Exhibit 10.2.6

 

20[  ] PERFORMANCE STOCK UNIT AWARD AGREEMENT

 

THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES THAT HAVE
BEEN

REGISTERED UNDER THE SECURITIES ACT OF 1933.  NEITHER THE SECURITIES AND
EXCHANGE COMMISSION

NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES
OR PASSED

ON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS.

 

This 20[  ] Performance Stock Unit Award Agreement (the “Agreement”) is made as
of the [  ]th day of [      ], 20[  ] (the “Award Date”), by and between CBL &
ASSOCIATES PROPERTIES, INC., a Delaware corporation (the “Company”), and
__________________ (the “Employee”).

 

WHEREAS, Employee is employed by CBL & Associates Management, Inc. (the “CBL
Management Company”), an affiliate of the Company;

 

WHEREAS, pursuant to the Stock Incentive Plan (as hereinafter defined) and
subject to the terms of this Agreement, the Company desires to grant to the
Employee performance stock units;

 

NOW, THEREFORE, in connection with the mutual covenants hereinafter set forth
and for other good and valuable consideration, the receipt and adequacy of which
is hereby acknowledged, the parties hereto agree as follows:

 

1.Definitions; Conflicts.  Capitalized terms used and not otherwise defined
herein shall have the meanings ascribed thereto in the CBL & Associates
Properties, Inc. 2012 Stock Incentive Plan (the “Stock Incentive Plan”) as may
be hereafter amended.  The terms and provisions of the Stock Incentive Plan,
including without limitation definitions of capitalized terms as set forth in
the Stock Incentive Plan, are incorporated herein and in the event of any
conflict or inconsistency between the terms and provisions of the Stock
Incentive Plan and the terms and provisions of this Agreement, the terms and
provisions of the Stock Incentive Plan shall govern and control.  Specifically,
but without limitation, the granting of the Performance Stock Units under this
Agreement and any and all issuances of shares of Common Stock for Performance
Stock Units pursuant to this Agreement shall be subject to the terms and
provisions of the Stock Incentive Plan including but not limited to any term in
the Stock Incentive Plan providing a  maximum limitation on the number of shares
of Common Stock that may be subject to the Performance Stock Units granted to
the Employee pursuant to this Agreement in any calendar year.  

 

2.Grant of Performance Stock Units.  Subject to the terms and conditions of this
Agreement including but not limited to the NYSE Grant Limitation set forth in
Paragraph 18 below, the Company hereby grants to the Employee ____________
performance stock units (the “Performance Stock Units”).  Such number of
Performance Stock Units is referred to hereinafter as the “Target Award”.  Each
Performance Stock Unit represents one share of the Company’s common stock, $0.01
par value (“Common Stock”). The actual number of Performance Stock Units earned
by the Employee shall be determined following the end of the three-year
performance period coinciding with the Company’s fiscal years 20[  ] through
20[  ] (the “Performance Period”) based upon the satisfaction of the performance
hurdles (the “Performance Criteria”) set forth in Exhibit A attached
hereto.  Following the completion of such Performance Period, and as soon as
practicable following the date on which the Compensation Committee certifies the
performance results for the Performance Period (the “Certification Date”) but
subject to the NYSE Grant Limitation set forth in Paragraph 18 below, the
Company shall issue to the Employee a number of shares of Common Stock equal to
the number of Performance Stock Units earned by the Employee (the shares of
Common Stock so issued to the Employee are herein referred to as the “Issued
Common Stock”).

 

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3.Forfeiture/Acceleration of Performance Stock Units.  As noted herein,
Performance Stock Units are not shares of Common Stock.  Shares of Common Stock
may be issued for Performance Stock Units upon satisfaction of Performance
Criteria as noted herein subject to the NYSE Grant Limitation set forth in
Paragraph 18 below.  Set forth in this Paragraph 3 are the provisions governing
the forfeiture or acceleration of Performance Stock Units in the event the
Employee’s employment with the CBL Management Company is terminated prior to the
issuance of Common Stock for Performance Stock Units.  As used herein, the term
“acceleration” of Performance Stock Units refers to an acceleration of the
issuance of Common Stock for Performance Stock Units prior to the conclusion of
the Performance Period.

 

(a) General. Except as set forth in Paragraphs 3(b) or 3(c) below, if the
Employee’s employment with the CBL Management Company terminates for any reason
prior to the end of the Performance Period, the Employee’s Performance Stock
Units granted pursuant to this Agreement shall thereupon be forfeited and the
Employee shall have no further right, title and/or interest in such Performance
Stock Units.  

 

(b)Termination for Death or Disability.   If the Employee’s employment with the
CBL Management Company terminates for reasons of the Employee’s death or
disability (defined as the complete and permanent disability of the Employee as
defined by the Company’s benefit insurance plans) prior to the end of the
Performance Period, then the Performance Stock Units shall be accelerated, and
the Performance Stock Units then deemed to be earned by the Employee will be a
pro-rated portion of the Performance Stock Units granted under this Agreement,
calculated based upon the achievement of the relevant Performance Criteria as
set forth in Exhibit A to this Agreement through the date of such termination,
and the Company shall issue to the Employee (or his or her beneficiary), within
60 days of the Employee’s separation from service, a number of fully vested
shares of Common Stock equal to the number of Performance Stock Units earned by
the Employee (subject to the potential payment of cash in lieu of a portion of
such shares due to the operation of the NYSE Grant Limitation, as detailed in
Paragraph 18 below).

 

 

(c)Termination following a Change of Control.  If the Employee’s employment with
CBL Management Company is terminated (other than for Cause) prior to the end of
the Performance Period but within 24 months after a Change of Control, then the
Performance Stock Units shall be accelerated, and the Performance Stock Units
then deemed to be earned by the Employee will be a pro-rated portion of the
Performance Stock Units granted under this Agreement, calculated based upon the
achievement of the relevant Performance Criteria as set forth in Exhibit A to
this Agreement through the date of such termination, and the Company shall issue
to the Employee (or his or her beneficiary), within 60 days of the Employee’s
separation from service, a number of fully vested shares of Common Stock equal
to the number of Performance Stock Units earned by the Employee (subject to the
potential payment of cash in lieu of a portion of such shares due to the
operation of the NYSE Grant Limitation, as detailed in Paragraph 18 below).

 

 

Upon the conclusion of the Performance Period, the provisions of this Paragraph
3 shall have no further force and effect.

 

 

4.Vesting of Common Stock.  As noted herein, Shares of Common Stock may be
issued for Performance Stock Units upon satisfaction of Performance Criteria as
noted herein.  Set forth in this Paragraph 4 are the provisions governing the
vesting of Issued Common Stock and provisions governing the forfeiture or
vesting of Issued Common Stock in the event of the Employee’s employment with
the CBL Management Company is terminated prior to the full vesting of the Issued
Common Stock.  As used in this Agreement, the

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term “vest” or “vesting” shall mean the immediate, non-forfeitable, fixed right
of present or future enjoyment of the Issued Common Stock.  Such Issued Common
Stock, subject to the terms, conditions and limitations contained herein
(including but not limited to the provisions of Paragraph 4 below and the NYSE
Grant Limitation set forth in Paragraph 18 below), shall vest as follows:  sixty
percent (60%) of such Issued Common Stock shall vest on the Certification Date;
an additional twenty percent (20%) of such Issued Common Stock shall vest on the
fourth (4th) anniversary of the Award Date, and the remaining Issued Common
Stock shall vest on the fifth (5th) anniversary of the Award Date (each a
“Vesting Date”); provided that the Employee has remained in continuous
employment with the CBL Management Company from the Award Date through the
applicable Vesting Date. Notwithstanding any provision herein to the contrary,
on a “Change of Control”, the portion of the Issued Common Stock that is
non-vested on the date of such event (including any Issued Common Stock that is
issued on such date pursuant to Paragraph 3(c) above, and including any cash
that is required to be paid to the Employee in lieu of the delivery of a portion
of the Issued Common Stock due to the operation of the NYSE Grant Limitation, as
detailed in Paragraph 18 below) shall immediately, on the date of such event,
thereupon vest in the Employee.

 

(a) General. Except as set forth above or in Paragraph 4(b) below, if the
Employee’s employment with the CBL Management Company terminates for any reason,
any non-vested portion of the Issued Common Stock shall thereupon be forfeited
and returned to the Company and the Employee shall have no further right, title
and/or interest in the non-vested portion of the shares of Issued Common Stock.

 

(b)Death or Disability.  If the Employee’s employment with the CBL Management
Company terminates for reasons of the Employee’s death or disability (as defined
herein), the portion of the Issued Common Stock that is non-vested on the date
of such termination (including any Issued Common Stock that is issued on such
date pursuant to Paragraph 3(b) above, and including the non-vested portion of
any cash that is required to be paid to the Employee in lieu of the delivery of
a portion of the Issued Common Stock due to the operation of the NYSE Grant
Limitation, as detailed in Paragraph 18 below) shall immediately, on the date of
such termination of employment, thereupon vest in the Employee or his/her
estate.  

 

(c)Six-Month Delayed Payment of Shares.  Notwithstanding Paragraphs 4(a), and
4(b) above, the Company shall delay issuance of any shares of Common Stock to
the Employee (and the payment of  any cash that is required to be paid to the
Employee in lieu of the delivery of a portion of the Issued Common Stock due to
the operation of the NYSE Grant Limitation, as applicable) for a period of six
months following the Employee’s termination of employment to the extent any
payment pursuant to this Agreement is considered a “deferred compensation”
payment for purposes of Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”), and such delayed payment is required pursuant to Code
Section 409A(a)(2)(B) because the Employee is a “specified employee” as defined
therein.

 

The provisions of this Paragraph 4 shall have no force and effect until shares
of Common Stock are issued to the Employee as set forth in this Agreement.

 

 

5.Rights as a Shareholder.  The Employee shall have all of the rights of a
shareholder with respect to the shares of Issued Common Stock pursuant to this
Agreement, subject only to the transfer restrictions set forth in Paragraph 6
below and forfeiture provisions set forth above.  The Employee’s rights as a
shareholder shall include the rights to receive all dividends on the Issued
Common Stock and to exercise any voting rights attributable to the Issued Common
Stock for so long as the Employee shall own the Issued Common Stock.  Prior to
the issuance of such Common Stock to the Employee, the Employee shall have no
rights of a shareholder.

 

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6.Non-Transferability of Performance Stock Units and Common Stock.  (a)  Except
for any transfers that may be required by law, the Performance Stock Units may
not be transferred by the Employee and any non-permitted attempted transfer by
the Employee shall be null and void.

 

(b)  With respect to any non-vested Issued Common Stock under this Agreement,
and the non-vested portion of any cash that is required to be paid to the
Employee in lieu of the delivery of a portion of the Issued Common Stock due to
the operation of the NYSE Grant Limitation, as applicable, except for any
transfers that may be required by law, including pursuant to any domestic
relations order or otherwise, such non-vested Issued Common Stock (or non-vested
cash payments, as applicable) may not be transferred by the Employee until the
termination of the vesting period (or immediate vesting pursuant to the
provisions of Paragraph 4 above) and any non-permitted attempted transfer by the
Employee of any such non-vested portion prior to the termination of the vesting
period shall be null and void.  Any transferee who may receive a transfer of
such non-vested Issued Common Stock (or the right to receive any non-vested cash
payments, as applicable) pursuant to a transfer required by law as set forth
above shall be subject to all the terms and provisions of this Agreement and any
termination of the employment of the Employee prior to the termination of the
vesting period (except for terminations of employment pursuant to Paragraph 4(b)
above or on a Change of Control) shall cause the forfeiture of any non-vested
shares (or cash payments, as applicable) even if such shares (or cash payments)
are in the hands of a transferee.

 

7.Restricted Stock.  To the extent any shares of shares of Common Stock issued
pursuant to this Agreement are not vested, such Common Stock will be considered
a grant of restricted property to the Employee that is subject to a “substantial
risk of forfeiture” as defined in Section 83 of the Code.

 

8.Restricted Stock Account; Uncertificated Shares.  The Employee understands and
acknowledges that any non-vested Issued Common Stock will be held in an
uncertificated form in a restricted stock account maintained by the Company’s
stock transfer agent for the Employee until such time as such shares of Issued
Common Stock are no longer subject to the restrictions set forth in this
Agreement.  The Employee understands and acknowledges that as the shares of
Issued Common Stock shall vest during the vesting period and upon such vesting,
the Company shall cause such vested shares to be issued out of the above-stated
restricted stock account and issued to an unrestricted stock account maintained
by the Company’s stock transfer agent for the Employee (with reduction in the
number of shares necessary to cover any applicable employment taxes unless the
Employee shall elect to pay such amounts in cash pursuant to notices and
procedures that the Company has instituted or shall institute) and such vested
shares shall no longer be subject to the terms and provisions of this
Agreement.  The Employee understands and acknowledges that in the event the
Employee’s employment with the Company, its Subsidiaries or Affiliates including
the CBL Management Company, is terminated at any time during the vesting period,
any non-vested shares of Issued Common Stock shall then be cancelled and/or
returned to the Company and that the Company shall be entitled to take such
action on behalf of the Employee in the form of executing such documents or
instruments to authorize the cancellation of such shares and/or return of same
to the Company.

 

9.No Enlargement of Employee Rights.  Nothing in this Agreement shall be
construed to confer upon the Employee any right to continued employment or to
restrict in any way the right of the Company or any Subsidiary or Affiliate
including the CBL Management Company to terminate the Employee’s employment at
any time.

 

10.Income Tax Withholding.  The Company, in its sole discretion, shall make such
provisions and take such steps as it may deem necessary or appropriate for the
withholding of all Federal, state, local and other taxes required by law to be
withheld with respect to the shares of Issued Common Stock, or any cash that is
required to be paid to the Employee in lieu of the delivery of a portion of the
Issued Common Stock due to the operation of the NYSE Grant Limitation, as
applicable (as such shares (or cash) vest or if certain tax elections are made
by the Employee, i.e., a Section 83(b) election under applicable provisions of
the Code) and

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any dividends paid on any portion of non-vested shares of Issued Common Stock,
including, but not limited to, the following:  (i) deducting the amount of any
such withholding taxes therefrom or from any other amounts then or thereafter
payable to the Employee by the Company or any of its Subsidiaries or Affiliates
including the CBL Management Company; (ii) requiring the Employee, or the
beneficiary or legal representative of the Employee, to pay to the Company the
amount required to be withheld or to execute such documents as the Company deems
necessary or desirable to enable the Company to satisfy its withholding
obligations; and/or (iii) withholding from the shares of Issued Common Stock
otherwise payable and/or deliverable one or more of such shares having an
aggregate Fair Market Value, determined as of the date the withholding tax
obligation arises, less than or equal to the amount of the total withholding tax
obligation.

 

11.Binding Effect.  This Agreement shall be binding upon the heirs, executors,
administrators and successors of the parties hereto.

 

12.Governing Law.  This Agreement shall be construed and interpreted in
accordance with the laws of the State of Delaware without reference to the
principles of conflicts of laws thereof.

 

13.Headings.  Headings are for the convenience of the parties and are not deemed
to be part of this Agreement.

 

14.Power of Attorney.  The Employee, by execution of this Agreement, does hereby
appoint the Company as the Employee’s attorney-in-fact for the limited purposes
of executing any documents or instruments necessary in conjunction with the
shares of Issued Common Stock while such shares are subject to the restrictions
provided by this Agreement.  The employee understands and acknowledges that the
shares of Issued Common Stock may be subject to adjustment or substitution, as
determined by the Company or the Company’s Compensation Committee, as to the
number, price or kind of a share of stock or other consideration subject to such
awards or as otherwise determined by the Company or the Company’s Compensation
Committee to be equitable in the event of changes in the outstanding stock or in
the capital structure of the Company by reason of stock dividends, stock splits,
reverse stock splits, recapitalizations, reorganizations, mergers,
consolidations, combinations, exchanges, or other relevant changes in
capitalization occurring after the date of grant of any such award.

 

15.Section 83(b) Election.  By execution of this Agreement, the Employee is
acknowledging that he/she understands that he/she may make a Section 83(b)
Election pursuant to applicable provisions of the Code with respect to any
non-vested Issued Common Stock but that such election must be made on or before
the date that is thirty (30) days from the original issuance of such shares
following the Certification Date as set forth above.

 

16.Compliance with Section 409A.  To the extent applicable and notwithstanding
any provision in this Agreement to the contrary, this Agreement shall be
interpreted and administered in accordance with Section 409A of the Code and
regulations and other guidance issued thereunder.  For purposes of determining
whether any payment made pursuant to this Agreement under the Stock Incentive
Plan results in a "deferral of compensation" within the meaning of Treasury
Regulation §1.409A-1(b), the Company shall maximize the exemptions described in
such section, as applicable.  Any reference to a “termination of employment” or
similar term or phrase shall be interpreted as a “separation from service”
within the meaning of Code Section 409A and the regulations issued thereunder.

 

17.Reference to Company.  The grant of Performance Stock Units hereunder is
being made to the Employee by virtue of the Employee’s status as an employee of
the CBL Management Company.  As stated above, the CBL Management Company is an
affiliate of the Company.  The use of the term “Company” in this Agreement
shall, unless the context specifically states otherwise, be deemed to include
both CBL & Associates Properties, Inc. and the CBL Management Company.

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18.NYSE Grant Limitation. The terms of Section 312.03(b) of the New York Stock
Exchange Listed Company Manual currently limit the number of shares of Company
Common Stock (or of any securities convertible into or exercisable for Common
Stock) that may be issued to the Employee (in his/her capacity as an officer of
the Company) in any transaction or series of related transactions without
obtaining approval of the Company’s shareholders as a prerequisite to such
issuance (the “NYSE Grant Limitation”). For purposes of applying the NYSE Grant
Limitation, the granting of any “performance-based award” (including the
Performance Stock Units referenced herein) must be deemed to equal the maximum
number of shares of Company Common Stock that could be issued under such award.
To the extent the grant of Performance Stock Units hereunder to the Employee
could produce an award to the Employee in excess of the NYSE Grant Limitation
for the Company’s current fiscal year, then at the conclusion of the Performance
Period and if the Company’s performance has resulted in a payout per the
Performance Stock Units (i.e., the issuance of shares of Company Common Stock
based on the Performance Criteria as set forth on Exhibit A), the number of
shares of Common Stock earned in excess of the amount of shares permitted to be
earned with respect to such Performance Stock Units after application of the
NYSE Grant Limitation as described above, if any, shall not be issued to
Employee, but an amount of cash equivalent to the number of shares of Company
Common Stock constituting such excess times the average of the high and low
trading prices reported for the Company’s Common Stock on the NYSE on the date
such shares would have otherwise been issuable to the Employee will be payable
to the Employee in cash, but subject to the vesting provisions as relates to the
issuance of Common Stock per the Performance Stock Units. In addition, to the
extent cash is to be paid to the Employee because of the application of the NYSE
Grant Limitation, the cash will be paid first ahead of the issuance of shares of
Common Stock.

 

19.Prospectus.A current prospectus describing the material terms of the Stock
Incentive Plan is available for review in the Company’s internal website in the
CBL Employee Guide in One Note under “Benefits – General Information – Stock
Incentive Plan”.

 

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
Award Date first written above.

 

CBL & ASSOCIATES PROPERTIES, INC.

 

 

By: ____________________  

Name:____________________

Title:____________________

 

 

 

 

 

EMPLOYEE:

 

 

 

  

 

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EXHIBIT A

PERFORMANCE CRITERIA FOR PERFORMANCE STOCK UNIT AWARD

 

 

 

 

Two thirds (66.67%) of the actual number of Performance Stock Units earned by
the Employee shall be determined following the end of the Performance Period
based upon the level of Total Shareholder Return or “TSR” (stock price
appreciation plus aggregate dividends) realized by holders of the Common Stock
as compared to the TSR for the Retail Sector Component of the FTSE NAREIT All
Equity REIT Index (the “NAREIT Retail Index”) over the same time period. The
level of achievement will be determined based on how the Company’s TSR ranks
among the constituents that comprise the NAREIT Retail Index in accordance with
the following table:

 

 

Performance
Benchmark Achieved at end of 20[  ]-20[  ] Performance Period

Number of Performance Stock Units Earned by the Employee

 

Below “Threshold” Level

No Performance Stock Units earned

 

“Threshold”

3rd Quartile

No less than 26th Percentile
of the NAREIT Retail Index TSR, pro-rated
for ranking within the quartile

0.5 - .99 x  66.67% of Target Award

“Target”

2nd Quartile

No less than 51st Percentile
of the NAREIT Retail Index TSR, pro-rated
for ranking within the quartile

 

1.0 – 1.49 x 66.67% of Target Award

“Maximum”

1st Quartile

At least 76th Percentile
of the NAREIT Retail Index TSR, pro-rated
for ranking within the quartile

1.5 - 2.0 x 66.67% of Target Award

 

If the calculated comparison ranking is between Threshold and Maximum for any
performance period, then the number of Performance Stock Units earned will be
prorated as indicated in the preceding table.

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One third (33.33%) of the actual number of Performance Stock Units earned by the
Employee shall be determined following the end of the Performance Period based
upon the Company’s achievement of at least a “Threshold” level of absolute TSR
for holders of the Company’s common stock over the same time period.   The level
of achievement will be determined based on the Company’s TSR over the
Performance Period in accordance with the following table:

 

 

Performance
Benchmark Achieved

Number of Shares
Awarded at Payout of Performance Share Units

Below “Threshold” Level

No performance shares earned

“Threshold”

Cumulative Company TSR of 30%

Shares issued equal to 0.5 x

33.33% of the Target Award, with excess over Threshold Benchmark pro-rated
between Threshold and Target levels

“Target”

Cumulative Company TSR of 45%

Shares issued equal to 1.0 x

33.33% of the Target Award, with excess over Target Benchmark pro-rated between
Target and High levels

“High”

Cumulative Company TSR of 55%

Shares issued equal to 1.5 x

33.33% Target Award, with excess over High Benchmark pro-rated between High and
Maximum levels

“Maximum”

Cumulative Company TSR of 65% or greater

Shares issued equal to 2.0 x

33.33% of the Target Award

 

If the calculated basis point comparison is between benchmarks as noted above
for any performance period, then the number of Performance Stock Units earned
will be prorated as indicated in the preceding table.

 

 

 

 

 

NOTE:  the implementation of the Performance Criteria stated herein and the
issuance of Common Stock of the Company to the Employee hereunder is subject to
the NYSE Grant Limitation set forth in Paragraph 18 of this Agreement.