Document:

Exhibit 4.1

Exhibit 4.1
REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT, as the same may be amended from time to time (this “Agreement”) is made and entered into as of the 31st day of July, 2012 (the “Effective Date”) by and among  KILROY REALTY CORPORATION, a Maryland corporation (the “Company”) and and each of the persons and entities made a party to this Agreement pursuant to a written joinder agreement that references this Agreement (each, a “Unitholder”). 
RECITALS
WHEREAS, pursuant to that certain Purchase Agreement effective as of February 14, 2012, as amended (the “Purchase Agreement”), among each Unitholder and the other tenant-in-common owners identified therein (collectively, “Seller”), as “Seller,” and KILROY REALTY, L.P., a Delaware limited partnership (the “Operating Partnership”), as “Buyer,” on and as of the Effective Date, (a) the Company is acquiring all right, title and interest of Seller in and to certain real property and related rights commonly known as “Sunset Media Tower” in Los Angeles, California, as more particularly described therein, and (b) each Unitholder is receiving Common Partnership Units (as defined below) in the Operating Partnership and being admitted as a Common Limited Partner (as defined below) under the Limited Partnership Agreement (as defined below), all as more particularly described in the Purchase Agreement and in the other documents and instruments executed and delivered by the applicable parties in connection therewith (collectively, the “Transactions”); and
WHEREAS, it is a condition to the “Closing” (as defined in the Purchase Agreement) of the Transactions that the Company enter into this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I
DEFINITIONS

Section 1.1 Definitions.  The following capitalized terms, as used in this Agreement, have the following meanings:

“Agreement” shall have the meaning ascribed to it in the preamble to this Agreement.
“Business Day” means any day except a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized by law to close.
“Common Partnership Units” means Common Partnership Units of the Operating Partnership issued pursuant to the Purchase Agreement, which may be redeemed with shares of Common Stock pursuant to the Limited Partnership Agreement.
“Commission” means the Securities and Exchange Commission.

“Common Stock” means the common stock, par value $0.01 per share, of the Company.
“Company” has the meaning set forth in the preamble to this Agreement.
“Effective Date” has the meaning set forth in the preamble to this Agreement.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Exchange Shares” means the shares of Common Stock issued or issuable upon redemption of the Common Partnership Units.
“Existing Shelf Registration Statement” means the Company's registration statement on Form S-3, Commission File No. 333-153583. 
“Holder” means any Person (including each Unitholder) who is the record or beneficial owner of any Registrable Security or any assignee or transferee of such Registrable Security (including assignments or transfers of Registrable Securities to such assignees or transferees as a result of the foreclosure on any loans secured by such Registrable Securities).
“Limited Partnership Agreement” means the Sixth Amended and Restated Agreement of Limited Partnership of the Company, dated as of March 27, 2012, as the same may be further amended, modified, supplemented or restated from time to time, including, with respect to any Protected Partner and/or Guaranty Partner, pursuant to such Person's Joinder Agreement.
“Operating Partnership” has the meaning set forth in the recitals to this Agreement.
“Person” means an individual or a corporation, partnership, limited liability company, association, trust, or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.
“Purchase Agreement” has the meaning set forth in the recitals to this Agreement.
“Registration Deadline” has the meaning set forth in Section 2.1.
“Registration Expenses” has the meaning set forth in Section 3.3.
“Registrable Security” or “Registrable Securities” means Exchange Shares and any shares of Common Stock issued as (or issuable upon the conversion or exercise of any warrant, right or other security which is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, such Exchange Shares, unless and until such Exchange Shares or shares of Common Stock (i) have been sold or transferred by a Holder to another Person pursuant to an effective registration statement, (ii) have been sold by a Holder to another Person pursuant to the provisions of Rule 144, (iii) may be sold pursuant to Rule 144, or (iv) have been otherwise transferred in a transaction that would constitute a sale under the Securities Act and, in each such case, such shares may be resold without volume, manner of sale or other restrictions or conditions without subsequent registration under the Securities Act.
“Resale Prospectus” has the meaning set forth in Section 3.4.
“Resale Registration Statement” means any registration statement of the Company 

pursuant to which Registrable Securities held by the Holders may be offered and sold pursuant to the Securities Act under Rule 415 (or any successor provision) on a continuous and delayed basis, including the Existing Shelf Registration Statement.  Resale Registration Statement shall include any prospectus or prospectus supplement that is part of such Resale Registration Statement and any document incorporated by reference therein. 
“Rule 144” means Rule 144 under the Securities Act, as such rule may be amended from time to time, or any similar successor rule that may be promulagated by the Commission.
“Rule 415” means Rule 415 under the Securities Act, as such rule may be amended from time to time, or any similar successor rule that may be promulagated by the Commission.
“Securities Act” means the Securities Act of 1933, as amended.
“Selling Holder” means a Holder who holds Registrable Securities that may be offered and sold pursuant to a Resale Registration Statement.
“Unitholder” has the meaning set forth in the preamble to this Agreement.

ARTICLE II.
FILING OF PROSPECTUS SUPPLEMENT

Section 2.1  Prospectus Supplement to Existing Shelf Registration Statement.  Subject to the provisions of Article III hereof, the Company will use commercially reasonable efforts to file with the Commission, not later than ten business days after the first (1st) anniversary of the Effective Date (the “Registration Deadline”), a prospectus supplement, or such supplemental materials as are then required by the rules and regulations of the Commission, to register the offer and sale by the Holders of all Registrable Securities pursuant to the Existing Shelf Registration Statement, and, if the Company, following use of its commercially reasonable efforts has been unable to file such supplement and/or materials by the Registration Deadline, then the Company shall continue to use its commercially reasonable efforts to file such supplement and/or materials until they have been filed with the Commission.  Subject to the provisions of Article III hereof, the Company will use commercially reasonable efforts to cause the Existing Shelf Registration Statement to be continuously effective from the Registration Deadline until the first date on which all of the Registrable Securities cease to be Registrable Securities.

Section 2.2  New Resale Registration Statement.  In the event the Company is unable to register the offer and sale by the Holders of all Registrable Securities pursuant to the Existing Shelf Registration Statement pursuant to Section 2.1 above, then, subject to the provisions of Article III hereof, the Company shall use commercially reasonable efforts to file as promptly as possible, a new Resale Registration Statement registering the offer and sale by the Holders of all Registrable Securities. The Company shall use its commercially reasonable efforts to cause such Resale Registration Statement to become effective as soon as practicable following its filing with the Commission.  Subject to the provisions of Article III hereof, the Company will use commercially reasonable efforts to cause such Resale Registration Statement to be continuously effective from the date such Resale Registration Statement is declared effective until the first date on which all of the Registrable Securities cease to be Registrable Securities.   

ARTICLE III.
REGISTRATION

Section 3.1  Registration Procedures.  In connection with any Resale Registration Statement covering Registrable Securities:

(a)Each Holder agrees to provide within 10 days after receipt of a written request pursuant to Section 4.3 by the Company such information regarding the proposed distribution by such Holder of the Registrable Securities and all other information reasonably requested by the Company.  If a Holder fails to deliver to the Company any such the requested information within such 10 day period, such Holder will not be entitled to the benefits of Section 2.1.

(b)Subject to Section 3.2 hereof, the Company will use commercially reasonable efforts to prepare and file with the Commission such amendments, supplements and additional Resale Registration Statements as may be necessary to comply with its obligations under Section 2.1.

(c)The Company will, if requested by any of the Holders, prior to filing any such Resale Registration Statement or prospectus, or any amendment or supplement thereto, furnish to each Selling Holder of the Registrable Securities covered thereby copies of such Resale Registration Statement or prospectus or amendment or supplement thereto as proposed to be filed and such other documents as such Selling Holder may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Selling Holder.

(d)The Company will promptly notify each Selling Holder of Registrable Securities covered by a Resale Registration Statement of any stop order issued or threatened by the Commission and take such commercially reasonable actions as may be required to prevent the entry of such stop order or to remove it if entered.

(e)The Company will use commercially reasonable efforts to register or qualify the Registrable Securities under such securities or blue sky laws of those jurisdictions in the United States (where an exemption is not available) as any Selling Holder reasonably (in light of the Selling Holder's intended plan of distribution) requests and will promptly notify any such requested Selling Holder of any stop order issued or threatened by any applicable state securities regulator or administrator and take such commercially reasonable actions as may be required to prevent the entry of any such stop order or to remove any such stop order if entered; provided, however, that the Company will not be required to (i) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this paragraph (e), (ii) subject itself to taxation in any such jurisdiction or (iii) consent to general service of process in any such jurisdiction.

(f)The Company will use commercially reasonable efforts to cause all such Registrable Securities to be listed on each securities exchange on which the Common Stock is then listed.  

(g)The Company will promptly notify each Selling Holder of such Registrable Securities, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the occurrence of an event requiring the preparation of a supplement or amendment to such prospectus, as amended and supplemented, so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a 

material fact or omit to state any material fact required to be stated therein or necessary to make the statement therein, in light of the circumstances then existing, not misleading and promptly make available to each Selling Holder a reasonable number of copies of any such supplement or amendment.  

Section 3.2  Material Developments; Suspension of Offering.

(a)     Notwithstanding the provisions of Section 2.1 or any other provisions of this Agreement to the contrary, the Company shall not be required to file a Resale Registration Statement or prospectus, or any amendment or supplement thereto, or to keep any Resale Registration Statement effective if the negotiation or consummation of a transaction by the Company or any of its subsidiaries is pending or an event has occurred, which negotiation, consummation or event would require additional disclosure by the Company in the Resale Registration Statement of material information which the Company (in the judgment of management of the Company) has a bona fide business purpose for keeping confidential and the nondisclosure of which in the Resale Registration Statement could reasonably cause the Resale Registration Statement to fail to comply with applicable disclosure requirements; provided, however, that the Company (i) will promptly notify the Holders of Registrable Securities otherwise entitled to registration of the foregoing and (ii) may not delay, suspend or withdraw the Resale Registration Statement for such reason more than twice in any twelve (12) month period or three times in any twenty-four (24) month period or for more than ninety (90) days at any time.  Upon receipt of any notice from the Company of the happening of any event during the period in which the Resale Registration Statement is effective which is of a type specified in the preceding sentence or as a result of which the Resale Registration Statement or related prospectus contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statement therein, in light of the circumstances under which they were made not misleading, Holders agree that they will immediately discontinue offers and sales of the Registrable Securities under the Resale Registration Statement until they receive copies of a supplemental or amended prospectus that corrects the misstatements or omissions and receive notice that any post-effective amendment has become effective or until advised in writing by the Company that the prospectus, or any amendment or supplement thereto, may be used.  If so directed by the Company, Holders will deliver to the Company or confirm in writing the destruction of any copies of the prospectus covering the Registrable Securities in their possession at the time of receipt of such notice.

(b)      If all reports required to be filed by the Company pursuant to the Exchange Act have not been filed by the required date without regard to any extension, or if the consummation of any business combination by the Company has occurred or is probable for purposes of Rule 3‐05 or Article 11 of Regulation S‐X under the Securities Act, upon written notice thereof by the Company to the Holders, the rights of the Holders to sell or distribute any Registrable Securities pursuant to any Resale Registration Statement or to require the Company to take action with respect to the registration of any Registrable Securities pursuant to this Agreement shall be suspended until the date on which the Company has filed such reports or obtained and filed the financial information required by Rule 3‐05 or Article 11 of Regulation S‐X to be included or incorporated by reference, as applicable, in any Resale Registration Statement and the Company shall notify the Holders as promptly as practicable when such suspension is no longer required. The Company's rights to suspend its obligations under this Section 3.2(b) shall be in additional to its rights under Section 3.2(a).
(c)     Each Holder agrees to keep confidential the fact that the Company has exercised its rights under this Section 3.2 and all material facts and circumstances relating to such exercise until such information is made public by the Company; provided, however, a Holder may disclose any such material facts and circumstances if ordered to do so by a court of competent jurisdiction.

Section 3.3    Registration Expenses.  

In connection with any registration of Registrable Securities required hereunder, the Company shall pay all the following registration expenses in connection with the registration (the “Registration Expenses”): (i) all registration and filing fees, (ii) fees and expenses of compliance with securities or blue sky laws, (iii) printing expenses, (iv) internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), (v) the fees and expenses incurred in connection with the listing of the Registrable Securities on each securities exchange on which the Common Stock is then listed, (vi) fees and disbursements of counsel for the Company and the independent public accountants of the Company, and (vii) the fees and expenses of any experts retained by the Company in connection with such registration.  The Holders shall be responsible for the payment of any and all other expenses incurred by them in connection with the registration and sale of Registrable Securities, including, without limitation, brokerage and sales commissions, placement agent fees, discounts and commissions attributable to the Registrable Securities, fees and disbursements of counsel engaged by the Holders, and any transfer taxes relating to the sale or disposition of the Registrable Securities.
Section 3.4     Indemnification by the Company.  
The Company agrees to indemnify and hold harmless each Holder, its partners, members, officers, directors, employees, representatives, and agents, and each Person, if any, who controls such Holder within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, and the officers, directors, agents and employees of each such controlling person, from and against any and all losses, claims, actions, damages, liabilities (joint or several), costs and expenses (including, without limitation, but subject to the provisions of Section 3.6 hereof, reasonable attorneys' fees and disbursements), to which they may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, actions, damages, liabilities costs or expenses (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in any Resale Registration Statement or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or arising out of any untrue statement or alleged untrue statement of a material fact contained in any prospectus contained in a Resale Registration Statement (a “Resale Prospectus”), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, except insofar as such losses, claims, damages or liabilities are caused by (i) any such untrue statement or omission or alleged untrue statement or omission based upon information furnished in writing to the Company by such Selling Holder or on such Selling Holder's behalf expressly for inclusion therein, or (ii) by the Selling Holder's breach of its obligations set forth in Section 3.1(a) or 3.2 of this Agreement; provided further, however, that the Company will not be liable in any case to the extent that any such claim, loss, damage, liability or expense arises out of or is based upon any untrue statement or omission contained in a Resale Prospectus which was corrected in a supplement or amendment thereto if such claim is brought by a purchaser of Registrable Securities from the Selling Holder and the Selling Holder failed to deliver to such purchaser the supplement or amendment to the Resale Prospectus in a timely manner. 
Section 3.5   Indemnification by Holders of Registrable Securities; Underwriting Agreement. 
Each Selling Holder of Registrable Securities covered by a Registration Statement  agrees to indemnify and hold harmless the Company, its officers, directors and agents and each Person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the indemnity set forth in Section 3.4 from the Company to Selling Holders, but only to the extent that such losses, claims, damages or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information relating to such Selling Holder furnished in writing by such Selling Holder or on such Selling Holder's behalf expressly for use in any Resale Registration Statement or Resale Prospectus or any amendment or supplement thereto.  Each Holder also agrees to indemnify and hold harmless any underwriters of the Registrable Securities, their 

officers and directors and each Person who controls such underwriters within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act on the same basis as that of the indemnification of the Company provided in this Section 3.5 or as otherwise provided pursuant to the terms of any underwriting agreement entered into by the Company and the Selling Holders.  If request by the Company, each Selling Holder agrees that the right to include any of such Selling Holder's Registrable Securities in the Resale Registration Statement shall be contingent upon such Selling Holder entering into an underwriting agreement in customary form with one or more underwriters selected by the Company.
Section 3.6     Conduct of Indemnification Proceedings.  
Each indemnified party shall give reasonably prompt notice to each indemnifying party of any action or proceeding commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify the indemnifying party (i) shall not relieve the indemnifying party from any liability which it may have under the indemnity agreement provided in Section 3.4 or 3.5 above, unless and to the extent it did not otherwise learn of such action and the lack of notice by the indemnified party adversely effects the rights and defenses available to the indemnifying party, and (ii) shall not, in any event, relieve the indemnifying party from any obligations to the indemnified party other than the indemnification obligation provided under Section 3.4 or 3.5 above.  If the indemnifying party so elects within a reasonable time after receipt of notice, the indemnifying party may assume the defense of the action or proceeding at the indemnifying party's own expense with counsel chosen by the indemnifying party and approved by the indemnified party, which approval shall not be unreasonably withheld; provided, however, that if the defendants in any such action or proceeding include both the indemnified party and the indemnifying party and the indemnified party reasonably determines, based upon advice of legal counsel experienced in such matters, that there may be legal defenses available to it which are different from or in addition to those available to the indemnifying party, then the indemnified party shall be entitled to separate counsel at the indemnifying party's expense, which counsel shall be chosen by the indemnified party and approved by the indemnifying party, which approval shall not be unreasonably withheld or delayed; provided further, that it is understood that the indemnifying party shall not be liable for the fees, charges and disbursements of more than one separate firm for all Holders with respect to a particular action or proceeding.  If the indemnifying party does not assume the defense, after having received the notice referred to in the first sentence of this Section 3.6, the indemnifying party will pay the reasonable fees and expenses of counsel for the indemnified party; in that event, however, the indemnifying party will not be liable for any settlement effected without the written consent of the indemnifying party, which consent shall not be unreasonably withheld or delayed.  If an indemnifying party assumes the defense of an action or proceeding in accordance with this Section 3.6, the indemnifying party shall not be liable for any fees and expenses of counsel for the indemnified party incurred thereafter in connection with that action or proceeding except as set forth in the second sentence of this Section 3.6.  Unless and until a final judgment is rendered that an indemnified party is not entitled to the costs of defense under the provisions of this Section, the indemnifying party shall reimburse, promptly as they are incurred, the indemnified party's reasonable costs of defense.
Section 3.7     Contribution.  
(a)     If the indemnification provided for in Section 3.4 or 3.5 hereof is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by indemnified party as a result of such losses, claims, damages or liabilities as between the Company on the one hand and each indemnifying Selling Holder on the other, in such proportion as is appropriate to reflect the relative fault of the Company and of each indemnifying Selling Holder in connection with such statements or omissions which resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations.  The relative fault of the Company on the one hand and of each indemnifying Selling Holder on the other shall be determined by reference to, among other things, 

whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or such indemnifying Selling Holder, and the Company's and the indemnifying Selling Holder's relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission and whether the indemnifying Selling Holder breached this Agreement.

(b)    The Company and the Selling Holders agree that it would not be just and equitable if contribution pursuant to this Section 3.7 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in Section 3.7(a).  The amount paid or payable by an indemnifying party as a result of the losses, claims, damages or liabilities referred to in Sections 3.4 and 3.5 hereof shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by the indemnified party in connection with investigating or defending any such action or claim.  No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

ARTICLE IV.
MISCELLANEOUS

Section 4.1   Specific Performance.  The parties hereto acknowledge that there would be no adequate remedy at law if any party fails to perform any of its obligations hereunder, and accordingly agree that each party, in addition to any other remedy to which it may be entitled at law or in equity, shall be entitled to compel specific performance of the obligation of any other party under this Agreement in accordance with the terms and conditions of this Agreement in any court of the United States or any State thereof having jurisdiction.

Section 4.2   Amendments and Waivers.  The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented without the prior written consent of the Company and the Holders holding at least fifty-one percent (51%) of the then outstanding Registrable Securities.  Any waiver or consents to the departure from the provisions of this Agreement must be in writing signed by the party against whom enforcement of such waiver or consent to departure is sought.  No failure or delay by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon any breach thereof shall constitute a waiver of any such breach or any other covenant, duty, agreement or condition.

Section 4.3   Notices.  All notices, demands, consents, approvals, requests or other communications given or made in connection with this Agreement shall be in writing and shall be deemed to have been given (a) if delivered by hand on the date of delivery or on the date delivery was refused by the addressee or (b) if delivered by certified mail or by overnight courier, on the date of delivery as established by the return receipt or courier service confirmation (or the date on which the return receipt or courier service confirms that acceptance of delivery was refused by the addressee), in each case as follows:

If to the Company, addressed to it at:
Kilroy Realty, L.P.
12200 West Olympic Boulevard, Suite 200
Los Angeles, California 90064
Attention: Mr. Jeffrey C. Hawken

Facsimile No.:  (310) 481-6540
Telephone No.:  (310) 481-8400

and to:
Latham & Watkins LLP
355 South Grand Avenue
Los Angeles, CA 90071-1560
Facsimile No:  (213) 891 - 8763
Telephone No :  (213) 891 - 8739
Attention: J. Scott Hodgkins
 

If to a Unitholder or Holder, addressed to it at at such address or fax number as such Unitholder or Holder shall have furnished to the Company in writing.
Section 4.4    Successors and Assigns.  A Holder may transfer or assign, in whole or from time to time in part, to one or more Persons its rights hereunder in connection with the transfer of Registrable Securities by such Holder to such Person, provided that such Holder complies with all laws applicable thereto and provides written notice of assignment to the Company promptly after such assignment is effected and the assignee executes a counterpart to this Agreement assuming all rights and obligations of a Holder hereunder.

Section 4.5   Counterparts; Electronic Signatures.  This Agreement may be executed in two or more counterparts, each of which shall constitute an original and all of which, when taken together, shall constitute one Agreement. In order to expedite the execution and delivery of this Agreement by the parties hereto, signatures transmitted via facsimile or other electronic means may be used in place of original signatures on this Agreement.  Each of the parties hereto intend to be bound by any signatures delivered via facsimile or other electronically transmitted means, and are aware that the other party will rely on any such facsimile or electronically transmitted signatures, and hereby waive any defenses to the enforcement of the terms of this Agreement based on the form of signature.

Section 4.6     Governing Law.  This Agreement, and the rights and obligations of the parties hereunder, shall be governed by, and construed and enforced in accordance with, the laws of the State of California, without regard to the laws of any other jurisdiction that might be applied because of the conflicts of laws principles of the State of California.

Section 4.7   WAIVER OF JURY TRIAL.  SUBJECT TO THE MANDATORY ARBITRATION PROVISIONS OF SECTION 4.8, EACH OF THE PARTIES ACKNOWLEDGES THAT IT HAS HAD THE ADVICE OF COUNSEL OF ITS CHOICE WITH RESPECT TO ITS RIGHTS TO TRIAL BY JURY UNDER THE CONSTITUTION OF THE UNITED STATES AND THE STATE OF CALIFORNIA.  EACH PARTY HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CONTROVERSY, DISPUTE OR CLAIM WHATSOEVER, (i) ARISING UNDER THIS AGREEMENT (OR ANY OTHER TRANSACTION DOCUMENT) OR (ii) IN ANY MANNER CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES WITH RESPECT TO THIS AGREEMENT  OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE TO THE EXTENT NOT COVERED BY THE MANDATORY ARBITRATION PROVISIONS IN SECTION 4.8  AND WHETHER NOW EXISTING OR HEREINAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; EACH PARTY HEREBY AGREES AND 

CONSENTS THAT ANY SUCH CONTROVERSY, DISPUTE OR CLAIM WHATSOEVER TO THE EXTENT NOT COVERED BY THE MANDATORY ARBITRATION PROVISIONS IN SECTION 4.8  SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY MAY FILE A COPY OF THIS SECTION WITH ANY COURT AS CONCLUSIVE EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.

Section 4.8    ARBITRATION.  

(a)EXCEPT AS PROVIDED IN SECTION 4.8(b) BELOW, ANY CONTROVERSY, DISPUTE OR CLAIM OF WHATSOEVER NATURE ARISING OUT OF, IN CONNECTION WITH, OR IN RELATION TO THE INTERPRETATION, PERFORMANCE OR BREACH OF THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS, INCLUDING ANY CLAIM BASED ON CONTRACT, TORT OR STATUTE, SHALL BE DETERMINED BY FINAL, BINDING AND CONFIDENTIAL ARBITRATION CONDUCTED BEFORE A SINGLE ARBITRATOR AND ADMINISTERED BY JAMS, INC. OR ITS SUCCESSOR (“JAMS”) PURSUANT TO JAMS' STREAMLINED ARBITRATION RULES AND PROCEDURES IF THE AMOUNT IN CONTROVERSY IS $500,000 OR LESS, AND JAMS' COMPREHENSIVE ARBITRATION RULES AND PROCEDURES, IF THE AMOUNT IN CONTROVERSY IS MORE THAN $500,000, AND THE SOLE ARBITRATOR SHALL BE SELECTED IN ACCORDANCE WITH SUCH APPLICABLE RULES.  ANY ARBITRATION HEREUNDER SHALL BE GOVERNED BY THE UNITED STATES ARBITRATION ACT, 9 U.S.C. 1-16 (OR ANY SUCCESSOR LEGISLATION THERETO), AND JUDGMENT UPON THE AWARD RENDERED BY THE ARBITRATOR MAY BE ENTERED BY ANY STATE OR FEDERAL COURT HAVING JURISDICTION THEREOF.  NEITHER THE PARTIES NOR THE ARBITRATOR SHALL DISCLOSE THE EXISTENCE, CONTENT OR RESULTS OF ANY ARBITRATION HEREUNDER WITHOUT THE PRIOR WRITTEN CONSENT OF ALL PARTIES; PROVIDED, HOWEVER, THAT ANY PARTY MAY DISCLOSE THE EXISTENCE, CONTENT OR RESULTS OF ANY SUCH ARBITRATION TO ITS PARTNERS, MEMBERS, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ATTORNEYS AND ACCOUNTANTS AND TO ANY OTHER PERSON TO WHOM DISCLOSURE IS REQUIRED BY APPLICABLE LAW, INCLUDING PURSUANT TO AN ORDER OF A COURT OF COMPETENT JURISDICTION.  UNLESS OTHERWISE AGREED BY THE PARTIES, ANY ARBITRATION HEREUNDER SHALL BE HELD AT A NEUTRAL LOCATION SELECTED BY THE ARBITRATOR IN LOS ANGELES, CALIFORNIA.  THE COST OF THE ARBITRATOR AND THE EXPENSES RELATING TO THE ARBITRATION (EXCLUSIVE OF ATTORNEYS' FEES AND COSTS) SHALL BE BORNE EQUALLY BY THE PARTIES TO SUCH CONTROVERSY, DISPUTE OR CLAIM UNLESS OTHERWISE SPECIFIED IN THE AWARD OF THE ARBITRATOR.  

(b)THE PROVISIONS OF THIS SECTION 4.8 SHALL NOT APPLY TO ANY REQUEST OR APPLICATION FOR AN ORDER OR DECREE GRANTING ANY PROVISIONAL OR ANCILLARY REMEDY (SUCH AS A TEMPORARY RESTRAINING ORDER OR INJUNCTION) WITH RESPECT TO ANY RIGHT OR OBLIGATION OF A PARTY, AND ANY PRELIMINARY DETERMINATION OF THE UNDERLYING CONTROVERSY, DISPUTE, QUESTION OR ISSUE AS IS REQUIRED TO DETERMINE WHETHER OR NOT TO GRANT SUCH RELIEF.  A FINAL AND BINDING DETERMINATION OF SUCH UNDERLYING CONTROVERSY, DISPUTE, QUESTION OR ISSUE SHALL BE MADE BY AN ARBITRATION CONDUCTED PURSUANT TO THIS SECTION 4.8 AFTER AN APPROPRIATE TRANSFER OR REFERENCE TO THE ARBITRATOR SELECTED PURSUANT TO THIS SECTION 4.8 UPON MOTION OR APPLICATION OF ANY PARTY TO HERETO.  ANY ANCILLARY OR PROVISIONAL RELIEF WHICH IS GRANTED PURSUANT TO THIS CLAUSE (ii) SHALL CONTINUE IN EFFECT PENDING AN ARBITRATION DETERMINATION AND ENTRY OF JUDGMENT THEREON PURSUANT TO THIS SECTION 4.8.

Section 4.9     Severability.  In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.

Section 4.10    Entire Agreement.  This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein.  This Agreement supersedes all prior agreements and understandings between the parties with respect to the subject matter of this Agreement.

Section 4.11    Headings.  The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning of any provision of this Agreement.

Section 4.12     Selling Holders Become Party to this Agreement.  By asserting or participating in the benefits of registration of Registrable Securities pursuant to this Agreement, each Holder agrees that it or he will be deemed a party to this Agreement and be bound by each of its terms.

Section 4.13     Rule 144.  The Company covenants that it will use commercially reasonable efforts to file any reports required to be filed by it under the Securities Act and the Exchange Act to the extent required from time to time to enable Holders to sell Registrable Securities without registration under the Securities Act within the limitations of the exemptions provided by Rule 144 under the Securities Act, as such Rule may be amended from time to time.  Upon the request of any Holder, the Company will deliver to such Holder a written statement as to whether it has filed such reports.

 [Signatures follow on next page]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of Effective Date set forth above.
“COMPANY”
KILROY REALTY CORPORATION., a Maryland corporation

By:            
Name:            
Title:            

By:            
Name:            
Title:            

“UNITHOLDERs”
[See Separate Joinders]Exhibit 10.7.8

 

FORM OF PRICE VESTED STOCK UNIT AGREEMENT

 

This PRICE VESTED STOCK UNIT AGREEMENT (the “Agreement”), dated as of the Grant Date set forth on the signature page hereof, is entered into by and between Hertz Global Holdings, Inc., a Delaware corporation (the “Company”), and the individual whose name is set forth on the participant section of the signature page hereof (the “Participant”).

 

1.  Grant of Price Vested Stock Units.  The Company hereby evidences and confirms its grant to the Participant, effective as of the Grant Date, of the number of performance stock units (the “Price Vested Stock Units”) set forth on the signature page hereof and which shall be subject to the adjustments as provided in this Agreement.  This Agreement is subordinate to, and the terms and conditions of the Price Vested Stock Units granted hereunder are subject to, the terms and conditions of the Hertz Global Holdings, Inc. 2008 Omnibus Incentive Plan (the “Plan”), which are incorporated by reference herein.  If there is any inconsistency between the terms hereof and the terms of the Plan, the terms of the Plan shall govern.  Any capitalized terms used herein without definition shall have the meanings set forth in the Plan.

 

2.  Vesting of Price Vested Stock Units.

 

(a)  General Vesting Requirements.

 

(i)  Except as otherwise provided in this Section 2, the Restriction Period applicable to the Price Vested Stock Units shall lapse, if at all, as to (1) 50% of the Price Vested Stock Units subject to this Agreement multiplied by (2) the Three Year Vesting Percentage, as of the Three Year Certification Date, subject to (x) the continued employment of the Participant by the Company or any Subsidiary thereof through the third anniversary of the Grant Date, (y) the achievement of the Three Year Performance Criteria set forth on the signature page hereof and (z) the Committee’s certification of the achievement of the Three Year Performance Criteria and Three Year Vesting Percentage in accordance with Section 3(a).  Price Vested Stock Units that cease to be subject to a Restriction Period in accordance with this Section 2(a)(i) shall be settled as provided in Section 3.

 

(ii)  Except as otherwise provided in this Section 2, the Restriction Period applicable to the Price Vested Stock Units shall lapse, if at all, as to (1) 50% of the Price Vested Stock Units subject to this Agreement multiplied by (2) the Four Year Vesting Percentage, as of the Four Year Certification Date, subject to (x) the continued employment of the Participant by the Company or any Subsidiary thereof through the fourth anniversary of the Grant Date, (y) the achievement of the Four Year Performance Criteria set forth on the signature page hereof and (z) the Committee’s certification of the achievement of the Four Year Performance

 

1

 

Criteria and Four Year Vesting Percentage in accordance with Section 3(a).  Price Vested Stock Units that cease to be subject to a Restriction Period in accordance with this Section 2(a)(ii) shall be settled as provided in Section 3.

 

(b)  If the Committee certifies on the Three Year Certification Date that the Three Year Vesting Percentage is less than 100%, then 50% of the Price Vested Stock Units subject to this Agreement (less the number of Price Vested Stock Units for which the Restriction Period lapsed pursuant to Section 2(a)(i)) shall immediately be forfeited and canceled.  If the Committee certifies on the Four Year Certification Date that the Four Year Vesting Percentage is less than 100%, then 50% of the Price Vested Stock Units subject to this Agreement (less the number of Price Vested Stock Units for which the Restriction Period lapsed pursuant to Section 2(a)(ii)) shall immediately be forfeited and canceled.

 

(c)  Termination of Employment.

 

(i)  Death or Disability During Three Year Performance Period.  If the Participant’s employment is terminated due to death or Disability prior to the third anniversary of the Grant Date, the Participant or, as the case may be, the Participant’s estate, shall retain a portion of his or her Price Vested Stock Units equal to the 50% of Price Vested Stock Units subject to this Agreement multiplied by a fraction (which shall not be greater than 1), the numerator of which is the number of whole months that have elapsed from the Grant Date to the date of termination and the denominator of which is 36 (the “Three Year Retained Award”).  The remainder of the Price Vested Stock Units shall be forfeited and canceled as of the date of the Participant’s termination.  The Restriction Period applicable to the Three Year Retained Award shall lapse, if at all, pursuant to this Section 2(c)(i), as to (1) the Price Vested Stock Units subject to the Three Year Retained Award multiplied by (2) the Three Year Vesting Percentage, as of the Three Year Certification Date.  Settlement of the Price Vested Stock Units with respect to which the Restriction Period on the Three Year Retained Award lapses shall be made as provided in Section 3.  Any Price Vested Stock Units under the Three Year Retained Award with respect to which the Restriction Period does not lapse in accordance with this Section 2(c)(i) shall be immediately forfeited and canceled.

 

(ii)  Death or Disability During Four Year Performance Period.  If the Participant’s employment is terminated due to death or Disability prior to the fourth anniversary of the Grant Date, the Participant or, as the case may be, the Participant’s estate, shall retain a portion of his or her Price Vested Stock Units equal to the 50% of Price Vested Stock Units subject to this Agreement multiplied by a fraction (which shall not be greater than 1), the numerator of which is the number of whole months that have elapsed from the Grant Date to the date of termination and the denominator of which is 48 (the “Four Year Retained

 

2

 

Award”).  The remainder of the Price Vested Stock Units shall be forfeited and canceled as of the date of the Participant’s termination.  The Restriction Period applicable to the Four Year Retained Award shall lapse, if at all, pursuant to this Section 2(c)(ii), as to (1) the Price Vested Stock Units subject to the Four Year Retained Award multiplied by (2) the Four Year Vesting Percentage, as of the Four Year Certification Date.  Settlement of the Price Vested Stock Units with respect to which the Restriction Period on the Four Year Retained Award lapses shall be made as provided in Section 3.  Any Price Vested Stock Units under the Four Year Retained Award with respect to which the Restriction Period does not lapse in accordance with this Section 2(c)(ii) shall be immediately forfeited and canceled.

 

(iii)  Any Other Reason.  If the Participant’s employment terminates (whether by the Participant or by the Company or a Subsidiary) for any reason other than death or Disability, any outstanding Price Vested Stock Units shall immediately be forfeited and canceled effective as of the date of the Participant’s termination.

 

(d)  Change in Control.

 

(i)  In the event of a Change in Control, the Restriction Period applicable to any outstanding Price Vested Stock Units subject to this Agreement shall lapse immediately prior to such Change in Control and shall be settled as set forth in Section 3.

 

(ii)  Notwithstanding section 2(d)(i), no cancellation, termination, lapse of Restriction Period or settlement or other payment shall occur with respect to the Price Vested Stock Units if the Committee (as constituted immediately prior to the Change in Control) reasonably determines, in good faith, prior to the Change in Control that the Price Vested Stock Units shall be honored or assumed or new rights substituted therefor by an Alternative Award, in accordance with the terms of Section 9.2 of the Plan.

 

3.  Certification and Settlement of Price Vested Stock Units.

 

(a)  Certification.  No later than 30 days after the end of the Three Year Performance Period, the Committee shall certify, in writing, the determination of the Three Year Performance Criteria and Three Year Vesting Percentage.  No later than 30 days after the end of the Four Year Performance Period, the Committee shall certify, in writing, the determination of the Four Year Performance Criteria and Four Year Vesting Percentage.  The date on which the Committee makes the certification with respect to the Three Year Performance Criteria and Three Year Vesting Percentage is referred to herein as the “Three Year Certification Date”, and the date on which the Committee makes the

 

3

 

certification with respect to the Four Year Performance Criteria and Four Year Vesting Percentage is referred to herein as the “Four Year Certification Date”.

 

(b)  Settlement.  Subject to Section 9(g), not later than 30 days after the lapse of the Restriction Period with respect to any Price Vested Stock Units, the Company shall issue to the Participant one share of Common Stock underlying each Price Vested Stock Unit as to which the Restriction Period has lapsed or, if the Committee so determines in its sole discretion, an amount in cash equal to the Fair Market Value of such shares of Common Stock or any combination of shares of Common Stock and cash having an aggregate Fair Market Value equal to such shares of Common Stock.  Upon issuance, such shares of Common Stock may be sold, transferred, pledged, assigned or otherwise alienated or hypothecated in compliance with all applicable law, this Agreement and any other agreement to which such shares are subject.  The Participant’s settlement rights pursuant to this Agreement shall be no greater than the right of any unsecured general creditor of the Company.

 

4.  Forfeiture.  Notwithstanding anything in the Plan or this Agreement to the contrary, if, during the Covered Period, the Participant engages in Wrongful Conduct, then any Price Vested Stock Units for which the Restriction Period has not then lapsed shall automatically terminate and be canceled upon the date on which the Participant first engaged in such Wrongful Conduct.  If the Participant engages in Wrongful Conduct or if the Participant’s employment is terminated for Cause, the Participant shall pay to the Company in cash any Performance-Based Financial Gain the Participant realized from the lapse of the Restriction Period applicable to all or a portion of the Price Vested Stock Units having a Vesting Date within the Wrongful Conduct Period.  By entering into this Agreement, the Participant hereby consents to and authorizes the Company and the Subsidiaries to deduct from any amounts payable by such entities to the Participant any amounts the Participant owes to the Company under this Section 4 to the extent permitted by law.  This right of set-off is in addition to any other remedies the Company may have against the Participant for the Participant’s breach of this Section 4.  The Participant’s obligations under this Section 4 shall be cumulative (but not duplicative) of any similar obligations the Participant has under the Plan, this Agreement, any Company policy, standard or code (including, without limitation, the Company’s Standards of Business Conduct), or any other agreement with the Company or any Subsidiary.

 

5.  Effect of Financial Restatements.  In the event that the Participant commits misconduct, fraud or gross negligence (whether or not such misconduct, fraud or gross negligence is deemed or could be deemed to be an event constituting Cause) and as a result of, or in connection with, such misconduct, fraud or gross negligence the Company restates any of its financial statements, then the Committee may require any or all of the following:

 

(a)  that the Participant forfeit some or all of the Price Vested Stock Units subject to this Agreement held by the Participant at the time of such restatement,

 

4

 

(b)  that the Participant forfeit (or pay to the Company) some or all of the cash or the shares of Common Stock held by the Participant at the time of such restatement that had been received in settlement of Price Vested Stock Units subject to this Agreement during the twelve-month period prior to the financial restatement (or such other period as determined by the Committee), and

 

(c)  that the Participant pay to the Company in cash all or a portion of the proceeds that the Participant realized from the sale of shares of Common Stock that had been received in settlement of any Price Vested Stock Units subject to this Agreement within the period commencing twelve months prior to the financial restatement (or such other period as determined by the Committee).

 

6.  Issuance of Shares.

 

(a)  Notwithstanding any other provision of this Agreement, the Participant may not sell the shares of Common Stock acquired upon settlement of the Price Vested Stock Units unless such shares are registered under the Securities Act of 1933, as amended (the “Securities Act”), or, if such shares are not then so registered, such sale would be exempt from the registration requirements of the Securities Act.  The sale of such shares must also comply with other applicable laws and regulations governing the Common Stock and Participant may not sell the shares of Common Stock if the Company determines that such sale would not be in material compliance with such laws and regulations.

 

(b)  The shares of Common Stock issued in settlement of the Price Vested Stock Units shall be registered in the Participant’s name, or, if applicable, in the names of the Participant’s heirs or estate.  In the Company’s discretion, such shares may be issued either in certificated form or in uncertificated, book entry form.  The certificate or book entry account shall bear such restrictive legends or restrictions as the Company, in its sole discretion, shall require.  If delivered in certificate form, the Company may deliver a share certificate to the Participant, or deliver shares electronically or in certificate form to the Participant’s designated broker on the Participant’s behalf.  If the Participant is deceased (or if Disabled and if necessary) at the time that a delivery of share certificates is to be made, the certificates will be delivered to the Participant’s estate, executor, administrator, legally authorized guardian or personal representative (as applicable).

 

(c)  The grant of the Price Vested Stock Units and issuance of shares of Common Stock upon settlement of the Price Vested Stock Units will be subject to and in compliance with all applicable requirements of federal, state or foreign law with respect to such securities.  No shares of Common Stock may be issued hereunder if the issuance of such shares would constitute a violation of any applicable federal, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the Common Stock may then be listed.  The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance of any

 

5

 

shares subject to the Price Vested Stock Units shall relieve the Company of any liability in respect of the failure to issue such shares as to which such requisite authority shall not have been obtained.  As a condition to the settlement of the Price Vested Stock Units, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company.

 

(d)  The Company will not be required to issue fractional shares of Common Stock upon settlement of the Price Vested Stock Units.

 

(e)  The Company may postpone the issuance and delivery of any shares of Common Stock provided for under this Agreement for so long as the Company determines to be necessary or advisable to satisfy the following: (1) the completion or amendment of any registration of such shares or satisfaction of any exemption from registration under any securities law, rule, or regulation; (2) compliance with any requests for representations; and receipt of proof satisfactory to the Company that a person seeking such shares on the Participant’s behalf upon the Participant’s Disability (if necessary), or upon the Participant’s estate’s behalf after the death of the Participant, is appropriately authorized.

 

7.  Participant’s Rights with Respect to the Price Vested Stock Units.

 

(a)  Restrictions on Transferability.  The Price Vested Stock Units granted hereby may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated other than with the consent of the Company or by will or by the laws of descent and distribution to the estate of the Participant upon the Participant’s death; provided that any such permitted transferee shall acknowledge and agree in writing, in a form reasonably acceptable to the Company, to be bound by the provisions of this Agreement and the Plan as if such beneficiary or the estate were the Participant. Any attempt by the Participant, directly or indirectly, to offer, transfer, sell, pledge, hypothecate or otherwise dispose of any Price Vested Stock Units or any interest therein or any rights relating thereto without complying with the provisions of the Plan and this Agreement, including this Section 7(a), shall be void and of no effect.  The Company will not be required to recognize on its books any action taken in contravention of these restrictions.

 

(b)  No Rights as Stockholder.  The Participant shall not have any rights as a stockholder of the Company with respect to any shares of Common Stock corresponding to the Price Vested Stock Units granted hereby unless and until shares of Common Stock are issued to the Participant in respect thereof.

 

8.  Adjustment in Capitalization.  In the event of any Adjustment Event affecting the Common Stock, the Committee shall make an equitable and proportionate anti-dilution adjustment to offset any resultant change in the pre-share price of the Common Stock and preserve the intrinsic value of any Awards granted under the Plan.  Such

 

6

 

mandatory adjustment may include a change in any or all of the number and kind of shares of Common Stock or other equity interests underlying the Price Vested Stock Units, and may include a change in the Base Stock Price, Three Year Performance Stock Hurdle Price, and/or Four Year Performance Stock Hurdle Price.  In addition, the Committee may make provisions for a cash payment to a Participant or a person who has an outstanding Award in such event.  The number of shares of Common Stock or other equity interests underlying the Price Vested Stock Units shall be rounded to the nearest whole number.  Any such adjustment shall be consistent with section 162(m) of the Code to the extent the Price Vested Stock Units are subject to such section of the Code and shall not result in adverse tax consequences to the Participant under section 409A of the Code.

 

9.  Miscellaneous.

 

(a)  Binding Effect; Benefits.  This Agreement shall be binding upon and inure to the benefit of the parties to this Agreement and their respective successors and assigns.  Nothing in this Agreement, express or implied, is intended or shall be construed to give any person other than the parties to this Agreement or their respective successors or assigns any legal or equitable right, remedy or claim under or in respect of any agreement or any provision contained herein.

 

(b)  Assignability.  Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by the Company or the Participant without the prior written consent of the other party.

 

(c)  No Right to Continued Employment.  Nothing in the Plan or this Agreement shall interfere with or limit in any way the right of the Company or any of its Subsidiaries to terminate the Participant’s employment at any time, or confer upon the Participant any right to continue in the employ of the Company or any of its Subsidiaries (regardless of whether such termination results in (1) the failure of any Award to vest; (2) the forfeiture of any unvested or vested portion of any Award; and/or (3) any other adverse effect on the individual’s interests under the Plan).  Nothing in the Plan or this Agreement shall confer on the Participant the right to receive any future Awards under the Plan.

 

(d)  Notices.  All notices and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given if delivered personally or sent by certified or express mail, return receipt requested, postage prepaid, or by any recognized international equivalent of such delivery, to the Company or the Participant, as the case may be, at the following addresses or to such other address as the Company or the Participant, as the case may be, shall specify by notice to the other:

 

7

 

If to the Company, to it at:

 

Hertz Global Holdings, Inc.

c/o The Hertz Corporation

225 Brae Boulevard

Park Ridge, New Jersey 07656

Attention: General Counsel

Fax: (201) 594-3122

 

If to the Participant, to the Participant at his or her most recent address as shown on the books and records of the Company or Subsidiary employing the Participant.

 

All such notices and communications shall be deemed to have been received on the date of delivery if delivered personally or on the third business day after the mailing thereof.

 

(e)  Amendment.  This Agreement may be amended from time to time by the Committee in its discretion; provided, however, that this Agreement may not be modified in a manner that would have a materially adverse effect on the Price Vested Stock Units as determined in the discretion of the Committee, except as provided in the Plan, or in any other written document signed by the Participant and the Company.  This Agreement may not be amended, modified or supplemented orally.

 

(f)  Interpretation.  The Committee shall have full power and discretion to construe and interpret the Plan (and any rules and regulations issued thereunder) and this Award.  Any determination or interpretation by the Committee under or pursuant to the Plan or this Award shall be final and binding and conclusive on all persons affected hereby.

 

(g)  Tax Withholding.  The Company shall have the right and power to deduct from all amounts paid to the Participant in cash or shares (whether under the Plan or otherwise) or to require the Participant to remit to the Company promptly upon notification of the amount due, an amount (which may include shares of Common Stock) to satisfy the minimum federal, state or local or foreign taxes or other obligations required by law to be withheld with respect thereto with respect to the Price Vested Stock Units.  No shares of Common Stock shall be issued unless and until arrangements satisfactory to the Committee shall have been made to satisfy the statutory minimum withholding tax obligations applicable with respect to such Price Vested Stock Units.  The Company may defer payments of cash or issuance or delivery of Common Stock until such requirements are satisfied.  Without limiting the generality of the foregoing, the Participant may elect to tender shares of Common Stock (including shares of Common Stock issuable in respect of the Price Vested Stock Units) to satisfy, in whole or in part, the amount required to be withheld (provided that such amount shall not be in

 

8

 

excess of the minimum amount required to satisfy the statutory withholding tax obligations).

 

(h)  Applicable Law.  This Agreement shall be governed by and construed in accordance with the law of the State of Delaware regardless of the application of rules of conflict of law that would apply the laws of any other jurisdiction.

 

(i)  Limitation on Rights; No Right to Future Grants; Extraordinary Item of Compensation.  By entering into this Agreement and accepting the Price Vested Stock Units evidenced hereby, the Participant acknowledges: (a) that the Plan is discretionary in nature and may be suspended or terminated by the Company at any time; (b) that the Award does not create any contractual or other right to receive future grants of Awards; (c) that participation in the Plan is voluntary; (d) that the value of the Price Vested Stock Units is not part of normal or expected compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments; and (e) that the future value of the Common Stock is unknown and cannot be predicted with certainty.

 

(j)  Employee Data Privacy.  The Participant authorizes any Affiliate of the Company that employs the Participant or that otherwise has or lawfully obtains personal data relating to the Participant to divulge or transfer such personal data to the Company or to a third party, in each case in any jurisdiction, if and to the extent appropriate in connection with this Agreement or the administration of the Plan.

 

(k)  Consent to Electronic Delivery.  By entering into this Agreement and accepting the Price Vested Stock Units evidenced hereby, the Participant hereby consents to the delivery of information (including, without limitation, information required to be delivered to the Participant pursuant to applicable securities laws) regarding the Company and the Subsidiaries, the Plan, this Agreement and the Price Vested Stock Units via Company web site or other electronic delivery.

 

(l)  Compensation Recovery Policy.  Without limiting any other provision of this Agreement, the Price Vested Stock Units granted hereunder shall be subject to the Compensation Recovery Policy under the Company’s Standards of Business Conduct (as amended from time to time, and including any successor or replacement policy or standard) to the extent applicable.

 

(m)  Company Rights.  The existence of the Price Vested Stock Units does not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business, including that of its Affiliates, or any merger or consolidation of the Company or any Affiliate, or any issue of bonds, debentures, preferred or other stocks with preference ahead of or convertible into, or otherwise affecting the Common Stock or the rights thereof, or the dissolution or liquidation of the

 

9

 

Company or any Affiliate, or any sale or transfer of all or any part of the Company’s or any Affiliate’s assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

 

(n)  Severability.  If a court of competent jurisdiction determines that any portion of this Agreement is in violation of any statute or public policy, then only the portions of this Agreement which violate such statute or public policy shall be stricken, and all portions of this Agreement which do not violate any statute or public policy shall continue in full force and effect.   Further, it is the parties’ intent that any court order striking any portion of this Agreement should modify the terms as narrowly as possible to give as much effect as possible to the intentions of the parties’ under this Agreement.

 

(o)  Further Assurances.  The Participant agrees to use his or her reasonable and diligent best efforts to proceed promptly with the transactions contemplated herein, to fulfill the conditions precedent for the Participant’s benefit or to cause the same to be fulfilled and to execute such further documents and other papers and perform such further acts as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated herein.

 

(p)  Headings and Captions.  The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

 

(q)  Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument.

 

10

 

IN WITNESS WHEREOF, the Company and the Participant have executed this Agreement as of the          day of                     ,              (the “Grant Date”).

 

	
 
    	
 
    
	
 
    	
HERTZ   GLOBAL HOLDINGS, INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
PARTICIPANT
    
	
 
    	
 
    
	
 
    	
«Name»
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    

 

 

	
Number   of Price Vested Stock Units granted hereby:
    	
 
    	
 
    
	
Base   Stock Price:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Three   Year Performance Period:
    	
 
    	
The   period of time commencing on the Grant Date through and including   [                    ].
    
	
 
    	
 
    	
 
    
	
Three   Year Performance Hurdle Stock Price:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Three   Year Performance Criteria:
    	
 
    	
The   20 Day Average Trailing Stock Price as of   [                    ].
    
	
 
    	
 
    	
 
    
	
Three   Year Vesting Percentage:
    	
 
    	
For   Three Year Performance Criteria that is equal to or below the Base Stock   Price, the Three Year Vesting Percentage shall be 0%. For Three Year   Performance Criteria that is equal to or above the Three Year Performance   Hurdle Stock Price, the Three Year Vesting Percentage shall be 100%. Linear   interpolation will be used to determine the applicable Three Year Vesting   Percentage for Three Year Performance Criteria that is between the Base Stock   Price and Three Year Performance Hurdle Stock Price.
    
	
 
    	
 
    	
 
    
	
Four   Year Performance Period:
    	
 
    	
The   period of time commencing on the Grant Date through and including   [                    ].
    

 

11

 

	
Four   Year Performance Hurdle Stock Price:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Four   Year Performance Criteria:
    	
 
    	
The   20 Day Average Trailing Stock Price as of   [                    ].
    
	
 
    	
 
    	
 
    
	
Four   Year Vesting Percentage:
    	
 
    	
For   Four Year Performance Criteria that is equal to or below the Base Stock   Price, the Four Year Vesting Percentage shall be 0%. For Four Year   Performance Criteria that is equal to or above the Four Year Performance   Hurdle Stock Price, the Four Year Vesting Percentage shall be 100%. Linear   interpolation will be used to determine the applicable Four Year Vesting   Percentage for Four Year Performance Criteria that is between the Base Stock   Price and Four Year Performance Hurdle Stock Price.
    

 

[For purposes of this Agreement, the “20 Day Average Trailing Stock Price” means the average Fair Market Value of the Common Stock for a period of 20 consecutive trading days ending on and including the applicable determination date (or, if such determination date is not a trading day, ending on and including the trading day that immediately precedes such determination date).]

 

12

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00206-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00206-of-00352.parquet"}]]