Document:

exhibittentwo.htm

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”) between Grow Condos, Inc. (Grow Condos), along with its successors and/or assigns, (the “Company”) and Joann Z Cleckner (the “Employee”) is entered into and dated as of November 1, 2015 (the “Effective Date”).

A.    Employee currently serves as Chief Financial Officer of the Company.

B.    The Company and Employee desire to establish the terms and conditions of Employee’s employment with the Company and the compensation and benefits (if any) to be paid to Employee if his employment with the Company is terminated.

NOW, THEREFORE, in consideration of the foregoing and the mutual promises and covenants contained herein, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1.Employment. During the term of this Agreement, the Company shall employ Employee as Chief Financial Officer (CFO). Employee shall have such authority, responsibilities and duties as may from time to time be assigned by the Board of Directors and/or the Chief Executive Officer (CEO) of the Company. Employee agrees to serve the Company faithfully and to the best of Employee’s ability, and to devote Employee’s full business time, attention and efforts to the business and affairs of the Company. Employee will perform all of his responsibilities in compliance with all applicable laws and regulations, and he will endeavor to ensure that all Company operations comply with all applicable laws and regulations. Further, Employee will comply with all rules, policies and procedures of the Company as modified from time to time.

2.Compensation.

(A)Base Salary. During the term of this Agreement, the Company shall pay Employee a base salary at the annual rate of $150,000. The Company shall pay the annual base salary in equal pro rata installments on the Company’s regular payroll dates. The Company shall also withhold and deduct from such installment payments such amounts as are required under federal, state and local law to be withheld for income tax or Social Security withholding purposes.

(B)Benefits. Employee may participate in all benefit plans, retirement plans and fringe benefits which may be available from time to time to employees of Employee’s level of employment in accordance with the Company’s policies. Employee shall be entitled to up to four weeks of non-accountable vacation per year. Non-accountable means no amounts shall be accrued, no amounts shall be carried over and no amounts shall be due Employee upon termination of employment. Employee’s participation in such benefits shall be subject to the terms of the applicable plans, as the same may be amended from time to time. The Company does not guarantee the adoption or continuance of any particular employee benefit during Employee’s employment, and nothing in this Agreement is intended to or shall in any way restrict the right of the Company to amend, modify or terminate any of its benefits during the term of this Agreement or Employee’s employment with the Company.

  

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(C)Incentive Compensation. Based on the Company’s successful financial performance and/or other applicable criteria, Employee shall be eligible to be paid an annual bonus as determined by the Board of Directors in its sole discretion.

(D)Stock Options. On December 18, 2014, the Company granted to Employee options to purchase up to 50,000 shares of the Company’s common stock, subject to the terms and conditions set forth in the Company’s Stock Option Plan. The options shall vest as follows: 16,667 options shall vest on December 18, 2015, 16,667 options shall vest on December 18, 2016, and 16,667 options shall vest on December 18, 2017, provided that Employee remains employed with the Company under this Agreement on the foregoing vesting dates.

                         (E)Other. Employee shall be paid a $600 monthly car allowance. In addition, the Company shall reimburse Employee’s reasonable monthly cell phone charges.

3.Term. The term of this Agreement shall begin on the Effective Date and end on April 26, 2019, unless earlier terminated pursuant to Section 4.

4.Termination.

(A)Termination by the Company for Cause. The Company may terminate this Agreement for Cause effective immediately upon notice to Employee of such termination. “Cause” means (i) material willful failure by Employee to meet objectives set by the Board of Directors and/or the CEO of the Company, (ii) material willful failure by Employee to perform Employee’s duties under this Agreement or comply with the directions of the Board of Directors or the CEO of the Company, (iii) malfeasance or gross negligence in the performance of Employee’s duties under this Agreement, (iv) Employee’s commission of (a) a felony, (b) material unethical business practice on the part of Employee in connection with the affairs of the Company or (c) a material breach of any of the provisions of this Agreement. Upon termination of this Agreement for Cause pursuant to this Section 4(A), the Company’s obligation to pay any amount to Employee, including but not limited to any base salary, incentive compensation, or any amount payable under any benefit plan or otherwise, shall immediately cease and the Company shall have no further obligation to Employee.

(B)Termination by the Company without Cause. The Company may terminate this Agreement without Cause, effective immediately upon notice to Employee. In the event of termination of this Agreement by the Company without Cause, and provided that Employee executes a general release of all claims in a form acceptable to the Company, the Company shall pay Employee severance compensation in the form of continuing payment of Employee’s base salary for a period of twelve (12) months following the date of termination or until Employee enters into an employment, consulting, or other business arrangement or relationship with another person/entity, whichever date is earlier. Employee understands and agrees that his receipt of severance compensation pursuant to this paragraph is expressly conditioned on his execution of a full and complete general release of claims in a form acceptable to Company. If Employee does not sign such a general release of claims, Employee shall not be entitled to receive any further compensation under the provisions of this Agreement after the date of termination. Any severance payment made under this Agreement will be paid according to Company’s normal payroll schedule and policies, except that the first payment (which will include all payments deferred pursuant to this clause) will be made on the 60th day following termination of this Agreement, provided that Employee executes and does not revoke the general release of claims and all rescission periods have expired by such 60th day.

  

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(C)Termination upon Death or Disability. This Agreement shall terminate immediately upon Employee’s death or disability. For purposes of this Agreement, “Disability” means Employee’s inability to perform the essential functions, duties and responsibilities contemplated under this Agreement, with or without reasonable accommodation, for a period of more than one-hundred-eighty (180) consecutive days due to any physical or mental incapacity or impairment.

(D)Termination by Employee. Employee may terminate this Agreement by providing the Company with ninety (90) days advance written notice of his intention to terminate the Agreement and his employment with the Company.

(E)Termination by Mutual Agreement. The Company and Employee may terminate this Agreement at any time by mutual, written consent.

(F)Effect of Termination. Except in the case of possible severance compensation upon termination by the Company without Cause (as set forth in Section 4(B)), or termination after a Change of Control (as set forth in Section 5), in the event that Employee’s employment with the Company is terminated,

Employee shall be entitled only to such compensation, expense reimbursement, allowance or other remuneration as is due and owing to Employee as of the date of termination. Without limiting the foregoing, Employee shall not be entitled to any compensation for accrued but unused vacation or other paid time off upon the termination of employment with the Company.

(G)Return of Company Property. Upon termination of Employee’s employment with the Company for any reason, Employee shall deliver promptly to the Company all property of the Company in Employee’s possession, custody or control including, without limitation: keys and/or access cards; clothing; computer or system passwords; vehicles; computers and other electronic devices, including cellular telephones; and the originals or any copies of files, records and/or documents concerning or relating to the Company, whether maintained in hard copy or electronic form, and whether maintained in their original state, in abstract or summary form, including any such materials or data addressing, identifying or reflecting the Company’s business plans or strategies, marketing plans or strategies, customers, financial condition and/or performance, sales strategies or techniques, or other confidential, proprietary and/or trade secret information of the Company. Employee agrees that he will not retain, use or provide to others a copy of any Company Confidential Information or other property in any form, including electronic, abstract, or summary form, at any time following the termination of Employee’s employment with the Company.

  

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5.Termination After Change of Control.

(A)Effect of Termination after Change of Control. Notwithstanding the provisions of Section 4, if a Change of Control of the Company occurs during the term of this Agreement and within twelve (12) months after the occurrence of the Change of Control Employee’s employment is terminated (i) by the Company, other than for Cause or by reason of Employee’s Death or Disability, or (ii) by Employee for Good Reason, Employee will be entitled to the benefits provided below:

(i)The Company shall promptly pay Employee all compensation and all expense reimbursement, allowance or other remuneration as is due and owing to Employee as of the date of termination.

(ii)The Company shall pay Employee a severance payment in an amount up to two times Employee’s then current annual base salary, which amount shall be payable as follows (except as provided in Section 10(B)): (a) the Company shall pay Employee an amount equal to Employee’s annual base salary in a single lump sum within 60 days after the date of termination, and (b) the Company shall continue to pay Employee an amount equal to Employee’s base salary according to the Company’s normal payroll schedule and policies for a period of twelve (12) months following the date of termination or until Employee enters into an employment, consulting, or other business arrangement or relationship with another person/entity, whichever date is earlier.

(iii)All unvested stock options to purchase capital stock of the Company then held by Employee shall immediately vest in full and shall be exercisable by Employee for a period of 90 days after the date of termination.

(iv)Employee shall be entitled to receive all benefits payable to Employee under any of the Company’s pension, life insurance, medical, health and accident, disability, deferred compensation, or savings plans in which Employee was participating immediately prior to the Change of Control, which shall be in addition to, and not reduced by, any other amounts payable to Employee under this Section 5.

(B)Definition of Change of Control. For purposes of this Agreement, a “Change of Control” of the Company shall mean any of the following,

  

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(i)The purchase or other acquisition by any one person, or more than one person acting as a group, of stock of the Company that, together with stock held by such person or group, constitutes more than 50% of the total combined value or total combined voting power of all classes of stock issued by the Company; provided, however, that if any one person or more than one person acting as a group is considered to own more than 50% of the total combined value or total combined voting power of such stock, the acquisition of additional stock by the same person or persons shall not be considered a Change of Control;

(ii)A merger, consolidation, reorganization or similar transaction occurs in which the stockholders of the Company prior to such transaction do not continue to hold, following such transaction, a majority of the voting power of the capital stock of the surviving corporation or entity;

(iii)The sale, lease, exchange or other transfer (in one transaction or a series of transactions) of all or substantially all of the assets of the Company; or

(iv)Individuals who constitute the Board of Directors of the Company as of the Effective Date of this Agreement (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the Effective Date whose election was approved by a vote of at least a majority of the directors comprising the Incumbent Board (or directors elected by the process set forth in this clause (iv)), shall be, for purposes of this clause (iv), considered as though he or she were a member of the Incumbent Board.

In all cases, the determination of whether a Change of Control has occurred shall be made in accordance with Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations, notices and other guidance of general applicability issued thereunder.

(C)Definition of Good Reason. For purposes of this Agreement, “Good Reason” shall mean the occurrence of any of the following without the consent of Employee:

(i)A material diminution in Employee’s Base Salary;

(ii)A material diminution in Employee’s authority, duties, or responsibilities, which would cause Employee’s position to become one of lesser responsibility, importance, or scope;

(iii)The relocation of Employee’s principal place of employment to a location more than 50 miles from Employee’s principal place of employment immediately prior to the Change of Control; or

(iv)The Company’s material breach of any provision of this Agreement;

  

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provided, that in no event shall Employee have Good Reason to terminate employment unless Employee has given written notice to the Company of the event or circumstance constituting Good Reason within ninety (90) days of the first occurrence of such event or circumstance and the Company has failed to cure such the event or circumstance within 30 days after such notice has been delivered to the Company, and provided, further, that the Employee’s date of termination shall be no later than the date that is one year following the date of the first occurrence of an event or circumstance constituting Good Reason.

In all cases, the determination of whether Good Reason exists shall be made in accordance with Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations, notices and other guidance of general applicability issued thereunder.

6.Confidential Information.

(A)Definition of Confidential Information. Employee understands and agrees that as an employee of the Company, Employee will receive, have access to, or contribute various proprietary, confidential, and/or trade secret information concerning the Company, its business operations, affairs, strategies, and clients, including, without limitation: trade secrets; customer lists, records and other information regarding customers (whether or not evidenced in writing); information regarding actual or prospective customer needs or preferences; price lists and pricing policies, financial plans, projections, records, ledgers and information; vendor profiles; purchase orders, agreements and related data; business development plans; sales, marketing and/or advertising plans or strategies; merchandising plans and strategies; research and development plans; employment records, data and policies, including information regarding the skills and abilities of Company personnel; tax or financial information; business and sales methods and operations; billing practices; business correspondence, memoranda and other records; inventions, improvements and discoveries; processes and methods; and business operations and related data formulae; computer records and related data; software code, know-how, research and development; trademark, technology, technical information, and copyrighted material; plans, designs, and related know-how; and any other confidential or proprietary data and information which Employee encounters during employment with the Company, whether in written, electronic or other form (collectively referred to hereafter as “Confidential Information”).

(B)Non-Disclosure; Non-Use. Employee agrees that at all times during the period of Employee’s employment and after the termination thereof for any reason whatsoever, Employee will hold in the strictest confidence, will keep secret, and will not disclose, use, or publish any of the Company’s Confidential Information, except as such disclosure, use or publication may be required in connection with Employee’s work for the Company. Employee hereby assigns to the Company any rights Employee may have or acquire in the Confidential Information and agrees that all of the Confidential Information is and shall be the sole property of the Company and its successors and assigns. Employee acknowledges and agrees that the Company’s Confidential Information constitutes a unique and valuable asset of the Company and represents a substantial investment of time and expense by the Company, and that any disclosure or other use of such knowledge or information other than for the sole benefit of the Company would be wrongful and would cause irreparable harm to the Company. Employee further understands and agrees that the confidentiality obligations set forth in this Article are continuing in nature, survive the termination of this Agreement or Employee’s employment, and restrict Employee’s activities following the termination of this Agreement or Employee’s employment.

  

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(C)Return of Confidential Information. When Employee’s employment with the Company comes to an end for any reason, or at any other time the Company so requests, Employee will give or return to the Company all records and any compositions, articles, devices, equipment, software, programs, and other items that disclose or contain Confidential Information or any summary, abstract or derivation thereof. This includes all copies or specimens in Employee’s possession, whether prepared or made by others or Employee. Employee shall acknowledge in writing the return of all such materials, when requested to do so by the Company. Employee shall also refrain from accessing Company’s files via computer or modem when so requested by the Company.

7.Employee Non-Solicitation Agreement. Employee understands and agrees that the Company’s workforce constitutes an important and vital aspect of its business. Employee agrees that during the term of his employment by the Company, and for a period twenty-four (24) consecutive months from the date of termination of such employment for whatever reason (whether occasioned by Employee or Company), Employee shall not, directly or indirectly, on behalf of himself or any person, firm, corporation, association or other entity, (a) solicit, or assist anyone else in the solicitation of, any of the Company’s then-current employees to terminate their employment with the Company; (b) hire or engage any of the Company’s then-current employees; or (c) otherwise encourage or induce any of the Company’s then-current employees to terminate their employment with the Company.

8.Obligations to Third Parties. Employee hereby confirms, represents and warrants that Employee is under no contractual or other legal commitments to any other person or entity that would restrict or prevent Employee’s performance of duties for the Company. Employee shall provide the Company with copies of any previous employment agreements or contracts with any of Employee’s prior employers, or confirm that he is not subject to any agreements with any other employers. If Employee possesses any proprietary information of another person or entity as a result of prior employment or relationship, Employee shall honor any legal obligation that Employee has with that person or entity with respect to such proprietary information and Employee shall not use or disseminate any such proprietary information at any time during his employment with the Company.

9.Knowing, Voluntary Agreement. Employee hereby acknowledges and states that he has read this Agreement fully and carefully; that the Agreement is written in language that is understandable to him, and that he fully appreciates the meaning of its terms; and that he enters into this Agreement freely and voluntarily. Employee has sought, or has had the opportunity to seek, independent legal counsel of Employee’s choice to the extent Employee deemed such advice necessary in connection with the review and execution of this Agreement.

  

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10.Code Section 409A.

(A)Compliance with Code Section 409A. It is intended that any amounts payable under this Agreement shall be exempt from or comply with the applicable requirements, if any, of Section 409A of the Internal Revenue Code of 1986, as amended, and the notices, regulations and other guidance of general applicability issued thereunder (“Code Section 409A”), and this Agreement will be interpreted in a manner that will preclude the imposition of additional taxes and interest imposed under Code Section 409A. The Agreement will be amended (as determined by the Company) to the extent necessary to comply with Code Section 409A. In all cases, for purposes of compliance with Code Section 409A, “termination of employment” shall have the same meaning as “separation from service” as defined in Code Section 409A.

(B)Payments Subject to Code Section 409A. If any of the payments described in this Agreement are subject to the requirements of Code Section 409A and the Company determines that Employee is a “specified employee” as defined in Code Section 409A as of the date of Employee’s termination of employment, then, to the extent required for compliance with Code Section 409A, all or a portion of such payments will not be paid or commence until the earliest of (i) the expiration of the six-month period measured from the date of Employee’s termination of employment with the Company, (ii) the date of Employee’s death or (iii) such earlier date as permitted under Code Section 409A. Upon the first business day following the expiration of the applicable period, all payments deferred pursuant to this paragraph shall be paid in a lump sum to Employee, and any remaining payments due shall be paid as otherwise provided herein or in the applicable agreement. No interest shall be due on any amounts so delayed.

11.General.

(A)Assignment. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns, except that neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned by Employee without the prior written consent of the Company.

(B)Severability. If any provision of this Agreement is determined to be prohibited by or unenforceable or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

(C)Entire Agreement. This Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes any prior understandings, agreements or representations by or between the parties.

  

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(D)No Waiver. No term or condition of this Agreement shall be deemed to have been waived except by a statement in writing signed by the party against whom enforcement of the waiver or estoppel is sought.

(E)Governing Law. The validity, interpretation, performance and enforcement of this Agreement shall be governed by the laws of the State of Oregon, without regard to conflicts of laws principles thereof.

(F)Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall be deemed one agreement.

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

	
GROW CONDOS, INC.

	
By: ____________________________

	
Date: ____________

Wayne A. Zallen

Chief Executive Officer

	
________________________________

	
Date: ____________

	
Joann Z. Cleckner

 

  

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Exhibit 10.1

FORM OF RESTRICTED SHARE AWARD AGREEMENT 

THIS RESTRICTED SHARE AWARD AGREEMENT (this “Agreement”), made as __________, 201___, is by and between Hines Global REIT, Inc., a Maryland corporation (the “Company”), and ___________ , an independent director of the Company (the “Director”).

WHEREAS, the Board of Directors of the Company (the “Board”) has determined that the Director and each of the Company’s other independent directors, as of the date of each annual meeting of the Company’s stockholders at which the director is re-elected to serve as an independent director of the Company, commencing with the September 2015 annual meeting of the Company’s stockholders (the “2015 Annual Meeting”), will automatically be granted shares of the Company’s common stock, par value $.001 per share (“Common Stock”) as set forth below; and

WHEREAS, such shares of Common Stock are subject to certain vesting and transfer restrictions as set forth herein.

NOW, THEREFORE, the Company and the Director agree as follows:

1. Grant of Shares. Subject to the terms, conditions and restrictions of this Agreement, as of each of (i) September 17, 2015, the date of the initial grant (the “Initial Grant Date”), and (ii) the date of each annual meeting of the Company’s stockholders thereafter at which the Director is elected as an independent director of the Company (each an “Annual Grant Date”, and together with the Initial Grant Date, each a “Grant Date”), the Director was or will be, as applicable, automatically granted $50,000 in shares of duly authorized, validly issued, fully paid and non-assessable Common Stock (the “Shares”). The number of Shares to be granted shall be determined by dividing $50,000 by the net asset value per share of the Company’s common stock that was most recently disclosed by the Company on or before the applicable Grant Date.  Pursuant to Sections 2 and 3 of this Agreement, the Shares are subject to certain restrictions, which restrictions and possible risk of forfeiture will expire in accordance with the provisions of Sections 2, 3 and 4 hereof. During the period that Shares remain subject to any of the restrictions under this Agreement, the Shares will be referred to herein as “Restricted Shares”. 
2. Restrictions on Transfer. The Director shall not sell, assign, transfer, pledge, exchange, encumber, hypothecate or otherwise dispose of the Restricted Shares, at any time during the period (the “Non-Assignment Period”) that begins on the applicable Grant Date for the Restricted Shares and ends on the earlier of (i) the second anniversary of the Grant Date applicable to the Restricted Shares, and (ii) the date on which Director’s Continuous Service (as defined in Appendix A) terminates by reason of the Director’s death or Disability (as defined in Appendix A). Any attempted sale, assignment, transfer, pledge, exchange, encumbrance, hypothecation or other disposition of the Restricted Shares at any time during the Non-Assignment Period or otherwise in violation of this Agreement shall be void and of no effect and the Company shall have the right to disregard the same on its books and records and to issue “stop transfer” instructions to its transfer agent.
3. Vesting. Subject to the terms of this Agreement, the Restricted Shares shall vest and become non-forfeitable as follows (but the Shares shall remain subject to the restrictions under Section 2 hereof until the last day of the Non-Assignment Period):

(a) One hundred percent (100%) upon the first anniversary of the applicable Grant Date (i.e., upon the first anniversary of the Initial Grant Date with respect to the Restricted Shares granted on the Initial Grant Date and upon the first anniversaries of each applicable Annual Grant Date for any Restricted Shares granted to the Director on the date of an annual meeting of the Company’s stockholders), subject in each case to the Director remaining in Continuous Service through and until such vesting date.

(b) One hundred percent (100%) upon a termination of the Director’s Continuous Service (as defined on Appendix A) by reason of the Director’s death or Disability (as defined in Appendix A);

(c) One hundred percent (100%) on the effective date of the consummation of a Change in Control (as defined in Appendix A), subject to the Director’s remaining in Continuous Service (as defined in Appendix A) through and until such vesting date.

(d) There shall be no proportionate or partial vesting in the periods prior to the applicable vesting dates and all vesting will occur only on the appropriate vesting date.

4. Forfeiture. If the Director’s Continuous Service (as defined in Appendix A) terminates for any reason, the Director shall automatically forfeit any Restricted Shares that have not previously vested on or before the termination of Continuous Service and that do not become vested pursuant to Sections 3(b) or (c) by reason of such termination of Continuous Service, and the Company shall reacquire and cancel such forfeited Restricted Shares for no consideration.  In addition, the Company may, in its discretion require that the Director repay to the Company the amount of any cash or other distributions received by the Director with respect to any Restricted Shares that are so forfeited.

5. Rights as a Holder of Restricted Shares. From and after the Grant Date, the Director shall have, with respect to the Restricted Shares, all of the rights of a holder of shares of Common Stock, including, without limitation, the right to vote the Shares, to receive and, except as otherwise provided in Section 4 hereof, retain all regular cash distributions payable to holders of Shares of record on and after the Grant Date (although such distributions will be treated, to the extent required by applicable law, as additional compensation for tax purposes), and to exercise all other rights, powers and privileges of a holder of Shares with respect to the Restricted Shares, with the exception that: (i) to the extent the Company issues a dividend in the form other than a cash distribution, including in the form of Shares or other property, such dividend will be subject to the same restrictions that are then applicable to the Restricted Shares and this Agreement and such restrictions will expire at the same time as the restrictions on the Restricted Shares expire; and (ii) the Director may not sell, assign, transfer, pledge, exchange, encumber, hypothecate or otherwise dispose of the Restricted Shares during the Non-Assignment Period. 

6. Taxes; Section 83(b) Election Shall Not Be Made; No Guaranty of Section 409A Compliance. 
(a) The Director shall be solely responsible for all applicable foreign, Federal, state, local or other taxes with respect to the Restricted Shares; provided, however, that at any time the Company is required to withhold any such taxes, the Director acknowledges that (i) no later than the date on which any Restricted Shares will have become vested, the Director shall pay to the Company, or make arrangements satisfactory to the Company regarding payment of, any Federal, state, local or other taxes of any kind required by law to be withheld with respect to any Restricted Shares which will have become so vested; (ii) the Company shall, to the extent permitted by law, have the right to deduct from any payment of any kind otherwise due to the Director any Federal, state or local or other taxes of any kind required by law to be withheld with respect to any Restricted Shares which will have become so vested, including that the Company may, but shall not be required to, sell a number of Restricted Shares sufficient to cover applicable withholding taxes; and (iii) in the event that the Director does not satisfy (i) above on a timely basis, the Company may, but shall not be required to, pay such required withholding and, to the extent permitted by applicable law, treat such amount as a demand loan to the Director at the maximum rate permitted by law, with such loan, at the Company’s sole discretion and provided the Company so notifies the Director within thirty (30) days of the making of the loan, secured by the Restricted Shares and any failure by the Director to pay the loan upon demand will entitle the Company to all of the rights at law of a creditor secured by the Restricted Shares. The Company may hold as security any certificates representing any Restricted Shares and, upon demand of the Company, the Director shall deliver to the Company any certificates in his or her possession representing the Restricted Shares together with a stock power duly endorsed in blank. 

(b) As a condition to each grant of Restricted Shares pursuant to this Agreement, the Director covenants and agrees that the Director shall not make an election under Section 83(b) of the Code, or any corresponding provisions of state tax laws, to be taxed on the value of the Restricted Shares on the Grant Date, and if the Director, attempts to make any such election, the Company, in its sole discretion, may revoke and cancel the award of the Restricted Shares for no consideration. 

(c) Although the Company makes no guarantee with respect to the tax treatment of the Restricted Shares, the award of Restricted Shares pursuant to this Agreement is intended to be exempt from Section 409A of the Code and will be limited, construed and interpreted in accordance with such intent. With respect to any distributions and other property issued in respect of the Shares, however, this Agreement is intended to comply with, or to be exempt from, the applicable requirements of Section 409A of the Code and will be limited, construed and interpreted in accordance with such intent. In no event whatsoever will the Company or any of its affiliates be liable for any additional tax, interest or penalties that may be imposed on the Director by Section 409A of the Code or any damages for failing to comply with Section 409A of the Code.

7. No Obligation to Continue Service. This Agreement is not an agreement of employment or service. Neither the execution of this Agreement nor the issuance of the Restricted Shares hereunder constitute an agreement by the Company to employ or retain, or to continue to retain, the Director during the entire, or any portion of, the term of this Agreement, including, but not limited to, any period during which any Restricted Shares are outstanding, nor does it modify in any respect the Board’s right to modify the Director’s compensation and the right of the Company’s stockholders to terminate the Director’s service on the board.

8. Legend. In the event that a certificate evidencing the Restricted Shares is issued, the certificate representing the Restricted Shares will have endorsed thereon the following legends:

(a) “THE ANTICIPATION, ALIENATION, ATTACHMENT, SALE, TRANSFER, ASSIGNMENT, PLEDGE, ENCUMBRANCE OR CHARGE OF THE SHARES OF STOCK REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS (INCLUDING FORFEITURE) OF AN AGREEMENT ENTERED INTO BETWEEN THE REGISTERED OWNER AND HINES GLOBAL REIT, INC. (THE “COMPANY”) DATED AS OF ______________, 201__.  A COPY OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY.”

(b) Any legend required to be placed thereon by applicable blue sky laws of any state.

Notwithstanding the foregoing, in no event will the Company be obligated to issue a certificate representing the Restricted Shares prior to vesting as set forth in Section 3 hereof.

9. Securities Representations. The Shares are being issued to the Director and this Agreement is being made by the Company in reliance upon the following express representations and warranties of the Director.

The Director acknowledges, represents and warrants that:

(a) the Director has been advised that the Director may be an “affiliate” within the meaning of Rule 144 under the Securities Act of 1933, as amended (the “Act”), currently or at the time the Director desires to sell the Shares following the vesting of the Restricted Shares, and in this connection the Company is relying in part on the Director’s representations set forth in this section.

(b) If the Director is deemed an affiliate within the meaning of Rule 144 of the Act, the Shares must be held indefinitely unless an exemption from any applicable resale restrictions is available or the Company files an additional registration statement (or a “re-offer prospectus”) with regard to such Shares.

(c) The Company is under no obligation to register the Shares (or to file a “re-offer prospectus”).

(d) If the Director is deemed an affiliate within the meaning of Rule 144 of the Act, the Director understands that the exemption from registration under Rule 144 will not be available unless (i) a public trading market then exists for the Common Stock, (ii) adequate information concerning the Company is then available to the public, and (iii) other terms and conditions of Rule 144 or any exemption therefrom are complied with; and that any sale of the Shares may be made only in limited amounts in accordance with such terms and conditions.

10. Power of Attorney. The Company, its successors and assigns, is hereby appointed the attorney-in-fact, with full power of substitution, of the Director for the purpose of carrying out the provisions of this Agreement and taking any action and executing any instruments which such attorney-in-fact may deem necessary or advisable to accomplish the purposes hereof, which appointment as attorney-in-fact is irrevocable and coupled with an interest. The Company, as attorney-in-fact for the Director, may in the name and stead of the Director, make and execute all conveyances, assignments and transfers of the Restricted Shares provided for herein, and the Director hereby ratifies and confirms that which the Company, as said attorney-in-fact, will do by virtue hereof. Nevertheless, the Director will, if so requested by the Company, execute and deliver to the Company all such instruments as may, in the judgment of the Company, be advisable for this purpose.

11. Miscellaneous.

(a) This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective heirs, personal legal representatives, successors, trustees, administrators, distributees, devisees and legatees. The Company may assign to, and 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 expressly assume and agree in writing to perform this Agreement. Notwithstanding the foregoing, the Director may not assign this Agreement or any of the Director’s rights, interests or obligations hereunder. 

(b) This award of Restricted Shares will not affect in any way the right or power of the Board or stockholders of the Company to make or authorize an adjustment, recapitalization or other change in the capital structure or the business of the Company, any merger or consolidation of the Company or subsidiaries, any issue of bonds, debentures, preferred or prior preference stock ahead of or affecting the Restricted Shares, the dissolution or liquidation of the Company, any sale or transfer of all or part of its assets or business or any other corporate act or proceeding.
(c) The Director agrees that the award of the Restricted Shares hereunder is special incentive compensation and that it, any dividends paid thereon (even if treated as compensation for tax purposes) will not be taken into account as “salary” or “compensation” or “bonus” in determining the amount of any payment under any pension, retirement or profit-sharing plan of the Company or any life insurance, disability or other benefit plan of the Company.
(d) No modification or waiver of any of the provisions of this Agreement will be effective unless in writing and signed by the party against whom it is sought to be enforced.

(e) This Agreement may be executed in one or more counterparts (including by facsimile transmission), each of which will be deemed an original, but all of which together will constitute one and the same instrument.
(f) The failure of any party hereto at any time to require performance by another party of any provision of this Agreement will not affect the right of such party to require performance of that provision, and any waiver by any party of any breach of any provision of this Agreement will not be construed as a waiver of any continuing or succeeding breach of such provision, a waiver of the provision itself, or a waiver of any right under this Agreement.
(g) The headings of the sections of this Agreement have been inserted for convenience of reference only and will in no way restrict or modify any of the terms or provisions hereof.

(h) All notices, consents, requests, approvals, instructions and other communications provided for herein will be in writing and validly given or made when delivered, or on the second succeeding business day after being mailed by registered or certified mail, whichever is earlier, to the persons entitled or required to receive the same, addressed, in the case of the Company to the President of the Company at the principal office of the Company and, in the case of the Director, at the address most recently on file with the Company.

(i) This Agreement will be construed, interpreted and governed and the legal relationships of the parties determined in accordance with the internal laws of the State of Maryland without reference to rules relating to conflicts of law.

(j) If any provision of this Agreement will be held invalid or unenforceable, such invalidity or unenforceability will not affect any other provisions hereof, and this Agreement will be construed and enforced as if such provisions had not been included.

(k) This Agreement contains the entire understanding of the parties with respect to the subject matter hereof (other than any other documents expressly contemplated herein) and supersedes any prior agreements between the Company and the Director.

[Signature Page Follows]

	
	
	 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.
	
			
	 
	

HINES GLOBAL REIT, INC.

	 
	 

	 
	By:
	 

	 
	 
	Name:

	 
	 
	Title:

	
		
	INDEPENDENT DIRECTOR
	 

	 
	 

	 
	 

	[Name]
	 

	
	
	 

APPENDIX A

“Change in Control” means and includes any of the following events:

(a) any transaction or series of transactions pursuant to which the Company sells, transfers, leases, exchanges or disposes of substantially all (i.e., at least eighty-five percent (85%)) of its assets for cash or property, or for a combination of cash and property, or for other consideration; or 

(b) any transaction pursuant to which Persons who are not current stockholders of the Company acquire by merger, consolidation, reorganization, division or other business combination or transaction, or by a purchase of an interest in the Company, an interest in the Company so that after such transaction, the stockholders of the Company immediately prior to such transaction no longer have a controlling (i.e., 50% or more) voting interest in the Company. 

“Continuous Service” means the absence of any interruption or termination of service as a director. Continuous Service shall not be considered interrupted in the case of (i) sick leave approved by the Board or (ii) any other leave of absence as approved by the Board or the chief executive officer of the Company.  However, notwithstanding anything in the foregoing to the contrary, the Board shall have complete and absolute discretion to determine whether a director is in the Continuous Service of the Company at any time. 

“Disability” means the Director is unable to satisfactorily perform his duties and responsibilities as a member of the Board of Directors of the Company by reason of any medically determinable physical or mental impairment that can be expected to result in death or to last for a period of not less than 12 months.

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