RESTRICTED STOCK AGREEMENT (Second Amended & Restated 2015 Stock Award and Incentive Plan)

RESTRICTED STOCK AGREEMENT

(Second Amended & Restated 2015 Stock Award and Incentive Plan)

 

 

This RESTRICTED STOCK AGREEMENT, dated as of [_____________] (the “Agreement”), is by and between Apartment Investment and Management Company, a Maryland corporation (the “Company”), and [_____________] (“Recipient”). Capitalized terms used but not otherwise defined in this Agreement shall have the respective meanings set forth in the Apartment Investment and Management Company Second Amended and Restated 2015 Stock Award and Incentive Plan (the “Plan”).

 

WHEREAS, effective [_____________] (the “Date of Grant”), the Compensation and Human Resources Committee (the “Committee”) of the Board of Directors (the “Board”) of the Company granted the Recipient a Restricted Stock Award, pursuant to which the Recipient shall receive shares of the Company’s Class A Common Stock, par value $0.01 per share (“Common Stock”), pursuant to and subject to the terms and conditions of the Plan.

 

NOW, THEREFORE, in consideration of the Recipient’s services to the Company and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

 

 

 

 

 

 

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3. Termination of Employment. Except as otherwise set forth in this Agreement, in the event that Recipient ceases to be employed by the Company for any reason prior to the lapse of the Restricted Period, then the Restricted Stock and any accrued but unpaid dividends that are at that time subject to restrictions set forth herein, shall be forfeited to the Company without payment of any consideration by the Company, and neither the Recipient nor any of his or her successors, heirs, assigns or personal representatives shall thereafter have any further rights or interests in such shares of Restricted Stock or certificates. In the event that Recipient’s employment with the Company is terminated due to his death or total and permanent disability then the Restricted Period set forth in Section 2(b) hereof shall immediately lapse as to all shares of Restricted Stock and the Restricted Stock shall become immediately fully vested. For purposes of this Section 3, Recipient’s employment will have terminated by reason of total and permanent disability if, in the reasonable and good faith judgment of the Company, the Recipient is totally and permanently disabled and is unable to return to or perform his or her duties on a full-time basis.

 

4. Change in Control. All unvested shares of Restricted Stock issued hereunder shall, in addition to any provisions relating to vesting contained in this Agreement, become immediately fully vested upon the termination of Recipient’s employment with the Company by the Company without Cause or by Recipient for Good Reason, in either case within the period commencing six months prior to and ending twenty-four (24) months following the occurrence of a Change in Control (as defined below).

 

(a) For purposes of this Agreement, a “Change in Control” shall mean the occurrence of any of the following events:

 

(i) an acquisition (other than directly from the Company) of any voting securities of the Company (the “Voting Securities”) by any “person” (as the term “person” is used for purposes of Section 13(d) or Section 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) immediately after which such person has “beneficial ownership” (within the meaning of Rule 13d‑3 promulgated under the Exchange Act) (“Beneficial Ownership”) of 50% or more of the combined voting power of the Company’s then outstanding Voting Securities; provided, however, in determining whether a Change in Control has occurred, Voting Securities that are acquired in a Non-Control Acquisition (as hereinafter defined) shall not constitute an acquisition that would cause a Change in Control. “Non-Control Acquisition” shall mean an acquisition (A) by or under an employee benefit plan (or a trust forming a part thereof) maintained by (1) the Company or (2) any corporation, partnership or other person of which a majority of its voting power or its equity securities or equity interest is owned directly or indirectly by the Company or in which the Company serves as a general partner or manager (a “Subsidiary”), (B) by the Company or any Subsidiary, or (C) by any person in connection with a Non-Control Transaction (as hereinafter defined). “Non-Control Transaction” shall mean a merger, consolidation, share exchange or reorganization involving the Company, in which (1) the stockholders of the Company, immediately before such merger, consolidation, share exchange or reorganization, own, directly or indirectly immediately following such merger, consolidation, share exchange or reorganization, at least 50% of the combined voting power of the outstanding voting securities of the corporation that is the successor in such merger, consolidation, share exchange or reorganization (the “Surviving Company”) in substantially the same proportion as their ownership of the Voting Securities immediately before such merger, consolidation, share exchange or reorganization, and (2) the individuals who were members of the Board of Directors of the Company immediately prior to the execution of the agreement providing for such merger, consolidation, share exchange or reorganization constitute at least 50% of the members of the board of directors of the Surviving Company;

 

(ii) the individuals who constitute the Board as of the date hereof (the “Incumbent Board”) cease for any reason to constitute at least 50% of the Board; provided, however, that if the election, or nomination for election by the Company’s stockholders, of any new director was approved by a vote of at least two-thirds of the Incumbent Board, such new director shall be considered as a member of the Incumbent Board; provided, further, that no individual shall be considered a member of the Incumbent Board if such individual initially assumed office as a result of either an actual or threatened “election contest” (as described in Rule 14a-11 promulgated under the Exchange Act) (an “Election Contest”) or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board of Directors (a “Proxy Contest”) including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest; or

 

(iii) the consummation of any of the following: (A) a merger, consolidation, share exchange or reorganization involving the Company (other than a Non-Control Transaction); (B) a complete liquidation

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or dissolution of the Company; or (C) an agreement for the sale or other disposition of all or substantially all of the assets of the Company to any person (other than a transfer to a Subsidiary).

 

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because any person (a “Subject Person”) acquired Beneficial Ownership of more than the permitted amount of the outstanding Voting Securities as a result of the acquisition of Voting Securities by the Company that, by reducing the number of Voting Securities outstanding, increases the proportional number of shares Beneficially Owned by such Subject Person, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition of Voting Securities by the Company, and after such share acquisition by the Company, such Subject Person becomes the Beneficial Owner of any additional Voting Securities that increases the percentage of the then outstanding Voting Securities Beneficially Owned by such Subject Person, then a Change in Control shall occur.

 

(b) “Cause” shall mean the termination of Recipient’s employment because of the occurrence of any of the following events, as determined by the Board in accordance with the procedure below:

 

(i) the failure by Recipient to attempt in good faith to perform his or her duties or to follow the lawful direction of the individual to whom Recipient reports; provided, however, that the Company shall have provided Recipient with written notice of such failure and Recipient has been afforded at least fifteen (15) days to cure same;

 

(ii) the indictment of Recipient for, or Recipient’s conviction of or plea of guilty or nolo contendere to, a felony or any other serious crime involving moral turpitude or dishonesty;

 

(iii) Recipient’s willfully engaging in misconduct in the performance of his or her duties (including theft, fraud, embezzlement, securities law violations, a material violation of the Company’s code of conduct or a material violation of other material written policies) that is injurious to the Company, monetarily or otherwise, in more than a de minimis manner;

 

(iv) Recipient’s willfully engaging in misconduct unrelated to the performance of his or her duties for the Company that is materially injurious to the Company, monetarily or otherwise;

 

(v) the material breach by Recipient of any material written agreement with the Company.

 

For purposes of this Section 4(b), no act, or failure to act, on the part of Recipient shall be considered “willful” unless done, or omitted to be done, by Recipient in bad faith and without reasonable belief that his or her action or omission was in the best interest of the Company. Any termination shall be treated as a termination for Cause only if (i) Recipient is given at least five (5) business days’ written notice of termination specifying the alleged Cause event and shall have the opportunity to appear (with counsel) before the full Board to present information regarding his or her views on the Cause event, and (ii) after such hearing, Recipient is terminated for Cause by at least a majority of the Board. After providing the notice of termination in the foregoing sentence, the Board may suspend Recipient with full pay and benefits until a final determination pursuant to this Section 4(b) has been made. Notwithstanding the foregoing provisions of this Section 4(b), if Recipient is party to an employment agreement with the Company that provides a definition of Cause, such definition shall apply instead of the foregoing provisions of this Section 4(b).

 

(c) “Good Reason” mean (i) a reduction in Recipient’s base salary; (ii) a material diminution in Recipient’s title or responsibilities; or (iii) relocation of Recipient’s primary place of employment more than fifty miles; provided, however, that Recipient may only terminate employment for Good Reason by delivering written notice to the Board within ninety (90) days following the date on which Recipient first knows of the event constituting Good Reason, which notice specifically identifies the facts and circumstances claimed by Recipient to constitute Good Reason, and the Company has failed to cure such facts and circumstances within thirty (30) days after receipt of such notice; and provided further, however, that if Recipient is party to an employment agreement with the Company that provides a definition of Good Reason, such definition shall apply instead of the foregoing provisions of this Section 4(c).

 

5. Tax Withholding; Tax Treatment.

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(a) Tax Withholding. Notwithstanding anything to the contrary, the release of the shares of Restricted Stock hereunder shall be conditioned upon the Recipient making adequate provision for federal, state or other withholding obligations, if any, which may arise upon the vesting of the Restricted Stock.

 

(b) Tax Treatment. Set forth below is a brief summary as of the Date of Grant of certain United States federal tax consequences of the award of Restricted Stock. THIS SUMMARY DOES NOT ADDRESS SPECIFIC STATE, LOCAL OR FOREIGN TAX CONSEQUENCES THAT MAY BE APPLICABLE TO THE RECIPIENT. THE RECIPIENT UNDERSTANDS THAT THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.

 

To ensure compliance with Treasury Department regulations, we advise you that, unless otherwise expressly indicated, any federal tax advice contained in this Agreement was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under the Code or (ii) promoting, marketing or recommending to another party any tax-related matters addressed herein.

 

Unless the Recipient has filed a Section 83(b) election as discussed below, the Recipient shall recognize ordinary income at the time or times the Restricted Stock vests in an amount equal to the aggregate Fair Market Value of such shares on each such date.

 

The Recipient hereby acknowledges that he or she has been informed that, with respect to the grant of Restricted Stock, an election may be filed by the Recipient with the Internal Revenue Service, within 30 days of the Date of Grant, electing pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended (the “Code”), to be taxed currently on the aggregate Fair Market Value of the Restricted Stock as of the Date of Grant.

 

THE RECIPIENT ACKNOWLEDGES THAT IT IS THE RECIPIENT’S SOLE RESPONSIBILITY AND NOT THE COMPANY’S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b) OF THE CODE, EVEN IF THE RECIPIENT REQUESTS THE COMPANY OR ITS REPRESENTATIVE TO MAKE THIS FILING ON THE RECIPIENT’S BEHALF.

 

BY SIGNING THIS AGREEMENT, THE RECIPIENT REPRESENTS THAT HE OR SHE HAS REVIEWED WITH HIS OR HER OWN TAX ADVISORS THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT AND THAT HE OR SHE IS RELYING SOLELY ON SUCH ADVISORS AND NOT ON ANY STATEMENTS OR REPRESENTATIONS OF THE COMPANY OR ANY OF ITS AGENTS. THE RECIPIENT UNDERSTANDS AND AGREES THAT HE OR SHE (AND NOT THE COMPANY) SHALL BE RESPONSIBLE FOR ANY TAX LIABILITY THAT MAY ARISE AS A RESULT OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

 

6. Miscellaneous.

 

(a) Entire Agreement. This Agreement and the Plan contain the entire understanding and agreement of the Company and the Recipient concerning the subject matter hereof, and supersede all earlier negotiations and understandings, written or oral, between the parties with respect thereto.

 

(b) Captions. The captions and section numbers appearing in this Agreement are inserted only as a matter of convenience. They do not define, limit, construe or describe the scope or intent of the provisions of this Agreement.

 

(c) Counterparts. This Agreement may be executed in counterparts, each of which when signed by the Company or the Recipient will be deemed an original and all of which together will be deemed the same agreement.

 

(d) Notices. Any notice or communication having to do with this Agreement must be given by personal delivery or by certified mail, return receipt requested, addressed, if to the Company or the Committee, to

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the attention of the General Counsel of the Company at the principal office of the Company and, if to the Recipient, to the Recipient’s last known address contained in the personnel records of the Company.

 

 

 

 

 

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

 

APARTMENT INVESTMENT AND

MANAGEMENT COMPANY

 

 

 

By: ______________________________

Name:

Title:

 

 

Recipient:

 

 

By: ______________________________

Name:

 

Address: ____________________________

____________________________

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