Exhibit 10.2

 

GLENBOROUGH REALTY TRUST INCORPORATED

 

2006 MULTI-YEAR INCENTIVE PROGRAM

 

PARTICIPATION AGREEMENT

 

THIS AGREEMENT is entered into as of this      day of February, 2006, by and
between Glenborough Realty Trust Incorporated, a Maryland corporation (the
“Company”) and                      (the “Employee”).

 

WHEREAS, the Company has established the 2006 Multi-Year Incentive Program (the
“Program”) pursuant to which certain employees of the Company may be granted
restricted shares of the Company’s common stock upon achievement of certain
Performance Goals (as defined below).

 

WHEREAS, the Employee provides valuable services for the benefit of the Company;
and

 

WHEREAS, in consideration of the foregoing the Employee has been designated by
the Board of Directors of the Company to participate in the Program for the
period beginning January 1, 2006 and ending December 31, 2008.

 

NOW, THEREFORE, the Company and the Employee agree as follows:

 

1. Participant in the Program. The Employee is a participant in the program for
the period beginning January 1, 2006 and ending December 31, 2008 (the
“Performance Period”).

 

2. Maximum Number of Restricted Shares. The Employee shall have the opportunity
to receive a maximum of                      restricted shares.

 

3. Performance Goals. The actual number of restricted shares received by the
Employee shall be determined based on satisfaction of the following Performance
Goals as measured at the end of the Performance Period:

 

(a) Relative Total Annual Shareholder Return (“Relative TSR”): Percentage
comparison of the Company’s Absolute TSR as compared to the NAREIT Office Index.

 

(b) Absolute Total Annual Shareholder Return (“Absolute TSR”): Percentage of
year over year growth (reduction) in the Company’s share price appreciation
(depreciation) plus dividends.

 

The foregoing Performance Goals shall be calculated (a) without regard to any
change in accounting standards that may be required by the Financial Accounting
Standards Board or any other relevant entity following the date of this
Agreement and (b) without regard to any mergers, non-property acquisitions or
restructurings affecting the Company that occur during the Performance Period.

 

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4. Performance Goal Weighting. The Performance Goal Weighting for each
Performance Goal identified in Section 3 is as follows:

 

Performance Goal

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   Performance Goal Weighting

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Relative TSR

   50 %

Absolute TSR

   50 %      100 %

 

5. Calculation of Actual Number of Shares to be Granted. The actual number of
restricted shares to be granted with respect to each Performance Goal identified
in Section 4 shall be calculated in accordance with the following equation:

 

(3 × Base Salary) × Performance Goal Weighting × Grant Percentage = Shares
Granted

        $18.10

 

The applicable Grant Percentage will be determined pursuant to Appendix A. For
an example, see Appendix B.

 

6. Grant of Shares. Subject to Sections 8 and 9, the actual number of restricted
shares to be granted to the Employee based on the achievement of the Performance
Goals for the Performance Period shall be determined by the Board of Directors
of the Company no later than February 15, 2009 and the restricted shares (if
any) shall be issued to the Employee on February 15, 2009. The Employee shall be
required to execute a Restricted Stock Agreement in connection with the issuance
of the restricted shares.

 

7. Vesting of the Shares. Subject to Sections 8 and 9, the restricted shares
awarded (if any) shall vest on February 15, 2010.

 

8. Termination of Employment. Subject to Section 9, in the event the Employee
terminates employment before February 15, 2009 for any reason other than death
or total and permanent disability, the Employee shall not be eligible to receive
a grant of restricted shares pursuant to this Agreement. Subject to Section 9,
in the event the Employee terminates employment before February 15, 2009 as the
result of death or total and permanent disability, the Employee shall receive
             shares for each full month of employment completed during the
Performance Period (up to a maximum of              shares) and all shares
awarded shall be fully vested upon grant. For purposes of this Section 8, the
Employee is permanently and totally disabled if he or she is unable to engage in
any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or which
has lasted or can be expected to last for a continuous period of not less than
12 months. The Employee shall not be considered to be permanently and totally
disabled unless he or she furnishes proof of the existence thereof in such form
and manner, and at such times, as the Board of Directors may require.

 

9. Change of Control. In the event a Change of Control occurs during the
Performance Period and provided the Employee continues to be employed by the
Company at the time the Change of Control occurs, the Performance Goals shall be
deemed to have been satisfied to the maximum extent possible and the Employee
shall be granted              shares immediately prior to the Change of Control.
All shares granted pursuant to the application of this Section 9 shall be fully
vested upon grant.

 

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“Change of Control.” For all purposes under this Agreement, “Change of Control”
shall mean a change in ownership or control of the Company effected through any
of the following transactions:

 

  a) The direct or indirect acquisition by any person or related group of
persons (other than an acquisition from or by the Company or by a
Company-sponsored employee benefit plan or by a person that directly or
indirectly controls, is controlled by, or is under common control with, the
Company) of beneficial ownership (within the meaning of Rule 13d-3 of the
Securities Exchange Act of 1934, as amended) of securities possessing more than
twenty percent (20%) of the total combined voting power of the Company’s
outstanding securities,

 

  b) The sale, transfer or other disposition of all or substantially all of the
assets of the Company (including the capital stock of the Company’s subsidiary
corporations), regardless of whether such sale, transfer or other disposition
occurs in connection with the complete liquidation or dissolution of the
Company;

 

  c) A merger or consolidation approved by the Company’s stock-holders in which
the Company is not the surviving entity, except for a transaction the principal
purpose of which is to change the state in which the Company is incorporated;

 

  d) The sale, transfer or other disposition of all or substantially all of the
assets of the Company (including the capital stock of the Company’s subsidiary
corporations) in connection with the complete liquidation or dissolution of the
Company approved by the Company’s stock-holders; or

 

  e) Any reverse merger approved by the Company’s stock-holders in which the
Company is the surviving entity but in which securities possessing more than
fifty percent (50%) of the total combined voting power of the Company’s
outstanding securities are transferred to a person or persons different from
those who held such securities immediately prior to such merger.

 

10. Governing Law. This Agreement is to be construed in accordance with and
governed by the internal laws of the State of California without giving effect
to any choice of law rule that would cause the application of the laws of any
jurisdiction other than the internal laws of the State of California to the
rights and duties of the parties. Should any provision of this Agreement be
determined by a court of law to be illegal or unenforceable, the other
provisions shall nevertheless remain effective and shall remain enforceable.

 

11. Administration and Interpretation. Any question or dispute regarding the
administration or interpretation of this Agreement shall be submitted by the
Employee or by the Company to the Board of Directors of the Company. The
resolution of such question or dispute by the Board of Directors of the Company
shall be final and binding on all persons.

 

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12. Venue. The parties hereto agree that any suit, action, or proceeding arising
out of or relating to the this Agreement shall be brought in the United States
District Court for the Northern District of California (or should such court
lack jurisdiction to hear such action, suit or proceeding, in a California state
court in the County of San Mateo) and that the parties shall submit to the
jurisdiction of such court. The parties irrevocably waive, to the fullest extent
permitted by law, any objection the party may have to the laying of venue for
any such suit, action or proceeding brought in such court. If any one or more
provisions of this Section 12 shall for any reason be held invalid or
unenforceable, it is the specific intent of the parties that such provisions
shall be modified to the minimum extent necessary to make it or its application
valid and enforceable.

 

IN WITNESS WHEREOF, the parties hereto have entered into this Participation
Agreement as of the day and year first above written.

 

GLENBOROUGH REALTY TRUST INCORPORATED, a Maryland corporation By  

 

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Its  

 

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The Employee represents that he or she is familiar with the terms and provisions
hereof, and hereby accepts the opportunity to receive a grant of restricted
shares subject to all of the terms and limitations hereof. The Employee has
reviewed this Participation Agreement in its entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Participation Agreement,
and fully understands all provisions of this Participation Agreement. The
Employee hereby agrees that all questions of interpretation and administration
relating to this Participation Agreement shall be resolved by the Board of
Directors in accordance with Section 11 of the Participation Agreement. The
Employee further agrees to the venue selection in accordance with Section 12 of
the Participation Agreement.

 

Dated:                                    Signed:  

 

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        The “Employee”

 

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APPENDIX A - GRANT FORMULA

 

   

Grant Percentage

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0%

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35%

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65%

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85%

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Relative TSR (% of Index)

  Less than 85th percentile   85th percentile(1)   100th percentile(2)   120th
percentile

Absolute TSR

  Less than 6%   6%(3)   9%(4)   12% or Greater

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1 If the Relative TSR is greater than the 85th percentile (but less than the
100th percentile) the Grant Percentage shall be increased by 2% for every
additional one percentile increase in Relative TSR.

2 If the Relative TSR is greater than the 100th percentile the Grant Percentage
shall be increased by 1% for every additional one percentile increase in
Relative TSR up to a maximum Grant Percentage of 85%.

3 If the Absolute TSR is greater than 6% (but less than 9%) the Grant Percentage
shall be increased by 1% for every additional 0.1% increase in Absolute TSR.

4 If the Absolute TSR is greater than 9% the Vesting Percentage shall be
increased by 1% for every additional 0.15% increase in Absolute TSR up to a
maximum Vesting Percentage of 85%.

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APPENDIX B - EXAMPLE

 

[Example to be completed upon execution of Agreement]

 

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