Exhibit 10.3
AMENDED AND RESTATED EMPLOYMENT
AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT
AGREEMENT (this “ Agreement ”), effective as of
March 12, 2009 (the “ Effective Date ”), is
entered into by and between Maguire Properties, Inc., a Maryland
corporation (the “ REIT ”), Maguire Properties,
L.P., a Maryland limited partnership (the “ Operating
Partnership ”) and Shant Koumriqian (the “
Executive ”). This Agreement amends and restates in
its entirety that certain employment letter agreement dated
July 27, 2004, as amended, by and between the REIT, the
Operating Partnership and the Executive (the “ Original
Agreement ”);
WHEREAS, the parties previously
entered into the Original Agreement, which set forth the terms of
the Executive’s employment with the REIT and the Operating
Partnership (collectively, the “ Company ”);
and
WHEREAS, the parties now desire to
amend and restate the Original Agreement on the terms and
conditions set forth herein, and to supersede the Original
Agreement in all respects effective as of the Effective
Date.
NOW, THEREFORE, IT IS HEREBY AGREED
AS FOLLOWS:
1. Employment Period .
Subject to the provisions for earlier termination hereinafter
provided, the Executive’s employment hereunder shall be for a
term (the “ Employment Period ”) commencing on
the Effective Date and ending on March 12, 2014 (the “
Initial Termination Date ”); provided ,
however , that this Agreement shall be automatically
extended for one additional year on the Initial Termination Date
and on each subsequent anniversary of the Initial Termination Date,
unless either the Executive or the Company elects not to so extend
the term of the Agreement by notifying the other party, in writing,
of such election not less than sixty (60) days prior to the
last day of the term as then in effect.
2. Terms of Employment
.
(a) Position and Duties
.
(i) During the Employment Period,
the Executive shall serve as Executive Vice President, Chief
Financial Officer of the REIT and the Operating Partnership and
shall perform such employment duties as are usual and customary for
such position. During the Employment Period, the Executive shall be
a member of the Executive Committee of the Company (if such a
committee exists), and the Executive shall report directly at all
times to the Chief Executive Officer of the Company. The Executive
shall have significant interface with the Board of Directors of the
REIT (the “ Board ”), investors, analysts,
lenders and other major stakeholders in the Company. At the
Company’s request, the Executive shall serve the Company
and/or its subsidiaries and affiliates in other offices and
capacities in addition to the foregoing consistent with the
Executive’s position as Executive Vice President, Chief
Financial Officer of the REIT and the Operating Partnership. In the
event that the Executive, during the Employment Period, serves in
any one or more of such additional capacities, the
Executive’s compensation shall not be increased beyond that
specified in Section 2(b) of this Agreement. In addition, in
the event the Executive’s service in one or more of
such
additional capacities is terminated,
the Executive’s compensation, as specified in
Section 2(b) of this Agreement, shall not be diminished or
reduced in any manner as a result of such termination for so long
as the Executive otherwise remains employed under the terms of this
Agreement.
(ii) During the Employment Period,
and excluding any periods of vacation and sick leave to which the
Executive is entitled, the Executive agrees to devote substantially
full-time attention and time during normal business hours to the
business and affairs of the Company. During the Employment Period
it shall not be a violation of this Agreement for the Executive to
(A) serve on corporate, civic or charitable boards or
committees, (B) deliver lectures, fulfill speaking engagements
or teach at educational institutions or (C) manage his
personal investments, so long as such activities do not
significantly interfere with the performance of the
Executive’s responsibilities as an employee of the Company in
accordance with this Agreement. It is expressly understood and
agreed that to the extent that any such activities have been
conducted by the Executive prior to the Effective Date, the
continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective
Date shall not thereafter be deemed to interfere with the
performance of the Executive’s responsibilities to the
Company; provided that no such activity that violates any written
non-competition agreement between the parties shall be
permitted.
(iii) During the Employment Period,
the Executive shall perform the services required by this Agreement
at the Company’s principal offices located in downtown Los
Angeles (the “ Principal Location ”), except for
travel to other locations as may be necessary to fulfill the
Executive’s duties and responsibilities hereunder.
(b) Compensation, Benefits,
Etc.
(i) Base Salary . During the
Employment Period, the Executive shall receive a base salary (the
“ Base Salary ”) of $350,000 per annum, as the
same may be increased thereafter pursuant to the Company’s
normal practices for its executives. The Base Salary shall be paid
at such intervals as the Company pays executive salaries generally.
During the Employment Period, the Base Salary shall be reviewed at
least annually for possible increase in the Company’s
discretion. Any increase in Base Salary shall not serve to limit or
reduce any other obligation to the Executive under this Agreement.
The Base Salary shall not be reduced after any such increase and
the term “Base Salary” as utilized in this Agreement
shall refer to Base Salary as so increased.
(ii) Annual Bonus . In
addition to the Base Salary, the Executive shall be eligible to
earn, for each fiscal year of the Company ending during the
Employment Period, an annual cash performance bonus (an “
Annual Bonus ”) under the Company’s bonus plan
or plans applicable to senior executives. The Executive’s
target Annual Bonus shall be 100% of his Base Salary actually paid
for such year and his maximum Annual Bonus shall be 200% of his
Base Salary actually paid for such year, but the actual Annual
Bonus shall be determined on the basis of the Executive’s
and/or the Company’s attainment of objective financial
performance metrics (including but not limited to funds from
operations or total shareholder return) or a combination of the
Company’s attainment of such financial performance metrics
and the Executive’s attainment of
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individual objectives, in each case
as established by the Compensation Committee of the Board in
accordance with the terms and conditions applicable to similarly
situated executives of the Company under such bonus
plan(s).
(iii) Acknowledgement of
Restricted Stock Awards .
(A) 2008 Restricted Stock .
The parties hereby acknowledge and agree that the REIT has granted
the Executive 17,644 restricted shares of the REIT’s common
stock in satisfaction of the REIT’s obligation under the
Original Agreement to grant the Executive the Restricted Stock
contemplated by, and defined in, Section 4 of the Original
Agreement, as amended and restated on December 16, 2008 (the
“ 2008 Restricted Stock ”). The terms and
conditions of the 2008 Restricted Stock are set forth in a
Restricted Stock Agreement, dated January 17, 2008, between
the Executive and the REIT.
(B) 2008 Restricted Stock
Units . The parties further acknowledge and agree that, on
October 2, 2008, the REIT granted the Executive 61,556
restricted stock units (the “ 2008 RSUs ”) under
the Second Amended and Restated 2003 Incentive Award Plan of
Maguire Properties, Inc., Maguire Properties Services, Inc. and
Maguire Properties, L.P. (the “ Incentive Plan
”). The terms and conditions of the 2008 RSUs are set forth
in a Restricted Stock Unit Award Agreement, dated October 2,
2008, between the Executive and the REIT.
(iv) Restricted Stock Unit
Award . The Company shall, on the Effective Date or as soon as
reasonably practicable thereafter, grant the Executive 52,000
restricted stock units with dividend equivalent rights (the “
2009 RSUs ” and, together with the 2008 RSUs, the
“ RSUs ”), which shall be subject to time-based
vesting, under the Incentive Plan. Consistent with the foregoing,
the terms and conditions of the 2009 RSUs shall be set forth in an
award agreement (the “ 2009 RSU Agreement ”)
substantially in the form attached hereto as Exhibit A , to
be entered into by the Company and the Executive and which shall
evidence the grant of the 2009 RSUs.
(v) Incentive, Savings and
Retirement Plans . During the Employment Period, the Executive
shall be entitled to participate in all other incentive plans,
practices, policies and programs, and all savings and retirement
plans, practices, policies and programs, in each case that are
applicable generally to senior executives of the
Company.
(vi) Welfare Benefit Plans .
During the Employment Period, the Executive and the
Executive’s eligible family members shall be eligible for
participation in the welfare benefit plans, practices, policies and
programs (including, if applicable, medical, dental, disability,
employee life, group life and accidental death insurance plans and
programs) maintained by the Company for its senior
executives.
(vii) Expenses . During the
Employment Period, the Executive shall be entitled to receive
prompt reimbursement for all reasonable business expenses incurred
by the Executive in accordance with the policies, practices and
procedures of the Company applicable to senior executives of the
Company.
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(viii) Fringe Benefits .
During the Employment Period, the Executive shall be entitled to
such fringe benefits and perquisites as are provided by the Company
to its senior executives from time to time, in accordance with the
policies, practices and procedures of the Company.
(ix) Vacation . During the
Employment Period, the Executive shall be entitled to paid vacation
in accordance with the plans, policies, programs and practices of
the Company applicable to its senior executives.
(x) Compensation Gross-Up .
The amount of compensation payable to the Executive pursuant to
Sections 2(b)(i), (ii), (iii) and (iv) above shall be
“grossed up” as necessary (on an after-tax basis) to
compensate for any additional social security withholding taxes due
as a result of the Executive’s shared employment by the
Operating Partnership, the REIT and, if applicable, any subsidiary
and/or affiliate thereof. If any amounts become payable to the
Executive pursuant to this Section 2(b)(x), then such amounts
shall be paid to the Executive promptly following the remittance of
such taxes to the appropriate taxing authority, but in no event
later than the end of the calendar year following that in which any
such remittance is made.
(xi) Indemnification
Agreement . The parties hereby acknowledge that they previously
entered into an Indemnification Agreement (the “
Indemnification Agreement ”), effective as of
January 17, 2008.
3. Termination of Employment
.
(a) Death or Disability . The
Executive’s employment shall terminate automatically upon the
Executive’s death or Disability during the Employment Period.
For purposes of this Agreement, “ Disability ”
shall mean the absence of the Executive from the Executive’s
duties with the Company on a full-time basis for 90 consecutive
days or for a total of 180 days in any 12-month period, in either
case as a result of incapacity due to mental or physical illness
which is determined to be total and permanent by a physician
selected by the Company or its insurers and acceptable to the
Executive or the Executive’s legal representative.
(b) Cause . The Company may
terminate the Executive’s employment during the Employment
Period for Cause or without Cause. For purposes of this Agreement,
“ Cause ” shall mean the occurrence of any one
or more of the following events unless the Executive fully corrects
the circumstances constituting Cause within a reasonable period of
time after receipt of the Notice of Termination (as defined
below):
(i) the Executive’s willful
and continued failure to substantially perform his duties with the
Company (other than any such failure resulting from the
Executive’s incapacity due to physical or mental illness or
any such actual or anticipated failure after his issuance of a
Notice of Termination for Good Reason), after a written demand for
substantial performance is delivered to the Executive by the Board,
which demand specifically identifies the manner in which the Board
believes that the Executive has not substantially performed his
duties;
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(ii) the Executive’s willful
commission of an act of fraud or dishonesty resulting in economic
or financial injury to the Company;
(iii) the Executive’s
conviction of, or entry by the Executive of a guilty or no contest
plea to, the commission of a felony or a crime involving moral
turpitude;
(iv) a willful breach by the
Executive of his fiduciary duty to the Company which results in
economic or other injury to the Company; or
(v) the Executive’s willful
and material breach of the Executive’s covenants set forth in
Section 8(a) or 8(b) hereof.
For purposes of this provision, no
act or failure to act, on the part of the Executive, shall be
considered “willful” unless it is done, or omitted to
be done, by the Executive in bad faith or without reasonable belief
that the Executive’s action or omission was in the best
interests of the Company. Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board
or based upon the advice of counsel for the Company shall be
conclusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of the Company.
The cessation of employment of the Executive shall not be deemed to
be for Cause unless and until there shall have been delivered to
the Executive a copy of a resolution duly adopted by the
affirmative vote of not less than two-thirds of the entire
membership of the Board at a meeting of the Board called and held
for such purpose (after reasonable notice is provided to the
Executive and the Executive is given an opportunity, together with
counsel for the Executive, to be heard before the Board), finding
that, in the good faith opinion of the Board, the Executive is
guilty of any of the conduct described in Section 3(b) hereof,
and specifying the particulars thereof in detail; provided ,
that if the Executive is a member of the Board, the Executive shall
not vote on such resolution nor shall the Executive be counted in
determining the “entire membership” of the
Board.
(c) Good Reason . The
Executive’s employment may be terminated by the Executive for
Good Reason or by the Executive without Good Reason. For purposes
of this Agreement, “ Good Reason ” shall mean
the occurrence of any one or more of the following events without
the Executive’s prior written consent, unless the Company
fully corrects the circumstances constituting Good Reason (provided
such circumstances are capable of correction) prior to the Date of
Termination (as defined below):
(i) the assignment to the Executive
of any duties materially inconsistent in any respect with the
Executive’s position (including status, offices, titles and
reporting requirements), authority, duties or responsibilities as
contemplated by Section 2(a) of this Agreement, or any other
action by the Company which results in a material diminution in
such position, authority, duties or responsibilities, excluding for
this purpose an isolated, insubstantial and inadvertent action not
taken in bad faith and which is remedied by the Company promptly
after receipt of notice thereof given by the Executive;
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(ii) the Company’s reduction
of the Executive’s Base Salary or Annual Bonus opportunity,
each as in effect on the date hereof or as the same may be
increased from time to time;
(iii) the relocation of the
Principal Location to a location more than thirty (30) miles
from such location, or the Company’s requiring the Executive
to be based at a location more than thirty (30) miles from the
Principal Location, except for required travel on the
Company’s business to an extent substantially consistent with
the Executive’s present business travel
obligations;
(iv) the Company’s failure to
obtain a satisfactory agreement from any successor to assume and
agree to perform this Agreement, as contemplated in Section 9
hereof; or
(v) the Company’s failure to
cure a material breach of its obligations under the Agreement after
written notice is delivered to the Board by the Executive which
specifically identifies the manner in which the Executive believes
that the Company has breached its obligations under the Agreement
and the Company is given a reasonable opportunity to cure any such
breach.
(d) Notice of Termination .
Any termination by the Company for Cause, or by the Executive for
Good Reason, shall be communicated by a Notice of Termination to
the other parties hereto given in accordance with
Section 11(c) of this Agreement. For purposes of this
Agreement, a “ Notice of Termination ” means a
written notice which (i) indicates the specific termination
provision in this Agreement relied upon, (ii) to the extent
applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Executive’s employment under the provision so indicated and
(iii) if the Date of Termination (as defined below) is other
than the date of receipt of such notice, specifies the termination
date (which date shall be not more than thirty days after the
giving of such notice). The failure by the Executive or the Company
to set forth in the Notice of Termination any fact or circumstance
which contributes to a showing of Good Reason or Cause shall not
waive any right of the Executive or the Company, respectively,
hereunder or preclude the Executive or the Company, respectively,
from asserting such fact or circumstance in enforcing the
Executive’s or the Company’s rights
hereunder.
4. Obligations of the Company
upon Termination .
(a) Without Cause or For Good
Reason . Subject to Section 4(d) below, if, during the
Employment Period, the Executive incurs a “separation from
service” from the Company (within the meaning of
Section 409A(a)(2)(A)(i) of the Internal Revenue Code of 1986,
as amended (the “ Code ”), and Treasury
Regulation Section 1.409A-1(h)) (a “ Separation from
Service ”) during the Employment Period by reason of
(1) a termination of the Executive’s employment without
Cause, or (2) a termination of the Executive’s
employment by the Executive for Good Reason:
(i) The Executive shall be paid, in
a single lump sum payment on the date of the Executive’s
termination of employment, the aggregate amount of the
Executive’s earned but unpaid Base Salary and accrued but
unpaid vacation pay through
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the date of such termination (the
“ Accrued Obligations ”). In addition, the
Executive shall be paid, in a single lump sum payment within 60
days after the date of the Executive’s Separation from
Service (such date, the “ Date of Termination ”)
(with the exact payment date to be determined by the Company in its
discretion), the aggregate amount of (A) any Annual Bonus
required to be paid to the Executive pursuant to
Section 2(b)(ii) above for any fiscal year of the Company that
ends on or before the Date of Termination to the extent not
previously paid (the “ Unpaid Bonus ”), and
(B) one and one-half (1.5) (the “ Severance
Multiple ”) times the sum of (x) the Base Salary in
effect on the Date of Termination plus (y) the average Annual
Bonus received by the Executive for the three complete fiscal years
(or such lesser number of years as the Executive ha
