Document:

Exhibit 10.2

 

INSMED INCORPORATED

 

SENIOR EXECUTIVE BONUS PLAN

 

(adopted by the Board of Directors on October 31, 2013)

 

1.              Purpose.

 

The purpose of the Senior Executive Bonus Plan (“Plan”) is to motivate and reward those individuals who are members of the senior executive management team of Insmed Incorporated (collectively, the “Executives”) in order to improve the performance and enterprise value of Insmed Incorporated (the “Company”) and achieve the established corporate goals of the Company. The term “Executives” shall mean those senior executives of the Company who are “officers” within the meaning of Rule 16a-1(f) promulgated under Section 16 of the Securities Exchange Act of 1934, as amended.  Under the Plan, an Executive may be awarded the opportunity to receive a performance bonus for a given fiscal year of the Company, as described in further detail in Section 3.

 

2.              The Committee.

 

The Plan shall be administered by the Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”). The Compensation Committee shall have the sole discretion and authority to administer and interpret the Plan as appropriate and the decisions of the Compensation Committee shall in every case be final and binding on all persons having an interest in the Plan.  As part of that authority, the Compensation Committee shall designate those members of the senior executive management team who are classified as “Executives” and therefore who are eligible to participate in the Plan, which designation may be changed from time to time.  Notwithstanding the foregoing, the Board of Directors of the Company (the “Board”) shall have the final authority to determine the terms under which the Company’s Chief Executive Officer shall participate in the Plan and references to the “Compensation Committee” shall mean the Board to the extent that the Board exercises this authority.

 

3.              Performance Bonus Amounts.

 

For each fiscal year, the performance bonus amount payable to each Executive under this Section 3 shall be expressed in terms of a target bonus, which shall be based on target goals for one or more of the performance criteria listed below and the extent to which such target goals are achieved. The Compensation Committee shall, for each fiscal year, select the target bonus amount for each Executive  (expressed as a percentage of base salary), the performance criteria, the respective target goals for the selected performance criteria, and the bonus amounts payable depending upon if and the extent to which such targets are achieved, in accordance with the following terms:

 

(i)             The relevant performance criteria may be selected from one or more of the following: (a) stock price appreciation, (b) gross or net sales or revenue, (c) operating profit, (d) gross, operating or net earnings (either before or after one or more of the following: (A) interest, (B) taxes, (C) depreciation and (D) amortization); (e) costs, (f) return on equity, (g) return on assets, (h) earnings per share, (i) total earnings, (j) earnings growth, (k) return on capital, (l) return on assets, (m) return on sales, (n) cash flow

 

 

(including, but not limited to, operating cash flow and free cash flow), (o) book value per share, (p) market share, (q) economic value added, (r) market value added, (s) productivity, (t) level of expenses, (u) new product development, (v) regulatory body filings and/or approvals regarding commercialization of a product, (w) implementation or completion of critical projects, (x) achievement of developmental milestones, or (y) peer group comparisons of any of the foregoing, any of which may be measured either in absolute terms or as compared to any incremental increase or decrease or as compared to results of a peer group or to market performance indicators or indices.  The Compensation Committee shall also have the authority to establish one or more performance criteria that are not listed above.

 

(ii)          As determined by the Compensation Committee, any given performance criterion may be measured over all or part of the fiscal year. If for a fiscal year the Compensation Committee determines to use only performance criteria measurable over the entire fiscal year, then it must identify in writing within ninety (90) days after the beginning of the fiscal year the target bonus, the selected performance criteria and the target goals. If for any fiscal year the Compensation Committee determines to use at least one performance criterion to be measured over less than the entire fiscal year, then the performance bonus for the fiscal year shall be the bonus calculated for such short performance period or, if more than one performance period per fiscal year is involved, then the sum of the bonuses calculated separately for each short performance period ending with or within the fiscal year. In that case, on or before the date which represents 25 percent of the total number of days in such short performance period, the Compensation Committee shall identify in writing the target bonus, the selected performance criteria and the target goals applicable to such period.

 

(iii)       The Compensation Committee may, in its sole discretion, provide that that any evaluation of performance under a performance criterion shall include or exclude any or all of the following events that may occur during the performance period: (a) the effects of charges for restructurings, discontinued operations, and/or extraordinary items, (b) items of gain, loss or expense determined to be extraordinary or unusual in nature or related to the disposal of a segment of a business or related to a change in accounting principle, (c) the cumulative effect of accounting changes, (d) asset write-downs, (e) litigation, claims, judgments, settlements or loss contingencies, (f) the effect of changes in tax law, accounting principles or other such laws or provisions affecting reported results, (g) accruals for reorganization and restructuring programs, (h) accruals of any amounts for payment under this Plan or any other compensation arrangement maintained by the Company, (i) items relating to financing activities, (j) items related to acquisitions, (k) items attributable to the business operations of any entity acquired by the Company during the performance period, (l) items related to amortization of acquired intangible assets, (m) items that are outside the scope of the Company’s core, on-going business activities, or (n) any other items of significant income or expense which are determined to be appropriate adjustments.

 

(iv)      The Compensation Committee may in its discretion direct that a performance bonus otherwise payable to any Executive be increased or reduced above or below the

 

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amount as calculated in accordance with the preceding terms, based on individual performance or such other factors as it deems appropriate.

 

4.              Payment of Bonuses.

 

The bonus or bonuses for a fiscal year (including all short performance periods ending with or within such year) shall be paid as soon as practicable following the determination of such bonuses following the end of such year or short performance period, as the case may be. No performance bonus under Section 3 hereof shall be paid until the Compensation Committee determines the extent to which the performance criteria and target goals have been satisfied and any further adjustments to one or more performance bonuses that the Compensation Committee may wish to make. Further, unless otherwise provided in a written agreement with an Executive or otherwise determined by the Compensation Committee in its sole discretion, an Executive must be employed by the Company on the date that bonus payments are made for a fiscal year or short performance period, as the case may be. If an Executive would otherwise be entitled to payment of a performance bonus under Section 3 hereof, but was not employed by the Company for the entire fiscal year or short performance period, as the case may be, he or she may, in the sole discretion of the Compensation Committee, receive a prorated portion of the bonus amount payable as though he or she were employed for the entire year determined as follows: (i) if the performance period for such bonus is the entire fiscal year, the full year bonus amount shall be multiplied by a fraction, the numerator of which is the number of days the Executive was employed by the Company during the fiscal year and the denominator of which is the number of days in the entire fiscal year; or (ii) if the bonus for the fiscal year represents the bonus or sum of bonuses computed separately for each short period within the fiscal year, then the bonus otherwise payable for each short period shall be multiplied by a fraction, the numerator of which is the number of days the Executive was employed by the Company during such short period and the denominator of which is the total number of days in such short period.  The Company shall withhold all applicable federal, state, local and foreign taxes required by law to be paid or withheld relating to the receipt or payment of any performance bonus.

 

5.              Amendment and Termination.

 

The Board or the Compensation Committee may terminate the Plan at any time, for any and no reason.  The Board or the Compensation Committee may also amend the Plan in any manner and at any time, for any or no reason, including an amendment that has or may have the result of reducing the amount of the performance bonus for one or more Executives.

 

6.              Recoupment Policy.

 

Subject to the terms and conditions of the Plan, the Compensation Committee may provide that any Executive and/or any bonus awarded under the Plan, is subject to any recovery, recoupment, clawback and/or other forfeiture policy maintained by the Company from time to time.

 

7.                                      General.

 

(i)                                     The Plan is adopted by the Board effective as of October 31, 2013.

 

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(ii)                                  Any rights of an Executive under the Plan shall not be assignable by such Executive, by operation of law or otherwise, except by will or the laws of descent and distribution.  No Executive may create a lien on any funds or rights to which he or she may have an interest under the Plan, or which is held by the Company for the benefit of the Executive under the Plan.

 

(iii)                               Participation in the Plan shall not give any Executive any right to remain in the Company’s employ. Further, the adoption of the Plan shall not be deemed to give any Executive or other individual the right to be selected to participate in the Plan in the future or limit the right of the Compensation Committee to decide, in its sole discretion, to cause an Executive’s participation in the Plan to cease at any time.

 

(iv)                              To the extent any person acquires a right to receive payments from the Company under the Plan, such rights shall be no greater than the rights of an unsecured creditor of the Company.

 

(v)                                 The Plan shall be governed by and construed in accordance with the laws of the State of New Jersey, without regard to its provisions regarding conflicts of laws.

 

(vi)                              If any one or more of the provisions contained in the Plan, or any application thereof, shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and all other applications thereof shall not in any way be affected or impaired thereby. The Plan shall be construed and enforced as if such invalid, illegal or unenforceable provision has never comprised a part hereof, and the remaining provisions hereof shall remain in full force and effect and shall not be affected by the invalid, illegal or unenforceable provision or by its severance herefrom. In lieu of such invalid, illegal or unenforceable provisions there shall be added automatically as a part hereof a provision as similar in terms and economic effect to such invalid, illegal or unenforceable provision as may be possible and be valid, legal and enforceable.

 

(vii)                           The adoption of the Plan by the Board shall not be construed as creating any limitations on the power of the Board or the Compensation Committee to adopt such other incentive arrangements as it may deem desirable.

 

(viii)                        The Plan as designed is not intended to comply with the requirements of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), but nothing in the Plan shall limit the authority of the Compensation Committee to take such actions as it may determine to take in order to permit performance bonuses under the Plan to satisfy all of the requirements applicable to “performance-based compensation” under Section 162(m) of the Code.

 

(viii)                        To the extent applicable, it is intended that the Plan and performance bonuses paid hereunder comply with the requirements of Section 409A of the Code and any related regulations or other guidance promulgated with respect to such Section by the U.S. Department of the Treasury or the Internal Revenue Service (“Section 409A”).  Any provision that would cause the Plan or any right granted hereunder to fail to satisfy Section 409A shall have no force or effect until amended to comply with Section 409A, which amendment may be retroactive to the extent permitted by Section 409A.

 

END OF PLAN DOCUMENT

 

4Exhibit 10.4

 

HOSPITALITY PROPERTIES TRUST

 

RESTRICTED SHARE AGREEMENT

 

This Restricted Share Agreement (this “Agreement”) is made as of «DATE», «YEAR», between «NAME» (the “Recipient”) and Hospitality Properties Trust (the “Company”).

 

In consideration of the mutual promises and covenants contained in this Agreement, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.                                      Grant of Shares.  Subject to the terms and conditions hereinafter set forth and the terms and conditions of the Hospitality Properties Trust 2012 Equity Compensation Plan, as it may be amended from time to time (the “Plan”), the Company hereby grants to the Recipient, effective as of the date of this Agreement, «NUMBER OF SHARES» of its common shares of beneficial interest, par value $.01 per share.  The shares so granted are hereinafter referred to as the “Shares,” which term shall also include any shares of the Company issued to the Recipient by virtue of his or her ownership of the Shares, by share dividend, share split, recapitalization or otherwise.

 

2.                                      Vesting; Repurchase of Shares.

 

(a)                                 Subject to Sections 2(b) and 2(c) hereof, the Shares shall vest one-fifth of the total number of Shares as of the date hereof and as to a further one-fifth of such total number of Shares on each anniversary of the date hereof for the next four calendar years.  Any Shares not vested as of any date are herein referred to as “Unvested Shares.”

 

(b)                                 Subject to Section 2(c) hereof, at the option of the Company, in the event the Recipient ceases to render significant services, whether as an employee or otherwise, to (i) the Company, (ii) the entity which is the manager or shared services provider to the Company or an entity controlled by, under common control with or controlling such entity (collectively, the “Manager”), or (iii) an affiliate of the Company (which shall be deemed for such purpose to include any other entity to which the Manager is the manager or shared services provider), all or any portion of the Unvested Shares shall be forfeited by the Recipient as of the date the Recipient ceases to render such services.  The Company may exercise such option by delivering or mailing to the Recipient (or his or her estate), at any time after the Recipient has ceased to render such services, a written notice of exercise of such option.  Such notice shall specify the number of Unvested Shares to be forfeited.

 

(c)                                  Notwithstanding anything in this Agreement to the contrary, immediately upon the occurrence of an Acceleration Event (as defined below), all of the Unvested Shares shall vest and any forfeiture or other rights of the Company described in Section 2(b) shall lapse in their entirety, and such vesting and lapse of forfeiture or other Company rights shall also immediately apply to each other common share of beneficial interest, par value $.01 per share, of the Company previously granted to the Recipient which then remains subject to comparable restrictions and rights.  For purposes of this Section 2(c), an Acceleration Event shall be deemed to occur immediately upon the

 

 

occurrence of any of the following events: a Change in Control, a Termination Event (as each such term is defined in Exhibit A hereto) or the death of the Recipient.

 

3.                                      Legends.  Share certificates, if any, evidencing the Shares shall prominently bear legends in substantially the following terms:

 

“THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED PURSUANT TO AN EQUITY COMPENSATION PLAN MAINTAINED BY THE TRUST.  THESE SHARES MAY BE SUBJECT TO TRANSFER AND/OR VESTING RESTRICTIONS, AND UNVESTED SHARES ARE SUBJECT TO REPURCHASE RIGHTS AND FORFEITURE CONDITIONS CONTAINED IN THE PLAN, THE RELATED GRANT OF SHARES OR AN AGREEMENT BETWEEN THE TRUST AND THE INITIAL HOLDER OF THESE SHARES.  A COPY OF APPLICABLE RESTRICTIONS, REPURCHASE RIGHTS AND FORFEITURE CONDITIONS WILL BE FURNISHED TO THE HOLDER OF THIS CERTIFICATE WITHOUT CHARGE UPON REQUEST TO THE SECRETARY OF THE TRUST.”

 

In the event that the Shares are not evidenced by share certificates, the share books and records of the Company shall contain a notation in substantially the following terms:

 

“THE SHARES COVERED BY THIS STATEMENT WERE ISSUED PURSUANT TO AN EQUITY COMPENSATION PLAN MAINTAINED BY THE TRUST.  THESE SHARES MAY BE SUBJECT TO TRANSFER AND/OR VESTING RESTRICTIONS, AND UNVESTED SHARES ARE SUBJECT TO REPURCHASE RIGHTS AND FORFEITURE CONDITIONS CONTAINED IN THE PLAN, THE RELATED GRANT OF SHARES OR AN AGREEMENT BETWEEN THE TRUST AND THE INITIAL HOLDER OF THESE SHARES.  A COPY OF APPLICABLE RESTRICTIONS, REPURCHASE RIGHTS AND FORFEITURE CONDITIONS WILL BE FURNISHED TO THE HOLDER OF THE SHARES COVERED BY THIS STATEMENT WITHOUT CHARGE UPON REQUEST TO THE SECRETARY OF THE TRUST.”

 

Certificates evidencing Shares and Shares not evidenced by certificates shall also bear or contain, as applicable, legends and notations as may be required by the Plan or the Company’s declaration of trust, any applicable supplement thereto or bylaws, each as in effect from time to time, or as the Company may otherwise determine appropriate.

 

Promptly following the request of the Recipient with respect to any Shares (or any other common share of beneficial interest, par value $.01 per share, of the Company previously granted to the Recipient) which have become vested, the Company shall take, at its sole cost and expense, all such actions as may be required to permit the Recipient to resell such shares including, without limitation, providing to the Company’s transfer agent certificates of officers of the Company, and opinions of counsel and/or filing an appropriate registration statement, and taking all such other actions as may be required to remove the legends set forth above with respect to transfer and vesting restrictions from the certificates evidencing such shares and, if applicable, from the share books and records of the Company.  The Company shall reimburse the

 

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Recipient, promptly upon the receipt of a request for payment, for all expenses (including legal expenses) reasonably incurred by the Recipient in connection with the enforcement of the Recipient’s rights under this paragraph.

 

4.                                      Tax Withholding.  To the extent required by law, the Company shall withhold or cause to be withheld income and other taxes incurred by the Recipient by reason of a grant of Shares, and the Recipient agrees that he or she shall upon request of the Company pay to the Company an amount sufficient to satisfy its tax withholding obligations from time to time (including as Shares become vested) as the Company may request.

 

5.                                      Miscellaneous.

 

(a)                                 Amendments.  Neither this Agreement nor any provision hereof may be changed or modified except by an agreement in writing executed by the Recipient and the Company; provided, however, that any change or modification that does not adversely affect the rights hereunder of the Recipient, as they may exist immediately prior to the effective date of such change or modification, may be adopted by the Company without an agreement in writing executed by the Recipient, and the Company shall give the Recipient written notice of such change or modification reasonably promptly following the adoption of such change or modification.

 

(b)                                 Binding Effect of the Agreement.  This Agreement shall inure to the benefit of, and be binding upon , the Company, the Recipient and their respective estates, heirs, executors, transferees, successors, assigns and legal representatives.

 

(c)                                  Provisions Separable.  In the event that any of the terms of this Agreement shall be or become or is declared to be illegal or unenforceable by any court or other authority of competent jurisdiction, such terms shall be null and void and shall be deemed deleted from this Agreement, and all the remaining terms of this Agreement shall remain in full force and effect.

 

(d)                                 Notices.  Any notice in connection with this Agreement shall be deemed to have been properly delivered if it is in writing and is delivered by hand or by facsimile or sent by registered certified mail, postage prepaid, to the party addressed as follows, unless another address has been substituted by notice so given:

 

	
To the Recipient:
    	
To   the Recipient’s address as set forth on the signature page hereof.
    
	
 
    	
 
    
	
To the Company:
    	
Hospitality   Properties Trust
    
	
 
    	
Two   Newton Place
    
	
 
    	
255   Washington Street, Suite 300
    
	
 
    	
Newton,   MA 02458
    
	
 
    	
Attn: Secretary
    

 

(e)                                  Construction.  The headings and subheadings of this Agreement have been inserted for convenience only, and shall not affect the construction of the provisions hereof.  All

 

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references to sections of this Agreement shall be deemed to refer as well to all subsections which form a part of such section.

 

(f)                                   Employment Agreement.  This Agreement shall not be construed as an agreement by the Company, the Manager or any affiliate of the Company or the Manager to employ the Recipient, nor is the Company, the Manager or any affiliate of the Company or the Manager obligated to continue employing the Recipient by reason of this Agreement or the grant of Shares to the Recipient hereunder.

 

(g)                                  Applicable Law.  This Agreement shall be construed and enforced in accordance with the laws of The Commonwealth of Massachusetts.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement, or caused this Agreement to be executed under seal, as of the date first above written.

 

 

	
 
    	
HOSPITALITY   PROPERTIES TRUST
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
RECIPIENT:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
«NAME»
    
	
 
    	
«ADDRESS»
    
	
 
    	
«CITY», «ST» «ZIP»
    

 

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Exhibit A

 

A “Change in Control” shall be deemed to have occurred if any of the events set forth in any one of the following paragraphs shall have occurred:

 

(a)                                 any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing 50% or more of either the then outstanding common shares of the Company or the combined voting power of the Company’s then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in paragraph (c)(i) below;

 

(b)                                 the following individuals cease for any reason to constitute a majority of the number of Trustees then serving: individuals who, on the date of the Agreement, constitute the Board and any new Trustee (other than a Trustee whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of Trustees) whose appointment or election by the Board or nomination for election by the Company’s shareholders was approved or recommended by a vote of at least two-thirds (2/3) of the Trustees then in office who either were Trustees on the date of the Agreement or whose appointment, election or nomination for election was previously so approved or recommended;

 

(c)                                  there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other entity, other than (i) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least 50% of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (ii) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company or its Affiliates) representing 50% or more of the combined voting power of the Company’s then outstanding securities; or

 

(d)                                 the shareholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, at least 50% of the combined voting power of the voting securities of which are owned by shareholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale.

 

A “Termination Event” shall occur if Reit Management & Research LLC (or any entity controlled by, under common control with or controlling Reit Management & Research LLC) ceases to be the manager or shared services provider to the Company.

 

 

For purposes of the definitions set forth on this Exhibit A, the following definitions shall apply, with capitalized terms used but not defined in this Exhibit A having the meaning set forth in the Plan:

 

“Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act.

 

“Agreement” shall mean the Restricted Share Agreement to which this Exhibit A is attached.

 

“Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the Exchange Act.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 

“Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities and (iv) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of shares of the Company.

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