Document:

Exhibit

EXHIBIT 10.4

THE HOWARD HUGHES CORPORATION 
RESTRICTED STOCK AGREEMENT
WHEREAS, <INSERT NAME> (the “Grantee”) is an employee of The Howard Hughes Corporation (and its subsidiaries, the “Company”);

WHEREAS, the grant of Restricted Stock was authorized by the Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”) on February 12, 2020;

WHEREAS, the date of grant is February 12, 2020 (“Date of Grant”); and

WHEREAS, pursuant to The Howard Hughes Corporation Amended and Restated 2010 Incentive Plan (the “Plan”), and subject to the terms and conditions thereof and the terms and conditions of this agreement (this “Agreement”), the Company has granted to Grantee as of the Date of Grant the right to receive <INSERT AMOUNT> shares of common stock of the Company (the “Restricted Shares”).

NOW, THEREFORE, the Company and Grantee hereby agree as follows:

1.Rights of Grantee.  The Restricted Shares subject to this grant shall be fully paid and nonassessable and shall be either: (i) represented by certificates held in custody by the Company until all restrictions thereon have lapsed, together with a stock power or powers executed by Grantee in whose name such certificates are registered, endorsed in blank and covering such Restricted Shares; or (ii) held at the Company’s transfer agent in book entry form with appropriate restrictions relating to the transfer of such Restricted Shares, and endorsed with an appropriate legend referring to the restrictions hereinafter set forth. Grantee shall have the right to vote the Restricted Shares. Upon vesting of the Restricted Shares hereunder, the Grantee: (x) shall receive cash dividends or cash distributions, if any, paid or made by the Company with respect to common shares after the Date of Grant and prior to the vesting of the Restricted Stock; and (y) shall receive any additional Restricted Shares that Grantee may become entitled to receive by virtue of a Restricted Share dividend, a merger or reorganization in which the Company is the surviving corporation or any other change in the capital structure of the Company.

Restrictions on Transfer of Restricted Shares. The Restricted Shares subject to this grant may not be assigned, exchanged, pledged, sold, transferred or otherwise disposed of by Grantee, except to the Company, until the Restricted Shares have become nonforfeitable in accordance with Sections 3, 4 and 5 hereof. The Grantee’s rights with respect to such purported transfer in violation of the provisions of this Section 2 of this Agreement shall be null and void, and the purported transferee shall obtain no rights with respect to such Restricted Shares.

2.Vesting of Restricted Shares. Subject to the terms and conditions of Sections 4 and 5 of this Agreement, the Restricted Shares covered by this Agreement shall vest in accordance with the vesting schedule based on the total shareholder return as set forth on Exhibit A (the 

“Performance-based Vesting Component”). Notwithstanding anything to the contrary set forth in this Agreement, in the event that Grantee’s employment relationship with the Company or a Subsidiary is involuntarily terminated by the Company or a Subsidiary for any reason, except for cause, and Grantee has been employed by the Company or a Subsidiary continuously for a period of at least forty-eight (48) months from December 31, 2019, then a percentage of the Performance-based Vesting Component shall become nonforfeitable on December 31, 2024 based on the total shareholder return from the Date of Grant to the date of termination in accordance with the schedule set forth on Exhibit A.

3.Forfeiture of Awards. Except to the extent Grantee’s rights to receive the Restricted Shares (and any dividends declared thereunder) covered by this Agreement have become nonforfeitable pursuant to Section 3 of this Agreement, Grantee’s rights to receive the Restricted Shares covered by this Agreement shall be forfeited automatically and without further notice on the date that Grantee ceases to be an employee of the Company or a Subsidiary.

4.Death or Disability. Notwithstanding Sections 3 and 4 of this Agreement, if the Grantee dies or suffers a Permanently Disability (as defined below) before the vesting of the Performancez-based Vesting Component, then 100% of the Performance-based Vesting Component shall vest and become nonforfeitable. “Permanent Disability” means, unless otherwise provided by the Compensation Committee (talking into account the requirements of Section 409A of the Code, if applicable), the inability of an employee to perform the material duties of his or her employment by reason of a medically determinable physical or mental impairment that can be expected to result in death or that has lasted or is expected to last for a continuous period of at least twelve (12) months, as determined by a duly licensed physician selected by the Committee.

5.Compliance with Law. The Company shall make reasonable efforts to comply with all applicable federal and state securities laws; provided, however, that notwithstanding any other provision of this Agreement, the Company shall not be obligated to issue any of the Restricted Shares covered by this Agreement if the issuance thereof would result in violation of any such law.

6.Compliance with Section 409A of the  Code. To the extent applicable, it is intended that this Agreement and the Plan comply with the provisions of Section 409A of the Code, so that the income inclusion provisions of Section 409A(a)(1) of the Code do not apply to Grantee. This Agreement and the Plan shall be administered in a manner consistent with this intent. Reference to Section 409A of the Code is to Section 409A of the Internal Revenue Code of 1986, as amended, and will also include any proposed, temporary or final regulations, or any other guidance promulgated with respect to such Section by the U.S. Department of the Treasury or the Internal Revenue Service.

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7.Amendments. Any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent that the amendment is applicable hereto; provided, however, that no amendment shall adversely affect the rights of Grantee under this Agreement without Grantee’s consent; further, provided, that Grantee’s consent shall not be required to an amendment that is deemed necessary by the Company to ensure compliance with Section 409A of the Code or the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 or any regulations promulgated thereunder, including as a result of the implementation of any recoupment policy the Company adopts to comply with the requirements set forth in the Dodd-Frank Act.

8.Severability. In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof, and the remaining provisions hereof shall continue to be valid and fully enforceable.

9.Relation to Plan. This Agreement is subject to the terms and conditions of the Plan. In the event of any inconsistency between the provisions of this Agreement and the Plan, the Plan shall govern. Capitalized terms used herein without definition shall have the meanings assigned to them in the Plan. The Compensation Committee acting pursuant to the Plan, as constituted from time to time, shall, except as expressly provided otherwise herein or in the plan, have the right to determine any questions which arise in connection with the grant of Restricted Shares.
10.Successors and Assigns. Without limiting Section 2 hereof, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of Grantee, and the successors and assigns of the Company.

11.Governing Law. This Agreement is made under, and shall be construed in accordance with, the internal substantive laws of the State of Delaware without giving effect to the principles of conflict of laws thereof.

[Remainder of Page Intentionally Left Blank, Signature Page to Follow]

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Executed in the name and on behalf of the Company, as of the 12th day of February 2020.

THE HOWARD HUGHES CORPORATION

By:      

Name: Paul Layne
Title:    Chief Executive Officer

The undersigned Grantee hereby acknowledges receipt of an executed original of this Agreement and accepts the right to receive the Restricted Shares or other securities covered hereby, subject to the terms and conditions of the Plan and the terms and conditions herein above set forth.

 
    Employee (Grantee)

Date:      

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EXHIBIT A

PERFORMANCE-BASED VESTING SCHEDULE

	
			
	Cumulative Compounded Annual Total Shareholder Return
	

Stock Price End
	

Vesting %

	0.00% to 10.99%
	$193.69 or below
	0%

	11.00% to 11.99%
	$193.70
	30%

	12.00% to 12.99%
	$202.59
	60%

	13.00% to 13.99%
	$211.80
	90%

	14.00% to 14.99%
	$221.33
	120%

	+
	+
	150%

The Performance-based Vesting Component of the Award shall vest on December 31, 2024, according to the schedule above; provided, that the Company achieves the corresponding cumulative compounded annual total shareholder return (“TSR”) target. $114.95, the volume weighted average share price of the Company for the last 30 trading days of 2019, shall be used as the beginning price for the purpose of calculating TSR. The ending price for the purpose of calculating TSR shall be the volume weighted average share price of the Company for the last 30 trading days of 2024. A TSR target is deemed satisfied if the TSR (calculated as described above) meets or exceeds such target. If the “Stock Price End” amount is higher than the threshold “Stock Price End” amount, but less than the “Stock Price End” amount for the next highest threshold, then, in this instance, the percentage of the award that vests shall be interpolated between the two thresholds. For example, if your award was for 1,000 shares and on December 31, 2024 the “Stock Price End” was $226.57 (i.e. mid-way between $221.33 and $231.21), then, in this instance, you would be entitled to 1,350 fully vested shares of HHC Common Stock (135% of 1,000 shares). Share price shall be based on the daily closing price of the Company’s common stock as reported in the consolidated transaction reporting system and shall be rounded to the nearest whole cent.

The Compensation Committee may make adjustments to the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events, including without limitation, stock splits, stock dividends, spinoffs or other similar events, or as a result of changes in applicable laws, regulations or accounting principles, to prevent dilution or enlargement of the benefits or increase in intended benefits or potential intended benefits provided by an Award; provided, that such adjustments shall be consistent with the requirements of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”) with regard to Awards subject to Section 162(m) of the Code.

The term “Award” shall have the meaning set forth in The Howard Hughes Corporation 2010 Amended and Restated Incentive Plan. All other capitalized terms used herein without definition shall have the meanings assigned to them in the Restricted Stock Agreement to which this Exhibit A is attached.

5Exhibit

EXHIBIT 10.5
	
	
	THE 
HOWARD 
HUGHES 
CORPORATION

	 

February 12, 2020

Saul Scherl
232 Lydecker Street
Englewood, NJ  07631

Dear Saul,
Thank you so much for your contributions thus far to HHC. Because you have been identified as critical to the success of our New York operations through the completion of the Tin Building scheduled for 1/3/2022, the below terms outline the Company’s retention efforts to retain you in your current role through such time. All prior agreements between you and HHC shall remain in effect, and shall be enforceable in accordance with their terms, except, and to the extent that, the terms of any such agreements are modified per terms of this letter.
The details of the retention package are as follows: 
Compensation:
Your annual base salary compensation remains $600,000 which calculates to $23,076.92 less applicable taxes and withholdings, to be paid on a biweekly basis.  Except as described herein, if either you or HHMC elects to terminate your employment with HHMC, you shall only be eligible to receive that portion of your compensation which you have actually earned as of the date when your employment is terminated and you shall have no right or claim to receive any future or expectant interest in any additional compensation to which you otherwise may have been entitled as of the date of such termination.
HHMC requests that you treat as confidential and not discuss compensation information, including but not limited to base salary, any applicable bonuses and/or incentives, with any HHMC employee or any individual associated with HHMC in any way, other than your direct manager or the Culture + People Department.  
Annual Cash Incentives:
You will be eligible for an annual discretionary bonus at a target of up to 100% of base salary, to be determined by overall company and individual performance goals being achieved.  
		
	•
	Based on the fact that your intended termination date is scheduled for 12/31/2021, for the performance year 2021, you will be eligible for an additional cash incentive of up to 100% of base salary in lieu of an annual LTIP award for the same year, to be determined by overall company and individual performance goals being achieved.  

Annual Long-Term Incentives for Performance Year 2019 and 2020:
You will continue to be eligible to participate in the annual award program under The Howard Hughes Corporation 2010 Amended and Restated Incentive Plan with an accelerated vesting schedule based on a mutually agreed upon separation date with the company on 12/31/2021. You will be eligible for an annual award of Restricted Stock at a target of 100% of Base Salary subject to the attainment of certain metrics that will be established at the end of each year for the following year, with a grant date and stock price to be determined by the HHC Compensation Committee. 
		
	•
	The annual incentive award issued in 2020 for the performance year 2019 will vest according to 50% for performance with a 2-year cliff vest and the remaining 50% for time, vesting at 50% per year over a 2- year period. The prevailing terms of this grant of HHC restricted stock will be set forth in The Howard Hughes Corporation Restricted Stock Agreement.

		
	•
	The annual incentive award issued in 2021 for the performance year 2020 will vest according to 50% for performance with a 1-year cliff vest and the remaining 50% for time, also with a 1- year cliff vest. The prevailing terms of this grant of HHC restricted stock will be set forth in The Howard Hughes Corporation Restricted Stock Agreement.

Additional Performance Based Long-Term Incentives:
Based on the critical role that you play in the successful operations and government relations activities of the Seaport District and in order to properly incentivize you to successfully see the project through to its completion, you have been approved to receive an additional Restrict Stock Award in the future per below:
		
	•
	You will receive a restricted stock award with an issue date and immediate vest date of 12/31/2021 in a value of up to $1,500,000, in the aggregate, to be converted to shares using the stock close price on the date of issuance, only upon the achievement of one or more performance goals that have been approved by the Compensation Committee, in whole or on a pro-rated basis, as it may be, based upon certain levels of achievement.

Expiration Date of Stock Options awarded on January 25, 2016: 
In an effort to optimize the value realization of the stock options granted to you on January 25, 2016 with a strike price of $112.64, the Company will provide you with amended terms that allows the expiration of this stock option award to remain as originally stated on 1/25/2026 without regard to your separation date with the company. 
Treatment of Unvested LTIP Awards:
If your employment is terminated by HHC for any reason, other than for cause or due to your death or disability, or by you for good reason, then you shall be eligible to (i) receive a cash payment equal to the market value, of all of your outstanding time-based LTIP awards, determined using the fair market value of the shares on the date of forfeiture and (ii) all performance-based LTIP awards will remain outstanding and vest or forfeit as the case may be, based on and in accordance with, the terms of each applicable award; and (iii) all unvested stock options shall fully vest
Paid Time Off and Other Benefit Programs: 
Paid Time Off will continue to accrue per your current bi-weekly accrual rate.  You are entitled to the exact same benefit programs and offerings.  
Expense Reimbursement:
If applicable, HHMC agrees to reimburse you 100% of your company related expenses on a monthly basis, subject to review and approval by your immediate supervisor of receipts and other appropriate documentation verifying in reasonable detail the nature of such expenditures for which you seek reimbursement.
As you know, HHMC is an at-will employer. Except as described in this letter, there is no employment contract between you and HHMC. There are no guarantees of future employment, promotion, salary increases, bonuses or location. It should also be understood that HHMC retains the right to revise, amend, delete or in any manner change any and all benefits and benefit related policies.  
As a material inducement to HHMC making this offer of employment, you hereby represent and warrant to HHMC that you are free to enter into employment with HHMC and you are not subject to any obligation, agreement or restrictive covenant which will prevent or interfere with your performance of your duties as an employee of HHMC.  You hereby acknowledge that, in the event you are bound by any prior agreement or obligation, the effect of which is to restrict you from the performance of your duties on behalf of HHMC, and HHMC is sought to be held liable for your actions, you agree to indemnify, defend and hold HHMC harmless from and against any and all damages, losses, liabilities, costs and expenses, including reasonable attorneys’ fees incurred by HHMC in connection with such claims or causes of action which are threatened or actually asserted against HHMC, and you agree that any compensation which may be due and owed to you by SH may be offset and reduced to the extent of HHMC’s expenditures under this paragraph.
By your signature you agree to the terms of this offer. It is very important for you to understand and acknowledge that except as duly authorized, you have no personal authority to bind HHMC, Howard Hughes Management Co., LLC or any of their affiliates to any contract, agreement or obligation, and that all contracts or agreements which obligate or propose to obligate HHMC, Seaport Hospitality or any of their affiliates, in any manner, to any third party must be signed and approved by a duly authorized officer of HHMC, Howard Hughes Management Co., LLC or the applicable affiliate, as the case may be.
Please contact me if there is anything further I can do to assist you or if you have any questions. 

Sincerely, 
/s/ Paul Layne
Paul Layne
Chief Executive Officer

/s/ Saul Scherl
 (Saul Scherl Signature)

AGREED AND ACCEPTED ON THIS12TH DAY OF FEBRUARY, 2020

	
		
	 
	 

	 
	 

	Paul Layne | Chief Executive Officer
T 281.719.6104 | M 713.598.8822
Paul.layne@howardhughes.com
	The Howard Hughes Corporation | Corporate HQ 
13355 Noel Rd.
22nd Floor
Dallas, TX  75240

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