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Exhibit
10.3
JER INVESTORS TRUST
INC.
JER Investors Trust Inc.
Nonqualified Stock Option and Incentive Award Plan
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 (the “Plan”) on the terms and
conditions set forth herein.
Any capitalized terms not
defined herein shall have their respective meanings set forth in
the 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 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 employment with J.E.
Robert Company, Inc. or any Affiliate thereof (the
“Employer”) through which services will be provided 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 remains
employed with the Employer which 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 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;
(ii) The Company or its
successor does not assume, convert or replace the Awards;
or
(iii) The Grantee’s
employment with the Employer is (x) involuntarily terminated
other than for Willful Misconduct (as defined below) or
(y) terminated by Grantee for Good Reason (as defined below),
for each of (x) and (y) at any time during the 24 month
period following the date of such Change in Control (and as a
result, the Grantee ceases to provide any services to the
Company),
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), (ii) or
(iii) above.
For purposes of this
Agreement, “Willful Misconduct” shall mean:
(A) the failure of Grantee to materially perform his duties
with the Company or any subsidiary of the Company;
(B) Grantee’s failure to follow reasonable and lawful
directives (consistent with the terms of this Agreement) of his
immediate supervisors or the management of the Company;
(C) the engaging by Grantee in gross negligence or willful or
reckless misconduct in connection with his employment; (D) the
conviction of Grantee for a felony, fraud, embezzlement, any crime
involving moral turpitude or any crime causing material harm,
financial or otherwise, to the Company; or (E) material breach
by Grantee of this Agreement and, if curable, failure to cure such
breach within ten (10) days after delivery of a written notice
to Grantee by the Company that identifies the breach.
For purposes of this
Agreement, “ Good Reason ” shall mean
(i) any material adverse change or diminution in
Grantee’s duties, responsibilitie
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