Document:

Exhibit 10.6

 

 

 

SOLSTICE HOLDINGS LLC

RETENTION AND INCENTIVE EQUITY

COMPENSATION PROGRAM

 

(EFFECTIVE AS OF MARCH 8, 2006)

 

 

TABLE OF
CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
  ESTABLISHMENT, PURPOSE AND DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  ESTABLISHMENT; PURPOSE

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.2

  	
  DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  INTERESTS AVAILABLE UNDER THIS PROGRAM

  	
  3

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  INTERESTS AVAILABLE UNDER THE IIAP

  	
  3

  
	
   

  	
   

  	
   

  
	
  2.2

  	
  INTERESTS AVAILABLE UNDER THE RECP

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  INITIAL INCENTIVE AWARD PLAN

  	
  3

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  INITIAL INCENTIVE AWARDS

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  RETENTION EQUITY COMPENSATION PLAN

  	
  5

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  RECP

  	
  5

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  ADJUSTMENTS TO CLASS A UNITS

  	
  6

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  ADJUSTMENTS

  	
  6

  
	
   

  	
   

  	
   

  
	
  5.2

  	
  FRACTIONAL RECP INTERESTS

  	
  6

  
	
   

  	
   

  	
   

  
	
  5.3

  	
  FORFEITED INTERESTS AVAILABLE FOR GRANT

  	
  6

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  ADMINISTRATION, GENERAL PROVISIONS

  	
  7

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  ADMINISTRATION OF THE PLAN

  	
  7

  
	
   

  	
   

  	
   

  
	
  6.2

  	
  AMENDMENT AND OTHER MATTERS

  	
  8

  
	
   

  	
   

  	
   

  
	
  6.3

  	
  WITHHOLDING TAXES

  	
  8

  
	
   

  	
   

  	
   

  
	
  6.4

  	
  GOVERNING LAW

  	
  9

  
	
   

  	
   

  	
   

  
	
  6.5

  	
  TERMINATION

  	
  9

  
	
   

  	
   

  	
   

  
	
  6.6

  	
  GENERAL PROVISIONS

  	
  9

  
				

 

i

 

SOLSTICE HOLDINGS LLC

RETENTION AND INCENTIVE EQUITY

COMPENSATION PROGRAM

 

ARTICLE I

ESTABLISHMENT, PURPOSE AND DEFINITIONS

 

1.1                                 ESTABLISHMENT; PURPOSE.

 

(a)                                  Solstice
Holdings LLC, a Delaware limited liability company (the “Company”),
hereby establishes the Solstice Holdings LLC Retention and Incentive Equity
Compensation Program (the “RIECP” or the “Program”), effective as
of March 8, 2006 (the “Effective Date”).

 

(b)                                 The
Program consists of the Retention Equity Compensation Plan (the “RECP”)
and the Initial Incentive Award Plan (the “IIAP”).

 

(c)                                  The
purpose of this Program is to assist in attracting and retaining key employees
of or on behalf of CenterPoint Properties Trust, a Maryland real estate
investment trust and a Subsidiary of the Company, and to provide such persons
with long-term incentives and rewards for superior performance and maximizing
shareholder value.

 

1.2                                 DEFINITIONS. Capitalized terms that
are used but not defined herein shall have the meaning set forth in the
Operating Agreement.

 

(a)                                  “Beneficiary” means the person or persons designated
by the Participant, in a writing provided to the Company or CenterPoint prior
to the Participant’s death, to receive amounts payable to the Participant under
this Program upon the Participant’s death. In the absence of such a written
beneficiary designation, the Beneficiary shall be the Participant’s surviving
spouse, or if none, the Participant’s estate.

 

(b)                                 “CenterPoint” means CenterPoint Properties Trust, a
Maryland real estate investment trust, its successors by merger or otherwise
upon or following a Change in Control and any corporation or other entity that
controls such successor corporation or entity and that adopts the Program and
at such time agrees to be the successor.

 

(c)                                  “CenterPoint Management Team” means the CEO and the
CFO.

 

(d)                                 “CEO” means the Chief Executive Officer of
CenterPoint, who initially shall be Michael M. Mullen.

 

(e)                                  “CFO” means the Chief Financial Officer of
CenterPoint, who initially shall be Paul S. Fisher.

 

 

(f)                                    “Committee” means the Compensation Committee of the
Board, as constituted from time to time and, to the extent of any delegation by
the Board pursuant to this Program to a subcommittee, such subcommittee.

 

(g)                                 “Company” has the meaning set forth in the
introductory paragraph of this Program.

 

(h)                                 “Date of Grant” means the date specified by the Board
on which a grant of Unvested Class A Units under the RECP or the IIAP
shall become effective, which shall not be earlier than the date on which the
Board takes action with respect thereto.

 

(i)                                     “Effective Date” has the meaning given to such term
in Section 1.1(a).

 

(j)                                     “Effective Time” has the meaning given to such term
in Section 1.3 of the Merger Agreement.

 

(k)                                  “Employment Agreement” means the employment agreement
by and between a Participant and CenterPoint (or as applicable, the Company or
any of their Subsidiaries that adopts the Program) setting
forth such individual’s terms of employment.

 

(l)                                     “Evidence of Award” means, under the RECP or the
IIAP, a Class A Unit award agreement, certificate, resolution or other
type or form of writing or other evidence Approved by the Board that sets
forth the terms and conditions of the awards granted, which may be in an
electronic medium, may be limited to notation on the books and records of
the Company and, with the Approval of the Board, need not be signed by a
representative of the Company or a Participant.

 

(m)                               “Initial Unvested Class A Units” has the meaning
set forth in Section 2.1.

 

(n)                                 “IIAP” means the Initial Incentive Award Plan,
further described in Article III hereof.

 

(o)                                 “Merger Agreement” means that certain Agreement and
Plan of Merger by and among CalEast, Solstice Merger Trust and CenterPoint
dated December 7, 2005, as amended on February 2, 2006, and as may be
further amended from time to time.

 

(p)                                 “New Hire” means a Participant who is commencing, or
has agreed to commence, employment with CenterPoint (or as applicable, the
Company or any of their Subsidiaries that adopts the Program) after the
Effective Date.

 

(q)                                 “Operating Agreement” means that certain Amended and
Restated Limited Liability Company Agreement of Solstice Holdings LLC, a
Delaware limited liability company dated as of March 7, 2006, as may be
amended from time to time.

 

(r)                                    “Participant” means an employee of CenterPoint (or as
applicable, the Company or any of their Subsidiaries that adopts the Program)
who is selected from time to time

 

2

 

by the CenterPoint Management Team to
participate in the Program, as Approved by the Board and has received an award
of Initial Unvested Class A Units or RECP Unvested Class A Units.

 

(s)                                  “Recommendation Period” has the meaning set forth in Section 6.1(a).

 

(t)                                    “RECP” means the Retention Equity Compensation Plan,
further described in Article IV hereof.

 

(u)                                 “RECP Unvested Class A Units” has the meaning
set forth in Section 2.2.

 

ARTICLE II

INTERESTS AVAILABLE UNDER THIS PROGRAM

 

2.1                                 INTERESTS AVAILABLE UNDER THE IIAP.
The IIAP provides for the one-time grant of restricted Unvested Class A
Units as described in Section 3.1(B)(iii) of the Operating Agreement
(“Initial Unvested Class A Units”). Subject to adjustment as
provided in Section 5.1 of this Program, the Initial Unvested Class A
Units available for issuance under the IIAP (Article III) shall have an
aggregate value as of the Effective Time of not more than nine million seven
hundred eighty-six thousand two hundred dollars ($9,786,200). The Initial
Unvested Class A Units shall be awarded in lieu of any share options,
restricted shares and/or performance units that CenterPoint may have
awarded to its employees in CenterPoint’s fiscal year 2006 for CenterPoint’s
fiscal year 2005 performance.

 

2.2                                 INTERESTS AVAILABLE UNDER THE RECP.
The RECP provides for the grant of interests of restricted Unvested Class A
Units (the “RECP Unvested Class A Units”). Subject to adjustment as
provided in Section 5.1 of this Program, the RECP Unvested Class A
Units available for issuance under the RECP (Article IV) shall have an
aggregate value as of the Effective Time of not more than ten million dollars
($10,000,000).

 

ARTICLE III

INITIAL INCENTIVE AWARD PLAN

 

3.1                                 INITIAL INCENTIVE AWARDS. The Board
may authorize grants of Initial Unvested Class A Units under this
IIAP, which shall be one-time grants, to those Participants selected to receive
such one-time grants as of the Effective Time, and after such grants are made,
no additional grants under the IIAP may be made. Such grants shall be made
upon the terms and conditions, in addition to those found in the Operating
Agreement, as the Board may determine in accordance with this Program,
including the following provisions:

 

(a)                                  Each grant shall
constitute an immediate transfer of the ownership of the Initial Unvested Class A
Units awarded under the IIAP to the Participant in consideration

 

3

 

of the performance of services, entitling
such Participant to Distributions and other rights, as provided in the
Operating Agreement, subject to the substantial risk of forfeiture and
restrictions on transfer hereinafter referred to.

 

(b)                                 Each grant will be
made without any additional consideration from the Participant.

 

(c)                                  Each grant of Initial
Unvested Class A Units will be subject to the terms and conditions of the
Operating Agreement. Upon issuance of Initial Unvested Class A Units, to
the extent a Participant has not already executed the signature page of
the Operating Agreement or an addendum thereto, such Participant shall sign an
addendum to the Operating Agreement agreeing to be bound by the provisions of
the Operating Agreement.

 

(d)                                 Each grant (i) shall
provide that the Class A Units covered thereby shall be subject to a “substantial
risk of forfeiture” within the meaning of Section 83 of the Code for a
period not to exceed five (5) years (which may include pro-rata or
graded vesting over such period) to be determined by the Board on the Date of
Grant and (ii) may provide for the earlier lapse of such substantial
risk of forfeiture in the event of a Change in Control or in the case of
certain events of termination of a Participant’s employment.

 

(e)                                  Each grant shall
provide that, during the period for which such substantial risk of forfeiture
is to continue, the transferability of the Initial Unvested Class A Units
shall be prohibited or restricted in the manner and to the extent prescribed by
the Board on the Date of Grant or as prescribed in the Operating Agreement. Such
restrictions may include without limitation rights of repurchase or first
refusal in favor of the Company or provisions subjecting the Initial Unvested Class A
Units to a continuing substantial risk of forfeiture in the hands of any
transferee.

 

(f)                                    Each grant of
Initial Unvested Class A Units awarded under the IIAP shall be evidenced
by an Evidence of Award, which Evidence of Award shall contain such terms and
provisions as the Board may determine consistent with this Program and the
Operating Agreement, as applicable, including, but not limited to, vesting and
forfeiture provisions.

 

(g)                                 Except as otherwise
provided in the Operating Agreement, a Participant’s Evidence of Award or a Participant’s Employment Agreement, as applicable, if
a Participant’s employment with CenterPoint (or as applicable, the Company or
any of their Subsidiaries that adopts the Program) is terminated for any
reason, the Participant shall immediately forfeit all Initial Unvested Class A
Units held. Upon such forfeiture, the Participant will no longer be entitled to
any further payments or Distributions from the Company and will have no further
rights under the IIAP with respect to those forfeited Initial Unvested Class A
Units.

 

(h)                                 Upon the vesting of a
Participant’s Initial Unvested Class A Units, such Class A Units
shall become Vested Class A Units subject to the terms of the Operating

 

4

 

Agreement relating to Vested Class A
Units, including, but not limited to the required repurchase by the Company
under Section 3.5(D) of the Operating Agreement.

 

ARTICLE IV

RETENTION EQUITY COMPENSATION PLAN

 

4.1                                 RECP. The Board may authorize
grants of RECP Unvested Class A Units under this RECP to Participants
(other than members of the CenterPoint Management Team) upon such terms and
conditions, in addition to those found in the Operating Agreement, as the Board
may determine in accordance with this Program, including the following
provisions:

 

(a)                                  Each grant shall
constitute an immediate transfer of the ownership of the RECP Unvested Class A
Units awarded under the RECP to the Participant in consideration of the
performance of services, entitling such Participant to Distributions and other
rights, as provided in the Operating Agreement, subject to the substantial risk
of forfeiture and restrictions on transfer hereinafter referred to.

 

(b)                                 Each grant will be
made without any additional consideration from the Participant.

 

(c)                                  Each grant of RECP
Unvested Class A Units will be subject to the terms and conditions of the
Operating Agreement. Upon issuance of RECP Unvested Class A Units, to the
extent a Participant has not already executed the signature page of the
Operating Agreement or an addendum thereto, each Participant shall sign an
addendum to the Operating Agreement agreeing to be bound by the provisions of
the Operating Agreement.

 

(d)                                 Each grant (i) shall
provide that the Class A Units covered thereby shall be subject to a “substantial
risk of forfeiture” within the meaning of Section 83 of the Code for a
period not to exceed ten (10) years (which may include pro-rata or
graded vesting over such period) to be determined by the Board on the Date of
Grant and (ii) may provide for the earlier lapse of such substantial
risk of forfeiture in the event of a Change in Control or in the case of
certain events of termination of a Participant’s employment.

 

(e)                                  Each grant shall
provide that, during the period for which such substantial risk of forfeiture
is to continue, the transferability of the RECP Unvested Class A Units
shall be prohibited or restricted in the manner and to the extent prescribed by
the Board on the Date of Grant or as prescribed in the Operating Agreement. Such
restrictions may include without limitation rights of repurchase or first
refusal in the Company or provisions subjecting the RECP Unvested Class A
Units to a continuing substantial risk of forfeiture in the hands of any
transferee.

 

(f)                                    Each grant of RECP
Unvested Class A Units awarded under the RECP shall be evidenced by an
Evidence of Award, which Evidence of Award shall contain such terms and
provisions as the Board may determine consistent with this Program and

 

5

 

the Operating Agreement, as applicable,
including, but not limited to, vesting and forfeiture provisions.

 

(g)                                 Except as provided in
the Operating Agreement, a Participant’s Evidence of Award or
a Participant’s Employment Agreement, as applicable, if a Participant’s
employment with CenterPoint (or as applicable, the Company or any of their
Subsidiaries that adopts the Program) is terminated for any reason, the
Participant shall immediately forfeit all RECP Unvested Class A Units held.
Upon such forfeiture, the Participant will no longer be entitled to any further
payments or Distributions from the Company and will have no further rights
under the RECP with respect to those forfeited RECP Unvested Class A
Units.

 

(h)                                 Upon the vesting of a
Participant’s RECP Unvested Class A Units, such Class A Units shall
become Vested Class A Units subject to the terms of the Operating
Agreement relating to Vested Class A Units, including, but not limited to
the required repurchase by the Company under Section 3.5(D) of the
Operating Agreement.

 

(i)                                     The members of the
CenterPoint Management Team will not be entitled to participate in the RECP.

 

ARTICLE V

ADJUSTMENTS TO CLASS A UNITS

 

5.1                                 ADJUSTMENTS. The Board may make or provide for such adjustments in the number
of restricted Unvested Class A Units granted hereunder or for substitution
of the restricted Unvested Class A Units granted hereunder for other fair,
equitable and valuable consideration as may be required in order to
prevent dilution or expansion of the rights of Participants that otherwise
would result from (i) any Membership Interest dividend, Membership
Interest split, combination of Membership Interests, recapitalization or other
change in the capital structure of the Company, (ii) any merger,
consolidation, spin-off, spin-out, split-off, split-up, reorganization, partial
or complete liquidation or other distribution of assets, issuance of warrants
or other rights to purchase securities or (iii) any other transaction or
event having an effect similar to any of the foregoing.

 

5.2                                 FRACTIONAL RECP INTERESTS. The
Company may issue fractional restricted Unvested Class A Units
pursuant to this Program. The Board may also
provide for the elimination of fractions or for the settlement thereof in cash.

 

5.3                                 FORFEITED INTERESTS AVAILABLE FOR GRANT.
An Unvested Class A Unit that is forfeited shall again be available to
be granted pursuant to the terms hereunder.

 

6

 

ARTICLE VI

ADMINISTRATION, GENERAL PROVISIONS

 

6.1                                 ADMINISTRATION OF THE PLAN.

 

(a)                                  Except as otherwise
provided in this Section 6.1(a), the Board shall administer the Program.
With respect to any determinations to be made pursuant to the provisions of Article 3
and Article 4, the CenterPoint Management Team shall make recommendations
to the Board, and the Board may approve or request that the CenterPoint
Management Team revise such recommendation. To the extent the Board requests
that the CenterPoint Management Team revise such recommendation, and until a
revised recommendation is approved by the Board, the CenterPoint Management
Team will have a period not to exceed thirty (30) days from the date the
initial recommendation is presented to the Board (the “Recommendation Period”)
to provide revised recommendations for approval by the Board. The Board shall
convene as often as reasonably required during the Recommendation Period. To
the extent the Board has not approved a recommendation from the CenterPoint
Management Team on or prior to the expiration of the Recommendation Period, the
Committee shall make a recommendation to the Board, after advising the
CenterPoint Management Team of such recommendation, and the Board shall make
and approve any determination it considers necessary or appropriate, in its
sole discretion.

 

(b)                                 The Board may from
time to time reserve a specified number of RECP Unvested Class A Units,
subject to adjustment as provided in Section 5.1 of this Program, for
grants to New Hires in connection with their employment with CenterPoint (or as
applicable, the Company or any of their Subsidiaries that adopts the Program)
or to any Participant in connection with a promotion or other form of
special recognition Approved in writing by the Board.

 

(c)                                  Subject to Section 6.1(a),
the Board shall have full authority regarding all matters relating to the
discharge of its responsibilities under this Program, and the interpretation
and construction by the Board of the provisions of this Program, or any
Evidence of Award shall be made in the sole discretion of the Board and shall
be final and conclusive.

 

(d)                                 The Board may delegate
to the Committee, to one or more subcommittees of the Committee, to one or more
of its members, or to one or more officers of the Company or CenterPoint, or to
one or more agents or advisors, such administrative duties or powers as it may deem
advisable, and the Board, the Committee, or any person to whom duties or powers
have been delegated as aforesaid, may employ one or more persons to render
advice with respect to any responsibility the Board, the Committee or such
person may have under the Program.

 

7

 

6.2                                 AMENDMENT AND OTHER MATTERS.

 

(a)                                  The Board may at
any time and from time to time, in its discretion amend, alter or terminate the
Program in whole or in part; provided, however, that any such
amendment or alteration will not affect the rights of Participants or their
successors under any Class A Units without their consent; and provided
further that any provisions relating to the Program set forth in the
Operating Agreement may be amended or altered only with the Approval of
the Board and with the consent of the Members as provided for in the Operating
Agreement.

 

(b)                                 In connection with a
merger, acquisition or other such similar transaction, the Board may grant
under this Program any award of restricted Unvested Class A Units in
exchange for the surrender and cancellation of an award that was not granted
under this Program (including but not limited to an award that was granted by
CenterPoint (or as applicable, the Company or any of their Subsidiaries that
adopts the Program), or by another corporation that is acquired by CenterPoint
(or as applicable, the Company or any of their Subsidiaries that adopts the
Program) by merger or otherwise, prior to the
adoption of this Program by the Board), and any such award or combination of
awards so granted under this Program may or may not cover the same
number of equity interests as had been covered by the canceled award and shall
be subject to such other terms, conditions and discretion as would have been
permitted under this Program had the canceled award not been granted.

 

(c)                                  This Program, any
Evidence of Award or any action taken hereunder will not confer upon any
Participant any right with respect to continuance of employment or other
service with CenterPoint (or as applicable, the Company or any of their
Subsidiaries that adopts the Program), nor will it interfere in any way with
any right CenterPoint (or as applicable, the Company or any of their
Subsidiaries that adopts the Program) would otherwise have to terminate such
Participant’s employment or other service at any time.

 

(d)                                 The Board may consistent
with this Program amend the terms of any award of restricted Unvested Class A
Units granted under this Program prospectively or retroactively; provided,
however, that no such amendment shall impair the rights of any
Participant under such Participant’s Class A Units without such
Participant’s consent.

 

6.3                                 WITHHOLDING TAXES.

 

(a)                                  To the extent that
the Company or CenterPoint is required to withhold federal, state, local or
foreign taxes in connection with any payment made or benefit realized by a
Participant or other person under this Program, and the amounts available to
the Company for the withholding are insufficient, it shall have the right to
require the Participant or the Participant’s Beneficiary to remit to the
Company or CenterPoint an amount sufficient to satisfy all federal, state and
local withholding tax requirements in connection with any payment made or
benefit realized by the Participant or the Participant’s

 

8

 

Beneficiary in connection with an award under
this Program. The Board may make mutually agreed-upon arrangements with
the Participant or the Participant’s Beneficiary for the satisfaction of such
required withholding liability, which may include, but not be limited to,
the relinquishment of any restricted Unvested Class A Unit.

 

(b)                                 If the Company or
CenterPoint is obligated to pay any amount to a governmental agency (or
otherwise makes a payment to a governmental agency) because of (A) a
Participant’s status or otherwise specifically attributable to a Participant in
his or her capacity as a Participant with respect to federal, state or local
withholding taxes imposed with respect to (i) any issuance of Class A
Units to a Participant by the Company under this Program or (ii) any
payments to a Participant or (B) a Participant’s breach of the Operating
Agreement or violation of any law, rule or regulation in his, her or its
capacity as a Participant, then the Company shall reduce the Distributions that
would otherwise be made to such Participant or if such Distributions are
insufficient to pay such obligation such Participant shall, to the fullest
extent permitted by law, indemnify the Company in full for the entire amount
paid (including, without limitation, any interest, penalties and expenses
associated with such payments).

 

6.4                                 GOVERNING LAW. The Program and all
grants and awards and actions taken thereunder shall be governed by and
construed in accordance with the internal substantive laws of the State of
Delaware.

 

6.5                                 TERMINATION. No grant will be made
under this Program more than ten (10) years after the date on which this
Program is first approved by the Board, but all grants made on or prior to such
date will continue in effect thereafter subject to the terms thereof and of
this Program.

 

6.6                                 GENERAL PROVISIONS.

 

(a)                                  No award of
restricted Unvested Class A Units may be made under this Program if
such award, and the receipt of cash thereunder, would be, in the opinion of
counsel selected by the Board, contrary to law or the regulations of any duly
constituted authority having jurisdiction over this Program.

 

(b)                                 Except as otherwise
provided in the Operating Agreement or any Evidence of Award, any action taken
hereunder shall not be construed as conferring upon any Participant any right (i) of
ownership in the Company; (ii) to participate in the management of the
business and affairs of CenterPoint (or as applicable, the Company or any of
their Subsidiaries that adopts the Program); or (iii) to vote on or
approve any matters requiring the consent or approval of the Members.

 

(c)                                  For purposes of this
Program, the continuous employment of the Participant with CenterPoint (or as
applicable, the Company or any of their Subsidiaries that adopts the Program)
shall not be deemed interrupted, and the Participant shall not be deemed to
have ceased to be employed by CenterPoint (or as applicable, the Company or any
of their Subsidiaries that adopts the Program) by
reason of the transfer of his or her employment among CenterPoint, or as applicable,
the Company or any of their Subsidiaries that adopts the Program.

 

9

 

(d)                                 Absence on leave
approved in accordance with the policies, procedures and practices of
CenterPoint (or as applicable, the Company or any of their Subsidiaries that
adopts the Program) shall not be considered interruption or termination of
service of any employee for any purposes of this Program or awards granted
hereunder, except that no awards may be granted to an employee while he or
she is absent on leave unless otherwise determined by the Board.

 

(e)                                  This Program shall be
binding upon, and shall inure to the benefit of the Company and any successor. The
Company may assign and transfer this Program, and delegate its duties hereunder,
to a Subsidiary of CenterPoint or the Company.

 

(f)                                    This Program shall
be unfunded and shall not create (or be construed to create) a trust or
separate fund.

 

(g)                                 If any provision of
the Program is or becomes invalid, illegal or unenforceable in any
jurisdiction, or would disqualify the Program or any award under any law deemed
applicable by the Board, the Board shall replace each invalid, illegal or
unenforceable provision with a valid, legal and enforceable provision which
will most nearly and equitably satisfy the economic effect of the invalid,
illegal or unenforceable provision.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

10Exhibit 10.7

 

SOLSTICE HOLDINGS LLC

RETENTION AND INCENTIVE EQUITY COMPENSATION
PROGRAM

 

RECP Award Agreement

 

 

WHEREAS, Solstice Holdings LLC, a Delaware limited liability company
(the “Company”), has established the Solstice Holdings LLC Retention and
Incentive Equity Compensation Program (the “RIECP” or the “Program”),
effective as of March 8, 2006, to assist in attracting key employees of or
on behalf of CenterPoint Properties Trust, a Maryland real estate investment
trust and a Subsidiary of the Company (“CenterPoint”), and to provide
the Grantee with long-term incentives and rewards for superior performance and
maximizing shareholder value;

 

WHEREAS, the Retention Equity Compensation Plan (the “RECP”) is
a component of the Program governing the grant of restricted Unvested Class A
Units to key employees, other than the members of the CenterPoint Management
Team;

 

WHEREAS,                             (the
“Grantee”) is an employee of CenterPoint and
has made and is expected to continue to make major contributions to the
short-term and long-term profitability, growth and financial strength of
CenterPoint;

 

WHEREAS, CenterPoint, the Company and the Grantee are parties to an
employment agreement dated March       ,
2006 (the “Employment Agreement”);

 

WHEREAS, the execution of this RECP Award Agreement in the favor of the
Grantee in the form hereof (this “Agreement”) has been authorized
by a resolution of the Board or, as authorized by the Board, the Committee that
was duly adopted effective as of
                 
(the “Date of Grant”).

 

NOW, THEREFORE, subject to the terms and conditions of the Program, the
Operating Agreement and as hereinafter set forth, the Company hereby grants to
the Grantee                     
restricted Unvested Class A Units (the “RECP Unvested Class A
Units”).

 

1.                                       Vesting
of the RECP Unvested Class A Units.

 

(a)                                  Subject to the terms
and conditions of the Operating Agreement and this Section 1, and provided
that the Grantee remains in the continuous employ of CenterPoint, the Grantee’s
RECP Unvested Class A Units awarded hereunder will be treated as Unvested Class A
Units prior to the fifth (5th) anniversary of the Effective Date, and on and
after such date, the Grantee’s RECP Unvested Class A Units will be treated
as Vested Class A Units.

 

(b)                                 Notwithstanding the
provisions of Section 1(a) hereof, upon termination of the Grantee’s
employment, the Grantee’s RECP Unvested Class A Units awarded under this
Agreement shall be subject to the vesting, forfeiture and other conditions as
specified

 

 

in the Grantee’s Employment Agreement. For
purposes of the terms and conditions of the Operating Agreement, any of the
Grantee’s RECP Unvested Class A Units that vest pursuant to the terms of
the Grantee’s Employment Agreement will be treated as Vested Class A Units
and the total number of Unvested Class A Units will be equal to zero (0). Except
as provided in this Section 1(b), all remaining RECP Unvested Class A
Units awarded hereunder shall be immediately forfeited, will not be treated as
either Vested Class A Units or Unvested Class A Units for purposes of
this Agreement or the terms and conditions of the Operating Agreement, will not
be entitled to any further payments or Distributions and will have no further
rights under the Program with respect to such RECP Unvested Class A Units.

 

(c)                                  Notwithstanding the
provisions of Section 1(a) hereof, in the event of a Change in
Control (as defined in the Grantee’s Employment Agreement) prior to termination
of the Grantee’s employment, all of the Grantee’s RECP Unvested Class A
Units awarded hereunder shall immediately vest and become nonforfeitable.

 

(d)                                 Notwithstanding any of
the provisions of Section 1 hereof and in accordance with the Program, the
Board may accelerate the vesting of the Grantee’s RECP Unvested Class A
Units awarded hereunder in connection with the termination of the Grantee’s
employment.

 

(e)                                  The Grantee’s Vested Class A
Units, if any, shall be subject to the terms and conditions of the Operating
Agreement and the put/call rights or required sale rights, as applicable, set
forth in the Grantee’s Employment Agreement.

 

2.                                       Distributions.

 

(a)                                  During Employment.
Provided that the Grantee remains in the continuous employ of CenterPoint, the
Grantee shall be eligible to receive such Grantee’s allocable share of
Distributions with respect to the RECP Unvested Class A Units awarded
hereunder, and such units that become Vested Class A Units as and when
provided for hereunder and under the Operating Agreement based on the Grantee’s
Class A Sharing Percentage.

 

(b)                                 Following
Termination of Employment. Following the termination of the Grantee’s
employment with CenterPoint for any reason, the Grantee shall be eligible to
continue to receive such Grantee’s allocable share of Distributions with
respect to the Grantee’s Vested Class A Units as and when provided under
the Operating Agreement based on the Grantee’s Class A Sharing Percentage.
The Grantee’s Vested Class A Units shall continue to be subject to the
terms and conditions of the Operating Agreement. The Grantee will not be
entitled to any further payments or Distributions with respect to any RECP
Unvested Class A Units and will have no further rights under the Program
or the Operating Agreement with respect to such RECP Unvested Class A
Units.

 

3.                                       Transferability.
Except as provided in the Operating Agreement, the Grantee’s rights under the
RECP Unvested Class A Units shall not be transferable by the Grantee
without

 

2

 

the prior Approval of the Board (or as
delegated by the Board, the Committee) and any attempted transfer without such
Approval shall be void ab initio.

 

4.                                       Operating
Agreement. The Grantee acknowledges and agrees that the RECP Unvested Class A
Units awarded hereunder, and any that become Vested Class A Units, are
subject to the terms and conditions of the Operating Agreement. The Grantee
further acknowledges and agrees that, to the extent Grantee has not already
executed the Operating Agreement or an addendum thereof, the Grantee will be
required to sign the addendum to the Operating Agreement, attached hereto as Exhibit A,
agreeing to be bound by the terms and conditions of the Operating Agreement as
a condition to receiving the RECP Unvested Class A Units awarded
hereunder.

 

5.                                       Compliance
with Law. The Company shall comply with all applicable laws and regulations
of any duly constituted authority having jurisdiction over the issuance of the
RECP Unvested Class A Units to Grantee as contemplated herein; provided,
however, that notwithstanding any other provision of this Agreement, the
Company shall not be obligated to issue any RECP Unvested Class A Units
hereunder if the issuance thereof would result in a violation of any such law
or regulation.

 

6.                                       Withholding
Taxes.

 

(a)                                  To
the extent that the Company or CenterPoint is required to withhold federal,
state, local or foreign taxes in connection with any issuance or transfer
hereunder of RECP Unvested Class A Units to the Grantee or to the Grantee’s
Beneficiary, as the case may be, it shall have the right to require the
Grantee or the Grantee’s Beneficiary to remit to CenterPoint or the Company an
amount sufficient to satisfy all federal, state and local withholding tax
requirements in connection with any payment made or benefit realized by the
Grantee or the Grantee’s Beneficiary in connection with this award. The Board may make
mutually agreed-upon arrangements with the Grantee or the Grantee’s Beneficiary
for the satisfaction of such withholding liability, which may include, but
not be limited to, the relinquishment of any RECP Unvested Class A Units.

 

(b)                                 If
the Company or CenterPoint is obligated to pay any amount to a governmental
agency (or otherwise makes a payment to a governmental agency) because of (A) the
Grantee’s status or otherwise specifically attributable to the Grantee in his
or her capacity as a Grantee with respect to federal, state or local
withholding taxes imposed with respect to (i) any issuance of Class A
Units to the Grantee by the Company under this award or (ii) any payments
to the Grantee or (B) the Grantee’s breach of the Operating Agreement or
violation of any law, rule or regulation in his, her or its capacity as a
Grantee, then the Company shall reduce the Distributions that would otherwise
be made to such Grantee or if such Distributions are insufficient to pay such
obligation such Grantee shall, to the fullest extent permitted by law,
indemnify the Company in full for the entire amount paid (including, without
limitation, any interest, penalties and expenses associated with such
payments).

 

7.                                       Continuation
of Employment. Neither this Agreement nor any action taken hereunder shall
be construed as giving the Grantee any right to continued employment with
CenterPoint, nor shall this Agreement or any action taken hereunder be
construed as entitling

 

3

 

CenterPoint to the services of the Grantee
for any period of time. For the purposes of this Agreement, the continuous
employment of the Grantee with CenterPoint shall not be deemed interrupted, and
the Grantee shall not be deemed to have ceased to be employed CenterPoint by
reason of the transfer of his employment among CenterPoint, the Company or a
Subsidiary or Affiliate of CenterPoint or of the Company which adopts the
Program.

 

8.                                       Limited
Rights. Except as otherwise provided in the Operating Agreement and the
Grantee’s Employment Agreement, the granting of RECP Unvested Class A
Units hereunder shall not confer upon the Grantee any right to participate in
the management of the business and affairs of the Company or any Subsidiary or
Affiliate of the Company. The granting of RECP Unvested Class A Units
hereunder shall confer upon the Grantee only those rights set forth in the
Operating Agreement, the Program, the Grantee’s Employment Agreement and this
Agreement.

 

9.                                       Unfunded
Plan. The Program shall be unfunded and shall not create (or be construed
to create) a trust or separate fund.

 

10.                                 Amendments.
Any amendment to the Program 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 the Grantee hereunder
under any Class A Units without the Grantee’s consent.

 

11.                                 Assignment.
This Agreement shall be binding upon, and shall inure to the benefit of the
Company and any successor. The Company may assign and transfer this
Agreement, and delegate its duties hereunder, to a Subsidiary of CenterPoint or
the Company.

 

12.                                 Severability.
In the event that one or more of the provisions of the Program or this
Agreement becomes invalid, illegal or unenforceable in any jurisdiction, or
would disqualify the Program, this Agreement or the RECP Unvested Class A
Units under any law deemed applicable by the Board, the Board shall replace
each invalid, illegal or unenforceable provision with a valid, legal and
enforceable provision which will most nearly and equitably satisfy the economic
effect of the invalid, illegal or unenforceable provision.

 

13.                                 Governing
Law. This Agreement is made in, and shall be construed in accordance with,
the laws of the State of Delaware.

 

14.                                 Agreement
Subject to Program. The RECP Unvested Class A Units granted under this
Agreement and all of the terms and conditions hereof are subject to all of the
terms and conditions of the Program. In the event of any inconsistency between
this Agreement and the Program, the terms of the Program will govern.

 

15.                                 Capitalized
Terms. Capitalized terms used herein and not otherwise defined herein have
the meanings assigned to such terms in the Program or to the extent not defined
in the Program, in the Operating Agreement.

 

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This Agreement is hereby executed by the
Company on this               
day of                     ,
20    .

 

	
   

  	
  SOLSTICE HOLDINGS LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
				

 

 

This Agreement is hereby executed by the
undersigned Grantee this                       
day of                   
20    . The Grantee hereby acknowledges receipt of an
executed original of this Agreement and accepts this award of RECP Unvested Class A
Units, subject to the terms and conditions of the Program, the Operating
Agreement and the terms and conditions set forth above. The
Grantee further acknowledges and agrees that, to the extent Grantee has not
already executed the Operating Agreement or an addendum thereof, the Grantee
will be required to sign the addendum to the Operating Agreement, attached
hereto as Exhibit A, agreeing to be bound by the terms and
conditions of the Operating Agreement as a condition to receiving the RECP
Unvested Class A Units awarded hereunder.

 

	
   

  	
   

  	
   

  
	
   

  	
  Grantee

  
	
   

  	
   

  
	
   

  	
  Date:

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