Exhibit 10.7
HIGHWOODS PROPERTIES,
INC.
2005 SHAREHOLDER VALUE
PLAN
Section 1. General Purpose of the Plan:
Definitions
The name of the plan is the
Highwoods Properties, Inc. 2005 Shareholder Value Plan (the
“Plan”). The purpose of the Plan is to further align
the interests of the officers of Highwoods Properties, Inc. (the
“Company”) and its Subsidiaries upon whose judgement,
initiative and efforts the Company largely depends for the
successful conduct of its business with those of the Company and
its shareholders. The Plan provides that those officers selected by
the Committee shall be allowed to participate in a long term
incentive plan which rewards them only upon the Company’s
achieving shareholder returns at or above that of the
Company’s peers, thereby stimulating their efforts on the
Company’s behalf and strengthening their desire to remain
with the Company.
The following terms shall be defined
as set forth below:
“Act”
means the Securities Exchange Act
of 1934, as amended.
“Agreement” shall mean the written agreement, substantially
in the form of Exhibit B attached hereto, evidencing an SVP Award
hereunder between the Company and the recipient of such SVP
Award.
“Board”
means the Board of Directors of the
Company.
“Cause”
means and shall be limited to a
vote of the Board resolving that the Participant should be
dismissed as a result of (i) any material breach by the Participant
of any agreement to which the Participant and the Company are
parties, (ii) any act (other than voluntary termination of
employment by the participant) or omission to act by the
Participant which may have a material and adverse effect on the
business of the Company or any Subsidiary or on the
Participant’s ability to perform services for the Company or
any Subsidiary, including, without limitation, the commission of
any crime (other than ordinary traffic violations), or (iii) any
material misconduct or neglect of duties by the Participant in
connection with the business or affairs of the Company or any
Subsidiary.
“Change of
control” is defined
in Section 9.
“Code”
means the Internal Revenue Code of
1986, as amended, and any successor Code, and related rules,
regulations and interpretations.
“Committee” means the Board or any Committee of the Board
referred to in Section 2.
“Disability” means disability as set forth in Section
22(e)(3) of the Code.
“Fair Market
Value” means the
last reported sale price at which a share of common stock in a
given company is traded on any given date or, if no such shares are
traded on such date, on the next most recent date on which such
shares were traded, as reflected on the New York Stock Exchange or,
if applicable, any other national stock exchange on which such
shares are traded.
“Non-Employee
Director” means a
director who is qualified as such under Rule 16b-3(b)(3)
promulgated under the Act or any successor definition under the
Act.
“Participant”
shall mean any of the employees
selected by the Committee to participate in the Plan and who
executes an Agreement.
“Peer
Group” shall mean
that list of companies as determined from time to time by the
Committee and as listed on Exhibit C attached hereto. The component
members of the Peer Group may be changed from time to time in the
reasonable discretion of the Committee.
“Performance
Measures” shall
mean the criteria and objectives, established by the Committee,
which shall be satisfied or met during the applicable Plan Period
as a condition to the holder’s receipt of an SVP Award. The
Committee may, in its reasonable discretion, amend or adjust the
Performance Measures or other terms and conditions of an
outstanding SVP Award in recognition of unusual or nonrecurring
events affecting the Company or its financial statements or changes
in law or accounting principles. If the Committee consists solely
of “outside directors” (within the meaning of Section
162(m) of the Code and the regulations promulgated thereunder) and
the Committee desires that compensation payable pursuant to any SVP
Award subject to Performance Measures shall be “qualified
performance-based compensation” within the meaning of Section
162(m) of the Code, the Performance Measures (i) shall be
established by the Committee no later than the end of the first
quarter of the Plan Period, as applicable (or such other time
permitted pursuant to Treasury Regulations promulgated under
Section 162(m) of the Code or otherwise permitted by the Internal
Revenue Service) and (ii) shall satisfy all other applicable
requirements imposed under Treasury Regulations promulgated under
Section 162(m) of the Code, including the requirement that such
Performance Measures be stated in terms of an objective formula or
standard.
“Plan
Period” shall mean
any period designated by the Committee for which the Performance
Measures shall be calculated, but generally, shall refer to the
three (3) year period beginning on each January 1.
“Restricted
Share” means a
Share, as defined below, subject to the terms, conditions and
provisions hereof.
“Share”
or “ Shares”
means one or more, respectively, of the Company’s shares of
common stock, par value $.01 per share, subject to adjustments
pursuant to Section 3.
“Shareholder
Return” shall mean
as to the common stock of any applicable company the percentage
determined by dividing (x) the fair Market Value of a share of such
stock at the end of the Plan Period plus all dividends or
distributions paid with respect to such share during the Plan
Period and assuming reinvestment in such shares of all such
dividends or distributions, adjusted to give effect to Section 3 of
the Plan, by (y) the Fair Market Value of a share of stock of the
applicable company on its last trading day immediately preceding
the first day of the Plan Period.
“Shareholder Value Plan
Award” or “SVP Award” shall mean a right stated as a grant of
Restricted Shares as provided hereby, contingent upon the
attainment of specified Shareholder Returns of the Company as
compared to Shareholder Returns of the Peer Group within the Plan
Period.
“Subsidiary” means Highwoods Realty Limited Partnership and
any corporation or other entity (other than the Company) in any
unbroken chain of corporations or other entities, beginning with
the Company, if each of the corporations or entities (other than
the last corporation or entity in the unbroken chain) owns stock or
other interests possessing 50% or more of the economic interest or
the total combined voting power of all classes of stock or other
interests in one of the other corporations or entities in the
chain.
Section 2. Administration of Plan: Committee
Authority to Select Participants and Determine SVP
Awards
(a) Committee . The Plan
shall be administered by the Compensation and Governance Committee
of the Board.
(b) Powers of Committee . The
Committee shall have the power and authority to grant SVP Awards
consistent with the terms of the Plan, including the power and
authority:
(i) to select Participants to whom
SVP Awards may be granted from time to time;
(ii) to determine the time or times
of a grant of an SVP Award;
(iii) to determine and modify the
terms and conditions, including restrictions, not inconsistent with
the terms of the Plan, of any SVP Award, which terms and conditions
may differ among individual SVP Awards and Participants, and to
approve the form of written instruments evidencing the SVP
Awards;
(iv) to accelerate the vesting of
all or any portion of any SVP Award;
(v) to extend the period in which an
SVP Award may be settled; and
(vi) to adopt, alter and repeal such
rules, guidelines and practices for administration of the Plan and
for its own acts and proceedings as it shall deem advisable; to
interpret the terms and provisions of the Plan and any SVP Awards
(including related written instruments); to make all determinations
it deems advisable for the administration of the Plan; to decide
all disputes arising in connection with the Plan; and to otherwise
supervise the administration of the Plan.
All decisions and interpretations of
the Committee shall be binding on all persons, including the
Company and Plan Participants.
Section 3. Mergers;
Substitutions
In the event of any stock split,
stock dividend, recapitalization, reorganization, merger,
consolidation, combination, exchange of shares, liquidation,
spin-off or other similar change in capitalization or similar
dividend affecting either the Company or a company included in the
Peer Group, the terms of the Plan shall be appropriately adjusted
by the Committee. The decision of the Committee regarding any such
adjustment shall be final, binding and conclusive.
Section 4. Eligibility
Participants in the Plan will be
such full or part-time officers of the Company and
