Form 8-K Parkway, Inc. For: Dec 12
Tweet
Share
E-mailUNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 12, 2016
PARKWAY, INC.
(Exact Name of Registrant as Specified in its Charter)
Maryland | 001-37819 | 61-1796261 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||
San Felipe Plaza 5847 San Felipe Street, Suite 2200, | ||||
Houston, Texas | 77057 | |||
(Address of Principal Executive Offices) | (Zip code) | |||
(346) 200-3100
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
As previously disclosed, on October 7, 2016, Cousins Properties Incorporated (“Cousins”) completed the spin-off (the “Spin-Off”) of Parkway, Inc. (the “Company”). Prior to the Spin-Off, Parkway Properties, Inc. (“Legacy Parkway”) was merged with and into a wholly-owned subsidiary of Cousins (the “Merger”), and then the Houston, Texas-based assets of Cousins and Legacy Parkway and their respective subsidiaries and certain other assets were contributed to the Company and Parkway Operating Partnership LP, the Company’s operating partnership (the “Separation”).
Before the Merger and the Separation, Legacy Parkway was party to an employment agreement with (i) James R. Heistand, dated as of July 8, 2013 and amended as of June 15, 2015 and July 7, 2016, (ii) M. Jayson Lipsey, dated as of October 25, 2013 and amended as of June 15, 2015, and (iii) Scott E. Francis, dated as of December 22, 2014 and amended as of June 15, 2015 (together, the “Prior Agreements”). In addition, concurrently with the execution of the merger agreement relating to the Merger, each of Messrs. Heistand, Lipsey, and Francis entered into limited waivers of certain rights under the Prior Agreements, which provided, among other things, that if he is offered continued employment with the Company pursuant to the assignment of his existing employment agreement to the Company or to a new employment agreement with the Company that is no less favorable than his employment agreement with Legacy Parkway, he may not terminate his employment for “good reason” under certain provisions of his Prior Agreement. In connection with the Separation and the Spin-Off, these executives were offered employment with the Company, and the Company assumed the Prior Agreements.
In recognition of the transformational aspects of the Separation and the Spin-Off of the Company’s business, the Compensation Committee (the “Compensation Committee”) of the Company’s Board of Directors (the “Board”) undertook a comprehensive review of the Company’s executive compensation policies. As a result of that review, on December 8, 2016, the Compensation Committee recommended that the Board approve, and on December 10, 2016, the Board acted on the Compensation Committee’s recommendation to approve, the following compensatory arrangements that affect the Company’s named executive officers.
New Employment Agreements
On December 12, 2016, the Company entered into new employment agreements (each an “Employment Agreement,” and collectively, the “Employment Agreements”) with each of Mr. Heistand, Mr. Lipsey, and Mr. Francis (each, an “Executive,” and collectively, the “Executives”) that supersede and replace in their entirety the Prior Agreements. Pursuant to the Employment Agreements, Mr. Heistand will continue his employment as the Company’s President and Chief Executive Officer; Mr. Lipsey will continue his employment as the Company’s Executive Vice President and Chief Operating Officer; and Mr. Francis will continue his employment as the Company’s Executive Vice President, Chief Financial Officer and Chief Accounting Officer.
The term of each Employment Agreement commenced on December 12, 2016 (the “Effective Date”) and ends on December 31, 2019, with automatic one-year renewals unless either the Company or the Executive elects not to renew the term of the Employment Agreement by providing the other party with 90 days’ notice. However, upon the occurrence of a “change in control” (as defined in the Employment Agreements), the term of the Employment Agreement will automatically extend until the later of the second anniversary of such change in control and the date on which the term would otherwise have ended.
Pursuant to the Employment Agreements, Mr. Heistand’s base salary will be $750,000; Mr. Lipsey’s base salary will be $450,000; and Mr. Francis’ base salary will be $400,000. These base salary amounts are the same as the Executives’ previously disclosed 2016 base salaries, except that, in connection with his promotion to Chief Financial Officer in connection with the Separation and the Spin-Off, Mr. Francis’ base salary has been increased from $350,000 to $400,000 to recognize and compensate for his increased duties and responsibilities. Each Executive’s base salary will be annually reviewed by the Compensation Committee and may be increased in the Compensation Committee’s sole discretion.
In addition, each Executive is entitled to participate in the Company’s discretionary annual cash incentive program as may be established or approved by the Board or the Compensation Committee from time to time. Mr.
Heistand’s annual cash incentive target opportunity is 150% of his base salary then in effect; Mr. Lipsey’s annual cash incentive target opportunity is 95% of his base salary then in effect; and Mr. Francis’ annual cash incentive target opportunity is 90% of his base salary then in effect. Mr. Lipsey’s annual cash incentive target opportunity has been increased from 90% to 95%; and Mr. Francis’ annual cash incentive target opportunity has been increased from 60% to 90%. Each Executive’s annual cash incentive target opportunity will be annually reviewed by the Compensation Committee and may be increased in the Compensation Committee’s sole discretion. For the 2016 calendar year, to compensate for each of the Executive’s efforts with respect to the Company’s business both before and after the Spin-Off and to recognize the extraordinary efforts of each Executive in preparing for and consummating the Separation and the Spin-Off, the Company will pay each Executive a transition bonus in lieu of an annual bonus for the 2016 calendar year, in an amount of $1,025,000 for Mr. Heistand, $427,500 for Mr. Lipsey, and $360,000 for Mr. Francis, payable in each case after the close of the 2016 calendar year.
Each Executive is also eligible to receive an annual equity grant under the Parkway, Inc. and Parkway Operating Partnership LP 2016 Omnibus Equity Incentive Plan (as it may be amended from to time to time, or its successor, the “2016 Plan”) in the amount and form as the Board or the Compensation Committee deems appropriate. For the 2017 calendar year, each Executive will receive pursuant to the 2016 Plan, effective as of the Effective Date, both (i) a grant of performance-based restricted stock units, covering 74,027 target units for Mr. Heistand, 32,572 target units for Mr. Lipsey, and 29,611 target units for Mr. Francis and (ii) a grant of time-based restricted stock units, having an aggregate grant date value equal to $375,000 for Mr. Heistand, $165,000 for Mr. Lipsey, and $150,000 for Mr. Francis. The performance-based restricted stock units will vest based upon achievement of certain total shareholder return performance metrics over the three-year performance period commencing on the Effective Date, subject to the Executive’s continued employment. The time-based restricted stock units will vest in equal annual installments over, for Mr. Heistand, three years commencing on the Effective Date, and for Messrs. Lipsey and Francis, four years commencing on the Effective Date, in each case subject to the Executive’s continued employment on each applicable vesting date.
Immediately prior to the Merger and the Spin-Off, each Executive forfeited certain time-based restricted stock units with respect to common stock of Legacy Parkway and certain performance-based LTIP units with respect to Parkway Properties LP in exchange for the same number of unvested time-based restricted stock units with respect to common stock of Legacy Parkway (the “Modified RSUs”). In the Spin-Off, the Company assumed the unvested portion of the Modified RSUs and converted them into time-based restricted stock units with respect to the Company’s common stock (the “Transition RSUs”). The Transition RSUs were originally scheduled to vest one-third on each of the first, second, and third anniversaries of the closing date of the Merger, subject to the Executive’s continued service with the Company on the applicable vesting date. Pursuant to the Employment Agreements, the Transition RSUs will instead vest 50% on January 1, 2017, and the remaining 50% of the Transition RSUs will vest in equal installments on each of the first, second, and third anniversaries of the closing date of the Merger, in each case subject to the Executive’s continued service with the Company on the applicable vesting date.
In addition, each Executive is entitled to participate in all employee benefit plans and programs available generally to other executives of the Company, including reimbursement of reasonable business expenses and vacation days, for Mr. Heistand, no fewer than 25 days per year and, for Messrs. Lipsey and Francis, in accordance with the Company’s policies.
Except in the case of a change in control of the Company (described below), if the Executive is terminated by the Company without “cause” (including the Company’s election not to renew and/or extend the term of the Employment Agreement where the Executive is willing to do so) or resigns for “good reason” (each as defined in the Employment Agreement) (a “Regular Involuntary Termination”), the Executive will be entitled to:
(i) | lump sum payment of any earned but unpaid base salary accrued through the date of termination and any earned but unpaid vacation pay, |
(ii) | to the extent unpaid, lump sum payment of the transition bonus with respect to the 2016 calendar year, |
(iii) | lump sum payment of any earned but unpaid annual bonus for the preceding calendar year, |
(iv) | if the termination is more than six months into the performance year, subject to the Compensation Committee’s certification of achievement for such year, payment of a pro-rated portion of the annual bonus for the year in which the termination occurs, |
(v) | payment of an amount equal to, for Mr. Heistand, the sum of 18 months of his then-current base salary plus 1.5 times the Executive’s then-current annual cash incentive target opportunity and, for Messrs. Lipsey and Francis, 12 months of his then-current base salary, in each case payable in 12 equal monthly installments, |
(vi) | immediate and automatic vesting of all then unvested Transition RSUs, |
(vii) | for other equity or equity-based awards that are subject to time-based vesting, an additional, for Mr. Heistand, 18 months of time-based vesting credit or, for Messrs. Lipsey and Francis, 12 months of time-based vesting credit, and |
(viii) | continued health care coverage for the Executive and his dependents at the Company’s cost for up to, for Mr. Heistand, 18 months and, for Messrs. Lipsey and Francis, 12 months after coverage would otherwise lapse. |
Furthermore, if the Regular Involuntary Termination is prior to the second anniversary of the Effective Date, and subject to Executive’s execution of the Release and Non-Compete Agreement, severance is enhanced with a lump sum payment of an amount equal to, for Mr. Heistand, 2.9 times the sum of (A) his then-current base salary and (B) his then-current annual cash incentive target opportunity or, for Messrs. Lipsey and Francis, the sum of (A) 24 months’ then-current base salary and (B) two times his then-current annual cash incentive target opportunity.
In lieu of the foregoing, if the Executive is terminated by the Company without “cause” (including the Company’s election not to renew and/or extend the term of the Employment Agreement where the Executive is willing to do so) or resigns for “good reason” (each as defined in the Employment Agreement), in each case within the 90 days prior to a “change in control” or two-year period following a “change in control,” or the Company’s delivery of a notice of its intent not to renew the term within the 90 days prior to a “change in control,” or for Mr. Heistand only, if he dies or becomes disabled within the two-year period following a “change in control” (as such term is defined in the Employment Agreement) (such events together, a “CIC Termination”), the Executive will be entitled to:
(i) | lump sum payment of any earned but unpaid base salary accrued through the date of termination and any earned but unpaid vacation pay, |
(ii) | to the extent unpaid, lump sum payment of the transition bonus with respect to the 2016 calendar year, |
(iii) | lump sum payment of any earned but unpaid annual bonus for the preceding calendar year, |
(iv) | if the termination is more than six months into the performance year, subject to the Compensation Committee’s certification of achievement for such year, payment of a pro-rated portion of the annual bonus for the year in which the termination occurs, |
(v) | payment of an amount equal to, for Mr. Heistand, 2.9 times the sum of (A) his then-current base salary and (B) his then-current annual cash incentive target opportunity or, for Messrs. Lipsey and Francis, the sum of (A) 24 months’ then-current base salary and (B) two times his then-current annual cash incentive target opportunity, |
(vi) | immediate and automatic vesting of all then unvested equity or equity-based awards that are subject to time-based vesting, and |
(vii) | continued health care coverage for the Executive and his dependents at the Company’s cost for up to, for Mr. Heistand, 18 months and, for Messrs. Lipsey and Francis, 12 months after coverage would otherwise lapse. |
Payment of the foregoing amounts or benefits in clauses (iv)-(viii) in connection with a Regular Involuntary Termination and clauses (iv)-(v) and (vii) in connection with a CIC Termination are subject to and conditioned upon the Executive’s execution of a general release and waiver in a form reasonably acceptable to the Company and the Executive’s compliance with the restrictive covenants contained in the Employment Agreement (the “Release and Non-Compete Agreement”).
Upon the Executive’s termination of employment due to death or “disability” (as defined in the Employment Agreement) (for Mr. Heistand only, other than within the two-year period following a “change in control”), the Executive (or, in the case of the Executive’s death, the Executive’s estate) will be entitled to:
(i) | lump sum payment of any earned but unpaid base salary accrued through the date of termination and any earned but unpaid vacation pay, |
(ii) | to the extent unpaid, lump sum payment of the transition bonus with respect to the 2016 calendar year, |
(iii) | lump sum payment of any earned but unpaid annual bonus for the preceding calendar year, |
(iv) | if the termination is more than six months into the performance year, subject to the Compensation Committee’s certification of achievement for such year, payment of a pro-rated portion of the annual bonus for the year in which the termination occurs, and |
(v) | immediate and automatic vesting of all then unvested Transition RSUs. |
For Mr. Heistand only, in the event that Mr. Heistand voluntarily terminates his employment with the Company after the three-year initial term of the Employment Agreement or after identifying and hiring if necessary a replacement president and chief executive officer of the Company deemed acceptable to the Board in its reasonable discretion, Mr. Heistand’s outstanding equity or equity-based awards subject to (i) time-based vesting will immediately vest pro rata based on the number of completed months in the vesting period and (ii) performance-based vesting will vest pro rata based on the number of completed whole years of the performance period and on the actual performance achievement level through the entire duration of the applicable performance period.
The Employment Agreements also include certain restrictive covenants. The covenants include (i) confidentiality and non-disparagement restrictions during the term of the Employment Agreement and thereafter, (ii) non-competition restrictions on the Executive during the term of the Employment Agreement and for 12 months thereafter, and (iii) non-solicitation restrictions on the Executive during the term of the Employment Agreement and, for Mr. Heistand, from 18 months thereafter to two years thereafter depending on the type of termination of employment or, for Messrs. Lipsey and Francis, for 12 months thereafter. The Company may also recover incentive and other compensation paid to the Executives, as and to the extent required by applicable law and the Company’s “clawback” policy, as in effect from time to time.
The foregoing summary of the Employment Agreements does not purport to be complete and is qualified in its entirety by reference to the full text of each of the Employment Agreements, which are attached as Exhibits 10.1, 10.2 and 10.3 to this Current Report on Form 8-K, which are incorporated by reference herein.
Form Restricted Stock Unit Award Agreements
To memorialize the time-based restricted stock units and the performance-based restricted stock units granted to the Executives in accordance with the Employment Agreements and to memorialize future restricted stock unit awards to the Executives, which awards shall be in the sole discretion of the Board or the Compensation Committee, the Compensation Committee approved a Form of Time-Based Restricted Stock Unit Agreement and a Form of Performance-Based Restricted Stock Unit Agreement, which are attached as Exhibits 10.4 and 10.5 to this Current Report on Form 8-K, which are incorporated by reference herein.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
Exhibit No. | Description | |
10.1 | Employment Agreement, dated as of December 12, 2016, by and between Parkway, Inc. and James R. Heistand. | |
10.2 | Employment Agreement, dated as of December 12, 2016, by and between Parkway, Inc. and M. Jayson Lipsey. | |
10.3 | Employment Agreement, dated as of December 12, 2016, by and between Parkway, Inc. and Scott E. Francis. | |
10.4 | Form of Time-Based Restricted Stock Unit Agreement under the Parkway, Inc. and Parkway Operating Partnership LP 2016 Omnibus Equity Incentive Plan. | |
10.5 | Form of Performance-Based Restricted Stock Unit Agreement under the Parkway, Inc. and Parkway Operating Partnership LP 2016 Omnibus Equity Incentive Plan. | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: December 13, 2016 | PARKWAY, INC. | |||||||
BY: | /s/ A. Noni Holmes-Kidd | |||||||
A. Noni Holmes-Kidd | ||||||||
Vice President, General Counsel and Secretary | ||||||||
EXHIBIT INDEX
Exhibit No. | Description | |
10.1 | Employment Agreement, dated as of December 12, 2016, by and between Parkway, Inc. and James R. Heistand. | |
10.2 | Employment Agreement, dated as of December 12, 2016, by and between Parkway, Inc. and M. Jayson Lipsey. | |
10.3 | Employment Agreement, dated as of December 12, 2016, by and between Parkway, Inc. and Scott E. Francis. | |
10.4 | Form of Time-Based Restricted Stock Unit Agreement under the Parkway, Inc. and Parkway Operating Partnership LP 2016 Omnibus Equity Incentive Plan. | |
10.5 | Form of Performance-Based Restricted Stock Unit Agreement under the Parkway, Inc. and Parkway Operating Partnership LP 2016 Omnibus Equity Incentive Plan. | |
EXECUTION VERSION
1
EMPLOYMENT AGREEMENT
This AGREEMENT (the “Agreement”) is entered into as of December 12, 2016 (the
“Effective Date”), by and between Parkway, Inc. (the “Company”) and James R. Heistand (the
“Executive”).
WHEREAS, Cousins Properties Incorporated (“Cousins”), Parkway Properties, Inc.
(“Legacy Parkway”), Parkway Properties LP, and Clinic Sub Inc. (“Merger Sub”) entered into
that certain Agreement and Plan of Merger, dated as of April 28, 2016 (the “Merger
Agreement”), pursuant to which Legacy Parkway merged with and into Merger Sub, with
Merger Sub continuing as the surviving company (the “Merger”);
WHEREAS, Cousins, Legacy Parkway, the Company, Parkway Operating Partnership
LP (the “Partnership”), and certain other parties entered into a Separation, Distribution and
Transition Services Agreement, dated as of October 5, 2016 (the “Separation and Distribution
Agreement”), pursuant to which, among other things, (i) the Houston, Texas assets of Legacy
Parkway and Cousins and certain other assets were contributed to the Company and the
Partnership, and (ii) Cousins distributed 100% of the capital stock of the Company to the
stockholders of Cousins (which included legacy stockholders of Legacy Parkway) (the
“Distribution”);
WHEREAS, the Company desires to continue to employ the Executive as President and
Chief Executive Officer of the Company, on the terms and conditions set forth herein;
WHEREAS, except as otherwise provided in this Agreement, the Company and the
Executive desire to replace, in their entirety, any prior agreements or arrangements providing for
severance payments and related benefits or payments or benefits upon a change in control
between the Executive and the Company or any of its affiliates, including without limitation that
Employment Agreement, dated as of July 8, 2013 and as amended June 15, 2015 and July 7,
2016, between Legacy Parkway and the Executive, which agreement was assumed by the
Company in connection with the Distribution as of October 7, 2016 (together, the “Prior
Agreements”); and
WHEREAS, the Executive desires to accept employment on the terms hereinafter set
forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants herein and
for other good and valuable consideration, the parties agree as follows:
1. Effective Date and Term; Termination of Prior Agreements.
(a) The Executive shall be employed by the Company for the period
commencing as of the Effective Date and ending on December 31, 2019, unless earlier
terminated pursuant to the terms hereof (the “Initial Term”), subject to automatic renewal for
additional one (1) year periods unless either party provides the other with ninety (90) days’
notice of such party’s intent not to renew (the Initial Term and any such renewal, the “Term”).
Notwithstanding anything to the contrary in this Section 1(a), upon the occurrence of a Change
EXECUTION VERSION
2
in Control (as defined below), the Term shall automatically extend until the later of (i) the
second (2nd) anniversary of such Change in Control and (ii) the date upon which the Term would
otherwise have ended. As further described in Section 6(b) and Section 6(c), the Company’s
election not to renew this Agreement at the end of the Initial Term or a renewal Term shall
constitute a termination by the Company without Cause, where the Executive is willing to extend
the Term under the Agreement’s existing terms and conditions; provided the Executive ceases
his employment on account of such non-renewal at the end of the then-current Term.
(b) From and after the Effective Date, the Executive’s entitlement to
payments or benefits under all Prior Agreements shall terminate, and the Prior Agreements and
all obligations of the parties thereunder will cease to have any further force and effect, except to
the extent set forth or contemplated herein or in that certain Letter Agreement, dated as of April
28, 2016, by and between Legacy Parkway and the Executive attached hereto as Schedule A
(“Transition Letter Agreement”).
2. Position and Duties.
(a) During the Term, the Executive shall serve as the Company’s President
and Chief Executive Officer and shall serve as a director on the Company’s Board of Directors
(the “Board”). The Executive shall report to the Company’s Board and shall have such duties
and responsibilities as are consistent with the Executive’s position and as may be assigned by the
Board from time to time. During the Term, the Executive shall be subject to, and shall act in
accordance with, all reasonable instructions and directions of the Board and all applicable
policies and rules of the Company.
(b) The Executive shall devote his full working time, energy, and attention to
the performance of his duties and responsibilities hereunder and shall not engage in any other
business, profession, or occupation for compensation or otherwise which would conflict with or
interfere with the rendition of the Executive’s services hereunder; provided that nothing herein
shall (i) preclude the Executive from (A) managing his personal, financial, and legal affairs, and
(B) with the Board’s prior written consent, serving as a director on the board of directors of a
publicly traded company that is not a competitor of the Company, or (ii) prevent the Executive
from engaging in civic and charitable activities, so long as such activities do not interfere with
the performance of his duties and responsibilities to the Company as provided hereunder. For
purposes hereof, United Legacy Bank is not a competitor of the Company, and consent is hereby
granted for the Executive to serve on the board thereof.
3. Compensation.
(a) During the Term, the Company shall pay the Executive a minimum base
salary at the rate of $750,000 per annum (the “Base Salary”), payable in regular installments in
accordance with the Company’s customary payroll practices. The Board or the Board’s
Compensation Committee (the “Committee”) shall annually review the Executive’s Base Salary
and, in its sole discretion, may increase the Executive’s annual Base Salary. References in this
Agreement to Base Salary shall refer to the annual Base Salary as may be increased by the Board
or the Committee from time to time.
EXECUTION VERSION
3
(b) In addition to the Base Salary, during the Term, the Executive shall be
eligible to participate in the Company’s discretionary annual incentive plan (the “AIP”) as may
be established and approved by the Board or the Committee from time to time, and pursuant to
the AIP, the Executive may earn an annual bonus (the “Annual Bonus”) for each calendar year
during the Term, with a target Annual Bonus opportunity of one hundred fifty (150%) of Base
Salary (the “Target Bonus”); provided, that the Board or the Committee shall annually review
the Executive’s Target Bonus and, in its sole discretion, may increase the Executive’s Target
Bonus, and references in this Agreement to Target Bonus shall refer to the Target Bonus as may
be increased by the Board or the Committee from time to time.
(1) The Annual Bonus actually paid, if any, for any calendar year shall
be determined by the Board or the Committee based upon the achievement of
annual performance objectives established by the Committee, and communicated
to the Executive, from time to time. The Annual Bonus shall be paid no later than
two and one-half (2.5) months following the end of the calendar year to which
such Annual Bonus relates, subject to the Executive’s continued employment with
the Company on the applicable payment date, except as otherwise provided
in Sections 6(a), 6(b), and 6(c).
(2) The Company agrees to pay to the Executive an Annual Bonus for
calendar year 2016 in the amount of $1,025,000 (the “Transition Bonus”). The
Transition Bonus shall be paid no later than February 15, 2017, subject to the
Executive’s continued employment with the Company on the applicable payment
date, except as otherwise provided in Sections 6(a), 6(b), and 6(c). The Transition
Bonus shall be in satisfaction of any Annual Bonus payable to the Executive by
Legacy Parkway, Cousins, or the Company under any Prior Agreements for the
2016 calendar year or fiscal year.
(c) During the Term, pursuant and subject to the terms of the Parkway, Inc.
and Parkway Operating Partnership LP 2016 Omnibus Equity Incentive Plan (as it may be
amended from time to time, or its successor, the “Plan”) and subject to Board or Committee
approval, the Executive shall be eligible to receive an annual grant of restricted stock units
(“RSUs”), which may be time-based and/or performance-based, and/or such other awards as the
Board or the Committee deems appropriate. In addition:
(1) Transition RSUs. Following the consummation of the Distribution
but not later than the Effective Date, the Executive shall receive (or shall have
received) the grant of time-based restricted stock units (“RSUs”) set forth on
Schedule B attached hereto (the “Transition RSUs”). Fifty percent (50%) of the
Transition RSUs shall vest on January 1, 2017, and the remaining fifty percent
(50%) shall vest ratable on each of the first, second and third anniversaries of the
Merger, subject to the Executive’s continued employment on each applicable
vesting date.
(2) Equity Grants. The Executive shall be eligible to receive an annual
grant in each calendar year commencing with 2017. However, the grant for
calendar year 2017 shall be made as of the Effective Date, based on a twelve (12)-
EXECUTION VERSION
4
month period beginning on the Effective Date (an "Agreement Year"). For such
grant, the Executive shall receive (i) a grant of performance-based RSUs,
covering 74,027 common share units, that vest based on achievement of certain
performance metrics over a three (3)-Agreement Year performance period, and
(ii) a grant of time-based RSUs, having an aggregate value equal to $375,000, that
vest in three equal annual installments over a three (3)-Agreement Year period,
and each such grant subject to the Executive’s continued employment on each
applicable vesting date. For purposes of the grant of time-based RSUs for the
Agreement Year, the number of common share units covered by the time-based
RSUs shall be determined by dividing the aggregate value of such award by the
fifteen (15)-day trailing average closing price of the Company’s common stock as
of the date of grant. For the avoidance of doubt, for any calendar year following
the 2017 calendar year, the Executive shall be eligible to receive an annual grant
in an amount and in the form as the Board or the Committee deems appropriate,
such grant to be made on or about the time the Committee convenes to evaluate
achievement for annual bonus determinations for the prior year and to have a
vesting start date commencing January 1 of the applicable calendar year.
(3) Qualified Retirement and CIC Termination. In the event of a CIC
Termination (as defined below), each of the Executive’s outstanding equity or
equity-based awards that is subject to time-based vesting shall immediately vest
and be paid in full upon the date of such CIC Termination. In the event of a
Qualified Retirement, the Executive’s outstanding equity or equity-based awards
subject to (i) time-based vesting shall immediately vest pro-rata, based on the
number of completed months in the vesting period prior to the Qualified
Retirement and (ii) performance-based vesting shall vest pro-rata, based on the
Executive’s number of completed whole years of the performance period and on
the actual performance achievement level through the entire duration of the
applicable performance period. For purposes hereof, a “Qualified Retirement”
shall occur when the Executive voluntarily terminates his employment with the
Company (i) after the Initial Term, or (ii) after identifying and hiring if necessary
a replacement to the Executive’s position with the Company deemed acceptable
to the Board in its reasonable discretion.
(4) Code Section 409A. Notwithstanding the foregoing, to the extent
accelerated payment is not permitted under Section 409A of the Internal Revenue
Code of 1986, as amended (the “Code”) without the imposition of a penalty, the
awards shall immediately vest in full, but be paid on the original payment
schedule set forth in such award.
4. Employee Benefits; Expense Reimbursement. During the Term:
(a) The Executive shall be entitled to participate in all employee benefit plans
and programs available generally to other executives of the Company.
EXECUTION VERSION
5
(b) The Executive shall be entitled to no fewer than twenty-five (25) days per
full year of vacation, subject to the terms and conditions of the Company’s policies as may be in
effect from time to time during the Term.
(c) The Company shall reimburse the Executive for all reasonable business
and entertainment expenses incurred by the Executive in furthering the goals of the Company,
subject to the Executive’s provision of documentation as the Board or the Committee may
reasonably request.
5. Termination of Employment.
(a) The Term and the Executive’s employment hereunder may be terminated
under the following circumstances.
(1) Death. The Term and the Executive’s employment hereunder shall
terminate upon the Executive’s death.
(2) Disability. The Term and the Executive’s employment hereunder
shall terminate in the event of the Executive’s Disability. For purposes of this
Agreement, “Disability” shall mean: as a result of the Executive’s incapacity due
to physical or mental illness or injury, the Executive (i) is eligible to receive a
benefit under the Company’s long-term disability plan applicable to the
Executive, or (ii) if no such long-term disability plan is applicable to the
Executive, the Executive is unable to perform his duties hereunder for a period of
ninety (90) consecutive days or a period of ninety (90) days in any one hundred
eighty (180)-day period, even with any reasonable accommodation required by
law.
(3) Cause. The Company may immediately terminate the Term and
the Executive’s employment hereunder for Cause. For purposes of this
Agreement, “Cause” shall mean: (i) the continued refusal by the Executive to
perform the material responsibilities and duties under this Agreement, (ii) the
engaging by the Executive in willful or reckless conduct, if such conduct is done
or omitted to be done by the Executive not in good faith, and is materially
injurious to the Company monetarily or otherwise, (iii) the Executive’s conviction
of, or pleading of guilty or nolo contendere to, a felony, (iv) the commission or
omission of any act by the Executive that is materially detrimental to the best
interests of the Company and that constitutes common law fraud or a violation of
applicable law, or (v) the Executive’s breach of any material provision of this
Agreement (including any Restrictive Covenants). Notwithstanding the
foregoing, the Term and the Executive’s employment shall not be deemed to have
been terminated for Cause unless the Company shall have given the Executive (A)
written notice setting forth the reasons for the Company’s intention to terminate
the Executive’s employment for Cause, and (B) a reasonable opportunity, not to
exceed thirty (30) days, to cure such failure, to the extent reasonably susceptible
to cure.
EXECUTION VERSION
6
(4) Good Reason. The Executive may terminate the Term and his
employment hereunder for Good Reason. For purposes of this Agreement, “Good
Reason” shall mean, (i) the Company’s failure to pay material compensation
when due and payable; (ii) a material diminution in the Executive’s position,
duties or responsibilities, including without limitation, the Executive’s no longer
holding the position and title of President and Chief Executive Officer or the
Executive’s being removed from or not being elected to the Board of the
Company; (iii) the Company’s material breach of any other material provision of
this Agreement; (iv) requiring the Executive to relocate his or her residence to a
location outside of Orlando, Florida; or (v) following a Change in Control, if at
any time during the two (2)-year period following such Change in Control
Executive is not given a compensation and benefits package, including in
particular annual equity or equity-based grants, that is at least as favorable as the
package Executive receives from the Company prior to the Change in Control.
The Executive shall not have Good Reason to terminate the Term and his
employment hereunder unless the Company shall have been given (A) a Notice of
Termination setting forth the reasons for the Executive asserting Good Reason,
and (B) a reasonable opportunity, not to exceed thirty (30) days, to cure such
failure.
(5) Any Other Reason. Either party may terminate the Term and the
Executive’s employment hereunder at any time for any reason other than those set
forth above; provided that the terminating party shall provide the other party with
Notice of Termination (as defined below in Section 5(b)).
(b) Notice of Termination. Any termination of the Executive’s employment
by the Company or by the Executive during the Term shall be communicated by providing the
other party at least sixty (60) days’ advance written notice of such termination (the “Notice of
Termination”) in accordance with Section 13(a); provided that no Notice of Termination shall be
required in the event of a termination on account of the death of the Executive and that the notice
of termination required under Section 5(a)(3) on account of the Executive’s termination by the
Company for Cause shall not require any amount of advance notification (except that with
respect to the determination of Cause, the Company shall have given the Executive prior notice
and the opportunity to cure as set forth in Section 5(a)(3) above).
6. Termination Payments.
(a) Death or Disability. In the event that the Executive’s employment
hereunder terminates as a result of the Executive’s death or Disability
other than within the two (2)-year period following a Change in Control,
all then unvested Transition RSUs shall immediately and automatically
vest, and the Company shall pay to the Executive (or, if applicable, to the
Executive’s estate), within thirty (30) days following the date of
termination of employment, (i) any earned but unpaid Base Salary accrued
through the date of termination and any earned but unpaid vacation pay
(collectively, the “Accrued Amounts”), (ii) any unpaid Transition Bonus,
and (iii) any earned but unpaid Annual Bonus for the calendar year
EXECUTION VERSION
7
preceding the date the Executive’s employment hereunder terminates and,
provided the Executive’s date of employment termination is more than six
months into the performance year and subject to the Committee’s
certification of achievement of the performance goals for such year after
the year is concluded, a pro-rated portion of any Annual Bonus for the
calendar year in which termination occurs (in each case without regard to
whether the Executive is employed on the date such Annual Bonus is
paid).
(b) Without Cause or For Good Reason. In the event that the Company
terminates the Executive’s employment hereunder without Cause (which shall include the
Company’s election not to renew and/or extend the Agreement, where the Executive is willing to
extend the Term, as provided in Section 1, on the Agreement’s existing terms and where the
Executive serves out the current Term, it being understood that Sections 5 and 6 shall continue to
apply in accordance with their terms and it being understood that following the end of the then-
current Term, the Executive’s employment shall have terminated), or the Executive terminates
his employment hereunder for Good Reason, in each case other than a CIC Termination, the
Executive shall be entitled to (i) the Accrued Amounts and any unpaid Transition Bonus, and, if
such termination is prior to the second anniversary of the Effective Date, the CIC Cash (as
defined in Section 6(c) below), each payable within thirty (30) days following the date of
termination of employment; (ii) any earned but unpaid Annual Bonus for the calendar year
preceding the date the Executive’s employment hereunder terminates and, provided the
Executive’s date of employment termination is more than six (6) months into the performance
year and subject to the Committee’s certification of achievement of the performance goals for
such year after the year is concluded, a pro-rated portion of any Annual Bonus for the calendar
year in which termination occurs, in each case payable on the date such amount would otherwise
have been paid (without regard to whether the Executive is employed on the date such Annual
Bonus is paid); (iii) an amount equal to the sum of (A) eighteen (18) months of the Executive’s
Base Salary and (B) one and one half (1.5) times the Executive’s then current Target Bonus,
payable in twelve (12) equal monthly installments in accordance with the Company’s customary
payroll practices starting one month after termination; (iv) immediate and automatic vesting of
all then unvested Transition RSUs and an additional eighteen (18) months’ time-based vesting
credit on any other outstanding equity or equity-based awards that are subject to time-based
vesting; and (v) continued health care coverage for himself and any of his eligible dependents at
the Company’s cost, for up to eighteen (18) months after coverage would otherwise lapse on
account of termination under the Company’s group health plans pursuant to the continuation of
coverage provisions contained in Sections 601 through 608 of the Employee Retirement Income
Security Act of 1974, as amended (the “Health Continuation Benefit”); provided, that any
payment that would otherwise have been made but that is conditioned upon the execution and
effectiveness of the Release (as defined below) shall not be made or provided until the fortieth
(40th) day following the date of such termination of employment. The payments and benefits
provided under this Section 6(b), other than the Accrued Amounts, Transition Bonus, and the
earned but unpaid Annual Bonus payment for the preceding calendar year, are subject to and
conditioned upon (x) the Executive’s execution of a valid general release and waiver (in a form
reasonably acceptable to the Company) within thirty (30) days following the date of termination,
waiving all claims the Executive may have against the Company, its successors, assigns,
affiliates, executives, officers, and directors relating to the Executive’s employment with the
EXECUTION VERSION
8
Company and the termination thereof (the “Release”), and such waiver becoming effective, and
(y) the Executive’s compliance with any restrictive covenants to which he may be subject
pursuant to Sections 7, 8, and 9 hereof (the “Restrictive Covenants”), provided that to the extent
the Executive inadvertently breaches any of the Restrictive Covenants set forth in Sections 7 and
9(a) hereof and such breach is reasonably susceptible to cure, the Executive shall be given a
reasonable opportunity, not to exceed ten (10) days, to cure such breach (the conditions in (x)
and (y), the “Conditions”). The Executive shall not be entitled to any other compensation or
benefits not expressly provided for in this Section 6(b), regardless of the time that would
otherwise remain in the Term had the Term not been terminated hereunder.
(c) CIC Termination. In lieu of the payments and benefits described
in Sections 6(a) and 6(b) above, and in addition to any accelerated vesting pursuant to Section
3(c)(3), in the event the Executive’s employment is terminated either by the Company without
Cause (which shall include the Company’s election not to renew and/or extend the Agreement,
where the Executive is willing to extend the Term, as provided in Section 1, on the Agreement’s
existing terms and where the Executive serves out the current Term, it being understood that
Sections 5 and 6 shall continue to apply in accordance with their terms and it being understood
that following the end of the then-current Term, the Executive’s employment shall have
terminated), by the Executive for Good Reason, or as a result of the Executive’s death or
Disability, in each such case within the two (2)-year period following a Change in Control, or if
there is a Termination in Anticipation of a Change in Control (any such termination, a “CIC
Termination”), the Executive shall be entitled to (i) the Accrued Amounts and any unpaid
Transition Bonus, each payable within thirty (30) days following the date of termination of
employment; (ii) any earned but unpaid Annual Bonus for the calendar year preceding the date
the Executive’s employment hereunder terminates, payable within thirty (30) days following the
date of termination of employment and, provided the Executive’s date of employment
termination is more than six (6) months into the performance year and subject to the
Committee’s certification of achievement of the performance goals for such year after the year is
concluded, a pro-rated portion of any Annual Bonus for the calendar year in which termination
occurs, payable on the date such amount would otherwise have been paid (without regard to
whether the Executive is employed on the date such Annual Bonus is paid); (iii) the Health
Continuation Benefit; and (iv) an amount equal to two and nine-tenths (2.9) times the sum of the
Executive’s Base Salary and then-current Target Bonus (“CIC Cash”). The payments and
benefits provided under this Section 6(c), other than the Accrued Amounts, Transition Bonus,
and the earned but unpaid Annual Bonus payment for the preceding calendar year, are subject to
and conditioned upon the Executive’s compliance with the Conditions. The payment described
in clause (iv) above shall be paid in lump sum within thirty (30) days following the date of
termination of employment, unless the Change in Control does not qualify as a 409A Change in
Control or such form is otherwise prohibited by Section 409A of the Code, in which case such
payment shall be payable in equal installments over a period of twelve (12) months, in
accordance with the Company’s customary payroll practices. For purposes of this Agreement:
(1) “Change in Control” shall have the meaning ascribed to such term
in the Plan and shall be inclusive of a 409A Change in Control; provided, for the
avoidance of doubt, a Change in Control shall exclude the Merger and the
Distribution.
EXECUTION VERSION
9
(2) “409A Change in Control” shall mean a change in the ownership
or effective control of the Company, or a change in the ownership of a substantial
portion of the assets of the Company, within the meaning of Section
409A(a)(2)(A)(v) of the Code and U.S. Treasury Regulation Section 1.409A-
3(i)(5); provided, for the avoidance of doubt, a 409A Change in Control shall
exclude the Merger and the Distribution.
(3) “Termination in Anticipation of a Change in Control” shall mean
termination of the Executive’s employment by the Company without Cause or by
the Executive for Good Reason, in either the case within the ninety (90) day
period prior to the consummation of a Change in Control.
(d) Any Other Reason. In the event the Executive’s employment is
terminated for any reason other than those described in Sections 6(a)-(c) above, the Company
shall pay to the Executive the Accrued Amounts within thirty (30) days following the date of
termination of employment.
(e) No Additional Obligations. Except as otherwise provided in this Section
6, and except for any vested benefits under any tax qualified pension plans of the Company, and
continuation of health insurance benefits on the terms and to the extent required by Section
4980B of the Code and Section 601 of the Employee Retirement Income Security Act of 1974,
as amended (which provisions are commonly known as COBRA), the Company shall have no
additional obligations under this Agreement, and the Executive shall not be entitled to any
additional compensation or benefits (including vesting) hereunder.
7. Confidentiality.
(a) The Executive hereby agrees that, during the Term and thereafter, he will
hold in strict confidence any Confidential Information related to the Company and its affiliates.
For purposes of this Agreement, the term “Confidential Information” shall mean all proprietary
information of the Company and its affiliates, which is not generally known to the public,
including without limitation any inventions, processes, methods of distribution, customer lists or
customers’ or trade secrets, and including any information which would not have been generally
known to the public but for disclosure by the Executive in breach of his obligations
hereunder; provided, that Confidential Information shall not include any information required by
law to be disclosed, but only if the Executive gave prompt written notice to the Company of such
requirement, discloses no more information than is so required, and cooperates with any attempts
by the Company to obtain a protective order or similar treatment.
(b) The Executive hereby agrees that, upon the termination of his
employment, he shall not take, without the prior written consent of the Company, any property of
the Company, including without limitation any drawing, blueprint, specification or other
document (in whatever form) of the Company or its affiliates which is of a confidential nature
relating to the Company or its affiliates, or, without limitation, relating to its or their methods of
distribution, or any description of any formulas or secret processes and will return any such
property or information (in whatever form) then in his possession.
EXECUTION VERSION
10
8. Non-Disparagement. The Executive hereby agrees, during the Term and
thereafter, not to defame or disparage the Company, its affiliates and their respective officers,
directors, members or employees, and the Company hereby agrees, during the Term and
thereafter, to prevent the then-current members of the Board from defaming or disparaging the
Executive; provided, that in addition to any other remedies a party may have, in the event the
other party fails to comply with the obligations set forth in this Section 8, any obligations the
first party may have under this Section 8 shall cease immediately. The Executive hereby agrees
to cooperate with the Company in refuting any defamatory or disparaging remarks by any third
party made in respect of the Company, its affiliates, or their directors, members, officers, or
employees. The Company hereby agrees to cooperate with the Executive in refuting any
defamatory or disparaging remarks made by any third party in respect of the Executive.
9. Non-Competition and Non-Solicitation.
(a) The Executive and the Company agree that the Company would likely
suffer significant harm from the Executive’s competing with the Company during the Term and
for some period of time thereafter. Accordingly, the Executive agrees that he will not, during the
Term and for a period of twelve (12) months following the termination of the Term and his
employment, directly or indirectly, become employed by, engage in business with, serve as an
agent or consultant to, become a partner, member, principal, stockholder or other owner (other
than a holder of less than one percent (1%) of the outstanding voting shares of any publicly held
company) of, any Competitor, or otherwise perform services relating to, the business or any
product, service or process of the Company or its affiliates at the time of the termination for any
Competitor (whether or not for compensation), including without limitation, office ownership,
office leasing and office management activities (the “Business”). For purposes of this
Agreement, the term “Competitor” shall mean any individual, partnership, corporation, limited
liability company, unincorporated organization, trust or joint venture, or a governmental agency
or political subdivision thereof that is engaged in, or otherwise competes or has a reasonable
potential for competing with the Company, anywhere in which the Company engages in the
Business.
(b) The Executive agrees that he shall not, directly or indirectly, during the
Term and for a period thereafter of (i) eighteen (18) months in the event of any termination other
than a CIC Termination, or (ii) two (2) years in the event of a CIC Termination, solicit or hire or
attempt to solicit or hire, as applicable, (A) any customer or supplier of the Company or its
affiliates in connection with a Competitor or to terminate or alter in a manner adverse to the
Company or its affiliates such customer’s or supplier’s relationship with the Company or its
affiliates, or (B) any employee, consultant or individual who was an employee or consultant
within the six (6) month period immediately prior thereto to terminate or otherwise alter his or
her relationship with the Company or any of its affiliates.
10. Injunctive Relief. It is impossible to measure in money the damages that will
accrue to the Company in the event that the Executive breaches any of the Restrictive Covenants.
In the event that the Executive breaches any such Restrictive Covenant, the Company shall be
entitled to an injunction restraining the Executive from violating such Restrictive Covenant
(without posting any bond). If the Company shall institute any action or proceeding to enforce
any such Restrictive Covenant, the Executive hereby waives the claim or defense that the
EXECUTION VERSION
11
Company has an adequate remedy at law and agrees not to assert in any such action or
proceeding the claim or defense that the Company has an adequate remedy at law. The
foregoing shall not prejudice the Company’s right to require the Executive to account for and
pay over to the Company, and the Executive hereby agrees to account for and pay over, the
compensation, profits, monies, accruals or other benefits derived or received by the Executive as
a result of any transaction constituting a breach of any of the Restrictive Covenants.
11. 280G.
(a) Notwithstanding any other provision of this Agreement or any other plan,
arrangement, or agreement to the contrary, if any of the payments or benefits provided or to be
provided by the Company or its affiliates to the Executive or for the Executive’s benefit pursuant
to the terms of this Agreement or otherwise (“Covered Payments”) constitute parachute
payments within the meaning of Section 280G of the Code (such payments, the “Parachute
Payments”) and would, but for this Section 11, be subject to the excise tax imposed under
Section 4999 of the Code (or any successor provision thereto) or any similar tax imposed by state
or local law or any interest or penalties with respect to such taxes (collectively, the “Excise
Tax”), or not be deductible under Section 280G of the Code, then such Covered Payments shall
be payable either (i) in full or (ii) reduced to the minimum extent necessary to ensure that no
portion of the Covered Payments is subject to the Excise Tax, whichever of the foregoing (i) or
(ii) results in the Executive’s receipt on an after-tax basis of the greatest amount of benefits after
taking into account the applicable federal, state, local and foreign income, employment and
excise taxes (including the Excise Tax).
(b) The Covered Payments shall be reduced in a manner that maximizes the
Executive’s economic position. In applying this principle, the reduction shall be made in a
manner consistent with the requirements of Section 409A of the Code, to the extent applicable,
and where two or more economically equivalent amounts are subject to reduction but payable at
different times, such amounts payable at the later time shall be reduced first but not below zero.
(c) Any determination required under this Section 11 shall be made in writing
by the Company or by an accounting firm selected and paid for by the Company. The Executive
shall provide the Company with such information and documents as the Company may
reasonably request in order to make a determination under this Section 11.
12. Clawback. The Company may recover incentive and other compensation paid to
the Executive, as and to the extent required by applicable law and the Company’s clawback
policy as may be in effect from time to time.
13. Miscellaneous.
(a) Any notice or other communication required or permitted under this
Agreement shall be effective only if it is in writing and shall be deemed to be given when
delivered personally or four (4) days after it is mailed by registered or certified mail, postage
prepaid, return receipt requested or one day after it is sent by a reputable overnight courier
service and, in each case, addressed as follows (or if it is sent through any other method agreed
upon by the parties):
EXECUTION VERSION
12
If to the Company, to:
Parkway, Inc.
390 North Orange Avenue
Suite 2400
Orlando, FL 32801
Attention: Compensation Committee Chairman
With a copy to:
Hogan Lovells US LLP
555 Thirteenth Street NW
Washington, D.C. 20004
Attention: Matt Thomson
If to the Executive:
_____________
or to such other address as any party hereto may designate by notice to the others.
(b) Except as expressly provided herein, this Agreement shall constitute the
entire agreement among the parties hereto with respect to the Executive’s employment
hereunder, and supersedes and is in full substitution for any and all prior understandings or
agreements with respect to the Executive’s employment or termination thereof (including,
without limitation, the Prior Agreements).
(c) This Agreement may be amended only by an instrument in writing signed
by the parties hereto, and any provision hereof may be waived only by an instrument in writing
signed by the party or parties against whom or which enforcement of such waiver is sought. The
failure of any party hereto at any time to require the performance by any other party hereto of
any provision hereof shall in no way affect the full right to require such performance at any time
thereafter, nor shall the waiver by any party hereto of a breach of any provision hereof be taken
or held to be a waiver of any succeeding breach of such provision or a waiver of the provision
itself or a waiver of any other provision of this Agreement.
(d) The parties hereto acknowledge and agree that each party has reviewed
and negotiated the terms and provisions of this Agreement and has had the opportunity to
contribute to its revision. Accordingly, the rule of construction to the effect that ambiguities are
resolved against the drafting party shall not be employed in the interpretation of this Agreement.
Rather, the terms of this Agreement shall be construed fairly as to both parties hereto and not in
favor or against either party.
(e) The parties hereto hereby represent that they each have the authority to
enter into this Agreement, and the Executive hereby represents to the Company that the
execution of, and performance of any of his duties under, this Agreement shall not constitute a
EXECUTION VERSION
13
breach of or otherwise violate any other agreement to which the Executive is a party. The
Executive hereby further represents to the Company that he will not utilize or disclose any
confidential information obtained by the Executive in connection with any former employment
with respect to his duties and responsibilities hereunder.
(f) This Agreement is binding on and is for the benefit of the parties hereto
and their respective successors, assigns, heirs, executors, administrators and other legal
representatives. Neither this Agreement nor any right or obligation hereunder may be assigned
by the Executive. The Company shall 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 this Agreement in the same manner and to the same extent that
the Company would have been required to perform it if no such succession had taken place. As
used in the Agreement, the “Company” shall mean both the Company as defined in the first
paragraph of the Agreement and any such successor that assumes this Agreement, by operation
of law or otherwise.
(g) Any provision of this Agreement (or portion thereof) which is deemed
invalid, illegal, or unenforceable in any jurisdiction shall, as to that jurisdiction and subject to
this Section, be ineffective to the extent of such invalidity, illegality or unenforceability, without
affecting in any way the remaining provisions thereof in such jurisdiction or rendering that or
any other provisions of this Agreement invalid, illegal, or unenforceable in any other jurisdiction.
If any covenant should be deemed invalid, illegal or unenforceable because its scope is
considered excessive, such covenant shall be modified so that the scope of the covenant is
reduced only to the minimum extent necessary to render the modified covenant valid, legal and
enforceable. No waiver of any provision or violation of this Agreement by the Company shall be
implied by the Company’s forbearance or failure to take action.
(h) The Company may withhold from any amounts payable to the Executive
hereunder all federal, state, city, or other taxes that the Company may reasonably determine are
required to be withheld pursuant to any applicable law or regulation (it being understood, that the
Executive shall be responsible for payment of all taxes in respect of the payments and benefits
provided herein).
(i) This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without reference to its principles of conflicts of law.
(j) This Agreement may be executed in several counterparts, each of which
shall be deemed an original, but all of which shall constitute one and the same instrument. A
facsimile of a signature shall be deemed to be and have the effect of an original signature.
(k) The headings in this Agreement are inserted for convenience of reference
only and shall not be a part of or control or affect the meaning of any provision hereof.
(l) The intent of the parties is that payments and benefits under the
Agreement comply with Section 409A of the Code and the regulations and guidance
promulgated thereunder (except to the extent exempt as short-term deferrals or otherwise) and,
accordingly, to the maximum extent permitted, the Agreement shall be interpreted to be in
EXECUTION VERSION
14
compliance therewith. A termination of employment shall not be deemed to have occurred for
purposes of any provision of this Agreement providing for the payment of any amounts or
benefits subject to Section 409A of the Code upon or following a termination of employment
unless such termination is also a “separation from service” within the meaning of Section 409A
of the Code and, for purposes of any such provision of this Agreement, references to a
“termination,” “termination of employment,” “termination of the Term” or like terms shall mean
“separation from service.” The determination of whether and when a separation from service has
occurred shall be made in a manner consistent with, and based on the presumptions set forth in,
US Treasury Regulation Section 1.409A-1(h) or any successor provision thereto. It is intended
that each installment, if any, of the payments and benefits provided hereunder shall be treated as
a separate “payment” for purposes of Section 409A of the Code. Neither the Company nor the
Executive shall have the right to accelerate or defer the delivery of any such payments or benefits
except to the extent specifically permitted or required by Section 409A of the Code; and if, as of
the date of the “separation from service,” the Executive is a “specified employee” (within the
meaning of that term under Section 409A(a)(2)(B) of the Code, or any successor provision
thereto), then with regard to any payment or the provision of any benefit that is subject to this
section (whether under this Agreement, or pursuant to any other agreement with, or plan,
program, or payroll practice of, the Company) and is due upon or as a result of the Executive’s
separation from service, such payment or benefit shall not be made or provided, to the extent
making or providing such payment or benefit would result in additional taxes or interest under
Section 409A of the Code, until the date which is the earlier of (A) the expiration of the six (6)-
month period measured from the date of such “separation from service,” and (B) the date of the
Executive’s death (the “Delay Period”) and this Agreement and each such agreement, plan,
program, or payroll practice shall hereby be deemed amended accordingly. Upon the expiration
of the Delay Period, all payments and benefits delayed pursuant to this Section (whether they
would have otherwise been payable in a single sum or in installments in the absence of such
delay) shall be paid or reimbursed to the Executive in a lump sum, and any remaining payments
and benefits due under this Agreement shall be paid or provided in accordance with the normal
payment dates specified for them herein. All reimbursements and in-kind benefits provided
under this Agreement or otherwise to the Executive shall be made or provided in accordance
with the requirements of Section 409A of the Code to the extent that such reimbursements or in-
kind benefits are subject to Section 409A of the Code. All expenses or other reimbursements
paid pursuant herewith and therewith that are taxable income to the Executive shall in no event
be paid later than the end of the calendar year next following the calendar year in which the
Executive incurs such expense or pays such related tax. With regard to any provision herein that
provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by
Section 409A of the Code, the right to reimbursement or in-kind benefits shall not be subject to
liquidation or exchange for another benefit, and the amount of expenses eligible for
reimbursement, or in-kind benefits provided, during any taxable year shall not affect the
expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable
year; provided that, the foregoing clause shall not be violated with regard to expenses reimbursed
under any arrangement covered by Section 105(b) of the Code solely because such expenses are
subject to a limit related to the period the arrangement is in effect and such payments shall be
made on or before the last day of the Executive’s taxable year following the taxable year in
which the expense occurred.
[Signature Page Follows]
EXECUTION VERSION
15
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written above.
EXECUTIVE
PARKWAY, INC.
By:
Name: A. Noni Holmes-Kidd
Title: Vice President and General Counsel
/s/ James R. Heistand
/s/ A. Noni Holmes-Kidd
EXECUTION VERSION
16
SCHEDULE A – TRANSITION LETTER AGREEMENT
[See Attached.]
April 28, 2016
Mr. James R. Heistand
Parkway Properties, Inc.
Bank of America Center
390 North Orange Avenue, Suite 2400
Orlando, Florida 32801
Dear James,
This letter agreement (this “Letter Agreement ”) memorializes our discussions regarding the terms and conditions of your
employment from and following the consummation of the transactions (collectively, the “Transactions ”) contemplated by the
Agreement and Plan of Merger among Parkway Properties, Inc., Parkway Properties LP, Cousins Properties Incorporated and Clinic
Sub Inc., dated as of the date hereof (the “Merger Agreement ”). For purposes of this Letter Agreement, terms that are capitalized but
not defined herein shall have the meanings set forth in the Merger Agreement.
As you know, the Merger Agreement contemplates that, immediately following the consummation of the Merger and the
Reorganization, Clinic will distribute, on a pro rata basis to the stockholders of Clinic, all of the shares of HoustonCo (the “ Houston
Distribution ”), and that you will be offered the role of Chief Executive Officer of HoustonCo in connection with the Houston
Distribution.
You agree that, if you are offered the role of Chief Executive Officer of HoustonCo in connection with the Houston
Distribution pursuant either to the assignment of your Employment Agreement (defined below) as in effect as of the date hereof (and
as modified hereby) to HoustonCo or to terms of a written employment agreement the terms of which are at least as favorable to you as
your Employment Agreement (defined below) as in effect as of the date hereof, you shall not have a basis for asserting, and shall be
deemed to have waived, any entitlement to terminate your employment under clauses (ii), (iii) or (iv) of the second sentence, as well as
the final sentence, of Section 5(a)(4) of the Employment Agreement by and between Pharmacy and you, dated as of July 8, 2013 and
amended as of June 15, 2015 (the “Employment Agreement ”), as a result of the consummation of the Transactions or any changes to
the terms and conditions (including, without limitation, the location) of your employment that result from the Transactions. Without
limiting the generality of the foregoing, you agree that Pharmacy or Clinic, as applicable, and its Affiliates may assign all of their
obligations under the Employment Agreement and/or this Letter Agreement to HoustonCo and its Affiliates. For purposes of
determining whether the terms of a new employment agreement are at least as favorable as the terms of your Employment Agreement,
any provision providing for “singletrigger” vesting of equity upon a change in control may be replaced with “doubletrigger vesting”
requiring both the occurrence of a change in control and your involuntary termination without cause or resignation for good reason,
and the following provisions may be disregarded: (a) any special onetime equity award, and (b) the provision in the final sentence of
section 5(a)(4) of your Employment Agreement.
You acknowledge and agree that the waiver contemplated by the preceding paragraph is material to Clinic’s and Pharmacy’s
willingness to consummate the Transactions and that good and valuable consideration will be provided, directly or indirectly, to you in
connection with the Transactions, including without limitation: (a) the accelerated vesting of certain Pharmacy Equity Awards and
Pharmacy Partnership LTIP Units upon the consummation of the Transactions, (b) exchange of unvested Pharmacy Partnership LTIP
Units, if any, into timevesting Pharmacy Equity Awards immediately prior to the consummation of the Transactions, which shall
partially vest upon the consummation of the Transactions and shall partially be assumed, (c) assumption of those Pharmacy Equity
Awards that are stock options, and (d) your continued employment with HoustonCo and its Affiliates following the consummation of
the Transactions as the Chief Executive Officer under the terms of the Employment Agreement (subject to the waiver described above)
or, if applicable, a new employment agreement satisfying the conditions described in paragraph three of this Letter Agreement.
Furthermore, in connection with consummation of the Transactions, you acknowledge and agree to the following:
1. That any annual incentive award payable to you for calendar year 2016 shall, notwithstanding any contrary provision of your
Employment Agreement, be subject to the sole discretion of Clinic and its Affiliates (which for this purpose, includes
HoustonCo, whether before or after the Houston Distribution),
2. That the Pharmacy Equity Awards and Pharmacy Partnership LTIP Units listed on Exhibit A may be converted into an equal
number of Pharmacy RSU Awards immediately prior to consummation of the Transactions, generally subject to the terms
and conditions of your current timebased Pharmacy RSU Awards, but vesting in four equal tranches, with twentyfive
percent (25%) becoming vested on the date of consummation of the Transactions, and twentyfive percent (25%) each
becoming vested on the first, second, and third anniversaries of the date of consummation of the Transactions; and
3. That in connection with the Transactions, unless Clinic waives this requirement in writing, you will not offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any HoustonCo common shares you hold
by reason of a Pharmacy Equity Award or a Pharmacy Partnership LTIP Unit that becomes fully vested as a result of the
Transactions, or enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of such common shares, whether any such transaction is to be settled by delivery of HoustonCo
common shares or other HoustonCo securities, in cash or otherwise, for sixty (60) days after consummation of the
Transactions. You further agree to execute such agreements and instruments as may be reasonably requested by Clinic or
HoustonCo to give further effect to this undertaking.
2
This Letter Agreement, together with the Employment Agreement, constitute the entire agreement between the parties
hereto with respect to the subject matter hereof. No provision of this Letter Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in a writing signed by you, Clinic, and Pharmacy. This Letter Agreement shall be
governed, construed, and interpreted under the laws of the State of New York without reference to its principles of conflicts of laws.
If the Effective Time does not occur, this Letter Agreement shall be null and void ab initio.
From and following the Effective Time, your employment shall continue to be at will and may be terminated by either you
or HoustonCo or its Affiliates at any time, without prior notice and for any or no reason.
We believe that you and HoustonCo will have a promising future. Please acknowledge your agreement to the terms of this
Letter Agreement by your signature below.
Cousins Properties Incorporated
By: /s/ Pamela F. Roper
Name: Pamela F. Roper
Title:
Senior Vice President, General Counsel and
Corporate Secretary
3
Parkway Properties, Inc.
By: /s/ David R. O’Reilly
Name: David R. O’Reilly
Title:
Executive Vice President and Chief
Financial Officer
By: /s/ Jeremy R. Dorsett
Name: Jeremy R. Dorsett
Title:
Executive Vice President, General
Counsel and Secretary
Acknowledged and Agreed:
/s/ James R. Heistand April 28, 2016
James R. Heistand Date
EXHIBIT A
Name Number
Pharmacy Equity Awards and Pharmacy
Partnership LTIP Units
?ames ?. Heistand ????00 201? Time?Based Pharmacy ??U Awards
?ames ?. Heistand 2????? 201? Time?Based Pharmacy ??U Awards
?ames ?. Heistand 1????? 201? Time?Based Pharmacy ??U Awards
?ames ?. Heistand ???00 201? Time?Based Pharmacy ??U Awards
?ames ?. Heistand ?????? 201? Pharmacy Partnership LTIP Units
?ames ?. Heistand ?????? 201? Pharmacy Partnership LTIP Units
Total 1????0? New Pharmacy ??U Awards
EXECUTION VERSION
SCHEDULE B – TRANSITION RSUs
Name Number of Transition RSUs
James R. Heistand 109,045
EXECUTION VERSION
1
EMPLOYMENT AGREEMENT
This AGREEMENT (the “Agreement”) is entered into as of December 12, 2016 (the
“Effective Date”), by and between Parkway, Inc. (the “Company”) and M. Jayson Lipsey (the
“Executive”).
WHEREAS, Cousins Properties Incorporated (“Cousins”), Parkway Properties, Inc.
(“Legacy Parkway”), Parkway Properties LP, and Clinic Sub Inc. (“Merger Sub”) entered into
that certain Agreement and Plan of Merger, dated as of April 28, 2016 (the “Merger
Agreement”), pursuant to which Legacy Parkway merged with and into Merger Sub, with
Merger Sub continuing as the surviving company (the “Merger”);
WHEREAS, Cousins, Legacy Parkway, the Company, Parkway Operating Partnership
LP (the “Partnership”), and certain other parties entered into a Separation, Distribution and
Transition Services Agreement, dated as of October 5, 2016 (the “Separation and Distribution
Agreement”), pursuant to which, among other things, (i) the Houston, Texas assets of Legacy
Parkway and Cousins and certain other assets were contributed to the Company and the
Partnership, and (ii) Cousins distributed 100% of the capital stock of the Company to the
stockholders of Cousins (which included legacy stockholders of Legacy Parkway) (the
“Distribution”);
WHEREAS, the Company desires to continue to employ the Executive as Executive Vice
President and Chief Operating Officer of the Company, on the terms and conditions set forth
herein;
WHEREAS, except as otherwise provided in this Agreement, the Company and the
Executive desire to replace in their entirety any prior agreements or arrangements providing for
severance payments and related benefits or payments or benefits upon a change in control
between the Executive and the Company or any of its affiliates, including without limitation that
Employment Agreement, dated as of October 25, 2013 and as amended June 15, 2015, between
Legacy Parkway and the Executive, which agreement was assumed by the Company in
connection with the Distribution as of October 7, 2016 (together, the “Prior Agreements”); and
WHEREAS, the Executive desires to accept employment on the terms hereinafter set
forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants herein and
for other good and valuable consideration, the parties agree as follows:
1. Effective Date and Term; Termination of Prior Agreements.
(a) The Executive shall be employed by the Company for the period
commencing as of the Effective Date and ending on December 31, 2019, unless earlier
terminated pursuant to the terms hereof (the “Initial Term”), subject to automatic renewal for
additional one (1) year periods unless either party provides the other with ninety (90) days’
notice of such party’s intent not to renew (the Initial Term and any such renewal, the “Term”).
Notwithstanding anything to the contrary in this Section 1(a), upon the occurrence of a Change
EXECUTION VERSION
2
in Control (as defined below), the Term shall automatically extend until the later of (i) the
second (2nd) anniversary of such Change in Control and (ii) the date upon which the Term would
otherwise have ended. As further described in Section 6(b) and Section 6(c), the Company’s
election not to renew this Agreement at the end of the Initial Term or a renewal Term shall
constitute a termination by the Company without Cause, where the Executive is willing to extend
the Term under the Agreement’s existing terms and conditions; provided the Executive ceases
his employment on account of such non-renewal at the end of the then-current Term.
(b) From and after the Effective Date, the Executive’s entitlement to
payments or benefits under all Prior Agreements shall terminate, and the Prior Agreements and
all obligations of the parties thereunder will cease to have any further force and effect, except to
the extent set forth or contemplated herein or in that certain Letter Agreement, dated as of April
28, 2016, by and between Legacy Parkway and the Executive attached hereto as Schedule A
(“Transition Letter Agreement”).
2. Position and Duties.
(a) During the Term, the Executive shall serve as the Company’s Executive
Vice President and Chief Operating Officer. The Executive shall report to the Company’s Chief
Executive Officer or the Board of Directors of the Company (the “Board”) and shall have such
duties and responsibilities as are consistent with the Executive’s position and as may be assigned
by the Chief Executive Officer or the Board from time to time. During the Term, the Executive
shall be subject to, and shall act in accordance with, all reasonable instructions and directions of
the Company and all applicable policies and rules of the Company.
(b) The Executive shall devote his full working time, energy, and attention to
the performance of his duties and responsibilities hereunder and shall not engage in any other
business, profession, or occupation for compensation or otherwise which would conflict with or
interfere with the rendition of the Executive’s services hereunder; provided that nothing herein
shall (i) preclude the Executive from (A) managing his personal, financial, and legal affairs, and
(B) with the Board’s prior written consent, serving as a director on the board of directors of a
publicly traded company that is not a competitor of the Company, or (ii) prevent the Executive
from engaging in civic and charitable activities, so long as such activities do not interfere with
the performance of his duties and responsibilities to the Company as provided hereunder.
3. Compensation.
(a) During the Term, the Company shall pay the Executive a minimum base
salary at the rate of $450,000 per annum (the “Base Salary”), payable in regular installments in
accordance with the Company’s customary payroll practices. The Board or the Board’s
Compensation Committee (the “Committee”) shall annually review the Executive’s Base Salary
and, in its sole discretion, may increase the Executive’s annual Base Salary. References in this
Agreement to Base Salary shall refer to the annual Base Salary as may be increased by the Board
or the Committee from time to time.
(b) In addition to the Base Salary, during the Term, the Executive shall be
eligible to participate in the Company’s discretionary annual incentive plan (the “AIP”) as may
EXECUTION VERSION
3
be established and approved by the Board or the Committee from time to time, and pursuant to
the AIP, the Executive may earn an annual bonus (the “Annual Bonus”) for each calendar year
during the Term, with a target Annual Bonus opportunity of ninety-five percent (95%) of Base
Salary (the “Target Bonus”); provided, that the Board or the Committee shall annually review
the Executive’s Target Bonus and, in its sole discretion, may increase the Executive’s Target
Bonus, and references in this Agreement to Target Bonus shall refer to the Target Bonus as may
be increased by the Board or the Committee from time to time.
(1) The Annual Bonus actually paid, if any, for any calendar year shall
be determined by the Chief Executive Officer and the Board or the Committee
based upon the achievement of annual performance objectives established by the
Chief Executive Officer and the Board or the Committee, and communicated to
the Executive, from time to time. The Annual Bonus shall be paid no later than
two and one-half (2.5) months following the end of the calendar year to which
such Annual Bonus relates, subject to the Executive’s continued employment with
the Company on the applicable payment date, except as otherwise provided
in Sections 6(a), 6(b), and 6(c).
(2) The Company agrees to pay to the Executive an Annual Bonus for
calendar year 2016 in the amount of $427,500 (the “Transition Bonus”). The
Transition Bonus shall be paid no later than February 15, 2017, subject to the
Executive’s continued employment with the Company on the applicable payment
date, except as otherwise provided in Sections 6(a), 6(b), and 6(c). The Transition
Bonus shall be in satisfaction of any Annual Bonus payable to the Executive by
Legacy Parkway, Cousins, or the Company under any Prior Agreements for the
2016 calendar year or fiscal year.
(c) During the Term, pursuant and subject to the terms of the Parkway, Inc.
and Parkway Operating Partnership LP 2016 Omnibus Equity Incentive Plan (as it may be
amended from time to time, or its successor, the “Plan”) and subject to Board or Committee
approval, the Executive shall be eligible to receive an annual equity grant as the Board or the
Committee deems appropriate. In addition:
(1) CIC Termination. In the event of a CIC Termination, each of the
Executive’s outstanding equity or equity-based awards that is subject to time-
based vesting shall immediately vest and be paid in full upon the date of such CIC
Termination.
(2) Transition RSUs. Following the consummation of the Distribution
but not later than the Effective Date, the Executive shall receive (or shall have
received) the grant of time-based restricted stock units (“RSUs”) set forth on
Schedule B attached hereto (the “Transition RSUs”). Fifty percent (50%) of the
Transition RSUs shall vest on January 1, 2017, and the remaining fifty percent
(50%) shall vest ratable on each of the first, second and third anniversaries of the
Merger, subject to the Executive’s continued employment on each applicable
vesting date.
EXECUTION VERSION
4
(3) Equity Grants. The Executive shall be eligible to receive an annual
grant in each calendar year commencing with 2017. However, the grant for
calendar year 2017 shall be made as of the Effective Date, based on a twelve (12)-
month period beginning on the Effective Date (an "Agreement Year"). For such
grant, the Executive shall receive (i) a grant of performance-based RSUs,
covering 32,572 common share units, that vest based on achievement of certain
performance metrics over a three (3)-Agreement Year performance period, and
(ii) a grant of time-based RSUs, having an aggregate value equal to $165,000, that
vest in annual twenty-five percent (25%) installments over a four (4)-Agreement
Year period, and each such grant subject to the Executive’s continued
employment on each applicable vesting date. For purposes of the grant of time-
based RSUs for the Agreement Year, the number of common share units covered
by the time-based RSUs shall be determined by dividing the aggregate value of
such award by the fifteen (15)-day trailing average closing price of the
Company’s common stock as of the date of grant. For the avoidance of doubt, for
any calendar year following the 2017 calendar year, the Executive shall be
eligible to receive an annual grant in an amount and in the form as the Board or
the Committee deems appropriate, such grant to be made on or about the time the
Committee convenes to evaluate achievement for annual bonus determinations for
the prior year and to have a vesting start date commencing January 1 of the
applicable calendar year.
(4) Code Section 409A. Notwithstanding the foregoing, to the extent
accelerated payment is not permitted under Section 409A of the Internal Revenue
Code of 1986, as amended (the “Code”) without the imposition of a penalty, the
awards shall immediately vest in full, but be paid on the original payment
schedule set forth in such award.
4. Employee Benefits; Expense Reimbursement. During the Term:
(a) The Executive shall be entitled to participate in all employee benefit plans
and programs available generally to other executives of the Company.
(b) The Executive shall be entitled to reimbursement of reasonable business
expenses and to vacation days to be provided in accordance with the Company’s policies as may
be in effect from time to time during the Term.
5. Termination of Employment.
(a) The Term and the Executive’s employment hereunder may be terminated
under the following circumstances.
(1) Death. The Term and the Executive’s employment hereunder shall
terminate upon the Executive’s death.
(2) Disability. The Term and the Executive’s employment hereunder
shall terminate in the event of the Executive’s Disability. For purposes of this
Agreement, “Disability” shall mean: as a result of the Executive’s incapacity due
EXECUTION VERSION
5
to physical or mental illness or injury, the Executive (i) is eligible to receive a
benefit under the Company’s long-term disability plan applicable to the
Executive, or (ii) if no such long-term disability plan is applicable to the
Executive, the Executive is unable to perform his duties hereunder for a period of
ninety (90) consecutive days or a period of ninety (90) days in any one hundred
eighty (180)-day period, even with any reasonable accommodation required by
law.
(3) Cause. The Company may immediately terminate the Term and the
Executive’s employment hereunder for Cause. For purposes of this Agreement,
“Cause” shall mean: (i) the continued refusal by the Executive to perform the
material responsibilities and duties under this Agreement, (ii) the engaging by the
Executive in willful or reckless conduct, if such conduct is done or omitted to be
done by the Executive not in good faith, and is materially injurious to the
Company monetarily or otherwise, (iii) the Executive’s conviction of, or pleading
of guilty or nolo contendere to, a felony, (iv) the commission or omission of any
act by the Executive that is materially detrimental to the best interests of the
Company and that constitutes common law fraud or a violation of applicable law,
or (v) the Executive’s breach of any material provision of this Agreement
(including any Restrictive Covenants). Notwithstanding the foregoing, the Term
and the Executive’s employment shall not be deemed to have been terminated for
Cause unless the Company shall have given the Executive (A) written notice
setting forth the reasons for the Company’s intention to terminate the Executive’s
employment for Cause, and (B) a reasonable opportunity, not to exceed thirty (30)
days, to cure such failure, to the extent reasonably susceptible to cure.
(4) Good Reason. The Executive may terminate the Term and his
employment hereunder for Good Reason. For purposes of this Agreement, “Good
Reason” shall mean, (i) the Company’s failure to pay material compensation
when due and payable, (ii) a material diminution in the Executive’s position,
duties or responsibilities, including without limitation, the Executive’s ceasing to
report to the Chief Executive Officer, (iii) the Company’s material breach of any
other material provision of this Agreement, (iv) requiring the Executive to
relocate his or her residence to a location outside of Orlando, Florida; or (v)
following a Change in Control, if at any time during the two (2)-year period
following such Change in Control Executive is not given a compensation and
benefits package, including in particular annual equity or equity-based grants, that
is at least as favorable as the package Executive receives from the Company prior
to the Change in Control. The Executive shall not have Good Reason to terminate
the Term and his employment hereunder unless the Company shall have been
given (A) a Notice of Termination setting forth the reasons for the Executive
asserting Good Reason, and (B) a reasonable opportunity, not to exceed thirty
(30) days, to cure such failure.
(5) Any Other Reason. Either party may terminate the Term and the
Executive’s employment hereunder at any time for any reason other than those set
EXECUTION VERSION
6
forth above; provided that the terminating party shall provide the other party with
Notice of Termination (as defined below in Section 5(b)).
(b) Notice of Termination. Any termination of the Executive’s employment
by the Company or by the Executive during the Term shall be communicated by providing the
other party at least sixty (60) days’ advance written notice of such termination (the “Notice of
Termination”) in accordance with Section 13(a); provided that no Notice of Termination shall be
required in the event of a termination on account of the death of the Executive and that the
Notice of Termination required under Section 5(a)(3) on account of the Executive’s termination
by the Company for Cause shall not require any amount of advance notification (except that with
respect to the determination of Cause, the Company shall have given the Executive prior notice
and the opportunity to cure as set forth in Section 5(a)(3) above).
6. Termination Payments.
(a) Death or Disability. In the event that the Executive’s employment
hereunder terminates as a result of the Executive’s death or Disability, all then unvested
Transition RSUs shall immediately and automatically vest, and the Company shall pay to the
Executive (or, if applicable, to the Executive’s estate), within thirty (30) days following the date
of termination of employment, (i) any earned but unpaid Base Salary accrued through the date of
termination and any earned but unpaid vacation pay (collectively, the “Accrued Amounts”), (ii)
any unpaid Transition Bonus, and (iii) any earned but unpaid Annual Bonus for the calendar year
preceding the date the Executive’s employment hereunder terminates and, provided the
Executive’s date of employment termination is more than six months into the performance year
and subject to the Committee’s certification of achievement of the performance goals for such
year after the year is concluded, a pro-rated portion of any Annual Bonus for the calendar year in
which termination occurs (in each case without regard to whether the Executive is employed on
the date such Annual Bonus is paid).
(b) Without Cause or For Good Reason. In the event that the Company
terminates the Executive’s employment hereunder without Cause (which shall include the
Company’s election not to renew and/or extend the Agreement, where the Executive is willing to
extend the Term, as provided in Section 1, on the Agreement’s existing terms and where the
Executive serves out the current Term, it being understood that Sections 5 and 6 shall continue to
apply in accordance with their terms and it being understood that following the end of the then-
current Term, the Executive’s employment shall have terminated), or the Executive terminates
his employment hereunder for Good Reason, in each case other than a CIC Termination, the
Executive shall be entitled to (i) the Accrued Amounts and any unpaid Transition Bonus, and, if
such termination is prior to the second anniversary of the Effective Date, the CIC Cash (as
defined in Section 6(c) below) each payable within thirty (30) days following the date of
termination of employment; (ii) any earned but unpaid Annual Bonus for the calendar year
preceding the date the Executive’s employment hereunder terminates and, provided the
Executive’s date of employment termination is more than six (6) months into the performance
year and subject to the Committee’s certification of achievement of the performance goals for
such year after the year is concluded, a pro-rated portion of any Annual Bonus for the calendar
year in which termination occurs, in each case payable on the date such amount would otherwise
have been paid (without regard to whether the Executive is employed on the date such Annual
EXECUTION VERSION
7
Bonus is paid); (iii) an amount equal to twelve (12) months’ Base Salary, payable in twelve (12)
equal monthly installments in accordance with the Company’s customary payroll practices
starting one month after termination; (iv) immediate and automatic vesting of all then unvested
Transition RSUs, and an additional twelve (12) months’ time-based vesting credit on any other
outstanding equity or equity-based awards that are subject to time-based vesting; and (v)
continued health care coverage for himself and any of his eligible dependents at the Company’s
cost, for up to twelve (12) months after coverage would otherwise lapse on account of
termination under the Company’s group health plans pursuant to the continuation of coverage
provisions contained in Sections 601 through 608 of the Employee Retirement Income Security
Act of 1974, as amended (the “Health Continuation Benefit”); provided, that any payment that
would otherwise have been made but that is conditioned upon the execution and effectiveness of
the Release (as defined below) shall not be made or provided until the fortieth (40th) day
following the date of such termination of employment. The payments and benefits provided
under this Section 6(b), other than the Accrued Amounts, Transition Bonus, and the earned but
unpaid Annual Bonus payment for the preceding calendar year, are subject to and conditioned
upon (x) the Executive’s execution of a valid general release and waiver (in a form reasonably
acceptable to the Company) within thirty (30) days following the date of termination, waiving all
claims the Executive may have against the Company, its successors, assigns, affiliates,
executives, officers, and directors relating to the Executive’s employment with the Company and
the termination thereof (the “Release”), and such waiver becoming effective, and (y) the
Executive’s compliance with any restrictive covenants to which he may be subject pursuant
to Sections 7, 8, and 9 hereof (the “Restrictive Covenants”, and the conditions in (x) and (y), the
“Conditions”). The Executive shall not be entitled to any other compensation or benefits not
expressly provided for in this Section 6(b), regardless of the time that would otherwise remain in
the Term had the Term not been terminated hereunder.
(c) CIC Termination. In lieu of the payments and benefits described
in Section 6(a) and 6(b) above, and in addition to any accelerated vesting pursuant to Section
3(c)(1), in the event the Executive’s employment is terminated either by the Company without
Cause (which shall include the Company’s election not to renew and/or extend the Agreement,
where the Executive is willing to extend the Term, as provided in Section 1, on the Agreement’s
existing terms and where the Executive serves out the current Term, it being understood that
Sections 5 and 6 shall continue to apply in accordance with their terms and it being understood
that following the end of the then-current Term, the Executive’s employment shall have
terminated), or by the Executive for Good Reason, in each such case within the two (2)-year
period following a Change in Control, or if there is a Termination in Anticipation of a Change in
Control (any such termination, a “CIC Termination”), the Executive shall be entitled to (i) the
Accrued Amounts and any unpaid Transition Bonus, each payable within thirty (30) days
following the date of termination of employment; (ii) any earned but unpaid Annual Bonus for
the calendar year preceding the date the Executive’s employment hereunder terminates, payable
within thirty (30) days following the date of termination of employment and, provided the
Executive’s date of employment termination is more than six (6) months into the performance
year and subject to the Committee’s certification of achievement of the performance goals for
such year after the year is concluded, a pro-rated portion of any Annual Bonus for the calendar
year in which termination occurs, payable on the date such amount would otherwise have been
paid (without regard to whether the Executive is employed on the date such Annual Bonus is
paid); (iii) the Health Continuation Benefit; and (iv) an amount equal to the sum of (A) twenty-
EXECUTION VERSION
8
four (24) months’ Base Salary and (B) two times (2x) the Target Bonus (“CIC Cash”). The
payments and benefits provided under this Section 6(c), other than the Accrued Amounts,
Transition Bonus, and the earned but unpaid Annual Bonus payment for the preceding calendar
year, are subject to and conditioned upon the Executive’s compliance with the Conditions. The
payment described in clause (iv) above shall be paid in lump sum within thirty (30) days
following the date of termination of employment, unless the Change in Control does not qualify
as a 409A Change in Control or such form is otherwise prohibited by Section 409A of the Code,
in which case such payment shall be payable in equal installments over a period of twelve (12)
months, in accordance with the Company’s customary payroll practices. For purposes of this
Agreement:
(1) “Change in Control” shall have the meaning ascribed to such term
in the Plan and shall be inclusive of a 409A Change in Control; provided, for the
avoidance of doubt, a Change in Control shall exclude the Merger and the
Distribution.
(2) “409A Change in Control” shall mean a change in the ownership
or effective control of the Company, or a change in the ownership of a substantial
portion of the assets of the Company, within the meaning of Section
409A(a)(2)(A)(v) of the Code and U.S. Treasury Regulation Section 1.409A-
3(i)(5); provided, for the avoidance of doubt, a 409A Change in Control shall
exclude the Merger and the Distribution.
(3) “Termination in Anticipation of a Change in Control” shall mean
(i) delivery by the Company of notice of its intent not to renew the Term pursuant
to Section 1, or (ii) termination of the Executive’s employment by the Company
without Cause or by the Executive for Good Reason, in either the case of (i) or (ii)
within the ninety (90) day period prior to the consummation of a Change in
Control.
(d) Any Other Reason. In the event the Executive’s employment is terminated
for any reason other than those described in Sections 6(a)-(c) above, the Company shall pay to
the Executive the Accrued Amounts within thirty (30) days following the date of termination of
employment.
(e) No Additional Obligations. Except as otherwise provided in this Section 6,
and except for any vested benefits under any tax qualified pension plans of the Company, and
continuation of health insurance benefits on the terms and to the extent required by Section
4980B of the Code and Section 601 of the Employee Retirement Income Security Act of 1974,
as amended (which provisions are commonly known as COBRA), the Company shall have no
additional obligations under this Agreement, and the Executive shall not be entitled to any
additional compensation or benefits (including vesting) hereunder.
7. Confidentiality.
(a) The Executive hereby agrees that, during the Term and thereafter, he will
hold in strict confidence any Confidential Information related to the Company and its affiliates.
EXECUTION VERSION
9
For purposes of this Agreement, the term “Confidential Information” shall mean all proprietary
information of the Company and its affiliates, which is not generally known to the public,
including without limitation any inventions, processes, methods of distribution, customer lists or
customers’ or trade secrets, and including any information which would not have been generally
known to the public but for disclosure by the Executive in breach of his obligations
hereunder; provided, that Confidential Information shall not include any information required by
law to be disclosed, but only if the Executive gave prompt written notice to the Company of such
requirement, discloses no more information than is so required, and cooperates with any attempts
by the Company to obtain a protective order or similar treatment.
(b) The Executive hereby agrees that, upon the termination of his
employment, he shall not take, without the prior written consent of the Company, any property of
the Company, including without limitation any drawing, blueprint, specification, or other
document (in whatever form) of the Company or its affiliates which is of a confidential nature
relating to the Company or its affiliates, or, without limitation, relating to its or their methods of
distribution, or any description of any formulas or secret processes and will return any such
property or information (in whatever form) then in his possession.
8. Non-Disparagement. The Executive hereby agrees, during the Term and
thereafter, not to defame or disparage the Company, its affiliates, and their respective officers,
directors, members, or employees, and the Company hereby agrees, during the Term and
thereafter, to use reasonable efforts to prevent the then-current members of the Board from
defaming or disparaging the Executive; provided, that in addition to any other remedies a party
may have, in the event the other party fails to comply with the obligations set forth in
this Section 8, any obligations the first party may have under this Section 8 shall cease
immediately. The Executive hereby agrees to cooperate with the Company in refuting any
defamatory or disparaging remarks by any third party made in respect of the Company, its
affiliates, or their directors, members, officers, or employees.
9. Non-Competition and Non-Solicitation.
(a) The Executive and the Company agree that the Company would likely
suffer significant harm from the Executive’s competing with the Company during the Term and
for some period of time thereafter. Accordingly, the Executive agrees that he will not, during the
Term and for a period of twelve (12) months following the termination of the Term and his
employment, directly or indirectly, become employed by, engage in business with, serve as an
agent or consultant to, become a partner, member, principal, stockholder, or other owner (other
than a holder of less than one percent (1%) of the outstanding voting shares of any publicly held
company) of, any Competitor, or otherwise perform services relating to, the business or any
product, service, or process of the Company or its affiliates at the time of the termination for any
Competitor (whether or not for compensation), including without limitation, office ownership,
office leasing, and office management activities (the “Business”). For purposes of this
Agreement, the term “Competitor” shall mean any individual, partnership, corporation, limited
liability company, unincorporated organization, trust, or joint venture, or a governmental agency
or political subdivision thereof that is engaged in, or otherwise competes or has a reasonable
potential for competing with the Company, anywhere in which the Company engages in the
Business.
EXECUTION VERSION
10
(b) The Executive agrees that he shall not, directly or indirectly, during the
Term and for a period thereafter of twelve (12) months following the termination of the Term
and his employment, solicit or hire or attempt to solicit or hire, as applicable, (i) any customer or
supplier of the Company or its affiliates in connection with a Competitor or to terminate or alter
in a manner adverse to the Company or its affiliates such customer’s or supplier’s relationship
with the Company or its affiliates, or (ii) any employee, consultant, or individual who was an
employee or consultant within the six (6) month period immediately prior thereto to terminate or
otherwise alter his or her relationship with the Company or any of its affiliates.
10. Injunctive Relief. It is impossible to measure in money the damages that will
accrue to the Company in the event that the Executive breaches any of the Restrictive Covenants.
In the event that the Executive breaches any such Restrictive Covenant, the Company shall be
entitled to an injunction restraining the Executive from violating such Restrictive Covenant
(without posting any bond). If the Company shall institute any action or proceeding to enforce
any such Restrictive Covenant, the Executive hereby waives the claim or defense that the
Company has an adequate remedy at law and agrees not to assert in any such action or
proceeding the claim or defense that the Company has an adequate remedy at law. The
foregoing shall not prejudice the Company’s right to require the Executive to account for and
pay over to the Company, and the Executive hereby agrees to account for and pay over, the
compensation, profits, monies, accruals, or other benefits derived or received by the Executive as
a result of any transaction constituting a breach of any of the Restrictive Covenants.
11. 280G.
(a) Notwithstanding any other provision of this Agreement or any other plan,
arrangement, or agreement to the contrary, if any of the payments or benefits provided or to be
provided by the Company or its affiliates to the Executive or for the Executive’s benefit pursuant
to the terms of this Agreement or otherwise (“Covered Payments”) constitute parachute
payments within the meaning of Section 280G of the Code (such payments, the “Parachute
Payments”) and would, but for this Section 11, be subject to the excise tax imposed under
Section 4999 of the Code (or any successor provision thereto) or any similar tax imposed by state
or local law or any interest or penalties with respect to such taxes (collectively, the “Excise
Tax”), or not be deductible under Section 280G of the Code, then such Covered Payments shall
be payable either (i) in full or (ii) reduced to the minimum extent necessary to ensure that no
portion of the Covered Payments is subject to the Excise Tax, whichever of the foregoing (i) or
(ii) results in the Executive’s receipt on an after-tax basis of the greatest amount of benefits after
taking into account the applicable federal, state, local, and foreign income, employment, and
excise taxes (including the Excise Tax).
(b) The Covered Payments shall be reduced in a manner that maximizes the
Executive’s economic position. In applying this principle, the reduction shall be made in a
manner consistent with the requirements of Section 409A of the Code, to the extent applicable,
and where two or more economically equivalent amounts are subject to reduction but payable at
different times, such amounts payable at the later time shall be reduced first but not below zero.
(c) Any determination required under this Section 11 shall be made in writing
by the Company or by an accounting firm selected and paid for by the Company. The Executive
EXECUTION VERSION
11
shall provide the Company with such information and documents as the Company may
reasonably request in order to make a determination under this Section 11.
12. Clawback. The Company may recover incentive and other compensation paid to
the Executive, as and to the extent required by applicable law and the Company’s clawback
policy as may be in effect from time to time.
13. Miscellaneous.
(a) Any notice or other communication required or permitted under this
Agreement shall be effective only if it is in writing and shall be deemed to be given when
delivered personally or four (4) days after it is mailed by registered or certified mail, postage
prepaid, return receipt requested, or one day after it is sent by a reputable overnight courier
service and, in each case, addressed as follows (or if it is sent through any other method agreed
upon by the parties):
If to the Company, to:
Parkway, Inc.
390 North Orange Avenue
Suite 2400
Orlando, FL 32801
Attention: Compensation Committee Chairman
With a copy to:
Hogan Lovells US LLP
555 Thirteenth Street NW
Washington, D.C. 20004
Attention: Matt Thomson
If to the Executive:
_____________
or to such other address as any party hereto may designate by notice to the others.
(b) Except as expressly provided herein, this Agreement shall constitute the
entire agreement among the parties hereto with respect to the Executive’s employment hereunder
and supersedes and is in full substitution for any and all prior understandings or agreements with
respect to the Executive’s employment or termination thereof (including, without limitation, the
Prior Agreements).
EXECUTION VERSION
12
(c) This Agreement may be amended only by an instrument in writing signed
by the parties hereto, and any provision hereof may be waived only by an instrument in writing
signed by the party or parties against whom or which enforcement of such waiver is sought. The
failure of any party hereto at any time to require the performance by any other party hereto of
any provision hereof shall in no way affect the full right to require such performance at any time
thereafter, nor shall the waiver by any party hereto of a breach of any provision hereof be taken
or held to be a waiver of any succeeding breach of such provision or a waiver of the provision
itself or a waiver of any other provision of this Agreement.
(d) The parties hereto acknowledge and agree that each party has reviewed
and negotiated the terms and provisions of this Agreement and has had the opportunity to
contribute to its revision. Accordingly, the rule of construction to the effect that ambiguities are
resolved against the drafting party shall not be employed in the interpretation of this Agreement.
Rather, the terms of this Agreement shall be construed fairly as to both parties hereto and not in
favor or against either party.
(e) The parties hereto hereby represent that they each have the authority to
enter into this Agreement, and the Executive hereby represents to the Company that the
execution of, and performance of any of his duties under, this Agreement shall not constitute a
breach of or otherwise violate any other agreement to which the Executive is a party. The
Executive hereby further represents to the Company that he will not utilize or disclose any
confidential information obtained by the Executive in connection with any former employment
with respect to his duties and responsibilities hereunder.
(f) This Agreement is binding on and is for the benefit of the parties hereto
and their respective successors, assigns, heirs, executors, administrators, and other legal
representatives. Neither this Agreement nor any right or obligation hereunder may be assigned
by the Executive. The Company shall 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 this Agreement in the same manner and to the same extent that
the Company would have been required to perform it if no such succession had taken place. As
used in the Agreement, the “Company” shall mean both the Company as defined in the first
paragraph of the Agreement and any such successor that assumes this Agreement, by operation
of law or otherwise.
(g) Any provision of this Agreement (or portion thereof) which is deemed
invalid, illegal, or unenforceable in any jurisdiction shall, as to that jurisdiction and subject to
this Section, be ineffective to the extent of such invalidity, illegality, or unenforceability, without
affecting in any way the remaining provisions thereof in such jurisdiction or rendering that or
any other provisions of this Agreement invalid, illegal, or unenforceable in any other jurisdiction.
If any covenant should be deemed invalid, illegal, or unenforceable because its scope is
considered excessive, such covenant shall be modified so that the scope of the covenant is
reduced only to the minimum extent necessary to render the modified covenant valid, legal, and
enforceable. No waiver of any provision or violation of this Agreement by the Company shall be
implied by the Company’s forbearance or failure to take action.
EXECUTION VERSION
13
(h) The Company may withhold from any amounts payable to the Executive
hereunder all federal, state, city, or other taxes that the Company may reasonably determine are
required to be withheld pursuant to any applicable law or regulation (it being understood, that the
Executive shall be responsible for payment of all taxes in respect of the payments and benefits
provided herein).
(i) This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without reference to its principles of conflicts of law.
(j) This Agreement may be executed in several counterparts, each of which
shall be deemed an original, but all of which shall constitute one and the same instrument. A
facsimile of a signature shall be deemed to be and have the effect of an original signature.
(k) The headings in this Agreement are inserted for convenience of reference
only and shall not be a part of or control or affect the meaning of any provision hereof.
(l) The intent of the parties is that payments and benefits under the
Agreement comply with Section 409A of the Code and the regulations and guidance
promulgated thereunder (except to the extent exempt as short-term deferrals or otherwise), and
accordingly, to the maximum extent permitted, the Agreement shall be interpreted to be in
compliance therewith. A termination of employment shall not be deemed to have occurred for
purposes of any provision of this Agreement providing for the payment of any amounts or
benefits subject to Section 409A of the Code upon or following a termination of employment
unless such termination is also a “separation from service” within the meaning of Section 409A
of the Code, and for purposes of any such provision of this Agreement, references to a
“termination,” “termination of employment,” “termination of the Term,” or like terms shall mean
“separation from service.” The determination of whether and when a separation from service has
occurred shall be made in a manner consistent with, and based on the presumptions set forth in,
US Treasury Regulation Section 1.409A-1(h) or any successor provision thereto. It is intended
that each installment, if any, of the payments and benefits provided hereunder shall be treated as
a separate “payment” for purposes of Section 409A of the Code. Neither the Company nor the
Executive shall have the right to accelerate or defer the delivery of any such payments or benefits
except to the extent specifically permitted or required by Section 409A of the Code; and if, as of
the date of the “separation from service,” the Executive is a “specified employee” (within the
meaning of that term under Section 409A(a)(2)(B) of the Code, or any successor provision
thereto), then with regard to any payment or the provision of any benefit that is subject to this
Section (whether under this Agreement, or pursuant to any other agreement with, or plan,
program, or payroll practice of, the Company) and is due upon or as a result of the Executive’s
separation from service, such payment or benefit shall not be made or provided, to the extent
making or providing such payment or benefit would result in additional taxes or interest under
Section 409A of the Code, until the date which is the earlier of (A) the expiration of the six (6)-
month period measured from the date of such “separation from service,” and (B) the date of the
Executive’s death (the “Delay Period”), and this Agreement and each such agreement, plan,
program, or payroll practice shall hereby be deemed amended accordingly. Upon the expiration
of the Delay Period, all payments and benefits delayed pursuant to this Section (whether they
would have otherwise been payable in a single sum or in installments in the absence of such
delay) shall be paid or reimbursed to the Executive in a lump sum, and any remaining payments
EXECUTION VERSION
14
and benefits due under this Agreement shall be paid or provided in accordance with the normal
payment dates specified for them herein. All reimbursements and in-kind benefits provided
under this Agreement or otherwise to the Executive shall be made or provided in accordance
with the requirements of Section 409A of the Code to the extent that such reimbursements or in-
kind benefits are subject to Section 409A of the Code. All expenses or other reimbursements
paid pursuant herewith and therewith that are taxable income to the Executive shall in no event
be paid later than the end of the calendar year next following the calendar year in which the
Executive incurs such expense or pays such related tax. With regard to any provision herein that
provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by
Section 409A of the Code, the right to reimbursement or in-kind benefits shall not be subject to
liquidation or exchange for another benefit, and the amount of expenses eligible for
reimbursement, or in-kind benefits provided, during any taxable year shall not affect the
expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable
year; provided that, the foregoing clause shall not be violated with regard to expenses reimbursed
under any arrangement covered by Section 105(b) of the Code solely because such expenses are
subject to a limit related to the period the arrangement is in effect and such payments shall be
made on or before the last day of the Executive’s taxable year following the taxable year in
which the expense occurred.
[Signature Page Follows]
EXECUTION VERSION
15
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written above.
EXECUTIVE
PARKWAY, INC.
By:
Name: A. Noni Holmes-Kidd
Title: Vice President and General Counsel
/s/ M. Jayson Lipsey
/s/ A. Noni Holmes-Kidd
EXECUTION VERSION
SCHEDULE A – TRANSITION LETTER AGREEMENT
[See Attached.]
April 28, 2016
M. Jayson Lipsey
Parkway Properties, Inc.
Bank of America Center
390 North Orange Avenue, Suite 2400
Orlando, Florida 32801
Dear Mr. Lipsey,
This letter agreement (this “Letter Agreement ”) memorializes our discussions regarding the terms and conditions of your
employment from and following the consummation of the transactions (collectively, the “Transactions ”) contemplated by the
Agreement and Plan of Merger among Parkway Properties, Inc., Parkway Properties LP, Cousins Properties Incorporated and Clinic
Sub Inc., dated as of the date hereof (the “Merger Agreement ”). For purposes of this Letter Agreement, terms that are capitalized but
not defined herein shall have the meanings set forth in the Merger Agreement.
As you know, the Merger Agreement contemplates that, immediately following the consummation of the Merger and the
Reorganization, Clinic will distribute, on a pro rata basis to the stockholders of Clinic, all of the shares of HoustonCo (the “ Houston
Distribution ”), and that you will be offered the role of Executive Vice President and Chief Operating Officer of HoustonCo in
connection with the Houston Distribution.
You agree that, if you are offered the role of Executive Vice President and Chief Operating Officer of HoustonCo in
connection with the Houston Distribution pursuant either to the assignment of your Employment Agreement (defined below) as in
effect as of the date hereof (and as modified hereby) to HoustonCo or to terms of a written employment agreement the terms of which
are at least as favorable to you as your Employment Agreement (defined below) as in effect as of the date hereof, you shall not have a
basis for asserting, and shall be deemed to have waived, any entitlement to terminate your employment under clauses (ii), (iii) or (iv) of
the second sentence, as well as the final sentence, of Section 5(a)(4) of the Employment Agreement by and between Pharmacy and
you, dated as of October 25, 2013 and amended as of June 15, 2015 (the “Employment Agreement ”), as a result of the consummation
of the Transactions or any changes to the terms and conditions (including, without limitation, the location) of your employment that
result from the Transactions. Without limiting the generality of the foregoing, you agree that Pharmacy or Clinic, as applicable, and its
Affiliates may assign all of their obligations under the Employment Agreement and/or this Letter Agreement to HoustonCo and its
Affiliates. For purposes of determining whether the terms of a new employment agreement are at least as favorable as the terms of your
Employment Agreement, any special onetime equity award may be disregarded.
You acknowledge and agree that the waiver contemplated by the preceding paragraph is material to Clinic’s and Pharmacy’s
willingness to consummate the Transactions and that good and valuable consideration will be provided, directly or indirectly, to you in
connection with the Transactions, including without limitation: (a) the accelerated vesting of certain Pharmacy Partnership LTIP Units
upon the consummation of the Transactions, (b) exchange of unvested Pharmacy Partnership LTIP Units, if any, into timevesting
Pharmacy Equity Awards immediately prior to the consummation of the Transactions, which shall partially vest upon the
consummation of the Transactions and shall partially be assumed, (c) assumption of those Pharmacy Equity Awards that are stock
options, and (d) your continued employment with HoustonCo and its Affiliates following the consummation of the Transactions as the
Executive Vice President and Chief Operating Officer under the terms of the Employment Agreement (subject to the waiver described
above) or, if applicable, a new employment agreement satisfying the conditions described in paragraph three of this Letter Agreement.
Furthermore, in connection with consummation of the Transactions, you acknowledge and agree to the following:
1. That any annual incentive award payable to you for calendar year 2016 shall, notwithstanding any contrary provision of your
Employment Agreement, be subject to the sole discretion of Clinic and its Affiliates (which for this purpose, includes
HoustonCo, whether before or after the Houston Distribution),
2. That the Pharmacy Equity Awards and Pharmacy Partnership LTIP Units listed on Exhibit A may be converted into an equal
number of Pharmacy RSU Awards immediately prior to consummation of the Transactions, generally subject to the terms
and conditions of your current timebased Pharmacy RSU Awards, but vesting in four equal tranches, with twentyfive
percent (25%) becoming vested on the date of consummation of the Transactions, and twentyfive percent (25%) each
becoming vested on the first, second, and third anniversaries of the date of consummation of the Transactions; and
3. That in connection with the Transactions, unless Clinic waives this requirement in writing, you will not offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any HoustonCo common shares you hold
by reason of a Pharmacy Equity Award or a Pharmacy Partnership LTIP Unit that becomes fully vested as a result of the
Transactions, or enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of such common shares, whether any such transaction is to be settled by delivery of HoustonCo
common shares or other HoustonCo securities, in cash or otherwise, for sixty (60) days after consummation of the
Transactions. You further agree to execute such agreements and instruments as may be reasonably requested by Clinic or
HoustonCo to give further effect to this undertaking.
This Letter Agreement, together with the Employment Agreement, constitute the entire agreement between the parties
hereto with respect to the subject matter hereof. No provision of this Letter Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in a writing signed by you, Clinic, and Pharmacy. This Letter Agreement shall be
governed, construed, and interpreted under the laws of the State of New York without reference to its principles of conflicts of laws.
2
If the Effective Time does not occur, this Letter Agreement shall be null and void ab initio.
From and following the Effective Time, your employment shall continue to be at will and may be terminated by either you
or HoustonCo or its Affiliates at any time, without prior notice and for any or no reason.
We believe that you and HoustonCo will have a promising future. Please acknowledge your agreement to the terms of this
Letter Agreement by your signature below.
Sincerely,
Cousins Properties Incorporated
By: /s/ Pamela F. Roper
Name: Pamela F. Roper
Title:
Senior Vice President, General Counsel and
Corporate Secretary
3
By: /s/ James R. Heistand
Name: James R. Heistand
Title: President and Chief Executive Officer
By: /s/ Jeremy R. Dorsett
Name: Jeremy R. Dorsett
Title:
Executive Vice President, General
Counsel and Secretary
Acknowledged and Agreed:
/s/ M. Jayson Lipsey April 28, 2016
M. Jayson Lipsey Date
EXHIBIT A
Name Number Class
M. ?ayson Lipsey ?3???0 ?01? Time?Base? ?harmacy ??? A?ar?s
M. ?ayson Lipsey 11???3 ?01? Time?Base? ?harmacy ??? A?ar?s
M. ?ayson Lipsey ??000 ?01? Time?Base? ?harmacy ??? A?ar?s
M. ?ayson Lipsey ????? ?013 ?March? Time?Base? ?harmacy ??? A?ar?s
M. ?ayson Lipsey 1????? ?013 ??ctober? Time?Base? ?harmacy ??? A?ar?s
M. ?ayson Lipsey ?3?10? ?01? ?harmacy ?artnership LTI? ?nits
M. ?ayson Lipsey 1??000 ?01? ?harmacy ?artnership LTI? ?nits
Total 100??33 Ne? ?harmacy ??? A?ar?s
SCHEDULE B – TRANSITION RSUs
Name Number of Transition RSUs
M. Jayson Lipsey 59,058
EXECUTION VERSION
1
EMPLOYMENT AGREEMENT
This AGREEMENT (the “Agreement”) is entered into as of December 12, 2016 (the
“Effective Date”), by and between Parkway, Inc. (the “Company”) and Scott E. Francis (the
“Executive”).
WHEREAS, Cousins Properties Incorporated (“Cousins”), Parkway Properties, Inc.
(“Legacy Parkway”), Parkway Properties LP, and Clinic Sub Inc. (“Merger Sub”) entered into
that certain Agreement and Plan of Merger, dated as of April 28, 2016 (the “Merger
Agreement”), pursuant to which Legacy Parkway merged with and into Merger Sub, with
Merger Sub continuing as the surviving company (the “Merger”);
WHEREAS, Cousins, Legacy Parkway, the Company, Parkway Operating Partnership
LP (the “Partnership”), and certain other parties entered into a Separation, Distribution and
Transition Services Agreement, dated as of October 5, 2016 (the “Separation and Distribution
Agreement”), pursuant to which, among other things, (i) the Houston, Texas assets of Legacy
Parkway and Cousins and certain other assets were contributed to the Company and the
Partnership, and (ii) Cousins distributed 100% of the capital stock of the Company to the
stockholders of Cousins (which included legacy stockholders of Legacy Parkway) (the
“Distribution”);
WHEREAS, the Company desires to continue to employ the Executive as Executive Vice
President, Chief Financial Officer, and Chief Accounting Officer of the Company, on the terms
and conditions set forth herein;
WHEREAS, except as otherwise provided in this Agreement, the Company and the
Executive desire to replace in their entirety any prior agreements or arrangements providing for
severance payments and related benefits or payments or benefits upon a change in control
between the Executive and the Company or any of its affiliates, including without limitation that
Employment Agreement, dated as of December 22, 2014 and as amended June 15, 2015,
between Legacy Parkway and the Executive, which agreement was assumed by the Company in
connection with the Distribution as of October 7, 2016 (together, the “Prior Agreements”); and
WHEREAS, the Executive desires to accept employment on the terms hereinafter set
forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants herein and
for other good and valuable consideration, the parties agree as follows:
1. Effective Date and Term; Termination of Prior Agreements.
(a) The Executive shall be employed by the Company for the period
commencing as of the Effective Date and ending on December 31, 2019, unless earlier
terminated pursuant to the terms hereof (the “Initial Term”), subject to automatic renewal for
additional one (1) year periods unless either party provides the other with ninety (90) days’
notice of such party’s intent not to renew (the Initial Term and any such renewal, the “Term”).
Notwithstanding anything to the contrary in this Section 1(a), upon the occurrence of a Change
EXECUTION VERSION
2
in Control (as defined below), the Term shall automatically extend until the later of (i) the
second (2nd) anniversary of such Change in Control and (ii) the date upon which the Term would
otherwise have ended. As further described in Section 6(b) and Section 6(c), the Company’s
election not to renew this Agreement at the end of the Initial Term or a renewal Term shall
constitute a termination by the Company without Cause, where the Executive is willing to extend
the Term under the Agreement’s existing terms and conditions; provided the Executive ceases
his employment on account of such non-renewal at the end of the then-current Term.
(b) From and after the Effective Date, the Executive’s entitlement to
payments or benefits under all Prior Agreements shall terminate, and the Prior Agreements and
all obligations of the parties thereunder will cease to have any further force and effect, except to
the extent set forth or contemplated herein or in that certain Letter Agreement, dated as of April
28, 2016, by and between Legacy Parkway and the Executive attached hereto as Schedule A
(“Transition Letter Agreement”).
2. Position and Duties.
(a) During the Term, the Executive shall serve as the Company’s Executive
Vice President, Chief Financial Officer, and Chief Accounting Officer. The Executive shall
report to the Company’s Chief Executive Officer or the Board of Directors of the Company (the
“Board”) and shall have such duties and responsibilities as are consistent with the Executive’s
position and as may be assigned by the Chief Executive Officer or the Board from time to time.
During the Term, the Executive shall be subject to, and shall act in accordance with, all
reasonable instructions and directions of the Company and all applicable policies and rules of the
Company.
(b) The Executive shall devote his full working time, energy, and attention to
the performance of his duties and responsibilities hereunder and shall not engage in any other
business, profession, or occupation for compensation or otherwise which would conflict with or
interfere with the rendition of the Executive’s services hereunder; provided that nothing herein
shall (i) preclude the Executive from (A) managing his personal, financial, and legal affairs, and
(B) with the Board’s prior written consent, serving as a director on the board of directors of a
publicly traded company that is not a competitor of the Company, or (ii) prevent the Executive
from engaging in civic and charitable activities, so long as such activities do not interfere with
the performance of his duties and responsibilities to the Company as provided hereunder.
3. Compensation.
(a) During the Term, the Company shall pay the Executive a minimum base
salary at the rate of $400,000 per annum (the “Base Salary”), payable in regular installments in
accordance with the Company’s customary payroll practices. The Board or the Board’s
Compensation Committee (the “Committee”) shall annually review the Executive’s Base Salary
and, in its sole discretion, may increase the Executive’s annual Base Salary. References in this
Agreement to Base Salary shall refer to the annual Base Salary as may be increased by the Board
or the Committee from time to time.
EXECUTION VERSION
3
(b) In addition to the Base Salary, during the Term, the Executive shall be
eligible to participate in the Company’s discretionary annual incentive plan (the “AIP”) as may
be established and approved by the Board or the Committee from time to time, and pursuant to
the AIP, the Executive may earn an annual bonus (the “Annual Bonus”) for each calendar year
during the Term, with a target Annual Bonus opportunity of ninety percent (90%) of Base Salary
(the “Target Bonus”); provided, that the Board or the Committee shall annually review the
Executive’s Target Bonus and, in its sole discretion, may increase the Executive’s Target Bonus,
and references in this Agreement to Target Bonus shall refer to the Target Bonus as may be
increased by the Board or the Committee from time to time.
(1) The Annual Bonus actually paid, if any, for any calendar year shall
be determined by the Chief Executive Officer and the Board or the Committee
based upon the achievement of annual performance objectives established by the
Chief Executive Officer and the Board or the Committee, and communicated to
the Executive, from time to time. The Annual Bonus shall be paid no later than
two and one-half (2.5) months following the end of the calendar year to which
such Annual Bonus relates, subject to the Executive’s continued employment with
the Company on the applicable payment date, except as otherwise provided
in Sections 6(a), 6(b), and 6(c).
(2) The Company agrees to pay to the Executive an Annual Bonus for
calendar year 2016 in the amount of $360,000 (the “Transition Bonus”). The
Transition Bonus shall be paid no later than February 15, 2017, subject to the
Executive’s continued employment with the Company on the applicable payment
date, except as otherwise provided in Sections 6(a), 6(b), and 6(c). The Transition
Bonus shall be in satisfaction of any Annual Bonus payable to the Executive by
Legacy Parkway, Cousins, or the Company under any Prior Agreements for the
2016 calendar year or fiscal year.
(c) During the Term, pursuant and subject to the terms of the Parkway, Inc.
and Parkway Operating Partnership LP 2016 Omnibus Equity Incentive Plan (as it may be
amended from time to time, or its successor, the “Plan”) and subject to Board or Committee
approval, the Executive shall be eligible to receive an annual equity grant as the Board or the
Committee deems appropriate. In addition:
(1) CIC Termination. In the event of a CIC Termination, each of the
Executive’s outstanding equity or equity-based awards that is subject to time-
based vesting shall immediately vest and be paid in full upon the date of such CIC
Termination.
(2) Transition RSUs. Following the consummation of the Distribution
but not later than the Effective Date, the Executive shall receive (or shall have
received) the grant of time-based restricted stock units (“RSUs”) set forth on
Schedule B attached hereto (the “Transition RSUs”). Fifty percent (50%) of the
Transition RSUs shall vest on January 1, 2017, and the remaining fifty percent
(50%) shall vest ratable on each of the first, second and third anniversaries of the
EXECUTION VERSION
4
Merger, subject to the Executive’s continued employment on each applicable
vesting date.
(3) Equity Grants. The Executive shall be eligible to receive an annual
grant in each calendar year commencing with 2017. However, the grant for
calendar year 2017 shall be made as of the Effective Date, based on a twelve (12)-
month period beginning on the Effective Date (an "Agreement Year"). For such
grant, the Executive shall receive (i) a grant of performance-based RSUs,
covering 29,611 common share units, that vest based on achievement of certain
performance metrics over a three (3)-Agreement Year performance period, and
(ii) a grant of time-based RSUs, having an aggregate value equal to $150,000, that
vest in annual twenty-five percent (25%) installments over a four (4)-Agreement
Year period, and each such grant subject to the Executive’s continued
employment on each applicable vesting date. For purposes of the grant of time-
based RSUs for the Agreement Year, the number of common share units covered
by the time-based RSUs shall be determined by dividing the aggregate value of
such award by the fifteen (15)-day trailing average closing price of the
Company’s common stock as of the date of grant. For the avoidance of doubt, for
any calendar year following the 2017 calendar year, the Executive shall be
eligible to receive an annual grant in an amount and in the form as the Board or
the Committee deems appropriate, such grant to be made on or about the time the
Committee convenes to evaluate achievement for annual bonus determinations for
the prior year and to have a vesting start date commencing January 1 of the
applicable calendar year.
(4) Code Section 409A. Notwithstanding the foregoing, to the extent
accelerated payment is not permitted under Section 409A of the Internal Revenue
Code of 1986, as amended (the “Code”) without the imposition of a penalty, the
awards shall immediately vest in full, but be paid on the original payment
schedule set forth in such award.
4. Employee Benefits; Expense Reimbursement. During the Term:
(a) The Executive shall be entitled to participate in all employee benefit plans
and programs available generally to other executives of the Company.
(b) The Executive shall be entitled to reimbursement of reasonable business
expenses and to vacation days to be provided in accordance with the Company’s policies as may
be in effect from time to time during the Term.
5. Termination of Employment.
(a) The Term and the Executive’s employment hereunder may be terminated
under the following circumstances.
(1) Death. The Term and the Executive’s employment hereunder shall
terminate upon the Executive’s death.
EXECUTION VERSION
5
(2) Disability. The Term and the Executive’s employment hereunder
shall terminate in the event of the Executive’s Disability. For purposes of this
Agreement, “Disability” shall mean: as a result of the Executive’s incapacity due
to physical or mental illness or injury, the Executive (i) is eligible to receive a
benefit under the Company’s long-term disability plan applicable to the
Executive, or (ii) if no such long-term disability plan is applicable to the
Executive, the Executive is unable to perform his duties hereunder for a period of
ninety (90) consecutive days or a period of ninety (90) days in any one hundred
eighty (180)-day period, even with any reasonable accommodation required by
law.
(3) Cause. The Company may immediately terminate the Term and the
Executive’s employment hereunder for Cause. For purposes of this Agreement,
“Cause” shall mean: (i) the continued refusal by the Executive to perform the
material responsibilities and duties under this Agreement, (ii) the engaging by the
Executive in willful or reckless conduct, if such conduct is done or omitted to be
done by the Executive not in good faith, and is materially injurious to the
Company monetarily or otherwise, (iii) the Executive’s conviction of, or pleading
of guilty or nolo contendere to, a felony, (iv) the commission or omission of any
act by the Executive that is materially detrimental to the best interests of the
Company and that constitutes common law fraud or a violation of applicable law,
or (v) the Executive’s breach of any material provision of this Agreement
(including any Restrictive Covenants). Notwithstanding the foregoing, the Term
and the Executive’s employment shall not be deemed to have been terminated for
Cause unless the Company shall have given the Executive (A) written notice
setting forth the reasons for the Company’s intention to terminate the Executive’s
employment for Cause, and (B) a reasonable opportunity, not to exceed thirty (30)
days, to cure such failure, to the extent reasonably susceptible to cure.
(4) Good Reason. The Executive may terminate the Term and his
employment hereunder for Good Reason. For purposes of this Agreement, “Good
Reason” shall mean, (i) the Company’s failure to pay material compensation
when due and payable, (ii) a material diminution in the Executive’s position,
duties or responsibilities, including without limitation, the Executive’s ceasing to
report to the Chief Executive Officer, (iii) the Company’s material breach of any
other material provision of this Agreement, (iv) requiring the Executive to
relocate his or her residence to a location outside of Orlando, Florida; or (v)
following a Change in Control, if at any time during the two (2)-year period
following such Change in Control Executive is not given a compensation and
benefits package, including in particular annual equity or equity-based grants, that
is at least as favorable as the package Executive receives from the Company prior
to the Change in Control. The Executive shall not have Good Reason to terminate
the Term and his employment hereunder unless the Company shall have been
given (A) a Notice of Termination setting forth the reasons for the Executive
asserting Good Reason, and (B) a reasonable opportunity, not to exceed thirty
(30) days, to cure such failure.
EXECUTION VERSION
6
(5) Any Other Reason. Either party may terminate the Term and the
Executive’s employment hereunder at any time for any reason other than those set
forth above; provided that the terminating party shall provide the other party with
Notice of Termination (as defined below in Section 5(b)).
(b) Notice of Termination. Any termination of the Executive’s employment
by the Company or by the Executive during the Term shall be communicated by providing the
other party at least sixty (60) days’ advance written notice of such termination (the “Notice of
Termination”) in accordance with Section 13(a); provided that no Notice of Termination shall be
required in the event of a termination on account of the death of the Executive and that the
Notice of Termination required under Section 5(a)(3) on account of the Executive’s termination
by the Company for Cause shall not require any amount of advance notification (except that with
respect to the determination of Cause, the Company shall have given the Executive prior notice
and the opportunity to cure as set forth in Section 5(a)(3) above).
6. Termination Payments.
(a) Death or Disability. In the event that the Executive’s employment
hereunder terminates as a result of the Executive’s death or Disability, all then unvested
Transition RSUs shall immediately and automatically vest, and the Company shall pay to the
Executive (or, if applicable, to the Executive’s estate), within thirty (30) days following the date
of termination of employment, (i) any earned but unpaid Base Salary accrued through the date of
termination and any earned but unpaid vacation pay (collectively, the “Accrued Amounts”), (ii)
any unpaid Transition Bonus, and (iii) any earned but unpaid Annual Bonus for the calendar year
preceding the date the Executive’s employment hereunder terminates and, provided the
Executive’s date of employment termination is more than six months into the performance year
and subject to the Committee’s certification of achievement of the performance goals for such
year after the year is concluded, a pro-rated portion of any Annual Bonus for the calendar year in
which termination occurs (in each case without regard to whether the Executive is employed on
the date such Annual Bonus is paid).
(b) Without Cause or For Good Reason. In the event that the Company
terminates the Executive’s employment hereunder without Cause (which shall include the
Company’s election not to renew and/or extend the Agreement, where the Executive is willing to
extend the Term, as provided in Section 1, on the Agreement’s existing terms and where the
Executive serves out the current Term, it being understood that Sections 5 and 6 shall continue to
apply in accordance with their terms and it being understood that following the end of the then-
current Term, the Executive’s employment shall have terminated), or the Executive terminates
his employment hereunder for Good Reason, in each case other than a CIC Termination, the
Executive shall be entitled to (i) the Accrued Amounts and any unpaid Transition Bonus, and, if
such termination is prior to the second anniversary of the Effective Date, the CIC Cash (as
defined in Section 6(c) below) each payable within thirty (30) days following the date of
termination of employment; (ii) any earned but unpaid Annual Bonus for the calendar year
preceding the date the Executive’s employment hereunder terminates and, provided the
Executive’s date of employment termination is more than six (6) months into the performance
year and subject to the Committee’s certification of achievement of the performance goals for
such year after the year is concluded, a pro-rated portion of any Annual Bonus for the calendar
EXECUTION VERSION
7
year in which termination occurs, in each case payable on the date such amount would otherwise
have been paid (without regard to whether the Executive is employed on the date such Annual
Bonus is paid); (iii) an amount equal to twelve (12) months’ Base Salary, payable in twelve (12)
equal monthly installments in accordance with the Company’s customary payroll practices
starting one month after termination; (iv) immediate and automatic vesting of all then unvested
Transition RSUs, and an additional twelve (12) months’ time-based vesting credit on any other
outstanding equity or equity-based awards that are subject to time-based vesting; and (v)
continued health care coverage for himself and any of his eligible dependents at the Company’s
cost, for up to twelve (12) months after coverage would otherwise lapse on account of
termination under the Company’s group health plans pursuant to the continuation of coverage
provisions contained in Sections 601 through 608 of the Employee Retirement Income Security
Act of 1974, as amended (the “Health Continuation Benefit”); provided, that any payment that
would otherwise have been made but that is conditioned upon the execution and effectiveness of
the Release (as defined below) shall not be made or provided until the fortieth (40th) day
following the date of such termination of employment. The payments and benefits provided
under this Section 6(b), other than the Accrued Amounts, Transition Bonus, and the earned but
unpaid Annual Bonus payment for the preceding calendar year, are subject to and conditioned
upon (x) the Executive’s execution of a valid general release and waiver (in a form reasonably
acceptable to the Company) within thirty (30) days following the date of termination, waiving all
claims the Executive may have against the Company, its successors, assigns, affiliates,
executives, officers, and directors relating to the Executive’s employment with the Company and
the termination thereof (the “Release”), and such waiver becoming effective, and (y) the
Executive’s compliance with any restrictive covenants to which he may be subject pursuant
to Sections 7, 8, and 9 hereof (the “Restrictive Covenants”, and the conditions in (x) and (y), the
“Conditions”). The Executive shall not be entitled to any other compensation or benefits not
expressly provided for in this Section 6(b), regardless of the time that would otherwise remain in
the Term had the Term not been terminated hereunder.
(c) CIC Termination. In lieu of the payments and benefits described
in Section 6(a) and 6(b) above, and in addition to any accelerated vesting pursuant to Section
3(c)(1), in the event the Executive’s employment is terminated either by the Company without
Cause (which shall include the Company’s election not to renew and/or extend the Agreement,
where the Executive is willing to extend the Term, as provided in Section 1, on the Agreement’s
existing terms and where the Executive serves out the current Term, it being understood that
Sections 5 and 6 shall continue to apply in accordance with their terms and it being understood
that following the end of the then-current Term, the Executive’s employment shall have
terminated), or by the Executive for Good Reason, in each such case within the two (2)-year
period following a Change in Control, or if there is a Termination in Anticipation of a Change in
Control (any such termination, a “CIC Termination”), the Executive shall be entitled to (i) the
Accrued Amounts and any unpaid Transition Bonus, each payable within thirty (30) days
following the date of termination of employment; (ii) any earned but unpaid Annual Bonus for
the calendar year preceding the date the Executive’s employment hereunder terminates, payable
within thirty (30) days following the date of termination of employment and, provided the
Executive’s date of employment termination is more than six (6) months into the performance
year and subject to the Committee’s certification of achievement of the performance goals for
such year after the year is concluded, a pro-rated portion of any Annual Bonus for the calendar
year in which termination occurs, payable on the date such amount would otherwise have been
EXECUTION VERSION
8
paid (without regard to whether the Executive is employed on the date such Annual Bonus is
paid); (iii) the Health Continuation Benefit; and (iv) an amount equal to the sum of (A) twenty-
four (24) months’ Base Salary and (B) two times (2x) the Target Bonus (“CIC Cash”). The
payments and benefits provided under this Section 6(c), other than the Accrued Amounts,
Transition Bonus, and the earned but unpaid Annual Bonus payment for the preceding calendar
year, are subject to and conditioned upon the Executive’s compliance with the Conditions. The
payment described in clause (iv) above shall be paid in lump sum within thirty (30) days
following the date of termination of employment, unless the Change in Control does not qualify
as a 409A Change in Control or such form is otherwise prohibited by Section 409A of the Code,
in which case such payment shall be payable in equal installments over a period of twelve (12)
months, in accordance with the Company’s customary payroll practices. For purposes of this
Agreement:
(1) “Change in Control” shall have the meaning ascribed to such term
in the Plan and shall be inclusive of a 409A Change in Control; provided, for the
avoidance of doubt, a Change in Control shall exclude the Merger and the
Distribution.
(2) “409A Change in Control” shall mean a change in the ownership
or effective control of the Company, or a change in the ownership of a substantial
portion of the assets of the Company, within the meaning of Section
409A(a)(2)(A)(v) of the Code and U.S. Treasury Regulation Section 1.409A-
3(i)(5); provided, for the avoidance of doubt, a 409A Change in Control shall
exclude the Merger and the Distribution.
(3) “Termination in Anticipation of a Change in Control” shall mean
(i) delivery by the Company of notice of its intent not to renew the Term pursuant
to Section 1, or (ii) termination of the Executive’s employment by the Company
without Cause or by the Executive for Good Reason, in either the case of (i) or (ii)
within the ninety (90) day period prior to the consummation of a Change in
Control.
(d) Any Other Reason. In the event the Executive’s employment is terminated
for any reason other than those described in Sections 6(a)-(c) above, the Company shall pay to
the Executive the Accrued Amounts within thirty (30) days following the date of termination of
employment.
(e) No Additional Obligations. Except as otherwise provided in this Section 6,
and except for any vested benefits under any tax qualified pension plans of the Company, and
continuation of health insurance benefits on the terms and to the extent required by Section
4980B of the Code and Section 601 of the Employee Retirement Income Security Act of 1974,
as amended (which provisions are commonly known as COBRA), the Company shall have no
additional obligations under this Agreement, and the Executive shall not be entitled to any
additional compensation or benefits (including vesting) hereunder.
7. Confidentiality.
EXECUTION VERSION
9
(a) The Executive hereby agrees that, during the Term and thereafter, he will
hold in strict confidence any Confidential Information related to the Company and its affiliates.
For purposes of this Agreement, the term “Confidential Information” shall mean all proprietary
information of the Company and its affiliates, which is not generally known to the public,
including without limitation any inventions, processes, methods of distribution, customer lists or
customers’ or trade secrets, and including any information which would not have been generally
known to the public but for disclosure by the Executive in breach of his obligations
hereunder; provided, that Confidential Information shall not include any information required by
law to be disclosed, but only if the Executive gave prompt written notice to the Company of such
requirement, discloses no more information than is so required, and cooperates with any attempts
by the Company to obtain a protective order or similar treatment.
(b) The Executive hereby agrees that, upon the termination of his
employment, he shall not take, without the prior written consent of the Company, any property of
the Company, including without limitation any drawing, blueprint, specification, or other
document (in whatever form) of the Company or its affiliates which is of a confidential nature
relating to the Company or its affiliates, or, without limitation, relating to its or their methods of
distribution, or any description of any formulas or secret processes and will return any such
property or information (in whatever form) then in his possession.
8. Non-Disparagement. The Executive hereby agrees, during the Term and
thereafter, not to defame or disparage the Company, its affiliates, and their respective officers,
directors, members, or employees, and the Company hereby agrees, during the Term and
thereafter, to use reasonable efforts to prevent the then-current members of the Board from
defaming or disparaging the Executive; provided, that in addition to any other remedies a party
may have, in the event the other party fails to comply with the obligations set forth in
this Section 8, any obligations the first party may have under this Section 8 shall cease
immediately. The Executive hereby agrees to cooperate with the Company in refuting any
defamatory or disparaging remarks by any third party made in respect of the Company, its
affiliates, or their directors, members, officers, or employees.
9. Non-Competition and Non-Solicitation.
(a) The Executive and the Company agree that the Company would likely
suffer significant harm from the Executive’s competing with the Company during the Term and
for some period of time thereafter. Accordingly, the Executive agrees that he will not, during the
Term and for a period of twelve (12) months following the termination of the Term and his
employment, directly or indirectly, become employed by, engage in business with, serve as an
agent or consultant to, become a partner, member, principal, stockholder, or other owner (other
than a holder of less than one percent (1%) of the outstanding voting shares of any publicly held
company) of, any Competitor, or otherwise perform services relating to, the business or any
product, service, or process of the Company or its affiliates at the time of the termination for any
Competitor (whether or not for compensation), including without limitation, office ownership,
office leasing, and office management activities (the “Business”). For purposes of this
Agreement, the term “Competitor” shall mean any individual, partnership, corporation, limited
liability company, unincorporated organization, trust, or joint venture, or a governmental agency
or political subdivision thereof that is engaged in, or otherwise competes or has a reasonable
EXECUTION VERSION
10
potential for competing with the Company, anywhere in which the Company engages in the
Business.
(b) The Executive agrees that he shall not, directly or indirectly, during the
Term and for a period thereafter of twelve (12) months following the termination of the Term
and his employment, solicit or hire or attempt to solicit or hire, as applicable, (i) any customer or
supplier of the Company or its affiliates in connection with a Competitor or to terminate or alter
in a manner adverse to the Company or its affiliates such customer’s or supplier’s relationship
with the Company or its affiliates, or (ii) any employee, consultant, or individual who was an
employee or consultant within the six (6) month period immediately prior thereto to terminate or
otherwise alter his or her relationship with the Company or any of its affiliates.
10. Injunctive Relief. It is impossible to measure in money the damages that will
accrue to the Company in the event that the Executive breaches any of the Restrictive Covenants.
In the event that the Executive breaches any such Restrictive Covenant, the Company shall be
entitled to an injunction restraining the Executive from violating such Restrictive Covenant
(without posting any bond). If the Company shall institute any action or proceeding to enforce
any such Restrictive Covenant, the Executive hereby waives the claim or defense that the
Company has an adequate remedy at law and agrees not to assert in any such action or
proceeding the claim or defense that the Company has an adequate remedy at law. The
foregoing shall not prejudice the Company’s right to require the Executive to account for and
pay over to the Company, and the Executive hereby agrees to account for and pay over, the
compensation, profits, monies, accruals, or other benefits derived or received by the Executive as
a result of any transaction constituting a breach of any of the Restrictive Covenants.
11. 280G.
(a) Notwithstanding any other provision of this Agreement or any other plan,
arrangement, or agreement to the contrary, if any of the payments or benefits provided or to be
provided by the Company or its affiliates to the Executive or for the Executive’s benefit pursuant
to the terms of this Agreement or otherwise (“Covered Payments”) constitute parachute
payments within the meaning of Section 280G of the Code (such payments, the “Parachute
Payments”) and would, but for this Section 11, be subject to the excise tax imposed under
Section 4999 of the Code (or any successor provision thereto) or any similar tax imposed by state
or local law or any interest or penalties with respect to such taxes (collectively, the “Excise
Tax”), or not be deductible under Section 280G of the Code, then such Covered Payments shall
be payable either (i) in full or (ii) reduced to the minimum extent necessary to ensure that no
portion of the Covered Payments is subject to the Excise Tax, whichever of the foregoing (i) or
(ii) results in the Executive’s receipt on an after-tax basis of the greatest amount of benefits after
taking into account the applicable federal, state, local, and foreign income, employment, and
excise taxes (including the Excise Tax).
(b) The Covered Payments shall be reduced in a manner that maximizes the
Executive’s economic position. In applying this principle, the reduction shall be made in a
manner consistent with the requirements of Section 409A of the Code, to the extent applicable,
and where two or more economically equivalent amounts are subject to reduction but payable at
different times, such amounts payable at the later time shall be reduced first but not below zero.
EXECUTION VERSION
11
(c) Any determination required under this Section 11 shall be made in writing
by the Company or by an accounting firm selected and paid for by the Company. The Executive
shall provide the Company with such information and documents as the Company may
reasonably request in order to make a determination under this Section 11.
12. Clawback. The Company may recover incentive and other compensation paid to
the Executive, as and to the extent required by applicable law and the Company’s clawback
policy as may be in effect from time to time.
13. Miscellaneous.
(a) Any notice or other communication required or permitted under this
Agreement shall be effective only if it is in writing and shall be deemed to be given when
delivered personally or four (4) days after it is mailed by registered or certified mail, postage
prepaid, return receipt requested, or one day after it is sent by a reputable overnight courier
service and, in each case, addressed as follows (or if it is sent through any other method agreed
upon by the parties):
If to the Company, to:
Parkway, Inc.
390 North Orange Avenue
Suite 2400
Orlando, FL 32801
Attention: Compensation Committee Chairman
With a copy to:
Hogan Lovells US LLP
555 Thirteenth Street NW
Washington, D.C. 20004
Attention: Matt Thomson
If to the Executive:
_____________
or to such other address as any party hereto may designate by notice to the others.
(b) Except as expressly provided herein, this Agreement shall constitute the
entire agreement among the parties hereto with respect to the Executive’s employment hereunder
and supersedes and is in full substitution for any and all prior understandings or agreements with
respect to the Executive’s employment or termination thereof (including, without limitation, the
Prior Agreements).
EXECUTION VERSION
12
(c) This Agreement may be amended only by an instrument in writing signed
by the parties hereto, and any provision hereof may be waived only by an instrument in writing
signed by the party or parties against whom or which enforcement of such waiver is sought. The
failure of any party hereto at any time to require the performance by any other party hereto of
any provision hereof shall in no way affect the full right to require such performance at any time
thereafter, nor shall the waiver by any party hereto of a breach of any provision hereof be taken
or held to be a waiver of any succeeding breach of such provision or a waiver of the provision
itself or a waiver of any other provision of this Agreement.
(d) The parties hereto acknowledge and agree that each party has reviewed
and negotiated the terms and provisions of this Agreement and has had the opportunity to
contribute to its revision. Accordingly, the rule of construction to the effect that ambiguities are
resolved against the drafting party shall not be employed in the interpretation of this Agreement.
Rather, the terms of this Agreement shall be construed fairly as to both parties hereto and not in
favor or against either party.
(e) The parties hereto hereby represent that they each have the authority to
enter into this Agreement, and the Executive hereby represents to the Company that the
execution of, and performance of any of his duties under, this Agreement shall not constitute a
breach of or otherwise violate any other agreement to which the Executive is a party. The
Executive hereby further represents to the Company that he will not utilize or disclose any
confidential information obtained by the Executive in connection with any former employment
with respect to his duties and responsibilities hereunder.
(f) This Agreement is binding on and is for the benefit of the parties hereto
and their respective successors, assigns, heirs, executors, administrators, and other legal
representatives. Neither this Agreement nor any right or obligation hereunder may be assigned
by the Executive. The Company shall 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 this Agreement in the same manner and to the same extent that
the Company would have been required to perform it if no such succession had taken place. As
used in the Agreement, the “Company” shall mean both the Company as defined in the first
paragraph of the Agreement and any such successor that assumes this Agreement, by operation
of law or otherwise.
(g) Any provision of this Agreement (or portion thereof) which is deemed
invalid, illegal, or unenforceable in any jurisdiction shall, as to that jurisdiction and subject to
this Section, be ineffective to the extent of such invalidity, illegality, or unenforceability, without
affecting in any way the remaining provisions thereof in such jurisdiction or rendering that or
any other provisions of this Agreement invalid, illegal, or unenforceable in any other jurisdiction.
If any covenant should be deemed invalid, illegal, or unenforceable because its scope is
considered excessive, such covenant shall be modified so that the scope of the covenant is
reduced only to the minimum extent necessary to render the modified covenant valid, legal, and
enforceable. No waiver of any provision or violation of this Agreement by the Company shall be
implied by the Company’s forbearance or failure to take action.
EXECUTION VERSION
13
(h) The Company may withhold from any amounts payable to the Executive
hereunder all federal, state, city, or other taxes that the Company may reasonably determine are
required to be withheld pursuant to any applicable law or regulation (it being understood, that the
Executive shall be responsible for payment of all taxes in respect of the payments and benefits
provided herein).
(i) This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without reference to its principles of conflicts of law.
(j) This Agreement may be executed in several counterparts, each of which
shall be deemed an original, but all of which shall constitute one and the same instrument. A
facsimile of a signature shall be deemed to be and have the effect of an original signature.
(k) The headings in this Agreement are inserted for convenience of reference
only and shall not be a part of or control or affect the meaning of any provision hereof.
(l) The intent of the parties is that payments and benefits under the
Agreement comply with Section 409A of the Code and the regulations and guidance
promulgated thereunder (except to the extent exempt as short-term deferrals or otherwise), and
accordingly, to the maximum extent permitted, the Agreement shall be interpreted to be in
compliance therewith. A termination of employment shall not be deemed to have occurred for
purposes of any provision of this Agreement providing for the payment of any amounts or
benefits subject to Section 409A of the Code upon or following a termination of employment
unless such termination is also a “separation from service” within the meaning of Section 409A
of the Code, and for purposes of any such provision of this Agreement, references to a
“termination,” “termination of employment,” “termination of the Term,” or like terms shall mean
“separation from service.” The determination of whether and when a separation from service has
occurred shall be made in a manner consistent with, and based on the presumptions set forth in,
US Treasury Regulation Section 1.409A-1(h) or any successor provision thereto. It is intended
that each installment, if any, of the payments and benefits provided hereunder shall be treated as
a separate “payment” for purposes of Section 409A of the Code. Neither the Company nor the
Executive shall have the right to accelerate or defer the delivery of any such payments or benefits
except to the extent specifically permitted or required by Section 409A of the Code; and if, as of
the date of the “separation from service,” the Executive is a “specified employee” (within the
meaning of that term under Section 409A(a)(2)(B) of the Code, or any successor provision
thereto), then with regard to any payment or the provision of any benefit that is subject to this
Section (whether under this Agreement, or pursuant to any other agreement with, or plan,
program, or payroll practice of, the Company) and is due upon or as a result of the Executive’s
separation from service, such payment or benefit shall not be made or provided, to the extent
making or providing such payment or benefit would result in additional taxes or interest under
Section 409A of the Code, until the date which is the earlier of (A) the expiration of the six (6)-
month period measured from the date of such “separation from service,” and (B) the date of the
Executive’s death (the “Delay Period”), and this Agreement and each such agreement, plan,
program, or payroll practice shall hereby be deemed amended accordingly. Upon the expiration
of the Delay Period, all payments and benefits delayed pursuant to this Section (whether they
would have otherwise been payable in a single sum or in installments in the absence of such
delay) shall be paid or reimbursed to the Executive in a lump sum, and any remaining payments
EXECUTION VERSION
14
and benefits due under this Agreement shall be paid or provided in accordance with the normal
payment dates specified for them herein. All reimbursements and in-kind benefits provided
under this Agreement or otherwise to the Executive shall be made or provided in accordance
with the requirements of Section 409A of the Code to the extent that such reimbursements or in-
kind benefits are subject to Section 409A of the Code. All expenses or other reimbursements
paid pursuant herewith and therewith that are taxable income to the Executive shall in no event
be paid later than the end of the calendar year next following the calendar year in which the
Executive incurs such expense or pays such related tax. With regard to any provision herein that
provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by
Section 409A of the Code, the right to reimbursement or in-kind benefits shall not be subject to
liquidation or exchange for another benefit, and the amount of expenses eligible for
reimbursement, or in-kind benefits provided, during any taxable year shall not affect the
expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable
year; provided that, the foregoing clause shall not be violated with regard to expenses reimbursed
under any arrangement covered by Section 105(b) of the Code solely because such expenses are
subject to a limit related to the period the arrangement is in effect and such payments shall be
made on or before the last day of the Executive’s taxable year following the taxable year in
which the expense occurred.
[Signature Page Follows]
EXECUTION VERSION
15
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written above.
EXECUTIVE
PARKWAY, INC.
By:
Name: A. Noni Holmes-Kidd
Title: Vice President and General Counsel
/s/ Scott E. Francis
/s/ A. Noni Holmes-Kidd
EXECUTION VERSION
SCHEDULE A – TRANSITION LETTER AGREEMENT
[See Attached.]
April 28, 2016
Scott E. Francis
Parkway Properties, Inc.
Bank of America Center
390 North Orange Avenue, Suite 2400
Orlando, Florida 32801
Dear Mr. Francis,
This letter agreement (this “Letter Agreement ”) memorializes our discussions regarding the terms and conditions of your
employment from and following the consummation of the transactions (collectively, the “Transactions ”) contemplated by the
Agreement and Plan of Merger among Parkway Properties, Inc., Parkway Properties LP, Cousins Properties Incorporated and Clinic
Sub Inc., dated as of the date hereof (the “Merger Agreement ”). For purposes of this Letter Agreement, terms that are capitalized but
not defined herein shall have the meanings set forth in the Merger Agreement.
As you know, the Merger Agreement contemplates that, immediately following the consummation of the Merger and the
Reorganization, Clinic will distribute, on a pro rata basis to the stockholders of Clinic, all of the shares of HoustonCo (the “ Houston
Distribution ”), and that you will be offered the role of Executive Vice President and Chief Accounting Officer of HoustonCo in
connection with the Houston Distribution.
You agree that, if you are offered the role of Executive Vice President and Chief Accounting Officer of HoustonCo in
connection with the Houston Distribution pursuant either to the assignment of your Employment Agreement (defined below) as in
effect as of the date hereof (and as modified hereby) to HoustonCo or to terms of a written employment agreement the terms of which
are at least as favorable to you as your Employment Agreement (defined below) as in effect as of the date hereof, you shall not have a
basis for asserting, and shall be deemed to have waived, any entitlement to terminate your employment under clauses (ii), (iii) or (iv) of
the second sentence, as well as the final sentence, of Section 5(a)(4) of the Employment Agreement by and between Pharmacy and
you, dated as of December 22, 2014 and amended as of June 15, 2015 (the “Employment Agreement ”), as a result of the
consummation of the Transactions or any changes to the terms and conditions (including, without limitation, the location) of your
employment that result from the Transactions. Without limiting the generality of the foregoing, you agree that Pharmacy or Clinic, as
applicable, and its Affiliates may assign all of their obligations under the Employment Agreement and/or this Letter Agreement to
HoustonCo and its Affiliates.
You acknowledge and agree that the waiver contemplated by the preceding paragraph is material to Clinic’s and Pharmacy’s
willingness to consummate the Transactions and that good and valuable consideration will be provided, directly or indirectly, to you in
connection with the Transactions, including without limitation: (a) the accelerated vesting of certain Pharmacy Partnership LTIP Units
upon the consummation of the Transactions, (b)
exchange of unvested Pharmacy Partnership LTIP Units, if any, into timevesting Pharmacy Equity Awards immediately prior to the
consummation of the Transactions, which shall partially vest upon the consummation of the Transactions and shall partially be
assumed, (c) assumption of those Pharmacy Equity Awards that are stock options, and (d) your continued employment with HoustonCo
and its Affiliates following the consummation of the Transactions as the Executive Vice President and Chief Accounting Officer under
the terms of the Employment Agreement (subject to the waiver described above) or, if applicable, a new employment agreement
satisfying the conditions described in paragraph three of this Letter Agreement.
Furthermore, in connection with consummation of the Transactions, you acknowledge and agree to the following:
1. That any annual incentive award payable to you for calendar year 2016 shall, notwithstanding any contrary provision of your
Employment Agreement, be subject to the sole discretion of Clinic and its Affiliates (which for this purpose, includes
HoustonCo, whether before or after the Houston Distribution),
2. That the Pharmacy Equity Awards and Pharmacy Partnership LTIP Units listed on Exhibit A may be converted into an equal
number of Pharmacy RSU Awards immediately prior to consummation of the Transactions, generally subject to the terms
and conditions of your current timebased Pharmacy RSU Awards, but vesting in four equal tranches, with twentyfive
percent (25%) becoming vested on the date of consummation of the Transactions, and twentyfive percent (25%) each
becoming vested on the first, second, and third anniversaries of the date of consummation of the Transactions; and
3. That in connection with the Transactions, unless Clinic waives this requirement in writing, you will not offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any HoustonCo common shares you hold
by reason of a Pharmacy Equity Award or a Pharmacy Partnership LTIP Unit that becomes fully vested as a result of the
Transactions, or enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of such common shares, whether any such transaction is to be settled by delivery of HoustonCo
common shares or other HoustonCo securities, in cash or otherwise, for sixty (60) days after consummation of the
Transactions. You further agree to execute such agreements and instruments as may be reasonably requested by Clinic or
HoustonCo to give further effect to this undertaking.
This Letter Agreement, together with the Employment Agreement, constitute the entire agreement between the parties
hereto with respect to the subject matter hereof. No provision of this Letter Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in a writing signed by you, Clinic, and Pharmacy. This Letter Agreement shall be
governed, construed, and interpreted under the laws of the State of New York without reference to its principles of conflicts of laws.
2
If the Effective Time does not occur, this Letter Agreement shall be null and void ab initio.
From and following the Effective Time, your employment shall continue to be at will and may be terminated by either you
or HoustonCo or its Affiliates at any time, without prior notice and for any or no reason.
We believe that you and HoustonCo will have a promising future. Please acknowledge your agreement to the terms of this
Letter Agreement by your signature below.
Sincerely,
Cousins Properties Incorporated
By: /s/ Pamela F. Roper
Name: Pamela F. Roper
Title:
Senior Vice President, General Counsel and
Corporate Secretary
3
Parkway Properties, Inc.
By: /s/ James R. Heistand
Name: James R. Heistand
Title: President and Chief Executive Officer
By: /s/ Jeremy R. Dorsett
Name: Jeremy R. Dorsett
Title:
Executive Vice President, General
Counsel and Secretary
Acknowledged and Agreed:
/s/ Scott E. Francis April 28, 2016
Scott E. Francis Date
EXHIBIT A
Name Number Class
? cott E. ? rancis 1? ??? 0 ?01? Time?Base? ? harmacy ? ? ? A? ar? s
? cott E. ? rancis ? ?? ? 4 ?01? Time?Base? ? harmacy ? ? ? A? ar? s
? cott E. ? rancis ??000 ?014 Time?Base? ? harmacy ? ? ? A? ar? s
? cott E. ? rancis 1?000 ?01? Time?Base? ? harmacy ? ? ? A? ar? s
? cott E. ? rancis 1? ?? ? ? ?01? ? harmacy ? artnership LTI? ? nits
? cott E. ? rancis ? ?000 ?014 ? er? ormance?Base? ? harmacy ? ? ? A? ar? s
Total ? 4??4? Ne? ? harmacy ? ? ? A? ar? s
SCHEDULE B – TRANSITION RSUs
Name Number of Transition RSUs
Scott E. Francis 31,892
PARKWAY, INC.
AND PARKWAY OPERATING PARTNERSHIP LP
2016 OMNIBUS EQUITY INCENTIVE PLAN
RESTRICTED STOCK UNIT AGREEMENT GRANT NOTICE
Parkway, Inc., a Maryland corporation (the “Company”), pursuant to the Parkway, Inc. and
Parkway Operating Partnership LP 2016 Omnibus Equity Incentive Plan (as it may be amended from time
to time, the “Plan”), hereby grants to the holder listed below (the “Participant”), an award of restricted
stock units (the “RSUs”). Each RSU represents the right to receive one (1) share of common stock of the
Company (each, a “Share”) in accordance with the terms and conditions hereof if applicable vesting
conditions are satisfied. This award of RSUs is subject to all of the terms and conditions set forth in this
Restricted Stock Unit Agreement Grant Notice (the “Grant Notice”), the Restricted Stock Unit Award
Agreement attached hereto as Exhibit A (together with the Grant Notice, the “Agreement”), the Plan, and
the Employment Agreement, by and between the Company and the Participant (as it may be amended
from time to time, the “Employment Agreement”) each of which is incorporated herein by reference.
Each RSU is hereby granted in tandem with a corresponding Dividend Equivalent, as further described in
Exhibit A. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined
meanings in this Agreement.
Participant:
Grant Date:
Total Number of RSUs:
Vesting Commencement Date:
Vesting Schedule: [25% of the RSUs shall vest on each of the days immediately prior to the first (1st), second (2nd), third (3rd), and fourth (4th)
anniversaries of the Vesting Commencement Date] OR [1/3 of
the RSUs shall vest on each of the days immediately prior to the
first (1st), second (2nd), and third (3rd) anniversaries of the Vesting
Commencement Date], subject to continued Service through the
applicable vesting date; the number of RSUs that vest on an
applicable vesting date shall be rounded to the nearest whole
number, provided you cannot vest in more than the number of
RSUs covered by this Agreement.
Notwithstanding the foregoing, if the Participant experiences a
termination of Service by the Company without Cause or by the
Participant for Good Reason, in either case other than a CIC
Termination, the Participant shall vest in the number of RSUs
that otherwise would have vested under the foregoing vesting
schedule during the [twelve (12)-month][eighteen (18)-month]
period following the date of the Participant’s termination of
Service, subject to the Participant’s satisfaction of the conditions
described in the Employment Agreement (including, without
limitation, the Participant’s execution of a general release and
waiver and compliance with restrictive covenants, as described in
the Employment Agreement).
Termination of RSUs and
Dividend Equivalents:
If the Participant experiences a termination of Service prior to the
applicable vesting date, all RSUs that have not become vested on
or prior to the date of such termination of Service (after taking
into consideration any vesting that may occur in connection with
such termination of Service, if any), and all Dividend Equivalents
associated with such RSUs, in each case will thereupon be
automatically forfeited by the Participant without payment of any
consideration therefor.
[Signature Page Follows]
By his signature below, the Participant agrees to be bound by the terms and conditions of the Plan
and this Agreement. The Participant has reviewed this Agreement and the Plan in their entirety, has had
an opportunity to obtain the advice of counsel prior to executing this Agreement, and fully understands all
provisions of the Agreement and the Plan. The Participant hereby agrees to accept as binding, conclusive,
and final all decisions or interpretations of the Committee upon any questions arising under the Plan or
the Agreement. In addition, by signing below, the Participant also agrees that the Company, in its sole
discretion, may satisfy any withholding obligations in accordance with Section 3.1of this Agreement by
(i) withholding Shares otherwise issuable to the Participant upon full vesting of the RSUs, (ii) instructing
a broker on the Participant’s behalf to sell Shares otherwise issuable to the Participant upon vesting of the
RSUs and submit the proceeds of such sale to the Company, or (iii) using any other method permitted by
Section 3.1 of the Agreement or the Plan. If the Participant is married, his spouse has signed the Consent
of Spouse attached hereto as Exhibit B.
PARKWAY, INC.
PARTICIPANT
By:
Print Name: Print Name:
Title:
Address:
By:
Print Name:
Title:
A-1
EXHIBIT A
TO RESTRICTED STOCK UNIT AGREEMENT GRANT NOTICE
RESTRICTED STOCK UNIT AWARD AGREEMENT
ARTICLE I.
GENERAL
1.1 Incorporation of Terms of Plan. The RSUs are subject to the terms and conditions of the
Plan, which are incorporated herein by reference. In the event of any inconsistency between the Plan and
this Agreement, the terms of the Plan shall control.
1.2 Defined Terms. Wherever the following terms are used in this Agreement they shall
have the meanings specified below, unless the context clearly indicates otherwise. Capitalized terms not
specifically defined herein shall have the meanings specified in the Plan and the Grant Notice to which
this Restricted Stock Unit Award Agreement is attached.
(a) “CIC Termination” shall have the meaning provided in the Employment
Agreement.
(b) “Good Reason” shall have the meaning provided in the Employment
Agreement.
ARTICLE II.
TERMS AND CONDITIONS OF RSUS AND DIVIDEND EQUIVALENTS
2.1 Grant of RSUs. Upon the terms and conditions set forth in the Plan, this Agreement, and
the Employment Agreement, effective as of the Grant Date set forth in the Grant Notice, the Company
hereby grants to the Participant an award of RSUs, together with an equivalent number of tandem
Dividend Equivalents, under the Plan. In consideration of this grant of RSUs, the Participant agrees to
render faithful and efficient services to the Company or its affiliates. Unless and until the RSUs have fully
vested in the manner set forth in the Grant Notice, the Participant will have no right to receive any Shares
or other payment in respect of the RSUs.
2.2 Vesting of RSUs.
(a) Subject to Sections 2.2(b) and 2.4 hereof, the RSUs shall vest and become
nonforfeitable, if at all, in accordance with the terms and conditions set forth in the Grant Notice.
(b) If the Participant experiences a termination of Service as a result of a CIC
Termination, all RSUs that have not become vested on or prior to the date of such termination of Service,
and all Dividend Equivalents associated with such RSUs, will immediately vest and become
nonforfeitable upon the occurrence of such termination of Service.
2.3 Payment of RSUs. As soon as administratively practicable following the vesting of any
RSUs pursuant to Section 2.2 hereof, but in no event later than thirty (30) days after such vesting date (for
the avoidance of doubt, this deadline is intended to comply with the “short term deferral” exemption from
Code Section 409A), the Company shall deliver to the Participant (or any transferee permitted under
Section 3.3 below) a number of Shares equal to the number of RSUs subject to this award or RSUs that
fully vest on the applicable vesting date (either by delivering one or more certificates for such Shares or
A-2
by entering such Shares in book entry form, as determined by the Committee in its sole discretion).
Notwithstanding the foregoing, if Shares cannot be issued pursuant to Section 19 of the Plan (or any
successor provision thereto) or are delayed under Section 2.5 below, the Shares shall be issued pursuant to
the preceding sentence as soon as administratively practicable after the Committee determines that Shares
can be issued in accordance with such Section. In no event shall any such delay in the issuance of Shares
impact the payment timing applicable to Dividend Equivalents payable in cash.
2.4 Forfeiture and Termination of RSUs and Dividend Equivalents. All RSUs and Dividend
Equivalents granted under this Agreement shall be forfeited and terminated as set forth in the Grant
Notice.
2.5 Conditions to Delivery of Shares. The Company shall not be required to issue or deliver
any certificates or make any book entries evidencing Shares deliverable hereunder prior to fulfillment of
the conditions set forth in Section 19 of the Plan. In the event that the Company delays a distribution or
payment in settlement of RSUs because it determines that the issuance of Shares in settlement of such
RSUs will violate federal securities laws or other applicable law, such distribution or payment shall be
made at the earliest date at which the Company reasonably determines that the making of such
distribution or payment will not cause such violation, as required by Treasury Regulation Section 1.409A-
2(b)(7)(ii). No payment shall be delayed under this Section 2.5 if such delay will result in a violation of
Code Section 409A.
2.6 Rights as Stockholder. The holder of the RSUs shall not be, nor have any of the rights or
privileges of, a stockholder of the Company, including, without limitation, voting rights and rights to
dividends, in respect of the RSUs or any Shares underlying the RSUs unless and until such Shares shall
have been issued by the Company and are held of record by such holder (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the Company). No
adjustment shall be made for a dividend or other right for which the record date is prior to the date the
Shares are issued, except as provided in Section 14 of the Plan.
2.7 Dividend Equivalents.
(a) Each RSU granted hereunder is hereby granted in tandem with a corresponding
Dividend Equivalent that shall remain outstanding from the Grant Date through the earlier to occur of (i)
the termination or forfeiture for any reason of the RSU to which such Dividend Equivalent corresponds or
(ii) the delivery to the Participant of the Shares underlying the RSU to which such Dividend Equivalent
corresponds.
(b) The Participant shall not be entitled to any payment under a Dividend Equivalent
with respect to any dividend with an applicable record date that occurs prior to the Grant Date or after the
termination of such RSU for any reason, whether due to payment, forfeiture of the RSU, or otherwise.
Dividend Equivalents and any amounts that may become distributable in respect thereof shall be treated
separately from the RSUs and the rights arising in connection therewith for purposes of the designation of
time and form of payments required by Code Section 409A.
(c) Each Dividend Equivalent (i) shall become payable if and when the RSU to
which such Dividend Equivalent relates vests and (ii) shall be paid in cash, unless otherwise determined
by the Committee, at the time of settlement of the underlying RSU in an amount equal to the total
dividends per Share with applicable record dates occurring over the period during which such Dividend
Equivalent was outstanding, as set forth in Section 2.7(b) above. If the RSU linked to a Dividend
Equivalent fails to vest and is forfeited for any reason, then (x) the linked Dividend Equivalent shall be
forfeited as well; (y) any amounts otherwise payable in respect of such Dividend Equivalent shall be
A-3
forfeited without payment; and (z) the Company shall have no further obligations in respect of such
Dividend Equivalent.
ARTICLE III.
MISCELLANEOUS PROVISIONS
3.1 Tax Withholding. The Company shall have the authority and the right to deduct or
withhold, or to require the Participant to remit to the Company (including without limitation, as provided
in the Agreement), an amount sufficient to satisfy all applicable federal, state, and local taxes (including
without limitation any income and employment tax obligations) required by law to be withheld (if any)
with respect to any taxable event arising in connection with the RSUs and/or the Dividend Equivalents.
The Company shall not be obligated to deliver any new certificate representing Shares to the Participant
or the Participant’s legal representative or to enter such Shares in book entry form unless and until the
Participant or the Participant’s legal representative shall have paid or otherwise satisfied in full the
amount of all federal, state, and local taxes applicable to the taxable income of the Participant arising in
connection with the RSUs or payments thereunder.
3.2 Administration. The Committee shall have the power to interpret the Plan and this
Agreement as provided in the Plan. All interpretations and determinations made by the Committee in
good faith shall be final and binding upon the Participant, the Company, and all other interested persons.
3.3 Grant Not Transferable. Without limiting the generality of any other provision hereof,
the RSUs and the Dividend Equivalents shall be subject to the restrictions on transferability set forth in
Section 18(d) of the Plan.
3.4 Adjustments. The Participant acknowledges that the RSUs and the Dividend Equivalents
are subject to modification and termination in certain events as provided in this Agreement and Sections
14 and 15 of the Plan.
3.5 Severability. In the event that any provision in this Agreement is held invalid or
unenforceable, such provision will be severable from, and such invalidity or unenforceability will not be
construed to have any effect on, the remaining provisions of this Agreement, which shall remain in full
force and effect.
3.6 Tax Consultation. The Participant understands that the Participant may suffer
adverse tax consequences in connection with the RSUs and/or Dividend Equivalents granted
pursuant to this Agreement (and any Shares issuable or amounts payable with respect thereto).
The Participant represents that the Participant has consulted with any tax consultants the
Participant deems advisable in connection with the RSUs and Dividend Equivalents and the
issuance of Shares and making of payments with respect thereto and that the Participant is not
relying on the Company for any tax advice.
3.7 Participant’s Representations. The Participant shall, if required by the Company,
concurrently with the issuance of any securities hereunder, make such written representations as are
deemed necessary or appropriate by the Company and/or the Committee.
3.8 Section 409A.
(a) General. To the extent that the Committee determines that any RSUs and/or
Dividend Equivalents may not be exempt from or compliant with Code Section 409A, the Committee
A-4
may amend this Agreement in a manner intended to preserve the intended tax treatment of the RSUs
and/or Dividend Equivalents and avoid the imposition of penalties under Code Section 409A by causing
the RSUs and Dividend Equivalents (as applicable) to comply with the requirements of Code Section
409A or an exemption therefrom (including amendments with retroactive effect), or take any other
actions as it deems necessary or appropriate in accordance with the foregoing. To the extent applicable,
this Agreement shall be interpreted in accordance with the provisions of Code Section 409A.
Notwithstanding anything herein to the contrary, the Participant expressly agrees and acknowledges that
in the event that any taxes are imposed under Code Section 409A in respect of any compensation or
benefits payable to the Participant, then (i) the payment of such taxes shall be solely the Participant’s
responsibility; (ii) neither the Company nor any of its past or present directors, officers, employees, or
agents shall have any liability for any such taxes; and (iii) the Participant shall indemnify and hold
harmless, to the greatest extent permitted under law, each of the foregoing from and against any claims or
liabilities that may arise in respect of any such taxes.
(b) Potential Six-Month Delay. Notwithstanding anything to the contrary in this
Agreement, no Shares (or other amounts) shall be paid to the Participant during the six (6)-month period
following the Participant’s “separation from service” (within the meaning of Code Section 409A, and
Treasury Regulation Section 1.409A-1(h)) (“Separation from Service”) to the extent that the Company
determines that the Participant is a “specified employee” (within the meaning of Code Section 409A) at
the time of such Separation from Service and that paying such amounts at the time or times indicated in
this Agreement would be a prohibited distribution under Code Section 409A(a)(2)(b)(i). If the payment
of any such amounts is delayed as a result of the previous sentence, then on the first (1st) business day
following the end of such six (6)-month period (or such earlier date upon which such amount can be paid
under Code Section 409A without being subject to such additional taxes), the Company shall pay to the
Participant in a lump-sum all Shares (or other amounts) that would have otherwise been payable to the
Participant during such six (6)-month period under this Agreement.
3.9 Amendment, Suspension, and Termination. To the extent permitted by the Plan, this
Agreement may be wholly or partially amended or otherwise modified, suspended, or terminated at any
time or from time to time by the Committee or the Board; provided, however, that, except as may
otherwise be provided by the Plan, no amendment, modification, suspension, or termination of this
Agreement shall adversely affect the RSUs or the Dividend Equivalents in any material way without the
prior written consent of the Participant.
3.10 Not a Contract of Service Relationship. Nothing in this Agreement or in the Plan shall
confer upon the Participant any right to continue to serve as an Employee, Director, Consultant, or other
service provider of the Company or any of its affiliates or shall interfere with or restrict in any way the
rights of the Company and its affiliates, which rights are hereby expressly reserved, to discharge or
terminate the services of the Participant at any time for any reason whatsoever, with or without Cause,
except to the extent expressly provided otherwise in a written agreement between the Company or an
affiliate and the Participant.
3.11 Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of
the Plan or this Agreement, if the Participant is subject to Section 16 of the Exchange Act, then the Plan,
the RSUs, the Dividend Equivalents, and this Agreement shall be subject to any additional limitations set
forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment
to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule. To
the extent permitted by applicable law, this Agreement shall be deemed amended to the extent necessary
to conform to such applicable exemptive rule.
A-5
3.12 Conformity to Securities Laws. The Participant acknowledges that the Plan and this
Agreement are intended to conform to the extent necessary with all provisions of the Securities Act of
1933, as amended, the Exchange Act, and any and all regulations and rules promulgated by the Securities
and Exchange Commission thereunder, as well as all applicable state securities laws and regulations.
Notwithstanding anything herein to the contrary, the Plan shall be administered, and the RSUs and
Dividend Equivalents are granted, only in such a manner as to conform to such laws, rules, and
regulations. To the extent permitted by applicable law, the Plan and this Agreement shall be deemed
amended to the extent necessary to conform to such laws, rules, and regulations.
3.13 Limitation on the Participant’s Rights. Participation in the Plan confers no rights or
interests other than as herein provided. This Agreement creates only a contractual obligation on the part
of the Company as to amounts payable and shall not be construed as creating a trust. The Plan, in and of
itself, has no assets. The Participant shall have only the rights of a general unsecured creditor of the
Company and its affiliates with respect to amounts credited and benefits payable, if any, with respect to
the RSUs, and rights no greater than the right to receive the Shares as a general unsecured creditor with
respect to RSUs, as and when payable hereunder.
3.14 Successors and Assigns. The Company or any affiliate may assign any of its rights under
this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the
successors and assigns of the Company and its affiliates. Subject to the restrictions on transfer set forth in
Section 3.3 hereof, this Agreement shall be binding upon the Participant and his or her heirs, executors,
administrators, successors and assigns.
3.15 Entire Agreement. The Plan, the Employment Agreement, and this Agreement (including
all Exhibits thereto or hereto, if any) constitute the entire agreement of the parties and supersede in their
entirety all prior undertakings and agreements of the Company and its affiliates and the Participant with
respect to the subject matter hereof.
3.16 Notices. Any notice to be given under the terms of this Agreement to the Company shall
be addressed to the Company in care of the Secretary of the Company at the Company’s principal office,
and any notice to be given to the Participant shall be addressed to the Participant at the Participant’s last
address reflected on the Company’s records. Any notice shall be deemed duly given when sent via email
or when sent by reputable overnight courier or by certified mail (return receipt requested) through the
United States Postal Service.
3.17 Governing Law and Venue. The laws of the State of Maryland shall govern the
interpretation, validity, administration, enforcement, and performance of the terms of this Agreement
regardless of the law that might be applied under principles of conflicts of laws. The Participant agrees
that the exclusive venue for any disputes arising out of or related to this Agreement shall be the state or
federal courts located in Orlando, Florida.
3.18 Titles. Titles are provided herein for convenience only and are not to serve as a basis for
interpretation or construction of this Agreement.
B-1
EXHIBIT B
TO RESTRICTED STOCK UNIT AGREEMENT GRANT NOTICE
CONSENT OF SPOUSE
I, _______________, spouse of _______________, have read and approve the Restricted Stock Unit
Agreement Grant Notice (the “Grant Notice”) to which this Consent of Spouse is attached and the
Restricted Stock Unit Award Agreement attached to the Grant Notice (together with the Grant Notice, the
“Agreement”). In consideration of issuing to my spouse the RSUs and Dividend Equivalents set forth in
the Agreement, I hereby appoint my spouse as my attorney-in-fact in respect to the exercise of any rights
under the Agreement and agree to be bound by the provisions of the Agreement insofar as I may have any
rights in said Agreement and any RSUs, Dividend Equivalents, Shares, or cash issued pursuant thereto
under the community property laws or similar laws relating to marital property in effect in the state of our
residence as of the date of the signing of the foregoing Agreement.
Dated:
Signature of Spouse
PARKWAY, INC.
AND PARKWAY OPERATING PARTNERSHIP LP
2016 OMNIBUS EQUITY INCENTIVE PLAN
RESTRICTED STOCK UNIT AGREEMENT GRANT NOTICE
Parkway, Inc., a Maryland corporation (the “Company”), pursuant to the Parkway, Inc. and
Parkway Operating Partnership LP 2016 Omnibus Equity Incentive Plan (as it may be amended from time
to time, the “Plan”), hereby grants to the holder listed below (the “Participant”) an award of restricted
stock units (the “RSUs”). Each RSU represents the right to receive one (1) share of common stock of the
Company (each, a “Share”) in accordance with the terms and conditions hereof if applicable vesting
conditions are satisfied. The RSUs granted pursuant to this Agreement shall be eligible to vest based
upon the satisfaction of both Performance Goals and continued Service (as set forth in Exhibit A and
Exhibit B) conditions applicable to the RSUs. Each RSU is hereby granted in tandem with a
corresponding Dividend Equivalent, as further described in Exhibit A. This award of RSUs is subject to
all of the terms and conditions set forth in this Restricted Stock Unit Agreement Grant Notice (the “Grant
Notice”), the Restricted Stock Unit Award Agreement attached hereto as Exhibit A and the Performance
Goals attached hereto as Exhibit B (together with the Grant Notice, the “Agreement”), and the Plan, each
of which is incorporated herein by reference. Unless otherwise defined herein, the terms defined in the
Plan shall have the same defined meanings in this Agreement.
Participant:
Target Number of RSUs:
Target Value as of Grant Date:
Grant Date:
End Date:
Performance Period: The period beginning on the Grant Date and ending on the End Date.
Vesting Schedule: The Participant shall be eligible to vest on the Certification Date in a number of RSUs with respect to the Performance Period,
subject to and conditioned upon the Participant’s continued
Service through the End Date and the Company’s achievement of
the Performance Goals as set forth in Exhibit B attached hereto
with respect to the Performance Period, in each case in
accordance with the terms and conditions of this Agreement.
[Signature Page Follows]
By his signature below, the Participant agrees to be bound by the terms and conditions of the Plan
and this Agreement. The Participant has reviewed this Agreement and the Plan in their entirety, has had
an opportunity to obtain the advice of counsel prior to executing this Agreement, and fully understands all
provisions of the Agreement and the Plan. The Participant hereby agrees to accept as binding, conclusive,
and final all decisions or interpretations of the Committee upon any questions arising under the Plan or
the Agreement. In addition, by signing below, the Participant also agrees that the Company, in its sole
discretion, may satisfy any withholding obligations in accordance with Section 9 of this Agreement by (i)
withholding Shares otherwise issuable to the Participant upon full vesting of the RSUs, (ii) instructing a
broker on the Participant’s behalf to sell Shares otherwise issuable to the Participant upon vesting of the
RSUs and submit the proceeds of such sale to the Company, or (iii) using any other method permitted by
Section 9 of the Agreement or the Plan. If the Participant is married, his spouse has signed the Consent of
Spouse attached hereto as Exhibit C.
PARKWAY, INC.
PARTICIPANT
By:
Print Name: Print Name:
Title:
Address:
By:
Print Name:
Title:
A-1
EXHIBIT A
TO RESTRICTED STOCK UNIT AGREEMENT GRANT NOTICE
RESTRICTED STOCK UNIT AWARD AGREEMENT
1. Grant. The Company hereby grants to the Participant, as of the Grant Date, an award of
RSUs, together with an equivalent number of tandem Dividend Equivalents, subject to the terms and
conditions contained in this Agreement and the Plan.
2. RSUs. Each RSU that Fully Vests on an applicable Vesting Date shall represent the right
to receive payment, in accordance with Section 6, of one Share. Unless and until an RSU Fully Vests, the
Participant will have no right to payment in respect of any such RSU. Prior to actual payment in respect
of any Fully Vested RSU, such RSU will represent an unsecured obligation of the Company, payable (if
at all) only from the general assets of the Company.
3. Vesting. Subject to the terms of the Plan and Section 5, if the Participant remains in
Service on the End Date, the RSUs (and their corresponding Dividend Equivalents) shall vest in
accordance with the provisions of Exhibit B.
4. Dividend Equivalents.
(a) Grant. Each RSU granted hereunder is hereby granted in tandem with a
corresponding Dividend Equivalent that shall remain outstanding from the Grant Date through the earlier
to occur of (i) the termination or forfeiture for any reason of the RSU to which such Dividend Equivalent
corresponds, or (ii) the delivery to the Participant of the Shares underlying the RSU to which such
Dividend Equivalent corresponds. For the avoidance of doubt, each Fully Vested RSU in excess of the
Target Number of RSUs, if any, determined in accordance with this Agreement shall be granted in
tandem with a corresponding Dividend Equivalent that shall be treated as if it remained outstanding from
the Grant Date to the Certification Date.
(b) Payment. Each Dividend Equivalent (i) shall become payable if and when the
RSU to which such Dividend Equivalent relates becomes Fully Vested, and (ii) shall be paid in cash,
unless otherwise determined by the Committee, at the time of settlement of the underlying RSU in an
amount equal to the total dividends per Share with applicable record dates occurring over the period
during which such Dividend Equivalent was outstanding. If the RSU linked to a Dividend Equivalent
fails to Fully Vest and is forfeited for any reason, then (x) the linked Dividend Equivalent shall be
forfeited as well; (y) any amounts otherwise payable in respect of such Dividend Equivalent shall be
forfeited without payment; and (z) the Company shall have no further obligations in respect of such
Dividend Equivalent. The Participant shall not be entitled to any payment under a Dividend Equivalent
with respect to any dividend with an applicable record date that occurs prior to the Grant Date or after the
termination of the underlying RSU for any reason, whether due to payment, forfeiture of the RSU, or
otherwise. Dividend Equivalents and any amounts that may become distributable in respect thereof shall
be treated separately from the RSUs and the rights arising in connection therewith for purposes of the
designation of time and form of payments required by Code Section 409A.
5. Forfeiture and Termination of RSUs and Dividend Equivalents.
(a) Failure to Achieve Performance Goal. To the extent that some or all of the RSUs
do not become Fully Vested as of the Certification Date based on achievement of the Performance Goals,
such unvested RSUs and all Dividend Equivalents associated with such unvested RSUs shall thereupon
automatically be forfeited by the Participant as of the Certification Date without payment of any
A-2
consideration therefor.
(b) Termination of Service Prior to the End Date. In the event that the Participant
experiences a Termination of Service prior to the End Date for any reason, all of the RSUs covered by
this Agreement as of the date of termination and any Dividend Equivalents associated with such RSUs
shall thereupon automatically be forfeited by the Participant as of the date of termination without payment
of any consideration therefor.
6. Payment of RSUs. As soon as administratively practicable following an applicable
Vesting Date on which any RSUs become Fully Vested in accordance with Exhibit B, but in no event
later than thirty (30) days after the applicable Vesting Date, the Company shall deliver to the Participant
(or any transferee permitted under Section 11 below) a number of Shares (either by delivering one or
more certificates for such Shares or by entering such Shares in book entry form, as determined by the
Committee in its sole discretion) equal to the number of RSUs that have Fully Vested on the applicable
Vesting Date.
7. Conditions to Delivery of Shares. The Company shall not be required to issue or deliver
any certificates or make any book entries evidencing Shares deliverable hereunder prior to fulfillment of
the conditions set forth in Section 19 of the Plan. In the event that the Company delays a distribution or
payment in settlement of RSUs because it determines that the issuance of Shares in settlement of such
RSUs will violate federal securities laws or other applicable law, such distribution or payment shall be
made at the earliest date at which the Company reasonably determines that the making of such
distribution or payment will not cause such violation, as required by Treasury Regulation Section
1.409A-2(b)(7)(ii). No payment shall be delayed under this Section 7 if such delay will result in a
violation of Code Section 409A. In no event shall any such delay in the issuance of Shares impact the
payment timing applicable to Dividend Equivalents payable in cash.
8. Rights as Stockholder. The holder of the RSUs shall not be, nor have any of the rights or
privileges of, a stockholder of the Company, including, without limitation, voting rights and rights to
dividends, in respect of the RSUs or any Shares underlying the RSUs unless and until such Shares shall
have been issued by the Company and are held of record by such holder (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the Company). No
adjustment shall be made for a dividend or other right for which the record date is prior to the date the
Shares are issued, except as provided in Section 14 of the Plan.
9. Tax Withholding. The Company shall have the authority and the right to deduct or
withhold, or to require the Participant to remit to the Company (including without limitation, as provided
in the Grant Notice), an amount sufficient to satisfy all applicable federal, state, and local taxes
(including without limitation any income and employment tax obligations) required by law to be
withheld (if any) with respect to any taxable event arising in connection with the RSUs and/or the
Dividend Equivalents. The Company shall not be obligated to deliver any new certificate representing
Shares to the Participant or the Participant’s legal representative or to enter such Shares in book entry
form unless and until the Participant or the Participant’s legal representative shall have paid or otherwise
satisfied in full the amount of all federal, state, and local taxes applicable to the taxable income of the
Participant arising in connection with the RSUs or payments thereunder.
10. Administration. The Committee shall have the power to interpret the Plan and this
Agreement as provided in the Plan. All interpretations and determinations made by the Committee in
good faith shall be final and binding upon the Participant, the Company, and all other interested persons.
11. Non-Transferability. Without limiting the generality of any other provision hereof, the
A-3
RSUs and Dividend Equivalents shall be subject to the restrictions on transferability set forth in Section
18(d) of the Plan.
12. Adjustments. The Participant acknowledges that the RSUs and Dividend Equivalents are
subject to modification and termination in certain events as provided in this Agreement and Sections 14
or 15 of the Plan.
13. Severability. In the event that any provision in this Agreement is held invalid or
unenforceable, such provision will be severable from, and such invalidity or unenforceability will not be
construed to have any effect on, the remaining provisions of this Agreement, which shall remain in full
force and effect.
14. Tax Consultation. The Participant understands that the Participant may suffer
adverse tax consequences in connection with the RSUs and/or Dividend Equivalents granted
pursuant to this Agreement (and any Shares issuable or amounts payable with respect thereto).
The Participant represents that the Participant has consulted with any tax consultants the
Participant deems advisable in connection with the RSUs and Dividend Equivalents and the
issuance of Shares and making of payments with respect thereto and that the Participant is not
relying on the Company for any tax advice.
15. Participant’s Representations. The Participant shall, if required by the Company,
concurrently with the issuance of any securities hereunder, make such written representations as are
deemed necessary or appropriate by the Company and/or the Committee.
16. Section 409A.
(a) General. To the extent that the Committee determines that any RSUs and/or
Dividend Equivalents may not be exempt from or compliant with Code Section 409A, the Committee
may amend this Agreement in a manner intended to preserve the intended tax treatment of the RSUs
and/or Dividend Equivalents and avoid the imposition of penalties under Code Section 409A by causing
the RSUs and Dividend Equivalents (as applicable) to comply with the requirements of Code Section
409A or an exemption therefrom (including amendments with retroactive effect), or take any other
actions as it deems necessary or appropriate in accordance with the foregoing. To the extent applicable,
this Agreement shall be interpreted in accordance with the provisions of Code Section 409A.
Notwithstanding anything herein to the contrary, the Participant expressly agrees and acknowledges that
in the event that any taxes are imposed under Code Section 409A in respect of any compensation or
benefits payable to the Participant, then (i) the payment of such taxes shall be solely the Participant’s
responsibility; (ii) neither the Company nor any of its past or present directors, officers, employees, or
agents shall have any liability for any such taxes; and (iii) the Participant shall indemnify and hold
harmless, to the greatest extent permitted under law, each of the foregoing from and against any claims or
liabilities that may arise in respect of any such taxes.
(b) Potential Six-Month Delay. Notwithstanding anything to the contrary in this
Agreement, no Shares (or other amounts) shall be paid to the Participant during the six (6)-month period
following the Participant’s “separation from service” (within the meaning of Code Section 409A, and
Treasury Regulation Section 1.409A-1(h)) (“Separation from Service”) to the extent that the Company
determines that the Participant is a “specified employee” (within the meaning of Code Section 409A) at
the time of such Separation from Service and that paying such amounts at the time or times indicated in
this Agreement would be a prohibited distribution under Code Section 409A(a)(2)(b)(i). If the payment
of any such amounts is delayed as a result of the previous sentence, then on the first (1st) business day
following the end of such six (6)-month period (or such earlier date upon which such amount can be paid
A-4
under Code Section 409A without being subject to such additional taxes), the Company shall pay to the
Participant in a lump-sum all Shares (or other amounts) that would have otherwise been payable to the
Participant during such six (6)-month period under this Agreement.
17. Amendment, Suspension, and Termination. To the extent permitted by the Plan, this
Agreement may be wholly or partially amended or otherwise modified, suspended, or terminated at any
time or from time to time by the Committee or the Board; provided, however, that, except as may
otherwise be provided by the Plan, no amendment, modification, suspension, or termination of this
Agreement shall adversely affect the RSUs or Dividend Equivalents in any material way without the
prior written consent of the Participant.
18. Not a Contract of Service Relationship. Nothing in this Agreement or in the Plan shall
confer upon the Participant any right to continue to serve as an Employee, Director, Consultant, or other
service provider of the Company or any of its affiliates or shall interfere with or restrict in any way the
rights of the Company and its affiliates, which rights are hereby expressly reserved, to discharge or
terminate the services of the Participant at any time for any reason whatsoever, with or without Cause,
except to the extent expressly provided otherwise in a written agreement between the Company or an
affiliate and the Participant.
19. Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of
the Plan or this Agreement, if the Participant is subject to Section 16 of the Exchange Act, then the Plan,
the RSUs, the Dividend Equivalents, and this Agreement shall be subject to any additional limitations set
forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment
to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule. To
the extent permitted by applicable law, this Agreement shall be deemed amended to the extent necessary
to conform to such applicable exemptive rule.
20. Conformity to Securities Laws. The Participant acknowledges that the Plan and this
Agreement are intended to conform to the extent necessary with all provisions of the Securities Act of
1933, as amended, and the Exchange Act, and any and all regulations and rules promulgated by the
Securities and Exchange Commission thereunder, as well as all applicable state securities laws and
regulations. Notwithstanding anything herein to the contrary, the Plan shall be administered, and the
RSUs and Dividend Equivalents are granted, only in such a manner as to conform to such laws, rules,
and regulations. To the extent permitted by applicable law, the Plan and this Agreement shall be deemed
amended to the extent necessary to conform to such laws, rules, and regulations.
21. Limitation on the Participant’s Rights. Participation in the Plan confers no rights or
interests other than as herein provided. This Agreement creates only a contractual obligation on the part
of the Company as to amounts payable and shall not be construed as creating a trust. The Plan, in and of
itself, has no assets. The Participant shall have only the rights of a general unsecured creditor of the
Company and its affiliates with respect to amounts credited and benefits payable, if any, with respect to
the RSUs, and rights no greater than the right to receive the Shares as a general unsecured creditor with
respect to RSUs, as and when payable hereunder.
22. Successors and Assigns. The Company or any affiliate may assign any of its rights under
this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the
successors and assigns of the Company and its affiliates. Subject to the restrictions on transfer set forth
in Section 11 above, this Agreement shall be binding upon the Participant and his or her heirs, executors,
administrators, successors and assigns.
23. Entire Agreement. The Plan and this Agreement (including all Exhibits thereto, if any)
A-5
constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and
agreements of the Company and its affiliates and the Participant with respect to the subject matter
hereof.
24. Notices. Any notice to be given under the terms of this Agreement to the Company shall
be addressed to the Company in care of the Secretary of the Company at the Company’s principal office,
and any notice to be given to the Participant shall be addressed to the Participant at the Participant’s last
address reflected on the Company’s records. Any notice shall be deemed duly given when sent via email
or when sent by reputable overnight courier or by certified mail (return receipt requested) through the
United States Postal Service.
25. Governing Law and Venue. The laws of the State of Maryland shall govern the
interpretation, validity, administration, enforcement, and performance of the terms of this Agreement
regardless of the law that might be applied under principles of conflicts of laws. The Participant agrees
that the exclusive venue for any disputes arising out of or related to this Agreement shall be the state or
federal courts located in Orlando, Florida.
26. Titles. Titles are provided herein for convenience only and are not to serve as a basis for
interpretation or construction of this Agreement.
B-1
\\DC - 039811/000025 - 9441635 v1
EXHIBIT B
TO RESTRICTED STOCK UNIT AGREEMENT GRANT NOTICE
PERFORMANCE GOALS
[The RSUs (and their corresponding Dividend Equivalents) shall vest based on the achievement of the Performance
Goals to be established, tailored, and set forth herein as of the Grant Date by the Committee based on one or more
Performance Goals under the Plan and consistent with the terms of the Plan.]
C-1
EXHIBIT C
TO RESTRICTED STOCK UNIT AGREEMENT GRANT NOTICE
CONSENT OF SPOUSE
I, ____________________, spouse of ____________________, have read and approve the Restricted
Stock Unit Agreement Grant Notice to which this Consent of Spouse is attached, including Exhibit A and
Exhibit B thereto (together, the “Agreement”). In consideration of issuing to my spouse the RSUs and
Dividend Equivalents set forth in the Agreement, I hereby appoint my spouse as my attorney-in-fact in
respect to the exercise of any rights under the Agreement and agree to be bound by the provisions of the
Agreement insofar as I may have any rights in said Agreement and any RSUs, Dividend Equivalents,
Shares, or cash issued pursuant thereto under the community property laws or similar laws relating to
marital property in effect in the state of our residence as of the date of the signing of the foregoing
Agreement.
Dated: _______________
Signature of Spouse
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Ripple CTO Addresses XRP and Ripple Naming Confusion
- TSMC Celebrates 30th North America Technology Symposium with Innovations Powering AI with Silicon Leadership
- CSE Bulletin: Delist - Tryp Therapeutics Inc. (TRYP)
Create E-mail Alert Related Categories
SEC FilingsSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
