Document:

ex_152684.htm

Exhibit 10.3

 

WASHINGTON PRIME GROUP INC.

 

EMPLOYEE PERFORMANCE STOCK UNIT AWARD AGREEMENT

 

(Louis Conforti)

 

This Performance Stock Unit Award Agreement (“Agreement”) made as of August 2, 2019 (the “Award Date”) among Washington Prime Group Inc., an Indiana corporation (the “Company”), its subsidiary, Washington Prime Group, L.P., an Indiana limited partnership and the entity through which the Company conducts substantially all of its operations (the “Partnership”), and the individual listed as participant on the signature page hereto (the “Participant”).

 

Recitals

 

 A.     The Participant is an employee of the Company or one of its Affiliates and provides services to the Partnership.

 

 B.     The Partnership has adopted the Partnership’s 2019 Stock Incentive Plan (as further amended, restated or supplemented from time to time hereafter, the “Plan”) to provide, among others, employees of the Partnership or an Affiliate (including the Company) with equity-based incentives to maintain and enhance the performance and profitability of the Partnership and the Company. Capitalized terms used herein without definitions shall have the meanings given to those terms in the Plan unless otherwise indicated.

 

 C.     Reference is made to the Amended and Restated Employment Agreement between the Participant and the Company dated as of August 2, 2019 (the “Employment Agreement”). This Award is intended to comply with the terms of the Employment Agreement and the terms of the Plan, and if there are any inconsistencies or ambiguity between (x) the same, then the terms of the Plan shall control, or (y) the Employment Agreement and this Agreement, then this Agreement shall control. For avoidance of doubt, the provisions of Section 7 of this Agreement shall override any similar provisions in the Employment Agreement.

 

 D.     This Agreement evidences an award (the “Award”) of the number of performance stock units (“Performance Stock Units”) specified in Section 2 of this Agreement, as approved by the Committee.

 

NOW, THEREFORE, the Company, the Partnership and the Participant agree as follows:

 

1.     Administration; Incorporation of the Plan. This Award shall be administered by the Committee which has the powers and authority as set forth in the Plan. The Committee will make the determinations and certifications required by this Award as promptly as reasonably practicable following the occurrence of the event or events necessitating such determinations or certifications. The provisions of the Plan are hereby incorporated by reference as if set forth herein. Should there be any conflict between the terms of this Agreement on the one hand, and the Plan on the other hand, the terms of this Agreement shall prevail.

 

 

 

 

2.     Award.

 

(a)     Grant of PSUs. Pursuant to, and subject to, the terms and conditions set forth herein and in the Plan, the Participant is hereby granted 500,000 Performance Stock Units as of the Award Date (the “Target PSU”). Each Performance Stock Unit represents a conditional right to receive one share of Common Stock.

 

(b)     Vesting. The Performance Stock Units granted hereunder shall be subject to the following performance-based and service-based vesting conditions:

 

  (i)      Performance-Based Vesting. The Performance Stock Units shall be deemed earned based on the achievement of the performance goal as described on Exhibit X attached hereto (“Exhibit X”), and upon certification of achievement by the Compensation Committee, provided that the Participant is actively employed by the Company in “good standing” through the last day of the Performance Period (as defined in Exhibit X) and is in continued compliance with the provisions of Section 8 of this Agreement.

 

  (ii)     Service-Based Vesting. The Performance Stock Units earned pursuant to the Section 2(b)(i) above (the “Earned PSUs”) will vest and become nonforfeitable with respect to one-third of the Earned PSUs on each of August 2, 2022, August 2, 2023 and August 2, 2024 (each such date, a “Vesting Date”), provided that the Participant is actively employed by the Company in “good standing” through the applicable Vesting Date and is in continued compliance with the provisions of Section 8 of this Agreement.

 

The Committee shall in its sole and absolute discretion determine the “good standing” of the Participant, and in making such determination, the Committee may consider such factors as it deems appropriate including, but not limited to, whether the Participant was placed on a performance plan or received corrective action or counseling. Unless otherwise determined by the Board or the Committee, and except as set forth in the following paragraph hereof, upon a termination of the Participant’s employment with the Company for any reason prior to the third anniversary of the Award Date, all of the then unvested Restricted Stock Units granted hereunder shall be forfeited without any consideration, and the Participant shall have no further rights thereto.

 

 (c)     Settlement. As soon as practicable following a Vesting Date or, if earlier, the date the Restricted Stock Units become vested pursuant to Section 3 (but in no event later than March 15th of the calendar year following the calendar year in which Performance Stock Units become vested), subject to Section 5 (pertaining to withholding of taxes), the Company shall deliver to the Participant one share of Common Stock in respect of each of the Performance Stock Units that vested free of any restrictions (including any dividend equivalent rights that are paid in shares of Common Stock in accordance with Section 6 below).

 

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3.     Termination of Employment; Change in Control.

 

 (a)     By the Company for Any Reason Other Than for Cause, As a result of Death or Disability, or By the Participant for Good Reason. If, during the Employment Period (as defined in the Employment Agreement), the Participant’s employment with the Company terminates as a result of (x) a termination by the Company for any reason other than for Cause (as defined in the Employment Agreement), (y) the Participant’s death or Disability (as defined in the Employment Agreement) or (z) a resignation by the Participant for Good Reason (as defined in the Employment Agreement), then, with respect to the Performance Stock Units outstanding as of the date of the Date of Termination (as defined in the Employment Agreement) and subject to the Participant’s delivery of an executed Release (as defined in the Employment Agreement) prior to the Release Deadline (as defined in the Employment Agreement):

 

(i)     if the Date of Termination occurs during the Performance Period, the Performance Period shall be deemed to have ended on the Date of Termination and the attainment of the performance goals shall be calculated by reference to performance as of the Date of Termination, as determined by the Committee in good faith in its sole discretion, and a pro-rata portion of the Earned PSUs that are scheduled to vest on each Vesting Date shall be deemed vested as of the Date of Termination (as defined in the Employment Agreement) equal to: (i) the total number of Earned PSUs scheduled to vest as of such Vesting Date, multiplied by (ii) a fraction, the numerator of which is the number of days the Participant provided service to the Company from and after the Award Date through the Date of Termination and the denominator of which is the total number of days from the Award Date through the Vesting Date; or

 

(ii)     if the Date of Termination occurs after the end of the Performance Period, a pro-rata portion of the Earned PSUs that are scheduled to vest on each Vesting Date shall be deemed vested as of the Date of Termination (as defined in the Employment Agreement) equal to: (i) the total number of Earned PSUs scheduled to vest as of such Vesting Date, multiplied by (ii) a fraction, the numerator of which is the number of days the Participant provided service to the Company from and after the Award Date through the Date of Termination and the denominator of which is the total number of days from the Award Date through the Vesting Date.

 

(b)     Change in Control. Notwithstanding anything contained herein to the contrary or in Section 11 of the Plan, in the event of a Change in Control (as defined in the Employment Agreement), the Performance Stock Units outstanding as of the date of the Change in Control shall vest as follows: (i) the Performance Period shall be deemed to have ended on the date of the Change in Control and the attainment of the performance goals shall be calculated by reference to performance as of the date of the Change in Control, as determined by the Committee in good faith in its sole discretion; and (ii) the number of Performance Stock Units earned pursuant to clause (i) shall be converted to time-vesting restricted stock units (RSUs) which shall vest as follows: (A) if the surviving or successor entity in the Change in Control does not continue, assume or replace such RSUs with a substitute grant with the same intrinsic value (“Substitute Stock”), such RSUs will vest on the date of the Change in Control; or (B) if the surviving or successor entity in the Change in Control continues, assumes or replaces such shares of stock with Substitute Stock, then such shares of Substitute Stock shall vest on the earlier of (x) the Vesting Dates described in Section 2(b)(ii) if the Participant provides continuous service to the Company, the surviving or successor entity, or one of their respective affiliates through such Vesting Dates or (y) if, prior to the Vesting Dates and within twenty-four months following the date of the Change in Control, the Participant’s service to the Company, the surviving or successor entity or one of their respective affiliates is terminated by the Company for any reason other than for Cause or by the Participant for Good Reason, the Substitute Stock shall be deemed vested as the date of such termination of employment, subject to the Participant’s delivery of an executed Release prior to the Release Deadline. For avoidance of doubt, Substitute Stock can only have the same intrinsic value if it is in the form of publicly registered stock that is readily traded on a major stock exchange.

 

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4.     Restrictions. Subject to any exceptions set forth in the Plan, no Performance Stock Unit granted hereunder may be sold, exchanged, transferred, assigned, pledged, hypothecated or otherwise disposed of or hedged, in any manner (including through the use of any cash-settled instrument), whether voluntarily or involuntarily and whether by operation of law or otherwise, other than by will or by the laws of descent and distribution. Any sale, exchange, transfer, assignment, pledge, hypothecation, or other disposition in violation of the provisions of this Section 4 will be null and void and any Performance Stock Unit which is hedged in any manner will immediately be forfeited. All of the terms and conditions of the Plan and this Agreement will be binding upon any permitted successors and assigns. Except as provided in Section 6 of this Agreement, a Performance Stock Unit shall not entitle the Participant to any incidents of ownership (including, without limitation, dividend and voting rights) in any Share until the Participant is issued the Share to which such Performance Stock Unit relates pursuant to Section 2(c) hereof.

 

5.     Tax Withholding. No later than the date as of which an amount first becomes includible in the gross income of the Participant for federal, state, local or foreign income tax purposes with respect to any Performance Stock Units, the Participant will pay to the Company or make arrangements satisfactory to the Company regarding the payment of any United States federal, state or local or foreign taxes of any kind required by law to be withheld with respect to the Performance Stock Units. The obligations of the Company under this Agreement shall be conditioned on compliance by the Participant with this Section 5, and the Company shall, to the extent permitted by law, have the right to deduct any such taxes from any payment otherwise due to the Participant, including deducting such amount from the delivery of Shares issued upon settlement of the Performance Stock Units, that gives rise to the withholding requirement.

 

6.     Dividend Equivalent Rights. So long as the Award is outstanding, the Participant shall accrue (in shares of Common Stock as set forth below) dividend equivalent payments equal to the regular cash dividends paid on the shares of Common Stock covered by this Award. Such dividend equivalents will be deemed reinvested in additional Performance Stock Units which will themselves accrue dividend equivalents. Unless the Company determines otherwise in its sole discretion, the dividend equivalents paid pursuant to this Section 6 shall be paid by the issuance of Shares of Common Stock based closing price of the Common Stock on the ex-dividend date, and shall accrue and be held in escrow by the Company and be subject to the same restrictions as the Performance Stock Units with regard to which they are issued, including without limitation, as to vesting (including accelerated vesting) and shall be delivered to the Participant at the time the corresponding shares of Common Stock are delivered to the Participant in accordance with Section 2(c). The Participant will not receive escrowed dividend equivalents on any Performance Stock Units which are forfeited and all such dividend equivalents shall be forfeited along with the Performance Stock Units which are forfeited. For the avoidance of doubt, the provisions of this Section 6 shall not apply to any extraordinary dividends or distributions. The Participant will have only the rights of a general unsecured creditor of the Company in respect of such dividend equivalent payments until delivered as specified herein.

 

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7.     Tax Representations. The Participant hereby represents and warrants to the Company as follows:

 

 (a)     The Participant has reviewed with the Participant’s own tax advisors the federal, state, local and foreign tax consequences of this Award and the transactions contemplated by this Agreement. The Participant is relying solely on such advisors and not on any statements or representations of the Company or any of its employees or agents.

 

 (b)     The Participant understands that the Participant (and not the Company) shall be responsible for the Participant’s own tax liability that may arise as a result of this Award or the transactions contemplated by this Agreement.

 

8.     Restrictive Covenants.

 

 (a)     Confidential Information.  During such time as the Participant is employed by the Company and thereafter, the Participant shall keep secret and retain in the strictest confidence, and shall hold in a fiduciary capacity for the benefit of the Company all secret or confidential information, knowledge or data relating to the Company or any of its affiliated companies, and their respective businesses, including without limitation, any data, information, ideas, knowledge and papers pertaining to the customers, prospective customers, prospective products or business methods of the Company, including without limitation the business methods, plans and procedures of the Company, that shall have been obtained by the Participant during the Participant’s employment by the Company or any of its affiliated companies and that shall not be or become public knowledge (other than by acts by the Participant or representatives of the Participant in violation of this Agreement).  After termination of the Participant’s employment with the Company, the Participant shall not, without the prior written consent of the Company or as may otherwise be required by law or legal process after reasonable advance written notice to the Company, use, communicate or divulge any such information, knowledge or data, directly or indirectly, to anyone other than the Company and those designated by it.  Nothing contained in this Agreement shall prohibit the Participant from disclosing or using information (i) which is now known by or hereafter becomes available to the general public (other than by acts by the Participant or representatives of the Participant in violation of this Agreement); (ii) which became known to the Participant from a source other than Company, or any of its subsidiaries or affiliates, other than as a result of a breach (known or which should have been known to the Participant) by such source of an obligation of confidentiality owed by it to Company, or any of its subsidiaries or affiliates (but not if such information was known by the Participant at such time of disclosure or use to be confidential); (iii) in connection with the proper performance of Participant’s duties to the Company, (iv) which is otherwise legally required (but only if the Participant gives reasonable advance notice to the Company of such disclosure obligation to the extent legally permitted, and cooperates with the Company (at the Company’s expense), if requested, in resisting such disclosure) or (v) which is reasonably appropriate in connection with a litigation or arbitration related to Participant’s employment with the Company or this Agreement.

 

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 (b)     Non-competition. During the period commencing on the Award Date and ending two (2) years after the termination of Participant’s employment by the Company (the “Covenant Period”), the Participant shall not engage in, have an interest in, or otherwise be employed by or, as an owner, operator, partner, member, manager, employee, officer, director, consultant, advisor, lender, or representative, associate with, or permit Participant’s name to be used in connection with the activities of, any business or organization engaged in the ownership, development, management, leasing, expansion or acquisition of indoor or outdoor shopping centers or malls (the “Business”) that, (i) if such business or organization is a public company, has a market capitalization of greater than $1 billion or, (ii) if such business or organization is a private company, has assets which may be reasonably valued of more than $1 billion, in (x) North America or (y) any country outside of North America in which the Company or any of its affiliates is engaged in the ownership, development, management, leasing, expansion or acquisition of indoor or outdoor shopping centers or malls, or has indicated an intent to do so or interest in doing so as evidenced by a written plan or proposal prepared by or presented to senior management of the Company prior to the date the Participant’s employment with the Company terminates; other than for or on behalf of, or at the request of, the Company or any affiliate; provided, that passive ownership of less than two percent (2%) of the outstanding stock of any publicly traded corporation (or private company through an investment in a hedge fund or private equity fund, or similar vehicle) shall not be deemed to be a violation of this Section 8(b) solely by reason thereof.  Notwithstanding the foregoing, the provisions of this Section 8(b) shall not be violated by the Participant being employed by, associating with or otherwise providing services to a subsidiary, division or unit of any entity where such entity has a subsidiary, division or unit (other than the subsidiary, division or unit with which the Participant is employed, associated with or otherwise provides services to) which is engaged in the Business so long as the Participant does not provide services or advice, with or without specific compensation, to the subsidiary, division or unit engaged in the Business.

 

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 (c)     Non-Solicitation of Employees.  During the Covenant Period, the Participant shall not, directly or indirectly, (i) induce or attempt to induce any employee of the Company to leave the employ of the Company or in any way interfere with the relationship between the Company, on the one hand, and any employee thereof, on the other hand, (ii) hire any person who was an employee of the Company until two (2) years after such individual’s employment relationship with the Company has been terminated or (iii) induce or attempt to induce any customer, supplier, licensee or other business relation of the Company to cease doing business with the Company, or in any way knowingly interfere with the relationship between any such customer, supplier, licensee or business relation, on the one hand, and the Company, on the other hand; provided, that solicitations incidental to general advertising or other general solicitations in the ordinary course not specifically targeted at such persons and employment of any person not otherwise solicited in violation hereof shall not be considered a violation of this Section 8(c). The Participant shall not be in violation of this Section 8(c) solely by providing a reference for a former employee of the Company.

 

 (d)     Non-Disparagement. The Participant agrees not to make any public disparaging, negative, or defamatory comments about the Company including the Company’s business, its directors, officers, employees, parents, subsidiaries, partners, affiliates, operating divisions, representatives or agents, or any of them, whether written, oral, or electronic.  In particular, the Participant agrees to make no public statements including, but not limited to, press releases, statements to journalists, employees, prospective employers, interviews, editorials, commentaries, or speeches, that disparage or may disparage the Company’s business, are critical of the Company or its business, or would cast the Company or its business in a negative light.  In addition to the confidentiality requirements set forth in this Agreement and those imposed by law, the Participant further agrees not to provide any third party, directly or indirectly, with any documents, papers, recordings, e-mail, internet postings, or other written or recorded communications referring or relating the Company’s business, that would support, directly or indirectly, any disparaging, negative or defamatory statement, whether written or oral. This Section 8(d) shall not be violated by (i) responding publicly to incorrect, disparaging, or derogatory public statements to the extent reasonably necessary to correct or refute such public statements or (ii) making any truthful statement to the extent (y) reasonably necessary in connection with any litigation, arbitration, or mediation or (z) required by law or by any court, arbitrator, mediator or administrative or legislative body (including any committee thereof) with apparent jurisdiction to order the person to disclose or make accessible such information.  The Company agrees not to make any public statement which is disparaging or defamatory about the Participant, whether written, oral, or electronic.  The Company’s obligations under the preceding sentence shall be limited to communications by its senior corporate executives having the rank of Senior Vice President or above and any member of the Board (“Specified Executives”), and it is agreed and understood that any such communication by any Specified Executive (or by any executive at the behest of a Specified Executive) shall be deemed to be a breach of this Section 8(d) by the Company.

 

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 (e)     Prior Notice Required.  The Participant hereby agrees that, prior to accepting employment with any other person or entity during the Covenant Period, the Participant will provide such prospective employer with written notice of the provisions of this Section 8, with a copy of such notice delivered simultaneously to the General Counsel of the Company.

 

 (f)     Return of Company Property/Passwords.  The Participant hereby expressly covenants and agrees that following termination of the Participant’s employment with the Company for any reason or at any time upon the Company’s written request, the Participant will promptly return to the Company all property of the Company in Participant’s possession or control (whether maintained at Participant’s office, home or elsewhere), including, without limitation, all Company passwords, credit cards, keys, beepers, laptop computers, cell phones and all copies of all management studies, business or strategic plans, budgets, notebooks and other printed, typed or written materials, documents, diaries, calendars and data of or relating to the Company or its personnel or affairs.  Notwithstanding the foregoing, the Participant shall be permitted to retain Participant’s rolodex (or similar list of personal contacts), compensation-related data, information needed for tax purposes and other personal items.

 

 (g)     Participant Covenants Generally.

 

(i)     The Participant’s covenants as set forth in this Section 8 are from time to time referred to herein as the “Participant Covenants.” If any of the Participant Covenants is finally held to be invalid, illegal or unenforceable (whether in whole or in part), such Participant Covenant shall be deemed modified to the extent, but only to the extent, of such invalidity, illegality or unenforceability and the remaining Participant Covenants shall not be affected thereby; provided, however, that if any of the Participant Covenants is finally held to be invalid, illegal or unenforceable because it exceeds the maximum scope determined to be acceptable to permit such provision to be enforceable, such Participant Covenant will be deemed to be modified to the minimum extent necessary to modify such scope in order to make such provision enforceable hereunder.

 

(ii)     The Participant understands that the foregoing restrictions may limit Participant’s ability to earn a livelihood in a business similar to the business of the Company and its controlled affiliates, but the Participant nevertheless believes that Participant has received and will receive sufficient consideration and other benefits as an employee of the Company and as otherwise provided hereunder to clearly justify such restrictions which, in any event (given Participant’s education, skills and ability), the Participant does not believe would prevent Participant from otherwise earning a living.  The Participant has carefully considered the nature and extent of the restrictions placed upon Participant by this Section 8, and hereby acknowledges and agrees that the same are reasonable in time and territory and do not confer a benefit upon the Company disproportionate to the detriment of the Participant.

 

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 (h)     Enforcement.  Because the Participant’s services are unique and because the Participant has access to confidential information, the parties hereto agree that money damages would be an inadequate remedy for any breach of this Section 8.  Therefore, in the event of a breach or threatened breach of this Section 8, the Company or its respective successors or assigns may, in addition to other rights and remedies existing in their favor at law or in equity, apply to any court of competent jurisdiction for specific performance and/or injunctive relief in order to enforce, or prevent any violations of, the provisions hereof (without posting a bond or other security) or require the Participant to account for and pay over to the Company all compensation, profits, moneys, accruals or other benefits derived from or received as a result of any transactions constituting a breach of the covenants contained herein, if and when final judgment of a court of competent jurisdiction is so entered against the Participant.

 

 (i)     Interpretation.  For purposes of this Section 8, references to “the Company” shall mean the Company as hereinbefore defined and any of its controlled affiliated companies.

 

9.     Amendment. No amendment of this Agreement shall materially adversely impair the rights of the Participant without the Participant’s consent, except such an amendment made to comply with applicable law (including Applicable Exchange listing standards or accounting rules) or avoid the incurrence of tax penalties under Section 409A of the Code.

 

10.     Successors and Assigns. This Agreement will be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement will be binding upon the Participant and the Participant’s beneficiary, if applicable.

 

11.     Captions. Captions provided herein are for convenience only and shall not affect the scope, meaning, intent or interpretation of the provisions of this Agreement.

 

12.     Severability; Entire Agreement. If any provision of the Plan or this Agreement is finally held to be invalid, illegal or unenforceable (whether in whole or in part), such provision will be deemed modified to the extent, but only to the extent, of such invalidity, illegality or unenforceability and the remaining provisions will not be affected thereby; provided that if any of such provision is finally held to be invalid, illegal, or unenforceable because it exceeds the maximum scope determined to be acceptable to permit such provision to be enforceable, such provision will be deemed to be modified to the minimum extent necessary to modify such scope in order to make such provision enforceable hereunder. The Plan and this Agreement contain the entire agreement of the parties with respect to the subject matter thereof and supersede all prior agreements, promises, covenants, arrangements, communications, representations and warranties between them, whether written or oral with respect to the subject matter thereof.

 

13.     Clawback. The Participant acknowledges that all securities issued and payments made pursuant to this Award are subject to clawback by the Company to the extent required by applicable law or the policies of the Company as in effect from time to time.

 

14.     Governing Law; Choice of Forum. This Agreement shall be governed by and construed in accordance with the laws of the State of Indiana, without reference to principles of conflict of laws. Venue for a dispute in respect of this Agreement shall be the federal courts located in Columbus, Ohio.

 

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15.     Acceptance. The Participant hereby acknowledges receipt of a copy of the Plan and this Agreement. The Participant has read and understands the terms and provisions thereof, and accepts the Performance Stock Units subject to all of the terms and conditions of the Plan and this Agreement.

 

16.     Section 409A. The amounts payable under this Agreement are intended to avoid the incurrence of tax penalties under Section 409A of the Code. This Agreement shall in all respects be administered in accordance with Section 409A of the Code. Each payment under this Agreement shall be treated as a separate payment for purposes of Section 409A of the Code. In no event may the Participant, directly or indirectly, designate the calendar year of any payment to be made under this Agreement. Notwithstanding anything herein to the contrary, in the event that the Participant is a “specified employee” within the meaning of Section 409A of the Code (as determined in accordance with the methodology established by the Company as in effect on the Date of Termination), amounts that constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code that would otherwise be payable and benefits that would otherwise be provided hereunder during the six-month period immediately following the Participant’s separation from service shall instead be paid, with interest in the case of cash payments (calculated at the applicable federal rate) determined as of the separation from service, or provided on the first business day after the date that is six months following the Participant’s separation from service; provided that, if the Participant dies following the Participant’s separation from service and prior to the payment of the any amounts delayed on account of Section 409A of the Code hereunder, such amounts shall be paid to the personal representative of the Participant’s estate within 30 days after the date of the Participant’s death.

 

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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the 2nd day of August, 2019.

 

	 	WASHINGTON PRIME GROUP INC.,
	 	    an Indiana corporation
	 	 
	 	By:  /s/ Robert P. Demchak          
	 	        Name: Robert P. Demchak
	 	
			        Title: Executive Vice President, General

			                 Counsel and Corporate Secretary

			
	 	 
	 	 
	 	 
	 	WASHINGTON PRIME GROUP, L.P.,
	 	    an Indiana limited partnership
	 	 
	 	By:  Washington Prime Group Inc.,
	 	        an Indiana corporation, its general partner
	 	 
	 	By:  /s/ Robert P. Demchak          
	 	        Name: Robert P. Demchak
	 	
			        Title: Executive Vice President, General

			                 Counsel and Corporate Secretary

			
	 	 
	 	 
	 	PARTICIPANT
	 	 
	 	By:  /s/ Louis Conforti          
	 	        Name: Louis Conforti       

 

[Signature Page to WPG Employee PSU Award Agreement]

 

 

 

 

EXHIBIT X

 

PSU Performance Goals for L. Conforti 2019 Inducement Award

 

	
			A.

				
			Performance Goals.

			

 

1.     Except as expressly provided in the Employment Agreement, the performance goals for the Performance Period (as defined below) shall be based on the Company’s Annualized Total Shareholder Return (“TSR”) for the Performance Period.

 

2.     PSUs shall be earned based on the annualized TSR for the Performance Period as follows:

 

	
			Annualized TSR for the Performance Period

				
			Earned PSUs

			
	
			Less than 15%

				
			0

			
	
			15% to 25%

				
			500,000

			
	
			Greater than 25%

				
			1,000,000

			

 

There shall be no interpolation for annualized TSR between 15% and 25%.

 

3.     Subject to the terms of the Agreement and the Employment Agreement, the PSUs earned in accordance with the above will vest and become nonforfeitable with respect to one-third of the such earned PSUs on each of August 2, 2022, August 2, 2023 and August 2, 2024, provided that the Participant is actively employed by the Company in “good standing” through the applicable Vesting Date and is in continued compliance with the provisions of Section 8 of this Agreement. The Committee shall in its sole and absolute discretion determine the “good standing” of the Participant, and in making such determination, the Committee may consider such factors as it deems appropriate including, but not limited to, whether the Participant was placed on a performance plan or received corrective action or counseling.

 

4.     PSUs that do not become vested on or before the applicable Vesting Date shall automatically be forfeited, except as otherwise expressly provided in Section 3 of the Agreement.

 

B.     Definitions.

 

“Beginning Price” means the average of the closing market prices of the Company’s common stock on the principal exchange on which such stock is traded for the twenty (20) consecutive trading days ending with the last trading day before the beginning of the Performance Period. For the purpose of determining Beginning Price, the value of dividends and other distributions shall be determined by treating them as reinvested in additional shares of stock at the closing market price on the ex-dividend date.

 

“Adjusted Ending Price” means the average of the closing market prices of the Company’s common stock on the principal exchange on which such stock is traded for the twenty (20) consecutive trading days ending on the last trading day of the Performance Period, as adjusted for the reinvestment of dividend equivalents during the Performance Period in additional share units. For the purpose of determining Ending Price, the value of dividends and other distributions shall be determined by treating them as reinvested in additional shares of stock at the closing market price on the ex-dividend date.

 

 

 

 

“Performance Period” means the period from the Award Date through and including the earlier of (i) August 2, 2022 or (ii) the date required by the applicable provisions of Section 3 of the Agreement.

 

“Annualized Total Shareholder Return” or “Annualized TSR” shall be expressed as a percentage and will be calculated using the following formula, rounded to the nearest whole percentile by application of regular rounding:

 

 

“A” represents the Adjusted Ending Price.

 

“B” represents the Beginning Price.

 

“C” represents the number of twelve-month periods in the Performance Period.

 

	
			B.

				
			Miscellaneous.

			

 

PSUs shall be earned as described herein only upon the certification by the Compensation Committee of the achievement, whose good faith certification shall determine whether such achievement occurred. The Compensation Committee shall meet for the purpose of certification and, to the extent appropriate, provide the applicable certification promptly.Exhibit

EXECUTION VERSION

SIXTH AMENDMENT

to

LOAN AGREEMENT

between

U.S. BANK NATIONAL ASSOCIATION

and

PINNACLE FINANCIAL PARTNERS, INC.

Sixth Amendment dated as of July 1, 2019
Fifth Amendment dated as of April 25, 2019
Fourth Amendment dated as of April 26, 2018
Third Amendment dated as of March 27, 2018
Second Amendment dated as of April 26, 2017
First Amendment dated as of March 27, 2017
Original Agreement dated as of March 29, 2016

SIXTH AMENDMENT TO 
LOAN AGREEMENT
This SIXTH AMENDMENT TO LOAN AGREEMENT (this “Sixth Amendment”) is dated as of July 1, 2019, and is made by and between PINNACLE FINANCIAL PARTNERS, INC., a Tennessee corporation (“Borrower”), and U.S. BANK NATIONAL ASSOCIATION, a national banking association (“Lender”).
R E C I T A L S:
A.Borrower is a bank holding company that owns 100% of the issued and outstanding capital stock of PINNACLE BANK, a Tennessee banking corporation with its principal banking offices in Nashville, Tennessee.  
B.The Borrower and Lender are party to a Loan Agreement dated as of March 29, 2016 (as amended, amended and restated, supplemented or otherwise modified from time to time prior to the date hereof including pursuant to that certain First Amendment to Loan Agreement dated March 27, 2017, the Second Amendment dated as of April 26, 2017, the Third Amendment dated as of March 28, 2018, the Fourth Amendment dated as of April 26, 2018 and the Fifth Amendment dated as of April 25, 2019,  the “Original Agreement”).  
C.The parties hereto desire to amend and modify the Original Agreement in accordance with the terms and subject to the conditions set forth in this Sixth Amendment.
D.Capitalized terms not otherwise defined in this Sixth Amendment shall have the meanings respectively ascribed to them in the Original Agreement.

NOW, THEREFORE, in consideration of the mutual covenants, conditions and agreements herein contained, the parties hereto hereby agree as follows:
A G R E E M E N T:
Section 1.AMENDMENTS TO THE ORIGINAL AGREEMENT.
  
1.1Making Loans (Section 5.2.6).  The covenant set forth in Section 5.2.6 of the Original Agreement shall be amended in its entirety to read as follows:

“Borrower shall not, nor shall it cause, permit or allow any Subsidiary to, make any loans or advances that exceed, in the aggregate, $5,000,000 in total outstanding principal amount at any time, whether secured or unsecured, to any Person, other than loans or advances made by a Subsidiary Bank (or any Subsidiary owned by a Subsidiary Bank) in the ordinary course of business and in accordance in all material respects with safe and sound banking practices and applicable laws and regulations.”
Section 2.REPRESENTATIONS AND WARRANTIES.  Borrower hereby represents and warrants to Lender as of the date hereof as follows:

(i)    No Event of Default or Unmatured Event of Default has occurred and is continuing, and no Event of Default or Unmatured Event of Default would result from the amendments contemplated hereby, in each case, after taking into account the amendments contemplated by this Amendment.

(ii)    The execution, delivery and performance by the Borrower of this Sixth Amendment have been duly authorized by all necessary corporate and other action and do not and will not require any registration with, consent or approval of, or notice to or action by any Person (including any Governmental Agency) in order to be effective and enforceable.
(iii)    This Sixth Amendment and the other Transaction Documents (as amended by this Sixth Amendment) constitute the legal, valid and binding obligations of Borrower, enforceable against Borrower in accordance with their respective terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium, or other laws relating to or limiting creditors’ rights or equitable principles generally.
(iv)    All of the representations and warranties of Borrower in the Original Agreement are true and correct as of the date hereof, after giving effect to the updates to the Disclosure Schedule delivered in connection with the execution of this Sixth Amendment, except to the extent that such representations and warranties specifically refer to an earlier date.
(v)    Borrower’s obligations under the Original Agreement and under the other Transaction Documents are not subject to any defense, counterclaim, set-off, right to recoupment, abatement or other claim.
Section 3.ADDITIONAL TERMS.

3.1.Acknowledgement of Indebtedness under Agreement.  Borrower acknowledges and confirms that, as of the date hereof, Borrower is indebted to Lender, without defense, setoff, or counterclaim, in the aggregate principal amount of ZERO AND 00/100 DOLLARS ($-0-) under the Original Agreement.

3.2.The Agreement.  On and after the Effective Date: (i) each reference in the Original Agreement to “this Agreement,” “hereunder,” “hereof,” “herein,” or words of like import shall mean and be a reference to the Original Agreement as amended hereby, (b) each reference to the Original Agreement in all Transaction Documents shall mean and be a reference to the Original Agreement, as amended hereby, and (c) this Sixth Amendment shall be deemed a “Transaction Document” for the purposes of the Original Agreement.

3.3.Sixth Amendment and Original Agreement to be Read Together.  This Sixth Amendment supplements and is hereby made a part of the Original Agreement, and the Original Agreement and this Sixth Amendment shall from and after the Effective Date be read together and shall constitute one agreement. Except as otherwise set forth herein, the Original Agreement shall remain in full force and effect.

3.4.Acknowledgements.  Borrower acknowledges that (i) it has been advised by counsel of its choice of law with respect to this Sixth Amendment, the Original Agreement, the other Transaction Documents and the transactions contemplated hereby and thereby, (ii) any waiver of Borrower set forth herein has been knowingly and voluntarily made, and (iii) the obligations of Lender hereunder shall be strictly construed and shall be expressly subject to Borrower’s compliance in all respects with the terms and conditions of the Original Agreement as amended by this Sixth Amendment.

3.5.No Waiver.    The execution, delivery and effectiveness of this Sixth Amendment shall not operate as a waiver of any Event of Default (including without limitation any Events of Default existing on the date hereof, if any), nor operate as a waiver of any right, power or remedy of Lender (including without limitation any rights, powers or remedies of Lender with respect to any Events of Default existing on the date hereof, if any), nor, except to the extent the Original Agreement is expressly amended by this Sixth 

Amendment, constitute a waiver of, or consent to any departure from, any provision of the Original Agreement, or any of the other Transaction Documents.

3.6.No Novation.  The terms and conditions of the Original Agreement are amended as set forth in this Sixth Amendment.  It is expressly understood and acknowledged that nothing in this Sixth Amendment shall be deemed to cause or otherwise give rise to a novation of the indebtedness contemplated in the Original Agreement.  All “Borrower’s Liabilities” under the Original Agreement shall in all respects be continuing and this Sixth Amendment shall not be deemed to evidence or result in a novation or repayment and re-borrowing of such “Borrower’s Liabilities.”

Section 4.CONDITIONS PRECEDENT.  The amendments set forth in SECTION 1 above shall become effective as of the date (the “Effective Date”) on which each of the following conditions shall have been satisfied: (i) Borrower and Lender shall have received one or more counterparts of this Sixth Amendment duly executed and delivered by the other; (ii) Lender shall have received payment from Borrower, in immediately available funds, an amount equal to the applicable facility fee and any outstanding unused fee plus an amount sufficient to reimburse Lender for all reasonable out-of-pocket costs, fees and expenses incurred by Lender, or for which Lender has become obligated, in connection with the negotiation, preparation and consummation of this Sixth Amendment, including but not limited to, reasonable attorneys’ fees and expenses invoiced as of the date hereof; and (iii) a copy, certified by the Secretary or Assistant Secretary of Borrower, of its Board of Directors’ resolutions authorizing the execution, delivery, and performance, respectively, of this Sixth Amendment and any other documents to be executed, delivered, or performed in connection with this Sixth Amendment.

Section 5.RELEASE.  Borrower, for itself and its successors and assigns, does hereby fully, finally and unconditionally release and forever discharge, and agrees to hold harmless, Lender and each of its equity holders and affiliates, and their respective agents, advisors, managers, parents, subsidiaries, attorneys, representatives, employees, officers and directors, and the successors, assigns, heirs and representatives of each of the foregoing, from any and all debts, claims, counterclaims, setoffs, obligations, damages, costs, attorneys’ fees and expenses, suits, demands, liabilities, actions, proceedings and causes of action, in each case whether known or unknown, contingent or fixed, direct or indirect and of whatever kind, nature or description, and whether in law or in equity, under contract, tort, statute or otherwise, that Borrower has heretofore had or now or hereafter can, shall or may have by reason of any act, omission or thing whatsoever done or omitted to be done on or prior to the Effective Date arising out of, connected with or related in any way to this Sixth Amendment, the Original Agreement, the other Transaction Documents, the transactions described therein, the Loan, Lender’s administration thereof, or the financing or banking relationships of Borrower with Lender.  

Section 6.MISCELLANEOUS.  This Sixth Amendment may be executed by facsimile and in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute but one and the same instrument. This Sixth Amendment shall be governed by, and construed in accordance with, the law of the State of New York. 

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EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES (TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT THAT IT MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION ARISING IN ANY WAY IN CONNECTION WITH THIS SIXTH aMENDMENT OR ANY OF THE OTHER TRANSACTION DOCUMENTS, OR ANY OTHER STATEMENTS OR ACTIONS OF BORROWER OR LENDER.  BORROWER ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS SIXTH AMENDMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS DISCUSSED THIS WAIVER WITH SUCH LEGAL COUNSEL.  BORROWER FURTHER ACKNOWLEDGES THAT (a) IT HAS READ AND UNDERSTANDS THE MEANING AND RAMIFICATIONS OF THIS WAIVER, (b) THIS WAIVER HAS BEEN REVIEWED BY BORROWER AND BORROWER’S COUNSEL AND IS A MATERIAL INDUCEMENT FOR LENDER TO ENTER INTO THIS SIXTH AMENDMENT AND THE TRANSACTION DOCUMENTS, AND (c) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER.
IN WITNESS WHEREOF, the parties hereto have caused this Sixth Amendment to be duly executed and delivered as of the day and year first above written.

	
		
	 
	PINNACLE FINANCIAL PARTNERS, INC.

By: /s/ Harold R. Carpenter__________
Name: Harold R. Carpenter
Title: CFO

	 
	U.S. BANK NATIONAL ASSOCIATION

By: /s/ Chris Cavacini
Name: Chris Cavacini
Title: Senior Vice President

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