Exhibit 10.3
THE MILLS CORPORATION
OPERATING GUIDELINES FOR THE ADMINISTRATION OF
EXECUTIVE LONG-TERM INCENTIVE AWARDS
Effective January 1, 2002
I.
PURPOSE
The purpose of the Executive Long-Term Incentive Program adopted by the Company
and approved by stockholders in 2002 (the "Program") is to further the growth
and profitability of The Mills Corporation (the "Company").
The Program
provides for cash and/or equity awards contingent on the achievement of
long-term corporate performance goals, long-term individual performance goals,
or a combination of both.
The Program is designed to enable the Company to
attract new executives, to encourage current key executives to remain with the
Company and to provide a financial incentive for them to further the achievement
of the Company's strategic and financial business objectives.
These Operating
Guidelines set forth the rules and regulations under which awards made from time
to time to Grantees under the Program will be administered.
II.
DEFINITIONS
The terms defined in this Section II shall, for purposes of these Operating
Guidelines, have the meanings herein specified, unless the context expressly or
by necessary implication otherwise requires:
A.
"AFFILIATE" MEANS, WITH RESPECT TO THE COMPANY, ANY COMPANY OR
OTHER TRADE OR BUSINESS THAT CONTROLS, IS CONTROLLED BY OR IS UNDER COMMON
CONTROL WITH THE COMPANY WITHIN THE MEANING OF RULE 405 OF REGULATION C UNDER
THE SECURITIES ACT OF 1933, INCLUDING, WITHOUT LIMITATION, ANY SUBSIDIARY OF THE
COMPANY.
B.
"AWARD" MEANS THE AWARD GRANTED TO A GRANTEE HEREUNDER THAT
PROVIDES THE OPPORTUNITY TO EARN CASH AND/OR AN EQUITY AWARD FOLLOWING THE END
OF A PERFORMANCE PERIOD, BASED ON THE LEVEL OF ATTAINMENT OF ONE OR MORE
PERFORMANCE TARGETS DURING THE PERFORMANCE PERIOD.
C.
"AWARD VALUATION SCHEDULE" MEANS THE SCHEDULE ESTABLISHED BY THE
COMMITTEE ON THE DETERMINATION DATE SETTING FORTH THE PERFORMANCE GOALS,
PERFORMANCE TARGETS AND TARGET INCENTIVE PERCENTAGES FOR EACH GRANTEE AND OR
CLASS OF GRANTEES AND THE METHOD FOR CALCULATING THE ULTIMATE EQUITY AWARD
AND/OR CASH PAYMENTS TO BE MADE TO GRANTEES UPON ACHIEVEMENT OF THE VARIOUS
BENCHMARKS ESTABLISHED AS PERFORMANCE TARGETS.
D.
"BASE SALARY" FOR ANY PERFORMANCE PERIOD MEANS A GRANTEE'S ANNUAL
BASE SALARY DETERMINED AS OF APRIL 1 OF EACH FISCAL YEAR OF THE APPLICABLE
PERFORMANCE PERIOD.
E.
"BOARD" MEANS THE BOARD OF DIRECTORS OF THE MILLS CORPORATION.
F.
"CAUSE" SHALL HAVE THE MEANING SUCH FORTH IN GRANTEE'S EMPLOYMENT
AGREEMENT IF SUCH AGREEMENT SPECIFICALLY PROVIDES THAT THE DEFINITION OF "CAUSE"
CONTAINED THEREIN SUPERSEDES THE DEFINITION OF CAUSE SET FORTH IN THE COMPANY'S
OPERATING GUIDELINES FOR THE ADMINISTRATION OF EXECUTIVE LONG-TERM INCENTIVE
AWARDS, OTHERWISE "CAUSE" MEANS:
(1)
THE GRANTEE COMMITS AN ACT OF FRAUD OR EMBEZZLEMENT WITH RESPECT
TO THE COMPANY OR ANY OF ITS AFFILIATES;
(2)
THE GRANTEE IS CONVICTED OF, OR ENTERS A PLEA OF GUILTY OR NOLO
CONTENDERE TO, ANY FELONY;
(3)
THE GRANTEE COMMITS ANY ACT OF DISHONESTY, BREACH OF FIDUCIARY
DUTY OR MISCONDUCT (WHETHER IN CONNECTION WITH THE GRANTEE'S RESPONSIBILITIES AS
AN EMPLOYEE OR OTHERWISE) THAT, IN THE COMPANY'S REASONABLE JUDGMENT, EITHER
MATERIALLY IMPAIRS THE COMPANY'S BUSINESS, GOODWILL OR REPUTATION OR