Exhibit 10.1

 

HIGHWOODS PROPERTIES, INC.

RETIREMENT PLAN

 

Effective as of March 1, 2006

 

Highwoods Properties, Inc. (the “Company”) hereby adopts the Highwoods
Properties, Inc. Retirement Plan (the “Plan”) for the purpose of retaining
Employees through Retirement. The Plan is designed to allow Participants certain
benefits upon Retirement.

 

1.

Definitions.

(a)          “Annual Incentive Bonus” means annual cash bonuses paid to eligible
Employees upon successful completion of goals and pursuant to the Company’s
then-existing compensation programs.

(b)          “Benefit Period” means the period during which a Participant
remains eligible for benefits under this Plan in accordance with Section 2.

(c)          “Board” means the board of directors of the Company or its
successor. “Board” shall also mean and refer to such other person, persons or
committee to whom the Board chooses to delegate designated aspects of plan
administration in its sole discretion.

(d)          “Cause” means the occurrence of any one or more of the following:
(1) an Employee breaches the terms of any agreement with the Company that
relates to change in control, noncompete, nonsolicitation of Employees,
discoveries or trade secrets or other confidential information; (2) an Employee
breaches any employment agreement with the Company; (3) an Employee is convicted
of or pleads no contest to any felony or any criminal offense involving fraud;
(4) an Employee materially violates any applicable local, state or federal
employment law, including, but not limited to, any anti-discrimination law; (5)
an Employee fails to perform substantially all of the duties of his or her
employment position; or (6) an Employee engages in gross misconduct. For
purposes of this Plan, any good faith determination of “Cause” shall be
conclusive if made by: (i) the Committee, in the case of a determination that
applies to any of the Company’s “named executive officers” (as defined for
purposes of the Company’s proxy statement); or (ii) the CEO, in the case of a
determination that applies to individuals other than any named executive
officer.

(e)          “Chief Executive Officer” or “CEO” means the individual who is,
from time to time, the chief executive officer of the Company or its successor.

(f)          “Committee” means the Board’s Compensation and Governance
Committee.

(g)          “Consent” means a written consent that references the affected
Employee(s) or Participant(s) and this Plan by name and is made by and in the
sole and absolute discretion of: (i) the Committee, in the case of a Consent
that applies to any of the Company’s “named executive officers” (as defined for
purposes of the Company’s proxy statement), or

 

Exhibit 10.1

 

 

(ii) the CEO, in the case of a Consent that applies to individuals other than
any named executive officer.

(h)          “Continuous Qualified Service” means the period of Employee’s
continuous employment on a full-time basis (unless Consent shall have been
obtained) by the Company or a Related Company. Unless Consent shall have been
obtained, Continuous Qualified Service begins on the Employee’s most recent date
of hire before Employee’s Retirement and ends on Employee’s Retirement Date.
Unless Consent shall have been obtained, Continuous Qualified Service ends upon
any termination of employment. Time spent on paid leave, including short-term
disability (but not long-term disability) counts as employment service.
Employment pursuant to the terms of a collective bargaining agreement does not
count as employment service for purposes of this definition.

(i)           “Employee” means any individual who is employed by the Company or
a subsidiary of the Company as a common law employee on a full-time basis
(unless Consent shall have been obtained) other than the following persons (who
shall not be eligible to participate in the Plan): (1) any individual who is
part of a collective bargaining unit unless the Employer and the collective
bargaining unit have agreed upon coverage under the Plan; or (2) any individual
who is deemed by the Employer to perform services as an independent contractor.
The Employer’s employment classification of a person shall be binding and
conclusive for all purposes of the Plan and shall remain in effect regardless of
any contrary classification or reclassification of such person by any other
person or entity, including without limitation the Internal Revenue Service, the
Department of Labor or a court of competent jurisdiction.

(j)           “Exercisability Benefit” means, subject to continuing compliance
with Section 2 hereof, the continuing exercisability, vesting and non-forfeiture
of a Participant’s Stock Options until the earlier of the expiration date set
forth in the applicable stock option agreement or the termination of the Benefit
Period (i.e., the Benefit Period shall be treated as a period of active
employment) in the manner set forth in Section 3. For purposes of clarification,
the Exercisability Benefit does not mean acceleration of the vesting of any
Stock Options that are not exercisable at the Retirement Date.

(k)          “Long-Term Incentive Awards” means, collectively, Stock Options,
Time-Based Restricted Stock and Performance-Based Restricted Stock issued on or
after March 1, 2006.

(l)           “Non-Compete Agreement” means an agreement prepared and delivered
by the Company and executed by an Employee and the Company that remains in
effect for as long as any unvested and/or unexercised Long-Term Incentive Awards
exist and restricts the Employee’s ability to engage in the ownership,
development, operation, management or leasing of any retail, industrial, office
or distribution properties in any metropolitan area in which the Company is
engaged in business at any time during the term of the Non-Compete Agreement
without Consent.

(m)        “Notice of Intent to Retire” means a completed notice of intent to
Retire on the Retirement Date specified by the Employee in the notice. The form
of notice provided by the Company must be used to complete the notice, must be
signed by the Employee, and must be

 

 

2

 

Exhibit 10.1

 

 

received by the person designated on the form by the following deadline: six
full calendar months before the Retirement Date for non-officers, and 12 full
calendar months before the Retirement Date for officers; provided that the
deadline may be changed by Consent. Notice of Intent to Retire can be revoked by
the Employee if Consent shall have been obtained.

(n)          “Participant” means an Employee of the Company who is eligible to
participate in this Plan in accordance with the provisions of Section 3.

 

(o)    

“Plan Administrator” means the Committee.

(p)          “Performance-Based Restricted Stock” means restricted stock awards
that become vested based upon performance measures (including total return-based
awards, i.e. awards under the various Shareholder Value Plans in effect as of
the date hereof) and were awarded on or after March 1, 2006 to an Employee
pursuant to the Company’s 1994 Amended and Restated Stock Option Plan or any
successor plan, but shall not include any such awards the grant terms of which
expressly provide that the holder thereof shall not be entitled to benefits
under this Plan with respect to such awards.

(q)          “Related Company” means: (1) any corporation that is a member of a
controlled group of corporations (as defined in Code Section 414(b) that
includes the Company); and (ii) any trade or business (whether or not
incorporated) that is under common control (as defined in Code Section 414(c)
with the Company. For purposes of applying Code Sections 414(b) and (c), 50% is
substituted for the 80% ownership level.

(r)          “Release” means a release of liability prepared and delivered by
the Company that is signed by the Employee.

(s)          “Retire” or “Retirement” means a voluntary termination of
employment with the Company and its affiliates by action of the Employee that
takes effect on the Employee’s Retirement Date unless it is determined by the
Company that circumstances constituting Cause existed on or before the
Retirement Date. In addition, a Retirement shall occur if the Company terminates
the Employee’s employment without Cause as long as an Employee shall have
satisfied the Retirement Age requirements and, unless Consent shall have been
obtained, such Employee shall have executed a Non-Compete Agreement and a
Release.

(t)           “Retirement Age” means that an Employee has satisfied either of
the following: (1) at least 30 years of Continuous Qualified Service; or (2) at
least 10 years of Continuous Qualified Service and attainment of age 55.

(u)          “Retirement Date” means the date that is on or after the Employee’s
Retirement Age and is specified by the Employee in the Employee’s Notice of
Intent to Retire, or such other date specified in a Consent.

(v)          “Termination of Employment” and “Separation from Service” mean the
date that the Participant separated from service within the meaning of Section
409A of the Code. Generally, a Participant separates from service if the
Participant dies, retires, or otherwise has a Separation from Service with the
Company, determined in accordance with the following:

 

 

 

3

 

Exhibit 10.1

 

 

(i)           Leaves of Absence. The employment relationship is treated as
continuing intact while the Participant is on military leave, sick leave, or
other bona fide leave of absence if the period of such leave does not exceed six
(6) months, or, if longer, so long as the Participant retains a right to
reemployment with the Company under an applicable statute or by contract. A
leave of absence constitutes a bona fide leave of absence only if there is a
reasonable expectation that the Participant will return to perform services for
the Company. If the period of leave exceeds six (6) months and the Participant
does not retain a right to reemployment under an applicable statute or by
contract, the employment relationship is deemed to terminate on the first date
immediately following such six (6)-month period. Notwithstanding the foregoing,
where a leave of absence is due to any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than six (6) months, where such impairment
causes the Participant to be unable to perform the duties of his or her position
of employment or any substantially similar position of employment, a twenty-nine
(29)-month period of absence shall be substituted for such six (6)-month period.

(ii)         Dual Status. Generally if a Participant performs services both as
an employee and an independent contractor, such Participant must separate from
service both as an employee, and as an independent contractor pursuant to
standards set forth in the Treasury Regulations, to be treated as having a
Separation from Service. However, if a Participant provides services to the
Company as an employee and as a member of the Board, and if any plan in which
such person participates as a Board member is not aggregated with this Plan
pursuant to Treasury Regulation Section 1.409A-1(c)(2)(ii), then the services
provided as a director are not taken into account in determining whether the
Participant has a Separation from Service as an employee for purposes of this
plan.

(iii)        Separation from Service. Whether a Separation from Service has
occurred is determined based on whether the facts and circumstances indicate
that the Company and the Participant reasonably anticipated that no further
services would be performed after a certain date or that the level of bona fide
services the Participant would perform after such date (whether as an employee
or as an independent contractor except as provided in section 1.7(b)) would
permanently decrease to no more than twenty percent (20%) of the average level
of bona fide services performed (whether as an employee or an independent
contractor, except as provided in subsection (ii) above) over the immediately
preceding thirty six (36) month period (or the full period of services to the
Company if the Participant has been providing services to the Company less than
thirty six (36) months). For periods during which a Participant is on a paid
bona fide leave of absence and has not otherwise terminated employment as
described above, for purposes of this paragraph the Participant is treated as
providing bona fide services at a level equal to the level of services that the
Participant would have been required to perform to receive the compensation paid
with respect to such leave of absence. Periods during which a Participant is on
an unpaid bona fide leave of absence and has not otherwise terminated employment
are disregarded for purposes of this paragraph (including for purposes of
determining the applicable thirty six (36) month (or shorter) period).

(iv)        Service with Related Companies. For purposes of determining whether
a Separation from Service has occurred under the above provisions, the “Company”
shall include the Company and all Related Companies.

 

 

 

4

 

Exhibit 10.1

 

 

(w)         “Stock Option” means stock options that were awarded to an Employee
pursuant to the Company’s 1994 Amended and Restated Stock Option Plan or any
successor plan on or after March 1, 2006, but shall not include any such awards
the grant terms of which expressly provide that the holder thereof shall not be
entitled to benefits under this Plan with respect to such awards.

(x)          “Time-Based Restricted Stock” means restricted stock awards that
become vested solely based upon the passage of time and were awarded on or after
March 1, 2006 to an Employee pursuant to the Company’s 1994 Amended and Restated
Stock Option Plan or any successor plan, but shall not include any such awards
the grant terms of which expressly provide that the holder thereof shall not be
entitled to benefits under this Plan with respect to such awards.

(y)          “Vesting Benefit” means, subject to continuing compliance with
Section 2 hereof, the continuing vesting and non-forfeiture of a Participant’s
Time-Based Restricted Stock and Performance-Based Restricted Stock until the
termination of the Benefit Period (i.e., the Benefit Period shall be treated as
a period of active employment) in the manner set forth in Section 3. For
purposes of clarification, the Vesting Benefit does not mean acceleration of the
vesting of any Time-Based Restricted Stock or Performance-Based Restricted Stock
that have not vested prior to the Retirement Date.

2.            Eligibility. An Employee shall become eligible for benefits under
this Plan if all of the following are satisfied:

(a)          the Employee has Retired after having duly submitted a Notice of
Intent to Retire in the manner set forth in this Plan;

(b)          the Company has timely received a Non-Compete Agreement duly
executed and not revoked by the Employee; and

(c)          the Company has timely received a Release duly executed and not
revoked by the Employee.

A Participant’s participation in this Plan and eligibility for Plan benefits
following Retirement will automatically terminate as of the first date the
Participant fails to fulfill any of his or her obligations under the Non-Compete
Agreement or the Release or on any such date that it is determined by the
Company that circumstances constituting Cause existed on or before the
Retirement Date with respect to such Employee. For purposes of this Plan, any
good faith determination made by the Company as to whether Cause existed or a
Participant shall have failed to fulfill any of his or her obligations under the
Non-Compete Agreement or the Release shall be conclusive.

3.           Benefits. Except to the extent the Committee specifies otherwise in
an award of Long-Term Incentive Awards or Annual Incentive Bonus, the following
benefits shall be available to a Participant:

(a)         Stock Options. Subject to the transition provisions set forth in
Section 3(e), the Exercisability Benefit shall apply during the Benefit Period
to all unexercised Stock

 

 

5

 

Exhibit 10.1

 

 

Options that are outstanding at the Retirement Date, whether or not vested at
the Retirement Date. During the Benefit Period, such Stock Options shall
continue to vest and become exercisable in accordance with the vesting schedules
set forth in the applicable stock option agreement. All outstanding Stock
Options that remain unexercised upon the occurrence of the original expiration
date set forth in the applicable stock option agreement or the termination of
the Benefit Period shall be cancelled and/or forfeited automatically without any
action by the Company or the Employee.

(b)          Time-Based Restricted Stock. Subject to the transition provisions
set forth in Section 3(e), the Vesting Benefit shall apply during the Benefit
Period to all unvested shares of Time-Based Restricted Stock that are
outstanding at the Retirement Date. During the Benefit Period, such shares of
Time-Based Restricted Stock shall continue to vest in accordance with the
vesting schedules set forth in the applicable restricted stock agreement. All
outstanding shares of Time-Based Restricted Stock that remain unvested upon the
termination of the Benefit Period shall be forfeited automatically without any
action by the Company or the Employee.

(c)          Performance-Based Restricted Stock. Subject to the transition
provisions set forth in Section 3(e) and to the next succeeding sentence, the
Vesting Benefit shall apply during the Benefit Period to all unvested shares of
Performance-Based Restricted Stock that are outstanding at the Retirement Date.
The number of such shares shall be adjusted, positively or negatively to the
extent applicable, at the end of the applicable performance period based on the
criteria set forth in the applicable restricted stock agreement. Notwithstanding
anything in the applicable restricted stock agreement to the contrary, the final
determination of the number of shares deemed to be vested and freely tradeable
at the end of such performance period shall not be subject to any pro rata
reduction based on the number of days such Participant was employed by the
Company during the applicable period. All outstanding shares of
Performance-Based Restricted Stock that remain unvested upon the termination of
the Benefit Period shall be forfeited automatically without any action by the
Company or the Employee.

(d)          Grants in Year of Retirement. Stock Options and Time-Based
Restricted Stock will be awarded for the year during which Retirement occurs in
the event an award for the year has not occurred before the Retirement Date and
the Benefit Period is in effect on the award date. Such award will be a
percentage of the Stock Options and Time-Based Restricted Stock that would have
been granted on the award date for the year if the Participant had been employed
on the award date. The percentage is the number of days a Participant employed
during the year through such Participant’s Retirement Date, divided by 365
(rounded up to the nearest whole percentage).

(e)          Transition Provisions. Notwithstanding anything herein to the
contrary: (i) the Vesting Benefit shall not apply to 75% of the Time-Based
Restricted Stock and Performance-Based Restricted Stock issued in 2006, 50% of
the Time-Based Restricted Stock and Performance-Based Restricted Stock issued in
2007 or 25% of the Time-Based Restricted Stock and Performance-Based Restricted
Stock issued in 2008; provided, however that if a Participant shall have become
vested in a portion of any such shares prior to the Retirement Date, such vested
portion shall reduce the portion to which the Vesting Benefit applies; and (ii)
the Exercisability Benefit shall not apply to 75% of the Stock Options issued in
2006, 50% of the Stock Options issued in 2007 or 25% of the Stock Options issued
in 2008; provided, however

 

 

6

 

Exhibit 10.1

 

 

that if a Participant shall have become vested in a portion of any such Stock
Options prior to the Retirement Date, such vested portion shall reduce the
portion to which the vesting provision of the Exercisability Benefit applies.
Fractional shares shall be rounded to the nearest whole share. The vesting,
exercisability and forfeiture of such awards not subject to benefits under this
Plan shall be governed by the applicable stock option agreement or restricted
stock agreement in effect as of the Retirement Date.

(i)            Examples. For purposes of clarification and illustration, set
forth below are examples assuming that a Participant received the following
grants on or after March 1, 2006:

 

March 1, 2006

 

March 1, 2007

Stock Options

200 Stock Options that vest ratably on an annual basis over four years and
remain outstanding for seven years from grant date

 

200 Stock Options that vest ratably on an annual basis over four years and
remain outstanding for seven years from grant date

 

Time-Based Restricted Stock

400 shares of Time-Based Restricted Stock that vest ratably on an annual basis
over four years

 

400 shares of Time-Based Restricted Stock that vest ratably on an annual basis
over four years

 

Performance-Based Restricted Stock

400 shares of Performance-Based Restricted Stock that vest only to the extent
certain performance metrics are achieved as of or during the three years ended
December 31, 2008. The commencement date for such period is January 1, 2006.

400 shares of Performance-Based Restricted Stock that vest only to the extent
certain performance metrics are achieved as of or during the three years ended
December 31, 2009. The commencement date for such period is January 1, 2007.

 

Example 1. Assume a Retirement Date of January 1, 2008:

With respect to the Long-Term Incentive Awards granted on March 1, 2006, the
Exercisability Benefit would apply to 25%, or 50, of such Stock Options. Since
one-fourth of the Stock Options granted in 2006, or 50 Stock Options, shall have
vested and become exercisable prior to the Retirement Date, the remaining 150
Stock Options will not be subject to the Exercisability Benefit and will be
forfeited automatically on the Retirement Date in accordance with the original
terms of the applicable stock option agreement. The Vesting Benefit would apply
to none of the Time-Based Restricted Stock since 25%, or 100 shares, shall have
vested prior to the Retirement Date. The remaining 300 shares of Time-Based
Restricted Stock will be forfeited automatically on the Retirement Date. The
Vesting Benefit would apply to 25% of the applicable number of shares of
Performance-Based Restricted Stock, which would vest and become freely tradeable
by such Participant on December 31, 2008. The remaining 75% of the
Performance-Based Restricted Stock will be forfeited automatically on the
Retirement Date.

With respect to the Long-Term Incentive Awards granted on March 1, 2007, the
Exercisability Benefit would apply to 50%, or 100 Stock Options, 25 of which
will vest and become exercisable on or about March 1, 2008, 25 of which will
vest and become exercisable on or about March 1, 2009, 25 of which will vest and
become exercisable on or about March 1, 2010 and 25 of which will vest and
become exercisable on or about March 1, 2011. Such Stock Options would remain
outstanding and exercisable until the earlier to occur of the

 

 

7

 

Exhibit 10.1

 

 

termination of the Benefit Period or March 1, 2014. The remaining 100 Stock
Options would be forfeited automatically on the Retirement Date. The Vesting
Benefit would apply to 50%, or 200 shares, of Time-Based Restricted Stock, 50 of
which will vest on March 1, 2008, 50 of which will vest on March 1, 2009, 50 of
which will vest on March 1, 2010 and 50 of which will vest on March 1, 2011. The
remaining 200 shares of Time-Based Restricted Stock will be forfeited
automatically on the Retirement Date. The Vesting Benefit would apply to 50% of
the applicable number of shares of Performance-Based Restricted Stock (subject
to adjustment pursuant to the performance criteria as set forth in Section
3(c)), which would vest and become freely tradeable by such Participant on
December 31, 2009. The remaining 50% of the Performance-Based Restricted Stock
will be forfeited automatically on the Retirement Date.

Example 2. Assume a Retirement Date of January 1, 2009:

With respect to the Long-Term Incentive Awards granted on March 1, 2006, the
Exercisability Benefit would apply to 25%, or 50, of such Stock Options. Since
more than 50 Stock Options shall have vested and become exercisable prior to the
Retirement Date, the remaining Stock Options will not be subject to the
Exercisability Benefit and, accordingly, with be subject to forfeiture in
accordance with the original terms of the applicable stock option agreement. The
Vesting Benefit would apply to none of the Time-Based Restricted Stock since
50%, or 200 shares, shall have vested prior to the Retirement Date. The
remaining 200 shares of Time-Based Restricted Stock will be forfeited
automatically on the Retirement Date. The Vesting Benefit would be inapplicable
with respect to the Performance-Based Restricted Stock because the Retirement
Date is after the applicable performance period and such shares would have
already been earned based on the performance metrics.

With respect to the Long-Term Incentive Awards granted on March 1, 2007, the
Exercisability Benefit would apply to 50%, or 100 Stock Options, 50 of which
will have vested and become exercisable prior to the Retirement Date, 17 of
which will vest and become exercisable on or about March 1, 2009, 17 of which
will vest and become exercisable on or about March 1, 2010 and 16 of which will
vest and become exercisable on or about March 1, 2011. Such Stock Options would
remain outstanding and exercisable until the earlier to occur of the termination
of the Benefit Period or March 1, 2015. The remaining 100 Stock Options would be
forfeited automatically on the Retirement Date. The Vesting Benefit would apply
to 50%, or 200 shares, of Time-Based Restricted Stock, 100 of which shall have
vested prior to the Retirement Date, 34 of which will vest on March 1, 2009, 33
of which will vest on March 1, 2010 and 33 of which will vest on March 1, 2011.
The remaining 200 shares of Time-Based Restricted Stock will be forfeited
automatically on the Retirement Date. The Vesting Benefit would apply to 50% of
the applicable number of shares of Performance-Based Restricted Stock (subject
to adjustment pursuant to the performance criteria as set forth in Section
3(c)), which would vest and become freely tradeable by such Participant on
December 31, 2009. The remaining 50% of the Performance-Based Restricted Stock
will be forfeited automatically on the Retirement Date.

(f)          Annual Incentive Bonus Benefit. A Participant will receive a cash
bonus for the year prior to the year during which the Participant’s Retirement
Date occurs. The bonus for the year preceding the year during which Retirement
occurs shall be the same amount that the Participant would have received, and
will be paid at the same time it would have been paid, if the

 

 

8

 

Exhibit 10.1

 

 

Participant had been an active Employee on the payment date. In addition, a
Participant will receive a percentage of any bonus the Participant would have
received for the year during which the Participant Retires if he or she had been
an active Employee on the payment date. The percentage is the number of days the
Employee was employed during the year through the Participant’s Retirement Date,
divided by 365. The bonus for the year during which Retirement occurs will be
paid no later than a date that is 2 ½ months after the end of such year.
Notwithstanding the foregoing, a bonus will not be paid pursuant to this Section
3(f) unless the Benefit Period is in effect on the date the bonus is to be paid.

(g)          Forfeiture and Clawback of Benefits. If the terms of the
Non-Compete Agreement or the Release are violated by any person who has received
any benefit under this Plan or it is determined by the Company that
circumstances constituting Cause existed on or before the Retirement Date with
respect to such Employee (each, a “Forfeiture Event”), then all Long-Term
Incentive Awards that remain outstanding as of the date of such determination
shall be forfeited and the value of the benefits received by the Participant
under this Plan shall be paid to the Company within ten (10) days after notice
is sent by the Company to the former Participant.

The value of the Exercisability Benefit shall be deemed to be zero if the option
either has not been exercised or was exercised during the period it could have
been exercised if the Exercisability Benefit had not applied (the “Normal
Exercise Period”). Otherwise, the value of the Exercisability Benefit shall be
deemed to be the difference between the amount included upon exercise in the
Participant’s gross income for federal income tax purposes and the amount that
would have been included as income if the exercise occurred at the highest price
prevailing in the market during the Normal Exercise Period (such amount will be
deemed to be zero if it would otherwise be negative).

The value of the Vesting Benefit shall be the amount included in the
Participant’s gross income for federal income tax purposes upon the occurrence
of each vesting of any award that would not have occurred if the Vesting Benefit
did not apply. To the extent an award was scheduled to become vested pursuant to
the Vesting Benefit, but has not yet become vested, such portion of the award is
forfeited upon notice from the Company that this Section applies, and shall have
no value for purposes of this Section.

Interest on all amounts owed to the Company pursuant to this Section 3(g) shall
be paid at the the prime rate reported in The Wall Street Journal as of the
occurrence of the Forfeiture Event and accrued from the date of the Forfeiture
Event to the date of payment.

4.            Claims and Administration. If a dispute arises concerning any
aspect of this Plan, including but not limited to a dispute over whether an
Employee is entitled to benefits under this Plan or as to the amount of a
Participant’s benefits, the Employee or Participant must first file a claim for
benefits in accordance with the following procedure. A claim for Plan benefits
must be in writing and addressed to the Plan Administrator, c/o Chairperson of
the Compensation and Governance Committee, Highwoods Properties, Inc., 3100
Smoketree Court, Suite 600, Raleigh, North Carolina 27604, or any other address
that may be designated from time to time. The claimant will receive a written
notice from the Plan Administrator with respect to the claim within 60 days (or
120 days if extenuating circumstances require an extension) of the date the

 

 

9

 

Exhibit 10.1

 

 

Plan Administrator received the claimant’s initial claim. If claimant is not
furnished notice regarding the claim within these time periods, the claim will
be considered denied.

If the Plan Administrator denies the claim, in whole or in part, it will tell
the claimant why, refer the claimant to the applicable provisions of the plan
document or other relevant records or papers, and inform the claimant when and
where the claimant may see them. The claimant will also be told if any
additional material or information is needed to perfect the claim, what material
or information is needed and why such material is needed.

In addition, the claimant will be told how he can appeal for reconsideration of
the decision. Should the claimant disagree with the determination, he has 60
days to request a review in writing. The Plan Administrator will reconsider the
claim and its resulting decision will be issued within 60 days after the
request. If more time is needed because of unusual circumstances, the claimant
will be notified.

No claim shall be considered unless it is filed with the Plan Administrator
within one (1) year after the claimant knew (or reasonably should have known) of
the principal facts on which the claim is based. Every untimely claim shall be
denied by the Plan Administrator without regard to the merits of the claim.

The exhaustion of these procedures is mandatory for resolving every claim and
dispute arising under this Plan. As to such claims and disputes: (i) no claimant
shall be permitted to commence any legal action relating to any such claim or
dispute (whether arising under section 502 or section 510 of ERISA or under any
other statute or non-statutory law) unless a timely claim has been filed under
these procedures and these procedures have been exhausted; and (ii) in any such
legal action all explicit and implicit determinations by the Plan Administrator
(including, but not limited to, determinations as to whether the claim was
timely filed) shall be afforded the maximum deference permitted by law.

No legal action (whether arising under section 502 or section 510 of ERISA or
under any other statute or non-statutory law) may be brought by any claimant on
any matter pertaining to this Plan unless the legal action is commenced in the
proper forum before the date ninety (90) days after the claimant has exhausted
these procedures. Knowledge of all facts that an Employee or Participant knew
(or reasonably should have known) shall be imputed to any claimant who is or
claims to be a beneficiary (or otherwise claims to derive an entitlement by
reference to an Employee or Participant) for the purpose of applying the one (1)
year period.

The Plan Administrator has the exclusive discretionary authority to construe and
to interpret the Plan, to decide all questions that may arise under the Plan,
and its decisions on such matters are final, conclusive and binding on all
parties. Any interpretation or determination made pursuant to such discretionary
authority shall be upheld on judicial review, unless it is shown that the
interpretation or determination was an abuse of discretion (i.e., arbitrary and
capricious).

5.           Amendment and Termination. The Board may terminate the Plan or
amend the Plan from time to time, either retroactively or prospectively;
provided that no amendment to the Plan may alter, impair or reduce a
Participant’s rights under the Plan after such Participant shall

 

 

10

 

Exhibit 10.1

 

 

have become eligible for benefits under this Plan, unless in the Board’s
reasonable judgment, the promises and benefits of the amended Plan are in the
aggregate no less favorable to such Participant than the promises and benefits
before the amendment or if in the Board’s reasonable judgment the amendment is
necessary to achieve the purpose of the Plan or the purpose of the Plan’s
benefits.

 

6.

Miscellaneous.

(a)          The terms of this Plan do not change the at-will nature of any
Participant’s employment with the Company. Nothing in this Plan may be construed
as a contract or other arrangement between a Participant and the Company to the
effect that the Participant will be employed for any specific period of time.

(b)          This Plan shall be effective as of March 1, 2006 and apply only to
a Retirement Date that occurs after that date. It is not intended that the
application of this Plan shall modify or alter the tax deductibility of any
payment or benefit paid or excluded hereunder.

(c)          Benefits under the Plan may not be assigned, transferred or pledged
to a third party, for example, as security for a loan or other debt, except to
repay bona fide debts to the Company.

(d)          The Company shall be permitted to deduct any applicable withholding
taxes from amounts payable pursuant to this Plan, or to require that the
Participant deliver such funds to the Company for transmittal to the applicable
taxing authority on behalf of such Participant, prior to the disbursement to
such Participant of any amounts payable pursuant to this Plan. Upon delivery to
the Company of satisfactory evidence that benefits received hereunder shall have
become includable in the gross income of the Participant for federal income tax
purposes, such Participant may elect to forfeit that number of shares of common
stock, whether or not a Long-Term Incentive Award and whether or not vested,
necessary to satisfy the tax amount due.

(e)          This Plan will be governed by the laws of the State of North
Carolina except to the extent preempted by federal law.

(f)          Notwithstanding anything herein to the contrary, it is solely the
obligation of each holder of the Company’s securities to be aware of and comply
with applicable federal and state securities laws. By receiving benefits under
this Plan, without limitation, each Participant represents and warrants to the
Company that he or she will not trade in any securities of the Company, whether
or not then an employee of the Company, on the basis of material, non-public
information.

 

 

 

11