Document:

Exhibit 10.2

 

DEFERRED COMPENSATION AGREEMENT (2013)

 

This Deferred Compensation Agreement (2013) (the “Agreement”) is entered into as of the 12th day of September, 2013 (the “Effective Date”), by and between SL Green Realty Corp. (the “Company”) and Marc Holliday (the “Executive”).

 

WHEREAS, the Executive has served the Company as its Chief Executive Officer;

 

WHEREAS, the Company desires to reward the Executive for his past service to the Company and encourage and incentivize the Executive to contribute to the long-term success of the Company; and

 

WHEREAS, Section 3(c) of the Employment Agreement (as hereinafter defined) provides that the Company shall make certain contributions to a deferred compensation account pursuant to the terms and conditions of this Agreement;

 

NOW, THEREFORE, in consideration of the promises and mutual covenants contained herein and for other good and valuable consideration, the receipt of which is mutually acknowledged, the Company and the Executive hereby agree as follows:

 

1.                                      Definitions.

 

“Change-in-Control” shall have the meaning set forth in the Employment Agreement.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Committee” means the Compensation Committee of the Board of Directors of the Company.

 

“Deferred Compensation Amount” means an amount equal to (x) the Stock Price on the Trigger Date, multiplied by (y) the number of Stock Units credited to the Account as of the Trigger Date that have vested in accordance with Section 3 as of the Payment Date (as defined in Section 4 below).

 

“Employment Agreement” means the Amended and Restated Employment Agreement, dated as of September 12, 2013, by and between the Company and the Executive, as such agreement may be amended from time to time.

 

“Fair Market Value” per share of Stock as of a particular date means (i) if shares of Stock are then listed on a national securities exchange, the closing sales price per share of Stock on the exchange for the last preceding date on which there was a sale of shares of Stock on such exchange, as determined by the Committee, (ii) if shares of Stock are not then listed on a national securities exchange but are then traded on an over-the-counter market, the average of the closing bid and asked prices for the shares of Stock in such over-the-counter market for the

 

 

last preceding date on which there was a sale of such shares in such market, as determined by the Committee, or (iii) if shares of Stock are not then listed on a national securities exchange or traded on an over-the-counter market, such value as the Committee in its discretion may in good faith determine; provided that, where the shares of Stock are so listed or traded, the Committee may make such discretionary determinations where the shares of Stock have not been traded for 10 trading days.

 

“Initial Contribution Date” means January 18, 2014.

 

“Stock Units” means the right to receive the value of one share of Stock in accordance with the terms of this Agreement.

 

“Separation from Service” means the Executive’s “separation from service” from the Company within the meaning set forth in Section 409A of the Code, determined in accordance with the presumptions set forth in Treasury Regulation Section 1.409A-1(h).

 

“Stock” means the common stock of the Company.

 

“Stock Price” means, as of a particular date, the average of the Fair Market Value of one share of Stock for the ten (10) consecutive trading days ending on, and including, such date (or, if such date is not a trading day, the most recent trading day immediately preceding such date); provided, however, that if such date is the date upon which a Transactional Change-in-Control occurs, the Stock Price as of such date shall be equal to the fair market value in cash, as determined by the Committee, of the total consideration paid or payable in the transaction resulting in the Transactional Change-in-Control for one share of Stock.

 

“Transactional Change-in-Control” means (a) a Change-in-Control described in clause (i)(a) of the definition thereof in the Employment Agreement, where the “person” or “group” makes a tender offer for the Stock, or (b) a Change-in-Control described in clauses (i)(C)(1) or (2) of the definition thereof in the Employment Agreement.

 

“Trigger Date” means the earliest of (a) the termination of the Executive’s employment with the Company for any reason and (b) the effective date of a Change-in-Control.

 

2.                                      Deferred Compensation Account.  The Company shall establish and maintain an individual bookkeeping account (the “Account”) to record all amounts credited to the Executive pursuant to this Agreement.  On the Initial Contribution Date and on each anniversary thereof during the Employment Period (as defined in the Employment Agreement) that occurs on or before the Trigger Date, excluding, however, any such anniversary occurring during the Extension Period (as defined in the Employment Agreement), the Company shall credit to the Account a number of Stock Units, which, when multiplied by the Stock Price on such date, has an aggregate value equal to the applicable “Contribution Amount,” where the Contribution Amount shall be (i) $550,000 on the Initial Contribution Date and (ii) $600,000 on the first and each following anniversary of the Initial Contribution Date.  For avoidance of doubt, the Company and Executive agree that from and after the Effective Date of this Agreement, the Company shall not be required to make any further contributions pursuant to the Deferred Compensation Agreement, dated as of December 18, 2009, by and between the Company and the Executive.

 

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3.                                      Vesting of Stock Units.  The Executive shall become fully vested with respect to Stock Units credited to the Account on the January 17th of the year following the year in which such Stock Units are first credited, subject in each case to the Executive’s continued employment through each applicable vesting date, but subject to accelerated vesting as set forth in the Employment Agreement.

 

Except as may be provided in the Employment Agreement, upon the termination of the Executive’s employment with the Company for any reason, all Stock Units that have not vested shall thereupon, and with no further action, be forfeited by the Executive.

 

4.                                      Payment of Deferred Compensation Amount.  The Company shall pay the Executive (or if applicable, the Executive’s beneficiary) the Deferred Compensation Amount in a lump-sum in cash on a date (the “Payment Date”) that is no later than 30 days following the earliest of (a) the Executive’s death; (b) the date of the Executive’s Separation from Service (or, to the extent necessary to maintain compliance with Section 409A of the Code, the date that is six months and one day after the date of the Executive’s Separation from Service); and (c) the effective date of a Change-in-Control, provided that any such transaction or series of transactions also constitutes a “change in the ownership” of the Company, a “change in the effective control” of the Company or a “change in ownership of a substantial portion of the assets” of the Company, each within the meaning of Section 409A of the Code and the regulations promulgated thereunder.

 

5.                                      Dividend Equivalent Rights.  If the Company pays a cash dividend on the Stock and the record date for such cash dividend occurs on or after the Initial Contribution Date and prior to the Trigger Date, then the Executive shall be entitled to a payment in cash, on a current basis, equal to the amount per share of Stock of such cash dividend multiplied by the number of Stock Units credited to the Executive’s Account, and not forfeited pursuant to Section 3 of this Agreement, as of the applicable record date for such cash dividend.

 

6.                                      Termination.  This Agreement shall automatically terminate and be of no further force and effect immediately following the payment of the Deferred Compensation Amount and all other amounts due pursuant to Section 5 of this Agreement.

 

7.                                      Transferability.  This Agreement is personal to the Executive, 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.  All payments to the Executive hereunder shall be net of any required Federal, state, and local tax withholding.

 

9.                                      Section 409A.  The parties intend that this Agreement will be administered in accordance with Section 409A of the Code.  To the extent that any provision of this Agreement is ambiguous as to its compliance with Section 409A of the Code, the provision shall be read in such a manner so that all payments hereunder comply with Section 409A of the Code.  The parties agree that this Agreement may be amended, as reasonably requested by either party, and as may be necessary to fully comply with Section 409A of the Code and all related rules and regulations in order to preserve the payments and benefits provided hereunder without additional

 

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cost to either party.  The Company makes no representation or warranty and shall have no liability to the Executive or any other person if any provisions of this Agreement are determined to constitute deferred compensation subject to Section 409A of the Code but do not satisfy an exemption from, or the conditions of, such Section.

 

10.                               Source of Payments/Unfunded Status.  The Agreement is intended to constitute an unfunded plan.  Any amount due and payable to the Executive or in respect of the Stock Units pursuant to the terms of this Agreement shall be paid solely from the general assets of the Company.  The Executive (and his beneficiary, if applicable) shall not have any interest in any specific asset as a result of this Agreement or any right to payment under the Agreement.  The Company shall not have any obligation to set aside any funds or shares of Stock for the purpose of making any benefit payments under this Agreement.  Nothing contained herein shall give the Executive (or his beneficiary, if applicable) any rights that are greater than those of a general unsecured creditor of the Company.  No action taken pursuant to the terms of this Agreement shall be construed to create a funded arrangement, a plan asset, or fiduciary relationship between the Company and the Executive (or his beneficiary, if applicable).

 

11.                               No Obligation to Continue Employment.  The Company is not obligated by or as a result of this Agreement to continue the Executive in employment and this Agreement shall not interfere in any way with the right of the Company to terminate the employment of the Executive at any time.

 

12.                               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 Executive 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.

 

13.                               Changes in Stock.  If (i) the Company or its subsidiaries shall at any time be involved in a merger, consolidation, dissolution, liquidation, reorganization, exchange of shares, sale of all or substantially all of the assets or stock of the Company or its subsidiaries or a transaction similar thereto, (ii) any stock dividend, stock split, reverse stock split, stock combination, reclassification, recapitalization or other similar change in the capital structure of the Company or its subsidiaries, or any distribution to holders of Stock other than cash dividends, shall occur or (iii) any other event shall occur which in the judgment of the Committee necessitates action by way of adjusting the terms of this Agreement, then the Committee shall take any such action as shall be necessary to maintain the Executive’s rights hereunder so that they are substantially proportionate to the rights existing prior to such event, including, without limitation, adjustments in (A) the number of Stock Units credited to the Account and (B) the Deferred Compensation Amount.

 

14.                               Counterparts.  This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

 

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

 

	
 
    	
SL GREEN REALTY CORP.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Stephen L. Green
    
	
 
    	
 
    	
Name:   Stephen L. Green
    
	
 
    	
 
    	
Title:   Chairman
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/   Marc Holliday
    
	
 
    	
Marc   HollidayExhibit 4.1

 

Form of 5.25% Senior Note due 2024

 

THIS GLOBAL NOTE IS HELD BY THE DEPOSITORY (AS DEFINED IN THE FIRST SUPPLEMENTAL INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 1.6 OF THE FIRST SUPPLEMENTAL INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 1.6 OF THE FIRST SUPPLEMENTAL INDENTURE, (3) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 401 OF THE ORIGINAL INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITORY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUER.

 

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY.  UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

 

CORPORATE OFFICE PROPERTIES, L.P. 
 5.25% SENIOR NOTES DUE 2024

 

No. 001

 

CUSIP No.:           22003B AH9

 

ISIN:      US22003BAH96

 

$250,000,000

 

Corporate Office Properties, L.P., a Delaware limited partnership (herein called the “Issuer,” which term includes any successor entity under the Indenture referred to on the reverse hereof), for value received hereby promises to pay to Cede & Co., or its registered assigns, the principal sum of TWO HUNDRED AND FIFTY MILLION DOLLARS ($250,000,000), or such lesser amount as is set forth in the Schedule of Increases or Decreases In Note on the other side of this Note, on February 15, 2024 at the office or agency of the Issuer maintained for that purpose in accordance with the terms of the Indenture, in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts, and to pay interest, semi-annually on February 15 and August 15 of each year, commencing February 15, 2014, on said principal sum at said office or agency, in like coin or currency, at the rate per annum of 5.25%, from the February 15 or August 15, as the case may be, next preceding the date of this Note to which interest has been paid or duly provided for, unless no interest has been paid or duly provided for on the Notes, in which case from September 16, 2013 until payment of said principal sum has been made or duly provided for.  The Issuer shall pay interest on any Notes in certificated form by check mailed to the address of the Person entitled thereto as it appears in the Note Register; provided, however, that a Holder of any Notes in certificated form in the aggregate principal amount of more than $2.0 million may specify by written notice to the Issuer that it pay interest by wire transfer of immediately available funds to the account specified by the Noteholder in such notice, or on any Global Note by wire transfer of immediately available funds to the account of the Depository or its nominee.

 

Reference is made to the further provisions of this Note set forth on the reverse hereof and the Indenture governing this Note.  Such further provisions shall for all purposes have the same effect as though fully set forth at this place.

 

This Note shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been signed manually or by facsimile or other electronic imaging means by the Trustee or a duly authorized authenticating agent under the Indenture.

 

 

IN WITNESS WHEREOF, the Issuer has caused this Note to be duly executed.

 

Dated:  September 16, 2013

 

	
 
    	
CORPORATE OFFICE PROPERTIES, L.P.
    
	
 
    	
 
    
	
 
    	
By:
    	
Corporate Office Properties Trust,
    
	
 
    	
 
    	
its sole general partner
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name: 
    	
Stephen E. Riffee
    
	
 
    	
 
    	
Title:
    	
Chief Financial Officer
    

 

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This is one of the Notes described in the within-named Indenture.

 

Dated:  September 16, 2013

 

	
 
    	
U.S. BANK NATIONAL ASSOCIATION,
    
	
 
    	
as Trustee
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Authorized Signatory
    

 

 

REVERSE SIDE OF NOTE

 

Corporate Office Properties, L.P.
 5.25% SENIOR NOTES DUE 2024

 

This Note is one of a duly authorized issue of Notes of the Issuer, designated as its 5.25% Senior Notes due 2024 (herein called the “Notes”), issued under and pursuant to an Indenture dated as of September 16, 2013 (herein called the “Original Indenture”), among the Issuer, the Guarantor and U.S. Bank National Association, as trustee (herein called the “Trustee”), as supplemented by the First Supplemental Indenture dated September 16, 2013 (herein called the “First Supplemental Indenture,” and together with the Original Indenture, the “Indenture”), among the Issuer, the Guarantor and the Trustee, to which Indenture and any indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Issuer, the Guarantor and the Holders of the Notes.  Defined terms used but not otherwise defined in this Note shall have the respective meanings ascribed thereto in the Indenture.

 

If an Event of Default (other than an Event of Default specified in Section 501(5), 501(6) or 501(7) of the Original Indenture with respect to the Issuer) occurs and is continuing, the principal of, premium, if any, and accrued and unpaid interest on all Notes may be declared to be due and payable by either the Trustee or the Holders of at least twenty five percent (25%) in aggregate principal amount of the Notes then outstanding, and, upon said declaration the same shall be immediately due and payable.  If an Event of Default specified in Section 501(5), 501(6) or 501(7) of the Original Indenture occurs with respect to the Issuer, the principal of and premium, if any, and interest accrued and unpaid on all the Notes shall be immediately and automatically due and payable without necessity of further action.

 

The Indenture contains provisions permitting the Issuer and the Trustee, with the consent of the Holders of not less than a majority in aggregate principal amount of the Notes at the time outstanding, to execute supplemental indentures adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture or modifying in any manner the rights of the Holders of the Notes, subject to exceptions set forth in Section 902 of the Original Indenture.  Subject to the provisions of the Indenture, the Holders of not less than a majority in aggregate principal amount of the Notes at the time outstanding may, on behalf of the Holders of all of the Notes, waive any past Default or Event of Default, subject to exceptions set forth in the Indenture.

 

No reference herein to the Indenture and no provision of this Note or of the Indenture shall impair, as among the Issuer and the Holder of the Notes, the obligation of the Issuer, which is absolute and unconditional, to pay the principal of, premium, if any, on and interest on this Note at the place, at the respective times, at the rate and in the coin or currency herein and in the Indenture prescribed.

 

Interest on the Notes shall be computed on the basis of a 360-day year of twelve 30-day months.

 

The Notes are issuable in fully registered form, without coupons, in denominations of $2,000 principal amount and any multiple of $2,000.  At the office or agency of the Issuer referred to on the face hereof, and in the manner and subject to the limitations provided in the Indenture, without payment of any service charge but with payment of a sum sufficient to cover any tax, assessment or other governmental charge that may be imposed in connection with any registration or exchange of Notes, Notes may be exchanged for a like aggregate principal amount of Notes of any other authorized denominations.

 

 

The Issuer shall have the right to redeem the Notes under certain circumstances as set forth in Section 1.4(d), Section 1.4(e) and Section 1.4(f) of the First Supplemental Indenture.

 

The Notes are not subject to redemption through the operation of any sinking fund.

 

Except as expressly provided in Article 16 of the Original Indenture, no recourse for the payment of the principal of or any premium or interest on this Note, or for any claim based hereon or otherwise in respect hereof, and no recourse under or upon any obligation, covenant or agreement of the Issuer in the Indenture or any supplemental indenture or in any Note, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, limited partner, member, manager, employee, agent, officer, director or subsidiary, as such, past, present or future, of the Guarantor, the Issuer or any of the Issuer’s Subsidiaries or of any successor thereto, either directly or through the Guarantor, the Issuer or any of the Issuer’s subsidiaries or of any successor thereto, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that all such liability is hereby expressly waived and released as a condition of, and as consideration for, the execution of the Indenture and the issue of this Note.

 

 

ASSIGNMENT FORM

 

To assign this Note, fill in the form below:

 

	
(I) or (we) assign and transfer this Note to:
    	
 
    
	
 
    	
(Insert assignee’s legal name)
    
	
 
    
	
(Insert assignee’s soc. sec. or tax I.D. no.)
    
	
 
    
	
 
    
	
 
    
	
 
    
	
(Print or type assignee’s name, address and zip code)
    

 

and irrevocably appoint                                to transfer this Note on the books of the Issuer.  The agent may substitute another to act for him.

 

	
Date:
    	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Your Signature:
    	
 
    
	
 
    	
 
    	
(Sign exactly as your name appears on the face of this Note)
    

 

	
Signature Guarantee*:
    	
 
    	
 
    	
 
    

 

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

 

 

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE *

 

The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global Note or Definitive Note for an interest in this Global Note, have been made:

 

	
Date of Exchange
    	
 
    	
Amount of
   decrease in
   Principal Amount
   at maturity of
   this Global Note
    	
 
    	
Amount of
   increase in
   Principal Amount
   at maturity of
   this Global Note
    	
 
    	
Principal Amount
   at maturity of
   this Global Note
   following such
   decrease (or
   increase)
    	
 
    	
Signature of
   authorized officer
   of Trustee or
   Custodian
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

*  This schedule should be included only if the Note is issued in global form.

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