Document:

Senior Management Compensation Plan

 

EXHIBIT 10.1

CRT PROPERTIES, INC.

SENIOR MANAGEMENT COMPENSATION PLAN

     The provisions of the CRT Properties, Inc. Senior Management Compensation Plan (the “Plan”)
apply to senior officers of CRT Properties, Inc. (the “Company”) selected to participate in the
Plan by the Company’s Chief Executive Officer (the “CEO”) and approved by the Compensation
Committee of the Board of Directors of the Company (the “Committee”). The Plan is effective
January 1, 2005.

     The Plan is administered by the Committee and consists of four segments: (1) an annual cash
salary, (2) annual incentive compensation in the form of cash bonuses, (3) restricted stock awards
with vesting 50% based on the passage of time and vesting 50% based on the Company achieving
financial hurdles based on total return to shareholders over a five-year period and (4) an
outperformance award payable in the form of restricted stock, with amounts dependent on the Company
achieving superior performance in shareholder value created over a three-year period, and with
service-based vesting over the following two years after any awards are made. All determinations
as to bonuses and awards are made by the Committee, subject to ratification by the Company’s Board
of Directors (the “Board”).

     1. Annual Cash Salary. The base salary for each executive selected to participate in
the Plan (a “Participant”) is generally determined by the Committee prior to the beginning of each
year, with the base salary so determined to be made effective January 1 of that year. The amount
of the base salary for each Participant is based on recommendations of the CEO (with the exception
of his own salary). The Committee also considers the salaries of individuals who perform
comparable responsibilities for the members of a peer group (currently consisting of public office
suburban REITs), individual performance, etc.

     2. Annual Cash Bonus. An annual cash bonus is determined by the Committee based
partly on Company performance and partly on individual performance in meeting the objectives and
goals for the Participant’s position. Individual performance may be based on achieving the
objectives of the relevant business unit, meeting budgets, individual skills in working with other
members of management, special project performance, professional growth, etc. Company performance
may be based on funds from operation (“FFO”), cash available for distribution (“CAD”), net
operating income, acquisition growth and other similar financial criteria. The allocation of the
bonus opportunity between corporate and individual performance for each officer would be determined
each year. The specific financial hurdles would be adjusted, as necessary, by the Committee to
reflect subsequent stock splits, extraordinary dividends, offerings of common shares, acquisitions,
changes in accounting rules, etc. The individual performance target would be adjusted for job
changes.

     Provided that specified levels of performance against specified criteria are satisfied,
Participants who remain employed through year-end (except as otherwise provided in a Participant’s
participation letter or employment agreement) earn aggregate bonuses (based on a percentage of
their salary for the year for which the award is made) for varying levels of performance, as
follows:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Levels of Performance	 
	Executive	 	Threshold	 	 	Target	 	 	High	 
	Thomas Crocker
	 	 	35	%	 	 	65	%	 	 	100	%
	Thomas Brockwell
	 	 	30	%	 	 	60	%	 	 	100	%
	William Wedge
	 	 	30	%	 	 	60	%	 	 	90	%
	Christopher Becker
	 	 	30	%	 	 	60	%	 	 	90	%
	Mark Cypert
	 	 	30	%	 	 	60	%	 	 	90	%
	Angelo Bianco
	 	 	30	%	 	 	50	%	 	 	85	%
	Todd Amara
	 	 	30	%	 	 	50	%	 	 	85	%

     Performance levels are linear ranging from Threshold through Target to High, not steps.

 

 

     Achievement of the corporate performance objectives is measured against targets approved
annually by the Committee. The performance targets used to determine achievement of individual
performance objectives are determined by the Committee, in consultation with the CEO, on an annual
basis. A letter designating the corporate and individual performance targets will be provided to
each Participant no later than January 31 of each year.

     Bonuses are paid in cash, based on financial statements and other data for the year being
measured, and are paid 80% within thirty days of completion by the Company of its unaudited
financial statements for the year to which the bonus relates, with all remaining amounts paid
immediately after computations are completed based on the audited financial statements for the
Company to confirm the unaudited calculations. In any event, bonuses shall be paid out in full no
later than 75 days after the end of the Company’s fiscal year.

     3. Restricted Stock Plan. The Restricted Stock Plan (“RSP”) is an integral part of
the Plan and is effective as of January 1, 2005. The 2005 awards under the RSP are set forth on
Exhibit A.

     The RSP is designed to increase stock ownership by senior management and to reward senior
management for sustained, superior performance by the Company measured over five-year periods (each
individual year in any such five-year period being a “vesting year”). The grant of restricted
stock awards, if any, would be determined at the sole discretion of the Committee. The restricted
stock award would vest 50% based on time and 50% based on Company performance over a five-year
period. With respect to the time-based portion, as long as a Participant remains employed by the
Company at the end of the vesting year in question (and except as otherwise provided in an
applicable employment agreement), vesting would occur in five equal installments (20% per vesting
year).

     Participants would vest in all or a portion of the other 50% of their restricted stock award
over a five-year period based on achievement, for the performance period in question, of total
shareholder return (“Company TSR”) per share of the Company’s common stock (assuming
contemporaneous reinvestment, in shares, of all dividends and other distributions in respect of
shares) that is equal to or greater than either (a) an average annually-compounded percentage
return per share set forth on Exhibit A for the same performance period or (b) the
percentage return of the “Morgan Stanley TSR” set forth on Exhibit A for the same
performance period (the lower of (a) and (b) being the “Target TSR” for that performance period).
For purposes of this Plan, “Morgan Stanley TSR” shall mean the weighted average total percentage
return per share achieved by common shares of Office Suburban REITs that are included throughout
the performance period as reported in Morgan Stanley’s Weekly Supplement on Real Estate Investment
Trusts, and again assuming contemporaneous reinvestment, in REIT shares, of all dividends and other
distributions. Company TSR shall be determined in the same manner as the Morgan Stanley TSR. In
the event that Morgan Stanley TSR is no longer reported, the Committee and management will endeavor
to select an appropriate replacement.

     Company TSR and Morgan Stanley TSR shall be measured following the end of each vesting year
for both (A) the performance period that begins on January 1 of that year and ends on December 31
of that year and (B) the performance period that begins on January 1 of the original award year and
ends on December 31 of the vesting year in question (the “Aggregate Performance Period”). If
Company TSR for a vesting year is equal to or greater than the Target TSR for that vesting year,
then each Participant shall vest in the corresponding performance-vesting portion of any restricted
stock award. If the Company TSR for an Aggregate Performance Period is equal to or greater than
the Target TSR for that Aggregate Performance Period, then each Participant shall vest in the
performance-vesting portion of any restricted stock award that corresponds to any portion of the
entire Aggregate Performance Period (i.e., both the vesting year in question and all previous
vesting years for which the performance vesting portion of such award did not vest).

     Cash dividends will be paid to the Participants on all outstanding restricted stock awards,
including any unvested portion. Any non-cash dividends or distributions will be subject to the
same vesting provisions as the shares of restricted stock to which they relate.

     As a condition of grant, each Participant must agree that, during his or her employment, such
Participant will not sell any Company shares acquired via awards under this Plan or its predecessor
(other than (y) sales to satisfy for tax liabilities incurred in connection with
equity awards under this Plan or its predecessor; (x) sales in connection with the sale, merger or
consolidation of the Company; or (z) sales approved by the Committee or the Board) if, immediately
following such sale, the total value (based on the reported closing price per share of

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Company common stock on the last day before the date of sale) of Company shares then
“beneficially owned” (as such term is defined in Rule 13d-3 promulgated under the Securities
Exchange Act of 1934, as amended) by such Participant would be less than the minimum holding
requirements set forth below, based on multiples of his or her prior year’s annual salary as
indicated below:

	 	 	 
	 	 	Minimum Value of Shares To Be Held = Multiple Times
	 	 	Prior Year’s Annual Base Salary
	Individual	 	Multiple of Salary
	Thomas Crocker
	 	5.0
	Thomas Brockwell
	 	3.5
	William Wedge
	 	2.5
	Christopher Becker
	 	2.5
	Mark Cypert
	 	2.5
	Angelo Bianco
	 	1.5
	Todd Amana
	 	1.5

     4. Outperformance Plan. The Outperformance Plan (“OPP”) is an integral part of the
Plan and is effective January 1, 2005. The purpose of the OPP is to encourage management to
“outperform” and to create shareholder value in excess of industry expectations in a “pay for
performance” structure. In the event the Company’s performance for the performance period
beginning January 1, 2005 and ending December 31, 2007 (the “Measurement Period”) generates an
Outperformance Amount (as defined below), the Committee will establish a performance pool in early
2008. The size of the performance pool shall be determined by multiplying 5% times the
Outperformance Amount, but in no event shall the size of the performance pool exceed $15 million.

     “Outperformance Amount” shall mean the amount by which the “Company Ending Value” exceeds the
greater of (a) “Morgan Stanley REIT Ending Value” and (b) the “Company Minimum
Return Value”.

     “Company Ending Value” shall mean an amount equal to the sum of (a) the aggregate
market value of the Company’s outstanding common stock as of December 31, 2007 plus (b) a
hypothetical amount equal to the market value as of December 31, 2007 of the additional shares that
would have been outstanding if all dividends and other distributions in respect of the Company’s
common stock made during the Measurement Period had been contemporaneously reinvested in newly
issued shares of the Company’s common stock. The market value as of December 31, 2007 shall be
based on the average closing market price of the Company’s common stock for the ten consecutive
trading days immediately prior to January 1, 2008.

     “Morgan Stanley REIT Ending Value” shall mean an amount equal to the aggregate value that
would have resulted if a sum equal to the aggregate market value of the Company’s outstanding
common stock as of December 31, 2004, based on the average closing market price of the Company’s
common stock for the ten consecutive trading days immediately prior to January 1, 2005 (“Company
Beginning Value”), had earned the percentage return set forth on Exhibit B of the Morgan
Stanley TSR for the Measurement Period. Since the Morgan Stanley TSR is not indexed, the Morgan
Stanley TSR compounded return for the Measurement Period will be created by taking the Company
Beginning Value and applying the Morgan Stanley TSR monthly return, as reported in Morgan Stanley’s
Weekly Supplement on Real Estate Investment Trusts, for each month through December 31, 2007. For
any subsequent issuances of common stock by the Company (other than pursuant to option exercises or
purchases through the Company’s Stock Investment Plan), the same methodology will be used, and the
monthly return of the Morgan Stanley TSR will be applied to the value of the shares issued by the
Company beginning with the month the additional common stock shares are issued.

     “Company Minimum Return Value” shall mean an amount representing (a) an annually-compounded
return set forth on Exhibit B, through the end of the Measurement Period, on the Company Beginning
Value, plus (b) an annually-compounded return set forth on Exhibit B, through the
end of the Measurement Period on any proceeds received in respect of issuance of new shares of
Company common stock (other than pursuant to option exercises or purchases through the Company’s
Stock Investment Plan) from the time the proceeds were received by the Company through the end of
the Measurement Period.

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     The allocation of the performance pool will be made pursuant to the percentages set forth in
Exhibit B, but only to Participants employed on December 31, 2007 (except as otherwise
provided in a Participant’s employment agreement). Awards (if any) will be made in early 2008 in
the form of restricted stock, with the stock vesting 50% upon issuance, 25% on December 31, 2008,
and 25% on December 31, 2009. Cash dividends will be paid to the Participants on all outstanding
restricted stock awards, including any unvested portion. Any non-cash dividends or distributions
will be subject to the same vesting provisions as the shares of restricted stock to which they
relate. An illustrative calculation of the determination of the performance pool is included as
Exhibit C.

     5. Change in Control. Except as otherwise provided in a participation letter (or
employment agreement), in the event that a Change in Control (as defined below) occurs while a
Participant is employed by the Company, the Participant shall be entitled to the following with
respect to his or her equity awards and OPP under this Plan: (i) any restricted stock that vests
based on continued employment and had not previously vested shall vest as of the date of such
Change in Control; (ii) with respect to any shares that vest based on performance and had not
previously vested, if a pertinent performance period has not ended on or prior to the date of such
Change in Control (including, for this purpose, the full five-year performance period under Section
3), the number of shares earned by the Participant shall be determined as of such date as if that
performance period had ended on such date (with performance accordingly measured against pro rated
target returns for the shortened performance period rather than the full target returns for the
originally scheduled performance period), and any shares earned shall vest as of such date, without
proration; (iii) with respect to the OPP, if such Change in Control occurs on or prior to the date
that awards are made in respect of the OPP in early 2008, the size of the OPP performance pool
shall be determined using a Measurement Period that ends on the earlier of (x) December 31, 2007
and (y) the date of such Change in Control, and any OPP awards shall be made as promptly as
reasonably practicable thereafter, in the form of fully vested shares or cash; and (iv) except to
the extent otherwise provided in an applicable deferral election of the Participant, any shares
that vest pursuant to this paragraph shall pay out promptly after vesting. With respect to the
OPP, the market value of the Company’s outstanding common stock shall be based on the average
closing market price of the Company’s common stock for the ten consecutive trading days immediately
prior to the date of the Change in Control.

     “Change in Control” shall mean the occurrence of any of the following events: (i) the Company
ceases to be a publicly owned corporation having at least 500 stockholders; (ii) there occurs any
event or series of events that would be required to be reported as a change of control in response
to item 1(a) on a Form 8-K filed by the Company under the Securities Act of 1933 or in any other
filing by the Company with the Securities and Exchange Commission unless the person, as that term
is defined or used in Section 13(d) or 14(d)(2) of the Securities Exchange Act of 1934 (for
purposes of this definition, “Person”), acquiring control is an affiliate of the Company as of the
date the stockholders of the Company approved the CRT Properties, Inc. 1998 Equity and Cash
Incentive Plan; (iii) the Company executes an agreement of acquisition, merger, or consolidation
which contemplates that after the effective date provided for in the agreement all or substantially
all of the business and/or assets of the Company will be controlled by another Person; provided,
however, for purposes of this subparagraph (iii) that if such an agreement requires as a condition
precedent approval by the Company’s shareholders of the agreement or transaction, a Change in
Control shall not be deemed to have taken place unless and until such approval is secured and if
the voting shareholders of such other Person shall, immediately after such effective date, be
substantially the same as the voting shareholders of the Company immediately prior to such
effective date, the execution of such agreement shall not, by itself, constitute a Change in
Control; (iv) any Person (other than the Company, a majority-owned subsidiary of the Company, an
employee benefit plan maintained by the Company or a majority-owned subsidiary of the Company)
becomes the beneficial owner, directly or indirectly (either as a result of the acquisition of
securities or as the result of an arrangement or understanding, including the holding of proxies,
with or among security holders), of securities of the Company representing 25% or more of the votes
that could then be cast in an election for members of the Board unless within 15 days of being
advised that such ownership level has been reached, the Board adopts a resolution approving the
acquisition of that level of securities ownership by such Person; (v) during any period of
twenty-four (24) consecutive months, commencing after the date the Company’s shareholders approved
the CRT Properties, Inc. 1998 Equity and Cash Incentive Plan, individuals who at the beginning of
such twenty-four (24) month period were directors of the Company shall cease to constitute at least
a majority of the Board, unless the election of each director who was not a director at the
beginning of such period has been approved in advance by directors representing at least two-thirds
of (i) the directors then in office who were directors at the beginning of the twenty-four (24)
month period or (ii) the directors specified in clause (i) above plus directors whose election has
been so approved by directors specified in clause (i) above, or (vi) (x) the Company

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combines with another entity and is the surviving entity, or (y) all or substantially all of
the assets or business of the Company are disposed of pursuant to a sale, merger, consolidation,
liquidation, dissolution or other transaction or series of transactions (any event described in
clause (x) or (y) being a “Triggering Event”), unless the holders of Voting Securities of the
Company immediately prior to such Triggering Event own, directly or indirectly, by reason of their
ownership of Voting Securities of the Company immediately prior to such Triggering Event, at least
a majority of the issued and outstanding securities of any class or classes having general voting
power, under ordinary circumstances in the absence of contingencies, to elect the members of the
Board (“Voting Securities”) (measured both by number of Voting Securities and by voting power and
excluding all Voting Securities owned by all new equity investors that invest in the Company
simultaneously with the occurrence of the Triggering Event) of (q) in the case of a combination in
which the Company is the surviving entity, the surviving entity and (r) in any other case, the
entity (if any) that succeeds to all or substantially all of the Company’s business and assets.

6. Amendment and
Termination. The Committee reserved the right to amend and terminate the
Plan at any time; provided, however, that no such amendment or
termination shall adversely affect a Participant’s rights with
respect to existing awards without the Participant’s consent. Upon the
occurrence of any change in control, going private transaction,
issuance of convertible debt, any new class of stock, or the like, or
other transaction or event that renders the making of
adjustment(s) appropriate, the Committee shall make appropriate
adjustment(s) in the Plan, such that the value and economic
opportunity represented by the OPP, or by any outstanding award, is
neither materially increased, nor materially decreased.

5Stock Award Agreement

 

EXHIBIT 10.2

RESTRICTED STOCK AWARD AGREEMENT

UNDER THE CRT PROPERTIES, INC.

AMENDED AND RESTATED 1998 EQUITY AND CASH INCENTIVE PLAN

Name of Grantee: _________________

No. of Shares: _________________

Grant Date: _________________

Final Acceptance Date: _________________

     Pursuant to the CRT Properties, Inc. Amended and Restated 1998 Equity and Cash Incentive Plan
(the “Plan”), CRT Properties, Inc. (the “Company”) hereby grants a Restricted Stock Award (an
“Award”) to the Grantee named above. Pursuant to this Award, the Grantee shall receive the number
of shares of Common Stock, par value $0.01 per share (the “Stock”) of the Company specified above,
subject to the restrictions and conditions set forth herein and in the Plan.

     1. Acceptance of Award. The Grantee shall have no rights with respect to this Award
unless he or she shall have accepted this Award prior to the close of business on the Final
Acceptance Date specified above by signing and delivering to the Company a copy of this Award
Agreement. Upon acceptance of this Award by the Grantee, the shares of Restricted Stock so
accepted shall be issued and held by the Company’s transfer agent in book entry form, and the
Grantee’s name shall be entered as the stockholder of record on the books of the Company.
Thereupon, the Grantee shall have all the rights of a shareholder with respect to such shares,
including voting and dividend rights, subject, however, to the restrictions and conditions
specified in Paragraph 2 below.

     2. Restrictions and Conditions.

     (a) Any book entries for the shares of Restricted Stock granted herein shall bear an
appropriate legend, as determined by the Committee in its sole discretion, to the effect that such
shares are subject to restrictions as set forth herein and in the Plan.

     (b) Shares of Restricted Stock granted herein may not be sold, assigned, transferred, pledged
or otherwise encumbered or disposed of by the Grantee prior to vesting.

     (c) If the Grantee’s employment with the Company and its Subsidiaries is voluntarily or
involuntarily terminated for any reason prior to vesting of shares of Restricted Stock granted
herein, unless otherwise provided in the Grantee’s employment agreement, all shares of Restricted
Stock that are still subject to risks of forfeiture shall be immediately forfeited.

     3. Vesting of Restricted Stock.

     The restrictions and conditions in Paragraph 2 of this Agreement shall lapse on the Vesting
Date or Dates specified in the following schedule so long as the Grantee remains an employee of the
Company or Subsidiary on such Dates. If a series of Vesting Dates is specified, then the
restrictions and conditions in Paragraph 2 shall lapse only with respect to the number of shares of
Restricted Stock specified as vested on such date.

 

 

	 	 	 	 	 
	Number of	 	 	 
	Shares Vested1	 	Vesting Date	 
	__________
	 	 	 	 
	__________
	 	 	 	 
	__________
	 	 	 	 

     Subsequent to such Vesting Date or Dates, the shares of Stock on which all restrictions and
conditions have lapsed shall no longer be deemed Restricted Stock.

     4. Acceleration of Vesting in Special Circumstances. Upon the occurrence of a Change
of Control of the Company (as defined in the Plan), any restrictions and conditions on all shares
of Stock subject to time-based vesting shall be deemed waived by the Committee and all such shares
shall automatically become fully vested and no longer be deemed Restricted Stock. Any restrictions
and conditions on all shares of Stock subject to performance vesting shall be deemed waived by the
Committee to the extent provided in the CRT Properties, Inc. Senior Management Compensation Plan.

     5. Dividends. Dividends on shares of Restricted Stock shall be paid currently to the
Grantee.

     6. Incorporation of Plan. Notwithstanding anything herein to the contrary, this
Agreement shall be subject to and governed by all the terms and conditions of the Plan and the CRT
Properties, Inc. Senior Management Compensation Plan. Capitalized terms in this Agreement shall
have the meaning specified in the Plan, unless a different meaning is specified herein.

     7. Transferability. This Agreement is personal to the Grantee, is non-assignable and
is not transferable in any manner, by operation of law or otherwise, other than by will or the laws
of descent and distribution.

     8. Tax Withholding. The Grantee shall, not later than the date as of which the
receipt of this Award becomes a taxable event for Federal income tax purposes, pay to the Company
or make arrangements satisfactory to the Committee for payment of any Federal, state, and local
taxes required by law to be withheld on account of such taxable event. The Grantee may elect to
have such minimum tax withholding obligation satisfied, in whole or in part, by authorizing the
Company to withhold from shares of Stock to be issued a number of shares of Stock with an aggregate
Fair Market Value that would satisfy the withholding amount due.

     9. No Obligation to Continue Employment. Neither the Company nor any Subsidiary is
obligated by or as a result of the Plan or this Agreement to continue the Grantee in employment and
neither the Plan nor this Agreement shall interfere in any way with the right of the Company or any
Subsidiary to terminate the employment of the Grantee at any time.

     10. Notices. Notices hereunder shall be mailed or delivered to the Company at its
principal place of business and shall be mailed or delivered to the Grantee at the address on file
with the Company or, in either case, at such other address as one party may subsequently furnish to
the other party in writing.

     11. Governing Law. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Florida, applied without regard to conflict of law principles. The
parties hereto agree that any action or proceeding arising directly, indirectly or otherwise in
connection with, out of, related to or from this Agreement, any breach hereof or any action covered
hereby, shall be resolved within the State of Florida and the parties hereto consent and submit to
the jurisdiction of the federal and state courts located within the City of Boca Raton, Florida.
The parties hereto further agree that any such action or proceeding brought by either party to
enforce any right, assert any claim, obtain any relief whatsoever in connection with this Agreement
shall be brought by such party exclusively in federal or state courts located within the State of
Florida.

	1	 	Vesting can be time-based or
performance-based.

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     12. Retention of Shares. Grantee hereby agrees that he or she will not sell any
shares of Stock granted pursuant to this Agreement if it would cause shares of Stock “beneficially
owned” (as such term is defined in Rule 13d-3 promulgated under the Securities Exchange Act of
1934, as amended) by him or her to have a value less than ___times his or her annual base
salary, other than sales to satisfy tax liabilities incurred in connection with this Award or other
equity awards from the Company, sales in connection with the sale, merger or consolidation of the
Company, or sales approved by the Committee or the Board.

	 	 	 	 	 
	 	CRT PROPERTIES, INC.

 	 
	 	By:  	 	 
	 	 	Title 	 
	 	 	 	 
	 

The foregoing Agreement is hereby accepted and the terms and conditions thereof hereby agreed to by
the undersigned.

	 	 	 
	Dated: __________________

	 	___________________________
	

	 	Grantee’s Signature
	
	

	 	Grantee’s name and address:
	

	 	___________________________
	

	 	___________________________
	

	 	___________________________
	

	 	___________________________

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