Document:

ex10_1.htm

 

Exhibit 10.1

 

CONSULTING SERVICES AGREEMENT

This Consulting Services Agreement (“Agreement”) is made and entered into this 18th day of August, 2009, by and between Maguire Properties, Inc., a Maryland corporation (the “REIT”),
Maguire Properties, L.P., a Maryland limited partnership (the “Operating Partnership,” and together with the REIT, the “Company”), and Mark T. Lammas (“Consultant”).  The Company and Consultant are sometimes collectively referred to herein as the “Parties”
and individually as a “Party.”

WHEREAS, the Company is a full service, public real estate company doing business primarily in Southern California, and the owner of a portfolio of office buildings and land held for development;

WHEREAS, Consultant is a highly experienced real estate executive and a former executive officer of the Company, with unique knowledge and expertise concerning the assets, development entitlements, business strategy and management of the Company;

WHEREAS, the Company and Consultant have concurrently entered into that certain Separation Agreement, dated as of August 18, 2009 (the “Separation Agreement”), pursuant to which Consultant’s
employment with the Company terminated effective as of September 1, 2009; and

WHEREAS, the Company and Consultant desire that Consultant provide the Company with services relating to the Company’s business and operations.

NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein, the Parties hereby agree as follows:

1.           Engagement.    The Company hereby engages Consultant, and Consultant agrees to provide certain
consulting services to the Company, in accordance with the terms of this Agreement.

2.           Consulting Period. During the period commencing on September
1, 2009 (the “Effective Date”) and ending on February 28, 2010, or such earlier date on which Consultant’s consulting relationship with the Company is terminated as provided herein (the “Consulting Period”), Consultant shall, at the Company’s request, provide consulting services to the Company as set forth in Section 3 below (the “Consulting
Services”).

3.           Services To Be Provided.  Consultant shall from time to time provide Consulting Services to the Company with regard
to the business and operations of the Company and its subsidiaries and affiliates.  Consultant shall provide the Consulting Services at the request of the Company’s Board of Directors, its Chief Executive Officer or any of their designees.  Consultant shall hold himself available at reasonable times and on reasonable notice to render the Consulting Services during the Consulting Period; provided, however, that the Consulting Services
rendered by Consultant during the 

  

  

  

Consulting Period shall not exceed 40 hours each calendar month.  Without limiting the foregoing, Consultant shall, upon the reasonable request of the persons specified above, (a) consult with the Company with respect to all matters concerning the Company in which Consultant had personal involvement during
his period of employment with the Company, (b) assist the Company in the negotiation and consummation of business matters and prospects pending at the time of his termination and thereafter, and (c) cooperate with and assist the Company in undertaking and preparing for legal and other proceedings relating to the affairs of the Company and its subsidiaries.

4.           Non-Exclusive Relationship.     The Consulting Services being provided by Consultant are on
a non-exclusive basis, and Consultant shall be entitled to perform or engage in any activity not inconsistent with or otherwise prohibited by this Agreement, the Separation Agreement or the surviving provisions of that certain Amended and Restated Employment Agreement with the Company, dated as of December 31, 2008 (the “Employment Agreement”).  Without limiting the foregoing, the Parties hereby reaffirm the covenants and provisions
set forth in Section 9 of the Employment Agreement and acknowledge and agree that the provisions of Section 9 of the Employment Agreement survived the termination of Consultant’s employment with the Company pursuant to the terms of the Separation Agreement and shall remain in full force and effect.

5.           Compensation.    The Company shall
pay Consultant the following compensation for the Consulting Services provided hereunder:

(a)           Consulting Fee.  During the Consulting Period, the Company shall pay Consultant a
monthly retainer of $20,000 for Consulting Services to be performed by Consultant (the “Consulting Fee”).  Consultant shall submit an invoice to the Company on a monthly basis not later than the 15th day following the last day of such month, reasonably detailing time expended and a description of the nature of the Consulting Services rendered; provided,
that the failure to submit such invoice shall not relieve the Company of its obligation to pay the Consulting Fee hereunder.  The Company shall pay Consultant the Consulting Fee for such services promptly, but in no event later than 30 days following the last day of the month with respect to which such services are performed.

(b)           Success Fees.  In addition to the Consulting Fee, the Company shall pay to Consultant a contingent success fee as indicated on Schedule
A hereto for the successful completion during the Consulting Period of each of the objectives set forth on Schedule A hereto (each, a “Success Fee”), provided that Consultant provided material Consulting Services with respect to such objective in accordance with Section 3 hereof; provided, however, that in
no event shall Consultant be entitled to any Success Fee with respect to any objective completed on or prior to September 7, 2009.  Schedule A may be amended or supplemented from time to time by a written instrument signed by each of the Parties.

Except as expressly provided in Section 12, subject to Consultant’s performance of Consulting Services through the successful completion of the applicable objective set forth on Schedule A, the Company shall pay Consultant the Success Fees, if any, payable 

  

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to Consultant pursuant to this Section 5(b), within 10 days following successful completion of the applicable objective(s).

(c)           Tax Obligations.  Consultant shall be responsible for the payment of all taxes owed on all amounts paid to Consultant by the Company hereunder
and shall protect the Company from any liability for the payment of any taxes of any kind with respect to the amounts paid to Consultant hereunder.

6.           Reimbursable Costs.  The Company shall reimburse
Consultant in accordance with general policies and practices of the Company for actual and reasonable expenses incurred in performing the Consulting Services (“Reimbursable Costs”), payable within 30 days of receipt of an invoice.  To the extent that any reimbursements provided to Consultant under this Section 6 are deemed to constitute compensation to Consultant, such amounts shall be paid or reimbursed reasonably promptly,
but not later than December 31 of the year following the year in which the expense was incurred.  The amount of any reimbursements that constitute compensation in one year shall not affect the amount of reimbursements constituting compensation that are eligible for payment or reimbursement in any other year, and Consultant’s right to such payments or reimbursement of any such expenses shall not be subject to liquidation or exchange for any other benefit.

7.           Duties of the Company.    The Company shall (i) grant Consultant access to records, files, employees
and consultants as reasonably required for Consultant to perform the Consulting Services contemplated herein; and (ii) pay to Consultant the amounts due to Consultant within the time periods specified herein.

8.           Duties of Consultant.   Subject to Section 3 above, Consultant shall (i) dedicate such time commitment
to the Consulting Services as is reasonably necessary to perform such Consulting Services, (ii) comply with all applicable federal, state and municipal laws and regulations required to enable Consultant to render to the Company the Consulting Services called for herein; (iii) maintain the confidentiality of all Company records, trade secrets and other confidential information to which he may have or obtain knowledge or access pursuant to this Agreement; and (iv) upon termination of the Consulting Period, return
to the Company all Company property in Consultant’s possession, including without limitation, keys, credit cards, telephone calling cards, computer hardware and software, cellular and portable telephone equipment, personal digital assistant (PDA) devices, manuals, books, notebooks, financial statements, reports and other documents.

9.           Assignment.    Neither Party shall assign any rights or delegate any obligations under this Agreement,
except as otherwise may be agreed in writing by both Parties; provided, that the Company may, without such consent, assign its rights and obligations to one or more of its affiliates.

10.         Retention of Authority.   Throughout the Consulting Period, the Company shall retain all authority and control over
the business, policies, operations and assets of the 

  

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Company.  Consultant shall not knowingly violate any rules or policies of the Company or violate any applicable law in connection with the performance of the Consulting Services.  The Company does not, by virtue of the Agreement, delegate to Consultant any of the powers, duties or responsibilities vested
in the Company by law or under the organizational documents of the Company.

 11.        Independent Consultant Status.    In performing the Consulting Services herein, the Company and Consultant
agree that Consultant shall at all times be acting solely as an independent contractor and not as an employee of the Company.  The parties acknowledge that Consultant was, prior to the Effective Date, an employee of the Company, serving as Executive Vice President, Investments of the Company, but that such employment relationship has terminated immediately prior to the effectiveness of this Agreement.  The Company and Consultant agree that Consultant will not be an employee of the Company
during the term hereof in any matter under any circumstances or for any purposes whatsoever, and that Consultant and not the Company shall have the authority to direct and control Consultant’s performance of his activities hereunder.  The Company shall not pay, on the account of Consultant or any principal, employee or contractor of Consultant, any unemployment tax or other taxes, required under the law to be paid with respect to employees; nor shall the Company withhold any monies from the fees
of Consultant for income tax purposes; nor shall the Company provide Consultant or any principal, employee or contractor of Consultant with any benefits, including pension, retirement, or any kind of insurance benefits, including workers’ compensation insurance.  Consultant and the Company hereby agree and acknowledge that this Agreement does not impose any obligation on the Company to offer employment to Consultant at any time.  Nothing contained in this Agreement shall be construed
to create a partnership or joint venture between the Company and Consultant, nor to authorize either Party to act as general or special agent of the other Party in any respect.

12.         Termination.  Either Party may terminate this Agreement and Consultant’s services hereunder at any time and for
any reason by providing at least 30 days’ prior written notice to the other Party in accordance with Section 14(i) below.  In the event of such termination, Consultant shall be entitled to receive (at the time set forth in Section 5(a)) all earned but unpaid Consulting Fees and Success Fees as of the date of termination, including a pro rata portion of such Consulting Fees for the partial month in which such termination occurs, and except as set forth in the following sentence, shall have no further
rights to payment of any consulting fees (including Success Fees) or other compensation hereunder.  Notwithstanding the foregoing, in the event of a termination of Consultant’s services by the Company without Cause (as defined below) during the Consulting Period or a termination by reason of expiration of the Consulting Period on February 28, 2010, any Success Fee that, but for such termination, would have been payable to Consultant for an objective with respect to which Consultant provided material
Consulting Services, and which is completed within 60 days following the date of such termination, shall be deemed to have been earned by Consultant upon the successful completion of such objective, and such Success Fee shall be paid to Consultant within 10 days following successful completion of such objective.  For purposes of the preceding sentence, “Cause” shall mean (i) Consultant’s willful commission of an act of
fraud or 

  

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dishonesty resulting in economic or financial injury to the Company; or (ii) Consultant’s material breach of any of his obligations under this Agreement.

13.         Indemnification.    In addition to the indemnity provided for in that certain Indemnification Agreement, dated
as of June 27, 2003, between the Company and the Executive, Company agrees to indemnify and hold harmless Consultant from and against any and all claims, demands, actions, settlements (subject to Company’s reasonable agreement) or judgments, including reasonable attorney’s fees and litigation expenses based upon or arising out of the activities described in this Agreement, where such claims, demands, actions, settlements or judgments are directly or indirectly caused by (i) the good faith actions
of Consultant within the scope of his authority under this Agreement, (ii) the gross negligence or willful misconduct of Company or its employees or (iii) the material breach of any provision hereof by the Company.  Consultant agrees to indemnify and hold harmless Company from and against any and all successful claims, demands, actions, settlements (subject to Consultant’s reasonable agreement) or judgments, including reasonable attorney’s fees and litigation expenses, based upon or arising
out of the activities described in this Agreement, where such claims, demands, actions, settlements or judgments are caused by (i) the gross negligence or willful misconduct of Consultant or (ii) Consultant’s breach of this Agreement, provided that the liability of Consultant under this Section 13 shall be limited to the amount of the Consulting Fees earned by Consultant hereunder.

14.         Miscellaneous.

(a)           Entire Agreement. This Agreement contains the entire understanding and agreement between the Parties relating to the subject matter hereof and supersedes all prior or contemporaneous
negotiations, arrangements, agreements, understandings, representations and statements, whether oral or written, with respect to that agreement, all of which are merged herein and shall be of no further force or effect.  No Party hereto shall be bound by or liable for any alleged representation, promise, inducement or statement of intention unless set forth herein or in an instrument or other writing delivered hereafter and signed by the Party to be bound thereby.  Each of the Parties acknowledges
and represents that, except as specifically set forth in this Agreement (or in the Employment Agreement or the Separation Agreement) or in an instrument or other writing delivered hereafter and signed by the Party to be bound thereby, such Party has not received any representations, warranties or promises by any person as a means of inducing it to enter into this Agreement, and further acknowledges and represents that it does not enter into this Agreement in reliance upon any oral or written representation, warranty
or promise of any person or entity that is not specifically set forth in this Agreement or in such instrument or other writing delivered hereafter and signed by the Party to be bound thereby.

   

(b)           Amendments.  No provision of this Agreement may be amended, modified or waived except by a written instrument signed by each of the Parties hereto (or, in the
case of a waiver, by the Party against whom enforcement of the waiver is sought).

 

  

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(c)           Parties in Interest.  This Agreement shall inure to the benefit of, and shall be binding upon, the Parties hereto and their respective successors
and permitted assigns.  The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.  As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.  No transfer of any interest hereunder shall be deemed to release the transferor from any of its obligations hereunder. Nothing in this Agreement is intended to confer any right or remedy under this Agreement on any person other than the Parties to this Agreement and their respective successors and permitted assigns, or to relieve or discharge any obligation or liability
of any person to any Party to this Agreement, or to give any person any right of subrogation or action over or against any Party to this Agreement or to any affiliate thereof. 

 

(d)           Choice of Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of California, without giving effect to the conflict-of-laws
rules and principles of said State.

 

(e)           Effect of Waivers and Consents.  No waiver of any default or breach by any Party hereto shall be implied from
any omission by a Party to take any action on account of such default or breach if such default or breach persists or is repeated and no express waiver shall affect any default or breach other than the default or breach specified in the express waiver, and that only for the time and to the extent therein stated.  One or more waivers of any covenant, term or condition of this Agreement by a Party shall not be construed to be a waiver of any subsequent breach of the same covenant, term or condition.  The
consent or approval by any Party shall not be deemed to waive or render unnecessary the consent to or approval of said Party of any subsequent or similar acts by a Party.

 

(f)            Counterparts.  This Agreement, and any document or instrument entered into, given or made pursuant to this
Agreement or authorized hereby, and any amendment or supplement hereto or thereto may be executed in two or more counter­parts, and by each Party on a separate counterpart, each of which, when executed and delivered, shall be an original and all of which together shall constitute one instrument, with the same force and effect as though all signatures appeared on a single document.  Any signature page of this Agreement or of such an amendment, supplement, document or instrument may be detached from
any counterpart without impairing the legal effect of any signatures thereon, and may be attached to another counterpart identical in form thereto but having attached to it one or more additional signature pages.  In proving this Agreement or any such amendment, supplement, document or instrument, it shall not be necessary to produce or account for more than one counterpart thereof signed by the Party against whom enforcement is sought.

 

  

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(g)           Attorneys’ Fees.  If any legal action or any arbitration or other proceeding is brought for the enforcement of this Agreement or any
document or instrument entered into, given or made pursuant to this Agreement or authorized hereby or thereby, or because of an alleged dispute, breach, default, or misrepresentation in connection with any of the provisions of this Agreement or of such document or instrument, the successful or prevailing Party shall be entitled to recover the attorneys’ fees, charges and other costs incurred by that Party in and in connection with that action or proceeding, in addition to any other relief to which it may
be entitled.  For purposes of this Agreement, the term “attorneys’ fees” or “attorneys’ fees and costs” shall mean the fees and expenses of counsel to the Parties hereto, which may include printing, photo­copying, duplicating and other expenses, air freight charges, and fees billed for law clerks, paralegals and other persons not admitted to the bar but performing services under the supervision of an attorney, and the costs and fees incurred in connection with
the enforcement or collection of any judgment obtained in any such proceeding.  The provisions of this paragraph shall survive the entry of any judgment, and shall not merge, or be deemed to have merged, into any judgment. 

 

(h)           Severability.  In construing this Agreement, if any portion of this Agreement shall be found to be invalid or unenforceable, the remaining terms and provisions
of this Agreement shall be given effect to the maximum extent permitted without considering the void, invalid or unenforceable provision.

 

(i)            Notices. All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other Party or by registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:

If to Consultant:  at Consultant’s most recent address on the records of the Company;

 

If to the REIT or the Operating Partnership:

 

Maguire Properties, Inc.

355 South Grand Avenue

Suite 3300

Los Angeles, CA  90071

Attn: General Counsel

with a copy to:

 

Latham & Watkins

355 South Grand Avenue

Los Angeles CA 90071-1560

Attn: David M. Taub

 

or to such other address as either party shall have furnished to the other in writing in accordance herewith.  Notice and communications shall be effective when actually received by the addressee.

 

  

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(j)            Confidentiality.  Consultant agrees that, except as otherwise set forth in this Agreement or required to enforce this Agreement or provided
by law or unless compelled by an order of a court, he shall keep the contents of this Agreement confidential and further agrees to refrain from generating or participating in any publicity statement, press release, or other public notice regarding this Agreement without the prior written consent of the Company unless required under applicable law or by a court order.  The provisions of this paragraph shall survive any termination of this Agreement. 

 

(k)           Exclusive Jurisdiction.  Subject to Section 14(m) below, each Party (i) agrees that any action arising out of or relating to this Agreement or the transaction
provided for herein shall be brought exclusively in the courts of the State of California or of the United States of America for the Southern District of California, (ii) accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of those courts, and (iii) irrevocably waives any objection, including, without limitation, any objection to the laying of venue or based on the grounds of forum non conveniens, which it
may now or hereafter have to the bringing of any action in those jurisdictions; provided, however, that any Party may assert in an action in any other jurisdiction or venue each mandatory defense, third-party claim or similar claim that, if not so asserted in such action, may thereafter not be asserted by such Party in an original action in the courts referred to in clause (i) of this paragraph.

 

(l)            Waiver of Jury Trial.  Each Party waives any right to a trial
by jury in any action to enforce or defend any right or any amendment, instrument, docu­ment or agreement delivered, or which in the future may be delivered, in connection herewith and agrees that any action shall be tried before a court and not before a jury.

 

(m)          Arbitration.  Any
disagreement, dispute, controversy or claim arising out of or relating to this Agreement or the interpretation of this Agreement or any arrangements relating to this Agreement or contemplated in this Agreement or the breach, termination or invalidity thereof shall be settled by final and binding arbitration administered by JAMS/Endispute in Los Angeles, California in accordance with the then existing JAMS/Endispute Arbitration Rules and Procedures for Employment Disputes.  In the event of such an arbitration
proceeding, Consultant and the Company shall select a mutually acceptable neutral arbitrator from among the JAMS/Endispute panel of arbitrators.  In the event Consultant and the Company cannot agree on an arbitrator, the Administrator of JAMS/Endispute will appoint an arbitrator.  Neither Consultant nor the Company nor the arbitrator shall disclose the existence, content, or results of any arbitration hereunder without the prior written consent of all parties.  Except as provided
herein, the Federal Arbitration Act shall govern the interpretation, enforcement and all proceedings.  The arbitrator shall apply the substantive law (and the law of remedies, if applicable) of the State of California, or federal law, or both, as applicable, and the arbitrator is without jurisdiction to apply any different substantive law.  The arbitrator shall have the authority to entertain a motion to dismiss and/or a motion for summary judgment by any party and shall apply the standards
governing such motions under the Federal Rules of Civil Procedure.  The arbitrator shall render an award and a written, 

 

  

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reasoned opinion in support thereof.  Judgment upon the award may be entered in any court having jurisdiction thereof.

 

(n)           Representation By Counsel.  Each of the Parties acknowledges that it or he has had the opportunity to consult with legal counsel of his choice prior to the execution
of this Agreement.  Without limiting the generality of the foregoing, Consultant acknowledges that he has had the opportunity to consult with his own independent legal counsel to review this Agreement for purposes of compliance with the requirements of Section 409A of the Code (as defined below) or an exemption therefrom, and that he is relying solely on the advice of his independent legal counsel for such purposes.

 

(o)           Code Section 409A.  The amounts payable under this Agreement are not intended to constitute “nonqualified deferred compensation” within the meaning of Section
409A of the Internal Revenue Code of 1986, as amended (the “Code”).  However, notwithstanding any provision of this Agreement to the contrary, if any such amounts payable under this Agreement are deemed to be subject to Section 409A of the Code, this Agreement shall be deemed to incorporate the terms and conditions required by Section 409A of the Code and Department of Treasury regulations promulgated thereunder.  To
the extent applicable, this Agreement shall be interpreted in accordance with Section 409A of the Code and Department of Treasury regulations and other interpretive guidance issued thereunder.  If the Company determines that any amounts payable under this Agreement may be subject to Section 409A of the Code and related Department of Treasury guidance, the Company may adopt such amendments to this Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive
effect), or take such other actions, as it deems necessary or appropriate to (i) exempt the amounts payable under this Agreement from Section 409A of the Code and/or preserve the intended tax treatment of such amounts, or (ii) comply with the requirements of Section 409A of the Code and related Department of Treasury guidance.

 

 

[Signature Page Follows] 

  

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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first set forth above.

MAGUIRE PROPERTIES, INC.

a Maryland Corporation

 

By:  /s/ Shant Koumriqian                                       

Name: Shant Koumriqian

Title    Executive Vice President &

            Chief Financial Officer

 

MAGUIRE PROPERTIES, L.P.,

a Maryland limited partnership

 

 

By:  Maguire Properties, Inc.

Its:   General Partner

 

 

By:  /s/ Shant Koumriqian                                       

Name: Shant Koumriqian

Title    Executive Vice President &

            Chief Financial Officer 

CONSULTANT

 /s/ Mark T. Lammas                                                

Mark T. Lammas

 

 

 

 

10ex10_2.htm

Exhibit 10.2

 

SEPARATION AGREEMENT

 

 

THIS SEPARATION AGREEMENT (this “Agreement”) is made and entered into as of August 18, 2009, by and between Maguire Properties, Inc., a Maryland corporation (the “REIT”), Maguire Properties,
L.P., a Maryland limited partnership (the “Operating Partnership”), and Mark T. Lammas (the “Executive”).

 

WHEREAS, the REIT, the Operating Partnership and the Executive have previously entered into that certain Amended and Restated Employment Agreement, effective as of December 31, 2008 (the “Employment Agreement”), which provides for the Executive’s employment
as Executive Vice President, Investments of the REIT and the Operating Partnership (collectively, the “Company”);

 

WHEREAS, pursuant to that certain Performance Award Agreement, dated as of April 1, 2005, by and between the REIT,
the Operating Partnership and the Executive (the “Performance Award Agreement”), the REIT granted to the Executive a Performance Award (as defined in the Performance Award Agreement) under the Amended and Restated 2003 Incentive Award Plan of Maguire Properties, Inc., Maguire Properties Services, Inc. and Maguire Properties, L.P. (as amended, the “Plan”);

 

WHEREAS, pursuant to that certain Restricted Stock Agreement, dated as of June 30, 2006, by and between the REIT, the Operating Partnership and the Executive (the “Restricted Stock Agreement”), the REIT granted to the Executive 56,867 shares of restricted common
stock of the REIT (the “Restricted Stock”) under the Plan;

 

WHEREAS, pursuant to that certain Restricted Stock Unit Award Agreement, dated as of October 2, 2008, by and between the REIT, the Operating Partnership and the Executive (the “RSU Agreement”), the REIT granted to the Executive 74,383 restricted stock units with
dividend equivalent rights (the “RSUs”) under the Plan; and

 

WHEREAS, the Executive and the Company have determined to provide for the termination of the Executive’s employment with the Company on the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the foregoing recitals, the mutual promises contained herein, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

 

	
  
	
1.
	
TERMINATION OF EMPLOYMENT AND EMPLOYMENT AGREEMENT

1.1.           Termination of Employment.  Effective as of September 1, 2009 (the “Separation Date”), the Executive’s employment
with the Company and its subsidiaries and affiliates (including, without limitation, as Executive Vice President, Investments) shall terminate and the Executive shall cease to be an employee and/or officer of any and all of the foregoing.  In addition, as of the Separation Date, the Executive hereby resigns from any and all directorships the Executive may hold with the Company or any of its subsidiaries or affiliates.

  

  

  

1.2.           Termination of Employment Agreement.  As of the Separation Date, the Employment Agreement shall automatically terminate and be of no further force and effect, and neither the Company nor the Executive
shall have any further obligations thereunder; provided, however, that the Company’s obligation to pay to the Executive the Accrued Obligations (as defined in the Employment Agreement) and the provisions of Section 2(b)(vii) (Expenses), Section 2(b)(x) (Compensation Gross-Up), Section 7 (Full Settlement), Section 8 (Certain Additional Payments by the Company), including with respect to any Excise Tax Gross-Up Payment (as defined in the Employment
Agreement), and Section 9 (Confidential Information and Non-Solicitation) of the Employment Agreement shall survive such termination of the Employment Agreement.  The parties hereby mutually agree that the amount of the Executive’s accrued but unpaid vacation pay through the Separation Date shall be equal to 240 hours of annualized pay for purposes of determining the amount of Accrued Obligations payable under Section 4(a)(i) of the Employment Agreement.

1.3.           Return of Property.  No later than the Separation Date, the Executive shall return to the Company all Company property
in his possession, including without limitation, keys, credit cards, telephone calling cards, computer hardware and software, cellular and portable telephone equipment, personal digital assistant (PDA) devices, manuals, books, notebooks, financial statements, reports and other documents.  Notwithstanding the foregoing, in connection with Executive’s role as a consultant following the Separation Date, during the consulting period the Executive may keep in his possession items of Company property
that are identified by the Company as appropriate for such role.

	
  
	
2.
	
SEVERANCE

2.1.           Severance.  Subject to Section 2.3 below, in consideration of, and subject to and conditioned upon the Executive’s execution and non-revocation of the Release (as defined below), the Operating
Partnership shall pay or provide to the Executive the following payments and benefits in accordance with Section 4(a) of the Employment Agreement:

(a)           A lump-sum cash payment in an amount equal to $1,500,000, which the parties acknowledge and agree represents the Severance Amount, within the meaning of Section 4(a)(i)(B) of the Employment Agreement; provided, that the parties further acknowledge and agree that there is
no Unpaid Bonus, within the meaning of Section 4(a)(i)(A) of the Employment Agreement, as of the Separation Date.  Subject to Section 2.3 below, payment of the Severance Amount shall be made in a single lump sum within 60 days after the date of Executive’s “separation from service” from the Company within the meaning of Section 409A(a)(2)(A)(i) of the Internal Revenue Code of 1986, as amended (the “Code”),
and Treasury Regulation Section 1.409A-1(h) (a “Separation from Service”);

 

(b)           A lump-sum cash payment in an amount equal to $402,198, which the parties acknowledge and agree represents the Pro-Rated Annual Bonus, within the meaning of 4(a)(ii) of the Employment Agreement.  Subject to Section 2.3 below, such payment shall be made in a single
lump sum within 60 days after the date of the Executive’s Separation from Service;

 

  

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(c)           Subject to Section 2.3 below, any unvested shares of Restricted Stock and any unvested RSUs shall become immediately vested in full as of the Separation Date.  The Executive acknowledges that the RSUs shall become payable in accordance with
the terms of the RSU Agreement (including, without limitation, under Section 2.3(b) thereof); 

 

(d)           During the period commencing on the Separation Date and ending on the earlier of (i) the eighteen-month anniversary of the Separation Date and (ii) the expiration of the Executive’s eligibility for benefits under Section 4980B of the Code and the regulations thereunder
(“COBRA”), the Company shall continue to provide the Executive and the Executive’s eligible family members with group health insurance coverage at least equal to that which would have been provided to them if the Executive’s employment had not been terminated, provided that the Executive properly elects continuation healthcare coverage under COBRA; provided, however, that if the Executive becomes re-employed with another
employer and is eligible to receive group health insurance coverage under another employer’s plans, the Company’s obligations under this Section 2.1(d) shall be reduced to the extent comparable coverage is actually provided to the Executive and the Executive’s eligible family members, and any such coverage shall be reported by the Executive to the Company (by way of example, if the Executive becomes re-employed but does not actually receive group health insurance coverage due to a pre-existing
condition limitation, then the Company’s obligations under this Section 2.1(d) will not be reduced); and

 

(e)           For a period of not more than one year following the Separation Date, the Company shall, at its sole expense and on an as-incurred basis, provide the Executive with reasonable outplacement services directly related to the Executive’s Separation from Service which
shall be consistent with industry practice for similarly situated executives.

 

2.2.           Performance Award.  The Executive hereby acknowledges that the Performance Award Agreement provides that in the event of a termination of the Executive’s
employment with the Company for any reason, the Executive’s right to receive payment of the Performance Award shall be forfeited to the extent that the Performance Award is not vested as of the date of termination.  The Executive further acknowledges that neither the Performance Award nor any portion thereof is vested as of the date hereof, and, to the extent that the Performance Award is not vested as of the Separation Date, all of the Executive’s right, title and interest in the Performance
Award shall thereupon be forfeited.

2.3.           Six-Month Delay.

(a)           Notwithstanding anything to the contrary in this Agreement, no payment or benefits, including without limitation the amounts payable under Section 2.1 hereof, shall be paid to the Executive during the six-month period following the Executive’s Separation from Service
if the Company determines that paying such amounts at the time or times indicated in this Agreement would be a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code.  If the payment of any such amounts is delayed as a result of the previous sentence, then on the first business day following the end of such six-month period (or such earlier date upon which such amount can be paid under Code Section 409A without resulting in a prohibited distribution, including as a result of the Executive’s
death), the Company shall pay the Executive a lump-sum 

 

  

3

  

amount equal to the cumulative amount that would have otherwise been payable to the Executive during such period.

 

(b)           The parties hereby acknowledge and agree that (i) the severance payments and benefits payable to the Executive under Section 2.1(a) and (b) above are payable on account of the Executive’s Separation from Service, (ii) the Executive is a “specified employee”
within the meaning of Section 409A(a)(2)(B)(i) of the Code, and (iii) the payment of such amounts shall not made before the date which is six months after the date of the Executive’s Separation from Service (or such earlier date upon which such amounts can be paid under Code Section 409A without resulting in a prohibited distribution, including as a result of the Executive’s death) in accordance with paragraph (a) above.

 

3.           RELEASE OF CLAIMS.  The Executive agrees that, as a condition to the Executive’s right to receive the payments and benefits
set forth in Section 2.1, within 21 days following the Separation Date, the Executive shall execute and deliver to the Company a release of claims in substantially the form attached hereto as Exhibit A (the “Release”).

4.           CONFIDENTIALITY, NON-SOLICITATION.  The parties hereby acknowledge
and agree that the Executive is bound by certain confidentiality and non-solicitation covenants set forth in Section 9 of the Employment Agreement.  Notwithstanding anything contained in this Agreement, the parties hereby reaffirm the covenants and provisions set forth in Section 9 of the Employment Agreement and acknowledge and agree that the provisions of Section 9 of the Employment Agreement shall survive the termination of the Executive’s employment with the Company and shall remain in full
force and effect.

	
  
	
5.
	
DISPUTE RESOLUTION

5.1.           Arbitration.  Except as provided in Section 9 of the Employment Agreement, any disagreement, dispute, controversy or claim arising out of or relating to this Agreement or the interpretation of this
Agreement or any arrangements relating to this Agreement or contemplated in this Agreement or the breach, termination or invalidity thereof shall be settled by final and binding arbitration administered by JAMS/Endispute in Los Angeles, California in accordance with the then existing JAMS/Endispute Arbitration Rules and Procedures for Employment Disputes.  In the event of such an arbitration proceeding, the Executive and the Company shall select a mutually acceptable neutral arbitrator from among the
JAMS/Endispute panel of arbitrators.  In the event the Executive and the Company cannot agree on an arbitrator, the Administrator of JAMS/Endispute will appoint an arbitrator.  Neither the Executive nor the Company nor the arbitrator shall disclose the existence, content, or results of any arbitration hereunder without the prior written consent of all parties.  Except as provided herein, the Federal Arbitration Act shall govern the interpretation, enforcement and all proceedings.  The
arbitrator shall apply the substantive law (and the law of remedies, if applicable) of the state of California, or federal law, or both, as applicable, and the arbitrator is without jurisdiction to apply any different substantive law.  The arbitrator shall have the authority to entertain a motion to dismiss and/or a motion for summary judgment by any party and shall apply the standards governing such motions under the Federal Rules of Civil Procedure.  The arbitrator shall render an award
and a written, reasoned opinion in support thereof.  Judgment upon the award may be entered in any court having jurisdiction thereof.

  

4

  

5.2.           Waiver of Jury Trial.   By submitting a dispute to arbitration, the parties hereto understand that they will not enjoy the benefits of a jury trial.  Accordingly, the parties hereto
expressly waive the right to a jury trial.

5.3.           Nonexclusive Remedy.  Notwithstanding the above provisions regarding arbitration, the parties each retain their respective rights to seek injunctive relief or other provisional remedies provided
under the law in any court having competent jurisdiction.

	
  
	
6.
	
MISCELLANEOUS

6.1.           Code Section 409A.  Certain compensation and benefits under this Agreement are intended to be exempt from the application of Code Section 409A, while other payments hereunder may constitute “nonqualified
deferred compensation” within the meaning of Section 409A, the payment of which is intended to comply with Section 409A.  To the extent applicable, this Agreement shall be interpreted in accordance with Code Section 409A and Department of Treasury regulations and other interpretive guidance issued thereunder.  Notwithstanding any provision of this Agreement to the contrary, if the Company determines that any such compensation or benefits payable under this Agreement may be subject to
Code Section 409A and related Department of Treasury guidance, the Company may, with the Executive’s prior written consent, adopt such amendments to this Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Company determines are necessary or appropriate to (i) exempt the compensation and benefits payable under this Agreement from Code Section 409A and/or preserve the intended tax treatment of such compensation
and benefits, or (ii) comply with the requirements of Code Section 409A and related Department of Treasury guidance.

6.2.           Withholding.  The Company may withhold from any amounts payable or benefits provided under this Agreement such Federal, state, local or foreign taxes as shall be required to be withheld pursuant
to any applicable law or regulation.

6.3.           Severability.  In construing this Agreement, if any portion of this Agreement shall be found to be invalid or unenforceable, the remaining terms and provisions of this Agreement shall be given effect
to the maximum extent permitted without considering the void, invalid or unenforceable provision.

6.4.           Successors.  This Agreement is personal to the Executive and without the prior written consent of the Company shall not be assignable by the Executive otherwise than by will or the laws of descent
and distribution; provided, however, that this Agreement shall be binding upon and inure to the benefit of and be enforceable by the Executive’s estate, heirs, beneficiaries, executors, and legal representatives, and the Executive may designate one or more beneficiaries with respect to the Executive’s rights under this Agreement upon the Executive’s death.  This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns.  The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume and agree to perform this Agreement in the same manner and 

  

5

  

to the same extent that the Company would be required to perform it if no such succession had taken place.  As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.

6.5.           Final and Entire Agreement; Amendment.  This Agreement, together with the Release, represents the final and entire agreement among the parties with respect to the subject matter hereof and supersedes
all prior agreements, negotiations and discussions between the parties hereto and/or their respective counsel with respect to the subject matter hereof; provided, however, that notwithstanding the foregoing, this Agreement shall not supersede or otherwise affect that certain Indemnification Agreement, dated as of June 27, 2003, between the Company and the Executive which shall remain in full force and effect.  Any amendment to this Agreement must
be in writing, signed by duly authorized representatives of the parties, and stating the intent of the parties to amend this Agreement.

6.6.           Consultation with Counsel.  The Executive acknowledges that (a) the Executive has consulted with or has had the opportunity to consult with independent counsel of the Executive’s own choice
concerning this Agreement and has been advised to do so by the Company, and (b) the Executive has read and understands the Agreement, is fully aware of its legal effect, and has entered into it freely based on the Executive’s own judgment.  Without limiting the generality of the foregoing, the Executive acknowledges that he has had the opportunity to consult with his own independent legal counsel to review this Agreement for purposes of compliance with the requirements of Code Section 409A or
an exemption therefrom, and that he is relying solely on the advice of his independent legal counsel for such purposes.

6.7.           Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of California, without reference to principles of conflict of laws that would result in
the application of any law other than that of the State of California.

6.8.           Cooperation in Legal Proceedings.  The Executive agrees that, after the Separation Date, upon the reasonable request of the Company, the Executive shall cooperate with and assist the Company in undertaking
and preparing for legal and other proceedings relating to the affairs of the Company and its subsidiaries.  The Executive shall be reimbursed for the reasonable expenses the Executive incurs in connection with any such cooperation and/or assistance, and shall receive from the Company reasonable per diem compensation (to be mutually agreed to by the Executive and the Company) in connection therewith.  Any such reimbursements and per
diem compensation shall be paid to the Executive no later than the 15th day of the month immediately following the month in which such expenses were incurred or such cooperation and/or assistance was provided (subject to the Executive’s timely submission to the Company of proper documentation with respect thereto).

6.9.           Non-Disparagement.  The Executive agrees that the Executive will not make any statement, publicly or privately, which would reasonably be expected to disparage the REIT, the Operating Partnership,
any of their subsidiaries or any of their respective employees, officers or directors.  The REIT and the Operating Partnership agree that they will not make any statement, publicly or privately, which would reasonably be expected to disparage the Executive. 

  

6

  

Notwithstanding the foregoing, this Section 6.9 shall not preclude the Executive or the Company from making any statement to the extent required by law or legal process.

6.10.           Notices.  All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:

If to the Executive:  at the Executive’s most recent address on the records of the Company;

 

If to the REIT or the Operating Partnership:

 

Maguire Properties, Inc.

355 South Grand Avenue

Suite 3300

Los Angeles, CA  90071

Attn: General Counsel

with a copy to:

 

Latham & Watkins

355 South Grand Avenue

Los Angeles, CA  90071-1560

Attn: David M. Taub

 

or to such other address as either party shall have furnished to the other in writing in accordance herewith.  Notice and communications shall be effective when actually received by the addressee.

 

6.11.           Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be an original, but all of which taken together shall constitute one instrument.

 

[Signature Page Follows]

 

  

7

  

IN WITNESS WHEREOF, the parties hereto have each executed this Agreement as of the date first above written. 

 

EXECUTIVE

 /s/ Mark T. Lammas                                               

Mark T. Lammas

 

MAGUIRE PROPERTIES, INC.,

a Maryland corporation

 

 

By:   /s/ Shant Koumriqian                                   

Name: Shant Koumriqian

Title:   Executive Vice President, Chief Financial

            Officer

 

 

MAGUIRE PROPERTIES, L.P.,

a Maryland limited partnership

 

By:  Maguire Properties, Inc.

Its:   General Partner

 

 

By:   /s/ Shant Koumriqian                                   

Name: Shant Koumriqian

Title:   Executive Vice President, Chief Financial

            Officer

 

 

S-1

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