exv10w1



 





EXHIBIT 10.1




Trizec Properties, Inc.

2002 Long-Term Incentive Plan

2004 Long-Term Outperformance Compensation Program

(Effective as of October 20, 2004)




ARTICLE 1




GENERAL





	1.1	 	Background; Purpose. Trizec Properties, Inc. (the “Company”) maintains
the Trizec Properties, Inc. 2002 Long-Term Incentive Plan (as amended,
modified or supplemented from time to time, the “Plan”). Among the forms
of compensation contemplated by the Plan are grants of Restricted Stock
and Performance Awards. This 2004 Long-Term Outperformance Compensation
Program (this “Program”) is adopted in furtherance of the authority to
make such grants and provides for grants of Restricted Stock (each, an
“Award”) to certain senior executives of the Company based on the
Company’s Total Return to Shareholders over a specified period of time.
The Awards shall be subject to the terms and conditions set forth herein
and in the Plan and shall be evidenced pursuant to agreements (each, an
“Agreement”) substantially in the form attached hereto as Exhibit A.
	 
	1.2	 	Administration. The Program and the Awards shall be administered by the
Compensation Committee (the “Committee”) of the Board of Directors of the
Company (the “Board”) in accordance with Section 3 of the Plan.
	 
	1.3	 	Definitions. Capitalized terms used herein without definitions shall
have the meanings given to those terms in the Plan. In addition, as used
herein:
	 
	 	 	“Award Value” with respect to each Participant means the Outperformance
Amount multiplied by the Participant’s Award Percentage.
	 
	 	 	“Award Percentage” means the percentage of the Outperformance Amount
allocated to each Participant by the Committee on or prior to January 18,
2005, the date that is 90 days following the Effective Date; provided,
however, that the aggregate Award Percentage for all Participants may not
exceed 100% of the Outperformance Amount.
	 
	 	 	“Disability” means a determination by the Committee that a Participant,
as a result of a physical or mental illness or other disability, has a
“Disability” for purposes of this Program.
	 
	 	 	“Dividend Value” means the aggregate amount of dividends paid on each
Share between the Effective Date and the Valuation Date.
	 
	 	 	“Effective Date” means October 20, 2004.



 









 





	 	 	“Measurement Date” means October 19, 2007.
	 
	 	 	“Outperformance Amount” means a dollar amount determined as of the
Valuation Date equal to 6% of the product of (a) the Total Return to Shareholders minus the
Outperformance Threshold multiplied by (b) $2,442,851,072.
	 
	 	 	“Outperformance Threshold” means a Total Return to Shareholders equal to
the greater of (i) 110% of the Peer Group TRS and (ii) a 10% Total Return
to Shareholders, compounded annually.
	 
	 	 	“Participant” means a senior executive of the Company selected by the
Committee to participate in the Plan on or prior to January 18, 2005, the
date that is 90 days following the Effective Date.
	 
	 	 	“Peer Group” means the Company’s peer competitors set forth in Schedule
A, as amended from time to time in accordance with the terms of the
Program.
	 
	 	 	“Peer Group TRS” means the average total return to shareholders of the
Peer Group calculated as of the Valuation Date in the same manner as the
Company’s Total Return to Shareholders.
	 
	 	 	“Share Price” is the average closing price of a Company Share as reported
on the New York Stock Exchange over the 20 trading days ending on the
applicable date of valuation.
	 
	 	 	“Total Return to Shareholders” means an amount, not less than zero, equal
to (a) the sum of the (i) the Dividend Value and (ii) the Share Price on
the Valuation Date minus the Share Price on the Effective Date divided by
(b) the Share Price on the Effective Date.
	 
	 	 	“Valuation Date” means, with respect to each Participant, the earlier of
(i) the Measurement Date, (ii) the date upon which a Change of Control
occurs and (iii) the date of the Participant’s termination of employment
due to the Participant’s death, Disability or Retirement.
	 
	 	 	“Vesting Date” means each date on which a Participant’s Award vests in
accordance with Section 2.2.1.




ARTICLE 2




OUTPERFORMANCE AWARDS





	2.1	 	Awards.
	 
	2.1.1	 	Award Grant. Subject to Section 2.1.2, each Participant is hereby
granted an Award consisting of a number of Restricted Shares calculated as
of the Valuation Date, equal to the Participant’s Award Value divided by
the Share Price with fractional Shares rounded




 









 






	 	 	up to the nearest whole
number of Shares. Awards will be paid in Restricted Shares (the “Award Shares”) as soon as reasonably practicable following the Valuation
Date. To the extent that, as of the Valuation Date, there is an
insufficient number of Shares available for issuance under the Plan, the
amount of Award Shares granted to each Participant shall be reduced on a
pro rata basis and the remaining portion of the Award Value will be paid
in cash. In such an event, references to Award Shares in the Program
shall, to the extent applicable, also be deemed to refer to such cash
amount (including,without limitation, in clause (i) of Section 2.1.2
below).
	 
	2.1.2	 	Maximum Award Pool. Notwithstanding anything set forth in Section
2.1.1, the aggregate Award Value allocated, and the maximum Award Shares
granted, to all Participants shall not exceed the lesser of (i) 2.5% of
the aggregate number of Shares outstanding on a fully diluted basis as of
the Valuation Date and (ii) $25,000,000 (the “Award Limit”); provided,
however, that to the extent that (a) the aggregate Award Percentages
allocated to Participants as of January 18, 2005 is less than 100% of the
Outperformance Amount and/or (b) a Participant’s Award is cancelled in
accordance with Section 2.2, each factor of the Award Limit shall be
reduced by an amount equal to such factor multiplied by the percentage of
the Outperformance Amount not allocated or the Participant’s cancelled
Award Percentage, as applicable. Any reductions to the Award Value and
Award Shares made pursuant to the Award Limit will be effected on a pro
rata basis with respect to all Participants.
	 
	2.1.3	 	Award Percentage; Cancellation of Awards; Participants. Following the
initial allocation by the Committee, the Award Percentages may not be
increased or decreased. In addition, to the extent that on or after
January 18, 2005, a Participant’s Award is cancelled in accordance with
Section 2.2, such Participant’s Award and Award Percentage shall be
eliminated and shall not become available for reallocation to other
Participants. Following January 18, 2005, no new Participants shall be
eligible to participate in the Program and any unallocated portions of the
Outperformance Amount shall be cancelled.
	 
	2.2	 	Vesting; Termination of Employment; Change of Control.
	 
	2.2.1	 	Vesting. Except as otherwise set forth herein, 75% of a Participant’s
Award shall vest on the Measurement Date and the remaining 25% of the
Award shall vest on the first anniversary of the Measurement Date provided
that the Participant remains in continuous employment with the Company
through each applicable Vesting Date.
	 
	2.2.2	 	Termination of Employment. If, prior to the applicable Vesting Date, a
Participant’s employment with the Company terminates for any reason other
than the Participant’s death or Disability, then the unvested portion of
the Participant’s Award shall be immediately cancelled and no Award Shares
shall be distributed in respect thereof.
	 
	2.2.3	 	Death; Disability. Notwithstanding any other provision herein, upon the
date of a Participant’s termination of employment with the Company due to
the Participant’s death or Disability (i) the Participant’s Award shall
immediately vest in full and be valued as of



 









 





		 	such date and (ii) as soon as
reasonably practicable following such Valuation Date, the
Participant will receive payment of his or her Award Shares.
	 
	2.2.4	 	Change in Control. Notwithstanding any other provision herein or in the
Plan, upon the effective date of a Change in Control (i) each Award shall
immediately vest in full and (ii) as soon as reasonably practicable
following such Valuation Date, each Participant will receive payment of
his or her Award Shares.
	 
	2.3	 	Payments by Participants. For purposes of Section 3.1(b) of the Plan, no
amount shall be payable to the Company by any Participant at any time in
respect of an Award.
	 
	2.4	 	Deferral. On a date determined by the Committee, which date will be at
least one year prior to the applicable Vesting Date, a Participant may
irrevocably elect to defer payment of any or all of his or her Award
Shares pursuant to the terms of a deferred compensation plan of the
Company in effect from time to time (the “Deferred Compensation Plan”).
Following deferral pursuant to this Section 2.4, the Award Shares shall be
governed by the terms of the Deferred Compensation Plan. Upon the
effective date of the deferral (i.e., the applicable Vesting Date), the
Award Shares deferred pursuant to this Section 2.4 shall no longer be
subject to cancellation. The Company may eliminate this Section 2.4 or
modify, amend or terminate a Participant’s deferral election pursuant to
the Deferred Compensation Plan at any time, in its sole discretion, if it
considers it necessary or advisable to do so under applicable laws.
	 
	2.5	 	Dividends. On and after the Valuation Date, if the Company pays a cash
dividend on the Shares, the Company shall pay the same cash dividend on
each issued and outstanding Award Share whether or not such Award Share
has then vested (which dividend shall be non-refundable, notwithstanding
any subsequent cancellation, if any, of Award Shares in respect of which
such dividend was paid). Upon cancellation of any Award Shares, payment
of dividends with respect to such cancelled Award Shares will cease
immediately. If a Participant elects to defer all or a portion of his or
her Award Shares pursuant to Section 2.4, any dividends paid on or
following the date of deferral with respect to such deferred Award Shares
shall be automatically deferred and deemed invested in additional Shares
in accordance with and subject to, the terms of the Deferred Compensation
Plan.




ARTICLE 3




MISCELLANEOUS





	3.1	 	Shareholder Rights. Prior to payment, a Participant shall not have any
rights as a shareholder (including, without limitation, voting rights)
with respect to Award Shares.
	 
	3.2	 	Restrictions on Transfer. Prior to the applicable Vesting Date, no
Participant shall assign, transfer, or otherwise encumber or dispose of
any Award or Award Shares except as provided by will or the laws of
descent and distributions. Following payment, a Participant may only
transfer 25% of his or her Award Shares in each of the four




 









 




		 	successive
12-month periods commencing on the Valuation Date and ending on the
fourth anniversary of the Valuation Date.

	 
	3.3	 	No Right to Continued Employment. Neither the Plan, the Program nor any
Agreement shall be construed as giving a Participant the right to be
retained in the employ or service of the Company, nor shall they interfere
in any way with the right of the Company to modify the terms of, or
terminate a Participant’s employment.
	 
	3.4	 	Amendments. The Committee may amend the Program or any Agreement at any
time; provided, however, that any amendment or modification which
adversely affects a Participant requires the prior written consent of such
Participant.
	 
	3.5	 	Incorporation of Plan. The provisions of the Plan are hereby
incorporated by reference as if set forth herein.
	 
	3.6	 	Restrictive Legends. The stock certificates evidencing the Award Shares
shall contain any restrictive or other legends that the Committee
determines are necessary and appropriate.
	 
	3.7	 	Withholding Taxes. Each Participant shall be required to remit any taxes
the Company determines are due and payable with respect to an Award. A
Participant may either pay the taxes due to the Company, or, in the sole
discretion of the Committee, request that Award Shares be withheld in an
amount sufficient to cover the obligation based on the then Fair Market
Value of such Award Shares. The Company may withhold the Award Shares (or
require its transfer agent to withhold issuance of the stock certificate
for the Award Shares) until taxes have been satisfied.
	 
	3.8	 	Governing Law. The Program and each Agreement shall be governed by the
laws of the State of Delaware. By participating in the Program, each
Participant consents to the jurisdiction of the federal and state courts
located in Chicago, Illinois.
	 
	3.9	 	Notices. Notices, required or permitted to be made under the Program or
any Agreement shall be sufficiently made if (a) sent by (i) registered or
certified mail, (ii) a nationally recognized courier service or (iii)
facsimile, and (b) addressed (x) to the Participant at his or her address
as set forth in the books and records of the Company or (y) to the Company
or the Committee at the principal office of the Company. Each Participant
is required to notify the Company promptly of any change of address.
	 
	3.10	 	Binding on Successors. The terms and provisions of the Program, the Plan
and any Agreement will be binding on any successor in interest to each
Participant, whether such successor attains such status through
inheritance, the laws of descent or otherwise.



 









 









Schedule A




Peer Group




Alexandria Real Estate Equities, Inc.

AMB Property Corporation

Arden Realty Group, Inc.

Boston Properties Inc.

Brandywine Realty Trust

CarrAmerica Realty Corporation

CenterPoint Properties Trust

Crescent Real Estate Equities

CRT Properties Inc.

Equity Office Properties Trust

First Industrial Realty Trust

Highwoods Properties, Inc.

Kilroy Realty Corporation

Liberty Property Trust

Mack-Cali Realty Corporation

Prentiss Properties Trust

ProLogis Trust

Reckson Associate Realty Corp.

SL Green Realty Corp.

Vornado Realty Trust




A member of the Peer Group may be removed for the following reasons:





	 	•	 	The member (or any successor entity) ceases to be primarily engaged
in the commercial real-estate business; or
	 
	 	•	 	The member (or any successor entity) ceases to be publicly traded
in the United States.




No new members will be added to the Peer Group at any time.




 









 







Exhibit A




[LETTERHEAD OF TRIZEC PROPERTIES, INC.]




October __, 2004




Dear [     ]:




     In
consideration of your dedicated service to Trizec Properties, Inc. (the
“Company”), we are pleased to announce that you have been granted an Award of
Restricted Shares under the Company’s 2004 Long-Term Outperformance
Compensation Program (“Program”). The Program permits you to receive a number
of restricted shares of the Company’s common stock based upon the total return
to shareholders attained over a three-year period commencing on October 20,
2004. The terms of your Award are set forth in the Program document, a copy of
which is attached to this letter. Your Award Percentage under the Program is
   %.



     Please acknowledge the receipt of this letter by signing in the space
provided below and return the signed letter to the attention of [     ] at
[     ].



     You may direct any questions you have regarding your Award or the Program
to [     ] at [     ].



TRIZEC PROPERTIES, INC.




	 
	

Name:

	Title:








EXECUTIVE




	 	 	 
	
 

	 	
 
	

	 	Date