTIVES AND NAREIT TSR
RESTRICTED STOCK UNIT AGREEMENT
This Restricted Stock Unit Agreement (this “Agreement”), dated as of May __, 2020 (the “Grant Date”), is between _____________ (the “Executive”) and Host Hotels & Resorts, Inc. (“Company”), a Maryland corporation, and governs a grant of Restricted Stock Units (“RSUs”) to the Executive pursuant to the Host Hotels & Resorts 2020 Comprehensive Stock and Cash Incentive Plan (the “Plan”). Capitalized terms not explicitly defined in this Agreement have the definitions ascribed to them in the Plan or in Exhibit A hereto. The Company and the Executive agree as follows:
Grant of Restricted Stock Units
. Subject to, and in accordance with the terms, conditions and restrictions set forth in the Plan and in this Agreement, effective as of the Grant Date the Company has granted __________ RSUs to the Executive, each of which represents the right to receive one share of Common Stock or, at the option of the Company, an amount of cash, in either case, as set forth in this Agreement. Executive will have no right to the distribution of any shares of Common Stock or payment of any cash until the time (if ever) the RSUs have vested.
Vesting Schedule
. Except as otherwise provided in Section 14, the RSUs are eligible to vest as follows:
(a)_____ RSUs (the “Corporate Objective RSUs”) shall vest, if at all, in one (1) installment on the Determination Date based on, and subject to, the Company’s performance on Corporate Objectives for a one-year Performance Period, provided that the Executive remains continuously employed by the Company through the Determination Date. The determination of performance and vesting of the RSUs shall be made by the Committee in its sole discretion based on the Company’s results on Corporate Objectives for the Performance Period as follows:
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If the level of Satisfaction on Corporate Objectives is |
Then the percentage of the Corporate Objective RSUs that will vest will be |
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<Threshold |
0% |
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Threshold |
25% |
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Target |
50% |
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>High |
100% |
The calculation of performance on Corporate Objectives shall be carried out to the third decimal point and the number of RSUs vested under this Section 2(a) will be rounded to the nearest whole RSU. The actual number of RSUs that vest shall be interpolated between the vesting percentages to the extent that Company performance is between the amounts set forth in the chart above. In the event that the Corporate Objective RSUs do not vest at the maximum level, such Corporate Objective RSUs that do not vest shall be forfeited on the Determination Date.
(b)______ RSUs (the “TSR RSUs”) shall vest, if at all, in 1 (one) installment on the Determination Date based on, and subject to, the Company’s performance on Relative NAREIT TSR for the three-year Performance Period, provided that the Executive remains continuously employed by the Company through the Determination Date. The determination of performance and vesting of the RSUs shall be made by the Committee in its sole discretion based on the Company’s results on Relative NAREIT TSR for the Performance Period as follows:
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If Relative NAREIT TSR is |
Then the percentage of TSR RSUs which will vest will be |
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<30th percentile |
0% |
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30th percentile |
25% |
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50th percentile |
50% |
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>75th percentile |
100% |
The calculation of Relative NAREIT TSR shall be carried out to the third decimal point and the number of RSUs vested under this Section 2(b) will be rounded to the nearest whole RSU. The actual number of RSUs that vest shall be interpolated between the vesting percentages to the extent that Relative NAREIT TSR is between the amounts set forth in the chart above. In the event that the TSR RSUs do not vest at the maximum level, such TSR RSUs that do not vest shall be forfeited on the Determination Date.
Settlement
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(a)In the event that a vesting date falls on a Saturday or Sunday or a day on which the New York Stock Exchange is not open for the transaction of business, then the RSUs shall vest on the next business day. The RSUs will be settled in shares of Common Stock, or at the Company’s option, paid in cash, in either case, within thirty (30) days following the applicable vesting date; provided that, any RSUs that vest pursuant to Section 14 will be settled no later than March 15 of the year following the year in which the applicable RSUs vest.
(b)If the RSUs are paid in cash, the amount of cash paid with respect to each RSU will equal the Fair Market Value of a share of Common Stock on the business day immediately preceding the payment date.
Dividends
. If the Company declares a cash dividend payable to substantially all holders of Common Stock with a record date after February 7, 2020 and before the RSUs are settled or forfeited in accordance with this Agreement, the Executive will be credited, for each RSU, with an amount equal to such cash dividend payable per share of Common Stock (a “Dividend Equivalent Right”), which shall accrue in cash without interest.
The Dividend Equivalent Rights will vest or be forfeited, as applicable, upon the vesting or forfeiture of the RSUs to which they relate and will be payable at the same time as the underlying RSUs are settled following vesting of such RSUs. None of the RSUs will be settled (nor will the Executive have any of the rights of a stockholder with respect to the underlying shares) and no
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Dividend Equivalent Rights (if any) will be paid until the vesting and other conditions under the Agreement and Plan are satisfied.
RSU Account
. The Company shall cause an account (the “Unit Account”) to be established and maintained on the books of the Company to record the number of RSUs and amount of Dividend Equivalent Rights credited to the Executive under the terms of this Agreement. Prior to settlement of any RSUs or payment of any Dividend Equivalent Rights, such RSUs and Dividend Equivalent Rights will represent an unsecured obligation of the Company, payable (if at all) only from the general assets of the Company. Accordingly, the Executive’s interest in the Unit Account shall be that of a general, unsecured creditor of the Company.
No Rights as Stockholder; Adjustments
. The Executive shall not be deemed to have any of the rights or privileges of a stockholder of the Company in respect of the RSUs or any shares of Common Stock deliverable under the Agreement unless and until the RSUs vest and electronic delivery representing such shares has been completed, recorded on the records of the Company or its transfer agents or registrars, and delivered to the Executive. Executive acknowledges that the RSUs, the shares of Common Stock subject to the RSUs and the Dividend Equivalent Rights are subject to adjustment, modification and termination in certain events as provided in this Agreement and the Plan.
Restrictions and Forfeiture
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(a)No Assignment or Transfer. The Executive shall not sell, pledge, transfer, subject to lien, assign, encumber or otherwise hypothecate the RSUs or any underlying shares unless and until the RSUs have vested, and shares have been issued, recorded and delivered and all other terms and conditions set forth in this Agreement and the Plan have been satisfied. Any attempt to do so contrary to the provisions of this Agreement shall be null and void.
(b)Recoupment Policy. The RSUs are subject to the terms and conditions of the Company’s Compensation Recoupment Policy (as amended from time to time, the “Recoupment Policy”). The Recoupment Policy provides for determinations by the Board that, as a result of, in whole or in part, fraud, intentional misconduct, or illegal behavior by the Executive, the Company’s financial results were restated or materially misstated (a “Policy Restatement”). In the event of a Policy Restatement, the Board may require, among other things (i) cancellation of any outstanding RSUs; and/or (ii) reimbursement of any cash payment in respect of the RSUs or gains in respect of the shares issued, if and to the extent determined by Board under the Recoupment Policy. Any determination made by the Board shall be binding upon the Executive. The Recoupment Policy is in addition to any other remedies which may be otherwise available at law, or in equity to the Company.
(c)Repayment/Forfeiture. The RSUs (including any proceeds, gains or other economic benefit the Executive actually or constructively receives with respect to the RSUs) will be subject to repayment or forfeiture as may be required to comply with the requirements of the U.S. Securities and Exchange Commission or any applicable law, rule or regulation, including the requirements of the Xxxx-Xxxxx Xxxx Street Reform and Consumer Protection Act and any rules or regulations thereunder, as may be in effect from time to time.
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(d)Stock Ownership & Retention. Any shares of Common Stock issued upon settlement of the RSUs will be subject to the Company’s Stock Ownership and Retention Policy as it may be amended from time to time.
No Effect on Employment
. This Agreement is not an employment contract and nothing in the Plan or this Agreement confers upon Executive any right to continue in the employ or service of the Company or any Subsidiary or interferes with or restricts in any way the rights of the Company and its Subsidiaries, which rights are hereby expressly reserved, to discharge or terminate the services of Executive at any time for any reason whatsoever. Neither the Plan nor this Agreement afford the Executive any rights to compensation or damages, including for loss or potential loss that the Executive may suffer by reason of the RSUs (including any Dividend Equivalent Rights) not vesting.
The Plan
. The RSUs are subject to the terms and conditions of this Agreement and the Plan, which is incorporated herein by reference. The terms of this Agreement are intended to be in full accordance with the Plan. However, in the event of any potential or actual conflict between any term of this Agreement and the Plan, the terms of the Plan will control.
Modifications to Agreement
. This Agreement, together with any Exhibits, represents the full and complete understanding between the Executive and the Company on the subjects covered. The Executive expressly warrants that Executive is not accepting this Agreement in reliance on any promises, representations or inducements other than those contained in this Agreement. Except as otherwise provided in the Plan, this Agreement cannot be modified or changed by any prior or contemporaneous or future oral agreement of the parties and this Agreement shall only be modified by the express written agreement of the parties.
Binding Agreement
. This Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.
Address for Notices
. Any notice to be given to the Company under the terms of this Agreement must be in writing and addressed to the Company in care of the Company’s Human Resources Department at the Company’s principal office. Any notice to be given to the Executive under the terms of this Agreement must be in writing and addressed to Executive at Executive’s last known mailing address or email address in the Company’s personnel files. By a notice given pursuant to this Section, either party may designate a different address for notices to be given to that party.
Governing Law
. This Agreement shall be governed by and construed in accordance with the laws of the State of Maryland, without regard to choice of law or conflict of law rules.
Termination; Retirement
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(a)Termination Generally. Except as otherwise provided in Sections 14(b), (c), (d) or (e) below, in the event that the Executive’s employment with the Company terminates for any reason, including but not limited to, by the Company for Cause or by the Executive without Good Reason, then any unvested RSUs (and Dividend Equivalent Rights) shall be immediately cancelled and forfeited as of the effective date of such termination (the “Termination Date”).
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(b)Death or Disability. In the event that the Executive’s employment is terminated by the Company due to Executive’s Disability or due to Executive’s death, any unvested RSUs (excluding, for the avoidance of doubt, any RSUs that were forfeited pursuant to Section 2(a) or 2(b)) will vest at the “High” (or 100%) level of performance as of the Termination Date.
(c)Without Cause or with Good Reason on or following a Change in Control. In the event that the Executive’s employment is terminated by the Company without Cause or by the Executive with Good Reason, in either case, on the date of or following a Change in Control, subject to the Executive’s execution and non-revocation of a Release Agreement within the time period specified in such Release Agreement, any unvested RSUs (excluding, for the avoidance of doubt, any RSUs that were forfeited pursuant to Section 2(a) or 2(b)) will vest at the “High” (or 100%) level of performance as of the Termination Date.
(d)Without Cause or with Good Reason prior to a Change in Control. In the event that the Executive’s employment with the Company is terminated by the Company without Cause or by the Executive with Good Reason, in either case, prior to a Change in Control, subject to the Executive’s execution and non-revocation of a Release Agreement within the time period specified in such Release Agreement, any unvested RSUs (excluding, for the avoidance of doubt, any RSUs that were forfeited pursuant to Section 2(a) or 2(b)) will be treated as follows:
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(i) |
the Corporate Objective RSUs will vest on the Termination Date at the “Target” (or 50%) level of performance as set forth in Section 2(a); and |
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(ii) |
provided that the Termination Date occurs during the final year of the Performance Period, the TSR RSUs will vest, if at all, on the Determination Date based on the Company’s actual performance on Relative NAREIT TSR during the Performance Period as determined by the Committee. For the avoidance of doubt, if such Termination Date occurs prior to the final year of the Performance Period, the TSR RSUs will be cancelled and forfeited as of the Termination Date. |
(e)Retirement. In the event that the Executive’s employment with the Company is terminated due to Executive’s Retirement, any unvested RSUs (excluding, for the avoidance of doubt, any RSUs that were forfeited pursuant to Section 2(a) or 2(b)) will be treated as follows:
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(i) |
the Corporate Objective RSUs will be cancelled and forfeited as of the Termination Date, unless otherwise determined by the Committee in its sole discretion; and |
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determined by the Committee. For the avoidance of doubt, if such Termination Date occurs prior to the final year of the Performance Period, the TSR RSUs will be cancelled and forfeited as of the Termination Date. |
Taxation
. Executive acknowledges that Executive is ultimately liable and responsible for all taxes owed in connection with the RSUs and the Dividend Equivalent Rights, regardless of any action the Company or any Subsidiary or affiliate employing the Executive (the “Employer”) takes with respect to any tax withholding obligations that arise in connection with the RSUs or Dividend Equivalents (the “Tax-Related Items”). Neither the Company nor any Subsidiary or Employer makes any representation or undertaking regarding the treatment of any Tax-Related Items in connection with the awarding, vesting or payment of the RSUs or the Dividend Equivalents or the subsequent sale of shares of Common Stock. The Company, the Subsidiaries and the Employer do not commit and are under no obligation to structure the RSUs or Dividend Equivalent Rights to reduce or eliminate the Executive’s liability for Tax-Related Items. Further, if the Executive has become subject to tax in more than one jurisdiction between the Grant Date and the date of any relevant taxable event, the Executive acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.
Prior to the relevant taxable or tax withholding event, as applicable, the Executive shall pay or make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all Tax-Related Items. In the event the Executive fails to pay or make such adequate arrangements, as determined by the Company and/or the Employer, the Executive hereby authorizes the Company and/or the Employer, or their respective agents, at their discretion and without any notice or further authorization by Executive, to satisfy the obligations with regard to all Tax-Related Items by withholding in shares of Common Stock to be issued upon settlement of the RSUs.
If the obligation for Tax-Related Items is satisfied by withholding in shares of Common Stock, the Executive is deemed to have been issued the full number of shares subject to the vested RSUs. No fractional shares will be withheld or issued pursuant to the grant of RSUs and the issuance of shares thereunder.
Confidential Information
. In consideration of the grant of RSUs (including any Dividend Equivalent Rights) the Executive acknowledges that the Company and/or its affiliates has made and will make available to the Executive, and the Executive will have access to, certain Confidential Information (as defined herein). The Executive acknowledges and agrees that any and all Confidential Information learned or obtained by the Executive during the course of the Executive’s service with the Company or any of its affiliates, whether developed by the Executive alone or in conjunction with others or otherwise, shall be and is the property of the Company and its affiliates. Accordingly, the Executive shall at all times keep all Confidential Information confidential and will not use such Confidential Information other than in connection with the Executive’s discharge of Executive’s duties with the Company and/or its affiliates, and will safeguard the Confidential Information from unauthorized disclosure. This covenant is not intended to, and does not limit in any way the Executive’s duties and obligations to the Company and its affiliates under the Company’s Code of Business Conduct and Ethics or to the Company
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and its affiliates under statutory and common law not to disclose or make personal use of the Confidential Information or trade secrets.
Electronic Communications
. The Company and its affiliates may choose to deliver any documents related to Executive’s current or future participation in the Plan by electronic means. By accepting this Award, the Executive consents and agrees to electronic delivery of any Plan documents, proxy materials, annual reports and other related documents, including all materials required to be distributed pursuant to applicable securities laws. The Company has established procedures for an electronic signature system for delivery and acceptance of Plan documents (including documents relating to any programs adopted under the Plan). The Executive consents to such procedures and agrees to participate in the Plan through an online or electronic system established and maintained by the Company or a third party designated by the Company. The Executive agrees that his or her electronic signature is the same as, and shall have the same force and effect as, his or her manual signature. The Executive understands that, unless earlier revoked by the Executive, this consent shall be effective for the duration of the Agreement and that he or she shall have the right at any time to request written copies of any and all materials referred to above.
Insider-Trading Notification
. The Executive acknowledges review of the Company’s Xxxxxxx Xxxxxxx Policy Statement, which may affect the sale of shares that may be issued to the Executive upon settlement of the RSUs. In particular, the Executive may be prohibited from effectuating certain transactions involving shares if the Executive has material nonpublic information about the Company. If the Executive is uncertain whether the insider-trading rules are applicable, the Executive should consult with a personal legal advisor.
Data Privacy
. By signing this Agreement, Executive consents to the collection, use and transfer, in electronic or other form, of personal data as described in this section by and among the Company and its Subsidiaries and affiliates exclusively for implementing, administering and managing the Executive’s participation in the Plan. The Company and its Subsidiaries and affiliates may hold certain personal information about Executive to implement, manage and administer the Plan and this Award (the “Data”). The Company and its Subsidiaries and affiliates may transfer the Data amongst themselves as necessary to implement, administer and manage Executive’s participation in the Plan, and the Company and its Subsidiaries and affiliates may transfer the Data to third parties assisting the Company with Plan implementation, administration and management. These recipients may be located in the Executive’s country, or elsewhere, and the Executive’s country may have different data privacy laws and protections than the recipients’ country. By accepting this Award, Executive authorizes such recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, to implement, administer and manage the Executive’s participation in the Plan.
Designation of Beneficiary
. The Executive may designate a beneficiary on the Stock Plan Beneficiary form that will be provided by the Company. Any distribution or delivery to be made to the Executive under this Agreement shall, if the Executive is then deceased, be made to the Executive’s designated beneficiary, or if no beneficiary survives, be made in accordance with the Plan to the person entitled thereto pursuant to the Executive’s will or the laws of descent and distribution.
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By Executive’s signature below, Executive agrees to be bound by the terms of this Agreement and the Plan. Executive has reviewed the Plan and this Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Agreement and fully understands all provisions of the Plan and this Agreement. Executive hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Plan or this Agreement.
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Accepted by the Executive: |
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For the Company: |
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Xxxxxx X. Xxxxxxxx Executive Vice President, HR |
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Definitions. Whenever the following capitalized terms are used in this Agreement they shall have the meanings set forth below, unless the context clearly indicates otherwise. Capitalized terms used in this Agreement and not defined herein shall have the meaning ascribed to them in the Plan.
“Cause” shall have the meaning set forth in Section 2.4 of the Severance Plan.
“Change in Control” shall have the meaning set forth in Section 2.5 of the Severance Plan.
“Confidential Information” shall mean all confidential and proprietary information of the Company, and its affiliates, including, without limitation, financial information, contracts and agreements, strategic and business plans concerning the Company, its business, assets or prospects and any and all analyses related thereto, offers, proposals and analyses related to acquisitions, dispositions and other transactions, contractor, supplier and vendor lists and information, designs, software systems, codes, marketing studies, research, reports, investigations, trade secrets or other information of similar character. Confidential Information shall not include (i) information which is generally available to the public, (ii) information obtained by the Executive from third persons other than employees of the Company, its subsidiaries, and affiliates not under agreement to maintain the confidentiality of the same, and (iii) information which is required to be disclosed by law or legal process.
“Corporate Objectives” shall mean the corporate-level goals for the Company approved by the Committee for the Performance Year, as such goals may be modified or changed by the Committee in its sole discretion.
“Determination Date” shall mean the date the Committee determines the number of RSUs that shall vest pursuant to Section 2(a) or Section 2(b), as applicable.
“Disability” shall have the meaning set forth in Section 2.6 of the Severance Plan.
“Ending Price” for the Company and the companies comprising the NAREIT Equity Lodging/Resort Index, shall mean the closing prices of the common stock of the Company and the common stock of companies comprising each of the respective indices on the trading days occurring on the last sixty (60) calendar days of the last calendar year of the Performance Period. By way of example only, if the Performance Period were the three-year period January 1, 2050 through December 31, 2052, then the Ending Price would be determined on the last sixty (60) calendar days of calendar year 2052.
“Good Reason” shall have the meaning set forth in Section 2.10 of the Severance Plan.
“NAREIT Equity Lodging/Resort Index” shall mean the index of North American Real Estate Investment Trusts and publicly-traded real estate companies that own and manage hotels and resorts as established by the Committee, provided that if a constituent company of the NAREIT Equity Lodging/Resort Index ceases to be actively traded, due, for example, to merger or bankruptcy or the Committee otherwise reasonably determines that
it is no longer suitable for the purposes of this Agreement, then such company shall be removed and the Committee in its reasonable discretion shall select a comparable company to be added to the NAREIT Equity Lodging/Resort Index for purposes of making the Relative NAREIT TSR comparison required hereunder meaningful and consistent across the relevant measurement period.
“Performance Period” shall mean (i) with respect to the Corporate Objective RSUs, the Performance Year; and (ii) with respect to the TSR RSUs, the three (3) calendar years, January 1 through December 31, beginning with the Performance Year. By way of example only, if grants were made in 2050, then the Performance Year would be calendar year 2050, and the Performance Period for the Corporate Objective RSUs would be the one-year period of January 1, 2050 through December 31, 2050 and the Performance Period for the TSR RSUs would be the three-year period of January 1, 2050 through December 31, 2052.
“Performance Year” shall mean calendar year of the Grant Date.
“Relative NAREIT TSR” shall mean the percentile rank of the Company in a period as compared to companies comprising the NAREIT Equity Lodging/Resort Index for such period. The percentile rank shall be determined by comparing the increase in the Starting Price over the Ending Price, plus dividends paid on the Company’s common stock during the applicable period, to the increase in the Starting Price over the Ending Price, plus dividends paid on the common stock of companies comprising the NAREIT Equity Lodging/Resort Index for such period. Additionally, the Committee may make, in its reasonable discretion, appropriate adjustments to the Relative NAREIT TSR to take into account all stock dividends, stock splits, reverse stock splits and the other events with respect to a constituent company of the NAREIT Equity Lodging/Resort Index that occur prior to the end of the relevant measurement period.
“Release Agreement” shall have the meaning set forth in Section 2.15 of the Severance Plan.
“Retirement” shall mean, with the consent of the Committee, the voluntary termination of Executive’s employment with the Company by the Executive where (i) the Executive’s full-time employment with the Company equals or exceeds five (5) years of service and (ii) the Executive’s age plus years of service with the Company as a full time Employee equals or exceeds 68.
“Severance Plan” shall mean the Host Hotels & Resorts, Inc. Severance Plan for Executives, as amended from time to time.
“Starting Price” for the Company and the companies comprising the NAREIT Equity Lodging/Resort Index, shall mean the average of the closing prices of the common stock of the Company and the common stock of companies comprising each of the respective indices, on the trading days occurring on the last sixty (60) calendar days of the year prior to the Performance Year. By way of example only, if the Performance Year were 2050, the
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Starting Price would be determined on the last sixty (60) calendar days of calendar year 2049.
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