VERSION 2





 


 


 


 


 


 


Exhibit 10.1


 


 


PARKWAY PROPERTIES,
INC.


2003 EQUITY INCENTIVE
PLAN


Incentive Restricted
Share Agreement


 


2009 FOCUS


Long-Term Equity
Compensation Plan


 


February __,
2009   


 


 


                                                


 


Dear ______:


 


We are pleased to notify you that the Committee under the
Parkway Properties, Inc. 2003 Equity Incentive Plan as amended (the "Incentive
Plan") has designated you as the recipient of a grant of Incentive Restricted
Shares, as part of the Company’s 2009 FOCUS Long-Term Equity Compensation Plan. 
This letter, once signed by you, will constitute your Incentive Restricted
Share agreement.  The grant is subject to your entry into this agreement.


1.                 
The number of Incentive Restricted Shares covered by the grant is _____,
and the date of the grant is _________, 2009.


2.                 
When a term defined in the Incentive Plan is used in this agreement, the
definition given in the Incentive Plan will apply for the purposes of this
agreement.


3.                 
Your interest in the Incentive Restricted Shares is forfeitable and will
become nonforfeitable only to the extent it is earned by the Company's
achievement of the performance goals set out in paragraph 4 and then vested by your satisfaction of the service conditions set out in paragraph
5.


4.                 
Portion of Grant Earned upon Achievement of Performance Goals.


        (a)               
Adjusted FFO Goal.  Up to one‐half of the Incentive
Restricted Shares covered by the grant may be earned on the basis of the
Company's adjusted funds from operations ("Adjusted FFO") for 2009. 
The threshold Adjusted FFO goal for 2009 is $____ per diluted share.  __________
of the grant will be earned for every ______ by which Adjusted FFO for 2009 exceeds
$____ per diluted share but not to exceed $____ per diluted share. 
Accordingly, one-half (50 percent) of the grant will be earned if Adjusted FFO
for 2009 equals or exceeds $____ per diluted share.


        (b)              
Strategic Objective Performance Goal.  Up to one‐half of
the Incentive Restricted Shares covered by the grant may be earned on the basis
of the Company's achievement of the following strategic objectives for 2009:


 










 






 


 


 


 



        ▪           
20 percent of the grant will be earned based on the Company’s continued
compliance with its long‐term debt financial

                    
covenants during 2009;

 


        ▪            20
percent of the grant will be earned if the total investment under the
discretionary fund joint venture between the Company

                    
and the Teacher Retirement System of Texas is at least $____ million for the
year ending December 31,2009; and

 


        ▪           
10
percent of the grant will be earned if aggregate borrowings under the Company's
line of credit do not exceed $___ million

                      at
December 31, 2009.

 


(c)               
Unearned Portion of Grant.  You will automatically forfeit all
interest in any portion of the grant that has not been earned pursuant to
paragraph 4(a) or (b).


5.                 
Service Condition.  The following schedule will determine your
nonforfeitable ("vested") interest in any portion of the grant that
is earned pursuant to paragraph 4(a) or (b) (the "earned portion of
your grant"):


	
  If you remain in the employ

  of the Company or a Subsidiary

  on the date
  below:                     

  	
  Your interest in the following percentage of the earned

  portion of your grant will become vested on that date:  

  
	
   

  	
   

  
	
  January 9, 2010

  	
  25
  percent

  
	
  January 9, 2011

  	
  An
  additional 25 percent

  
	
  January 9, 2012

  	
  An
  additional 25 percent

  
	
  January 9, 2013

  	
  An
  additional 25 percent

  



 


            If your employment with the Company and its
Subsidiaries terminates on or after January 9, 2010, and before January 9, 2013, by reason of your death or Permanent Disability, you will become vested on
the date of the termination of your employment in the balance of the earned
portion of your grant.


6.                 
Definitions; Determinations by Committee.


          (a)               
The Company’s funds from operations ("FFO") for a given year will
be that reported to the public, measured in accordance with the definition of
FFO adopted by the National Association of Real Estate Investment Trusts
("NAREIT"), as in effect on January 1, 2009.  The Company's Adjusted FFO for 2009 will be its FFO for the year, modified to eliminate the
effect of certain accounting adjustments that the Compensation Committee
determines do not reflect the economic results of operating real estate, currently
including:  the amortization of above or below market leases, charges for impairment
of value of real estate, expenses related to the early extinguishment of debt, the
expense of original issue cost associated with redemption of preferred stock,
and gain or loss on sales of real property.  The Compensation Committee may, in
its sole discretion, elect to adjust FFO for other accounting items that arise
during 2009 and that the Compensation Committee determines do not reflect the recurring
results of operating real estate.


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                        If NAREIT changes the definition
of FFO, the Compensation Committee may, in its discretion, adopt the changed
definition for the purposes of this agreement, provided that if the changed
definition is adopted, the goal set out in paragraph 4(a) will be adjusted to
the extent the Committee determines appropriate so that the goal is reasonably equivalent
as related to the original and changed definitions of FFO.


          (b)              
The Committee shall determine the Company's Adjusted FFO for 2009 only
after completion of the audited financial statements for the Company for 2009
and shall certify its determination.  No portion of the grant shall be earned
under paragraph 4(a) until the Committee has certified a determination that the
Adjusted FFO for 2009 exceeds the threshold goal.


          (c)               
If there is a change in the capital structure of the Company or merger
or other event described in the first or last paragraph of Section 16 of the
Incentive Plan, the Committee shall make appropriate adjustments to the goal
set out in paragraph 4(a).


          (d)              
The Committee shall also determine whether the Company has satisfied the
strategic objectives set out in paragraph 4(b) and shall certify its
determination.  No portion of the grant shall be earned under paragraph 4(b) unless and until the Committee has certified the satisfaction of one or more of
the strategic objectives.


          (e)               
The determinations of the Committee shall be final and binding on you,
the Company, and any other interested party.


7.                 
The period beginning on the date of grant during which your interest in an
Incentive Restricted Share remains forfeitable is called the Restricted Period
for that share.  During the Restricted Period with respect to an Incentive
Restricted Share the Company will hold the certificate for that Incentive
Restricted Share, and you may not assign or otherwise transfer that Incentive
Restricted Share or any interest in that Incentive Restricted Share.  You may,
however, vote the Incentive Restricted Share.  During the Restricted Period
with respect to an Incentive Restricted Share, the Company will credit a
bookkeeping account with dividend equivalents, which will be amounts equal to
the dividends payable with respect to the Incentive Restricted Share, and the
amount of those dividends will be payable only as provided in paragraph 8.


8.                 
If your interest in any earned Incentive Restricted Shares becomes vested
under paragraph 5, the Company will deliver a certificate for the number of
Incentive Restricted Shares in which your interest becomes vested and pay the
dividend equivalents credited to your account under paragraph 7 with respect to those Incentive Restricted Shares.  The Company will make the delivery
and payment as soon as practicable after the later of (i) the vesting date
specified in paragraph 5 for such Incentive Restricted Shares and (ii) the
Committee's certification of its determination regarding the Company's
satisfaction of the relevant performance goals, but in no event later than
December 31 of the year in which the vesting date occurs.  Such delivery or
payment will be made to you or, in the event of your death, to your estate or
the person to whom your rights are transferred by will or under the laws of
descent and distribution, subject to satisfaction of any federal, state, and
local income and employment tax withholding obligation incurred by the Company.


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9.                 
The Company will deduct from any payment of dividend equivalents the
amount of tax it is obliged to withhold with respect to the payment.  You or,
in the event of your death, the person to whom Shares will be delivered may
make provision for payment of any tax the Company is obliged to withhold in
connection with the vesting of your interest or the delivery of the Shares, by
making payment to the Company in cash or by authorizing the Company to retain a
number of Shares having a Fair Market Value on the date the tax is to be
determined equal to the amount of the withholding obligation.  The Company may
elect in its discretion to retain Shares from the number deliverable, to
satisfy its withholding obligation.


10.             
The Company has provided you with a copy of the Incentive Plan, which
describes certain terms, conditions, restrictions, and limits on the Incentive
Restricted Shares granted to you.  In addition to being subject to the terms of
this agreement, the grant to you is subject to the terms, conditions,
restrictions, and limits set forth in the Incentive Plan, as if they were set
forth in full in this agreement, including the following:


       (a)               
If your employment with the Company and its Subsidiaries terminates for
any reason before January 9, 2010, you will forfeit, as of the date of the
termination of your employment, your interest in all Incentive Restricted
Shares.


       (b)              
You will forfeit any portion of the grant that is not earned pursuant to
paragraph 4.


       (c)               
You will forfeit any earned portion of the grant in which your interest
does not vest under paragraph 5.


Upon a forfeiture, all interest in the affected Incentive
Restricted Shares and in the dividend equivalents attributable to those Shares
will automatically revert to the Company.


 


                                                PARKWAY PROPERTIES, INC.


 


 


 


                                                By __________________________________


 


                        By executing this agreement, I
acknowledge receipt of a copy of the Parkway Properties, Inc. 2003 Equity Incentive
Plan as amended and agree to be bound by the terms and conditions of the
Incentive Plan and this agreement.  I also agree to follow any guidelines
promulgated by the Company from time to time for the ownership and retention of
shares by directors, officers, and executives, as applicable to me.


 


 


Date:  _____________, 2009                                                                             _____________________________________


 


 


 


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