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EXHIBIT 10.12
DEFERRED COMPENSATION PLAN
PREPARED FOR
TRIZEC PROPERTIES, INC.
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TRIZEC PROPERTIES, INC.
DEFERRED COMPENSATION PLAN
ARTICLE I - PURPOSE; EFFECTIVE DATE
1.1. PURPOSE. The purposes of this
Deferred Compensation Plan (hereinafter, the
"Plan") is
(i) to permit a select group of management and highly
compensated employees of TRIZEC PROPERTIES, INC. and its
subsidiaries to
defer the
receipt of income which would otherwise become payable to them,
and (ii)
to permit certain employees who receive awards of restricted
stock
units to defer settlement of such awards. It is intended that
this
plan, by
providing this deferral opportunity, will assist the Company in
retaining
and attracting individuals of exceptional ability by providing
them with
these benefits.
1.2. EFFECTIVE DATE. The Plan shall be effective as of
January 1, 2004.
ARTICLE II - DEFINITIONS
For the purpose of this Plan, the following
terms shall have the meanings
indicated, unless the context clearly
indicates otherwise:
2.1. ACCOUNT(s). "Account(s)" means the
account or accounts maintained on the
books of
the Company used solely to calculate the amount payable to each
Participant under this Plan and shall not constitute a separate
fund of
assets.
The Accounts available for each Participant shall be identified
as:
a)
Retirement
Account;
b)
Restricted Stock Unit
Account; and,
c)
In-Service Account;
each Participant may maintain up to two (2)
In-Service Accounts based on selecting different times of payments
as
selected under Article V, below.
2.2. BENEFICIARY. "Beneficiary" means
the person, persons or trust as
designated by the
Participant, entitled under Article VI to receive any
Plan
benefits payable after the Participant's death.
2.3. BOARD. "Board" means the Board of
Directors of the Company.
2.4. CHANGE IN CONTROL. A "Change in
Control" of the Company shall have the
same
meaning as is set forth in Section 10.3 of the Trizec
Properties,
Inc. 2002
Long Term Incentive Plan (Amended and Restated Effective May
29,
2003), as
may hereinafter be modified or amended from time to time
(hereafter, the
"2002 Long Term Incentive Plan").
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2.5. COMMITTEE. "Committee" means the
Committee appointed by the Board to
administer
the Plan pursuant to Article VII.
2.6. COMPANY. "Company" means TRIZEC
PROPERTIES, INC., a Delaware corporation,
and any
directly or indirectly affiliated subsidiary corporations, any
other
affiliate designated by the Board, or any successor to the
business
thereof.
2.7. COMPENSATION. "Compensation" means
the base salary and commissions payable
to, and
bonus or incentive compensation earned by a Participant with
respect to
employment services performed for the Company by the
Participant and considered to be "wages" for purposes of federal
income
tax
withholding. Notwithstanding the forgoing, Compensation shall
not
include
reimbursements or other expense allowances (whether or not
includable
in gross income, and including but not limited to car
allowances), (cash or non-cash) fringe benefits (including but not
limited
to contest
prizes), moving expenses, welfare benefits (including but not
limited to
imputed income on life insurance coverage, unused and/or
accrued
vacation pay and severance pay), tax equalization packages or
imputed
income attributable to the forgiveness of loans. For purposes
of
this Plan
only, Compensation shall be calculated before reduction for any
amounts
deferred by the Participant pursuant to the Company's tax
qualified
plans which may be maintained under Section 401(k) or Section
125 of the
Internal Revenue Code of 1986, as amended, (the "Code"), or
pursuant
to this Plan or any other non-qualified plan which permits the
voluntary
deferral of compensation. Inclusion of any other forms of
compensation is subject to Committee approval.
2.8. DEFERRAL COMMITMENT. "Deferral
Commitment" means a commitment made by a
Participant to defer a portion of Compensation or Restricted Stock
Units
as set
forth in Article III, or a Discretionary Contribution pursuant
to
Section
4.5. The Deferral Commitment shall apply to each payment of
salary,
commissions and/or bonus payable to a Participant, to the
specified
vesting tranche of an award of Restricted Stock Units or any
other
compensation and shall specify the Account or Accounts to which
the
Compensation deferred shall be credited. Such designation shall be
made in
whole
percentages and shall be made in a form acceptable to the
Committee.
A Deferral
Commitment shall remain in effect until amended or revoked as
provided
under Sections 3.3 or 3.5, below.
2.9. DEFERRAL PERIOD. "Deferral Period"
means (i) with respect to the deferral
of
Compensation, each calendar year, except that a Participant may
have an
initial
Deferral Period as provided in Section 3.1(c) below, and (ii)
the
applicable
vesting date with respect to each vesting tranche of Restricted
Stock
Units.
2.10. DETERMINATION DATE. "Determination
Date" means each calendar day.
2.11. DISABILITY. "Disability" means a
physical or mental condition that
prevents
the Participant from satisfactorily performing the
Participant's
usual
duties for Company. The Committee shall determine the existence
of
Disability, in its sole discretion, and may rely on advice from a
medical
examiner
satisfactory to the Committee in making the determination.
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2.12. DISCRETIONARY CONTRIBUTION.
"Discretionary Contribution" means the Company
or, at the
discretion of the Company, Participant contribution credited to
a
Participant's Account(s) under Section 4.5, below. This term shall
also
refer to
amounts, if any, which reflect amounts previously held under a
similar or
predecessor deferred compensation plan and which the
Participant has elected to further defer under the terms and
conditions of
this
Plan.
2.13. DISTRIBUTION ELECTION. "Distribution
Election" means the form prescribed
by the
Committee and completed by the Participant, indicating the
chosen
form of
payment for benefits payable from each Account under this Plan,
as
elected by
the Participant.
2.14. INTEREST. "Interest" means the amount
credited to a Participant's
Account(s) on each
Determination Date, which shall be based on the
Valuation
Funds chosen by the Participant as provided in Section 2.21,
below and
in a manner consistent with Section 4.3, below. Such credits to
a
Participant's Account may be either positive or negative to reflect
the
increase
or decrease in value of the Account in accordance with the
provisions
of this Plan.
2.15. FINANCIAL HARDSHIP. "Financial
Hardship" means a severe financial hardship
of the
Participant resulting from a Disability of the Participant, a
sudden and
unexpected illness or accident of the Participant or of a
dependent
of the Participant, loss of the Participant's property due to
casualty,
or other similar extraordinary and unforeseeable circumstance
arising as
a result of events beyond the control of the Participant.
Financial
Hardship shall be determined based upon such standards as are,
from time
to time, established by the Committee, and such determination
shall be
in the sole discretion of the Committee.
2.16. 401(k) PLAN. "401(k) Plan" means the
defined contribution plan maintained
by the
Company that qualifies under Section 401(a) of the Code and
satisfies
the requirements of Section 401(k) of the Code, or any
successor
plan
thereto.
2.17. PARTICIPANT. "Participant" means any
individual who is eligible, pursuant
to Section
3.1, below, to participate in this Plan, and who has elected to
defer
Compensation or Restricted Stock Units, or who was a participant
in
a similar
or predecessor plan of deferred compensation and who has
elected
to
participate in this Plan, in accordance with Article III, below.
Such
employee
shall remain a Participant in this Plan for the period of
deferral
and until such time as all benefits payable under this Plan
have
been paid
in accordance with the provisions hereof.
2.18. PLAN. "Plan" means this Deferred
Compensation Plan as amended from time to
time.
2.19. RESTRICTED STOCK UNITS. "Restricted
Stock Units" means unvested restricted
stock
units awarded to Participant under the 2002 Long Term Incentive
Plan, and
identified by the Committee as being eligible for deferral
under
the
provisions of this Plan, or which was awarded under any other
equity
award
program and identified by the Committee as being eligible for
deferral
under the provisions of this Plan. Restricted shares of
Company's
common
stock granted pursuant to such program are also deemed to be
Restricted
Stock Units for purposes of this Plan.
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2.20. RETIREMENT. "Retirement" means the
date of termination of service of a
Participant for reasons other than death or disability after:
(a)
attaining age sixty (60)
with at least five (5) Years of Service; (b)
attaining
age sixty-five (65); or (c) terminating under circumstances
which the
Company, in its sole discretion, elects to treat as a
Retirement
for
purposes of this Plan.
2.21. VALUATION FUNDS. "Valuation Funds"
means one or more of the independently
established funds or indices that are identified and listed by
the
Committee.
In addition, the Committee shall designate one Valuation Fund
as the
Trizec Stock Unit Fund. These Valuation Funds are used solely
to
calculate
the Interest that is credited to each Participant's Account(s)
in
accordance with Article IV, below, and does not represent, nor
should
it be
interpreted to convey any beneficial interest on the part of
the
Participant in any asset or other property of the Company. The
determination of the increase or decrease in the performance of
each
Valuation
Fund shall be made by the Committee in its reasonable
discretion. The
Committee shall select the various Valuation Funds
available
to the Participants with respect to this Plan and shall set
forth a
list of these Valuation Funds attached hereto as Exhibit A,
which
may be
amended from time to time in the discretion of the Committee.
2.22. YEARS OF SERVICE. "Years of Service"
means the years of service credited
to a
Participant in the 401(k) Plan, whether or not the Participant is
a
participant in such plan.
ARTICLE III -
ELIGIBILITY AND PARTICIPATION
3.1. ELIGIBILITY AND PARTICIPATION.
a)
ELIGIBILITY. Eligibility to participate in the Plan shall be
limited
to those select key employees of Company who are designated by
management, from time to time, based on criteria established by
the
Committee in its sole discretion, and who are approved by the
Committee. In addition, participation in this Plan may be offered
to
individuals who have received awards of Restricted Stock Units
under
the 2002 Long Term Incentive Plan and to individuals (including
former employees) who currently participate in a similar or
predecessor deferred compensation plan under guidelines and
procedures established by the Committee.
b)
PARTICIPATION. An individual's participation in the Plan shall
be
effective upon notification to the individual by the Committee
of
eligibility to participate, and completion and submission of a
Deferral Commitment, an Allocation Form, and a Form of Payment
Designation to the Committee no later than (i) fifteen (15)
days
prior to the beginning of the Deferral Period with respect to
Compensation deferrals and (ii) six months prior to the
Deferral
Period with respect to deferrals of Restricted Stock Units.
c)
FIRST-YEAR
PARTICIPATION. When an individual first becomes eligible
to participate in this Plan during a Deferral Period, a
Deferral
Commitment may be submitted to the Committee within thirty (30)
days
after the Committee notifies the individual of eligibility to
participate. Such Deferral Commitment will be effective only
with
regard to Compensation earned and payable following submission
of
the Deferral Commitment to the Committee, and, subject to
Section
3.2(e) below, to Restricted Stock Units which are unvested at
the
time of such deferral.
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3.2. FORM OF DEFERRAL COMMITMENT. A
Participant may elect to make a Deferral
Commitment
in the form permitted by the Committee. The Deferral Commitment
shall
specify the following:
a) DEFERRAL AMOUNTS;
ACCOUNTS. A Deferral Commitment shall be made with
respect to each payment of salary, commissions and/or bonus
payable
by the Company to a Participant during the Deferral Period, and
shall designate the portion of each deferral that shall be
allocated
among the various Accounts, except that no deferral shall be made
to
an Account at the same time that a distribution is to be made
from
that Account. The Participant shall set forth the amount to be
deferred as a full percentage of salary, commissions and/or
bonus
(the Participant may designate a different percentage of
salary,
commissions and bonus that is to be deferred under this Plan).
Salary Deferral Commitments shall be made in roughly equal
amounts
over the Deferral Period. Deferrals of bonus Compensation may
be
stated as a percentage of the bonus otherwise payable in excess of
a
stated
dollar amount.
b)
ALLOCATION
TO VALUATION FUNDS. The Participant shall specify in a
separate form (known as the "Allocation Form") filed with the
Committee, the Participant's initial allocation of the amounts
deferred into each Account among the various available
Valuation
Funds.
c)
MAXIMUM
DEFERRAL. A Participant may defer up to seventy-five percent
(75%) of base salary, and/or up to one hundred percent (100%)
of
commissions and bonus otherwise payable.
d)
MINIMUM
DEFERRAL. The minimum amount of each payment of salary,
commissions or bonus that may be deferred shall be one (1)
percent
(1%), but in no event shall the amount deferred be less than
five
thousand dollars ($5,000) per Deferral Period.
e)
DEFERRAL
OF RESTRICTED STOCK UNITS. Notwithstanding the forgoing,
(i) the election to defer Restricted Stock Units must be stated as
a
percentage of the tranche of Restricted Stock Units previously
awarded to the Participant and vesting on a particular date,
(ii)
the election to defer Restricted Stock Units must be made and
accepted by the Committee at least six (6) months prior to the
date
such Restricted Stock Units would otherwise vest under the terms
of
the 2002 Long Term Incentive Plan and applicable award agreement
and
(iii) shall be credited only to the Restricted Stock Unit
Account.
Such deferral of Restricted Stock Units will be allocated only
to
the Trizec Stock Unit Fund. The Participant may elect to defer up
to
one hundred percent (100%) of the outstanding tranche of
Restricted
Stock Units awarded to the Participant and vesting on a
specified
date, but must defer a minimum of five percent (5%).
3.3. PERIOD OF COMMITMENT. Once a
Participant has made a Deferral Commitment
with
respect to Compensation, that Commitment shall remain in effect
for
the next
succeeding Deferral Period, except that a Participant may
choose
to modify
a Deferral Commitment applicable to bonus no later than July
31st of
the Deferral Period. In addition, the Deferral Commitment with
respect to
base salary shall remain in effect for all future Deferral
Periods
unless revoked or amended in writing by the Participant and
delivered
to the Committee no later than fifteen (15) days prior to the
beginning
of a subsequent Deferral Period. Notwithstanding the forgoing,
any
election to defer Restricted Stock Units shall apply only to
the
particular
vesting tranche of a Restricted Stock Unit award set forth in
the
appropriate election form; additional deferrals of Restricted
Stock
Units must
be made on a separate election form.
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3.4. COMMITMENT LIMITED BY TERMINATION
OR DISABILITY. If a Participant suffers
a
Disability or terminates employment with Company, for any
reason
including
death, prior to the end of the Deferral Period, the Deferral
Period
shall end as of the date of such Disability or termination.
3.5. MODIFICATION OF DEFERRAL
COMMITMENT. Except as provided in Sections 3.3,
3.4, above, and 5.5 below, a
Deferral Commitment with respect to
Compensation shall be irrevocable by the Participant during a
Deferral
Period. A
Deferral Commitment with respect to Restricted Stock Units
shall
be
irrevocable.
3.6. CHANGE IN EMPLOYMENT STATUS. If
the Committee determines that a
Participant's employment performance is no longer at a level that
warrants
reward
through participation in this Plan, but does not terminate the
Participant's employment with Company, the Participant's existing
Deferral
Commitment
shall terminate at the end of the Deferral Period, and no new
Deferral
Commitment may be made by such Participant after notice of such
determination is given by the Committee, unless the Participant
later
satisfies
the requirements of Section 3.1, above. If the Committee, in
its
sole
discretion, determines that the Participant no longer qualifies as
a
member of
a select group of management or highly compensated employees,
as
determined
in accordance with the Employee Retirement Income Security Act
of 1974,
as amended (hereafter, "ERISA"), the Committee may, in its sole
discretion
terminate any Deferral Commitment for that year, prohibit the
Participant from making any future Deferral Commitments and/or
distribute
the
Participant's Account Balances in accordance with Article V of
this
Plan as if
the Participant had terminated employment with the Company as
of that
time.
3.7. DEFAULTS IN EVENT OF INCOMPLETE OR
INACCURATE DEFERRAL COMMITMENTS. In the
event that
a Participant submits a Deferral Commitment to the Committee
that
contains information necessary to the operation of this Plan
which,
in the
sole discretion of the Committee, is incomplete or inaccurate,
and
the
Committee is unable, after reasonable efforts to contact the
Participant, to ascertain the intent of the Participant with
respect to
the
Deferral Commitment, the Committee shall be authorized to assume
the
following,
and such assumptions shall be communicated to the Participant:
a)
If no
Account is listed - assume Retirement Account was selected;
b)
If
Accounts listed equal less than 100% - assume balance is
deferred
into Retirement Account;
c)
If
Accounts listed equal more than 100% - assume proportionate
reduction to each Account selected;
d)
If no
Valuation Fund is selected - assume Money Market Fund was
selected;
e)
If
Valuation Fund(s) selected equal less than 100% - assume that
Money Market Fund was selected for balance;
f)
If
Valuation Fund(s) selected equal more than 100% - assume
proportionate reduction to each Valuation Fund selected;
g)
If no
Distribution Election is chosen - assume lump sum for
In-Service Account and three (3) year for Retirement Account
was
selected; and,
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h)
If no time
of payment is chosen for In-Service Account - assume the
earliest possible date available under the provisions of
Section
5.2, below was selected.
provided, however that notwithstanding the
forgoing, Restricted Stock Units
shall only be held in the Restricted Stock
Unit Account.
ARTICLE IV - DEFERRED COMPENSATION ACCOUNT
4.1. ACCOUNTS. The Compensation
deferred by a Participant under the Plan, any
Discretionary Contributions and Interest shall be credited to
the
Participant's
Retirement or In-Service Account(s). Any Restricted Stock
Units
deferred by a Participant under the Plan shall be credited to
the
Participant's Restricted Stock Unit Account. Separate accounts may
be
maintained
on the books of the Company to reflect the different Accounts
chosen by
the Participant, and the Participant shall designate the
portion
of each
deferral that will be credited to each Account as set forth in
Section
3.2(a) and (e), above. These Accounts shall be used solely to
calculate
the amount payable to each Participant under this Plan and
shall
not
constitute a separate fund of assets.
4.2. TIMING OF CREDITS; WITHHOLDING. A
Participant's deferred salary, bonus or
commissions shall be credited to each Account designated by the
Participant on the same day that the compensation deferred would
have
otherwise
been payable to the Participant. A Participant's deferred
Restricted
Stock Units shall be credited to the Restricted Stock Unit
Account at
the time the Restricted Stock Units would have otherwise vested
under the
terms of the award there
