Document:

PKY-2015.05.14-8K-EX 10.2 LTIP AGREEMENT

EXHIBIT 10.2
PARKWAY PROPERTIES, INC., 
PARKWAY PROPERTIES LP 
PROFITS INTEREST UNITS (LTIP UNITS) AGREEMENT 
 
THIS PROFITS INTEREST UNITS AGREEMENT (this “Agreement”) is made and entered into as of [                            ] (the “Grant Date”), by and between Parkway Properties LP, a Delaware limited partnership (the “Partnership”), and [                            ] (the “Participant”). Capitalized terms used in this Agreement but not otherwise defined herein shall have their respective meanings set forth in the Plan (as defined below) or the Partnership Agreement, as applicable. 
WHEREAS, Parkway Properties, Inc. (the “Company”) and the Partnership maintain the Parkway Properties, Inc. and Parkway Properties LP 2015 Omnibus Equity Incentive Plan (as amended from time to time, the “Plan”); 
WHEREAS, the Company and the Partnership wish to carry out the Plan (the terms of which are hereby incorporated by reference and made a part of this Agreement); 
WHEREAS, Section 12(c) of the Plan authorizes the issuance of Profits Interest Units (LTIP Units) to Employees, Directors, or Consultants for the performance of services to or for the benefit of the Partnership in the Participant’s capacity as a Partner or in anticipation of the Participant becoming a Partner; and 
WHEREAS, the Committee, appointed to administer the Plan, has determined that it would be to the advantage and in the best interest of the Company, in its own capacity and in its capacity as the sole stockholder of Parkway Properties General Partners, Inc. (the “General Partner”), in its individual capacity and as sole general partner of the Partnership, and the Company’s stockholders to issue the Award (as defined below) to the Participant as an inducement to the Participant to provide services to or for the benefit of the Partnership, and as an additional incentive to continue in the Service of the Company.
THE PARTIES HERETO AGREE AS FOLLOWS: 
1.    Issuance of Award.  In consideration of the Participant’s agreement to provide services to or for the benefit of the Partnership, effective as of the Grant Date, the Partnership hereby issues to the Participant an Award (the “Award”) of [            ] Profits Interest Units (LTIP Units) of the Partnership (the “Total Profits Interest Units”), which will be subject to (a) vesting as provided in Section 2 below and (b) forfeiture as provided in Section 3 below.  If not already a Partner, the Partnership admits the Participant as a Partner of the Partnership on the terms and conditions set forth herein, in the Plan, and in the Partnership Agreement.  The Partnership and the Participant acknowledge and agree that the Profits Interest Units are hereby issued to the Participant for the performance of services to or for the benefit of the Partnership in his or her capacity as a Partner or in anticipation of the Participant becoming a Partner.  Upon receipt of the Award, the Participant shall, automatically and without further action on his or her part, be deemed to be a party to, signatory of, and bound by the Partnership Agreement.  At the request of the Partnership, the Participant shall execute the Partnership Agreement or a counterpart signature 

1

page thereto.  The Participant acknowledges that the Partnership from time to time may issue or cancel (or otherwise modify) Profits Interest Units in accordance with the terms of the Partnership Agreement. 
2.       Vesting.  The Profits Interest Units shall vest in accordance with the provisions of this Section 2.  The number of Profits Interest Units that Fully Vest on any Vesting Date shall be rounded to the nearest whole Profits Interest Unit, but in no event shall the aggregate number of Profits Interest Units that Fully Vest and become payable in accordance with this Award exceed the Total Profits Interest Units. 
2.1        [Insert Performance-Based Metrics] 
2.2     [Insert Accelerated Vesting Provision, If Any] 
2.3         Definitions 
(a)    [“Baseline Price” means the fifteen (15) trading day trailing average market closing price over the period ending on [                            ].] 
(b)     [“End Date” means [                            ].] 
(c)     “Fully Vest” or “Fully Vested” means that, with respect to a Profits Interest Unit, both (A) the continued Service and (B) the TSR Value performance condition applicable to such Profits Interest Unit has been satisfied. 
 
(d)     “Performance Period” means the period beginning on the Grant Date and ending on the End Date. 

(e)     “Service” means the Participant’s continued service as an Employee, Consultant, and/or Director. 

(f)     “Termination of Service” means: 
(i)     As to a Consultant, the time when the engagement of a Participant as a Consultant to the Company and its affiliates is terminated for any reason, with or without Cause, including, without limitation, by resignation, discharge, death, or retirement, but excluding terminations where the Consultant simultaneously commences or remains in Service as an Employee and/or Director with the Company or any of its affiliates. 
(ii)     As to a Non-Employee Director, the time when a Participant who is a Non-Employee Director ceases to be a Director for any reason, including, without limitation, a termination by resignation, failure to be elected, death, or retirement, but excluding terminations where the Participant simultaneously commences or remains in Service as an Employee and/or Consultant with the Company or any of its affiliates. 
(iii)     As to an Employee, the time when the employee-employer relationship between a Participant and the Company and its affiliates is terminated for any reason, including, without limitation, a termination by resignation, discharge, death, disability, or retirement, but excluding terminations where the Participant simultaneously commences and/or remains in Service as a Consultant and/or Director with the Company or any of its affiliates. 

2

The Committee, in its sole discretion, shall determine the effect of all matters and questions relating to any Termination of Service, including without limitation, whether a Termination of Service has occurred, whether any Termination of Service resulted from a discharge for Cause, and whether any particular leave of absence constitutes a Termination of Service.  For purposes of the Plan and this Agreement, a Participant’s employee-employer relationship or consultancy relationship shall be deemed to be terminated in the event that the affiliate employing or contracting with such Participant ceases to remain an affiliate following any merger, sale of stock, or other corporate transaction or event (including, without limitation, a spin-off). 
(g)     “TSR Value” means, as of any given date, the sum of (i) the fifteen (15) trading day trailing average market closing price over the period ending on the date on which TSR Value is being measured, plus (ii) the aggregate dividends (including ordinary and special dividends) per Share with a record date that occurs during the period beginning on the Grant Date and continuing through and including the date on which TSR Value is being measured. 
(h)     “Vesting Date” means, with respect to a Profits Interest Unit, the date on which the Profits Interest Unit becomes Fully Vested. 
2.4         Distributions.  The Participant shall be entitled to distributions on the Profits Interest Units in accordance with the provisions set forth in the Partnership Agreement (including the limitations set forth in Section 16.4(b) of the Partnership Agreement); provided, however, that, prior to the date that a Profits Interest Unit becomes Fully Vested, the Participant shall receive ten percent (10%) of such distributions from the Partnership (the “10% Distribution”) to which such holder is otherwise entitled with respect to such Profits Interest Unit pursuant to the Partnership Agreement, and the remaining ninety percent (90%) of such distributions from the Partnership to which such holder is otherwise entitled with respect to such Profits Interest Unit pursuant to the Partnership Agreement (the “Accrued Distribution”) shall be distributed to the Participant with respect to such Profits Interest Unit as set forth in the immediately following sentence.  Subject to the limitations set forth in the Partnership Agreement with respect to distributions (including the limitations set forth in Section 16.4(b) of the Partnership Agreement), prior to any distributions otherwise being made pursuant to Section 5.1 of the Partnership Agreement or otherwise following the applicable Vesting Date with respect to a Profits Interest Unit, the Participant shall receive a special distribution of Available Cash (as defined in the Partnership Agreement) equal to the aggregate amount of Accrued Distributions with respect to such Profits Interest Unit, with such special distribution being made as soon as it is reasonably practicable to do so after the applicable Vesting Date in compliance with such limitations.  If the Profits Interest Unit linked to an Accrued Distribution fails to Fully Vest and is forfeited for any reason, then (x) the linked Accrued Distribution shall be forfeited, and (y) the Partnership shall have no further obligations in respect of such Accrued Distribution.

3

3.    Forfeiture of Profits Interest Units. 
3.1        Termination Prior to End Date.  Notwithstanding the foregoing, in the event that the Participant incurs a Termination of Service for any reason, the Award and all Profits Interest Units, to the extent not vested as of the Participant’s Termination of Service, after taking into consideration any vesting that may occur in connection with such Termination of Service (if any) (and each of the proportionate amount of the Participant’s Capital Account balance attributable to such Profits Interest Units and any Accrued Distributions linked to such Profits Interest Units) shall thereupon automatically and without further action be cancelled and forfeited, and the Participant shall have no further right or interest in or with respect to such unvested Profits Interest Units (or such proportionate amount of the Participant’s Capital Account balance or any Accrued Distributions linked to such Profits Interest Units).  No portion of the Award which is unvested as of the Participant’s Termination of Service shall thereafter become vested. 
3.2        Profits Interest Units Unvested as of End Date.  In addition, in the event that the Participant remains in continuous Service through the End Date, any Profits Interest Units that have not Fully Vested as of the End Date, including without limitation any Profits Interest Units that do not Fully Vest based on TSR Value as of the End Date (and the proportionate amount of the Participant’s Capital Account balance attributable to such Profits Interest Units and any Accrued Distributions linked to such Profits Interest Units) shall thereupon automatically and without further action be cancelled and forfeited, and the Participant shall have no further right or interest in or with respect to such unvested Profits Interest Units (or such proportionate amount of the Participant’s Capital Account balance or any Accrued Distributions linked to such Profits Interest Units).  
 
4.    Restrictions on Awards; Distributions. 
4.1        Transfer Restrictions. 
(a)     Notwithstanding Section 2 above, the Participant shall not, without the consent of the General Partner (which the General Partner may give or withhold in its sole discretion), sell, pledge, assign, hypothecate, transfer, or otherwise dispose of (collectively, “Transfer”) any Profits Interest Units (the “Transfer Restrictions”); provided, however, that the Transfer Restrictions shall not apply to any Transfer of Profits Interest Units to the Partnership or the Company or to any Transfer by will or pursuant to the laws of descent and distribution. 
(b)     The Award and the Profits Interest Units are subject to the terms of the Plan and the terms of the Partnership Agreement, including, without limitation, the restrictions on transfer of Partnership Units (including, without limitation, Profits Interest Units) set forth in Article 11 of the Partnership Agreement.  Any permitted transferee of the Award or the Profits Interest Units under Section 4.1(a) above shall take such Award and Profits Interest Units subject to the terms of the Plan, this Agreement, and the Partnership Agreement.  Any such permitted transferee must, upon the request of the Partnership, agree to be bound by the Plan, the Partnership Agreement, and this Agreement, and shall execute the same on request, and must agree to such other waivers, limitations, and restrictions as the Partnership or the Company may reasonably require.  Any Transfer of the Award or Profits Interest Units which is not made in compliance with the Plan, the Partnership Agreement, and this Agreement shall be null and void ab initio and of no effect. 

4

4.2        Execution and Return of Documents and Certificates.  At the Company’s or the Partnership’s request, the Participant hereby agrees to promptly execute, deliver, and return to the Partnership any and all documents or certificates that the Company or the Partnership deems necessary or desirable to effectuate the cancellation and forfeiture of the unvested Profits Interest Units and the proportionate amount of the Participant’s Capital Account balance attributable to the Profits Interest Units, or to effectuate the transfer or surrender such unvested Profits Interest Units and Capital Account balance to the Partnership. 
5.    Representations, Warranties, Covenants, and Acknowledgments of Participant. The Participant hereby represents, warrants, covenants, acknowledges, and agrees on behalf of the Participant and his or her spouse, if applicable, that: 
5.1    Investment; Status of Participant.  The Participant is holding the Award for the Participant’s own account, and not for the account of any other Person.  The Participant is holding the Award for investment and not with a view to distribution or resale thereof except in compliance with applicable laws regulating securities.  The Participant has such knowledge, skill, and experience in business, financial, and investment matters such that the Participant is capable of evaluating the merits and risks of an investment in the Profits Interest Units and is capable of protecting his or her interests in connection with his or her investment in the Profits Interest Units.  To the extent that the Participant has deemed it appropriate to do so, the Participant has retained and relied upon necessary and appropriate professional advice regarding the investment, tax, and legal merits and consequences of this Agreement and holding the Profits Interest Units.  By reason of the Participant’s business and financial experience, the Participant has the capacity to protect his or her own interests in connection with his or her investment in the Profits Interest Units.  The Participant represents that he or she is an “accredited investor” as that term is defined in Rule 501 of Regulation D of the Securities Act.  The Participant agrees to furnish any additional information requested to assure compliance with applicable federal securities laws and the securities laws of any state in connection with the holding of the Profits Interest Units. 
5.2        Relation to Partnership.  The Participant is presently an Employee of, or Consultant to, the Partnership, or is otherwise providing services to or for the benefit of the Partnership, and in such capacity has become personally familiar with the business of the Partnership. 
5.3        Access to Information. The Participant has had the opportunity to ask questions of, and to receive answers from, the Partnership with respect to the terms and conditions of the transactions contemplated hereby and with respect to the business, affairs, financial conditions, and results of operations of the Partnership. 
5.4         Registration.  The Participant understands that the Profits Interest Units have not been registered under the Securities Act of 1933, as amended (the “Securities Act”) and the Profits Interest Units cannot be transferred by the Participant other than in accordance with the terms and conditions set forth in the Plan, this Agreement, and the Partnership Agreement and, in any event, unless such transfer is registered under the Securities Act or an exemption from such registration is available.  The Partnership has made no agreements, covenants, or undertakings whatsoever to register the transfer of the Profits Interest Units under the Securities Act.  The Partnership has made no representations, warranties, or covenants whatsoever as to whether any exemption from the Securities Act, including, without limitation, any exemption for limited sales in routine brokers’ transactions pursuant to Rule 144 of the Securities Act (“Rule 144”), will be 

5

available.  If an exemption under Rule 144 is available at all, it will not be available until all applicable terms and conditions of Rule 144 have been satisfied. 
5.5        Public Trading.  None of the Partnership’s securities is presently publicly traded, and none of the Company, the Partnership, or any of their Subsidiaries has made any representations, covenants, or agreements as to whether there will be a public market for any of its securities. 
5.6        Tax Advice.  None of the Company, the Partnership, or any of their Subsidiaries has made any warranties or representations to the Participant with respect to the income tax consequences of the issuance of the Profits Interest Units or the transactions contemplated by this Agreement (including, without limitation, with respect to the making of an election under Code Section 83(b)), and the Participant is in no manner relying on the Partnership or its representatives for an assessment of such tax consequences.  The Participant is advised to consult with his or her own tax advisor with respect to such tax consequences and his or her ownership of the Profits Interest Units. 
6.        Capital Account.  The Participant shall make no contribution of capital to the Partnership in connection with the Award, and as a result, the Participant’s Capital Account balance in the Partnership immediately after his or her receipt of the Profits Interest Units shall be equal to zero, unless the Participant was a Partner in the Partnership prior to such issuance, in which case the Participant’s Capital Account balance shall not be increased as a result of his or her receipt of the Profits Interest Units. 
7.        Section 83(b) Election.  The Participant covenants that he or she shall make an election under Code Section 83(b) (and any comparable election in the state of the Participant’s residence) with respect to the Profits Interest Units covered by the Award, within thirty (30) calendar days following the Grant Date, and the Company hereby consents to the making of such election.  In connection with such election, the Participant and the Participant’s spouse, if applicable, shall execute and deliver to the Company with this executed Agreement, a copy of the election pursuant to Code Section 83(b) substantially in the form attached hereto as Exhibit A.  The Participant represents that the Participant has consulted any tax consultant(s) that the Participant deems advisable in connection with the filing of an election under Code Section 83(b) and similar state tax provisions.  The Participant acknowledges that it is the Participant’s sole responsibility and not the responsibility of the Company, the Partnership, or any of their Subsidiaries to timely file an election under Code Section 83(b) (and any comparable state election), even if the Participant requests that the Company, the Partnership, or any of their Subsidiaries, or any representative of the Company, the Partnership, or any of their Subsidiaries, make such filing on the Participant’s behalf.  The Participant is encouraged to consult his or her tax advisor to determine if there is a comparable election to file in the state of his or her residence. 
8.        Covenants.  The Participant hereby covenants that so long as the Participant holds any Profits Interest Units, at the request of the Partnership, the Participant shall disclose to the Partnership in writing such information relating to the Participant’s ownership of the Profits Interest Units as the Partnership reasonably believes to be necessary or desirable to ascertain in order to comply with the Code or the requirements of any other appropriate taxing authority. 

6

9.        Taxes.  The Partnership and the Participant intend that (a) the Profits Interest Units be treated as “profits interests” within the meaning of the Code, Treasury Regulations promulgated thereunder, and any published guidance by the Internal Revenue Service with respect thereto, including, without limitation, Internal Revenue Service Revenue Procedure 93-27, 1993-2 C.B. 343, as clarified by Internal Revenue Service Revenue Procedure 2001-43, 2001-2 C.B. 191; (b) the issuance of such interests not be a taxable event to the Partnership or the Participant as provided in such Revenue Procedures; and (c) the Partnership Agreement, the Plan, and this Agreement be interpreted consistently with such intent.  In furtherance of such intent, effective immediately prior to the issuance of the Profits Interest Units, the Partnership will cause the “Gross Asset Value” (as defined in the Partnership Agreement) of all Partnership assets to be adjusted to equal their respective gross fair market values and make the resulting adjustments to the “Capital Accounts” (as defined in the Partnership Agreement) of the Partners, in each case as set forth in the Partnership Agreement and based upon a Fair Market Value equal to the trading price of the Common Shares at the time of such adjustment.  The Partnership may withhold from the Participant’s wages, or require the Participant to pay to the Partnership, any applicable withholding or employment taxes resulting from the issuance of the Award hereunder, from the vesting or lapse of any restrictions imposed on the Award, or from the ownership or disposition of the Profits Interest Units. 
10.        Remedies.  The Participant shall be liable to the Partnership for all costs and damages, including incidental and consequential damages, resulting from a disposition of the Award or the Profits Interest Units which is in violation of the provisions of this Agreement.  Without limiting the generality of the foregoing, the Participant agrees that the Partnership shall be entitled to obtain specific performance of the obligations of the Participant under this Agreement and immediate injunctive relief in the event any action or proceeding is brought in equity to enforce the same.  The Participant will not urge as a defense that there is an adequate remedy at law. 
11.        Governing Law and Venue.  The laws of the State of Maryland shall govern the interpretation, validity, administration, enforcement, and performance of the terms of this Agreement regardless of the law that might be applied under principles of conflicts of laws.  The Participant agrees that the exclusive venue for any disputes arising out of or related to this Agreement shall be the state or federal courts located in Orlando, Florida. 
12.        Survival of Representations and Warranties.  The representations, warranties, and covenants contained in Section 5 above shall survive the later of the date of execution and delivery of this Agreement or the issuance of the Award. 
13.        Unit Certificate Restrictive Legends.  Certificates evidencing the Award, to the extent such certificates are issued, may bear such restrictive legends as the Partnership and/or the Partnership’s counsel may deem necessary or advisable under applicable law or pursuant to this Agreement, including, without limitation, the following legends or legends substantially similar thereto: 
“The offering and sale of the securities represented hereby have not been registered under the Securities Act of 1933, as amended (the “Securities Act”).  Any transfer of such securities will be invalid unless a Registration Statement under the Securities Act is in effect as to such transfer or in the opinion of counsel for the Partnership such registration is unnecessary in order for such transfer to comply with the Securities Act.” 

7

“The securities represented hereby are subject to forfeiture and transferability and other restrictions as set forth in (i) a written agreement with the Partnership, (ii) the Parkway Properties, Inc. and Parkway Properties LP 2015 Omnibus Equity Incentive Plan, and (iii) the Second Amended and Restated Agreement of Limited Partnership of Parkway Properties LP, dated as February 27, 2013, in each case, as may be amended from time to time, and such securities may not be sold or otherwise transferred except pursuant to the provisions of such documents.” 
14.        Restrictions on Public Sale by Participant.  To the extent such limitation is not inconsistent with applicable law, the Participant agrees not to effect any sale or distribution of the Profits Interest Units or any similar security of the Company, or any securities convertible into or exchangeable or exercisable for such securities, including a sale pursuant to Rule 144, during the fourteen (14) days prior to, and during the ninety (90)-day period beginning on, the effective date of a registration statement filed by the Partnership or the Company (except as part of such registration), if and to the extent requested in writing by the Partnership or the Company in the case of a non-underwritten public offering or if and to the extent requested in writing by the managing underwriter or underwriters and consented to by the Partnership or the Company, which consent may be given or withheld in the Partnership’s or the Company’s sole and absolute discretion, in the case of an underwritten public offering (such agreement to be in the form of lock-up agreement provided by the managing underwriter or underwriters). 
15.        Conformity to Securities Laws.  The Participant acknowledges that the Plan and this Agreement are intended to conform to the extent necessary with all provisions of all applicable federal and state laws, rules, and regulations (including, but not limited to the Securities Act and the Exchange Act and any and all regulations and rules promulgated by the Securities and Exchange Commission thereunder, including without limitation the applicable exemptive conditions of Rule 16b-3 of the Exchange Act) and to such approvals by any listing, regulatory, or other governmental authority as may, in the opinion of counsel for the Partnership or the Company, be necessary or advisable in connection therewith.  Notwithstanding anything herein to the contrary, the Plan shall be administered, and the Award of Profits Interest Units is made, only in such a manner as to conform to such laws, rules, and regulations.  To the extent permitted by applicable law, the Plan, this Agreement, and the Award shall be deemed amended to the extent necessary to conform to such laws, rules, and regulations. 
 
16.        Code Section 409A.  Neither the Award nor the Profits Interest Units are intended to constitute or provide for “nonqualified deferred compensation” within the meaning of Section 409A of the Code (“Section 409A”).  However, notwithstanding any other provision of the Plan or this Agreement, if at any time the Committee determines that the Award or the Profits Interest Units may be subject to Section 409A, the Committee shall have the right, in its sole discretion, to adopt such amendments to the Plan or this Agreement or take such other actions (including amendments and actions with retroactive effect) as the Committee determines are necessary or appropriate either for the Award and the Profits Interest Units to be exempt from the application of Section 409A or to comply with the requirements of Section 409A.  Notwithstanding the foregoing, none of the Company, the Partnership, or any of their Subsidiaries shall have any obligation to adopt any such amendment or take any such other action, and nothing contained in this Section 16 shall create any such obligation. 

8

17.        Not a Contract of Service Relationship.  Nothing in this Agreement or in the Plan shall confer upon the Participant any right to continue to serve as an Employee, Director, Consultant, or other service provider of the Partnership, Company, or any of their affiliates or shall interfere with or restrict in any way the rights of the Partnership, the Company, and their affiliates, which rights are hereby expressly reserved, to discharge or terminate the services of the Participant at any time for any reason whatsoever, with or without Cause, except to the extent expressly provided otherwise in a written agreement between the Partnership, the Company, or an affiliate and the Participant.

18.        Counterparts.  This Agreement may be executed in any number of counterparts, any of which may be executed and transmitted (without limitation) by facsimile or e-mail, and each of which shall be deemed to be an original, but all of which together shall be deemed to be one and the same instrument. 

19.        Successors and Assigns.  Subject to the limitations set forth in this Agreement, this Agreement shall be binding upon, and inure to the benefit of, the executors, administrators, heirs, legal representatives, successors and assigns of the parties hereto, including, without limitation, any business entity that succeeds to the business of the Partnership.  Subject to the restrictions on transfer set forth in Section 4 above, this Agreement shall be binding upon the Participant and his or her heirs, executors, administrators, successors and assigns. 

20.        Entire Agreement; Amendments and Waivers.  The Plan, the Partnership Agreement, this Agreement (including all Exhibits thereto, if any), and a written employment agreement between the Partnership, the Company, or any of their affiliates and the Participant (if any) constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Partnership, the Company, and its affiliates and the Participant with respect to the subject matter hereof.  This Agreement may not be amended except in an instrument in writing signed by the Participant and a duly authorized representative of the Company.  No amendment, supplement, modification, or waiver of this Agreement shall be binding unless executed in writing by the party to be bound thereby.  No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar), nor shall such waiver constitute a continuing waiver unless otherwise expressly provided. 

21.        Invalidity.  If any term, provision, covenant, or condition of this Agreement is held by a court of competent jurisdiction to exceed the limitations permitted by applicable law, then the provisions will be deemed reformed to the maximum limitations permitted by applicable law and the parties hereby expressly acknowledge their desire that in such event such action be taken.  If for any reason one or more of the provisions contained in this Agreement or in any other instrument referred to herein, shall, for any reason, be held to be invalid, illegal, or unenforceable in any respect, then to the maximum extent permitted by law, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement or any other such instrument. 

9

22.        Titles.  Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement. 
 

10

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above. 

                	
			
	PARKWAY PROPERTIES LP,
a Delaware limited partnership

	 
	 

	By:
	 
	Parkway Properties General Partners, Inc.,
a Delaware corporation, its general partner

	 
	 

	By:
	 
	 

	Name:
	 
	 

	Title:
	 
	 

	 
	 

	By:
	 
	 

	Name:
	 
	 

	Title:
	 
	 

	 

	PARKWAY PROPERTIES, INC., a Maryland corporation

	 
	 

	By:
	 
	 

	Name:
	 
	 

	Title:
	 
	 

	 
	 

	By:
	 
	 

	Name:
	 
	 

	Title:
	 
	 

	 

	PARTICIPANT:

	 

	 

	(Sign Name)

	 

	(Print Name)

The Participant’s spouse indicates, by the execution of this Agreement, his or her consent to be bound by the terms herein as to his or her interests, whether as community property or otherwise, if any, in the Profits Interest Units. 
 
                	
	
	Participant’s Spouse:

	 

	 

	(Sign Name)

	 

	 

	(Print Name)

11

EXHIBIT A
ELECTION PURSUANT TO SECTION 83(b) OF THE 
INTERNAL REVENUE CODE TO INCLUDE IN GROSS 
INCOME THE EXCESS OVER THE PURCHASE PRICE, 
IF ANY, OF THE VALUE OF PROPERTY TRANSFERRED 
IN CONNECTION WITH SERVICES 
The undersigned hereby elects pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended, to include in the undersigned’s gross income for the [       ] taxable year the excess (if any) of the fair market value of the property described below, over the amount the undersigned paid for such property, if any, and supplies herewith the following information in accordance with the Treasury regulations promulgated under Section 83(b): 
1.     The undersigned’s name, address, and taxpayer identification (social security) number are: 
 
	
			
	Name:
	  

	 
	 

	Address:
	  

	 
	 

	Social Security #:
	  
	 

The undersigned’s spouse’s name, address, and taxpayer identification (social security) number are (complete if applicable): 
 
	
			
	Name:
	  

	 
	 

	Address:
	  

	 
	 

	Social Security #:
	  
	 

2.     The property with respect to which the election is made consists of [_____] Profits Interest Units (the “Award”) of Parkway Properties LP, a Delaware limited partnership (the “Partnership”), representing an interest in the future profits, losses, and distributions of the Partnership. 
3.     The date on which the above property was transferred to the undersigned was [                            ], and the taxable year to which this election relates is [      ]. 
4.     The above property is subject to the following restrictions: (a) forfeiture and/or a right of repurchase by the Partnership if the undersigned ceases to be an employee or director of, or consultant to, the Partnership or a parent or subsidiary thereof, and (b) certain other restrictions set forth in the Second Amended and Restated Limited Partnership Agreement of Parkway Properties LP, dated as of February 27, 2013, as amended from time to time, should the undersigned wish to transfer the Award (in whole or in part). 

5.     The fair market value of the above property at the time of transfer (determined without regard to any restrictions other than those which by their terms will never lapse) is $0. 
 
6.     The amount paid for the above property by the undersigned was $0. 
7.     A copy of this election has been furnished to the Partnership, and the original will be filed with the income tax return of the undersigned to which this election relates. 
 
	
							
	 
	 
	 
	 

	Date:
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	[Name]
	 

	Date:
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	Name of Spouse:PKY-2015.05.14-8K-EX 10.3 TRSU AGREEMENT

EXHIBIT 10.3
 
PARKWAY PROPERTIES, INC.
AND PARKWAY PROPERTIES LP
2015 OMNIBUS EQUITY INCENTIVE PLAN
 
RESTRICTED STOCK UNIT GRANT NOTICE
Parkway Properties, Inc., a Maryland corporation (the “Company”), pursuant to the Parkway Properties, Inc. and Parkway Properties LP 2015 Omnibus Equity Incentive Plan (as may be amended from time to time, the “Plan”), hereby grants to the holder listed below (the “Participant”), an award of restricted stock units (the “RSUs”).  Each RSU represents the right to receive one (1) share of common stock of the Company (each, a “Share”) in accordance with the terms and conditions hereof if applicable vesting conditions are satisfied.  This award of RSUs is subject to all of the terms and conditions set forth in this Restricted Stock Unit Grant Notice (the “Grant Notice”), the Restricted Stock Unit Award Agreement attached hereto as Exhibit A (together, the “Agreement”), the Plan, and the Employment Agreement, dated as of [______________], by and between the Company and the Participant (the “Employment Agreement”), each of which is incorporated herein by reference.  Each RSU is hereby granted in tandem with a corresponding Dividend Equivalent, as further described in Exhibit A.  Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Agreement.    
	
		
	Participant:
	[__________________]

	Grant Date:
	[______________]

	Total Number of RSUs:
	[___]

	Vesting Commencement Date:
	[______________]

	Vesting Schedule:
	[______________] 

	Termination of RSUs and Dividend Equivalents:
	If the Participant experiences a Termination of Service prior to the applicable vesting date, all RSUs that have not become vested on or prior to the date of such Termination of Service (after taking into consideration any vesting that may occur in connection with such Termination of Service, if any), and all Dividend Equivalents associated with such RSUs, in each case will thereupon be automatically forfeited by the Participant without payment of any consideration therefor.    

By his or her signature below, the Participant agrees to be bound by the terms and conditions of the Plan and this Agreement.  The Participant has reviewed this Agreement and the Plan in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Agreement, and fully understands all provisions of this Grant Notice, the Agreement, and the Plan. The Participant hereby agrees to accept as binding, conclusive, and final all decisions or interpretations of the Committee upon any questions arising under the Plan or the Agreement.  In addition, by signing below, the Participant also agrees that the Company, in its sole discretion, may satisfy any withholding obligations in accordance with Section 3.1 of this Agreement by (i) withholding Shares otherwise issuable to the Participant upon full vesting of the RSUs, (ii) instructing a broker on the Participant’s behalf to sell Shares otherwise issuable to the Participant upon vesting of the RSUs and submit the proceeds of such sale to the Company, or (iii) using any other method permitted by Section 3.1 of the Agreement or the Plan.  If the Participant is married, his or her spouse has signed the Consent of Spouse attached hereto as Exhibit B.

1

	
						
	PARKWAY PROPERTIES, INC.

	 
	PARTICIPANT

	By:
	 
	 
	 
	 

	 
	 
	 
	 
	 

	Print Name: 
	 
	 
	Print Name: 
	 

	 
	 
	 
	 
	 

	Title:
	 
	 
	 
	 

	 
	 
	 
	Address: 
	 

	 
	 
	 
	 
	 

	By:
	 
	 
	 
	 

	 
	 
	 
	 
	 

	Print Name: 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	Title:
	 
	 
	 
	 

2

EXHIBIT A
TO RESTRICTED STOCK UNIT GRANT NOTICE
RESTRICTED STOCK UNIT AWARD AGREEMENT
ARTICLE I.
GENERAL
1.1    Incorporation of Terms of Plan.  The RSUs are subject to the terms and conditions of the Plan, which are incorporated herein by reference. In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan shall control.

1.2    Defined Terms.  Wherever the following terms are used in this Agreement they shall have the meanings specified below, unless the context clearly indicates otherwise.  Capitalized terms not specifically defined herein shall have the meanings specified in the Plan and the Grant Notice to which this Restricted Stock Unit Award Agreement is attached.

(a)“Cause” shall have the meaning provided in the Employment Agreement. 

(b)“CIC Termination” shall have the meaning provided in the Employment Agreement.

(c)“Good Reason” shall have the meaning provided in the Employment Agreement.  

(d)“Non-Employee Director” shall mean a Director of the Company who is not an Employee.

(e)“Termination of Service” shall mean:

(i) As to a Consultant, the time when the engagement of a Participant as a Consultant to the Company and its affiliates is terminated for any reason, with or without Cause, including, without limitation, by resignation, discharge, death, or retirement, but excluding terminations where the Consultant simultaneously commences or remains in Service as an Employee and/or Director with the Company or any of its affiliates.

(ii)As to a Non-Employee Director, the time when a Participant who is a Non-Employee Director ceases to be a Director for any reason, including, without limitation, a termination by resignation, failure to be elected, death, or retirement, but excluding terminations where the Participant simultaneously commences or remains in Service as an Employee and/or Consultant with the Company or any of its affiliates.

(iii)As to an Employee, the time when the employee-employer relationship between a Participant and the Company and its affiliates is terminated for any reason, including, without limitation, a termination by resignation, discharge, death, disability, or retirement, but excluding terminations where the Participant simultaneously commences and/or remains in Service as a Consultant and/or Director with the Company or any of its affiliates.

The Committee, in its sole discretion, shall determine the effect of all matters and questions relating to any Termination of Service, including without limitation, whether a Termination of Service has occurred, whether any Termination of Service resulted from a discharge for Cause, and whether any particular leave of absence constitutes a Termination of Service.  For purposes of the Plan and this Agreement, a Participant’s 

A-1

Service shall be deemed to be terminated in the event that the affiliate employing or contracting with such Participant ceases to remain an affiliate following any merger, sale of stock, or other corporate transaction or event (including, without limitation, a spin-off).
ARTICLE II.
TERMS AND CONDITIONS OF RSUS AND DIVIDEND EQUIVALENTS

2.1    Grant of RSUs.  Upon the terms and conditions set forth in the Plan, this Agreement, and the Employment Agreement, effective as of the Grant Date set forth in the Grant Notice, the Company hereby grants to the Participant an award of RSUs, together with an equivalent number of tandem Dividend Equivalents, under the Plan.  In consideration of this grant of RSUs, the Participant agrees to render faithful and efficient services to the Company or its affiliates. Unless and until the RSUs have fully vested in the manner set forth in the Grant Notice, the Participant will have no right to receive any Shares or other payment in respect of the RSUs.

2.2    Vesting of RSUs. 

(a)    Subject to Sections 2.2(b) and 2.4 hereof, the RSUs shall vest and become nonforfeitable, if at all, in accordance with the terms and conditions set forth in the Grant Notice. 

(b)    If the Participant experiences a Termination of Service as a result of a CIC Termination after the date on which the Company’s stockholders approve the Plan, all RSUs that have not become vested on or prior to the date of such Termination of Service, and all Dividend Equivalents associated with such RSUs, will immediately vest and become nonforfeitable upon the occurrence of such Termination of Service. 

2.3    Payment of RSUs.  As soon as administratively practicable following the vesting of any RSUs pursuant to Section 2.2 hereof, but in no event later than thirty (30) days after such vesting date (for the avoidance of doubt, this deadline is intended to comply with the “short term deferral” exemption from Code Section 409A), the Company shall deliver to the Participant (or any transferee permitted under Section 3.3 below) a number of Shares equal to the number of RSUs subject to this award or RSUs that fully vest on the applicable vesting date (either by delivering one or more certificates for such Shares or by entering such Shares in book entry form, as determined by the Committee in its sole discretion).  Notwithstanding the foregoing, if Shares cannot be issued pursuant to Section 20 of the Plan (or any successor provision thereto) or are delayed under Section 2.5 below, the Shares shall be issued pursuant to the preceding sentence as soon as administratively practicable after the Committee determines that Shares can be issued in accordance with such Section.  In no event shall any such delay in the issuance of Shares impact the payment timing applicable to Dividend Equivalents payable in cash.

2.4    Forfeiture and Termination of RSUs and Dividend Equivalents.  All RSUs and Dividend Equivalents granted under this Agreement shall be forfeited and terminated as set forth in the Grant Notice.  
  
2.5    Conditions to Delivery of Shares.  The Company shall not be required to issue or deliver any certificates or make any book entries evidencing Shares deliverable hereunder prior to fulfillment of the conditions set forth in Section 20 of the Plan.  In the event that the Company delays a distribution or payment in settlement of RSUs because it determines that the issuance of Shares in settlement of such RSUs will violate federal securities laws or other applicable law, such distribution or payment shall be made at the earliest date at which the Company reasonably determines that the making of such distribution or payment will not cause such violation, as required by Treasury Regulation Section 1.409A-2(b)(7)(ii).  No payment shall be delayed under this Section 2.5 if such delay will result in a violation of Code Section 409A.

A-2

2.6    Rights as Stockholder.  The holder of the RSUs shall not be, nor have any of the rights or privileges of, a stockholder of the Company, including, without limitation, voting rights and rights to dividends, in respect of the RSUs or any Shares underlying the RSUs unless and until such Shares shall have been issued by the Company and are held of record by such holder (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company).  No adjustment shall be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 14 of the Plan. 

2.7    Dividend Equivalents.  

(a)    Each RSU granted hereunder is hereby granted in tandem with a corresponding Dividend Equivalent that shall remain outstanding from the Grant Date through the earlier to occur of (i) the termination or forfeiture for any reason of the RSU to which such Dividend Equivalent corresponds or (ii) the delivery to the Participant of the Shares underlying the RSU to which such Dividend Equivalent corresponds.  

(b)    The Participant shall not be entitled to any payment under a Dividend Equivalent with respect to any dividend with an applicable record date that occurs prior to the Grant Date or after the termination of such RSU for any reason, whether due to payment, forfeiture of the RSU, or otherwise.  Dividend Equivalents and any amounts that may become distributable in respect thereof shall be treated separately from the RSUs and the rights arising in connection therewith for purposes of the designation of time and form of payments required by Code Section 409A.

(c)    Each Dividend Equivalent (i) shall become payable if and when the RSU to which such Dividend Equivalent relates vests and (ii) shall be paid in cash, unless otherwise determined by the Committee, at the time of settlement of the underlying RSU in an amount equal to the total dividends per Share with applicable record dates occurring over the period during which such Dividend Equivalent was outstanding, as set forth in Section 2.7(b) above.  If the RSU linked to a Dividend Equivalent fails to vest and is forfeited for any reason, then (x) the linked Dividend Equivalent shall be forfeited as well; (y) any amounts otherwise payable in respect of such Dividend Equivalent shall be forfeited without payment; and (z) the Company shall have no further obligations in respect of such Dividend Equivalent.

ARTICLE III.
MISCELLANEOUS PROVISIONS

3.1    Tax Withholding.  The Company shall have the authority and the right to deduct or withhold, or to require the Participant to remit to the Company (including without limitation, as provided in the Grant Notice), an amount sufficient to satisfy all applicable federal, state, and local taxes (including without limitation any income and employment tax obligations) required by law to be withheld (if any) with respect to any taxable event arising in connection with the RSUs and/or the Dividend Equivalents. The Company shall not be obligated to deliver any new certificate representing Shares to the Participant or the Participant’s legal representative or to enter such Shares in book entry form unless and until the Participant or the Participant’s legal representative shall have paid or otherwise satisfied in full the amount of all federal, state, and local taxes applicable to the taxable income of the Participant arising in connection with the RSUs or payments thereunder.

3.2    Administration.  The Committee shall have the power to interpret the Plan and this Agreement as provided in the Plan. All interpretations and determinations made by the Committee in good faith shall be final and binding upon the Participant, the Company, and all other interested persons. 

A-3

3.3    Grant Not Transferable.  Without limiting the generality of any other provision hereof, the RSUs and the Dividend Equivalents shall be subject to the restrictions on transferability set forth in Section 19(d) of the Plan.  

3.4    Adjustments.  The Participant acknowledges that the RSUs and the Dividend Equivalents are subject to modification and termination in certain events as provided in this Agreement and Sections 14 and 15 of the Plan.

3.5    Severability.  In the event that any provision in this Agreement is held invalid or unenforceable, such provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of this Agreement, which shall remain in full force and effect.

3.6    Tax Consultation.  The Participant understands that the Participant may suffer adverse tax consequences in connection with the RSUs and/or Dividend Equivalents granted pursuant to this Agreement (and any Shares issuable or amounts payable with respect thereto).  The Participant represents that the Participant has consulted with any tax consultants the Participant deems advisable in connection with the RSUs and Dividend Equivalents and the issuance of Shares with respect thereto and making of payments and that the Participant is not relying on the Company for any tax advice.

3.7    Participant’s Representations. The Participant shall, if required by the Company, concurrently with the issuance of any securities hereunder, make such written representations as are deemed necessary or appropriate by the Company and/or the Committee.

3.8    Section 409A.  This Agreement shall be interpreted in accordance with the requirements of Code Section 409A.  The Committee may, in its discretion, adopt such amendments to the Plan or this Agreement or adopt other policies and procedures (including amendments, policies, and procedures with retroactive effect), or take any other actions, as the Committee determines are necessary or appropriate to comply with the requirements of Code Section 409A or an available exemption therefrom; provided, however, that the Committee shall have no obligation to take any such action(s) or to indemnify any person for failing to do so. 

3.9    Amendment, Suspension, and Termination.  To the extent permitted by the Plan, this Agreement may be wholly or partially amended or otherwise modified, suspended, or terminated at any time or from time to time by the Committee or the Board; provided, however, that, except as may otherwise be provided by the Plan, no amendment, modification, suspension, or termination of this Agreement shall adversely affect the RSUs or the Dividend Equivalents in any material way without the prior written consent of the Participant. 

3.10    Not a Contract of Service Relationship.  Nothing in this Agreement or in the Plan shall confer upon the Participant any right to continue to serve as an Employee, Director, Consultant, or other service provider of the Company or any of its affiliates or shall interfere with or restrict in any way the rights of the Company and its affiliates, which rights are hereby expressly reserved, to discharge or terminate the services of the Participant at any time for any reason whatsoever, with or without Cause, except to the extent expressly provided otherwise in a written agreement between the Company or an affiliate and the Participant.

3.11    Limitations Applicable to Section 16 Persons.  Notwithstanding any other provision of the Plan or this Agreement, if the Participant is subject to Section 16 of the Exchange Act, then the Plan, the RSUs, the Dividend Equivalents, and this Agreement shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment 

A-4

to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule.  To the extent permitted by applicable law, this Agreement shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.

3.12    Conformity to Securities Laws.  The Participant acknowledges that the Plan and this Agreement are intended to conform to the extent necessary with all provisions of the Securities Act of 1933, as amended, the Exchange Act, and any and all regulations and rules promulgated by the Securities and Exchange Commission thereunder, as well as all applicable state securities laws and regulations.  Notwithstanding anything herein to the contrary, the Plan shall be administered, and the RSUs and Dividend Equivalents are granted, only in such a manner as to conform to such laws, rules, and regulations.  To the extent permitted by applicable law, the Plan and this Agreement shall be deemed amended to the extent necessary to conform to such laws, rules, and regulations.

3.13    Limitation on the Participant’s Rights.  Participation in the Plan confers no rights or interests other than as herein provided.  This Agreement creates only a contractual obligation on the part of the Company as to amounts payable and shall not be construed as creating a trust.  The Plan, in and of itself, has no assets.  The Participant shall have only the rights of a general unsecured creditor of the Company and its affiliates with respect to amounts credited and benefits payable, if any, with respect to the RSUs, and rights no greater than the right to receive the Shares as a general unsecured creditor with respect to RSUs, as and when payable hereunder. 

3.14    Successors and Assigns.  The Company or any affiliate may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company and its affiliates.  Subject to the restrictions on transfer set forth in Section 3.3 hereof, this Agreement shall be binding upon the Participant and his or her heirs, executors, administrators, successors and assigns.

3.15    Entire Agreement.  The Plan, the Employment Agreement, and this Agreement (including all Exhibits thereto or hereto, if any) constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and its affiliates and the Participant with respect to the subject matter hereof. 

3.16    Notices.  Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of the Secretary of the Company at the Company’s principal office, and any notice to be given to the Participant shall be addressed to the Participant at the Participant’s last address reflected on the Company’s records.  Any notice shall be deemed duly given when sent via email or when sent by reputable overnight courier or by certified mail (return receipt requested) through the United States Postal Service.

3.17    Governing Law and Venue. The laws of the State of Maryland shall govern the interpretation, validity, administration, enforcement, and performance of the terms of this Agreement regardless of the law that might be applied under principles of conflicts of laws.  The Participant agrees that the exclusive venue for any disputes arising out of or related to this Agreement shall be the state or federal courts located in Orlando, Florida.

3.18    Titles.  Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

A-5

EXHIBIT B
TO RESTRICTED STOCK UNIT GRANT NOTICE
CONSENT OF SPOUSE
 
I, _______________, spouse of _______________, have read and approve the Restricted Stock Unit Grant Notice (the “Grant Notice”) to which this Consent of Spouse is attached and the Restricted Stock Unit Award Agreement attached to the Grant Notice (together with the Grant Notice, the “Agreement”).  In consideration of issuing to my spouse the shares of the Restricted Stock Units and Dividend Equivalents set forth in the Grant Notice, I hereby appoint my spouse as my attorney-in-fact in respect to the exercise of any rights under the Agreement and agree to be bound by the provisions of the Agreement insofar as I may have any rights in said Agreement and any Restricted Stock Units, Dividend Equivalents, or any shares of the common stock of Parkway Properties, Inc. or cash issued pursuant thereto under the community property laws or similar laws relating to marital property in effect in the state of our residence as of the date of the signing of the foregoing Agreement. 
 
	
									
	 
	 
	 
	 
	 
	 

	Dated:
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	Signature of Spouse

B-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00245-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00245-of-00352.parquet"}]]