**Exhibit 10.4**

 

 

 

**CENTERPOINTMANAGEMENT GROUP, LLCMANAGEMENT INCENTIVE PLAN**

 

**Effective asof March 8, 2006**

 

 

----

 

# ARTICLE 1ESTABLISHMENT AND PURPOSE

#  

CenterPointManagement Group, LLC, a Delaware limited liability company (the “Company”),hereby establishes the CenterPoint Management Group, LLC Management IncentivePlan (the “MIP”), effective as of March    **,** 2006 (the “Effective Date”). The Company is the MIPUnit Member (as defined in the Amended and Restated Limited Liability CompanyAgreement of Solstice Holdings LLC, a Delaware limited liability company (“Solstice”))of Solstice. The purpose of this MIP is to assist the Company and CenterPointProperties Trust, a Maryland real estate investment trust and a Subsidiary ofSolstice (“CenterPoint”), in attracting and retaining key employees andto provide such persons with long-term incentives and rewards for superiorperformance.

 

# ARTICLE 2DEFINITIONS

#  

Capitalizedterms that are used but not defined herein shall have the meaning set forth inthe MIP Unit Member Operating Agreement.

 

## 2.1                                 “AllocationDate” means the initial allocation date on or around the Effective Date and theannual date following the close of each Solstice fiscal year selected by theBoard (commencing with the Solstice fiscal year ending June 30, 2007) onwhich a grant of MIP Units shall become effective, which shall not be prior tothe date the Board takes action with respect thereto.

##  

## 2.2                                 “Beneficiary”means the person or persons designated by the Participant, in a writingprovided to the Company, Solstice or CenterPoint prior to the Participant’sdeath, to receive amounts payable to the Participant under this MIP upon theParticipant’s death. In the absence of such a written beneficiary designation,the Beneficiary shall be the Participant’s surviving spouse, or if none, theParticipant’s estate.

##  

## 2.3                                 “Board”means the board of managers of Solstice or any committee or individual dulyauthorized by the board of managers of Solstice to exercise any right or perform anyobligations of the board of managers of Solstice relating to this MIP.

##  

## 2.4                                 “CenterPointManagement Team” means the Chief Executive Officer of CenterPoint and the ChiefFinancial Officer of CenterPoint.

##  

## 2.5                                 “Changein Control Sale” shall have the meaning set forth in the MIP Unit MemberOperating Agreement.

##  

## 2.6                                 “Committee”means the Compensation Committee of Solstice, as constituted from time to timeand, to the extent of any delegation by the Board pursuant to this MIP to asubcommittee, such subcommittee.

##  

## 2.7                                 “DistributionDate” means each date the Company distributes cash to a Participant pursuant tothe terms of the MIP Unit Member Operating Agreement.

 

----

 

## 2.8                                 “EmploymentAgreement” means any employment agreement between a Participant andCenterPoint, Solstice or a Subsidiary thereof.

##  

## 2.9                                 “FinalAllocation Date” has the meaning set forth in Section 5.7.

##  

## 2.10                           “MIPBoard” means the board of managers of the Company.

##  

## 2.11                           “MIPUnits” shall have the meaning set forth in the MIP Unit Member OperatingAgreement.

##  

## 2.12                           “MIPUnit Award Agreement” means the written agreement between a Participant and theCompany evidencing the grant of a MIP Unit to the Participant and setting forthcertain terms and conditions that apply to such grant.

##  

## 2.13                           “MIPUnit Member Operating Agreement” means the operating agreement with respect tothe MIP Unit Member of Solstice, as amended, modified, supplemented or restatedfrom time to time.

##  

## 2.14                           “MIPUnit Sharing Percentage” shall have the meaning set forth in the MIP UnitMember Operating Agreement.

##  

## 2.15                           “NewHire” means a Participant who is commencing, or has agreed to commence,employment with CenterPoint (or as applicable, the Company, Solstice or any oftheir Affiliates that adopts the MIP) after the Effective Date.

##  

## 2.16                           “Participant”means an employee of CenterPoint (or as applicable the Company, Solstice or anyof their Affiliates that adopts the MIP) to whom the Board has granted a MIPUnit pursuant to the terms of this MIP and the MIP Unit Member OperatingAgreement.

##  

# ARTICLE 3ADMINISTRATION OF THE MIP

#  

## 3.1                                 Pursuantto the terms of the MIP Unit Member Operating Agreement, the MIP Board hasdelegated to the Board, subject to Section 3.2 below, full and soleauthority to administer this MIP.

##  

## 3.2                                 Withrespect to any determinations to be made pursuant to the provisions of Articles4 and 5, the CenterPoint Management Team shall make recommendations to theBoard, and the Board may approve or request that the CenterPointManagement Team revise such recommendation. To the extent the Board requests thatthe CenterPoint Management Team revise such recommendation, and until a revisedrecommendation is approved by the Board, the CenterPoint Management Team willhave a period not to exceed thirty (30) days from the date the initialrecommendation is presented to the Board (the “Recommendation Period”)to provide revised recommendations for approval by the Board. The Board shallconvene as often as reasonably required during the Recommendation Period. Tothe extent the Board has not approved a recommendation from the CenterPointManagement Team on or prior to the expiration of the Recommendation Period, theCommittee shall make a recommendation to the Board, after advising theCenterPoint Management Team of such recommendation, and the

 

2

----

 

## Board shall make and approveany determination it considers necessary or appropriate, in its solediscretion.

##  

## 3.3                                 TheBoard may from time to time reserve a specified number of MIP Units,subject to adjustment as provided in Section 10.4 of this MIP, for grantsto New Hires with respect to commencement of their employment with CenterPoint(or as applicable the Company, Solstice or any of their Affiliates that adoptsthe MIP) or to any Participant in connection with a promotion or other form ofspecial recognition Approved in writing by the Board.

##  

## 3.4                                 Subjectto Section 3.2, the Board shall have full authority regarding all mattersrelating to the discharge of its responsibilities under this MIP, and theinterpretation and construction by the Board of the provisions of this MIP, orany MIP Unit Award Agreement, shall be made in the sole discretion of the Boardand shall be final and conclusive.

##  

## 3.5                                 TheBoard may delegate to the Committee, to one or more subcommittees of the Committee,to one or more of its members, or to one or more officers of the Company orCenterPoint, or to one or more agents or advisors, such administrative dutiesor powers as it may deem advisable, and the Board, the Committee, or anyperson to whom duties or powers have been delegated as aforesaid, may employone or more persons to render advice with respect to any responsibility theBoard, the Committee or such person may have under this MIP.

##  

# ARTICLE 4ELIGIBILITY

#  

The Board may authorizegrants of MIP Units under this MIP to Participants upon such terms andconditions as the Board may determine and pursuant to and in accordancewith the MIP Unit Member Operating Agreement and the MIP. Each employeeidentified on Appendix A shall be a Participant as of the later of theEffective Date and the date he or she executes the MIP Unit Award Agreementevidencing the grant set forth on Appendix A. On or before each AllocationDate, the Board shall designate such other employees who shall be Participants,including New Hires.

 

# ARTICLE 5GRANTS OF MIP UNITS

#  

## 5.1                                 Themaximum number of MIP Units that may be granted under this MIP (includingthe up to 3,880 MIP Units that may be granted as of the Effective Dateunder Section 5.2) shall not exceed an aggregate of 10,000 MIP Units.

##  

## 5.2                                 Asof the Effective Date, the Board shall grant to each Participant selected toreceive a grant of MIP Units as of the Effective Date based on such Participant’s(i) cash investment in Solstice, if any, and (ii) position and titlewith respect to the Participant’s employment by CenterPoint. The total MIPUnits to be granted as of the Effective Date shall not exceed 3,880 MIP Units.

##  

## 5.3                                 Beforeeach Allocation Date, the Board shall designate the number of MIP Units to begranted to each Participant on such Allocation Date in whole or fractional MIPUnits and not to exceed the maximum MIP Units available for grant during suchfiscal year as set forth in

 

3

----

 

## Section 5.4.            On each Allocation Date, the Boardshall grant to each Participant the number of MIP Units so designated.

##  

## 5.4                                 Asof the Effective Date and on each Allocation Date following the fiscal yearsidentified below, the Board may grant to all Participants, including anyNew Hires, a total number of MIP Units not to exceed the following maximums foreach fiscal year, as set forth below; provided, however, that tothe extent that the Board does not grant the maximum MIP Units available to begranted on an Allocation Date, the number of remaining MIP Units that is theexcess of the maximum MIP Units available to be granted minus the amount of MIPUnits actually granted on such Allocation Date shall be cancelled.

 
| **FISCAL YEAR**                                           | ** ** | **MAXIMUM MIP UNITS** | ** ** |
|----------------------------------------------------------------|------------|---------------------------------|------------|
|                                                           |       |                            |       |
| As of the  Effective Date                                      |       | 3,880                           |       |
|                                                           |       |                            |       |
| Fiscal Year  1: (July 1, 2006 – June 30, 2007)  |       | 0                               |       |
|                                                           |       |                            |       |
| Fiscal Year  2: (July 1, 2007 – June 30, 2008)  |       | 1,100                           |       |
|                                                           |       |                            |       |
| Fiscal Year  3: (July 1, 2008 – June 30, 2009)  |       | 1,100                           |       |
|                                                           |       |                            |       |
| Fiscal Year  4: (July 1, 2009 – June 30, 2010)  |       | 1,100                           |       |
|                                                           |       |                            |       |
| Fiscal Year  5: (July 1, 2010 – June 30, 2011)  |       | 1,100                           |       |
|                                                           |       |                            |       |
| Fiscal Year  6: (July 1, 2011 – June 30, 2012)  |       | 550                             |       |
|                                                           |       |                            |       |
| Fiscal Year  7: (July 1, 2012 – June 30, 2013)  |       | 550                             |       |
|                                                           |       |                            |       |
| Fiscal Year  8: (July 1, 2013 – June 30, 2014)  |       | 206.25                          |       |
|                                                           |       |                            |       |
| Fiscal Year  9: (July 1, 2014 – June 30, 2015)  |       | 206.25                          |       |
|                                                           |       |                            |       |
| Fiscal Year  10: (July 1, 2015 – June 30, 2016) |       | 206.25                          |       |

 

## 5.5                                 EachMIP Unit granted under this MIP shall be subject to the terms and conditions ofthis MIP and the MIP Unit Member Operating Agreement and shall be evidenced

 

4

----

 

## by a MIP Unit Award Agreementwhich shall set forth, along with the MIP Unit Member Operating Agreement andthe Participant’s Employment Agreement, as applicable, the terms and conditionsthat shall apply to the grant of a MIP Unit, as determined by the Board.

##  

## 5.6                                 Uponissuance of a grant of MIP Units, to the extent a Participant has not alreadyexecuted the signature page of the MIP Unit Member Operating Agreement oran addendum thereto, such Participant shall sign an addendum to the MIP UnitMember Operating Agreement agreeing to be bound by the provisions of the MIPUnit Member Operating Agreement.

##  

## 5.7                                 Theterm of this MIP shall expire effective as of, and no grant will be made underthis MIP after the grant(s) made on, the Allocation Date for the fiscal yearcommencing July 1, 2015 (the “Final Allocation Date”), if any; provided,however, that all grants made on or prior to the Final Allocation Datewill continue in effect thereafter subject to the terms of the Participant’sEmployment Agreement, if any, the MIP Unit Award Agreement, the MIP Unit MemberOperating Agreement and this MIP.

##  

# ARTICLE 6FORFEITURE AND NONTRANSFERABILITY

#  

## 6.1                                 Subjectto Article 8 and Section 6.4, any vesting or risk of forfeiture thatapplies to a Participant’s MIP Units, including in the event of a Change inControl, shall be set forth in the Participant’s Employment Agreement or MIPUnit Award Agreement, as applicable.

##  

## 6.2                                 Priorto the occurrence of a Change in Control Sale, each MIP Unit that is forfeitedin connection with a Participant’s termination of employment may begranted to any other Participant on the Allocation Date that next follows thedate the MIP Unit is forfeited; provided, however, that anyforfeited MIP Unit that is not reallocated and granted to another Participanton the next following Allocation Date shall be cancelled. In the event of aChange in Control Sale, the MIP Units will be subject to the terms of Article 8.

##  

## 6.3                                 Exceptfor transfers in connection with forfeiture or redemption, or as otherwiseprovided in the MIP Unit Member Operating Agreement, no Participant may sell,exchange, transfer, pledge, hypothecate, or otherwise dispose of any MIP Unitwhich he or she has been granted without the prior approval of the Board andany attempted transfer without such approval shall be *void abinitio.*

##  

## 6.4                                 Exceptas otherwise provided in this MIP, the MIP Unit Member Operating Agreement, aParticipant’s Employment Agreement, if any, or a Participant’s MIP Unit AwardAgreement, if a Participant’s employment with the CenterPoint (or as applicablethe Company, Solstice or any Affiliate that adopts the MIP) is terminated forany reason prior to a Distribution, the Participant shall immediately forfeitall MIP Units to which the Participant has been allocated. Upon suchforfeiture, the Participant will not be entitled to any further payments andwill have no further rights under this MIP.

 

5

----

 

# ARTICLE 7DISTRIBUTIONS AND REDEMPTIONS

#  

## 7.1                                 EachParticipant shall be entitled to receive Distributions of Distributable Cash inaccordance with his or her MIP Unit Sharing Percentage pursuant to the MIP UnitMember Operating Agreement; provided, however, that any MIP Unitsgranted on or after the valuation determination date for which a Distributionis to be made shall not be included in any Participant’s MIP Unit SharingPercentage for purposes of determining such payment.

##  

## 7.2                                 TheCompany shall redeem a Participant’s MIP Units at such times and under suchcircumstances as are specified in the MIP Unit Member Operating Agreement.

##  

# ARTICLE 8CHANGE IN CONTROL SALE

#  

Upon a Changein Control Sale, (i) there shall be no further issuance, allocation orgrant, or reissuance, reallocation or regrant of any MIP Units issued underthis MIP, whether pursuant to this MIP or otherwise, (ii) all issued andoutstanding MIP Units issued under this MIP will no longer be subject toforfeiture (except as provided in a Participant’s Employment Agreement, if any,in connection with termination of the Participant’s employment for Cause (asdefined in the Participant’s Employment Agreement)) and (iii) the Company’sobligations under this MIP shall continue as herein provided until the term ofthe MIP expires pursuant to Section 5.7.

 

# ARTICLE 9AMENDMENT

#  

The terms andconditions set forth in this document may be altered, modified, amended orwaived only upon the affirmative vote of at least sixty-six percent (66%) ofthe Participants. The provisions of this MIP which are set forth in the MIPUnit Member Operating Agreement may only be altered, modified or waivedpursuant to the MIP Unit Member Operating Agreement.

 

# ARTICLE 10MISCELLANEOUS

#  

## 10.1                           TheCompany may issue fractional MIP Units pursuant to this MIP. The Board may alsoprovide for the elimination of fractions or for the settlement thereof in cash.

##  

## 10.2                           To theextent that the Company is required to withhold federal, state, local orforeign taxes in connection with any payment made or benefit realized by aParticipant or other person under this MIP, and the amounts available to theCompany for the withholding are insufficient, it shall have the right torequire the Participant or the Participant’s Beneficiary to remit to theCompany an amount sufficient to satisfy all federal, state and localwithholding tax requirements in connection with any payment made or benefitrealized by the Participant or the Participant’s Beneficiary in connection withan award under this MIP. The Board may make mutually agreed-uponarrangements with the Participant or the Participant’s Beneficiary for the

 

6

----

 

## satisfaction of such requiredwithholding liability, which may include, but not be limited to, therelinquishment of any MIP Unit.

##  

## 10.3                           If theCompany is obligated to pay any amount to a governmental agency (or otherwisemakes a payment to a governmental agency) because of (A) a Participant’sstatus or otherwise specifically attributable to a Participant in his or hercapacity as a Participant with respect to federal, state or local withholdingtaxes imposed with respect to (i) any issuance of MIP Units to aParticipant by the Company or (ii) any payments to a Participant or (B) aParticipant’s breach of the MIP Unit Member Operating Agreement or violation ofany law, rule or regulation in his, her or its capacity as a Participant,then the Company shall reduce the Distributions that would otherwise be made tosuch Participant or if such Distributions are insufficient to pay suchobligation such Participant shall, to the fullest extent permitted by law,indemnify the Company in full for the entire amount paid (including, withoutlimitation, any interest, penalties and expenses associated with suchpayments).

##  

## 10.4                           TheBoard may make or provide for adjustments in the number of MIP Unitsgranted hereunder or substitution of the MIP Units for other fair, equitableand valuable consideration as may be required in order to prevent dilutionor expansion of the rights of a Participant that otherwise would result fromany (i) dividend, Membership Interest split, combination of MembershipInterests, recapitalization or other change in the capital structure of theCompany; (ii) any merger, consolidation, spin-off, spin-out, split-off,split-up, reorganization, partial or complete liquidation; or (iii) otherdistribution of assets, issuance of warrants or other rights to purchasesecurities, or any other corporate transaction or event having any effectsimilar to any of the foregoing.

##  

## 10.5                           Exceptas otherwise provided in the MIP Unit Member Operating Agreement or in any MIPUnit Award Agreement, the granting of a MIP Unit shall not be construed asconferring upon a Participant any right to participate in the management of thebusiness and affairs of the Company and any Subsidiary or Affiliate of theCompany. The granting of a MIP Unit shall confer upon the Participant onlythose rights set forth in the MIP Unit Member Operating Agreement, this MIP andany applicable MIP Unit Award Agreement and Employment Agreement.

##  

## 10.6                           The MIPshall be binding upon and shall inure to the benefit of the Company and anysuccessor. The Company may assign its obligations and delegate its dutiesunder this MIP to a Subsidiary of the Company, Solstice or CenterPoint.

##  

## 10.7                           The MIPshall not constitute a contract of employment between the Participant and anyother person or entity and shall not interfere with any person’s or entity’sright to discharge a Participant without prior notice at any time and for anyreason, subject to any applicable Employment Agreement.

##  

## 10.8                           Anywaiver or consent, express or implied, to or of any breach by any Person in theperformance by that Person of its obligations hereunder is not a consent orwaiver to or of any other breach in the performance by that Person of the sameor any of the obligations of that Person hereunder. Failure on the part ofa Person to complain of any act of any Person

 

7

----

 

## irrespective of how long thatfailure continues, does not constitute a waiver by that Person of its rightswith respect to that failure until the applicable statute-of-limitations periodhas run.

##  

## 10.9                           Anyreference in this MIP to the singular includes the plural where appropriate,and any reference in this MIP to the masculine gender includes the feminine andneuter genders where appropriate.

##  

## 10.10                     The laws ofthe State of Delaware (without giving effect to its conflicts of lawprinciples) govern all matters arising out of or relating to the MIP. In theevent of a direct conflict between the provisions of the MIP and any mandatoryprovision of the Act, the applicable provision of the Act shall control.

##  

## 10.11                     If anyprovision of this MIP is or becomes invalid, illegal or unenforceable in anyjurisdiction, or would disqualify this MIP or any award under any law deemedapplicable by the Board, the Board shall replace each invalid, illegal orunenforceable provision with a valid, legal and enforceable provision whichwill most nearly and equitably satisfy the economic effect of the invalid,illegal or unenforceable provision.

##  

## 10.12                     The MIP shallbe unfunded and shall not create (or be construed to create) a trust orseparate fund.

##  

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

*   *   *  *   *

 

8

----

 

APPENDIX AMIP UNIT GRANTS AS OF THE EFFECTIVE DATE

 

The Boardshall grant to the following employees a number of MIP Units as set forth ineach such employees’ MIP Unit Award Agreement, not to exceed an aggregateamount of 3,800 MIP Units.

 

1.                                       [NAMEAND TITLE]

 

2.                                       [NAMEAND TITLE]

 

3.                                       [NAMEAND TITLE]

 

4.                                       [NAMEAND TITLE]

 

5.                                       [NAMEAND TITLE]

 

6.                                       [NAMEAND TITLE]

 

7.                                       [NAMEAND TITLE]

 

8.                                       [NAMEAND TITLE]

 

9.                                       [NAMEAND TITLE]

 

10.                                 [NAMEAND TITLE]

 

11.                                 [NAMEAND TITLE]

 

12.                                 [NAMEAND TITLE]

 

13.                                 [NAMEAND TITLE]

 

14.                                 [NAMEAND TITLE]

 

9

----