Document:

Exhibit 4.3

 

Execution Copy

 

NABORS INDUSTRIES, INC.

 

$350,000,000 5.100% Senior Notes due 2023

 

REGISTRATION RIGHTS AGREEMENT

 

New York, New York

September 12, 2013

 

CITIGROUP GLOBAL MARKETS INC.

388 Greenwich Street

New York, New York 10013

 

HSBC SECURITIES (USA) INC.

452 Fifth Avenue

New York, New York 10018

 

MIZUHO SECURITIES USA INC.

320 Park Avenue, 12th floor

New York, New York 10022

 

As Representatives of the Initial

Purchasers named in Schedule A

hereto

 

Ladies and Gentlemen:

 

Nabors Industries, Inc., a corporation organized under the laws of the State of Delaware (the “Company”), proposes to issue and sell to the several initial purchasers named in Schedule A hereto (the “Initial Purchasers”), upon the terms set forth in a purchase agreement, dated September 4, 2013 (the “Purchase Agreement”), $350,000,000 aggregate principal amount of its 5.100% Senior Notes due 2023 (the “Notes”) relating to the initial placement of the Notes (the “Initial Placement”).  The Notes will be unconditionally guaranteed (the “Guarantee” and together with the Notes, the “Securities”) on a senior basis by Nabors Industries Ltd., a Bermuda company (the “Guarantor”).  To satisfy a condition to the obligations of the Initial Purchasers under the Purchase Agreement, the Company and the Guarantor agree with the Initial Purchasers for the benefit of the holders from time to time of the Securities (including the Initial Purchasers) and the New Securities (as defined herein) (each a “Holder” and, together, the “Holders”), as follows:

 

1.                                      Definitions.  Capitalized terms used herein without definition shall have their respective meanings set forth in the Purchase Agreement.  As used in this Registration Rights Agreement (this “Agreement”), the following capitalized defined terms shall have the following meanings:

 

 

“Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.

 

“Affiliate” of any specified Person shall have the same meaning as in Rule 501(b) of Regulation D of the Act.

 

“Agreement” shall have the meaning set forth in this Section 1 hereof.

 

“Broker-Dealer” shall mean any broker or dealer registered as such under the Exchange Act.

 

“Business Day” shall mean any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions or trust companies are authorized or obligated by law to close in New York City.

 

“Closing Date” shall mean the date on which the Securities are initially issued.

 

“Commission” shall mean the Securities and Exchange Commission.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder.

 

“Exchange Offer Registration Period” shall mean the 180-day period following the effective date of the Exchange Offer Registration Statement, exclusive of any period during which any stop order shall be in effect suspending the effectiveness of the Exchange Offer Registration Statement, or such shorter period as will terminate when (i) all New Securities held by Exchanging Dealers or Initial Purchasers have been sold pursuant thereto or (ii) Exchanging Dealers are no longer required to deliver a Prospectus in connection with market-making or other trading activities, whichever occurs first.

 

“Exchange Offer Registration Statement” shall mean a registration statement of the Company and the Guarantor on an appropriate form under the Act with respect to the Registered Exchange Offer, all amendments and supplements to such registration statement, including post-effective amendments thereto, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein.

 

“Exchanging Dealer” shall mean any Holder (which may include any of the Initial Purchasers) that is a Broker-Dealer and elects to exchange for New Securities any Securities that it acquired for its own account as a result of market-making activities or other trading activities (but not directly from the Company or any Affiliate of the Company).

 

“Free Writing Prospectus” shall mean each free writing prospectus (as defined in Rule 405 under the Act) prepared by or on behalf of the Company (or any of its agents or representatives) or used or referred to by the Company (or any of its agents or representatives) in connection with the sale of the Securities or the New Securities.

 

“Holder” shall have the meaning set forth in the preamble hereto.

 

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“Indenture” shall mean the Indenture relating to the Securities, dated as of September 12, 2013, among the Company, the Guarantor, Wilmington Trust, National Association, as trustee, and Citibank, N.A., as securities administrator, as the same may be amended from time to time in accordance with the terms thereof.

 

“Initial Placement” shall have the meaning set forth in the preamble hereto.

 

“Initial Purchasers” shall have the meaning set forth in the preamble hereto.

 

“Losses” shall have the meaning set forth in Section 7(a) hereof.

 

“Majority Holders” shall mean the Holders of a majority of the aggregate principal amount of Notes and/or New Notes, as applicable, registered under a Registration Statement.

 

“Managing Underwriters” shall mean the investment banker or investment bankers and manager or managers that shall administer an underwritten offering.

 

“Memorandum” shall have the meaning set forth in the Purchase Agreement.

 

“New Notes” shall mean debt securities of the Company, guaranteed by the Guarantor, identical in all material respects to the Notes (except that the Special Interest provisions and the transfer restrictions shall be modified or eliminated, as appropriate) and to be issued under the Indenture or the New Securities Indenture.

 

“New Securities” shall mean debt securities of the Company and the Related Guarantees of the Guarantor, identical in all material respects to the Securities (except that the Special Interest provisions and the transfer restrictions shall be modified or eliminated, as appropriate) and to be issued under the Indenture or the New Securities Indenture.

 

“New Securities Indenture” shall mean an indenture among the Company, the Guarantor and the New Securities Trustee, identical in all material respects to the Indenture (except that Special Interest provisions will be eliminated).

 

“New Securities Trustee” shall mean a bank or trust company reasonably satisfactory to the Initial Purchasers, as trustee with respect to the New Securities under the New Securities Indenture.

 

“Prospectus” shall mean the prospectus included in any Registration Statement (including, without limitation, a prospectus that discloses information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A under the Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Securities or the New Securities covered by such Registration Statement, and all amendments and supplements thereto and all material incorporated by reference therein.

 

“Purchase Agreement” shall have the meaning set forth in the preamble hereto.

 

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“Registered Exchange Offer” shall mean the proposed offer by the Company to issue and deliver to the Holders of Securities that are not prohibited by any law or policy of the Commission from participating in such offer, in exchange for such Securities, a like aggregate principal amount of the New Notes and Related Guarantees.

 

“Registration Default” shall have the meaning set forth in Section 4.

 

“Registration Statement” shall mean any Exchange Offer Registration Statement or Shelf Registration Statement that covers any of the Securities or the New Securities pursuant to the provisions of this Agreement, any amendments and supplements to such registration statement, including post-effective amendments (in each case including the Prospectus contained therein), all exhibits thereto and all material incorporated by reference therein.

 

“Related Guarantees” shall mean the guarantees of the Guarantor to be issued under the Indenture or the New Securities Indenture in respect of New Notes.

 

“Securities” shall have the meaning set forth in the preamble hereto.

 

“Shelf Registration” shall mean a registration effected pursuant to Section 3 hereof.

 

“Shelf Registration Period” has the meaning set forth in Section 3(b) hereof.

 

“Shelf Registration Statement” shall mean a “shelf” registration statement of the Company and the Guarantor on an appropriate form pursuant to the provisions of Section 3 hereof which covers some or all of the Securities and/or New Securities, as applicable, providing for sales of such Securities or New Securities, as applicable, on a delayed on continuous basis pursuant to Rule 415 under the Act, or any similar rule that may be adopted by the Commission, amendments and supplements to such registration statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein.

 

“Special Interest” shall have the meaning set forth in Section 4 hereof.

 

“Trust Indenture Act” shall mean the Trust Indenture Act of 1939, as amended, and the rules and regulations of the Commission promulgated thereunder and any successor act, rules and regulations.

 

“Trustee” shall mean the trustee with respect to the Securities and New Securities under the Indenture.

 

“Underwriter” shall mean any underwriter of Securities or New Securities in connection with an offering thereof under a Registration Statement.

 

2.                                      Registered Exchange Offer.

 

(a)         Except as set forth in Section 3 below, the Company and the Guarantor shall prepare, at their cost, and shall file with the Commission the Exchange Offer

 

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Registration Statement with respect to the Registered Exchange Offer.  The Company and the Guarantor shall use their reasonable best efforts to cause the Exchange Offer Registration Statement to become effective under the Act not later than May 12, 2014.

 

(b)         Upon the effectiveness of the Exchange Offer Registration Statement, the Company and the Guarantor shall promptly commence the Registered Exchange Offer.

 

(c)          In connection with the Registered Exchange Offer, the Company and the Guarantor shall:

 

(i)                                     mail or otherwise furnish in accordance with Commission rules to each Holder a copy of the Prospectus forming part of the Exchange Offer Registration Statement, together with an appropriate letter of transmittal and related documents;

 

(ii)                                  commence and use their reasonable best efforts to complete the Registered Exchange Offer promptly, but no later than June 9, 2014, and hold the Registered Exchange Offer open for not less than 20 Business Days;

 

(iii)                               use their reasonable best efforts to keep the Exchange Offer Registration Statement continuously effective under the Act, supplemented and amended as required under the Act to ensure that it is available for sales of New Securities by Exchanging Dealers or the Initial Purchasers during the Exchange Offer Registration Period;

 

(iv)                              utilize the services of a depositary for the Registered Exchange Offer, which may be the Trustee, the New Securities Trustee or an Affiliate of either of them;

 

(v)                                 permit Holders to withdraw tendered Securities at any time prior to the close of business, New York time, on the last Business Day on which the Registered Exchange Offer is open; and

 

(vi)                              comply in all material respects with all applicable laws.

 

(d)         As soon as practicable after the close of the Registered Exchange Offer, the Company and the Guarantor shall:

 

(i)                                     accept for exchange all Notes tendered and not validly withdrawn pursuant to the Registered Exchange Offer;

 

(ii)                                  deliver to the Trustee for cancellation in accordance with Section 5(r) all Notes so accepted for exchange; and

 

(iii)                               cause the Trustee or New Securities Trustee, as the case may be, promptly to authenticate and deliver to each Holder of Securities a

 

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principal amount of New Notes equal to the principal amount of the Notes of such Holder so accepted for exchange.

 

(e)          Each Holder hereby acknowledges and agrees that any Broker-Dealer and any such Holder using the Registered Exchange Offer to participate in a distribution of the New Securities (x) could not under Commission policy as in effect on the date of this Agreement rely on the position of the Commission in Morgan Stanley and Co., Inc. (pub. avail. June 5, 1991) and Exxon Capital Holdings Corporation (pub. avail. May 13, 1988), as interpreted in the Commission’s letter to Shearman & Sterling dated July 2, 1993 and similar no-action letters; and (y) must comply with the registration and prospectus delivery requirements of the Act in connection with any secondary resale transaction which must be covered by an effective registration statement containing the selling security holder information required by Item 507 or 508, as applicable, of Regulation S-K under the Act if the resales are of New Securities obtained by such Holder in exchange for Securities acquired by such Holder directly from the Company or one of its Affiliates.  Accordingly, each Holder participating in the Registered Exchange Offer shall be required to represent to the Company and the Guarantor that, at the time of the consummation of the Registered Exchange Offer:

 

(i)                                     any New Securities received by such Holder will be acquired in the ordinary course of business;

 

(ii)                                  such Holder will have no arrangement or understanding with any Person to participate in the distribution of the Securities or the New Securities within the meaning of the Act;

 

(iii)                               such Holder is not an Affiliate of the Company or the Guarantor or if it is an Affiliate, such Holder will comply with the registration and prospectus delivery requirements of the Act to the extent applicable;

 

(iv)                              if such Holder is not a Broker-Dealer, that it is not engaged in, and does not intend to engage in, the distribution of the New Securities; and

 

(v)                                 if such Holder is a Broker-Dealer, that it will receive New Securities for its own account in exchange for Securities that were acquired as a result of market-making activities or other trading activities and that it will deliver a prospectus in connection with any resale of such New Securities.

 

3.                                      Shelf Registration.

 

(a)         If (i) due to any change in law or applicable interpretations thereof by the Commission’s staff, the Company determines upon advice of its outside counsel that it is not permitted to effect the Registered Exchange Offer as contemplated by Section 2 hereof; (ii) for any other reason the Exchange Offer Registration Statement is not declared effective by May 12, 2014 or the Registered Exchange Offer is not consummated by June 9, 2014; (iii) the Initial Purchasers determine upon advice of their counsel that a Shelf Registration Statement must be filed in connection with any public offering or sale of Securities that are not eligible to be exchanged for New Securities in

 

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the Registered Exchange Offer and that are held by them following consummation of the Registered Exchange Offer; or (iv) any Holder (other than the Initial Purchasers) is not eligible to participate in the Registered Exchange Offer or does not receive freely tradeable New Securities in the Registered Exchange Offer other than by reason of such Holder being an Affiliate of the Company (it being understood that the requirement that a participating Broker-Dealer deliver the prospectus contained in the Exchange Offer Registration Statement in connection with sales of New Securities shall not result in such New Securities being not “freely tradeable”), the Company and the Guarantor shall effect a Shelf Registration Statement in accordance with subsection (b) below.

 

(b)         If required pursuant to subsection (a) above,

 

(i)                                     the Company and the Guarantor, at their cost, shall as promptly as practicable, but in no event later than 90 days after such obligation to file arises, file with the Commission and use their reasonable best efforts to cause to become effective under the Act as soon as practicable, but in no event later than 120 days after the obligation to file the Shelf Registration Statement arises, a Shelf Registration Statement relating to the offer and sale of the Securities or the New Securities, as applicable, by the Holders thereof from time to time in accordance with the methods of distribution elected by such Holders and set forth in such Shelf Registration Statement; provided, however, that no Holder (other than the Initial Purchasers) shall be entitled to have the Securities or New Securities held by it covered by such Shelf Registration Statement unless such Holder agrees in writing to be bound by all of the provisions of this Agreement applicable to such Holder; and provided further, that with respect to New Securities received by the Initial Purchasers in exchange for Securities constituting any portion of an unsold allotment, the Company and the Guarantor may, if permitted by current interpretations by the Commission’s staff, file a post-effective amendment to the Exchange Offer Registration Statement containing the information required by Item 507 or 508 of Regulation S-K, as applicable, in satisfaction of their obligations under this subsection with respect thereto, and any such Exchange Offer Registration Statement, as so amended, shall be referred to herein as, and governed by the provisions herein applicable to, a Shelf Registration Statement;

 

(ii)                                  the Company and the Guarantor shall use their reasonable best efforts to keep the Shelf Registration Statement continuously effective, supplemented and amended as required by the Act, in order to permit the Prospectus forming part thereof to be usable by Holders until the earliest of (A) the time when all of the Securities or New Securities, as applicable, covered by the Shelf Registration Statement can be sold pursuant to Rule 144 without limitation by non-affiliates of the Company under clause (d) of Rule 144, (B) the date on which all the Securities or New Securities, as applicable, covered by the Shelf Registration Statement have been sold pursuant to the Shelf Registration Statement, and (C) one year from the date the Shelf Registration Statement is declared effective by the Commission  (in any such case, such period being called the “Shelf Registration Period”); it being understood that the Company and the

 

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Guarantor shall be deemed not to have used their reasonable best efforts to keep the Shelf Registration Statement effective during the requisite period if they voluntarily take any action that would result in Holders of Securities or New Securities covered thereby not being able to offer and sell such Securities or New Securities during that period, unless (A) such action is required by applicable law; or (B) such action is taken by the Company and the Guarantor in good faith and for valid business reasons (not including avoidance of the Company’s and the Guarantor’ obligations hereunder), including, but not limited to, the acquisition or divestiture of assets, so long as the Company and the Guarantor promptly thereafter comply with the requirements of Section 5(k) hereof, if applicable; and

 

(iii)                               the Company and the Guarantor shall cause the Shelf Registration Statement and the related Prospectus and any amendment or supplement thereto, as of the effective date of the Shelf Registration Statement or such amendment or supplement, (A) to comply in all material respects with the applicable requirements of the Act and the rules and regulations of the Commission; and (B) not to contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

4.                                      Special Interest.  If (x) any Registration Statement required to be filed pursuant to Section 2 or 3 of this Agreement is not declared effective within the timeframe required by this Agreement, (y) the Registered Exchange Offer is not completed by June 9, 2014 or (z) after either the Exchange Offer Registration Statement or the Shelf Registration Statement has become effective, such Registration Statement thereafter ceases to be effective or usable in connection with resales of Securities or New Securities in accordance with and during the periods specified in this Agreement (each such event referred to in clauses (a) and (b), a “Registration Default”), then, as liquidated damages, interest (“Special Interest”) will accrue on the principal amount of the Securities and the New Securities (in addition to the stated interest on the Securities and New Securities) from and including the date on which any such Registration Default shall occur to but excluding the date on which all Registration Defaults have been cured.  Special Interest will accrue at a rate of 0.25% per annum.

 

All obligations of the Company and the Guarantor set forth in the preceding paragraph that are outstanding with respect to any Security at the time such Security is exchanged for a New Security shall survive until such time as all such obligations with respect to such Security have been satisfied in full.

 

5.                                      Additional Registration Procedures.  In connection with any Shelf Registration Statement and, to the extent applicable, any Exchange Offer Registration Statement, the following provisions shall apply.

 

(a)         The Company and the Guarantor shall:

 

(i)                                     furnish to the Initial Purchasers, not less than five Business Days prior to the filing thereof with the Commission, a draft copy of any

 

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Exchange Offer Registration Statement and any Shelf Registration Statement, and each amendment thereof and each amendment or supplement, if any, to the Prospectus included therein (including all documents incorporated by reference therein after the initial filing) and shall use their reasonable best efforts to reflect in each such document, when so filed with the Commission, such comments as the Initial Purchasers reasonably propose;

 

(ii)                                  include the information to the effect of that set forth in:

 

(A)                               Annex A and Annex B hereto in the forepart of the Prospectus contained in the Exchange Offer Registration Statement,

 

(B)                               Annex C hereto in the underwriting or plan of distribution section of the Prospectus contained in the Exchange Offer Registration Statement, and

 

(C)                               Annex D hereto in the letter of transmittal delivered pursuant to the Registered Exchange Offer;

 

(iii)                               if requested by the Initial Purchasers, include the information required by Item 507 or 508 of Regulation S-K, as applicable, in the Prospectus contained in the Exchange Offer Registration Statement; and

 

(iv)                              in the case of a Shelf Registration Statement, include the names of the Holders that propose to sell Securities or New Securities, as applicable, pursuant to the Shelf Registration Statement as selling security holders.

 

(b)         The Company and the Guarantor shall ensure that:

 

(i)                                     any Registration Statement and any amendment thereto and any Prospectus forming part thereof and any amendment or supplement thereto complies in all material respects with the Act and the rules and regulations thereunder; and

 

(ii)                                  any Registration Statement and any amendment thereto does not, when it becomes effective (within the meaning of Rule 430B under the Act), contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.

 

(c)          The Company and the Guarantor shall advise the Initial Purchasers, the Holders of Securities or New Securities covered by any Shelf Registration Statement and any Exchanging Dealer under any Exchange Offer Registration Statement that has provided in writing to the Company and the Guarantor a telephone or facsimile number and address for notices, and, if requested by the Initial Purchasers or any such Holder or Exchanging Dealer shall confirm such advice in writing (which notice pursuant to clauses (ii)-(v) hereof shall be accompanied by an instruction to suspend the use of the

 

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Prospectus until the Company and the Guarantor shall have remedied the basis for such suspension):

 

(i)                                     when a Registration Statement and any amendment thereto has been filed with the Commission and when such Registration Statement or any post-effective amendment thereto has become effective;

 

(ii)                                  of any request by the Commission for any amendment or supplement to the Registration Statement or the Prospectus or for additional information;

 

(iii)                               of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose;

 

(iv)                              of the receipt by the Company and the Guarantor of any notification with respect to the suspension of the qualification of the Securities or New Securities included therein for sale in any jurisdiction or the initiation of any proceeding for such purpose; and

 

(v)                                 of the happening of any event that requires any change in the Registration Statement or the Prospectus so that, as of such date, the statements therein are not misleading and do not omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of the Prospectus, in the light of the circumstances under which they were made) not misleading.

 

(d)         The Company and the Guarantor shall use their reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of any Registration Statement or the qualification of the Securities or New Securities therein for sale in any jurisdiction at the earliest possible time.

 

(e)          The Company and the Guarantor shall furnish to each Holder of Securities or New Securities covered by any Shelf Registration Statement, without charge, at least one copy of such Shelf Registration Statement and any post-effective amendment thereto, and, if the Holder so requests in writing, all material incorporated therein by reference and all exhibits thereto (including exhibits incorporated by reference therein).

 

(f)           The Company and the Guarantor shall, during the Shelf Registration Period, furnish to each Holder of Securities or New Securities covered by any Shelf Registration Statement, without charge, as many copies of the Prospectus (including each preliminary Prospectus) included in such Shelf Registration Statement and any amendment or supplement thereto as such Holder may reasonably request.  The Company and the Guarantor consent to the use of the Prospectus or any amendment or supplement thereto by each of the selling Holders of Securities or New Securities in connection with the offering and sale of the Securities or New Securities covered by the Prospectus, or any amendment or supplement thereto, included in the Shelf Registration Statement.

 

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(g)          The Company and the Guarantor shall furnish to each Exchanging Dealer or the Initial Purchasers which so requests, without charge, at least one copy of the Exchange Offer Registration Statement and any post-effective amendment thereto, including all material incorporated by reference therein, and, if the Exchanging Dealer so requests in writing, all exhibits thereto (including exhibits incorporated by reference therein).

 

(h)         The Company and the Guarantor shall promptly deliver to the Initial Purchasers, each Exchanging Dealer and each other Person required to deliver a Prospectus during the Exchange Offer Registration Period, without charge, as many copies of the Prospectus included in such Exchange Offer Registration Statement and any amendment or supplement thereto as any such Person may reasonably request.  The Company and the Guarantor consent to the use of the Prospectus or any amendment or supplement thereto by the Initial Purchasers, any Exchanging Dealer and any such other Person that may be required to deliver a Prospectus following the Registered Exchange Offer in connection with the offering and sale of the New Securities covered by the Prospectus, or any amendment or supplement thereto, included in the Exchange Offer Registration Statement.

 

(i)             Prior to the Registered Exchange Offer or any other offering of Securities or New Securities pursuant to any Registration Statement, the Company and the Guarantor shall arrange, if necessary, for the qualification of the Securities or the New Securities for sale under the laws of such jurisdictions as any Holder shall reasonably request and will maintain such qualification in effect so long as required; provided that in no event shall the Company and the Guarantor be obligated to qualify to do business in any jurisdiction where they are not then so qualified or to take any action that would subject them to service of process in suits or to taxation in such jurisdiction, in any such jurisdiction where they are not then so subject.

 

(j)            The Company and the Guarantor shall cooperate with the Holders of Securities and New Securities to facilitate the timely preparation and delivery of certificates representing New Securities or Securities to be issued or sold pursuant to any Registration Statement free of any restrictive legends and in such denominations (to the extent permitted under the Indenture) and registered in such names as Holders may request.

 

(k)         Upon the occurrence of any event contemplated by subsections (c)(ii) through (v) above, the Company and the Guarantor shall promptly prepare a post-effective amendment to the applicable Registration Statement or an amendment or supplement to the related Prospectus or file any other required document so that, as thereafter delivered to the Initial Purchasers or Exchanging Dealers, the Prospectus will not include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.  In such circumstances, the period of effectiveness of the Exchange Offer Registration Statement provided for in Section 2 and the Shelf Registration Statement provided for in Section 3(b) shall each be extended by the number of days from and including the date of the giving of a notice of suspension pursuant to

 

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Section 5(c) to and including the date when the Initial Purchasers, the Holders of the Securities or New Securities and any known Exchanging Dealer shall have received such amended or supplemented Prospectus pursuant to this Section 5(k).

 

(l)             Not later than the effective date of any Registration Statement, the Company and the Guarantor shall provide a CUSIP number for the Securities or the New Securities, as the case may be, registered under such Registration Statement and provide the Trustee with printed certificates for such Securities or New Securities, in a form eligible for deposit with The Depository Trust Company.

 

(m)     The Company and the Guarantor shall comply with all applicable rules and regulations of the Commission and shall make generally available to their security holders as soon as practicable after the effective date of the applicable Registration Statement an earnings statement satisfying the provisions of Section 11(a) of the Act.

 

(n)         The Company and the Guarantor shall cause the Indenture or the New Securities Indenture, as the case may be, to be qualified under the Trust Indenture Act in a timely manner.

 

(o)         The Company and the Guarantor may require each Holder of Securities or New Securities to be sold pursuant to any Shelf Registration Statement to furnish to the Company and the Guarantor such information regarding the Holder and the distribution of such Securities as the Company and the Guarantor may from time to time reasonably require for inclusion in such Registration Statement.  The Company and the Guarantor may exclude from such Shelf Registration Statement the Securities or New Securities of any Holder that fails to furnish such information within a reasonable time after receiving such request.

 

(p)         In the case of any Shelf Registration Statement, the Company and the Guarantor shall enter into such agreements and take all other appropriate actions (including if requested an underwriting agreement in customary form) in order to expedite or facilitate the registration or the disposition of the Securities or New Securities, and in connection therewith, if an underwriting agreement is entered into, cause the same to contain indemnification provisions and procedures no less favorable than those set forth in Section 7 (or such other provisions and procedures acceptable to the Majority Holders and the Managing Underwriters, if any, with respect to all parties to be indemnified pursuant to Section 7).

 

(q)         In the case of any Shelf Registration Statement, the Company and the Guarantor shall use their reasonable best efforts to:

 

(i)                                     make reasonably available for inspection by the Holders of Securities or New Securities to be registered thereunder, any Underwriter participating in any disposition pursuant to such Registration Statement, and any attorney, accountant or other agent retained by the Holders or any such Underwriter all relevant financial and other records, pertinent corporate documents and properties of the Company and its subsidiaries;

 

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(ii)                                  cause the Company’s officers, directors and employees to supply all relevant information reasonably requested by the Holders or any such Underwriter, attorney, accountant or agent in connection with any such Registration Statement as is customary for similar due diligence examinations; provided, however, that any information that is designated in writing by the Company, in good faith, as confidential at the time of delivery of such information shall be kept confidential by the Holders or any such Underwriter, attorney, accountant or agent, unless such disclosure is made in connection with a court proceeding or required by law, or such information becomes available to the public generally or through a third party without an accompanying obligation of confidentiality;

 

(iii)                               make such representations and warranties to the Holders of Securities or New Securities registered thereunder and the Underwriters, if any, in form, substance and scope as are customarily made by issuers to Underwriters in primary underwritten offerings and covering matters including, but not limited to, those set forth in the Purchase Agreement;

 

(iv)                              obtain opinions of counsel to the Company and the Guarantor and updates thereof (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the Managing Underwriters, if any) addressed to each selling Holder and the Underwriters, if any, covering such matters as are customarily covered in opinions requested in underwritten offerings and such other matters as may be reasonably requested by such Holders and Underwriters;

 

(v)                                 obtain “cold comfort” letters and updates thereof from the independent certified public accountants of the Company (and, if necessary, any other independent certified public accountants of any subsidiary of the Company or of any business acquired by the Company for which financial statements and financial data are required to be, included in the Registration Statement), addressed to each selling Holder of Securities or New Securities registered thereunder and the Underwriters, if any, in customary form and covering matters of the type customarily covered in “cold comfort” letters in connection with primary underwritten offerings; and

 

(vi)                              deliver such documents and certificates as may be reasonably requested by the Majority Holders and the Managing Underwriters, if any, including those to evidence compliance with Section 5(k) and with any customary conditions contained in the underwriting agreement or other agreement entered into by the Company and the Guarantor.

 

The actions set forth in clauses (iii), (iv), (v) and (vi) of this Section shall be performed at (A) the effectiveness of such Registration Statement and each post-effective amendment thereto; and (B) each closing under any underwriting or similar agreement as and to the extent required thereunder.

 

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(r)            If a Registered Exchange Offer is to be consummated, upon delivery of the Securities by Holders to the Company (or to such other Person as directed by the Company) in exchange for the New Securities, the Company shall mark, or caused to be marked, on the Securities so exchanged that such Securities are being canceled in exchange for the New Securities.  In no event shall the Securities be marked as paid or otherwise satisfied.

 

(s)           If any Broker-Dealer shall underwrite any Securities or New Securities or participate as a member of an underwriting syndicate or selling group or “assist in the distribution” (within the meaning of the Rules of Fair Practice and the By-Laws of the Financial Industry Regulatory Authority, Inc.) thereof, whether as a Holder of such Securities or New Securities or as an Underwriter, a placement or sales agent or a broker or dealer in respect thereof, or otherwise, will assist such Broker-Dealer in complying with the requirements of such Rules and By-Laws, including, without limitation, by:

 

(i)                                     if such Rules or By-Laws shall so require, engaging a “qualified independent underwriter” (as defined in such Rules) to participate in the preparation of the Registration Statement, to exercise usual standards of due diligence with respect thereto and, if any portion of the offering contemplated by such Registration Statement is an underwritten offering or is made through a placement or sales agent, to recommend the yield of such Securities or New Securities;

 

(ii)                                  indemnifying any such qualified independent underwriter to the extent of the indemnification of Underwriters provided in Section 7 hereof; and

 

(iii)                               providing such information to such Broker-Dealer as may be required in order for such Broker-Dealer to comply with the requirements of such Rules.

 

(t)            The Company and the Guarantor shall use their reasonable best efforts to take all other steps necessary to effect the registration of the Securities or the New Securities, as the case may be, covered by a Registration Statement.

 

6.                                      Registration Expenses.  The Company and the Guarantor shall bear all expenses incurred in connection with the performance of their obligations under Sections 2, 3 and 5 hereof and, in the event of any Shelf Registration Statement, will reimburse the Holders for the reasonable fees and disbursements of one firm or counsel designated by the Majority Holders to act as counsel for the Holders in connection therewith, but excluding fees and expenses of counsel to the Initial Purchasers, all agency fees and commissions, underwriting discounts and commissions and transfer taxes attributable to the sale or disposition of Securities by a Holder.

 

7.                                      Indemnification and Contribution.

 

(a)                                 The Company and the Guarantor agree, jointly and severally, to indemnify and hold harmless (i) the Initial Purchasers, (ii) each Holder of Securities or New Securities, as the case may be, covered by any Registration Statement (including

 

14

 

with respect to any Prospectus delivery as contemplated in Section 5(h) hereof, each Exchanging Dealer), (iii) each Person, if any, who controls (within the meaning of either Section 15 of the Act or Section 20 of the Exchange Act) any of the foregoing (any of the Persons referred to in this clause (iii) being hereinafter referred to as a “controlling person”), and (iv) the respective officers, directors, partners, employees, representatives and agents of the Initial Purchasers, such Holders (including predecessor Holders) or any controlling person (any person referred to in clause (i), (ii), (iii) or (iv) may hereinafter be referred to as an “Indemnified Holder”), from and against any and all losses, claims, damages, and liabilities (including, without limitation, reasonable legal fees and other expenses incurred in connection with any suit, action or proceeding or any claim asserted) (collectively “Losses”) caused by any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement, preliminary Prospectus, Prospectus, Free Writing Prospectus or any “issuer information” (as defined in Rule 433 of the Act) filed or required to be filed pursuant to Rule 433(d) under the Act, or any amendment or supplement thereto, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages or liabilities are caused by any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with information relating to any Indemnified Holder furnished to the Company or the Guarantor in writing by such Indemnified Holder expressly for use therein.

 

(b)                                 Each Holder agrees, severally and not jointly, to indemnify and hold harmless the Company and the Guarantor, each of their respective directors and officers and each Person who controls the Company or the Guarantor within the meaning of either Section 15 of the Act or Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the Company and the Guarantor to each Holder, but only with reference to such losses, claims, damages or liabilities which are caused by any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with information relating to a Holder furnished to the Company or the Guarantor in writing by such Holder expressly for use in any Registration Statement, preliminary Prospectus or Prospectus, or any amendment or supplement thereto. This indemnity agreement will be in addition to any liability which any such Holder may otherwise have.

 

(c)                                  Each of the Initial Purchasers, severally and not jointly, agrees to indemnify and hold harmless the Company and the Guarantor, each of their respective directors and officers and each Person who controls the Company or the Guarantor within the meaning of either Section 15 of the Act or Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the Company and the Guarantor to the Initial Purchasers, but only with reference to such losses, claims, damages or liabilities which are caused by any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with information relating to the Initial Purchasers furnished to the Company or the Guarantor in writing by the Initial Purchasers expressly for use in any Registration Statement, preliminary Prospectus or Prospectus, or any amendment or supplement thereto. This indemnity agreement will be in addition to any liability which the Initial Purchasers may otherwise have.

 

15

 

(d)                                 If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any Person in respect of which indemnity may be sought pursuant to either of the three preceding paragraphs, such Person (the “Indemnified Person”) shall promptly notify the Person or Persons against whom such indemnity may be sought (each an “Indemnifying Person”) in writing, and such Indemnifying Person, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others entitled to indemnification pursuant to this Section 7 that the Indemnifying Person may designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding.  In any such proceeding, the Indemnifying Person shall be able to participate in such proceeding and, to the extent that it so elects, jointly with any other similarly situated Indemnifying Person, to assume the defense thereof.  In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless (i) such Indemnifying Person and the Indemnified Person shall have mutually agreed to the contrary or (ii) the named parties in any such proceeding (including any impleaded parties) include an Indemnifying Person and an Indemnified Person and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them.  It is understood that an Indemnifying Person shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Persons, and that all such fees and expenses shall be reimbursed as they are incurred.  Any such separate firm for the Indemnified Holders shall be designated in writing by the Majority Holders, any such separate firm for the Company, its directors, respective officers and such control Persons of the Company shall be designated in writing by the Company, and any such separate firm for the Guarantor, its directors, respective officers and such control Persons of the Guarantor shall be designated in writing by the Guarantor. The Indemnifying Person shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, such Indemnifying Person agrees to indemnify any Indemnified Person from and against any loss or liability by reason of such settlement or judgment.  No Indemnifying Person shall, without the prior written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding.

 

(e)                                  If the indemnification provided for in the first, second and third paragraphs of this Section 7 is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each Indemnifying Person under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Indemnifying Person on the one hand and the Indemnified Person on the other hand pursuant to the Purchase Agreement

 

16

 

or from the offering of the Securities or New Securities pursuant to any Registration Statement which resulted in such losses, claims, damages or liabilities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Indemnifying Person on the one hand and the Indemnified Person on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company and the Guarantor on the one hand and any Indemnified Holder on the other shall be deemed to be in the same proportion as the total net proceeds from the Initial Placement received by the Company and the Guarantor bear to the total net proceeds received by such Indemnified Holder from sales of Securities or New Securities giving rise to such obligations.  The relative fault of the parties shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or the Guarantor or such Indemnified Holder and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

 

(f)                                   Each of the Company, the Guarantor and the Initial Purchasers agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph.  The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses incurred by such Indemnified Person in connection with investigating or defending any such action or claim.  Notwithstanding the provisions of this Section 7, in no event shall any Holder of any Securities or New Securities be required to contribute any amount in excess of the amount by which the net proceeds received by such Holder from the sale of the Security or New Security pursuant to a Registration Statement exceeds the amount of damages which such Holder would have otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.  No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

 

(g)                                  The remedies provided for in this Section 7 are not exclusive and shall not limit any rights or remedies that may otherwise be available to any indemnified party at law or in equity.

 

(h)                                 The indemnity and contribution agreements contained in this Section 7 shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Holder or any Person controlling any Holder or by or on behalf of the Company or the Guarantor, their respective officers or directors or any other Person controlling any of the

 

17

 

Company or the Guarantor and (iii) acceptance of and payment for any of the Securities or New Securities.

 

8.                                      Underwritten Registrations.

 

(a)         If any of the Securities or New Securities, as the case may be, covered by any Shelf Registration Statement are to be sold in an underwritten offering, the Managing Underwriters shall be selected by the Majority Holders and shall be reasonably satisfactory to the Company and the Guarantor.

 

(b)         No Person may participate in any underwritten offering pursuant to any Shelf Registration Statement, unless such Person (i) agrees to sell such Person’s Securities or New Securities, as the case may be, on the basis reasonably provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements; and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements.

 

9.                                      No Inconsistent Agreements.  The Company has not, as of the date hereof, entered into, nor shall it, on or after the date hereof, enter into, any agreement with respect to its securities that is inconsistent with the rights granted to the Holders herein or otherwise conflicts with the provisions hereof.

 

10.                               Amendments and Waivers.  The provisions of this Agreement, including the provisions of this sentence, may not be amended, qualified, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the Company has obtained the written consent of the Majority Holders (or, after the consummation of any Registered Exchange Offer in accordance with Section 2 hereof, of New Securities); provided, however, that, with respect to any matter that directly or indirectly affects the rights of the Initial Purchasers hereunder, the Company shall obtain the written consent of the Initial Purchasers.  Notwithstanding the foregoing (except the foregoing proviso), a waiver or consent to departure from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders whose Securities or New Securities, as the case may be, are being sold pursuant to a Registration Statement and that does not directly or indirectly affect the rights of other Holders may be given by the Majority Holders, determined on the basis of Securities or New Securities, as the case may be, being sold rather than registered under such Registration Statement.

 

11.                               Notices.  All notices and other communications (including without limitation any notices or other communications to the Trustee) provided for or permitted hereunder shall be made in writing by hand-delivery, registered first-class mail, next-day air courier or facsimile:

 

(1)                                 if to a Holder, at the most current address of such Holder set forth on the records of the registrar under the Indenture and the stock ledger of the Guarantor;

 

18

 

(2)                                 if to the Initial Purchasers:

 

Citigroup Global Markets Inc.

HSBC Securities (USA) Inc.

Mizuho Securities USA Inc.

 

As Representatives of the Initial Purchasers named on Schedule A hereto

 

c/o

 

Citigroup Global Markets Inc.

388 Greenwich Street

New York, New York 10013

Attention: General Counsel

 

HSBC Securities (USA) Inc.

452 Fifth Avenue

New York, New York 10018

Attention: General Counsel

 

Mizuho Securities USA Inc.

320 Park Avenue, 12th floor

New York, New York 10022

Attention: General Counsel

 

with copies (which shall not constitute notice) to:

 

Vinson & Elkins L.L.P.

1001 Fannin Street, Suite 2500

Houston, Texas  77002-6760

Attention:  T. Mark Kelly

Facsimile No.:  (713) 615-5531

 

(3)                                 if to the Company, at the addresses as follows:

 

Nabors Industries, Inc.

c/o Nabors Corporate Services, Inc.

515 West Greens Road, Suite 1200

Houston, Texas  77067

Attention:  General Counsel

Facsimile No.: (281) 775-8431

 

19

 

with copies (which shall not constitute notice) to:

 

Milbank, Tweed, Hadley & McCloy LLP

1 Chase Manhattan Plaza

New York, New York  10005

Attention:  Arnold B. Peinado III

Facsimile No.  (212) 822-5546

 

(4)                                 if to the Guarantor:

 

Nabors Industries Ltd.

Crown House

4 Par-La-Ville Road, Second Floor

Hamilton, HM08, Bermuda

 

All such notices and communications shall be deemed to have been duly given: when delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; one Business Day after being timely delivered to a next-day air courier; and when the addressor receives facsimile confirmation, if sent by facsimile.

 

The Initial Purchasers or the Company or the Guarantor by notice to the other parties may designate additional or different addresses for subsequent notices or communications.

 

12.                               Successors.  This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including, without the need for an express assignment or any consent by the Company or the Guarantor thereto, subsequent Holders of Securities or New Securities.  The Company and the Guarantor hereby agree to extend the benefits of this Agreement to any Holder of Securities and the New Securities, and any such Holder may specifically enforce the provisions of this Agreement as if an original party hereto.

 

13.                               Counterparts.  This Agreement may be executed (including by facsimile) in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

 

14.                               Headings.  The headings used herein are for convenience only and shall not affect the construction hereof.

 

15.                               Applicable Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK.

 

16.                               Severability.  If any one of more of the provisions contained herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other

 

20

 

respect and of the remaining provisions hereof shall not be in any way impaired or affected thereby, it being intended that all of the rights and privileges of the parties shall be enforceable to the fullest extent permitted by law.

 

17.                               Securities Held by the Company, etc.  Whenever the consent or approval of Holders of a specified percentage of principal amount of Securities or New Securities is required hereunder, Securities or New Securities, as applicable, held by the Company or its Affiliates (other than subsequent Holders of Securities or New Securities if such subsequent Holders are deemed to be Affiliates solely by reason of their holdings of such Securities or New Securities) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage.

 

18.                               No Fiduciary Duty. The Company and Guarantor hereby acknowledge that (a) the Initial Purchasers are acting as principal and not as an agent or fiduciary of the Company or the Guarantor and (b) the Company’s engagement of the Initial Purchasers in connection with the offering and the process leading up to the offering pursuant to the Purchase Agreement is as independent contractors and not in any other capacity.  Furthermore, the Company and the Guarantor agree that they are solely responsible for making their own judgments in connection with the offering, the Registered Exchange Offer or a Shelf Registration (irrespective of whether any of the Initial Purchasers has advised or is currently advising the Company or the Guarantor on related or other matters).  The Company and the Guarantor agree that they will not claim that the Initial Purchasers have rendered advisory services of any nature or respect, or owe an agency, fiduciary or similar duty to the Company or the Guarantor, in connection with such transaction or the process leading thereto

 

[Remainder of This Page is Intentionally Left Blank]

 

21

 

If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this Agreement and your acceptance shall represent a binding agreement among the Company, the Guarantor and you.

 

	
 
    	
Very truly yours,
    
	
 
    	
 
    
	
 
    	
NABORS INDUSTRIES, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Clark Wood
    
	
 
    	
 
    	
Name: Clark Wood
    
	
 
    	
 
    	
Title: Controller
    
	
 
    	
 
    	
 
    
	
 
    	
NABORS INDUSTRIES LTD.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Mark D. Andrews
    
	
 
    	
 
    	
Name: Mark D. Andrews
    
	
 
    	
 
    	
Title: Corporate Secretary
    

 

Signature Page to Registration Rights Agreement

2023 Notes

 

 

The foregoing Agreement is hereby 

confirmed and accepted as of the 

date first above written.

 

CITIGROUP GLOBAL MARKETS INC.

 

 

	
By:
    	
/s/   Brian D. Bednarski
    	
 
    
	
 
    	
Name:   Brian D. Bednarski
    	
 
    
	
 
    	
Title:   Managing Director
    	
 
    

 

HSBC SECURITIES (USA) INC.

 

 

	
By:
    	
/s/   Elsa Y. Wang
    	
 
    
	
 
    	
Name:   Elsa Y. Wang
    	
 
    
	
 
    	
Title:   Vice President
    	
 
    

 

MIZUHO SECURITIES USA INC.

 

 

	
By:
    	
/s/   JM Shepard
    	
 
    
	
 
    	
Name:   JM Shepard
    	
 
    
	
 
    	
Title:   M.D.
    	
 
    

 

 

Acting as Representatives of the Initial

Purchasers named in Schedule A hereto

 

Signature Page to Registration Rights Agreement

2023 Notes

 

 

SCHEDULE A

 

Initial Purchasers

 

Citigroup Global Markets Inc.

HSBC Securities (USA) Inc.

Mizuho Securities USA Inc.

Morgan Stanley & Co. LLC

Merrill Lynch, Pierce Fenner & Smith
 Incorporated

Mitsubishi UFJ Securities (USA), Inc.

PNC Capital Markets LLC

BBVA Securities Inc.

Wells Fargo Securities, LLC

U.S. Bancorp Investments, Inc.

SMBC Nikko Securities America, Inc.

 

 

ANNEX A

 

Each broker-dealer that receives new notes for its own account in exchange for old notes that were acquired as a result of market-making or other trading activities must acknowledge that it will comply with the registration and prospectus delivery requirements of the Act in connection with any offer, resale, or other transfer of the new notes issued in the exchange offer, including information with respect to any selling holder required by the Act in connection with any resale of the new notes.

 

Furthermore, any broker-dealer that acquired any of its old notes directly from us:

 

·                  may not rely on the applicable interpretation of the staff of the SEC’s position contained in Exxon Capital Holdings Corporation (pub. avail. May 13, 1988), Morgan Stanley and Co., Inc. (pub. avail. June 5, 1991), as interpreted in the Commission’s letter to Shearman & Sterling dated July 2, 1993 and similar no-action letters; and

 

·                  must also be named as a selling noteholder in connection with the registration and prospectus delivery requirements of the Act relating to any resale transaction. See “Plan of Distribution” and “The Exchange Offer —Purpose and Effect of Exchange Offer Registration Rights.”

 

 

ANNEX B

 

Each broker-dealer that receives new notes for its own account in exchange for old notes, where such old notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will comply with the registration and prospectus delivery requirements of the Act in connection with any offer, resale or other transfer of such new notes, including information with respect to any selling holder required by the Act in connection with the resale of the new notes. We have agreed that for a period of 180 days after the effective date of the registration statement of which this prospectus forms a part (or for such shorter period during which broker-dealers are required by law to deliver such prospectus), we will make this prospectus available to any broker-dealer for use in connection with any such resale. See “Plan of Distribution.”

 

 

ANNEX C

 

PLAN OF DISTRIBUTION

 

Each broker-dealer that receives New Notes for its own account pursuant to this exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such New Notes.  This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of New Securities received in exchange for Securities where such Securities were acquired as a result of market-making activities or other trading activities.  We have agreed that, starting on the effective date of the registration statement of which this prospectus is a part and ending on the close of business 180-days after such date or such shorter period as will terminate when all New Securities held by Exchanging Dealers or Initial Purchasers have been sold pursuant hereto (or for such shorter period during which broker-dealers are required by law to deliver such prospectus), we will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale.  In addition, until                     , 201    , all dealers effecting transactions in the New Securities may be required to deliver a prospectus.

 

We will not receive any proceeds from any sale of New Securities by brokers-dealers.  New Securities received by broker-dealers for their own account pursuant to the Exchange Offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the New Securities or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices.  Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer and/or the purchasers of any such New Securities.  Any broker-dealer that resells New Securities that were received by it for its own account pursuant to the Exchange Offer and any broker-dealer that participates in a distribution of such New Securities may be deemed to be an “underwriter” within the meaning of the Act and any profit of any such resale of New Securities and any commissions or concessions received by any such Persons may be deemed to be underwriting compensation under the Act.  The Letter of Transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Act.

 

Furthermore, any broker-dealer that acquired any of the old notes directly from us:

 

·                  may not rely on the applicable interpretation of the staff of the SEC’s position contained in Exxon Capital Holdings Corporation (pub. avail. May 13, 1988), Morgan Stanley and Co., Inc. (pub. avail. June 5, 1991), ), as interpreted in the Commission’s letter to Shearman & Sterling dated July 2, 1993 and similar no-action letters; and

 

·                  must also be named as a selling noteholder in connection with the registration and prospectus delivery requirements of the Act relating to any resale transaction.

 

Annex C - 1

 

For a period of 180-days after the effective date of the registration statement of which this prospectus is a part or such shorter period as will terminate when all New Securities held by Exchanging Dealers or Initial Purchasers have been sold pursuant hereto (or for such shorter period during which broker-dealers are required by law to deliver such prospectus), we will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests such documents in the Letter of Transmittal.  We have agreed to pay all expenses incident to the Exchange Offer (including the expenses of one counsel for the holder of the Securities) other than commissions or concessions of any brokers or dealers and will indemnify the holders of the Securities (including any broker-dealers) against certain liabilities, including liabilities under the Act.

 

[If applicable, add information required by Regulation S-K Items 507 and/or 508.]

 

Annex C - 2

 

ANNEX D

 

CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.

 

	
Name:
    	
 
    	
 
    
	
Address:
    	
 
    	
 
    
	
 
    	
 
    	
 
    

 

If the undersigned is not a broker-dealer, the undersigned represents that it is acquiring the New Securities in the ordinary course of its business, that it has no arrangement or understanding with any Person to participate in a distribution of the New Securities and that it is not an affiliate of the Company as such terms are interpreted by the Commission.  If the undersigned is a broker-dealer then it has a prospectus delivery requirement with respect to resales of the New Securities and that the Commission has taken the position the Broker-Dealers may fulfill their prospects delivery requirements with respect to resales of the New Securities (other than a resale of an unsold allotment from the original sale of the notes) with the prospectus contained in the Exchange Offer Registration Statement relating to such New Securities.Exhibit 10.1

 

AMENDED AND RESTATED EMPLOYMENT AND NONCOMPETITION AGREEMENT

 

This AMENDED AND RESTATED EMPLOYMENT AND NONCOMPETITION AGREEMENT (“Agreement”) is made as of the 12th day of September, 2013, to be effective January 18, 2013, between Marc Holliday (“Executive”) and SL Green Realty Corp., a Maryland corporation with its principal place of business at 420 Lexington Avenue, New York, New York 10170 (the “Employer”), and amends in its entirety and completely restates that certain employment agreement between Executive and the Employer dated as of January 1, 2004, as amended and restated on April 16, 2007, as amended on December 17, 2008 and as amended and restated on December 18, 2009.

 

1.              Term.  The term of this Agreement shall commence on January 18, 2013 and, unless earlier terminated as provided in Section 6 below, shall terminate on January 17, 2016 (the “Current Term”); provided, however, that Sections 4 and 8 (and any enforcement or other procedural provisions hereof affecting Sections 4 and 8) hereof shall survive the termination of this Agreement as provided therein.  Executive will provide written notice to the Employer (a “Non-Renewal Notice”) on or before September 15, 2015 in the event that Executive does not intend, on or before the expiration of the Current Term, to enter into a new/extended employment agreement with the Employer pursuant to which Executive will remain employed by the Employer in the same position and performing the same duties as set forth herein for at least one year following the expiration of the Current Term.  If Executive delivers a Non-Renewal Notice on or before September 15, 2015, then the Employer, at its sole option and discretion, may extend the Current Term by 120 days, upon written notice to Executive on or before October 15, 2015.  If Executive does not deliver a Non-Renewal Notice on or before September 15, 2015 and has not entered into a new/extended employment agreement with the Employer on or before December 31, 2015, then the Employer, at its sole option and discretion, may extend the Current Term by 225 days, upon written notice to Executive on or before the expiration of the Current Term.  The 120-day or 225-day extension period, as applicable, is herein referred to as the “Extension Period.”  In addition, in the event that a Change-in-Control occurs within 18 months prior to the scheduled expiration of the Current Term, Executive may elect, by written notice to the Employer within 30 days after the Change-in-Control, to extend the expiration of the Current Term until the date that is 18 months after such Change-in-Control. The period of Executive’s employment hereunder consisting of the Current Term (as extended in the event of the Change-in-Control, if applicable) and the Extension Period, if any, is herein referred to as the “Employment Period.”

 

2.              Employment and Duties.

 

(a)         Duties.  During the Employment Period, Executive shall be employed in the business of the Employer and its affiliates.  Executive shall serve the Employer as a senior corporate executive and shall have the title of Chief Executive Officer (“CEO”) of the Employer and, for so long as so elected, member of the Board of Directors of the Employer (the “Board”).  Executive, as CEO, shall be principally responsible for all decision-making with respect to the Employer (including with respect to the hiring and dismissal of subordinate executives), subject to supervision in the ordinary course by the Chairman of the Board (“Chairman”) or by the Board, it being expressly understood and agreed that Executive will consult frequently with the Chairman and that the Chairman may take an active role in working with Executive to develop the policies

 

 

of the Employer.  Executive’s duties and authority shall be as further set forth in the By-laws of the Employer and as otherwise established from time to time by the Board, but in all events such duties shall be commensurate with his position as CEO of the Employer.

 

(b)         Best Efforts.  Executive agrees to his employment as described in this Section 2 and agrees to devote substantially all of his business time and efforts to the performance of his duties under this Agreement, except as otherwise approved by the Board; provided, however, that nothing herein shall be interpreted to preclude Executive, so long as there is no material interference with his duties hereunder, from (i) participating as an officer or director of, or advisor to, any charitable or other tax-exempt organizations or otherwise engaging in charitable, fraternal or trade group activities; (ii) investing and managing his assets as an investor in other entities or business ventures; provided that he performs no management or similar role (or, in the case of investments other than those in entities or business ventures engaged in the Business (as defined in Section 8), he performs a management role comparable to the role that a significant partner would have, but performs no day-to-day management or similar role) with respect to such entities or ventures and such investment does not violate Section 8 hereof; and provided, further, that, in any case in which another party involved in the investment has a material business relationship with the Employer, Executive shall give prior written notice thereof to the Board; or (iii) serving as a member of the board of directors of a for-profit corporation with the approval of the Board.

 

(c)          Travel.  In performing his duties hereunder, Executive shall be available for all reasonable travel as the needs of the Employer’s business may require.  Executive shall be based in New York City or Westchester County, or within 25 miles of Manhattan but not in New Jersey or Long Island.

 

3.              Compensation and Benefits.  In consideration of Executive’s services hereunder, the Employer shall compensate Executive as provided in this Agreement.

 

(a)         Base Salary.  The Employer shall pay Executive an aggregate minimum annual salary at the rate of $1,050,000 per annum during the Employment Period (“Base Salary”).  Base Salary shall be payable bi-weekly in accordance with the Employer’s normal business practices and shall be reviewed by the Board or Compensation Committee of the Board at least annually.  In no event shall Executive’s Base Salary in effect at a particular time be reduced without his prior written consent.

 

(b)         Incentive Compensation/Bonuses.  In addition to Base Salary, with respect to fiscal year 2013 and thereafter during the Employment Period, Executive shall be eligible for and shall receive, upon approval of the Board or Compensation Committee of the Board, such annual bonuses as the Employer, in its sole discretion, may deem appropriate to reward Executive for job performance.  Such annual bonuses may be payable upon the achievement of specific goals established in advance by the Compensation Committee of the Board or may be discretionary. In addition, Executive shall be eligible to participate in any other bonus or incentive compensation plans in effect with respect to senior executive officers of the Employer, as the Board or Compensation Committee of the Board, in its sole discretion, may deem appropriate to reward Executive for job performance.  Executive shall also be entitled to receive an award allocation in any outperformance plan that the Company implements during the Employment Period at no less than his current rate of allocation in the SL Green Realty Corp. 2011 Long-Term Outperformance

 

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Plan (the “2011 Outperformance Plan”), which is 22.67% of the plan.  It is expressly understood that, with respect to awards made to Executive pursuant to the SL Green Realty Corp. 2010 Notional Unit Long-Term Compensation Plan (the “2010 Outperformance Plan”) , the 2011 Outperformance Plan and any future outperformance plan (collectively,  the “Outperformance Plans”), the provisions of the Outperformance Plans, as amended from time to time, and not the provisions of this Agreement shall govern in accordance with their terms, except: (i) to the extent the provisions of this Agreement are specifically referred to or incorporated into the Outperformance Plans and (ii) as specifically provided otherwise in this Agreement.

 

(c)          Deferred Compensation.  During the Employment Period (but excluding the Extension Period), the Employer shall make annual notional contributions of $550,000 for 2014 and $600,000 for 2015, on January 18th of each respective year, into a deferred compensation account maintained on behalf of the Executive, with terms as set forth in the form of Deferred Compensation Agreement (2013) attached as Exhibit B hereto.  Executive shall vest in each such contribution on January 17th of the following year subject to Executive’s continued employment with the Employer through such date, but subject to acceleration as set forth herein or in Exhibit B hereto.

 

(d)         Extension Period Compensation.  During the Extension Period, if any, in lieu of the compensation set forth in Sections 3(a)-(c) above for such period, the Employer shall pay Executive a salary (“Extension Period Salary”) during such period in cash, at a per annum rate equal to the sum of the following: (i) Executive’s Base Salary during the prior fiscal year; (ii) any annual cash bonus earned by Executive for the prior fiscal year; (iii) the value of any required contributions, notional or otherwise, made by the Employer during the prior fiscal year to a deferred compensation plan on behalf of Executive, including those made pursuant to Section 3(c) above; and (iv) the value of that portion of Executive’s equity awards granted on or after the date hereof which vested during the period from January 18th of the prior fiscal year through January 17th of the year in which the Extension Period commences.  The value of the equity awards in the foregoing clause (iv) shall be equal to (A) for all equity awards that deliver the full value of the underlying securities, the Fair Market Value of such securities as of the vesting date; (B) for each award of stock options, that percentage of the grant date fair value of such award which is equal to the percentage of the award that became so vested; and (C) for all other equity awards, the Fair Market Value of such awards on the vesting date as determined by the Compensation Committee of the Board.  For purposes of the foregoing, “Fair Market Value” of a security on a particular date means (i) if the securities are then listed on a national securities exchange, the closing sales price of such security on the principal national securities exchange on which such securities are listed on such date (or, if such date is not a trading day, on the last trading day preceding such date ), (ii) if the securities 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 such securities in such over-the-counter market for such date (or, if there were no sales on such date in such market, on the last preceding date on which there was a sale of such Shares in such market, as determined by the Compensation Committee of the Board), or (iii) if the securities are not then listed on a national securities exchange or traded on an over-the-counter market, such value as the Compensation Committee of the Board in its discretion may in good faith determine; provided that, where the securities are so listed or traded, the Compensation Committee of the Board may make such discretionary determinations where the Shares have not been traded for 10 trading days.  Extension Period Salary shall be payable bi-weekly in accordance with the Employer’s normal business practices, except that if the annual cash bonus

 

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for Executive for the prior fiscal year has not yet been determined as of any bi-weekly payment date, the portion of the Extension Period Salary for such bi-weekly period that is based on such annual cash bonus shall be paid promptly after the amount of such bonus is determined.

 

(e)          Expenses.  Executive shall be reimbursed for all reasonable business related expenses incurred by Executive at the request of or on behalf of the Employer, provided that such expenses are incurred and accounted for in accordance with the policies and procedures established by the Employer.  Any expenses incurred during the Employment Period but not reimbursed by the Employer by the end of the Employment Period, shall remain the obligation of the Employer to so reimburse Executive.

 

(f)           Health and Welfare Benefit Plans.  During the Employment Period, Executive and Executive’s immediate family shall be entitled to participate in such health and welfare benefit plans as the Employer shall maintain from time to time for the benefit of senior executive officers of the Employer and their families, on the terms and subject to the conditions set forth in such plan.  Nothing in this Section shall limit the Employer’s right to change or modify or terminate any benefit plan or program as it sees fit from time to time in the normal course of business so long as it does so for all senior executives of the Employer.

 

(g)          Vacations.  Executive shall be entitled to paid vacations in accordance with the then regular procedures of the Employer governing senior executive officers.

 

(h)         Certain Other Benefits.  During the Employment Period, the Employer shall provide to Executive such other benefits, as generally made available to other senior executives of the Employer.  In addition, the Employer shall maintain life insurance for the benefit of Executive’s beneficiaries in a face amount equal to $10,000,000; provided, however, that such coverage shall only be required if available to the Employer at reasonable rates; and provided, further, that Executive cooperates as reasonably requested by the Employer in the Employer’s efforts to obtain such insurance.  If such insurance is not available at reasonable rates, then the Employer shall provide such coverage on a self-insured basis, at a cost to the Employer not to exceed the amount Executive would receive upon a termination by the Employer without Cause (as defined in Section 6(a)(iii) below) within eighteen (18) months after a Change-in-Control under Section 7(a)(v).

 

(i)             Timing of Expense Reimbursement.  All in-kind benefits provided and expenses eligible for reimbursement under this Agreement must be provided by the Employer or incurred by Executive during the time periods set forth in this Agreement.  All reimbursements shall be paid as soon as administratively practicable, but in no event shall any reimbursement be paid after the last day of the taxable year following the taxable year in which the expense was incurred.  The amount of in-kind benefits provided or reimbursable expenses incurred in one taxable year shall not affect the in-kind benefits to be provided or the expenses eligible for reimbursement in any other taxable year.  Such right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

 

(j)            Post-Change-in-Control Compensation.  If a Change-in-Control occurs during the Employment Period, then, unless the parties hereto agree otherwise, for the period from the Change-in-Control through the end of the Employment Period, in lieu of the compensation set forth in Sections 3(a)-(c) above for such period, the Employer shall pay Executive an amount (the

 

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“Change-in-Control Period Compensation”) during such period in cash at a per annum rate at least equal to the sum of the following: (i) Executive’s Base Salary in effect immediately prior to the Change-in-Control (which shall be considered Executive’s Base Salary for all periods following the Change-in-Control for purposes of Section 7 below); (ii) the annual cash bonus earned by Executive for the most recently completed fiscal year prior to the Change-in-Control for which the amount of the annual cash bonus has been determined (including any portion of the annual cash bonus paid in the form of shares of Common Stock, stock units or other equity awards, as determined at the time of grant by the Compensation Committee of the Board, in its sole discretion, and reflected in the minutes or consents of the Compensation Committee of the Board relating to the approval of such equity awards, but excluding any annual or other equity awards made other than as payment of a cash bonus) (which shall be considered Executive’s annual cash bonus for all periods following the Change-in-Control for purposes of Section 7 below); (iii) the value of any required contributions, notional or otherwise, made by the Employer during the most recently completed fiscal year prior to the Change-in-Control to a deferred compensation plan on behalf of Executive, including those made pursuant to Section 3(c) above (which shall be considered Executive’s annual deferred compensation contribution for all periods following the Change-in-Control for purposes of Section 7 below); and (iv) the value of that portion of Executive’s equity awards (other than grants under the 2010 Outperformance Plan, the 2011 Outperformance Plan or any future outperformance plan or equity awards that were granted in lieu of annual cash bonus, as determined at the time of grant by the Compensation Committee of the Board, in its sole discretion, and reflected in the minutes or consents of the Compensation Committee of the Board relating to the approval of such equity awards) that vested during the period from January 18th of the prior fiscal year through January 17th of the year in which the Change-in-Control occurs.  The value of the equity awards in the foregoing clause (iv) shall be equal to (A) for all equity awards that deliver the full value of the underlying securities, the Fair Market Value (as defined in Section 3(d)) of such securities as of the vesting date; (B) for each award of stock options, that percentage of the grant date fair value of such award which is equal to the percentage of the award that became so vested; and (C) for all other equity awards, the Fair Market Value of such awards on the vesting date as determined by the Compensation Committee of the Board.  The Change-in-Control Period Compensation shall be payable bi-weekly in accordance with the Employer’s normal business practices.  The Employer, with the consent of Executive, may grant substitute equity awards in lieu of the component of the Change-in-Control Period Compensation attributable to the value of Executive’s equity awards as set forth in clause (iv) above.

 

4.              Indemnification and Liability Insurance.  The Employer agrees to indemnify Executive to the extent permitted by applicable law, as the same exists and may hereafter be amended, from and against any and all losses, damages, claims, liabilities and expenses asserted against, or incurred or suffered by, Executive (including the costs and expenses of legal counsel retained by the Employer to defend Executive and judgments, fines and amounts paid in settlement actually and reasonably incurred by or imposed on such indemnified party) with respect to any action, suit or proceeding, whether civil, criminal administrative or investigative in which Executive is made a party or threatened to be made a party, either with regard to his entering into this Agreement with the Employer or in his capacity as an officer or director, or former officer or director, of the Employer or any affiliate thereof for which he may serve in such capacity.  The Employer also agrees to secure and maintain officers and directors liability insurance providing coverage for Executive.  The provisions of this Section 4 shall remain in effect after this Agreement is terminated irrespective of the reasons for termination.

 

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5.              Employer’s Policies.  Executive agrees to observe and comply with the reasonable rules and regulations of the Employer as adopted by the Board from time to time regarding the performance of his duties and communicated to Executive, and to carry out and perform orders, directions and policies communicated to him from time to time by the Board, so long as same are otherwise consistent with this Agreement.

 

6.              Termination.  Executive’s employment hereunder may be terminated under the following circumstances:

 

(a)         Termination by the Employer.

 

(i)                                     Death.  Executive’s employment hereunder shall terminate upon his death.

 

(ii)                                  Disability.  If, as a result of Executive’s incapacity due to physical or mental illness or disability, Executive shall have been incapable of performing his duties hereunder even with a reasonable accommodation on a full-time basis for the entire period of four consecutive months or any one hundred and twenty (120) days in a one hundred and eighty (180)-day period, and within thirty (30) days after written Notice of Termination (as defined in Section 6(d)) is given he shall not have returned to the performance of his duties hereunder on a full-time basis, the Employer may terminate Executive’s employment hereunder.

 

(iii)                               Cause.  The Employer may terminate Executive’s employment hereunder for Cause by a majority vote of all members of the Board, excluding the vote of Executive.  For purposes of this Agreement, “Cause” shall mean Executive’s:  (A) engaging in conduct which is a felony; (B) material breach of any of his obligations under Sections 8(a) through 8(e) of this Agreement; (C) willful misconduct of a material nature or gross negligence with regard to the Employer or any of its affiliates; (D) material fraud with regard to the Employer or any of its affiliates; (E) willful or material violation of any reasonable written rule, regulation or policy of the Employer applicable to senior executives unless such a violation is cured within thirty (30) days after written notice of such violation by the Board; or (F) failure to competently perform his duties which failure is not cured within thirty (30) days after receiving notice from the Employer specifically identifying the manner in which Executive has failed to perform (it being understood that, for this purpose, the manner and level of Executive’s performance shall not be determined based on the financial performance (including without limitation the performance of the stock) of the Employer).  For clarity, conduct shall not be considered “willful” with respect to any action taken or not taken based on the advice of the Employer’s inside or outside legal counsel.

 

(iv)                              Without Cause.  Executive’s employment hereunder may be terminated by the Employer at any time with or without Cause (as defined in Section 6(a)(iii) above), by a vote of two-thirds or more of all of the members of the Board (not taking into account Executive as a member of the Board), upon written notice to Executive, subject only to the severance provisions specifically set forth in Section 7.

 

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(b)         Termination by Executive.

 

(i)                                     Disability.  Executive may terminate his employment hereunder for Disability within the meaning of Section 6(a)(ii) above.

 

(ii)                                  With Good Reason.  Executive’s employment hereunder may be terminated by Executive with Good Reason by written notice to the Board providing at least ten (10) days’ notice prior to such termination.  For purposes of this Agreement, termination with “Good Reason” shall mean the occurrence of one of the following events within sixty (60) days prior to such termination:

 

(A)                               a material change in duties, responsibilities, status or positions with the Employer that does not represent a promotion from or maintaining of Executive’s duties, responsibilities, status or positions as CEO of a publicly traded company (which, (I) so long as Executive is the CEO of the Employer, shall include the appointment of another person as co-CEO of the Employer and (II) with respect to a termination within 18 months after a Change-in-Control, shall include the failure of Stephen L. Green to serve as chairman of the board of directors of the surviving entity (which shall include the Employer if the Employer is the surviving entity), or the equivalent position if such entity is not a corporation, unless Executive is appointed to such position), except in connection with the termination of Executive’s employment for Cause, disability, retirement or death;

 

(B)                               a failure by the Employer to pay compensation when due in accordance with the provisions of Section 3, which failure has not been cured within twenty (20) business days after the notice of the failure (specifying the same) has been given by Executive to the Employer; or a failure by the Employer to grant awards with terms as set forth on Exhibit A hereto to Executive on or before the dates set forth on Exhibit A;

 

(C)                               a material breach by the Employer of any provision of this Agreement, which breach has not been cured within thirty (30) days after notice of noncompliance (specifying the nature of the noncompliance) has been given by Executive to the Employer;

 

(D)                               the Employer’s requiring Executive to be based in an office not meeting the requirements of the last sentence of Section 2(c);

 

(E)                                a reduction by the Employer in Executive’s Base Salary to less than the minimum Base Salary set forth in Section 3(a);

 

(F)                                 the failure by the Employer to continue in effect an equity award program or other substantially similar program under which Executive is eligible to receive awards;

 

(G)                               a material reduction in Executive’s benefits under any benefit plan (other than an equity award program) compared to those currently received

 

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(other than in connection with and proportionate to the reduction of the benefits received by all or most senior executives or undertaken in order to maintain such plan in compliance with any federal, state or local law or regulation governing benefits plans, including, but not limited to, the Employee Retirement Income Security Act of 1974, which shall not constitute Good Reason for the purposes of this Agreement); or

 

(H)                              the failure by the Employer to obtain from any successor to the Employer an agreement to be bound by this Agreement pursuant to Section 15 hereof, which has not been cured within thirty (30) days after the notice of the failure (specifying the same) has been given by Executive to the Employer.

 

(iii)                               Without Good Reason.  Executive shall have the right to terminate his employment hereunder without Good Reason, subject to the terms and conditions of this Agreement.

 

(c)          Definitions.  The following terms shall be defined as set forth below.

 

(i)                                     A “Change-in-Control” shall be deemed to have occurred if:

 

(A)                               any Person, together with all “affiliates” and “associates” (as such terms are defined in Rule 12b-2 under the Securities Exchange Act of 1934 (the “Exchange Act”)) of such Person, shall become the “beneficial owner” (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Employer representing 25% or more of either (1) the combined voting power of the Employer’s then outstanding securities having the right to vote in an election of the Board (“Voting Securities”) or (2) the then outstanding shares of all classes of stock of the Employer (in either such case other than as a result of the acquisition of securities directly from the Employer); or

 

(B)                               the members of the Board at the beginning of any consecutive 24-calendar-month period commencing on or after the date hereof (the “Incumbent Directors”) cease for any reason other than due to death to constitute at least a majority of the members of the Board; provided that any director whose election, or nomination for election by the Employer’s stockholders, was approved by a vote of at least a majority of the Incumbent Directors, shall be deemed to be an Incumbent Director; or

 

(C)                               there is consummated (1) any consolidation or merger of the Employer or any subsidiary that would result in the Voting Securities of the Employer outstanding immediately prior to such merger or consolidation representing (either by remaining outstanding or by being converted into voting securities of the surviving entity) less than 50% of the total voting power of the voting securities of the surviving entity outstanding immediately after such merger or consolidation or ceasing to have the power to elect at least a majority of the board of directors or other governing body of such surviving entity or (2) any sale, lease, exchange or other transfer (in one transaction or a series of

 

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transactions contemplated or arranged by any party as a single plan) of all or substantially all of the assets of the Employer, if the shareholders of the Employer and unitholders of SL Green Operating Partnership, L.P. taken as a whole and considered as one class immediately before such transaction own, immediately after consummation of such transaction, equity securities and partnership units possessing less than 50 percent of the surviving or acquiring company and partnership taken as a whole; or

 

(D)                               the stockholders of the Employer shall approve any plan or proposal for the liquidation or dissolution of the Employer.

 

Notwithstanding the foregoing, a “Change-in-Control” shall not be deemed to have occurred for purposes of the foregoing clause (A) solely as the result of an acquisition of securities by the Employer which, by reducing the number of shares of stock or other Voting Securities outstanding, increases (x) the proportionate number of shares of stock of the Employer beneficially owned by any Person to 25% or more of the shares of stock then outstanding or (y) the proportionate voting power represented by the Voting Securities beneficially owned by any Person to 25% or more of the combined voting power of all then outstanding Voting Securities; provided, however, that if any Person referred to in clause (x) or (y) of this sentence shall thereafter become the beneficial owner of any additional stock of the Employer or other Voting Securities (other than pursuant to a share split, stock dividend, or similar transaction), then a “Change-in-Control” shall be deemed to have occurred for purposes of the foregoing clause (A).

 

(ii)                                  “Person” shall have the meaning used in Sections 13(d) and 14(d) of the Exchange Act; provided however, that the term “Person” shall not include (A) Executive or (B) the Employer, any of its subsidiaries, or any trustee, fiduciary or other person or entity holding securities under any employee benefit plan of the Employer or any of its subsidiaries.  In addition, no Change-in-Control shall be deemed to have occurred under clause (i)(A) above by virtue of a “group” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becoming a beneficial owner as described in such clause, if any individual or entity described in clause (A) or (B) of the foregoing sentence is a member of such group.

 

(d)         Notice of Termination.  Any termination of Executive’s employment by the Employer or by Executive (other than on account of death) shall be communicated by written Notice of Termination to the other party hereto in accordance with Section 11 of this Agreement.  For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and, as applicable, shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated.  Executive’s employment shall terminate as of the effective date set forth in the Notice of Termination (the “Termination Date”), which date shall not be more than thirty (30) days after the date of the Notice of Termination.

 

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7.              Compensation Upon Termination; Change-in-Control.

 

(a)         Termination By Employer Without Cause or By Executive With Good Reason.  If, during the Employment Period (i) Executive is terminated by the Employer without Cause pursuant to Section 6(a)(iv) above, or (ii) Executive shall terminate his employment hereunder with Good Reason pursuant to Section (6)(b)(ii) above, then the Employment Period shall terminate as of the Termination Date, Executive shall be entitled to receive his earned and accrued but unpaid Base Salary on the Termination Date, and Executive shall also be entitled to the following payments and benefits in lieu of any further compensation for periods subsequent to the Termination Date, subject, in the case of the following items, to (1) Executive’s execution of a mutual release agreement with the Employer in form and substance reasonably satisfactory to Executive and the Employer, whereby, in general, each party releases the other from all claims such party may have against the other party (other than (A) claims against the Employer relating to the Employer’s obligations under this Agreement, including without limitation, Executive’s rights to indemnification and D&O insurance coverage and to vested benefits under any employee benefit plan of the Employer or any affiliate of the Employer in which Executive participates, and certain other specified agreements arising in connection with or after Executive’s termination, including, without limitation, Employer’s obligations hereunder to provide severance payments and benefits and accelerated vesting of equity awards and (B) claims against Executive relating to or arising out of any act of fraud, intentional misappropriation of funds, embezzlement or any other action with regard to the Employer or any of its affiliated companies that constitutes a felony under any federal or state statute committed or perpetrated by Executive during the course of Executive’s employment with the Employer or its affiliates, in any event, that would have a material adverse effect on the Employer, or any other claims that may not be released by the Employer under applicable law) (the “Release Agreement”), which the Employer shall execute within five (5) business days after such execution by Executive, and (2) the effectiveness and irrevocability of the Release Agreement with respect to Executive within thirty (30) days after the Termination Date (with the 30th day after the Termination Date being referred to herein as the “Payment Date”):

 

(i)                                     On the Payment Date, Executive shall receive a prorated annual cash bonus equal to (A) the average of the annual cash bonuses (including any portion of the annual cash bonus paid in the form of shares of Common Stock, stock units, LTIP units in SL Green Operating Partnership, L.P. (“LTIP Units”) or other equity awards, as determined at the time of grant by the Compensation Committee of the Board, in its sole discretion, and reflected in the minutes or consents of the Compensation Committee of the Board relating to the approval of such equity awards, but excluding any annual or other equity awards made other than as payment of a cash bonus) earned by Executive in respect of the two most recently completed fiscal years for which the amount of the annual cash bonus has been determined (the “Average Annual Bonus”) multiplied by (B) a fraction, the numerator of which is the number of days in the fiscal year in which Executive’s employment terminates through the Termination Date (and the number of days in the prior fiscal year, in the event that Executive’s annual cash bonus for such year had not been determined as of the Termination Date) and the denominator of which is 365.

 

(ii)                                  Executive shall receive as severance pay, in a single payment on the Payment Date, an amount in cash equal to the sum of (A) the Executive’s average annual

 

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Base Salary in effect during the twenty-four (24) months immediately prior to the Termination Date (the “Average Annual Base Salary”), (B) the Average Annual Bonus and (C) the Executive’s average annual deferred compensation contribution for the twenty-four (24) months immediately prior to the Termination Date, calculated based on the cash value of the annual deferred compensation contributions as of the dates of such contributions (the “Average Annual Deferred Compensation”).

 

(iii)                               If Executive was participating in the Employer’s group health, dental and/or vision plan immediately prior to the Termination Date, then the Employer shall pay to Executive a monthly cash payment for a period of twelve (12) months after the Termination Date equal to the amount of monthly employer contribution that the Employer would have made to provide health, dental and/or vision insurance to Executive if Executive had remained employed by the Employer.  Notwithstanding the foregoing, the Employer shall in no event be required to make the payments otherwise required by this Section 7(a)(iii) after such time as Executive becomes entitled to receive benefits of the same type from another employer or recipient of Executive’s services (such entitlement being determined without regard to any individual waivers or other similar arrangements).

 

(iv)                              Executive shall receive equity awards with terms as set forth on Exhibit A hereto to the extent such equity awards had not previously been granted to Executive. Any unvested shares of restricted stock, restricted stock units, LTIP Units or other equity-based awards (i.e., shares, units or other awards then still subject to restrictions under the applicable award agreement) granted to Executive by the Employer, including the equity awards granted pursuant to this Section 7(a)(iv), and any unvested deferred compensation contribution made pursuant to Section 3(c) above shall not be forfeited on the Termination Date and shall become vested (i.e., free from such restrictions), and any unexercisable or unvested stock options granted to Executive by the Employer shall not be forfeited on the Termination Date and shall become vested and exercisable, on the Payment Date.  Any unexercised stock options granted to Executive by the Employer on or after January 1, 2004 shall remain exercisable until the second January 1 to follow the Termination Date or, if earlier, the expiration of the initial applicable term stated at the time of the grant.  For avoidance of doubt, the provisions of this Section 7(a)(iv) shall not apply to grants made under the Outperformance Plans, which shall be governed by their terms as in effect from time to time.

 

(v)                                 In the event such termination occurs in connection with or within eighteen (18) months after a Change-in-Control, then, in addition to the payments and benefits set forth above (or, as specifically cited below, in lieu of such payments and benefits): (A) in lieu of the severance payment set forth in Section 7(a)(ii), Executive shall receive as severance pay, in a single payment on the Payment Date, an amount in cash equal to three (3) times the sum of (I) the Average Annual Base Salary, (II) the Average Annual Bonus and (III) the Average Annual Deferred Compensation, (B) the monthly cash payment provided for in the first sentence of Section 7(a)(iii) above shall be extended from twelve (12) months to twenty-four (24) months, but shall otherwise be subject to the terms of Section 7(a)(iii); (C) neither Executive nor the Employer shall be required to execute the Release Agreement; and (D) if such Change-in-Control also constitutes a “change in the ownership” of the Employer, a “change in the effective

 

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control” of the Employer or a “change in ownership of a substantial portion of the assets” of the Employer, each within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations promulgated thereunder, then the Payment Date shall occur on the Termination Date.

 

Other than as may be provided under Section 4 or as expressly provided in this Section 7(a) or Section 7(e), the Employer shall have no further obligations hereunder following such termination.

 

(b)         Termination By the Employer For Cause or By Executive Without Good Reason.  If, during the Employment Period, (i) Executive is terminated by the Employer for Cause pursuant to Section 6(a)(iii) above, or (ii) Executive voluntarily terminates his employment hereunder without Good Reason pursuant to Section 6(b)(iii) above, then the Employment Period shall terminate as of the Termination Date and Executive shall be entitled to receive his earned and accrued but unpaid Base Salary on the Termination Date, but, for avoidance of doubt, shall not be entitled to any annual cash bonus for the year in which the termination occurs, severance payment, continuation of benefits or acceleration of vesting or extension of exercise period of any equity awards, except as otherwise provided in the documentation applicable to such equity awards.  Other than as may be provided under Section 4 or as expressly provided in this Section 7(b) or Section 7(e), the Employer shall have no further obligations hereunder following such termination.

 

(c)          Termination by Reason of Death.  If Executive’s employment terminates due to his death during the Employment Period, Executive’s estate (or a beneficiary designated by Executive in writing prior to his death) shall be entitled to the following payments and benefits:

 

(i)                                     On the Termination Date, Executive’s estate (or a beneficiary designated by Executive in writing prior to his death) shall receive an amount equal to any earned and accrued but unpaid Base Salary and a prorated annual cash bonus (equal to the Average Annual Bonus multiplied by a fraction, the numerator of which is the number of days in the fiscal year in which Executive’s employment terminates through the date of Executive’s death (and the number of days in the prior fiscal year, in the event that Executive’s annual cash bonus for such year had not been determined as of the date of Executive’s death) and the denominator of which is 365).

 

(ii)                                  Executive’s estate (or a beneficiary designated by Executive in writing prior to his death) shall receive equity awards with terms as set forth on Exhibit A hereto to the extent such equity awards had not previously been granted to Executive. Executive’s estate (or a beneficiary designated by Executive in writing prior to his death) shall be credited with twenty-four (24) months of service after termination under any provisions governing restricted stock, restricted stock units, LTIP Units, options or other equity-based awards granted to Executive or Executive’s estate (or a beneficiary designated by Executive in writing prior to his death) by the Employer, including the equity awards granted pursuant to this Section 7(c)(ii), relating to the vesting or initial exercisability thereof, and, if such twenty-four (24) months of credit would fall within a vesting period, a pro rata portion of the unvested shares of restricted stock, restricted stock units, LTIP Units or other equity-based awards granted to Executive by the Employer that otherwise would have become vested upon the conclusion of such vesting

 

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period (assuming, if applicable, the attainment of any required performance goals) shall become vested on the date of Executive’s termination due to his death, and a pro rata portion of the unexercisable stock options granted to Executive by the Employer that otherwise would have become exercisable upon the conclusion of such vesting period (assuming, if applicable, the attainment of any required performance goals) shall become exercisable on the date of Executive’s termination due to such death; provided that any unvested or unexercisable restricted stock, restricted stock units, LTIP Units, options or other equity-based awards that were granted as payment of a cash bonus, as determined at the time of grant by the Compensation Committee of the Board, in its sole discretion, and reflected in the minutes or consents of the Compensation Committee of the Board relating to the approval of such equity awards, shall become fully vested and exercisable on the date of Executive’s death.  In addition, any unvested deferred compensation contribution made pursuant to Section 3(c) above shall become fully vested upon the date of Executive’s death.  For avoidance of doubt, the provisions of this Section 7(c)(ii) shall not apply to (1) grants made under the Outperformance Plans, which shall be governed by their terms as in effect from time to time and (2) option grants made under the SL Green Realty Corp. Third Amended and Restated 2005 Stock Option and Incentive Plan (the “2005 Plan”), which such options shall become fully vested and exercisable on the date of Executive’s termination due to such death in accordance with their terms as currently in effect.  Furthermore, upon such death, any vested unexercised stock options granted to Executive by the Employer on or after January 1, 2004 shall remain vested and exercisable until the earlier of (A) the date on which the term of such stock options otherwise would have expired, or (B) the second January 1 after the date of Executive’s termination due to his death.

 

Notwithstanding the foregoing, Executive shall only be entitled to receive the prorated annual cash bonus set forth in Section 7(c)(i) above, the vesting credit, payments and other benefits set forth in Section 7(c)(ii) above and any accelerated vesting or other benefits under the Outperformance Plans or the 2005 Plan to the extent that the aggregate Value of such vesting credit, payments and other benefits and any other such accelerated vesting or benefits, on the date of Executive’s death, exceeds the amount payable to Executive’s beneficiaries under the life insurance (or self-insurance) provided pursuant to the second and third sentences of Section 3(h) (the amount of such excess Value being referred to as the “Excess Value”).  For purposes of the foregoing, “Value,” on a particular date, shall mean (A) for options which become vested, the product of the number of options multiplied by the excess, if any, the Fair Market Value (as defined in Section 3(d)) of the Common Stock as of such date over the exercise price of the option, (B) for restricted stock, restricted stock units, stock units made as a deferred compensation contribution pursuant to Section 3(c), LTIP Units or other equity awards that deliver the full value of the underlying securities which become vested, the Fair Market Value of such securities as of such date, and (C) for all other equity awards that become vested, the Fair Market Value of such awards as of such date as determined by the Compensation Committee.  In the event Excess Value exists upon a termination of Executive’s employment pursuant to this Section 7(c), then the prorated annual cash bonus set forth in Section 7(c)(i) above, each of the vesting credit, payments and other benefits set forth in Section 7(c)(ii) above and any accelerated vesting or other benefits under the Outperformance Plans or the 2005 Plan that Executive’s estate (or a beneficiary designated by Executive in writing prior to his death) would otherwise be entitled to pursuant to Section 7(c)(i), Section 7(c)(ii), the Outperformance Plans or the 2005 Plan shall be prorated based on a percentage equal to (A) the Excess Value divided by (B) the

 

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aggregate Value of the prorated annual cash bonus set forth in Section 7(c)(i) and all vesting credit, payments and other benefits and any accelerated vesting or other benefits that Executive’s estate (or a beneficiary designated by Executive in writing prior to his death) would be entitled to pursuant to Section 7(c)(ii) or the Outperformance Plans or the 2005 Plan if no limitations on such amounts applied.

 

Other than as may be provided under Section 4 or as expressly provided in this Section 7(c) or Section 7(e), the Employer shall have no further obligations hereunder following such termination.

 

(d)         Termination by Reason of Disability.  In the event that Executive’s employment terminates during the Employment Period due to his disability as defined in Section 6(a)(ii) above, Executive shall be entitled to receive his earned and accrued but unpaid Base Salary on the Termination Date and Executive shall be entitled to the following payments and benefits in lieu of any further compensation for periods subsequent to the Termination Date, subject to (1) Executive’s execution of the Release Agreement, which Release Agreement the Employer shall execute within five (5) business days after such execution by Executive, and (2) the effectiveness and irrevocability of the Release Agreement with respect to Executive within thirty (30) days after the Termination Date:

 

(i)                                     On the Payment Date, Executive shall receive a prorated annual cash bonus equal to the Average Annual Bonus multiplied by a fraction, the numerator of which is the number of days in the fiscal year in which Executive’s employment terminates through the Termination Date (and the number of days in the prior fiscal year, in the event that Executive’s annual cash bonus for such year had not been determined as of the Termination Date) and the denominator of which is 365.

 

(ii)                                  Executive shall receive as severance pay, in a single payment on the Payment Date, an amount in cash equal to the sum of (A) the Average Annual Base Salary, (B) the Average Annual Bonus and (C) the Average Annual Deferred Compensation.

 

(iii)                               If Executive was participating in the Employer’s group health, dental and/or vision plan immediately prior to the Termination Date, then the Employer shall pay to Executive a monthly cash payment for a period of thirty-six (36) months after the Termination Date equal to the amount of monthly employer contribution that the Employer would have made to provide health, dental and/or vision insurance to Executive if Executive had remained employed by the Employer.  Notwithstanding the foregoing, the Employer shall in no event be required to make the payments otherwise required by this Section 7(d)(iii) after such time as Executive becomes entitled to receive benefits of the same type from another employer or recipient of Executive’s services (such entitlement being determined without regard to any individual waivers or other similar arrangements).

 

(iv)                              Executive shall receive equity awards with terms as set forth on Exhibit A hereto to the extent such equity awards had not previously been granted to Executive. Executive shall be credited with twenty-four (24) months of service after termination under any provisions governing restricted stock, restricted stock units, LTIP

 

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Units, options or other equity-based awards granted to Executive by the Employer, including the equity awards granted pursuant to this Section 7(d)(iv), relating to the vesting or initial exercisability thereof and, if such twenty-four (24) months of credit would fall within a vesting period, a pro rata portion of the unvested shares of restricted stock, restricted stock units, LTIP Units or other equity-based awards granted to Executive by the Employer that otherwise would have become vested upon the conclusion of such vesting period (assuming, if applicable, the attainment of any required performance goals) shall become vested on the Payment Date, and a pro rata portion of the unvested or unexercisable stock options granted to Executive by the Employer that otherwise would have become vested or exercisable upon the conclusion of such vesting period (assuming, if applicable, the attainment of any required performance goals) shall become vested and exercisable on the Payment Date; provided that any unvested or unexercisable restricted stock, restricted stock units, LTIP Units, options or other equity-based awards that were granted as payment of a cash bonus, as determined at the time of grant by the Compensation Committee of the Board, in its sole discretion, and reflected in the minutes or consents of the Compensation Committee of the Board relating to the approval of such equity awards shall become fully vested and exercisable on the Payment Date.  Any vested unexercised stock options granted to Executive by the Employer on or after January 1, 2004 shall remain vested and exercisable until the earlier of (A) the date on which the term of such stock options otherwise would have expired, or (B) the second January 1 after the Termination Date.  In addition, any unvested deferred compensation contribution made pursuant to Section 3(c) above shall become fully vested upon the Payment Date.  For avoidance of doubt, the provisions of this Section 7(d)(iv) shall not apply to (1) grants made under the Outperformance Plans, which shall be governed by their terms as in effect from time to time and (2) option grants made under the 2005 Plan, which such options shall become fully vested and exercisable on the date of Executive’s termination due to such disability in accordance with their terms as currently in effect.

 

Other than as may be provided under Section 4 or as expressly provided in this Section 7(d) or Section 7(e), the Employer shall have no further obligations hereunder following such termination.

 

(e)          Notwithstanding any of the foregoing provisions to the contrary and without regard to any release requirement, Executive (or his estate, as applicable) shall be entitled to (i) receive payment for any already accrued but unused vacation days and any unreimbursed expenses already incurred on behalf of the Employer (to the extent consistent with the Employer’s expense reimbursement policies absent a termination), (ii) retain any already vested stock options or any other already vested equity based compensation (subject, in each case, to the terms of the underlying option or equity award agreement and plan (including, without limitation, any provision of an option providing for its expiration upon or within a certain number of days following termination)), and (iii) retain any vested rights in any 401(k) plans in which he participated during his employment, in the case of each of (i)-(iii) above, as of the Termination Date.  Nothing in this Section 7 shall be construed to limit any rights Executive may have to elect to continue his health coverage pursuant to 29 U.S.C. § 1161 et seq. (commonly known as “COBRA”).

 

8.              Confidentiality; Prohibited Activities.  Executive and the Employer recognize that due to the nature of his employment and relationship with the Employer, Executive has access to and develops

 

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confidential business information, proprietary information, and trade secrets relating to the business and operations of the Employer.  Executive acknowledges that (i) such information is valuable to the business of the Employer, (ii) disclosure to, or use for the benefit of, any person or entity other than the Employer, would cause irreparable damage to the Employer, (iii) the principal businesses of the Employer are the acquisition, development, management, leasing or financing of (A) any office real estate property, including without limitation the origination of first-mortgage and mezzanine debt or preferred equity financing for real estate projects throughout the United States and (B) any multi-family residential or retail real estate property located inside the borough of Manhattan (collectively, the “Business”) and (iv) the Employer is one of the limited number of persons who have developed a business such as the Business.  Executive further acknowledges that his duties for the Employer include the duty to develop and maintain client, customer, employee, and other business relationships on behalf of the Employer; and that access to and development of those close business relationships for the Employer render his services special, unique and extraordinary.  In recognition that the goodwill and business relationships described herein are valuable to the Employer, and that loss of or damage to those relationships would destroy or diminish the value of the Employer, and in consideration of the compensation (including severance) arrangements hereunder, and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged by Executive, Executive agrees as follows:

 

(a)         Confidentiality.  During the term of this Agreement (including any extensions), and at all times thereafter, Executive shall maintain the confidentiality of all confidential or proprietary information of the Employer (“Confidential Information”), and, except in furtherance of the business of the Employer or as specifically required by law or by court order, he shall not directly or indirectly disclose any such information to any person or entity; nor shall he use Confidential Information for any purpose except for the benefit of the Employer.  For purposes of this Agreement, “Confidential Information” includes, without limitation:  client or customer lists, identities, contacts, business and financial information (excluding those of Executive prior to employment with Employer); investment strategies; pricing information or policies, fees or commission arrangements of the Employer; marketing plans, projections, presentations or strategies of the Employer; financial and budget information of the Employer; new personnel acquisition plans; and all other business related information which has not been publicly disclosed by the Employer.  This restriction shall apply regardless of whether such Confidential Information is in written, graphic, recorded, photographic, data or any machine readable form or is orally conveyed to, or memorized by, Executive.  For the avoidance of doubt, Section 8(a) shall not interfere with Executive’s rights to retain copies of any documents or data relating to Executive’s compensation and benefits (including, without limitation, copies of this Employment Agreement, and side letters and any documents relating to any of Executive’s equity based award rights or other compensation and benefits) and/or discuss the same with Executive’s advisors or immediate family (in each case, on a confidential basis).

 

(b)         Prohibited Activities.  Because Executive’s services to the Employer are essential and because Executive has access to the Employer’s Confidential Information, Executive covenants and agrees that, so long as the Employer has not materially breached its obligations to Executive under this Agreement (or, in the event such breach has occurred, the Employer has cured such breach or such breach only occurred following a material breach by Executive of his obligations under this Agreement):

 

(i)                                     during the Employment Period, any period thereafter during which Executive remains employed by the Employer and (x) for the 18-month period following

 

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the termination of Executive by either party for any reason other than termination in connection with or within eighteen (18) months after a Change-in-Control, or (y) for the 6-month period following the termination of Executive in connection with or within eighteen (18) months after a Change-in-Control, Executive will not, anywhere in the United States, without the prior written consent of the Board which shall include the unanimous consent of the Directors other than any other officer of the Employer, directly or indirectly (individually, or through or on behalf of another entity as owner, partner, agent, employee, consultant, or in any other capacity), engage, participate or assist, as an owner, partner, employee, consultant, director, officer, trustee or agent, in any element of the Business, subject, however, to Section 8(c) below; provided, however, that, if Executive’s employment with the Employer terminates upon or after the scheduled expiration of the term of this Agreement (including any extensions) without any early termination under Section 6, the restrictions of this Section 8(b)(i) shall apply for one (1) year (rather than eighteen (18) months) following the termination of Executive’s employment (as reduced by the Extension Period, if any); and

 

(ii)                                  during the Employment Period, any period thereafter during which Executive remains employed by the Employer and (x) in the case of clause (A) below, the 30-month period following the termination of Executive by either party for any reason (including upon or after the scheduled expiration of the term of this Agreement (including any extensions)) other than a termination in connection with or within eighteen (18) months after a Change-in-Control that constitutes a termination either by the Employer without Cause or by Executive with Good Reason, or (y) the one-year period following such termination in the case of clause (B) below, Executive will not, without the prior written consent of the Board which shall include the unanimous consent of the Directors who are not officers of the Employer, directly or indirectly (individually, or through or on behalf of another entity as owner, partner, agent, employee, consultant, or in any other capacity), (A) solicit, encourage, or engage in any activity to induce any employee of the Employer to terminate employment with the Employer, or to become employed by, or to enter into a business relationship with, any other person or entity, or (B) solicit, encourage, or engage in any activity to induce any prospective party to a transaction with the Employer (including, without limitation, potential purchases, sales or leases of real estate assets) that is under agreement, negotiation or active consideration by the Employer to not enter into or complete such transaction with the Employer (or to only do so on terms less favorable to the Employer than otherwise would have been obtained); provided that, following the termination of Executive, this clause (B) shall only apply to transactions that were under agreement, negotiation or active consideration by the Employer during the six-month period prior to such termination. For purposes of this subsection, the term “employee” means any individual who is an employee of or consultant to the Employer (or any affiliate) during the six-month period prior to Executive’s last day of employment.

 

(c)          Other Investments/Activities.  Notwithstanding anything contained herein to the contrary, Executive is not prohibited by this Section 8 from making investments (i) expressly disclosed to the Employer in writing before the date hereof; (ii) solely for investment purposes and without participating in the business in which the investments are made, in any entity that engages, directly or indirectly, in the acquisition, development, construction, operation, management, financing or leasing of office real estate properties, regardless of where they are

 

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located, if (x) Executive’s aggregate investment in each such entity constitutes less than one percent of the equity ownership of such entity, (y) the investment in the entity is in securities traded on any national securities exchange, and (z) Executive is not a controlling person of, or a member of a group which controls, such entity; or (iii) if the investment is made in (A) assets other than Competing Properties (including, without limitation, multi-family residential or retail real estate properties located outside of the borough of Manhattan) or (B) any entity other than one that is engaged, directly or indirectly, in the acquisition, development, construction, operation, management, financing or leasing of Competing Properties.  For purposes of this Agreement, a “Competing Property” means:  (i) an office real estate property located outside of New York City, unless the property (A) is not an appropriate investment opportunity for the Employer, (B) is not directly competitive with the Businesses of the Employer and (C) has a fair market value at the time Executive’s investment is made of less than $25 million, (ii) an office real estate property located in New York City or (iii) a multi-family residential or real estate property located in the borough of Manhattan.

 

(d)         Employer Property.  Executive acknowledges that all originals and copies of materials, records and documents generated by him or coming into his possession during his employment by the Employer are the sole property of the Employer (“Employer Property”).  During his employment, and at all times thereafter, Executive shall not remove, or cause to be removed, from the premises of the Employer, copies of any record, file, memorandum, document, computer related information or equipment, or any other item relating to the business of the Employer, except as required by law or legal process or in furtherance of his duties under this Agreement.  When Executive terminates his employment with the Employer, or upon request of the Employer at any time, Executive shall promptly deliver to the Employer all originals and copies of Employer Property in his possession or control and shall not retain any originals or copies in any form, except that Executive may retain a copy of his Rolodex or other similar contact list.  For the avoidance of doubt, Section 8(d) shall not interfere with Executive’s rights to retain copies of any documents or data relating to Executive’s compensation and benefits (including, without limitation, copies of this Employment Agreement, and side letters and any documents relating to any of Executive’s equity-based award rights or other compensation and benefits) and/or discuss the same with Executive’s advisors or immediate family (in each case, on a confidential basis).

 

(e)          No Disparagement.  For one (1) year following termination of Executive’s employment for any reason, Executive shall not intentionally disclose or cause to be disclosed any negative, adverse or derogatory comments or information about (i) the Employer and its parent, affiliates or subsidiaries, if any; (ii) any product or service provided by the Employer and its parent, affiliates or subsidiaries, if any; or (iii) the Employer’s and its parent’s, affiliates’ or subsidiaries’ prospects for the future.  For one (1) year following termination of Executive’s employment for any reason, the Employer shall not disclose or cause to be disclosed any negative, adverse or derogatory comments or information about Executive.  Nothing in this Section shall prohibit either the Employer or Executive from testifying truthfully in any legal or administrative proceeding or otherwise truthfully responding to any other request for information or testimony that Executive is legally required to respond to, or making any legally required disclosures, and/or discussing any of the above with the Employer’s legal advisors or Executive’s legal advisors on a confidential basis.

 

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(f)           Remedies.  Executive declares that the foregoing limitations in Sections 8(a) through 8(e) above are reasonable and necessary for the adequate protection of the business and the goodwill of the Employer.  If any restriction contained in this Section 8 shall be deemed to be invalid, illegal or unenforceable by reason of the extent, duration or scope thereof, or otherwise, then the court making such determination shall have the right to reduce such extent, duration, scope, or other provisions hereof to make the restriction consistent with applicable law, and in its reduced form such restriction shall then be enforceable in the manner contemplated hereby.  In the event that Executive breaches any of the promises contained in this Section 8, Executive acknowledges that the Employer’s remedy at law for damages will be inadequate and that the Employer will be entitled to specific performance, a temporary restraining order or preliminary injunction to prevent Executive’s prospective or continuing breach and to maintain the status quo.  The existence of this right to injunctive relief, or other equitable relief, or the Employer’s exercise of any of these rights, shall not limit any other rights or remedies the Employer may have in law or in equity, including, without limitation, the right to arbitration contained in Section 9 hereof and the right to compensatory and monetary damages.  Executive hereby agrees to waive his right to a jury trial with respect to any action commenced to enforce the terms of this Agreement.  Executive shall have remedies comparable to those of the Employer as set forth above in this Section 8(f) if the Employer breaches Section 8(e).

 

(g)          Transition.  Regardless of the reason for his departure from the Employer, Executive agrees that at the Employer’s sole costs and expense, for a period of not more than thirty (30) days after termination of Executive, he shall take all steps reasonably requested by the Employer to effect a successful transition of client and customer relationships to the person or persons designated by the Employer, subject to Executive’s obligations to his new employer.

 

(h)         Cooperation with Respect to Litigation.  During the Employment Period and at all times thereafter, Executive agrees to give prompt written notice to the Employer of any formally asserted claim relating to the Employer and to cooperate fully, in good faith and to the best of his ability with the Employer in connection with any and all pending, potential or future claims, investigations or actions which directly or indirectly relate to any action, event or activity about which Executive has or is reasonably believed by the Employer to have direct material knowledge in connection with or as a result of his employment by the Employer hereunder, provided that Executive is not waiving any legal rights he may have. Such cooperation will include all assistance that the Employer, its counsel or its representatives may reasonably request, including reviewing documents, meeting with counsel, providing factual information and material, and appearing or testifying as a witness; provided, however, that the Employer will reimburse Executive for all reasonable expenses, including travel, lodging and meals, and reasonable legal fees and expenses (except to the extent that legal representation is provided by the Employer at the Employer’s expense) incurred by him in fulfilling his obligations under this Section 8(h) and, except as may be required by law or by court order, should Executive then be employed by an entity other than the Employer, such cooperation will not materially interfere with Executive’s then current employment or his efforts to obtain new employment.  In addition, for all time that Executive reasonably expends at the request of the Employer in cooperating with the Employer pursuant to this Section 8(h) when Executive is no longer employed by the Employer, the Employer shall compensate Executive at a per diem rate equal to the sum of (A) Base Salary in Executive’s last fiscal year of employment during the Employment Period plus (B) Executive’s actual annual cash bonus for the last full fiscal year of employment during the Employment Period for which such a bonus was determined, divided by 220; provided that Executive’s right to

 

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such compensation shall not apply to time spent in activities that could have been compelled pursuant to a subpoena, including testimony and related attendance at depositions, hearings or trials.

 

(i)             Survival.  The provisions of this Section 8 and any other provisions relating to the enforcement thereof shall survive termination of Executive’s employment.

 

9.              Arbitration.  Any controversy or claim arising out of or relating to this Agreement or the breach of this Agreement (other than a controversy or claim arising under Section 8, to the extent necessary for the Employer (or its affiliates, where applicable) to avail itself of the rights and remedies referred to in Section 8(f)) that is not resolved by Executive and the Employer (or its affiliates, where applicable) shall be submitted to arbitration in New York, New York in accordance with New York law and the procedures of the American Arbitration Association.  The determination of the arbitrator(s) shall be conclusive and binding on the Employer (or its affiliates, where applicable) and Executive and judgment may be entered on the arbitrator(s)’ award in any court having jurisdiction.

 

10.       Conflicting Agreements.  Executive hereby represents and warrants that the execution of this Agreement and the performance of his obligations hereunder will not breach or be in conflict with any other agreement to which he is a party or is bound, and that he is not now subject to any covenants against competition or similar covenants which would affect the performance of his obligations hereunder.

 

11.       Notices.  All notices or other communications required or permitted to be given hereunder shall be in writing and shall be delivered by hand and or sent by prepaid telex, cable or other electronic devices or sent, postage prepaid, by registered or certified mail or telecopy or overnight courier service and shall be deemed given when so delivered by hand, telexed, cabled or telecopied, or if mailed, three (3) days after mailing (one (1) business day in the case of express mail or overnight courier service), as follows:

 

(a)         if to Executive:

 

Marc Holliday, at the address shown on the execution page hereof.

 

(b)         if to the Employer:

 

SL Green Realty Corp.
 420 Lexington Avenue
 New York, New York 10170

Attn:  General Counsel

 

With a copy to:

 

Goodwin Procter LLP

Exchange Place

Boston, Massachusetts  02109

Attention:  Daniel P. Adams

 

or such other address as either party may from time to time specify by written notice to the other party hereto.

 

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12.       Amendments.  No amendment, modification or waiver in respect of this Agreement shall be effective unless it shall be in writing and signed by the party against whom such amendment, modification or waiver is sought.

 

13.       Severability.  If any provision of this Agreement (or any portion thereof) or the application of any such provision (or any portion thereof) to any person or circumstances shall be held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision hereof (or the remaining portion hereof) or the application of such provision to any other persons or circumstances.

 

14.       Withholding.  The Employer shall be entitled to withhold from any payments or deemed payments any amount of tax withholding it determines to be required by law.

 

15.       Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of both parties and their respective successors and assigns, including any corporation with which or into which the Employer may be merged or which may succeed to its assets or business, provided, however, that the obligations of Executive are personal and shall not be assigned by him.  This Agreement shall inure to the benefit of and be enforceable by Executive’s personal and legal representatives, executors, administrators, assigns, heirs, distributees, devisees and legatees.

 

16.       Counterparts.  This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more such counterparts have been signed by each of the parties and delivered to the other party.

 

17.       Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be performed entirely within such State, without regard to the conflicts of law principles of such State.

 

18.       Choice of Venue.  Subject to the provisions of Section 9, Executive agrees to submit to the jurisdiction of the United States District Court for the Southern District of New York or the Supreme Court of the State of New York, New York County, for the purpose of any action to enforce any of the terms of this Agreement.

 

19.       Parachutes.

 

(a)         Notwithstanding any other provision of this Agreement, if all or any portion of the payments and benefits provided under this Agreement (including without limitation any accelerated vesting and any other payment or benefit received in connection with a Change-in-Control or the termination of Executive’s employment), or any other payments and benefits which Executive receives or is entitled to receive under any plan, program, arrangement or other agreement, whether from the Employer or an affiliate of the Employer, or any combination of the foregoing, would constitute an excess “parachute payment” within the meaning of Section 280G of the Code (whether or not under an existing plan, arrangement or other agreement) (each such parachute payment, a “Parachute Payment”), and would result in the imposition on Executive of an excise tax under Section 4999 of the Code or any successor thereto, then the following provisions shall apply:

 

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(i)                                     If the Parachute Payment, reduced by the sum of (1) the Excise Tax and (2) the total of the federal, state, and local income and employment taxes payable by Executive on the amount of the Parachute Payment which are in excess of the Threshold Amount, are greater than or equal to the Threshold Amount, Executive shall be entitled to the full benefits payable under this Agreement.

 

(ii)                                  If the Threshold Amount is less than (x) the Parachute Payment, but greater than (y) the Parachute Payment reduced by the sum of (1) the Excise Tax and (2) the total of the federal, state, and local income and employment taxes on the amount of the Parachute Payment which are in excess of the Threshold Amount, then the Parachute Payment shall be reduced (but not below zero) to the extent necessary so that the sum of all Parachute Payments shall not exceed the Threshold Amount.  In such event, the Parachute Payment shall be reduced in the following order:  (1) cash payments not subject to Section 409A of the Code; (2) cash payments subject to Section 409A of the Code; (3) equity-based payments and acceleration; and (4) non-cash forms of benefits.  To the extent any payment is to be made over time (e.g., in installments, etc.), then the payments shall be reduced in reverse chronological order.

 

(b)         For the purposes of this Section 19, “Threshold Amount” shall mean three times Executive’s “base amount” within the meaning of Section 280G(b)(3) of the Code and the regulations promulgated thereunder less one dollar ($1.00); and “Excise Tax” shall mean the excise tax imposed by Section 4999 of the Code, and any interest or penalties incurred by Executive with respect to such excise tax.

 

(c)          The determination as to which of the alternative provisions of Section 19(a) shall apply to Executive shall be made by a certified public accounting firm of national reputation reasonably selected by the Employer.  Executive and the Employer shall provide the accounting firm with all information which any accounting firm reasonably deems necessary in computing the Threshold Amount. For purposes of determining which of the alternative provisions of Section 19(a) shall apply, Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation applicable to individuals for the calendar year in which the determination is to be made, and state and local income taxes at the highest marginal rates of individual taxation in the state and locality of Executive’s residence on the Termination Date, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes.  Any determination by the accounting firm shall be binding upon the Employer and the Executive.

 

20.       Section 409A.

 

(a)         Anything in this Agreement to the contrary notwithstanding, if at the time of Executive’s separation from service within the meaning of Section 409A of the Code, the Employer determines that Executive is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, then to the extent any payment or benefit that Executive becomes entitled to under this Agreement on account of Executive’s separation from service would be considered deferred compensation subject to the 20 percent additional tax imposed pursuant to Section 409A(a) of the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, such payment shall not be payable and such benefit shall not be provided until the date that is the earlier of (A) six (6) months and one day after Executive’s separation from service, or (B)

 

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Executive’s death.  If any such delayed cash payment is otherwise payable on an installment basis, the first payment shall include a catch-up payment covering amounts that would otherwise have been paid during the six-month period but for the application of this provision, and the balance of the installments shall be payable in accordance with their original schedule.  Any payments delayed pursuant to this Section 20(a) shall bear interest during the period of such delay at the simple rate of 5% per annum.

 

(b)         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 cost to either party.

 

(c)          To the extent that any payment or benefit described in this Agreement constitutes “non-qualified deferred compensation” under Section 409A of the Code, and to the extent that such payment or benefit is payable upon the Executive’s termination of employment, then such payments or benefits shall be payable only upon the Executive’s “separation from service.”  The determination of whether and when a separation from service has occurred shall be made in accordance with the presumptions set forth in Treasury Regulation Section 1.409A-1(h).

 

(d)         The Employer makes no representation or warranty and shall have no liability to 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.

 

21.       Entire Agreement.  This Agreement (including, without limit, any attached exhibits hereto and any equity and award agreements referred to herein or therein) contains the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings relating to such subject matter.  The parties hereto shall not be liable or bound to any other party in any manner by any representations, warranties or covenants relating to such subject matter except as specifically set forth herein.

 

22.       Section Headings.  Section headings used in this Agreement are included for convenience of reference only and will not affect the meaning of any provision of this Agreement.

 

23.       Board Approval.  The Employer represents that the Board (or the Compensation Committee thereof) has approved the economic terms of this Agreement.

 

[Remainder of page intentionally left blank]

 

23

 

IN WITNESS WHEREOF, this Agreement is entered into as of the date and year first written above.

 

 

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

 

 

EXHIBIT A

 

Time-Based Vesting Equity Awards

 

2014 Grant

 

1.              Plan:  SL Green Realty Corp. Third Amended and Restated 2005 Stock Option and Incentive Plan or any future equity plan (the “Plan”)

 

2.              Type of Award:  LTIP units in SL Green Operating Partnership, L.P.

 

3.              Grant Date:  On or before January 17, 2014

 

4.              Total Number of Units:  35,148

 

5.              Distributions will be paid on all units whether vested or not from and after the grant date. Upon grant, an amount in cash will be paid to Executive equal to (i) the per share amount of all dividends declared with respect to the Common Stock with a record date on or after January 18, 2013 and before the grant date multiplied by (ii) the total number of units set forth above.

 

6.              Vesting:  Subject to acceleration as set forth in the Agreement, the units shall vest in their entirety on January 17, 2014, if employment continues through such date.

 

7.              No Sell:  Executive may not sell, assign, transfer, or otherwise encumber or dispose of LTIP units until the earlier of (i) the date that is two years after such units vested, (ii) the termination of Executive’s employment or (iii) a Change-in-Control.

 

2015 Grant

 

1.              Plan:  The Plan

 

2.              Type of Award:  LTIP units in SL Green Operating Partnership, L.P.

 

3.              Grant Date:  On or before January 17, 2015

 

4.              Total Number of Units:  35,148

 

5.              Distributions will be paid on all units whether vested or not from and after the grant date. Upon grant, an amount in cash will be paid to Executive equal to (i) the per share amount of all dividends declared with respect to the Common Stock with a record date on or after January 18, 2013 and before the grant date multiplied by (ii) the total number of units set forth above.

 

6.              Vesting:  Subject to acceleration as set forth in the Agreement, the units shall vest in their entirety on January 17, 2015, if employment continues through such date.

 

7.              No Sell:  Executive may not sell, assign, transfer, or otherwise encumber or dispose of LTIP units until the earlier of (i) the date that is two years after such shares/units vested, (ii) the termination of Executive’s employment or (iii) a Change-in-Control.

 

2016 Grant

 

1.              Plan:  The Plan

 

2.              Type of Award:  LTIP units in SL Green Operating Partnership, L.P.

 

3.              Grant Date:  On or before January 17, 2016

 

4.              Total Number of Units:  35,148

 

A-1

 

5.              Distributions will be paid on all units whether vested or not from and after the grant date. Upon grant, an amount in cash will be paid to Executive equal to (i) the per share amount of all dividends declared with respect to the Common Stock with a record date on or after January 18, 2013 and before the grant date multiplied by (ii) the total number of units set forth above.

 

6.              Vesting:  Subject to acceleration as set forth in the Agreement, the units shall vest in their entirety on January 17, 2016, if employment continues through such date.

 

7.              No Sell:  Executive may not sell, assign, transfer, or otherwise encumber or dispose of LTIP units until the earlier of (i) the date that is two years after such shares/units vested, (ii) the termination of Executive’s employment or (iii) a Change-in-Control.

 

Performance-Based Vesting Equity Awards

 

2014 Grant

 

1.              Plan:  The Plan

 

2.              Type of Award:  LTIP units in SL Green Operating Partnership, L.P.

 

3.              Grant Date:  On or before January 17, 2014

 

4.              Total Number of Units:  52,722

 

5.              The Special LTIP Unit Sharing Percentage will equal 10%, the Distribution Participation Date will be the vesting date and additional LTIP units will be earned to the extent the aggregate amount of distributions that would have been received on vested LTIP units from January 18, 2013 through the vesting date (if the Distribution Participation Date had been the issuance date) exceeds the amount of the Special LTIP Unit Distribution that Executive becomes entitled to upon such vesting date. Additional LTIP units will be granted on the initial grant date in an amount that is estimated by the Employer, in its sole discretion, to equal or exceed the maximum amount of additional LTIP units that could be earned pursuant to this provision, which will be subject to forfeiture if they are not earned.

 

6.              Vesting:  Subject to acceleration as set forth in the Agreement, the units shall vest on January 17, 2014, if employment continues through such date and the performance-based vesting criteria set forth below are satisfied on such date, or, if the units do not vest on January 17, 2014, on the first Subsequent Vesting Date on which the performance-based vesting criteria set forth below are satisfied, provided that employment continues through such date.  For purposes of this paragraph, “Subsequent Vesting Date” shall mean January 17, 2015 or January 17, 2016.

 

The performance criteria applicable to the units subject to performance-based vesting are as follows:

 

(i)                                     Such units shall vest on January 17, 2014 if the Employer achieves either (A) a 7% per year increase in funds from operations on a per-share of Common Stock of the Employer basis, or (B) a 7% per year total return to stockholders on each share of Common Stock outstanding during the entire period, during fiscal year 2013.

 

(ii)                                  If the performance criteria set forth in clause (i) above are not achieved in fiscal year 2013, but are achieved on a cumulative basis beginning with fiscal year 2013, and ending with the last fiscal year completed before the Subsequent Vesting Date, then, if and as employment continues through such Subsequent Vesting Date, the performance criteria will be met for such units as of such Subsequent Vesting Date.  Any units subject to performance-based vesting that have not vested as of the last Subsequent Vesting Date shall be forfeited.

 

A-2

 

Notwithstanding the foregoing, if the performance criteria set forth in clause (i) above for fiscal year 2013 (or on a cumulative basis as set forth in clause (ii) above) are not met, but the Employer’s percentage total return to stockholders or increase in funds from operations on a per-share of Common Stock of the Employer basis is in the top 40% of its peer group companies (as to be determined for such year by the committee administering the Plan, in its sole discretion) for such year (or years on a cumulative basis beginning with 2013), then the performance criteria shall be deemed to have been met for such year.  Total return to stockholders shall be calculated based on the average of the Fair Market Value of one share of Common Stock for the ten (10) trading days at the beginning and end of such period, plus the per share amount of all dividends with an ex-dividend date occurring during such period.

 

7.              No Sell:  Executive may not sell, assign, transfer, or otherwise encumber or dispose of LTIP units until the earlier of (i) the date that is two years after such shares/units vested, (ii) the termination of Executive’s employment or (iii) a Change-in-Control.

 

2015 Grant

 

1.              Plan:  The Plan

 

2.              Type of Award:  LTIP units in SL Green Operating Partnership, L.P.

 

3.              Grant Date:  On or before January 17, 2015

 

4.              Total Number of Units:  52,722

 

5.              The Special LTIP Unit Sharing Percentage will equal 10%, the Distribution Participation Date will be the vesting date and additional LTIP units will be earned to the extent the aggregate amount of distributions that would have been received on vested LTIP units from January 18, 2013 through the vesting date (if the Distribution Participation Date had been the issuance date) exceeds the amount of the Special LTIP Unit Distribution that Executive becomes entitled to upon such vesting date. Additional LTIP units will be granted on the initial grant date in an amount that is estimated by the Employer, in its sole discretion, to equal or exceed the maximum amount of additional LTIP units that could be earned pursuant to this provision, which will be subject to forfeiture if they are not earned.

 

6.              Vesting:  Subject to acceleration as set forth in the Agreement, the units shall vest on January 17, 2015, if employment continues through such date and the performance-based vesting criteria set forth below are satisfied on such date, or, if the units do not vest on January 17, 2015, on the Subsequent Vesting Date if the performance-based vesting criteria set forth below are satisfied, provided that employment continues through such date.  For purposes of this paragraph, “Subsequent Vesting Date” shall mean January 17, 2016.

 

The performance criteria applicable to the units subject to performance-based vesting are as follows:

 

(i)                                     Such units shall vest on January 17, 2015 if the Employer achieves either (A) a 7% per year increase in funds from operations on a per-share of Common Stock of the Employer basis, or (B) a 7% per year total return to stockholders on each share of Common Stock outstanding during the entire period, during fiscal year 2014.

 

(ii)                                  If the performance criteria set forth in clause (i) above are not achieved in fiscal year 2014, but are achieved on a cumulative basis beginning with fiscal year 2013, and ending with the last fiscal year completed before a Vesting Date, then, if and as employment continues through such Vesting Date, the performance criteria will be met for such units as of such Vesting Date.  Any units subject to performance-based vesting that have not

 

A-3

 

vested as of the last Vesting Date shall be forfeited.  For purposes of this clause, “Vesting Date” shall mean January 17, 2015 or January 17, 2016.

 

Notwithstanding the foregoing, if the performance criteria set forth in clause (i) above for fiscal year 2014 (or on a cumulative basis as set forth in clause (ii) above) are not met, but the Employer’s percentage total return to stockholders or increase in funds from operations on a per-share of Common Stock of the Employer basis is in the top 40% of its peer group companies (as to be determined for such year by the committee administering the Plan, in its sole discretion) for such year (or years on a cumulative basis beginning with 2013), then the performance criteria shall be deemed to have been met for such year.  Total return to stockholders shall be calculated based on the average of the Fair Market Value of one share of Common Stock for the ten (10) trading days at the beginning and end of such period, plus the per share amount of all dividends with an ex-dividend date occurring during such period.

 

7.              No Sell:  Executive may not sell, assign, transfer, or otherwise encumber or dispose of LTIP units until the earlier of (i) the date that is two years after such shares/units vested, (ii) the termination of Executive’s employment or (iii) a Change-in-Control.

 

2016 Grant

 

1.              Plan:  The Plan

 

2.              Type of Award:  LTIP units in SL Green Operating Partnership, L.P.

 

3.              Grant Date:  On or before January 17, 2016

 

4.              Total Number of Units:  52,722

 

5.              The Special LTIP Unit Sharing Percentage will equal 10%, the Distribution Participation Date will be the vesting date and additional LTIP units will be earned to the extent the aggregate amount of distributions that would have been received on vested LTIP units from January 18, 2013 through the vesting date (if the Distribution Participation Date had been the issuance date) exceeds the amount of the Special LTIP Unit Distribution that Executive becomes entitled to upon such vesting date. Additional LTIP units will be granted on the initial grant date in an amount that is estimated by the Employer, in its sole discretion, to equal or exceed the maximum amount of additional LTIP units that could be earned pursuant to this provision, which will be subject to forfeiture if they are not earned.

 

6.              Vesting:  Subject to acceleration as set forth in the Agreement, the units shall vest in their entirety on January 17, 2016, if employment continues through such date and the performance-based vesting criteria set forth below are satisfied on such date.

 

The performance criteria applicable to the units subject to performance-based vesting are as follows:

 

(i)                                     Such units shall vest on January 17, 2016 if the Employer achieves either (A) a 7% per year increase in funds from operations on a per-share of Common Stock of the Employer basis, or (B) a 7% per year total return to stockholders on each share of Common Stock outstanding during the entire period, during fiscal year 2015.

 

(ii)                                  If the performance criteria set forth in clause (i) above are not achieved in fiscal year 2015, but are achieved on a cumulative basis beginning with fiscal year 2013, and ending with the fiscal year 2015, then, if and as employment continues through January 17, 2016, the performance criteria will be met for such units as of January 17, 2016.  Any units subject to performance-based vesting that have not vested as of January 17, 2016 shall be forfeited.

 

A-4

 

Notwithstanding the foregoing, if the performance criteria set forth in clause (i) above for fiscal year 2015 (or on a cumulative basis as set forth in clause (ii) above) are not met, but the Employer’s percentage total return to stockholders or increase in funds from operations on a per-share of Common Stock of the Employer basis is in the top 40% of its peer group companies (as to be determined for such year by the committee administering the Plan, in its sole discretion) for such year (or years on a cumulative basis beginning with 2013), then the performance criteria shall be deemed to have been met for such year.  Total return to stockholders shall be calculated based on the average of the Fair Market Value of one share of Common Stock for the ten (10) trading days at the beginning and end of such period, plus the per share amount of all dividends with an ex-dividend date occurring during such period.

 

7.              No Sell:  Executive may not sell, assign, transfer, or otherwise encumber or dispose of LTIP units until the earlier of (i) the date that is two years after such shares/units vested, (ii) the termination of Executive’s employment or (iii) a Change-in-Control.

 

A-5

 

EXHIBIT B

 

DEFERRED COMPENSATION AGREEMENT (2013)

 

B-1

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