EXHIBIT 10.1


 


RESTRICTED STOCK UNIT AWARD
AGREEMENT


 


THIS RESTRICTED
STOCK UNIT AWARD AGREEMENT (the “Agreement”), dated as of the 2nd day of March,
2006 (the “Award Date”) and entered into by and between iStar Financial Inc.
(the “Company”) and the Participant identified on the Notice of Grant of Award
attached hereto (the “Notice”), sets forth the general terms and conditions of
an award of restricted stock units (“Units”) relating to shares of Common Stock
of the Company (“Shares”) made to the Participant, pursuant to the iStar
Financial Inc. 1996 Long-Term Incentive Plan, as amended and restated (the
“Plan”). Except as otherwise defined herein, capitalized terms used in this
Agreement have the respective meanings set forth in the Plan.


 


1.     Award.  The number of Units, representing the right
to receive an equivalent number of Shares, is set forth in the attached Notice.


 


2.     Vesting.


 


(a)   The Units shall vest in increments in the
amounts, and on the dates, set forth in the attached Notice, if the Participant’s
employment with an iStar Entity (as defined below) has not terminated before
each such vesting date; provided, however, all of the Units shall
become immediately vested in the event the Participant terminates employment
with an iStar Entity by reason of death or Disability or if an iStar Entity
terminates Participant’s employment without Cause (as defined below) and a new
employment relationship is not established between Participant and another
iStar Entity within 30 days of such termination.


 


(b)   Upon the vesting of Units, Participant shall
be entitled to receive Shares equal to the number of vested Units. The Company
shall withhold Shares in an amount necessary to satisfy any applicable income
taxes and other withholding obligations due in connection with the vesting of
the Units. Promptly following each vesting date, the net amount of Shares shall
be issued and delivered to Participant, free of any restrictive legend, in
certificated form or otherwise as Participant may direct.


 


(c)   In the event that Participant voluntarily
terminates employment with an iStar Entity or an iStar Entity terminates
Participant’s employment for Cause (as defined below), any unvested portion of
the Units shall be forfeited automatically as of the date of termination of employment.


 


(d)   “iStar Entity” shall mean the Company and any
entity controlled by, controlling or under common control with the Company.


 


(e)   “Cause” shall mean:


 


(i)    Any actions or omissions representing
fraudulent or willful misconduct against the Company, any of its affiliates or
any iStar Entity; provided, however, that no act or failure to act shall be
considered “willful” unless it is done, or omitted to be done, without


 

















 


reasonable belief that such action or omission was in
the best interest of the Company or the iStar Entity that then employs
Participant;


 


(ii)   conviction of a felony (unless such felony
solely involves traffic violations or unless such felony reversed, overturned
or vacated on appeal);


 


(iii)  any grossly negligent action or omission or
action or omission representing reckless disregard of any of Participant’s
duties and obligations as an employee or otherwise to the Company, its
affiliates or any iStar Entity if such action or omission results in materially
adverse consequences for the Company, its affiliates or any iStar Entity;


 


(iv)  a knowing action or knowing omission to take
any action which would place the Company or any iStar Entity that employs
Participant in material default in the performance of any of its contractual or
legal duties or obligations to other persons or entities; provided, however,
that no act or failure to act shall be considered “knowing” unless it is done,
or omitted to be done, without reasonable belief that such action or omission
was in the best interest of the Company or any iStar Entity that employs
Participant;


 


(v)   the failure, left uncured after not less than
thirty (30) days prior written notice from the Company or any iStar Entity that
employs Participant specifying in reasonable detail the breach(es) complained
of, to substantially perform his or her duties to the Company or any iStar
Entity that employs Participant (excluding, however, any failure to meet any
performance targets), except where such failure results from incapacity due to
physical or mental illness; or


 


(vi)  any dereliction of duty or negligent
misconduct in respect of Participant’s duties and obligations as an employee or
otherwise to the Company, its affiliates or any iStar Entity which results in a
breach by the Company or any iStar Entity that employs Participant of any
contractual agreement binding upon the Company or any iStar Entity that employs
Participant and which breach causes material adverse consequences for the
Company, its affiliates or any iStar Entity.


 


3.     Restrictions on Units.


 


(a)   The “Restricted Period” with respect to each
installment of Units is the period commencing on the Award Date and ending on
the vesting date for such installment.


 


(b)   During the Restricted Period, Units that are
not vested (and the Shares represented by such Units) are not transferable
except as designated by the Participant by will or by the laws of descent and
distribution or, subject to such procedures as the Administrator may establish,
to or for the benefit of the Participant’s family. Except as permitted by the
foregoing, Units that are not vested (and the Shares represented by such Units)
may not be sold, assigned, transferred, pledged, hypothecated, encumbered or
otherwise disposed of (whether by operation of law and otherwise) or be subject
to execution, attachment or similar process. Any attempt to so sell, transfer,
assign, pledge, hypothecate, voluntarily encumber or otherwise dispose of Units
or Shares shall be null and void.  Upon
the vesting of Units, the Shares that are delivered to Participant shall be
fully transferable by Participant.


 


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(c)   During the Restricted Period, Units that are
not vested (and the Shares represented by such Units) shall not be evidenced by
a certificate registered in the name of the Participant.


 


(d)   During the Restricted Period, the Participant
shall not be entitled to vote with respect to Shares represented by Units that
are not vested.  Upon the vesting of
Units, the Participant shall have full rights as a shareholder with respect to
the Shares to be delivered to Participant upon vesting, including the right to
vote such Shares.


 


4.     Dividend
Equivalent Rights.  From and after
the Award Date and ending on the vesting date of each installment of Units, the
Participant shall be entitled to receive payments with respect to each Unit
equal to the dividends paid by the Company on one Share. Such payments shall be
made to the Participant in cash, net of applicable tax withholdings, on the
same date as dividend payments are made to Company shareholders. The right to
receive such payments with respect to a Unit shall terminate upon the vesting
of such Unit, at which time the Participant shall be entitled to receive Shares
equal to the number of vested Units, net of applicable tax withholdings, and
shall thereafter receive dividends on such Shares in the same manner as other
Company shareholders. 


 


5.     Adjustments
to Number of Units and Shares.  In
the event of any change in the Company’s outstanding Shares by reason of any
stock dividend, split, spinoff, recapitalization or other similar change, the
terms and the number of any outstanding Units (and the Shares represented by
such Units) shall be equitably adjusted by the Administrator in its discretion
to the extent the Administrator determines that such adjustment is necessary to
preserve the benefit of this Agreement for the Participant and the Company.


 


5.     Agreement
Not Contract of Employment.  This
Agreement does not constitute a contract of employment, and does not give the
Participant the right to be retained in the employ of the Company.


 


6.     Successors
and Assigns.  This Agreement shall be
binding upon, and inure to the benefit of, the Company and its successors and
assigns, and upon any person acquiring, whether by merger, consolidation,
purchase of assets or otherwise, all or substantially all of the Company’s
assets and business.


 


7.     Administration.  The authority to administer and interpret
this Agreement shall be vested in the Administrator, and the Administrator
shall have all the powers with respect to this Agreement as it has with respect
to the Plan.  Any interpretation of the
Agreement by the Administrator and any decision made by it with respect to the
Agreement are final and binding on all persons.


 


8.     Representations.  The Shares represented by the Units are
currently registered under the Securities Act of 1933, as amended (the
“Securities Act”), and any applicable state securities laws, pursuant to an
effective registration statement.  The
Participant hereby represents and covenants that any subsequent sale of any
such Shares shall be made either pursuant to an effective registration
statement under the Securities Act and any applicable state securities laws, or
pursuant to an exemption from registration under the Securities Act and such
state securities laws.


 


9.     Plan
Governs.  The terms of this Agreement
shall be subject to the terms of the Plan, a copy of which may be obtained by
the Participant from the office of the Secretary of the Company.


 


10.   Amendment
and Termination.  The Board of
Directors of the Company may at any time amend or terminate the Plan, provided
that no such amendment or termination may materially adversely affect the
rights of the Participant awarded hereunder.


 


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11.   Waiver
of Responsibility.  Participant
understands that the Company has assumed no responsibility for advising
Participant as to the tax consequences to Participant of the grant of Units
under this Agreement.  Participant should
consult with his or her individual tax advisor concerning the applicability of
Federal, state and local tax laws to the Restricted Shares and to his or her
personal tax circumstances.


 


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