Document:

hst-ex107_602.htm

EXHIBIT 10.7 

 

 

[Name of Executive]

PERFORMANCE BASED 

RESTRICTED STOCK UNIT AGREEMENT

 

This Restricted Stock Unit Agreement (this “Agreement”), dated as of ________________, (the “Grant Date”), is between __________ (the “Executive”) and Host Hotels & Resorts, Inc. (“Company”), a Maryland corporation, and governs a grant of Restricted Stock Units (“RSUs”) to the Executive pursuant to the Host Hotels & Resorts 2009 Comprehensive Stock and Cash Incentive Plan (the “Plan”).  Capitalized terms not explicitly defined in this Agreement have the definitions ascribed to them in the Plan or in Exhibit A hereto.  The Company and the Executive agree as follows:

 

1.Restricted Stock Unit Grant.  Upon the terms and subject to the terms and conditions set forth in the Plan and in this Agreement, including, but not limited to, Sections 9 and 17 of the Agreement, the Executive has been granted -----------RSUs effective as of the Grant Date.  Each RSU is equivalent to one share of Common Stock for purposes of determining the number of shares subject to this Award. If the Company declares a cash dividend payable to stockholders of Common Stock that is payable to stockholders of record after the Grant Date and before the applicable shares deliverable under this Agreement are issued hereunder, this Award will reflect, and represent the future right to receive, subject to the restrictions herein, an amount equal to such cash dividend per share payable per share of Common Stock then subject to this Award (a “Dividend Equivalent Right”). The Dividend Equivalent Rights will be subject to the same restrictions of this Agreement to which the RSUs to which they relate are subject.  None of the RSUs will be issued (nor will you have the rights of a stockholder with respect to the underlying shares) and no Dividend Equivalent Rights (if any) will be paid until the vesting conditions described below are satisfied.

 

2.Vesting Schedule and Release.  The grant of RSUs to the Executive shall be subject to certain restrictions and risks of forfeiture as set forth in Section 9 and Section 17 of this Agreement.  Subject to the foregoing, the RSUs shall vest as follows:

 

(a) _________ RSUs shall vest based on the Company’s performance against Strategic Objective Goals, as described in Section 3 hereof (the “Strategic Objectives Award”); and 

 

(b) __________ RSUs shall vest based on the Company’s performance compared to the Relative NAREIT TSR, as described in Section 4 hereof, (the “Relative TSR Awards”); and 

 

(c) ________ RSUs shall vest based on the Company’s performance compared to the Relative Lodging TSR, as described in Section 5 hereof, (the “Relative TSR Awards”); and

 

(d) __________ RSUs shall vest based on the Company’s performance compared to the Relative S&P 500 TSR as described in Section 6 hereof, (the “Relative TSR Awards”).

 

All determinations of vesting in the Strategic Objectives Award and the Relative TSR Awards shall be determined by the Compensation Policy Committee (the “Committee”) of the Board of Directors of the Company (the “Board”) in its sole discretion.

 

 

 

 

In the event that a vesting date falls on a Saturday or Sunday or a day on which the New York Stock Exchange is not open for the transaction of business, then the applicable portion of the RSUs shall vest on the next business day.  Except as provided in Section 17, the shares shall be released from the RSUs by the Company and the restrictions shall be removed from the shares within thirty (30) days following each applicable vesting date. In addition, any Dividend Equivalent Rights shall be paid by the Company when the related shares are released from the RSUs by the Company.  The RSUs attributable to shares that have been issued and the related Dividend Equivalent Rights that have been paid will be considered fully satisfied and will cease to be outstanding under this Agreement.

 

3.Strategic Objectives Award.  The Strategic Objectives Award may vest in one (1) installment for the period January 1 to December 31 of the Performance Year, based on the Company’s satisfaction of the Strategic Objective Goals for such period as follows:

 

		
	
If the level of Satisfaction of Strategic Objective Goals is
	
Then the percentage of the Strategic Objectives Award which will vest will be

	
 

<Threshold
	
0%

	
 

Threshold
	
25%

	
 

Target
	
50%

	
 

>High
	
100%

 

The Executive will vest in the Strategic Objectives Award, provided that the Executive is employed by the Company on the date that the Committee determines the level of satisfaction on the Strategic Objective Goals for the period above, unless otherwise provided in Sections 9 and 17 of this Agreement.  RSUs that do not vest on the date the Committee determines the level of satisfaction of the Strategic Objective Goals for such year shall be forfeited on such date.

 

4.Relative NAREIT TSR Award.  The Relative NAREIT TSR Award may vest in one (1) installment for the Performance Period, based on the Company's results on Relative NAREIT TSR for the applicable period as follows:

 

 

		
	
 

If Relative NAREIT TSR is 
	
Then the percentage of the Relative NAREIT TSR for the relevant period which will vest will be

2

 

 

		
	
 

<30th percentile
	
 

0%

	
 

30th percentile
	
 

25%

	
 

50th percentile
	
 

50%

	
 

>75th percentile
	
 

100%

 

The Executive will vest in the applicable installment of the Relative NAREIT TSR Award, provided that the Executive is employed by the Company on the date that the Committee determines the Relative NAREIT TSR for the applicable period, unless otherwise provided in Sections 9 and 17 of this Agreement.

 

The calculation of the Relative NAREIT TSR and the number of RSUs vested under the Relative NAREIT TSR Award shall be carried out to the third decimal point.  The actual number of RSUs of the Relative NAREIT TSR Award which shall vest shall be interpolated between the vesting percentages to the extent that the Relative NAREIT TSR is between the amounts set forth in the chart above.  RSUs subject to the Relative NAREIT TSR Award that do not vest on the date the Committee determines the Relative NAREIT TSR for the applicable period shall be forfeited on such date.

 

5.Relative Lodging TSR Award.  The Relative Lodging TSR Award may vest in one (1) installment for the Performance Period, based on the Company's results on based on the Company's results on Relative Lodging TSR for the applicable period as follows:

 

		
	
 

If Relative Lodging TSR is 
	
Then the percentage of the Relative Lodging TSR for the relevant period which will vest will be

	
 

<30th percentile
	
 

0%

	
 

30th percentile
	
 

25%

	
 

50th percentile
	
 

50%

	
 

>75th percentile
	
 

100%

 

The Executive will vest in the applicable installment of the Relative Lodging TSR Award, provided that the Executive is employed by the Company on the date that the Committee determines the Relative Lodging TSR for the applicable period, unless otherwise provided in Sections 9 and 17 of this Agreement.

 

The calculation of the Relative Lodging TSR Award and the number of RSUs vested under the Relative Lodging TSR Award shall be carried out to the third decimal point.  The actual number of RSUs of the Relative Lodging TSR Award which shall vest shall be interpolated between the vesting 

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percentages to the extent that the Relative Lodging TSR is between the amounts set forth in the chart above.  RSUs subject to the Relative Lodging TSR Award that do not vest on the date the Committee determines the Relative Lodging TSR for the applicable period shall be forfeited on such date.

 

6.Relative S&P 500 TSR Award.  The Relative S&P 500 TSR Award may vest in one (1) installment for the Performance Period, based on the Company's results on Relative S&P 500 TSR for the applicable period as follows:

 

 

		
	
 

If Relative S&P 500 TSR is 
	
Then the percentage of the Relative S&P 500 TSR for the relevant period which will vest will be

	
 

<30th percentile
	
 

0%

	
 

30th percentile
	
 

25%

	
 

50th percentile
	
 

50%

	
 

>75th percentile
	
 

100%

 

The Executive will vest in the applicable installment of the Relative S&P 500 TSR Award, provided that the Executive is employed by the Company on the date that the Committee determines the Relative S&P 500 TSR for the applicable period, unless otherwise provided in Sections 9 and 17 of this Agreement.

 

The calculation of the Relative S&P 500 TSR Award and the number of RSUs vested under the Relative S&P 500 TSR Award shall be carried out to the third decimal point.  The actual number of RSUs of the Relative S&P 500 TSR Award which shall vest shall be interpolated between the vesting percentages to the extent that the Relative S&P 500 TSR is between the amounts set forth in the chart above.  RSUs subject to the Relative S&P 500 TSR Award that do not vest on the date the Committee determines the Relative S&P 500 TSR for the applicable period shall be forfeited on such date.

 

7.Company’s Obligation.  Each RSU represents the right to receive a share and payment of Dividend Equivalent Rights after satisfying the applicable vesting and other conditions set forth in the Plan and this Agreement. Unless and until the RSUs vest, the Executive will have no right to receive any shares or payment of Dividend Equivalent Rights in respect of such RSUs. Prior to actual distribution of any shares or payment of any Dividend Equivalent Rights pursuant to the vesting of any RSUs, such RSUs will represent an unsecured obligation of the Company, payable (if at all) only from the general assets of the Company.

 

8.Rights as Stockholder; Change in Shares.  The Executive shall have none of the 

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rights or privileges of a stockholder of the Company in respect of the RSUs or the shares deliverable under the Agreement unless and until the RSUs vest and electronic delivery representing such shares has been completed, recorded on the records of the Company or its transfer agents or registrars, and delivered to the Executive.  After such issuance, recordation and delivery, the Executive shall have all the rights of a stockholder of the Company with respect to voting such shares and receipt of dividends and distributions on such shares. 

 

In the event any or all of the shares subject to the RSUs are split, or combined, or in any other manner changed, modified or amended, or the Company is recapitalized, restructured, or reorganized, the RSUs may be adjusted as provided in Article 12 of the Plan. 

 

9.Restrictions and Forfeiture.  

 

a. No Assignment or Transfer.  The Executive shall not sell, pledge, transfer, subject to lien, assign or otherwise hypothecate the RSUs unless and until the RSUs have vested, and shares have been issued, recorded and delivered and all other terms and conditions set forth in this Agreement and the Plan have been satisfied.  Any attempt to do so contrary to the provisions of this Agreement shall be null and void. 

 

b. Recoupment Policy.  The RSU are subject to the terms and conditions of the Company’s Compensation Recoupment Policy (such policy, as it may be amended from time to time, the “Recoupment Policy”).  The Recoupment Policy provides for determinations by the Board that, as a result of, in whole or in part, fraud, intentional misconduct, or illegal behavior by the Executive, the Company’s financial results were restated or materially misstated (a “Policy Restatement”).  In the event of a Policy Restatement, the Board may require, among other things (i) cancellation of any of the RSUs that remain outstanding; and/or (ii) reimbursement of any gains in respect of the shares vested, if and to the extent determined by Board under the Recoupment Policy.  Any determination made by the Board shall be binding upon the Executive. The Recoupment Policy is in addition to any other remedies which may be otherwise available at law, or in equity to the Company.

 

c. Repayment/Forfeiture.  Any benefits that the Executive may receive hereunder shall be subject to repayment or forfeiture as may be required to comply with the requirements of the U.S. Securities and Exchange Commission or any applicable law, rule or regulation, including the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or regulations thereunder, as may be in effect from time to time. 

 

d. Stock Ownership & Retention. The Restricted Stock is subject to the Company’s Stock Ownership and Retention Policy as it may be amended from time to time.

 

10.Other Long-Term Incentive Awards.  The Executive understands and agrees that the Executive is not entitled to receive any additional stock options award, deferred bonus stock awards or additional restricted stock units.  The Committee reserves the right to make additional long-term incentive awards to individuals in cases where it believes doing so is in the best interests of the Company and its stockholders.

 

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11.No Effect on Employment.  This Agreement is not an employment contract.  The terms of the Executive’s employment are not affected or changed in any way by the grant of any Award, and neither the Plan nor this Agreement afford the Executive any rights to compensation or damages, including for loss or potential loss that the Executive may suffer by reason of the RSUs (including any Dividend Equivalent Rights) not vesting as a result of the termination of the Plan, forfeiture of the RSUs or the termination of the Executive’s employment.  Except as otherwise provided in Section 17, the balance of any RSUs (including any Dividend Equivalent Rights) that have not vested shall be forfeited in the event that the Executive ceases to be an Employee for any reason prior to the applicable vesting date.

 

12.The Plan.  The RSUs awarded by the Committee and described in this Agreement are made in accordance with and subject to the Plan.  The terms of this Agreement are intended to be in full accordance with the Plan.  However, in the event of any potential or actual conflict between any term of this Agreement and the Plan, this Agreement shall automatically be amended to comply with the terms of the Plan. 

 

13.Modifications to Agreement.  This Agreement together with its Exhibits represents the full and complete understanding between the Executive and the Company on the subjects covered.  The Executive expressly warrants that he or she is not accepting this Agreement in reliance on any promises, representations or inducements other than those contained in this Agreement.  Except as otherwise provided in the Plan, this Agreement cannot be modified or changed by any prior or contemporaneous or future oral agreement of the parties.  Except as otherwise provided in the Plan, this Agreement shall only be modified by the express written agreement of the parties.  

 

14.Binding Agreement.  This Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

 

15.Address for Notices.  Any notice to be given to the Company under the terms of this Agreement will be addressed to the Company, Host Hotels & Resorts, 6903 Rockledge Drive, Bethesda, MD 20817, Attention: Human Resources, or at such other address as the Company may designate in writing.

 

16.Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Maryland, without regard to choice of law or conflict of law rules. 

 

17.Termination under the Severance Plan; Retirement.  

 

a. This Agreement is subject to the Company’s Severance Plan, attached in this grant package.

 

(i) If the Executive’s employment with the Company is terminated by the Company for Cause or by the Executive without Good Reason, then all unvested RSUs shall be forfeited.

 

(ii) Subject to the execution and effectiveness of a Release Agreement, if the 

6

 

 

Executive’s employment with the Company is terminated by the Company without Cause or by the Executive with Good Reason not following a Change in Control while any RSUs remain unvested and not previously forfeited, then the Executive shall:

 

(1) immediately vest in the then-unvested portion of the Strategic Objectives Award, based on the Target level of performance during the applicable period pursuant to Section 3; and

 

(2) remain eligible to vest in the portion of the Relative TSR Awards which had not yet become vested pursuant to Sections 4, 5 or 6 of this Agreement, as applicable, but which had been scheduled to vest pursuant to the applicable section of this Agreement with respect to any period ending on December 31 of the year in which the date of termination (the “Termination Date”) occurs, in each case based on the Company’s actual performance during the applicable period as determined by the Committee.

 

(iii) If the Executive’s employment with the Company is terminated by (a) reason of the Executive’s death or (b) Disability, and any RSUs remain unvested and not previously forfeited, then all unvested RSUs shall vest and all restrictions thereon shall be removed.

 

(iv) Subject to the execution and effectiveness of a Release Agreement, if the Executive’s employment with the Company is terminated by (a) the Company without Cause following a Change in Control, or (b) the Executive with Good Reason following a Change in Control, and any RSUs remain unvested and not previously forfeited, then all unvested RSUs shall vest and all restrictions thereon shall be removed. 

 

b. If the Executive’s employment with the Company is terminated due to Executive’s Retirement, then: 

 

(i) the unvested portion of the Strategic Objectives Award shall be forfeited, unless otherwise determined by the Committee, and 

 

(ii) if the Termination Date occurs after December 31 of the Performance Year , then, subject to the consent of the Committee, Executive shall remain eligible to vest in the portion of the Relative TSR Awards which have not yet become vested pursuant to Sections 4, 5, or 6 of this Agreement, as applicable, but which had been scheduled to vest pursuant to the applicable section of this Agreement with respect to any period ending on December 31 of the year of the Termination Date, in each case based on the Company’s actual performance during the applicable period as determined by the Committee.

 

 

c. Payment in respect of awards that vest pursuant to this Section 17 will occur no later than March 15 of the year following the earlier of (i) the year in which the applicable performance period ends and (ii) the year in which the applicable amount vests.  Any distribution or delivery to be made to the Executive under this Agreement shall, if the Executive is then deceased, be made to the 

7

 

 

Executive’s designated beneficiary, or if no beneficiary survives the transferee must furnish the Company with (a) written notice of his or her status as transferee, and (b) evidence satisfactory to the Company to establish the validity of the transfer and compliance with any laws or regulations pertaining to said transfer.

 

18.Taxation.  Regardless of any action the Company and/or the Subsidiary or affiliate employing the Executive (the “Employer”) take with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related items related to the Executive’s participation in the Plan and legally applicable to the Executive (“Tax-Related Items”), the Executive acknowledges that the ultimate liability for all Tax-Related Items is and remains the Executive’s responsibility and may exceed the amount actually withheld by the Company or the Employer. The Executive further acknowledges that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the RSUs, including, but not limited to, the grant, vesting or settlement of the RSUs, the issuance of shares in settlement of the RSUs, the subsequent sale of shares acquired at vesting and the receipt of any dividends and/or any dividend equivalents; and (ii) do not commit to and are under no obligation to structure the terms of the Award or any aspect of the RSUs to reduce or eliminate the Executive’s liability for Tax-Related Items or achieve any particular tax result. Further, if the Executive has become subject to tax in more than one jurisdiction between the Grant Date and the date of any relevant taxable event, the Executive acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction. 

 

Prior to the relevant taxable or tax withholding event, as applicable, the Executive shall pay or make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all Tax-Related Items. In the event the Executive fails to pay or make such adequate arrangements, as determined by the Company and/or the Employer, the Executive hereby authorizes the Company and/or the Employer, or their respective agents, at their discretion and without any notice or authorization by Executive, to satisfy the obligations with regard to all Tax-Related Items by withholding in shares to be issued upon vesting/settlement of the RSUs.  

 

In the event the Company withholds shares to satisfy Tax-Related Items, the Company shall withhold an amount of shares equal to the maximum statutory withholding amount in the applicable jurisdiction (rounded down to the nearest whole share), or such lesser amount as may be determined by the Executive or the Committee using the Fair Market Value on the date such shares are withheld.   If the obligation for Tax-Related Items is satisfied by withholding in shares, for tax purposes, the Executive is deemed to have been issued the full number of shares subject to the vested RSUs, notwithstanding that a number of the shares is held back solely for the purpose of paying the Tax-Related Items due as a result of any aspect of the Executive’s participation in the Plan. No fractional shares will be withheld or issued pursuant to the grant of RSUs and the issuance of shares thereunder.

 

Finally, the Executive shall pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of the Executive’s participation in the Plan that cannot be satisfied by the means previously described. The Executive hereby agrees to indemnify and keep indemnified the Company, any subsidiary, any 

8

 

 

parent and the Employer, if different, from and against any liability for or obligation to pay any liability for income tax, employee’s National Insurance contributions (if applicable) or any other social security contributions and employment related taxes wherever in the world arising that is attributable to (1) the grant or any benefit derived by the Executive from the RSUs, (2) the vesting of the RSUs, distribution of shares and the removal of restrictions on the RSUs and shares, or (3) the disposal of any RSUs or shares. The Company may refuse to issue or deliver the shares or the proceeds of the sale of shares, if the Executive fails to comply with the Executive’s obligations in connection with the Tax-Related Items. The Executive shall have no further rights with respect to any shares that are retained by the Company pursuant to this provision, and under no circumstances will the Company be required to issue any fractional shares. 

 

19.Confidential Information.  In consideration of the grant of RSUs (including any Dividend Equivalent Rights) the Executive hereby agrees that the Company and/or its affiliates has made and will make available to the Executive, and the Executive will have access to, certain Confidential Information (as defined herein) of the Company and its affiliates.  The Executive acknowledges and agrees that any and all Confidential Information learned or obtained by the Executive during the course of the Executive’s employment with the Company or any of its affiliates, whether developed by the Executive alone or in conjunction with others or otherwise, shall be and is the property of the Company and its affiliates.  Accordingly, the Executive shall at all times keep all Confidential Information confidential and will not use such Confidential Information other than in connection with the Executive’s discharge of his/her employment with the Executive’s Employer, and will safeguard the Confidential Information from unauthorized disclosure.  This covenant is not intended to, and does not limit in any way the Executive’s duties and obligations to the Company and its affiliates the Company’s Code of Conduct and Ethics or to the Company and its affiliates under statutory and common law not to disclose or make personal use of the Confidential Information or trade secrets.  

20.Electronic Communications.  The Company and its affiliates may choose to deliver any documents related to your current or future participation in the Plan by electronic means.  By accepting this grant, the Executive consents and agrees to electronic delivery of any Plan documents, proxy materials, annual reports and other related documents, including all materials required to be distributed pursuant to applicable securities laws. The Company has established procedures for an electronic signature system for delivery and acceptance of Plan documents (including documents relating to any programs adopted under the Plan).  The Executive consents to such procedures and agrees to participate in the Plan through an online or electronic system established and maintained by the Company or a third party designated by the Company.  The Executive agrees that his or her electronic signature is the same as, and shall have the same force and effect as, his or her manual signature.  The Executive understands that, unless earlier revoked by the Executive, this consent shall be effective for the duration of the Agreement and that he or she shall have the right at any time to request written copies of any and all materials referred to above.

21.Insider-Trading Notification.  The Executive should be aware of the insider-trading rules, which, if applicable to the Executive, may impact the sale of shares issued to him or her upon settlement of the RSUs.  In particular, the Executive may be prohibited from effectuating certain transactions involving shares if he or she has inside information about the Company.  If the 

9

 

 

Executive is uncertain whether the insider-trading rules apply to him or her, the Executive should consult with his or her personal legal advisor.  

22.Data Privacy.  By signing this Agreement, the Executive acknowledges and agrees that the Company and any of its affiliates is permitted to hold and process personal (and sensitive) information and data about the Executive as part of its personnel and other business records; and may use such information in the course of the Company’s (or any Company affiliate’s) business.  The Executive agrees that the Company and any Company affiliate may disclose such information to third parties, including where they are situated outside the European Economic Area, the United States or such other area in which the Executive may be located, in the event that such disclosure is in the Company’s or one of its affiliate’s view required for the proper conduct of the Company’s and/or one of its affiliate’s business.  Note that countries outside the European Economic Area may not provide for a similar level of data protection as within the European Economic Area pursuant to the European Data Protection Directive 95/46/EC.  This Section applies to information held, used or disclosed in any medium.

23.Designation of Beneficiary. The executive may designate a beneficiary on the Stock Plan Beneficiary form that will be provided.

 

			
	
Accepted by the Executive:
	
 
	
For the Company:

	
 
	
 
	
 

	
 
	
 
	
 

 

 

10

 

EXHIBIT 10.7 

 

 

EXHIBIT A

 

Definitions.  Whenever the following capitalized terms are used in this Agreement they shall have the meanings set forth below, unless the context clearly indicates otherwise.  Capitalized terms used in this Agreement and not defined herein shall have the meaning ascribed to them in the Plan.

 

“Cause” shall have the meaning set forth in Section 2.4 of the Severance Plan.

 

“Change in Control” shall have the meaning set forth in Section 2.5 of the Severance Plan.

 

“Confidential Information” shall mean all confidential and proprietary information of the Company, and its affiliates, including, without limitation, financial information, contracts and agreements, strategic and business plans concerning the Company, its business, assets or prospects and any and all analyses related thereto, offers, proposals and analyses related to acquisitions, dispositions and other transactions, contractor, supplier and vendor lists and information, designs, software systems, codes, marketing studies, research, reports, investigations, trade secrets or other information of similar character.  Confidential Information shall not include (i) information which is generally available to the public, (ii) information obtained by the Executive from third persons other than employees of the Company, its subsidiaries, and affiliates not under agreement to maintain the confidentiality of the same, and (iii) information which is required to be disclosed by law or legal process.

 

“Disability” shall have the meaning set forth in Section 2.6 of the Severance Plan. 

 

“Ending Price” for the Company and the companies comprising the NAREIT Equity Index, the Lodging Index and the S&P 500 Index, as applicable, shall mean the closing prices of the common stock of the Company and the common stock of companies comprising each of the respective indices on the trading days occurring on the last sixty (60) calendar days of the last calendar year of the Performance Period. By way of example only, if the Performance Period were the three-year period January 1, 2050 through December 31, 2052, then the Ending Price would be determined on the last sixty (60) calendar days of calendar year 2052. 

 

“Good Reason” shall have the meaning set forth in Section 2.10 of the Severance Plan.

 

“Lodging Index” shall mean the index of lodging and hospitality companies as established by the Committee, provided that if a constituent company of the Lodging Index ceases to be actively traded, due, for example, to merger or bankruptcy or the Committee otherwise reasonably determines that it is no longer suitable for the purposes of this Agreement, then such company shall be removed and the Committee in its reasonable discretion shall select a comparable company to be added to the 

 

 

 

Lodging Index for purposes of making the Relative Lodging TSR comparison required hereunder meaningful and consistent across the relevant measurement period.

 

“NAREIT Equity Index” shall mean the index of North American Real Estate Investment Trusts and publicly-traded real estate companies as established by the Committee, provided that if a constituent company of the NAREIT Equity Index ceases to be actively traded, due, for example, to merger or bankruptcy or the Committee otherwise reasonably determines that it is no longer suitable for the purposes of this Agreement, then such company shall be removed and the Committee in its reasonable discretion shall select a comparable company to be added to the NAREIT Equity Index for purposes of making the Relative NAREIT TSR comparison required hereunder meaningful and consistent across the relevant measurement period.

 

“Performance Period” shall mean the three (3) calendar years, January 1 through December 31, beginning with the Performance Year. By way of example only, if grants were made in 2050, then the Performance Year would calendar year 2050, and the Performance Period would be the three-year period of January 1, 2050 through December 31, 2052.

 

“Performance Year” shall mean calendar year of the Grant Date.

 

“Relative Lodging TSR” shall mean the percentile rank of the Company in a period as compared to the Lodging Index for such period and shall be determined by comparing the increase in the Starting Price over the Ending Price, plus dividends paid on the Company’s common stock, to the increase in the Starting Price over the Ending Price, plus dividends paid on the common stock of the companies comprising the Lodging Index for such period. Additionally, the Committee may make, in its reasonable discretion, appropriate adjustments to the Relative Lodging TSR to take into account all stock dividends, stock splits, reverse stock splits and the other events with respect to a constituent company of the Lodging Index that occur prior to the end of the relevant measurement period.

 

“Relative Lodging TSR Award” shall mean that portion of the Relative TSR Awards that may vest under Section 5 of this Agreement based on Relative Lodging TSR.

 

“Relative NAREIT TSR” shall mean the percentile rank of the Company in a period as compared to companies comprising the NAREIT Equity Index for such period, and shall be determined by comparing the increase in the Starting Price over the Ending Price, plus dividends paid on the Company’s common stock during the applicable period, to the increase in the Starting Price over the Ending Price, plus dividends paid on the common stock of companies comprising the NAREIT Equity Index for such period. Additionally, the Committee may make, in its reasonable discretion, appropriate adjustments to the Relative NAREIT TSR to take into account all stock dividends, stock splits, reverse stock splits and the other events with respect to a constituent company of 

12

 

 

the NAREIT Equity Index that occur prior to the end of the relevant measurement period.

 

“Relative NAREIT TSR Award” shall mean that portion of the Relative TSR Awards that may vest under Section 4 of this Agreement based on Relative NAREIT TSR.

 

“Relative S&P 500 TSR” shall mean the percentile rank of the Company in a period as compared to the companies comprising the S&P 500 Index for such period, and shall be determined by comparing the increase in the Starting Price over the Ending Price, plus dividends paid on the Company’s common stock, to the increase in the Starting Price over the Ending Price, plus dividends paid on the common stock of the companies comprising the S&P 500 Index for such period. Additionally, the Committee may make, in its reasonable discretion, appropriate adjustments to the Relative S&P 500 TSR to take into account all stock dividends, stock splits, reverse stock splits and the other events with respect to a constituent company of the S&P 500 Index that occur prior to the end of the relevant measurement period. 

 

“Relative S&P 500 TSR Award” shall mean that portion of the Relative TSR Awards that may vest under Section 6 of this Agreement based on Relative S&P 500 TSR.

 

“Relative TSR Awards” shall mean, in the aggregate, that portion of the RSU that may be earned based on the Relative NAREIT TSR, Relative Lodging TSR and Relative S&P 500 TSR.

 

“Release Agreement” shall have the meaning set forth in Section 2.15 of the Severance Plan.

 

“Retirement” shall mean, with the consent of the Committee, the voluntary termination of Executive’s employment with the Company by the Executive where (i) the Executive’s full-time employment with the Company equals or exceeds five (5) years of service and (ii) the Executive’s age plus years of service with the Company as a full time Employee equals or exceeds 68.

 

“S&P 500 Index” shall mean the index of the companies included in the Standard & Poor’s 500 Index as of January 1 of the Performance Year (excluding the Company), provided that if a constituent company of the S&P 500 Index ceases to be actively traded, due, for example, to merger or bankruptcy or the Committee otherwise reasonably determines that it is no longer suitable for the purposes of this Agreement, then such company shall be removed and the Committee in its reasonable discretion shall select a comparable company to be added to the S&P 500 Index for purposes of making the Relative S&P 500 TSR comparison required hereunder meaningful and consistent across the relevant measurement period.

 

 “Severance Plan” shall mean the “Host Hotels & Resorts, Inc. Severance Plan for Executives”, together with all amendments. 

13

 

 

 

“Starting Price” for the Company and the companies comprising the NAREIT Equity Index, the Lodging Index and the S&P 500 Index, as applicable, shall mean the average of the closing prices of the common stock of the Company and the common stock of companies comprising each of the respective indices, on the trading days occurring on the last sixty (60) calendar days of the year prior to the Performance Year. By way of example only, if the Performance Year were 2050, the Starting Price would be determined on the last sixty (60) calendar days of calendar year 2049. 

 

“Strategic Objective Goals” shall mean the goals for the Company approved by the Committee for the Performance Year, as such goals may be modified or changed by the Committee in its sole discretion.  

 

14kop-ex10116_186.htm

Exhibit 10.116

 

 

 

 

 

KOPPERS HOLDINGS INC.

RESTRICTED STOCK UNIT ISSUANCE AGREEMENT – TIME VESTING

 

RECITALS

 

	
A.
	
The Board has adopted the Plan for the purpose of retaining the services of selected Employees, non-employee members of the Board (or the board of directors of any Parent or Subsidiary) and consultants and other independent advisors who provide services to the Corporation (or any Parent or Subsidiary).

	
B.
	
Participant is to render valuable services to the Corporation (or a Parent or Subsidiary), and this Agreement is executed pursuant to, and is intended to carry out the purposes of, the Plan in connection with the Corporation’s issuance of shares of Common Stock to Participant under the Plan.

	
C.
	
All capitalized terms in this Agreement shall have the meaning assigned to them in the attached Appendix A.

NOW, THEREFORE, it is hereby agreed as follows:

1.Grant of Restricted Stock Units.  The Corporation hereby awards to Participant, as of the Award Date, Restricted Stock Units under the Plan. Each Restricted Stock Unit represents the right to receive one share of Common Stock on the specified issuance date following the vesting of that unit. The number of shares of Common Stock subject to the awarded Restricted Stock Units, the applicable vesting schedule for those shares, the date on which those vested shares shall become issuable to Participant and the remaining terms and conditions governing the award (the “Award”) shall be as set forth in this Agreement.

AWARD SUMMARY

		
	
Award Date:
	
March 5, 2018

	
Number of Shares Subject to Award: 
	
________ shares of Common Stock (the “Shares”) 

	
Vesting Schedule:

 

 

 

 

 

 
	
.  

100% of the Shares shall vest on December 31, 2018, provided the Participant continues in Service until December 31, 2018.

However, one or more Shares may be subject to accelerated vesting in accordance with the provisions of Paragraph 5 of this Agreement. 

 
 

 

		
	
Issuance Schedule:
	
The Shares in which Participant vests in accordance with the foregoing Vesting Schedule shall become issuable immediately upon vesting (the “Issue Date”). The actual issuance of the Shares shall be subject to the Corporation’s collection of all applicable Withholding Taxes and shall be effected on the applicable Issue Date or as soon as administratively practicable thereafter, but in no event later than the close of the calendar year in which such Issue Date occurs or (if later) the fifteenth (15th) day of the third (3rd) calendar month following such Issue Date.  The procedures pursuant to which the applicable Withholding Taxes are to be collected are set forth in Paragraph 7 of this Agreement.

2.Limited Transferability.  Prior to the actual issuance of the Shares which vest hereunder, Participant may not transfer any interest in the Award or the underlying Shares; provided, however, any Shares which vest hereunder but which otherwise remain unissued at the time of Participant’s death may be transferred pursuant to the provisions of Participant’s will or the laws of inheritance or to Participant’s designated beneficiary or beneficiaries of this Award. Participant may make a beneficiary designation for this Award at any time by filing the appropriate form with the Plan Administrator or its designee.

3.Cessation of Service. Except as otherwise provided in Paragraph 5 below, should Participant cease Service for any reason prior to vesting in one or more Shares subject to this Award, then the Award will be immediately cancelled with respect to those unvested Shares, and the number of Restricted Stock Units will be reduced accordingly.  Participant shall thereupon cease to have any right or entitlement to receive any Shares under those cancelled units.

4.Stockholder Rights and Dividend Equivalents

(a)The holder of this Award shall not have any stockholder rights, including voting or dividend rights, with respect to the Shares subject to the Award until Participant becomes the record holder of those Shares following their actual issuance upon the Corporation’s collection of the applicable Withholding Taxes.

(b)Notwithstanding the foregoing, should any stock dividend, whether regular or extraordinary, be declared and paid on the outstanding Common Stock while one or more Shares remain subject to this Award (i.e., those Shares are not otherwise issued and outstanding for purposes of entitlement to the dividend or distribution), then Participant shall automatically be credited with an additional number of Restricted Stock Units equal to the number of shares of Common Stock which would have been paid on the Shares (plus the number of additional shares previously credited to Participant pursuant to the dividend equivalent right provisions of this Paragraph 4) at the time subject to this Award had those Shares been actually issued and outstanding and entitled to that dividend.  The additional Restricted Stock Units so credited shall vest at the same time as the Shares to which they relate and shall be distributed to Participant concurrently with the issuance of those Shares on the applicable Issue Date.  However, each such distribution shall be subject to the Corporation’s collection of the Withholding Taxes applicable to that distribution.  

(c)Notwithstanding the foregoing, should any cash dividend, whether regular or extraordinary, be declared and paid on the outstanding Common Stock while one or more Shares remain subject to this Award (i.e., those Shares are not otherwise issued and outstanding for purposes of entitlement to the dividend or distribution), then a special book account shall be established for Participant and credited with a dollar amount equal to the amount 

2

 
 

 

of that dividend paid per share multiplied by the number of Restricted Stock Units at  the time subject to this Award (plus the number of additional shares previously credited to Participant pursuant to the dividend equivalent right provisions of this Paragraph 4) as of the record date for the dividend.  As of the first business day in January each year, the cash dividend amounts credited to the special book account during the immediately preceding calendar year shall be converted into a book entry of an additional number of Restricted Stock Units determined by dividing (i) those cash dividend equivalent amounts by (ii) the average of the Fair Market Value per share of Common Stock on each of the dates in the immediately preceding calendar year on which those dividends on the outstanding Common Stock were paid.  The additional Restricted Stock Units so credited shall vest at the same time as the Shares to which they relate and shall be distributed to Participant concurrently with the issuance of those Shares on the applicable Issue Date.  However, each such distribution shall be subject to the Corporation’s collection of the Withholding Taxes applicable to that distribution.  

5.Accelerated Vesting/Change in Control. 

(a)Should Participant’s Service terminate by reason of his or her Retirement, death or Permanent Disability prior to final vesting date set forth in Paragraph 1, then Participant shall immediately vest in a prorated additional number of Shares in which Participant would have been vested at the time of such termination had 100% of the Shares that were scheduled to be vested on December 31, 2018,  instead vested in a series of  ten (10) successive equal monthly installments over the duration of the  ten (10) month period preceding December 31, 2018.

(b)Any Restricted Stock Units subject to this Award at the time of a Change in Control may be assumed by the successor entity or otherwise continued in full force and effect or may be replaced with a cash retention program of the successor entity which preserves the Fair Market Value of the unvested shares of Common Stock subject to the Award at the time of the Change in Control and provides for subsequent payout of that value in accordance with the same (or more favorable) vesting schedule in effect for the Award at the time of such Change in Control.  In the event of such assumption or continuation of the Award or such replacement of the Award with a cash retention program, no accelerated vesting of the Restricted Stock Units shall occur at the time of the Change in Control.  

(c)In the event the Award is assumed or otherwise continued in effect, the Restricted Stock Units subject to the Award shall be adjusted immediately after the consummation of the Change in Control so as to apply to the number and class of securities into which the Shares subject to those units immediately prior to the Change in Control would have been converted in consummation of that Change in Control had those Shares actually been issued and outstanding at that time.  To the extent the actual holders of the outstanding Common Stock receive cash consideration for their Common Stock in consummation of the Change in Control,  the successor corporation (or parent entity) may, in connection with the assumption or continuation of the Restricted Stock Units subject to the Award at that time, substitute one or more shares of its own common stock with a fair market value equivalent to the cash consideration paid per share of Common Stock in the Change in Control transaction, provided such common stock is readily tradable on an established U.S. securities exchange or market.  

(d)If the Restricted Stock Units subject to this Award at the time of the Change in Control are not assumed or otherwise continued in effect or replaced with a cash retention program in accordance with Paragraph 5(a), then those units will vest immediately prior to the closing of the Change in Control.  The Shares subject to those vested units, together with 

3

 
 

 

any other Shares in which Participant is at that time vested, will be issued on the Issue Date triggered by the Change in Control (or otherwise converted into the right to receive the same consideration per share of Common Stock payable to the other stockholders of the Corporation in consummation of that Change in Control and distributed at the same time as such stockholder payments), subject to the Corporation’s collection of the applicable Withholding Taxes pursuant to the provisions of Paragraph 7. For purposes of this Section 5(d), the Issue Date shall be the effective date of the Change in Control so long as it qualifies as a “change in the ownership or effective control” of the Corporation within the meaning of Section 409A(a)(2)(A)(v) of the Code and regulations thereunder.  If it does not so qualify, the Issue Date shall be the date that is three (3) years from the Award Date.

(e)Upon an involuntary termination of Participant’s Service for reasons other than Misconduct within twenty-four (24) months following a Change in Control transaction which does not otherwise result in the accelerated vesting of the Restricted Stock Units pursuant to the provisions of subparagraph (d) of this Paragraph 5, all unvested Restricted Stock Units hereunder shall immediately vest at that time. Any unvested cash account maintained on Participant’s behalf pursuant to the cash retention program established in accordance with subparagraph (b) of this Paragraph 5 shall also vest at the time of such involuntary termination.  The Issue Date for such vested Shares or cash shall be six months after the date of termination (or, if earlier, the date that is three (3) years from the Award Date), so long as the Change in Control qualifies as a “change in the ownership or effective control” of the Corporation within the meaning of Section 409A(a)(2)(A)(v) of the Code and regulations thereunder.  If it does not so qualify, the Issue Date shall be the date that is three (3) years from the Award Date.

(f)This Agreement shall not in any way affect the right of the Corporation to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.

6.Adjustment in Shares.  In the event of any of the following transactions affecting the outstanding shares of Common Stock as a class without the Corporation’s receipt of consideration: any stock split, stock dividend, spin-off transaction, extraordinary distribution (whether in cash, securities or other property), recapitalization, combination of shares, exchange of shares or other similar transaction affecting the outstanding Common Stock as a class without the Corporation’s receipt of consideration or in the event of a substantial reduction to the value of the outstanding shares of Common Stock by reason of a spin-off transaction or extraordinary distribution, then equitable adjustments shall be made to the total number and/or class of securities issuable pursuant to this Award in such manner as the Plan Administrator deems appropriate in order to reflect such change and thereby prevent the dilution or enlargement of benefits hereunder.  In determining such adjustments, the Plan Administrator shall take into account any amounts credited to Participant pursuant to the dividend equivalent right provisions of Paragraph 4 in connection with such transaction, and the determination of the Plan Administrator shall be final, binding and conclusive.

7.Collection of Withholding Taxes.  

(a)Upon the applicable Issue Date, the Corporation shall issue to or on behalf of Participant a certificate (which may be in electronic form) for the applicable number of underlying shares of Common Stock, subject, however, to the Corporation’s collection of the applicable Withholding Taxes.

4

 
 

 

(b)Until such time as the Corporation provides Participant with written or electronic notice to the contrary, the Corporation shall collect Withholding Taxes required to be withheld with respect to the vesting or issuance of the vested Shares hereunder (including shares attributable to the dividend equivalent rights provided under Paragraph 4) through an automatic share withholding procedure pursuant to which the Corporation will withhold, at the time of such vesting or issuance, a portion of the  Shares with a Fair Market Value (measured as of the vesting or issuance date) equal to the amount of those taxes  (the “Share Withholding Method”); provided, however, that the amount of any Shares so withheld shall not exceed the amount necessary to satisfy the Corporation‘s required tax withholding obligations using the minimum statutory withholding rates for federal and state tax purposes that are applicable to supplemental taxable income, or as otherwise approved by the Plan Administrator. Participant shall be notified in writing or electronically in the event such Share Withholding Method is no longer available.

 (c)Should any Shares (including shares attributable to the dividend equivalent rights provided under Paragraph 4) be vested or be issued at a time when the Share Withholding Method is not available, then the Withholding Taxes required to be withheld with respect to those Shares shall be collected from Participant through either of the following alternatives: 

-Participant’s delivery of his or her separate check payable to the Corporation in the amount of such taxes, or

-the use of the proceeds from a next-day sale of the Shares issued to Participant, provided and only if (i) such a sale is permissible under the Corporation’s trading policies governing the sale of Common Stock, (ii) Participant makes an irrevocable commitment, on or before the Issue Date for those Shares, to effect such sale of the Shares and (iii) the transaction is not otherwise deemed to constitute a prohibited loan under Section 402 of the Sarbanes-Oxley Act of 2002. 

(d)Except as otherwise provided in Paragraph 4 and Paragraph 5(b) the settlement of all Restricted Stock Units which vest under the Award shall be made solely in shares of Common Stock.  In no event, however, shall any fractional shares be issued.  Accordingly, the total number of shares of Common Stock to be issued pursuant to the Award shall, to the extent necessary, be rounded down to the next whole share in order to avoid the issuance of a fractional share.

 

8.Compliance with Laws and Regulations.  The issuance of shares of Common Stock pursuant to the Award shall be subject to compliance by the Corporation and Participant with all applicable requirements of law relating thereto and with all applicable regulations of any stock exchange on which the Common Stock may be listed for trading at the time of such issuance.

9.Additional Conditions.  

(a)The Corporation may cancel this Award, and Participant shall cease to have any further right to the underlying Shares, at any time Participant is not in compliance with this Agreement, the Plan and the following conditions: 

(i)Participant shall not render services for any organization or engage, directly or indirectly, in any business which, in the judgment of the Plan Administrator or, if delegated by the Plan Administrator to the Chief Executive Officer, in the judgment of such 

5

 
 

 

officer, is or becomes competitive with the Corporation or any Affiliate, or which is or becomes otherwise prejudicial to or in conflict with the interests of the Corporation or any Affiliate. Such judgment shall be based on Participant’s positions and responsibilities while employed by the Corporation or an Affiliate, Participant’s post-Service responsibilities and position with the other organization or business, the extent of past, current and potential competition or conflict between the Corporation or an Affiliate and the other organization or business, the effect on customers, suppliers and competitors of Participant’s assuming the post-Service position and such other considerations as are deemed relevant given the applicable facts and circumstances. Participant shall be free, however, to purchase as an investment or otherwise, stock or other securities of such organization or business so long as they are listed upon a recognized securities exchange or traded over the counter, and such investment does not represent a substantial investment to Participant or a greater than one percent (1%) equity interest in the organization or business.

(ii)Participant shall not, without prior written authorization from the Corporation, disclose to anyone outside the Corporation, or use in other than the Corporation’s business, any secret or confidential information, knowledge or data, relating to the business of the Corporation or an Affiliate in violation of his or her agreement with the Corporation or the Affiliate.

(iii)Participant shall disclose promptly and assign to the Corporation or the Affiliate all right, title and interest in any invention or idea, patentable or not, made or conceived by Participant during employment by the Corporation or the Affiliate, relating in any manner to the actual or anticipated business, research or development work of the Corporation or the Affiliate and shall do anything reasonably necessary to enable the Corporation or the Affiliate to secure a patent where appropriate in the United States and in foreign countries.

(iv)Participant shall not in any way, directly or indirectly (a) induce or attempt to induce any employee of the Corporation to quit employment with the Corporation; (b) otherwise interfere with or disrupt the Corporation’s relationship with its employees; (c) solicit, entice, or hire away any employee of the Corporation; or (d) hire or engage any employee of the Corporation or any former employee of the Company whose employment with the Corporation ceased less than one (1) year before the date of such hiring or engagement.

(v)Participant will not divert or attempt to divert from the Corporation any business the Corporation had enjoyed or solicited from its customers during the two (2) years prior to the diversion or attempted diversion of such business. 

(vi)Participant shall not make any disparaging statements about the Corporation to any of the Corporation’s past, present, or future customers, employees, clients, contractors, vendors, or to the media or to any other person either orally or by any other medium of communication, including internet communication.  As used herein, the term "disparaging statement" means any communication, oral or written, which would cause or tend to cause humiliation or embarrassment or to cause a recipient of such communication to question the business condition, integrity, product, service, quality, confidence, or good character of the Corporation.

(b)Notwithstanding any other provision of the Plan or this Agreement, the Plan Administrator in its sole discretion may cancel this Award at any time prior to the issuance 

6

 
 

 

of the Shares, if the employment of Participant shall be terminated, other than by reason of death, unless the conditions in this Section 9 are met.

(c)Failure to comply with the conditions of this Section 9 prior to, or during the six months after, any payment or delivery pursuant to this Award shall cause the issuance of the Shares to be rescinded. The Corporation shall notify Participant in writing of any such rescission within two (2) years after delivery of the Shares, and within ten (10) days after receiving such notice, Participant shall either return the delivered Shares to the Corporation or pay to the Corporation the amount of the proceeds recognized upon any sale or other disposition of those Shares. 

(d)Upon delivery of the Shares pursuant to this Award, the Plan Administrator may require Participant to certify on a form acceptable to the Plan Administrator, that Participant is in compliance with the terms and conditions of the Plan and this Agreement.

(e)This Award, and the right to receive and retain any Shares or cash payments covered by this Award, shall be subject to rescission, cancellation or recoupment, in whole or part, if and to the extent so provided under any “clawback” or similar policy of the Corporation in effect on the Award Date or that may be established thereafter, including any modification or amendment thereto, or as required by the Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or other applicable law.

(f)By accepting this Award under the Plan, Participant agrees and acknowledges that Participant is obligated to cooperate with, and provide any and all assistance necessary to, the Corporation to recover or recoup any Award or amounts paid under the Plan subject to claw-back pursuant to such law or policy.  Such cooperation and assistance shall include, but is not limited to, executing, completing and submitting any documentation necessary to recover or recoup any Award or amounts paid pursuant to this Award.

10.Notices.  Any notice required to be given or delivered to the Corporation under the terms of this Agreement shall be in writing and addressed to the Secretary of the Corporation at its principal corporate office at 436 Seventh Avenue, Pittsburgh, PA 15219.  Except to the extent electronic notice is expressly authorized hereunder, any notice required to be given or delivered to Participant shall be in writing and addressed to Participant at the address indicated below Participant’s signature line on this Agreement.  All notices shall be deemed effective upon personal delivery (or electronic delivery to the extent authorized hereunder) or upon deposit in the U.S. mail, postage prepaid and properly addressed to the party to be notified.

11.Successors and Assigns.  Except to the extent otherwise provided in this Agreement, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the Corporation and its successors and assigns and Participant, Participant’s assigns, the legal representatives, heirs and legatees of Participant’s estate and any beneficiaries of the Award designated by Participant.

12.Construction.  This Agreement and the Award evidenced hereby are made and granted pursuant to the Plan and are in all respects limited by and subject to the terms of the Plan.  All decisions of the Plan Administrator with respect to any question or issue arising under the Plan or this Agreement shall be conclusive and binding on all persons having an interest in the Award.

7

 
 

 

13.Governing Law.  The interpretation, performance and enforcement of this Agreement shall be governed by the laws of the Commonwealth of Pennsylvania without resort to Pennsylvania’s conflict-of-laws rules.

14.Employment at Will.  Nothing in this Agreement or in the Plan shall confer upon Participant any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Corporation (or any Parent or Subsidiary employing or retaining Participant) or of Participant, which rights are hereby expressly reserved by each, to terminate Participant’s Service at any time for any reason, with or without cause, unless such rights have otherwise been limited pursuant to a separate agreement between the Corporation (or any Parent or Subsidiary) and Participant.

15.Section 409A.  This Award is intended to be excepted from coverage under, or compliant with the provisions of, Section 409 of the Code and the regulations promulgated thereunder (“Section 409A”) and shall be construed accordingly.  Notwithstanding the foregoing or any provision of the Plan to the contrary, if the Award is subject to the provisions of Section 409A (and not excepted therefrom), the provisions of the Plan and this Agreement shall be administered, interpreted and construed in a manner necessary to comply with Section 409A (or disregarded to the extent such provision cannot be so administered, interpreted, or construed).  If any payments or benefits hereunder may be deemed to constitute nonconforming deferred compensation subject to taxation under the provisions of Section 409A, Participant agrees that the Corporation may, without the consent of Participant, modify the Agreement and the Award to the extent and in the manner the Corporation deems necessary or advisable or take such other action or actions, including an amendment or action with retroactive effect, that the Corporation deems appropriate in order either to preclude any such payments or benefits from being deemed “deferred compensation” within the meaning of Section 409A or to provide such payments or benefits in a manner that complies with the provisions of Section 409A such that they will not be taxable thereunder. Notwithstanding, the Corporation makes no representations and/or warranties with respect to compliance with Section 409A, and Participant recognizes and acknowledges that Section 409A could potentially impose upon Participant certain taxes or interest charges for which Participant is and shall remain solely responsible.

8

 
 

 

IN WITNESS WHEREOF, the parties have executed this Agreement on the Award Date indicated above.

		
	
KOPPERS HOLDINGS INC.

	
A.
	
 

	
By:
	
 

	
Title:
	
President and CEO

	
 

 

 

Participant  _______________________________

	
 
	
 

	
Signature:
	
 

	
Address:
	
 

	
B.
	
 

	
C.
	
 

 

 

9

 
 

 

APPENDIX A

DEFINITIONS

The following definitions shall be in effect under the Agreement:

A.Affiliate means any entity that, directly or through one or more intermediaries, is controlled by the Corporation, and any entity in which the Corporation has a significant equity interest as determined by the Plan Administrator.

B.Agreement shall mean this Restricted Stock Unit Issuance Agreement.

C.Award shall mean the award of restricted stock units made to Participant pursuant to the terms of this Agreement.

D.Award Date shall mean the date the restricted stock units are awarded to Participant pursuant to the Agreement and shall be the date indicated in Paragraph 1 of the Agreement.

E.Board shall mean the Corporation’s Board of Directors.

F.Change in Control of the Corporation shall have occurred in the event that: 

(i)a person, partnership, joint venture, corporation or other entity, or two or more of any of the foregoing acting as a “person” within the meaning of Sections 13(d)(3) of the 1934 Act, other than the Corporation, a majority-owned subsidiary of the Corporation or an employee benefit plan of the Corporation or such subsidiary (or such plan’s related trust), become(s) the “beneficial owner” (as defined in Rule 13d-3 under the Act) of fifty percent (50%) or more of the then outstanding voting stock of the Corporation; 

(ii)during any period of two consecutive years, individuals who at the beginning of such period constitute the Board (together with any new Board member whose election by the Corporation’s Board or whose nomination for election by the Corporation’s stockholders, was approved by a vote of at least two-thirds of the Board members then still in office who either were Board members at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board members then in office; 

(iii)all or substantially all of the business of the Corporation is disposed of pursuant to a merger, consolidation or other transaction in which the Corporation is not the surviving corporation or the Corporation combines with another company and is the surviving corporation (unless the Corporation’s stockholders immediately following such merger, consolidation, combination, or other transaction beneficially own, directly or indirectly, more than fifty percent (50%) of the aggregate voting stock or other ownership interests of (x) the entity or entities, if any, that succeed to the business of the Corporation or (y) the combined company);  

A-1

 

 
 

 

(iv)the closing of the sale of all or substantially all of the assets of the Corporation or a liquidation or dissolution of the Corporation; or

(v)the acquisition, directly or indirectly, by any person or related group of persons (other than the Corporation or a person that directly or indirectly controls, is controlled by, or is under common control with, the Corporation of beneficial ownership (within the meaning of Rule 13d-3 of the Act) of securities possessing more than twenty percent (20%) of the total combined voting power of the Corporation’s outstanding securities pursuant to a tender or exchange offer made directly to the Corporation’s stockholders which the Board does not recommend such stockholders to accept.

G.Code shall mean the Internal Revenue Code of 1986, as amended.

H.Common Stock shall mean shares of the Corporation’s common stock.

I.Corporation shall mean Koppers Holdings Inc., a Pennsylvania corporation, and any successor corporation to all or substantially all of the assets or voting stock of Koppers Holdings Inc. which shall by appropriate action adopt the Plan. 

J.Employee shall mean an individual who is in the employ of the Corporation (or any Parent or Subsidiary), subject to the control and direction of the employer entity as to both the work to be performed and the manner and method of performance.

K.Fair Market Value per share of Common Stock on any relevant date shall be determined in accordance with the following provisions:

(i)If the Common Stock is at the time traded on the Nasdaq Global Market, then the Fair Market Value shall be the closing selling price per share of Common Stock at the close of regular hours trading (i.e., before after-hours trading begins) on the Nasdaq Global Market on the date in question, as such price is reported by the National Association of Securities Dealers for that particular Stock Exchange. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists.

(ii)   If the Common Stock is at the time listed on any other Stock Exchange, then the Fair Market Value shall be the closing selling price per share of Common Stock at the close of regular hours trading (i.e., before after-hours trading begins) on the date in question on the Stock Exchange determined by the Plan Administrator to be the primary market for the Common Stock, as such price is officially quoted in the composite tape of transactions on such exchange.  If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists.

L.Misconduct shall mean the commission of any act of fraud, embezzlement or dishonesty by Participant, any unauthorized use or disclosure by Participant of confidential information or trade secrets of the Corporation (or any Parent or Subsidiary), or any other intentional misconduct by Participant adversely affecting the business or affairs of the Corporation 

A-2

 

 
 

 

(or any Parent or Subsidiary) in a material manner.  The foregoing definition shall not in any way preclude or restrict the right of the Corporation (or any Parent or Subsidiary) to discharge or dismiss Participant or any other person in the Service of the Corporation (or any Parent or Subsidiary) for any other acts or omissions, but such other acts or omissions shall not be deemed, for purposes of the Plan or this Agreement, to constitute grounds for termination for Misconduct.

M.1934 Act shall mean the Securities Exchange Act of 1934, as amended from time to time.

N.Participant shall mean the person to whom the Award is made pursuant to the Agreement. 

O.Parent shall mean any corporation (other than the Corporation) in an unbroken chain of corporations ending with the Corporation, provided each corporation in the unbroken chain (other than the Corporation) owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

P.Permanent Disability shall mean the inability of a Participant to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which is expected to result in death or to be of continuous duration of twelve (12) months or more.

Q.Plan shall mean the Corporation’s Amended and Restated 2005 Long-Term Incentive Plan.

R.Plan Administrator shall mean the committee(s) designated by the Board to administer the Plan. 

S.Retirement shall mean Participant’s voluntary termination from Service (i) on or after his attainment of age sixty five (65), or (ii) on or after his attainment of age 55 with at least ten (10) years of service, or involuntary termination from Service with at least thirty (30) years of service other than in connection with a termination for Misconduct.  “Years of service” means Participant’s total number of years of “accumulated service” as such term is defined with respect to salaried employees under the Retirement Plan for Koppers Inc. (regardless of whether Participant is eligible to receive a benefit under such plan).

T.Service shall mean Participant’s performance of services for the Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a non-employee member of the board of directors or a consultant or independent advisor. For purposes of this Agreement, Participant shall be deemed to cease Service immediately upon the occurrence of either of the following events: (i) Participant no longer performs services in any of the foregoing capacities for the Corporation (or any Parent or Subsidiary) or (ii) the entity for which Participant performs such services ceases to remain a Parent or Subsidiary of the Corporation, even though Participant may subsequently continue to perform services for that entity. Service shall not be deemed to cease during a period of military leave, sick leave or other personal leave approved by the Corporation; provided, however, that except to the extent otherwise required by law or expressly authorized by the Plan Administrator or by the Corporation’s written policy on leaves of absence, no Service credit shall be given for vesting purposes for any period Participant is on a leave of absence.  

A-3

 

 
 

 

U.Stock Exchange shall mean the American Stock Exchange, the Nasdaq Global Market or the New York Stock Exchange.

V.Subsidiary shall mean any corporation (other than the Corporation) in an unbroken chain of corporations beginning with the Corporation, provided each corporation (other than the last corporation) in the unbroken chain owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

W.Withholding Taxes shall mean the federal, state and local income and employment taxes required to be withheld by the Corporation in connection with the vesting and concurrent issuance of the shares of Common Stock under the Award, including any additional shares resulting from the dividend equivalent right provisions of the Award. 

 

A-4

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