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Exhibit
10.4
JER INVESTORS TRUST
INC.
JER Investors Trust Inc.
Nonqualified Stock Option and Incentive Award Plan
(Manager
Only)
Form of Performance Unit
Agreement
THIS PERFORMANCE UNIT
AGREEMENT (this “Agreement”), dated and effective as of
the __ day of
[ ],
200[ ] (the “Date of Grant”), is entered into by and
between JER Investors Trust Inc., a Maryland corporation (the
“Company”), and
[ ]
(the “Grantee” and, together with the Company, the
“Parties”).
RECITALS
The Company is granting to
Grantee performance units with respect to the Company’s
common stock, par value $0.01 per share (the “Common
Stock”), under the Company’s Nonqualified Stock Option
and Incentive Award Plan (Manager Only) (the “Manager
Plan”) on the terms and conditions set forth
herein.
Any capitalized terms not
defined herein shall have their respective meanings set forth in
the Manager Plan.
NOW, THEREFORE, the Parties
hereto agree as follows:
1. Grant of Performance
Units .
(a) Grant of Performance
Units . Effective as of the Date of Grant, the Company hereby
agrees to grant to the Grantee, subject to the terms hereof,
[ ]
performance units representing the right to receive
[ ]
shares of Common Stock (the “Performance Units”)
pursuant to the terms of this Agreement.
(b) Any purported transfer or
sale of the Performance Units shall be prohibited.
(c) Adjustments . The
number or kind of Shares of Common Stock underlying each
Performance Unit covered by this Agreement may be adjusted as the
Board determines pursuant to Section 3.3 of the Manager Plan
in order to prevent dilution or expansion of the Grantee’s
rights under these terms and conditions as a result of events such
as stock dividends, stock splits, or other change in the capital
structure of the Company, or any merger, consolidation, spin-off,
liquidation or other corporate transaction or event having a
similar effect.
2. Restrictions and
Restricted Period .
(a) Restrictions .
Subject to the Grantee’s continued provision of services to
the Company through the applicable Performance Vesting Date (as
defined below), the Performance Units shall vest in
[ ]
equal annual installments on
[ ],
[ ],
and
[ ]
(each, a “Performance Vesting Date”), subject in each
case to achievement of the Performance Hurdle (as defined below) as
of the applicable Performance Vesting Date at which time, the
Common Shares underlying each such vested Performance Unit shall be
issued to the Grantee. The Common Shares underlying such
Performance Units will not be issued unless and until the
applicable Performance Units become vested.
(b) Performance Hurdle
. The “Performance Hurdle” shall be achieved only if
total returns to common shareholders equal or exceed
[ ]%
per annum on a cumulative compounded basis (“Total
Return”). Total Return shall be measured annually in
accordance with the books and records of the Company at the end of
the respective first quarter financial reporting periods of each
calendar year coinciding with the applicable Performance Vesting
Date (i.e., March 31st of each respective calendar year).
Total Return, expressed as a percentage and stated on an annual
basis, shall equal the quotient resulting from dividing
(A) the sum of (i) total cumulative dividends on Common
Stock declared by the Company and having a Common Stock shareholder
of record date starting from
[ ]
and continuing through and including the Performance Vesting Date,
plus (ii) the simple average (i.e., the arithmetic mean) of
the trading day closing prices (as listed on the New York Stock
Exchange) for the Common Stock during the period commencing
March 24 of the applicable year, through and including
March 31 of the applicable year (the “Performance
Vesting Date Share Price”), less (iii) the Base Share
Price (as defined below) by (B) the Base Share Price. Solely
for purposes of calculating such Total Return, the “Base
Share Price” per share of Common Stock shall be equal to the
simple average (i.e., the arithmetic mean) of the trading day
closing prices (as listed on the New York Stock Exchange) for the
Common Stock during the period commencing March 24,
200[ ], through and including March 31,
200[ ] (the “Base Share
Price”).
(c) Cumulative Catch-up
Opportunity . If the Performance Hurdle is not met for a given
Performance Vesting Date such that a portion of the Performance
Units does not vest on such Performance Vesting Date (a
“Missed Performance Tranche”), but the Grantee
continues to provide services to the Company through a subsequent
Performance Vesting Date as of which Performance Vesting Date of
the Performance Hurdle described in Section 2(b) above is
satisfied, then the Grantee will become vested in the prior Missed
Performance Tranche(s) at such time.
(d) Effect of Restatement
of Financial Results . To the extent any financial results of
the Company have been misstated as a result of the Grantee’s
misconduct or negligence, and such results are later restated
downward, then the Performance Units awarded under this Agreement
(including Common Shares issued pursuant to Performance Units that
were previously vested) shall be subject to
forfeiture, in whole or in part, as the
Board determines at its discretion. In the case of the forfeiture
of Common Shares issued pursuant to Performance Units that were
previously vested, in lieu of returning such Common Shares to the
Company, the Board may require the Grantee to pay to the Company an
amount in cash equal to the then Fair Market Value of such
Shares.
(e) Change in Control
. In the event that a “Change in Control” (as defined
in the Manager Plan) of the Company occurs prior to the date
restrictions set forth herein lapse and, on or after such Change in
Control, one or more of the following occurs:
(i) JER Commercial Debt
Advisors LLC ceases to serve as the manager of the Company or its
successor; or
(ii) The Company or its
successor does not assume, convert or replace the
Awards,
then the Performance Units
shall become immediately and fully vested if the Performance Hurdle
would have been met if measured on an annualized basis (including
for up to the remaining vesting periods) as of the date immediately
prior to the first to occur of (i) or (ii).
(f) Tax Withholding
Obligations . Notwithstanding any provision to the contrary,
the issuance of the Common Shares hereunder shall be conditioned
upon the Grantee making adequate provision for Federal, state or
other tax withholding obligations, if any, which arise upon the
release of the Shares, whether by withholding, direct payment to
the Company, or
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