Document:

exv10w6

Exhibit 10.6

INDEMNIFICATION AGREEMENT

     THIS INDEMNIFICATION AGREEMENT (“Agreement”) is made and entered into as of the ___day of
                    , 2010, by and between Terreno Realty Corporation, a Maryland corporation (the
“Company”), and                                          (“Indemnitee”).

     WHEREAS, at the request of the Company, Indemnitee currently serves as a [director] [and]
[officer] of the Company and may, therefore, be subjected to claims, suits or proceedings arising
as a result of his service; and

     WHEREAS, as an inducement to Indemnitee to continue to serve as such [director] [and]
[officer], the Company has agreed to indemnify and to advance expenses and costs incurred by
Indemnitee in connection with any such claims, suits or proceedings, to the maximum extent
permitted by law; and

     WHEREAS, the parties by this Agreement desire to set forth their agreement regarding
indemnification and advance of expenses;

     NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the
Company and Indemnitee do hereby covenant and agree as follows:

     Section 1. Definitions. For purposes of this Agreement:

     (a) “Change in Control” shall mean any of the following:

          (i) any “person,” as such term is used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended (the “Act”) (other than the Company, any of its subsidiaries, or any
trustee, fiduciary or other person or entity holding securities under any employee benefit plan or
trust of the Company or any of its subsidiaries), together with all “affiliates” and “associates”
(as such terms are defined in Rule 12b-2 under the Act) of such person, shall become the
“beneficial owner” (as such term is defined in Rule 13d-3 under the Act), directly or indirectly,
of securities of the Company representing 40 percent or more of the combined voting power of the
Company’s then outstanding securities having the right to vote in an election of the Board of
Directors (“Voting Securities”) (in such case other than as a result of an acquisition of
securities directly from the Company); or

          (ii) the date a majority of the members of the Board of Directors is replaced during any
12-month period by directors whose appointment or election is not endorsed by a majority of the
members of the Board of Directors before the date of the appointment or election; or

          (iii) the consummation of (A) any consolidation or merger of the Company where the
stockholders of the Company, immediately prior to the consolidation or merger, would not,
immediately after the consolidation or merger, beneficially own (as such term is defined in Rule
13d-3 under the Act), directly or indirectly, shares representing in the aggregate more than

 

 

50 percent of the voting shares of the Company issuing cash or securities in the consolidation
or merger (or of its ultimate parent corporation, if any), or (B) any sale or other transfer (in
one transaction or a series of transactions contemplated or arranged by any party as a single plan)
of all or substantially all of the assets of the Company.

          Notwithstanding the foregoing, a “Change in Control” shall not be deemed to have occurred for
purposes of the foregoing clause (i) solely as the result of an acquisition of securities by the
Company which, by reducing the number of shares of Voting Securities outstanding, increases the
proportionate number of Voting Securities beneficially owned by any person to 40 percent or more of
the combined voting power of all of the then outstanding Voting Securities; provided, however, that
if any person referred to in this sentence shall thereafter become the beneficial owner of any
additional shares of Voting Securities (other than pursuant to a stock split, stock dividend, or
similar transaction or as a result of an acquisition of securities directly from the Company) and
immediately thereafter beneficially owns 40 percent or more of the combined voting power of all of
the then outstanding Voting Securities, then a “Change in Control” shall be deemed to have occurred
for purposes of the foregoing clause (i).

     (b) “Corporate Status” means the status of a person as a present or former director, officer,
employee or agent of the Company or as a director, trustee, officer, partner, manager, managing
member, fiduciary, employee or agent of any other foreign or domestic corporation, partnership,
limited liability company, joint venture, trust, employee benefit plan or other enterprise that
such person is or was serving in such capacity at the request of the Company. As a clarification
and without limiting the circumstances in which Indemnitee may be serving at the request of the
Company, service by Indemnitee shall be deemed to be at the request of the Company if Indemnitee
serves or served as a director, trustee, officer, partner, manager, managing member, fiduciary,
employee or agent of any corporation, partnership, limited liability company, joint venture, trust,
employee benefit plan or other enterprise (i) of which a majority of the voting power or equity
interest is owned directly or indirectly by the Company or (ii) the management of which is
controlled directly or indirectly by the Company.

     (c) “Disinterested Director” means a director of the Company who is not and was not a party to
the Proceeding in respect of which indemnification and/or advance of Expenses is sought by
Indemnitee.

     (d) “Effective Date” means the date set forth in the first paragraph of this Agreement.

     (e) “Expenses” means any and all reasonable and out-of-pocket attorneys’ fees and costs,
retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees,
federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed
receipt of any payments under this Agreement, ERISA excise taxes and penalties and any other
disbursements or expenses incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, being or preparing to be a witness in or otherwise
participating in a Proceeding. Expenses shall also include Expenses incurred in connection with
any appeal resulting from any Proceeding including, without limitation, the premium, security for
and other costs relating to any cost bond supersedeas bond or other appeal bond or its equivalent.

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     (f) “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in
matters of corporation law and neither is, nor in the past five years has been, retained to
represent: (i) the Company or Indemnitee in any matter material to either such party (other than
with respect to matters concerning Indemnitee under this Agreement or of other indemnitees under
similar indemnification agreements), or (ii) any other party to or participant or witness in the
Proceeding giving rise to a claim for indemnification or advance of Expenses hereunder.
Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who,
under the applicable standards of professional conduct then prevailing, would have a conflict of
interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s
rights under this Agreement.

     (g) “Proceeding” means any threatened, pending or completed action, suit, arbitration,
alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other
proceeding, whether brought by or in the right of the Company or otherwise and whether of a civil
(including intentional or unintentional tort claims), criminal, administrative or investigative
(formal or informal) nature, including any appeal therefrom, except one pending or completed on or
before the Effective Date, unless otherwise specifically agreed in writing by the Company and
Indemnitee. If Indemnitee reasonably believes that a given situation may lead to or culminate in
the institution of a Proceeding, such situation shall also be considered a Proceeding.

     Section 2. Services by Indemnitee. Indemnitee will serve as a [director] [and]
[officer] of the Company. However, this Agreement shall not impose any independent obligation on
Indemnitee or the Company to continue Indemnitee’s service to the Company. This Agreement shall
not be deemed an employment contract between the Company (or any other entity) and Indemnitee.

     Section 3. General. The Company shall indemnify, and advance Expenses to, Indemnitee
(a) as provided in this Agreement and (b) otherwise to the maximum extent permitted by Maryland law
in effect on the Effective Date and as amended from time to time; provided, however, that no change
in Maryland law shall have the effect of reducing the benefits available to Indemnitee hereunder
based on Maryland law as in effect on the Effective Date. The rights of Indemnitee provided in
this Section 3 shall include, without limitation, the rights set forth in the other sections of
this Agreement, including any additional indemnification permitted by Section 2-418(g) of the
Maryland General Corporation Law (the “MGCL”).

     Section 4. Standard for Indemnification. If, by reason of Indemnitee’s Corporate
Status, Indemnitee is, or is threatened to be, made a party to any Proceeding, Indemnitee shall be
indemnified against all judgments, penalties, fines and amounts paid in settlement and all Expenses
actually and reasonably incurred by him or on his behalf in connection with any such Proceeding
unless it is established that (a) the act or omission of Indemnitee was material to the matter
giving rise to the Proceeding and (i) was committed in bad faith or (ii) was the result of active
and deliberate dishonesty, (b) Indemnitee actually received an improper personal benefit in money,
property or services or (c) in the case of any criminal Proceeding, Indemnitee had reasonable cause
to believe that his conduct was unlawful.

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     Section 5.
Certain Limits on Indemnification. Notwithstanding any other provision of
this Agreement (other than Section 6), Indemnitee shall not be entitled to:

     (a) indemnification hereunder if the Proceeding was one by or in the right of the Company and
Indemnitee is adjudged to be liable to the Company;

     (b) indemnification hereunder if Indemnitee is adjudged to be liable on the basis that
personal benefit was improperly received in any Proceeding charging improper personal benefit to
Indemnitee, whether or not involving action in the Indemnitee’s Corporate Status; or

     (c) indemnification or advance of Expenses hereunder if the Proceeding was brought by
Indemnitee unless: (i) the Proceeding was brought to enforce indemnification under this Agreement,
and then only to the extent in accordance with and as authorized by Section 12 of this Agreement,
or (ii) the Company’s charter or Bylaws, a resolution of the stockholders entitled to vote
generally in the election of directors or of the Board of Directors or an agreement approved by the
Board of Directors to which the Company is a party expressly provide otherwise.

     Section 6. Court-Ordered Indemnification. Notwithstanding any other provision of this
Agreement, a court of appropriate jurisdiction, upon application of Indemnitee and such notice as
the court shall require, may order indemnification in the following circumstances:

     (a) if it determines Indemnitee is entitled to reimbursement under Section 2-418(d)(1) of the
MGCL, the court shall order indemnification, in which case Indemnitee shall be entitled to recover
the Expenses of securing such reimbursement; or

     (b) if it determines that Indemnitee is fairly and reasonably entitled to indemnification in
view of all the relevant circumstances, whether or not Indemnitee (i) has met the standards of
conduct set forth in Section 2-418(b) of the MGCL or (ii) has been adjudged liable for receipt of
an improper personal benefit under Section 2-418(c) of the MGCL, the court may order such
indemnification as the court shall deem proper. However, indemnification with respect to any
Proceeding by or in the right of the Company or in which liability shall have been adjudged in the
circumstances described in Section 2-418(c) of the MGCL shall be limited to Expenses.

     Section 7. Indemnification for Expenses of a Party Who is Wholly or Partly Successful.
Notwithstanding any other provision of this Agreement, and without limiting any such provision, to
the extent that Indemnitee was or is, by reason of his Corporate Status, made a party to (or
otherwise becomes a participant in) any Proceeding and is successful, on the merits or otherwise,
in the defense of such Proceeding, Indemnitee shall be indemnified for all Expenses actually and
reasonably incurred by him or on his behalf in connection therewith. If Indemnitee is not wholly
successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but
less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee
under this Section 7 for all Expenses actually and reasonably incurred by him or on his behalf in
connection with each such claim, issue or matter, allocated on a reasonable and proportionate
basis. For purposes of this Section 7 and, without

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limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal,
with or without prejudice, shall be deemed to be a successful result as to such claim, issue or
matter.

     Section 8. Advance of Expenses for a Party. If, by reason of Indemnitee’s Corporate
Status, Indemnitee is, or is threatened to be, made a party to any Proceeding, the Company shall,
without requiring a preliminary determination of Indemnitee’s ultimate entitlement to
indemnification hereunder, advance all reasonable Expenses incurred by or on behalf of Indemnitee
in connection with such Proceeding within ten days after the receipt by the Company of a statement
or statements requesting such advance or advances from time to time, whether prior to or after
final disposition of such Proceeding. Such statement or statements shall reasonably evidence the
Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written
affirmation by Indemnitee of Indemnitee’s good faith belief that the standard of conduct necessary
for indemnification by the Company as authorized by law and by this Agreement has been met and a
written undertaking by or on behalf of Indemnitee, in substantially the form attached hereto as
Exhibit A or in such form as may be required under applicable law as in effect at the time
of the execution thereof, to reimburse the portion of any Expenses advanced to Indemnitee relating
to claims, issues or matters in the Proceeding as to which it shall ultimately be established that
the standard of conduct has not been met by Indemnitee and which have not been successfully
resolved as described in Section 7 of this Agreement. To the extent that Expenses advanced to
Indemnitee do not relate to a specific claim, issue or matter in the Proceeding, such Expenses
shall be allocated on a reasonable and proportionate basis. The undertaking required by this
Section 8 shall be an unlimited general obligation by or on behalf of Indemnitee and shall be
accepted without reference to Indemnitee’s financial ability to repay such advanced Expenses and
without any requirement to post security therefor.

     Section 9. Indemnification and Advance of Expenses of a Witness. Notwithstanding any
other provision of this Agreement, to the extent that Indemnitee is or may be, by reason of his
Corporate Status, made a witness or otherwise asked to participate in any Proceeding, whether
instituted by the Company or any other party, and to which Indemnitee is not a party, he shall be
advanced all reasonable Expenses and indemnified against all Expenses actually and reasonably
incurred by him or on his behalf in connection therewith within ten days after the receipt by the
Company of a statement or statements requesting such advance or advances from time to time, whether
prior to or after final disposition of such Proceeding. Such statement or statements shall
reasonably evidence the Expenses incurred by Indemnitee.

     Section 10. Procedure for Determination of Entitlement to Indemnification.

     (a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a
written request, including therein or therewith such documentation and information as is reasonably
available to Indemnitee and is reasonably necessary to determine whether and to what extent
Indemnitee is entitled to indemnification. Indemnitee may submit one or more such requests from
time to time and at such time(s) as Indemnitee deems appropriate in his sole discretion. The
officer of the Company receiving any such request from Indemnitee shall, promptly upon receipt of
such a request for indemnification, advise the Board of Directors in writing that Indemnitee has
requested indemnification.

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     (b) Upon written request by Indemnitee for indemnification pursuant to Section 10(a) above, a
determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto
shall promptly be made in the specific case: (i) if a Change in Control shall have occurred, by
Independent Counsel, in a written opinion to the Board of Directors, a copy of which shall be
delivered to Indemnitee, which Independent Counsel shall be selected by the Indemnitee and approved
by the Board of Directors in accordance with Section 2-418(e)(2)(ii) of the MGCL, which approval
will not be unreasonably withheld; or (ii) if a Change in Control shall not have occurred, (A) by
the Board of Directors by a majority vote of a quorum consisting of Disinterested Directors or, if
such a quorum cannot be obtained, then by a majority vote of a duly authorized committee of the
Board of Directors consisting solely of one or more Disinterested Directors, (B) if Independent
Counsel has been selected by the Board of Directors in accordance with Section 2-418(e)(2)(ii) of
the MGCL and approved by the Indemnitee, which approval shall not be unreasonably withheld, by
Independent Counsel, in a written opinion to the Board of Directors, a copy of which shall be
delivered to Indemnitee or (C) if so directed by a majority of the members of the Board of
Directors, by the stockholders of the Company. If it is so determined that Indemnitee is entitled
to indemnification, payment to Indemnitee shall be made within ten days after such determination.
Indemnitee shall cooperate with the person, persons or entity making such determination with
respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons
or entity upon reasonable advance request any documentation or information which is not privileged
or otherwise protected from disclosure and which is reasonably available to Indemnitee and
reasonably necessary to such determination in the discretion of the Board of Directors or
Independent Counsel if retained pursuant to clause (ii)(B) of this Section 10(b). Any Expenses
incurred by Indemnitee in so cooperating with the person, persons or entity making such
determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s
entitlement to indemnification) and the Company shall indemnify and hold Indemnitee harmless
therefrom.

     (c) The Company shall pay the reasonable fees and expenses of Independent Counsel, if one is
appointed.

     Section 11. Presumptions and Effect of Certain Proceedings.

     (a) In making any determination with respect to entitlement to indemnification hereunder, the
person or persons or entity making such determination shall presume that Indemnitee is entitled to
indemnification under this Agreement if Indemnitee has submitted a request for indemnification in
accordance with Section 10(a) of this Agreement, and the Company shall have the burden of proof to
overcome that presumption in connection with the making of any determination contrary to that
presumption.

     (b) The termination of any Proceeding or of any claim, issue or matter therein, by judgment,
order, settlement or conviction, upon a plea of nolo contendere or its equivalent, or entry of an
order of probation prior to judgment, does not create a presumption that Indemnitee did not meet
the requisite standard of conduct described herein for indemnification.

     (c) The knowledge and/or actions, or failure to act, of any other director, officer, employee
or agent of the Company or any other director, trustee, officer, partner, manager, managing member,
fiduciary, employee or agent of any other foreign or domestic corporation,

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partnership, limited liability company, joint venture, trust, employee benefit plan or other
enterprise shall not be imputed to Indemnitee for purposes of determining any other right to
indemnification under this Agreement.

     Section 12. Remedies of Indemnitee.

     (a) If (i) a determination is made pursuant to Section 10(b) of this Agreement that Indemnitee
is not entitled to indemnification under this Agreement, (ii) advance of Expenses is not timely
made pursuant to Section 8 of this Agreement, (iii) no determination of entitlement to
indemnification shall have been made pursuant to Section 10(b) of this Agreement within 60 days
after receipt by the Company of the request for indemnification, (iv) payment of indemnification is
not made pursuant to Section 7 of this Agreement within ten days after receipt by the Company of a
written request therefor, or (v) payment of indemnification pursuant to any other section of this
Agreement or the charter or Bylaws of the Company is not made within ten days after a determination
has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an
adjudication in an appropriate court located in the State of Maryland, or in any other court of
competent jurisdiction, of his entitlement to such indemnification or advance of Expenses.
Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a
single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration
Association. Indemnitee shall commence a proceeding seeking an adjudication or an award in
arbitration within 180 days following the date on which Indemnitee first has the right to commence
such proceeding pursuant to this Section 12(a); provided, however, that the foregoing clause shall
not apply to a proceeding brought by Indemnitee to enforce his rights under Section 7 of this
Agreement. Except as set forth herein, the provisions of Maryland law (without regard to its
conflicts of laws rules) shall apply to any such arbitration. The Company shall not oppose
Indemnitee’s right to seek any such adjudication or award in arbitration.

     (b) In any judicial proceeding or arbitration commenced pursuant to this Section 12,
Indemnitee shall be presumed to be entitled to indemnification or advance of Expenses, as the case
may be, under this Agreement and the Company shall have the burden of proving that Indemnitee is
not entitled to indemnification or advance of Expenses, as the case may be. If Indemnitee
commences a judicial proceeding or arbitration pursuant to this Section 12, Indemnitee shall not be
required to reimburse the Company for any advances pursuant to Section 8 of this Agreement until a
final determination is made with respect to Indemnitee’s entitlement to indemnification (as to
which all rights of appeal have been exhausted or lapsed). The Company shall, to the fullest
extent not prohibited by law, be precluded from asserting in any judicial proceeding or arbitration
commenced pursuant to this Section 12 that the procedures and presumptions of this Agreement are
not valid, binding and enforceable and shall stipulate in any such court or before any such
arbitrator that the Company is bound by all of the provisions of this Agreement.

     (c) If a determination shall have been made pursuant to Section 10(b) of this Agreement that
Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any
judicial proceeding or arbitration commenced pursuant to this Section 12, absent a misstatement by
Indemnitee of a material fact, or an omission of a material fact

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necessary to make Indemnitee’s statement not materially misleading, in connection with the
request for indemnification.

     (d) In the event that Indemnitee, pursuant to this Section 12, seeks a judicial adjudication
of or an award in arbitration to enforce his rights under, or to recover damages for breach of,
this Agreement, Indemnitee shall be entitled to recover from the Company, and shall be indemnified
by the Company for, any and all Expenses actually and reasonably incurred by him in such judicial
adjudication or arbitration. If it shall be determined in such judicial adjudication or
arbitration that Indemnitee is entitled to receive part but not all of the indemnification or
advance of Expenses sought, the Expenses incurred by Indemnitee in connection with such judicial
adjudication or arbitration shall be appropriately prorated.

     (e) Interest shall be paid by the Company to Indemnitee at the maximum rate allowed to be
charged for judgments under the Courts and Judicial Proceedings Article of the Annotated Code of
Maryland for amounts which the Company pays or is obligated to pay for the period commencing with
the date on which the Company was requested to advance expenses in accordance with Section 8 of
this Agreement or to make the determination of entitlement to indemnification under Section 12(a)
above and ending on the date such payment is made to Indemnitee by the Company.

     Section 13. Defense of the Underlying Proceeding.

     (a) Indemnitee shall notify the Company promptly in writing upon being served with any
summons, citation, subpoena, complaint, indictment, request or other document relating to any
Proceeding which may result in the right to indemnification or the advance of Expenses hereunder
and shall include with such notice a description of the nature of the Proceeding and a summary of
the facts underlying the Proceeding. The failure to give any such notice shall not disqualify
Indemnitee from the right, or otherwise affect in any manner any right of Indemnitee, to
indemnification or the advance of Expenses under this Agreement unless the Company’s ability to
defend in such Proceeding or to obtain proceeds under any insurance policy is materially and
adversely prejudiced thereby, and then only to the extent the Company is thereby actually so
prejudiced.

     (b) Subject to the provisions of the last sentence of this Section 13(b) and of Section 13(c)
below, the Company shall have the right to defend Indemnitee in any Proceeding which may give rise
to indemnification hereunder; provided, however, that the Company shall notify Indemnitee of any
such decision to defend within 15 calendar days following receipt of notice of any such Proceeding
under Section 13(a) above. The Company shall not, without the prior written consent of Indemnitee,
which shall not be unreasonably withheld or delayed, consent to the entry of any judgment against
Indemnitee or enter into any settlement or compromise which (i) includes an admission of fault of
Indemnitee, (ii) does not include, as an unconditional term thereof, the full release of Indemnitee
from all liability in respect of such Proceeding, which release shall be in form and substance
reasonably satisfactory to Indemnitee or (iii) would impose any Expense, judgment, fine, penalty or
limitation on Indemnitee. This Section 13(b) shall not apply to a Proceeding brought by Indemnitee
under Section 12 of this Agreement.

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     (c) Notwithstanding the provisions of Section 13(b) above, if in a Proceeding to which
Indemnitee is a party by reason of Indemnitee’s Corporate Status, (i) Indemnitee reasonably
concludes, based upon an opinion of counsel approved by the Company, which approval shall not be
unreasonably withheld, that he may have separate defenses or counterclaims to assert with respect
to any issue which may not be consistent with other defendants in such Proceeding, (ii) Indemnitee
reasonably concludes, based upon an opinion of counsel approved by the Company, which approval
shall not be unreasonably withheld, that an actual or apparent conflict of interest or potential
conflict of interest exists between Indemnitee and the Company, or (iii) if the Company fails to
assume the defense of such Proceeding in a timely manner, Indemnitee shall be entitled to be
represented by separate legal counsel of Indemnitee’s choice, subject to the prior approval of the
Company, which shall not be unreasonably withheld, at the expense of the Company. In addition, if
the Company fails to comply with any of its obligations under this Agreement or in the event that
the Company or any other person takes any action to declare this Agreement void or unenforceable,
or institutes any Proceeding to deny or to recover from Indemnitee the benefits intended to be
provided to Indemnitee hereunder, Indemnitee shall have the right to retain counsel of Indemnitee’s
choice, subject to the prior approval of the Company, which shall not be unreasonably withheld, at
the expense of the Company (subject to Section 12(d) of this Agreement), to represent Indemnitee in
connection with any such matter.

     Section 14. Non-Exclusivity; Survival of Rights; Subrogation.

     (a) The rights of indemnification and advance of Expenses as provided by this Agreement shall
not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under
applicable law, the charter or Bylaws of the Company, any agreement or a resolution of the
stockholders entitled to vote generally in the election of directors or of the Board of Directors,
or otherwise. Unless consented to in writing by Indemnitee, no amendment, alteration or repeal of
this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under
this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status
prior to such amendment, alteration or repeal, regardless of whether a claim with respect to such
action or inaction is raised prior or subsequent to such amendment, alteration or repeal. No right
or remedy herein conferred is intended to be exclusive of any other right or remedy, and every
other right or remedy shall be cumulative and in addition to every other right or remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The assertion of any
right or remedy hereunder, or otherwise, shall not prohibit the concurrent assertion or employment
of any other right or remedy.

     (b) In the event of any payment under this Agreement, the Company shall be subrogated to the
extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers
required and take all action necessary to secure such rights, including execution of such documents
as are necessary to enable the Company to bring suit to enforce such rights.

     Section 15. Insurance. The Company will use its reasonable best efforts to acquire
directors and officers liability insurance, on terms and conditions deemed appropriate by the Board
of Directors, with the advice of counsel, covering Indemnitee or any claim made against Indemnitee
by reason of his Corporate Status and covering the Company for any indemnification

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or advance of Expenses made by the Company to Indemnitee for any claims made against
Indemnitee by reason of his Corporate Status. Without in any way limiting any other obligation
under this Agreement, the Company shall indemnify Indemnitee for any payment by Indemnitee arising
out of the amount of any deductible or retention and the amount of any excess of the aggregate of
all judgments, penalties, fines, settlements and Expenses incurred by Indemnitee in connection with
a Proceeding over the coverage of any insurance referred to in the previous sentence. The
purchase, establishment and maintenance of any such insurance shall not in any way limit or affect
the rights or obligations of the Company or Indemnitee under this Agreement except as expressly
provided herein, and the execution and delivery of this Agreement by the Company and the Indemnitee
shall not in any way limit or affect the rights or obligations of the Company under any such
insurance policies. If, at the time the Company receives notice from any source of a Proceeding to
which Indemnitee is a party or a participant (as a witness or otherwise) the Company has director
and officer liability insurance in effect, the Company shall give prompt notice of such Proceeding
to the insurers in accordance with the procedures set forth in the respective policies.

     Section 16. Coordination of Payments. The Company shall not be liable under this
Agreement to make any payment of amounts otherwise indemnifiable or payable or reimbursable as
Expenses hereunder if and to the extent that Indemnitee has otherwise actually received such
payment under any insurance policy, contract, agreement or otherwise.

     Section 17. Reports to Stockholders. To the extent required by the MGCL, the Company
shall report in writing to its stockholders the payment of any amounts for indemnification of, or
advance of Expenses to, Indemnitee under this Agreement arising out of a Proceeding by or in the
right of the Company with the notice of the meeting of stockholders of the Company next following
the date of the payment of any such indemnification or advance of Expenses or prior to such
meeting.

     Section 18. Duration of Agreement; Binding Effect.

               (a) This Agreement shall continue until and terminate on the later of (i) the date that
Indemnitee shall have ceased to serve as a director, officer, employee or agent of the Company or
as a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of
any other foreign or domestic corporation, real estate investment trust, partnership, limited
liability company, joint venture, trust, employee benefit plan or other enterprise that such person
is or was serving in such capacity at the request of the Company and (ii) the date that Indemnitee
is no longer subject to any actual or possible Proceeding (including any rights of appeal thereto
and any Proceeding commenced by Indemnitee pursuant to Section 12 of this Agreement).

     (b) The indemnification and advance of Expenses provided by, or granted pursuant to, this
Agreement shall be binding upon and be enforceable by the parties hereto and their respective
successors and assigns (including any direct or indirect successor by purchase, merger,
consolidation or otherwise to all or substantially all of the business or assets of the Company),
shall continue as to an Indemnitee who has ceased to be a director, officer, employee or agent of
the Company or a director, trustee, officer, partner, manager, managing member, fiduciary, employee
or agent of any other foreign or domestic corporation, partnership, limited

-10-

 

liability company, joint venture, trust, employee benefit plan or other enterprise that such
person is or was serving in such capacity at the request of the Company, and shall inure to the
benefit of Indemnitee and his spouse, assigns, heirs, devisees, executors and administrators and
other legal representatives.

     (c) The Company shall require and cause any successor (whether direct or indirect by purchase,
merger, consolidation or otherwise) to all, substantially all or a substantial part, of the
business and/or assets of the Company, by written agreement in form and substance satisfactory to
Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform if no such succession had taken place.

     (d) The Company and Indemnitee agree herein that a monetary remedy for breach of this
Agreement, at some later date, may be inadequate, impracticable and difficult of proof, and further
agree that such breach may cause Indemnitee irreparable harm. Accordingly, the parties hereto
agree that Indemnitee may enforce this Agreement by seeking injunctive relief and/or specific
performance hereof, without any necessity of showing actual damage or irreparable harm and that by
seeking injunctive relief and/or specific performance, Indemnitee shall not be precluded from
seeking or obtaining any other relief to which he may be entitled. Indemnitee shall further be
entitled to such specific performance and injunctive relief, including temporary restraining
orders, preliminary injunctions and permanent injunctions, without the necessity of posting bonds
or other undertakings in connection therewith. The Company acknowledges that, in the absence of a
waiver, a bond or undertaking may be required of Indemnitee by a court, and the Company hereby
waives any such requirement of such a bond or undertaking.

     Section 19. Severability. If any provision or provisions of this Agreement shall be
held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality
and enforceability of the remaining provisions of this Agreement (including, without limitation,
each portion of any Section, paragraph or sentence of this Agreement containing any such provision
held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable)
shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest
extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent
necessary to conform to applicable law and to give the maximum effect to the intent of the parties
hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including,
without limitation, each portion of any Section, paragraph or sentence of this Agreement containing
any such provision held to be invalid, illegal or unenforceable, that is not itself invalid,
illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

     Section 20. Identical Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original but all of which
together shall constitute one and the same Agreement. One such counterpart signed by the party
against whom enforceability is sought shall be sufficient to evidence the existence of this
Agreement.

-11-

 

     Section 21. Headings. The headings of the paragraphs of this Agreement are inserted
for convenience only and shall not be deemed to constitute part of this Agreement or to affect the
construction thereof.

     Section 22. Modification and Waiver. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of
any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other
provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

     Section 23. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand
and receipted for by the party to whom said notice or other communication shall have been directed
or (ii) mailed by certified or registered mail with postage prepaid, on the third business day
after the date on which it is so mailed:

     (a) If to Indemnitee, to the address set forth on the signature page hereto.

     (b) If to the Company, to:

Terreno Realty Corporation

16 Maiden Lane, Fifth Floor

San Francisco, CA 94108

or to such other address as may have been furnished in writing to Indemnitee by the Company or to
the Company by Indemnitee, as the case may be.

     Section 24. Governing Law. The parties agree that this Agreement shall be governed
by, and construed and enforced in accordance with, the laws of the State of Maryland, without
regard to its conflicts of laws rules.

     Section 25. Miscellaneous. Use of the masculine pronoun shall be deemed to include
usage of the feminine pronoun where appropriate.

[SIGNATURE PAGE FOLLOWS]

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

	 	 	 	 	 	 	 
	 	 	COMPANY:  
	 
	 	 	 	 	 	 
	 	 	TERRENO REALTY CORPORATION
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	INDEMNITEE
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Address:	 	 	 	 

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EXHIBIT A

FORM OF UNDERTAKING TO REPAY EXPENSES ADVANCED

The Board of Directors of Terreno Realty Corporation

Re: Undertaking to Repay Expenses Advanced

Ladies and Gentlemen:

     This undertaking is being provided pursuant to that certain Indemnification Agreement dated
the ___day of                     , 20___, by and between Terreno Realty Corporation, a Maryland
corporation (the “Company”), and the undersigned Indemnitee (the “Indemnification Agreement”),
pursuant to which I am entitled to advance of Expenses in connection with [Description of
Proceeding] (the “Proceeding”).

     Terms used herein and not otherwise defined shall have the meanings specified in the
Indemnification Agreement.

     I am subject to the Proceeding by reason of my Corporate Status or by reason of alleged
actions or omissions by me in such capacity. I hereby affirm my good belief that at all times,
insofar as I was involved as [a director] [an officer] of the Company, in any of the facts or
events giving rise to the Proceeding, I (1) did not act with bad faith or active or deliberate
dishonesty, (2) did not receive any improper personal benefit in money, property or services and
(3) in the case of any criminal proceeding, had no reasonable cause to believe that any act or
omission by me was unlawful.

     In consideration of the advance of Expenses by the Company for reasonable attorneys’ fees and
related Expenses incurred by me in connection with the Proceeding (the “Advanced Expenses”), I
hereby agree that if, in connection with the Proceeding, it is established that (1) an act or
omission by me was material to the matter giving rise to the Proceeding and (a) was committed in
bad faith or (b) was the result of active and deliberate dishonesty or (2) I actually received an
improper personal benefit in money, property or services or (3) in the case of any criminal
proceeding, I had reasonable cause to believe that the act or omission was unlawful, then I shall
promptly reimburse the portion of the Advanced Expenses relating to the claims, issues or matters
in the Proceeding as to which the foregoing findings have been established.

     IN WITNESS WHEREOF, I have executed this Affirmation and Undertaking on this ___day of
                    , 20___.exv10w7

Exhibit 10.7

TERRENO REALTY CORPORATION

LONG-TERM INCENTIVE PLAN

	1.	 	Purpose

          This Long-Term Incentive Plan (the “Plan”) is intended to provide an incentive for
superior work and to motivate executives and employees of Terreno Realty Corporation (the
“Company”) toward even higher achievement and business results, to tie their goals and
interests to those of the Company and its stockholders and to enable the Company to attract and
retain highly qualified executives and employees. The Plan is for the benefit of Participants (as
defined below).

	2.	 	Definitions

          For purposes of this Plan:

          (a) “Award” means a grant to a Participant hereunder.

          (b) “Award Notice” means a notice or agreement provided to a Participant that sets
forth the terms, conditions and limitations of the Participant’s participation in this Plan,
including, without limitation, the Participant’s Target Award.

          (c) “Board” means the Board of Directors of the Company.

          (d) “Closing Index Value” means, with respect to each Performance Measurement Index,
the Performance Measurement Index Value as of the last day of any Performance Measurement Period.

          (e) “Closing Stock Price” means the Stock Price as of the last day of any Performance
Measurement Period.

          (f) “Code” means Internal Revenue Code of 1986, as amended.

          (g) “Committee” means the Compensation Committee of the Board.

          (h) “Effective Date” means [                    ], the date this Plan was approved by the
Committee.

          (i) “FTSE NAREIT Equity Industrial Index” means the FTSE NAREIT Equity Industrial
Index, or, in the event such index is discontinued or its methodology significantly changed, a
comparable index selected by the Committee in good faith.

          (j) “Initial Index Value” means, with respect to each Performance Measurement Index,
the Performance Measurement Index Value as of the first day of any Performance Measurement Period.

 

 

          (k) “Initial Stock Price” means the Stock Price as of the first day of any Performance
Measurement Period. Notwithstanding the foregoing, the Initial Stock Price for any Performance
Measurement Period commencing on the Effective Date shall be the “Price to the Public” (or
equivalent) set forth on the cover page for the final prospectus relating to the Company’s Initial
Public Offering.

          (l) “MSCI US REIT Index” means the MSCI US REIT Index (RMS), or, in the event such
index is discontinued or its methodology significantly changed, a comparable index selected by the
Committee in good faith.

          (m) “Participant” means an executive or employee of the Company selected by the
Committee to participate in the Plan.

          (n) “Performance Measurement Indexes” means the MSCI US REIT Index and the FTSE NAREIT
Equity Industrial Index.

          (o) “Performance Measurement Index Value” for each Performance Measurement Index
means, with respect to any date, the average value of such Performance Measurement Index for the
ten consecutive trading days immediately preceding such date.

          (p) “Performance Measurement Period” means, a three calendar year period commencing on
January 1, 2011 and each January 1 thereafter while this Plan is effective, and concluding on
December 31 of the second calendar year thereafter. Notwithstanding the foregoing, (x) the first
Performance Measurement Period shall commence on the Effective Date and conclude on December 31,
2011 and (y) the second Performance Measurement Period shall commence on the Effective Date and
conclude on December 31, 2012.

          (q) “Stock” means the Company’s common stock, par value $0.01 per share.

          (r) “Stock Price” means, as of a particular date, the average closing price of one
share of Stock for the ten consecutive trading days ending on, and including, such date (or, if
such date is not a trading day, the most recent trading day immediately preceding such date).

          (s) “Target Award” means a Participant’s target award for each Performance Measurement
Period, as set forth in the Participant’s Award Notice.

          (t) “Total Shareholder Return” means, with respect to a Performance Measurement
Period, the total percentage return per share achieved by the Stock assuming contemporaneous
reinvestment in the Stock of all dividends and other distributions (excluding dividends and
distributions paid in the form of additional shares of Stock) at the closing price of one share of
Stock on the date such dividend or other distribution was paid, based on the Initial Stock Price
and the Closing Stock Price for such Performance Measurement Period.

	3.	 	Administration

          (a) The Plan shall be administered by the Committee. The Committee shall have the
discretionary authority to make all determinations (including, without limitation, the
interpretation and construction of the Plan and the determination of relevant facts) regarding the

2

 

entitlement to any Award hereunder and the amount of any Award to be paid under the Plan
(including the number of shares of Stock issuable to any Participant), provided such determinations
are made in good faith and are consistent with the purpose and intent of the Plan. In particular,
but without limitation and subject to the foregoing, the Committee shall have the authority:

               (i) to select Participants under the Plan;

               (ii) to determine the Target Award and any formula or criteria for the determination of the
Target Award for each Participant;

               (iii) to determine the terms and conditions, not inconsistent with the terms of this Plan,
which shall govern Award Notices and all other written instruments evidencing an Award hereunder,
including the waiver or modification of any such conditions;

               (iv) to adopt, alter and repeal such administrative rules, guidelines and practices governing
the Plan as it shall from time to time deem advisable; and

               (v) to interpret the terms and provisions of the Plan and any Award granted under the Plan
(and any Award Notices or other agreements relating thereto) and to otherwise supervise the
administration of the Plan.

          (b) Notwithstanding anything herein to the contrary, the Committee may, in its discretion,
make appropriate adjustments to any Award, any Target Award, any Initial Stock Price, any Closing
Stock Price, the target performance levels for any Performance Measurement Period or the Total
Shareholder Return for any period in connection with or as a result of any of the following events
which occur or have occurred after the Effective Date: reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split or other similar change in the
Company’s capital stock, if the outstanding shares of Stock are increased or decreased or are
exchanged for a different number or kind of shares or other securities of the Company, or
additional shares or new or different shares or other securities of the Company or other non-cash
assets are distributed with respect to such shares of Stock or other securities.

          (c) Subject to the terms hereof, all decisions made by the Committee pursuant to the Plan
shall be final, conclusive and binding on all persons, including the Company and the Participants.
No member of the Board or the Committee, nor any officer or employee of the Company acting on
behalf of the Board or the Committee shall be personally liable for any action, determination or
interpretation taken or made in good faith with respect to the Plan, and all members of the Board
or Committee and each and any officer or employee of the Company acting on their behalf shall, to
the extent permitted by law, be fully indemnified and protected by the Company in respect of any
such action, determination or interpretation.

	4.	 	Determination and Payment of Awards

          (a) Each Participant’s Award Notice shall specify such Participant’s Target Award. The Target
Award may be expressed as a dollar amount or as a percentage of a Participant’s base salary or
other compensation, a number of shares of Stock or pursuant to any other method, amount or formula
selected by the Committee for such Participant, and may apply for all or a

3

 

specified number of Performance Measurement Periods, each as determined in the sole discretion
of the Committee.

          (b) The amount of a Participant’s Award hereunder shall be determined based on Total
Shareholder Return for each Performance Measurement Period relative to the percentage appreciation
of each Performance Measurement Index for such period. The percentage appreciation of each
Performance Measurement Index shall be established by comparing the Initial Performance Measurement
Index Value to the Closing Performance Index Value. Unless otherwise specified in an Award Notice,
(i) 50 percent of the Award shall be calculated with reference to Total Shareholder Return relative
to the percentage appreciation of the MSCI US REIT Index, and (ii) the remaining 50 percent of the
Award shall be calculated with reference to Total Shareholder Return relative to the percentage
appreciation of the FTSE NAREIT Equity Industrial Index.

          (c) The actual value of a Participant’s Award hereunder shall be determined at the conclusion
of a Performance Measurement Period, as follows:

     (i) If Total Shareholder Return for the Performance Measurement Period is less than the
percentage appreciation of a Performance Measurement Index for such period, Participants
shall not receive an Award with respect to the 50 percent of the Target Award calculated
with reference to such Performance Measurement Index.

     (ii) If Total Shareholder Return for the Performance Measurement Period equals or
exceeds the percentage appreciation of a Performance Measurement Index for such period,
Participants shall receive an Award equal to 50 percent of the Target Award.

     (iii) If Total Shareholder Return for the Performance Measurement Period exceeds the
percentage appreciation of a Performance Measurement Index by 100 basis points or more,
Participants shall receive an Award equal to 150 percent of the Target Award. If Total
Shareholder Return for the Performance Measurement Period exceeds the percentage
appreciation of both Performance Measurement Indexes by 100 basis points or more,
Participants shall receive an Award equal to 300 percent of the Target Award.

     (iv) Notwithstanding the foregoing, if Total Shareholder Return for the Performance
Measurement Period is negative the value of each Participant’s Award, as determined pursuant
to Section 4(c)(ii) and (iii), above, shall be reduced by 50 percent.

          (d) The dollar value of Participant’s Awards shall be determined by the Committee as soon as
practicable following the conclusion of the relevant Performance Measurement Period. Following
determination of such amounts, the Company shall issue to each Participant a number of shares of
Stock with an aggregate Stock Price on the date of issuance equal to the dollar value of each
Participant’s Award. The shares of Stock shall be issued between January 1 and March 15 of the
calendar year that follows the conclusion of the relevant Performance Measurement Period.

4

 

	5.	 	Termination of Employment

          Unless otherwise provided in any Award Notice, if at any time prior to the end of a
Performance Measurement Period a Participant’s employment or other service relationship with the
Company terminates for any reason, such Participant shall forfeit the right to receive any payment
or Award not paid to the Participant as of the date of termination of employment or other service
relationship.

	6.	 	Miscellaneous

          (a) Amendment and Termination. The Company reserves the right to amend or terminate
the Plan at any time in its discretion without the consent of any Participants, but no such
amendment shall adversely affect the rights of the Participants with regard to outstanding Awards.
In the event the Plan is terminated, the Company shall determine the Awards payable to Participants
based on the Total Shareholder Return relative to the Performance Measurement Indexes for each
Performance Measurement Period ending on the date of Plan termination. The Awards for each
Performance Measurement Period shall be further prorated to reflect the shortened Performance
Measurement Period.

          (b) No Contract for Continuing Services. This Plan shall not be construed as creating
any contract for continued services between the Company or any of its subsidiaries and any
Participant and nothing herein contained shall give any Participant the right to be retained as an
employee or consultant of the Company or any of its subsidiaries.

          (c) No Transfers. A Participant’s rights in an interest under the Plan may not be
assigned or transferred.

          (d) Unfunded Plan. The Plan shall be unfunded and shall not create (or be construed
to create) a trust or separate fund. Likewise, the Plan shall not establish any fiduciary
relationship between the Company or any of subsidiaries or affiliates and any Participant. To the
extent that any Participant holds any rights by virtue of an award under the Plan, such right shall
be no greater than the right of an unsecured general creditor of the Company or any of its
subsidiaries.

          (e) Governing Law. The Plan and each Award Letter awarded under the Plan shall be
construed in accordance with and governed the laws of the State of California, without regard to
principles of conflict of laws of such state.

          (f) Tax Withholding. Any issuance of shares of Stock to a Participant shall be
subject to tax withholding. The minimum tax withholding obligation shall be satisfied through a
net issuance of shares. The Company shall withhold from shares of Stock to be issued to the
Participant a number of shares of Stock with an aggregate fair market value that would satisfy the
minimum withholding amount due.

          (g) Construction. Wherever appropriate, the use of the masculine gender shall be
extended to include the feminine and/or neuter or vice versa; and the singular form of words shall
be extended to include the plural; and the plural shall be restricted to mean the singular.

5

 

          (h) Headings. The Section headings and Section numbers are included solely for ease
of reference. If there is any conflict between such headings or numbers and the text of this Plan,
the text shall control.

          (i) Effect on Other Plans. Nothing in this Plan shall be construed to limit the
rights of Participants under the Company’s or its subsidiaries’ benefit plans, programs or
policies.

          (j) Effective Date. The Plan shall be effective as of the Effective Date.

6

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