Consolidated-Tomoka Land Co. Restricted Share Award Agreement by and between Consolidated-Tomoka Land Co. and Mark E. Patten, made as of April 16, 2012

 

 

This Restricted Share Award Agreement (the “Agreement”) is made as of the 16th day of April, 2012 (the "Grant Date"), by and between CONSOLIDATED-TOMOKA LAND CO., a Florida corporation (the “Company”) and Mark E. Patten (“Grantee”).

 

The Company has adopted the Consolidated-Tomoka Land Co. 2010 Equity Incentive Plan (the “Plan”) which is administered by the Compensation Committee of the Company’s Board of Directors (the “Committee”).  Section 7 of the Plan provides that the Committee shall have the discretion and right to grant Restricted Shares, subject to the terms and conditions of the Plan and any additional terms provided by the Committee.  The Committee has granted Restricted Shares to the Grantee as of the Grant Date pursuant to the terms of the Plan and this Agreement.  The Grantee desires to accept the grant of Restricted Shares and agrees to be bound by the terms and conditions of the Plan and this Agreement.  Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Agreement.

 

1.           Award of Restricted Shares.  Subject to the terms and conditions provided in this Agreement and the Plan, the Company hereby grants to the Grantee 17,000 Restricted Shares (the “Awarded Shares”) as of the Grant Date.  The extent to which the Grantee’s rights and interest in the Awarded Shares becomes vested and non-forfeitable shall be determined in accordance with the provisions of Section 2 of this Agreement.  The Committee has determined that the Awarded Shares are intended to satisfy the requirements for “qualified performance-based compensation” under Code Section 162(m), and therefore the Committee designates the grant of Awarded Shares as a Qualified Performance-Based Award.

2.           Performance Vesting.  The vesting of the Grantee’s rights and interest in the Awarded Shares of Restricted Stock shall be determined in accordance with the performance vesting criteria set forth in Exhibit A attached to this Agreement.

3.           Shares Held by Custodian; Shareholder Rights.

(a)           The Grantee hereby authorizes and directs the Company to deliver any Restricted Shares issued by the Company to evidence the Awarded Shares to the Secretary of the Company or such other officer of the Company as may be designated by the Company’s Chief Executive Officer (the “Share Custodian”) to be held by the Share Custodian until the Awarded Shares become vested in accordance with Section 2 of this Agreement.  When all or any portion of the Awarded Shares become vested, the Share Custodian shall deliver to the Grantee (or his beneficiary in the event of death) a certificate representing the vested Awarded Shares (which then will be unrestricted).  The Grantee hereby irrevocably appoints the Share Custodian, and any successor thereto, as the true and lawful attorney-in-fact of the Grantee with full power and authority to execute any stock transfer power or other instrument necessary to transfer the Awarded Shares to the Company, or to transfer a portion of the Awarded Shares to the Grantee on an unrestricted basis upon vesting, pursuant to this Agreement, in the name, place, and stead of the Grantee.  The term of such appointment shall commence on the Grant Date and shall continue until all the Awarded Shares become vested or are forfeited.

(b)           During the period that the Share Custodian holds any of the Awarded Shares of Restricted Stock subject to this Section 3, the Grantee shall have the right to vote such Awarded Shares.  The Grantee will cease to have the right to vote any of the Awarded Shares that are forfeited if and when such shares are forfeited.  The number of Awarded Shares set forth in Section 1 of this Agreement shall be the maximum number of Awarded Shares to which the voting rights described in this Section 3 shall be applicable.

(c)           The Grantee shall not receive any dividends with respect to the Awarded Shares for the period beginning on the Grant Date and ending on the vesting date.  In the event the number of Awarded Shares is increased or reduced in accordance with Section 10 of the Plan, and in the event of any distribution of common stock or other securities of the Company in respect of such shares of common stock, the Grantee agrees that any certificate representing shares of such additional common stock or other securities of the Company issued as a result of any of the foregoing shall be delivered to the Share Custodian and shall be subject to all of the provisions of this Agreement as if initially received hereunder.

4.           Tax Consequences. The Grantee shall pay all applicable federal, state and local income and employment taxes (including taxes of any foreign jurisdiction) which the Company is required to withhold at any time with respect to the Awarded Shares. Such payment shall be made in full, at the Grantee's election, in cash or check, by withholding from the Grantee's next normal payroll check, or by the tender of Shares of the Company’s common stock (including Awarded Shares then vesting). Shares tendered as payment of required withholding shall be valued at the closing price per share of the Company’s common stock on the date such withholding obligation arises.

5.           No Effect on Employment or Rights under Plan.  Nothing in the Plan or this Agreement shall confer upon the Grantee the right to continue in the employment of the Company or affect any right which the Company may have to terminate the employment of the Grantee regardless of the effect of such termination of employment on the rights of the Grantee under the Plan or this Agreement.  If the Grantee's employment is terminated for any reason whatsoever (and whether lawful or otherwise), he will not be entitled to claim any compensation for or in respect of any consequent diminution or extinction of his rights or benefits (actual or prospective) under this Agreement or any Award or otherwise in connection with the Plan. The rights and obligations of the Grantee under the terms of his employment with the Company or any Subsidiary will not be affected by his participation in the Plan or this Agreement, and neither the Plan nor this Agreement form part of any contract of employment between the Grantee and the Company or any Subsidiary.  The granting of Awards under the Plan is entirely at the discretion of the Committee, and the Grantee shall not in any circumstances have any right to be granted an Award.

6.           Governing Laws.  This Agreement shall be construed and enforced in accordance with the laws of the State of Florida.

 

7.           Successors.  This Agreement shall inure to the benefit of, and be binding upon, the Company and the Grantee and their heirs, legal representatives, successors and permitted assigns.

8.           Severability.  In the event that any one or more of the provisions or portion thereof contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, the same shall not invalidate or otherwise affect any other provisions of this Agreement, and this Agreement shall be construed as if the invalid, illegal or unenforceable provision or portion thereof had never been contained herein.

9.           Entire Agreement.   Subject to the terms and conditions of the Plan, which are incorporated herein by reference, this Agreement expresses the entire understanding and agreement of the parties hereto with respect to such terms, restrictions and limitations.

10.           Headings.   Section headings used herein are for convenience of reference only and shall not be considered in construing this Agreement.

 

11.           Additional Acknowledgements.  By their signatures below, the Grantee and the Company agree that the Awarded Shares are granted under and governed by the terms and conditions of the Plan and this Agreement.  Grantee has reviewed in their entirety the prospectus that summarizes the terms of the Plan and this Agreement, has had an opportunity to request a copy of the Plan in accordance with the procedure described in the prospectus, has had an opportunity to obtain the advice of counsel prior to executing this Agreement and fully understands all provisions of the Plan and this Agreement.  Grantee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions relating to the Plan and this Agreement.

 

IN WITNESS WHEREOF, the Company and the Grantee have executed this Agreement as of the Grant Date set forth above.

 

CONSOLIDATED-TOMOKA LAND CO.

By: /s/ John J. Allen                                 

      Chairman, Compensation Committee

I have read the Consolidated-Tomoka Land Co. 2010 Equity Incentive Plan adopted on April 28, 2010, and by my signature I agree to be bound by the terms and conditions of the Plan and this form of agreement.

Date: April 16, 2012                                                                               Mark E. Patten                                    

Grantee Signature

The number of Restricted Shares that shall vest under this Agreement shall be based upon the extent to which the Company's common stock attains certain target prices per share (each, a "Performance Condition").  The Performance Condition shall be deemed satisfied with respect to each of the “Tranches” of Restricted Shares described below upon the achievement at any time prior to the sixth anniversary of the Grant Date of the corresponding Stock Price Hurdle described below, in each case, provided that (a) the Grantee is employed by the Company at the time such Stock Price Hurdle is achieved or (b) such Stock Price Hurdle is achieved during the sixty (60) day period following the termination of the Grantee’s employment for any reason other than by death, disability, for Cause (as defined in any employment agreement between Grantee and the Company) or due to the Grantee’s voluntary resignation of employment. Upon the Grantee’s cessation of employment with the Company for any reason, any then remaining unvested Tranches of Restricted Shares shall be forfeited without consideration; provided, however, that if the Grantee’s employment is terminated for any reason other than by death, disability, for Cause (as defined in any employment agreement between Grantee and the Company) or due to the Grantee’s voluntary resignation of employment, then any then remaining unvested Tranches of Restricted Shares shall be forfeited without consideration sixty (60) days after such termination.  If any Tranche of the Restricted Shares fails to satisfy the applicable Stock Price Condition prior to six (6) years from the Grant Date, then that Tranche of the Restricted Shares shall be forfeited.

 

For the purposes of this Exhibit A, the Restricted Shares shall be divided into six “Tranches” as follows:

 

(1) “First Tranche” shall mean 2,500 of the Restricted Shares, for which the Performance Condition will be satisfied upon achievement of the First Stock Price Hurdle;

 

(2) “Second Tranche” shall mean 2,500 of the Restricted Shares, for which the Performance Condition will be satisfied upon achievement of the Second Stock Price Hurdle;

 

(3) “Third Tranche” shall mean 3,000 of the Restricted Shares, for which the Performance Condition will be satisfied upon achievement of the Third Stock Price Hurdle; and

 

(4) “Fourth Tranche” shall mean 3,000 of the Restricted Shares, for which the Performance Condition will be satisfied upon achievement of the Fourth Stock Price Hurdle.

 

(5) “Fifth Tranche” shall mean 3,000 of the Restricted Shares, for which the Performance Condition will be satisfied upon achievement of the Fifth Stock Price Hurdle.

 

(6) “Sixth Tranche” shall mean 3,000 of the Restricted Shares, for which the Performance Condition will be satisfied upon achievement of the Sixth Stock Price Hurdle.

 

For the purposes of this Exhibit A, the following terms shall have the following meanings:

 

(A) “First Stock Price Hurdle” shall mean the written certification by the Committee that the price per share of Company Common Stock has met or exceeded the greater of $36.00 or 120 percent of the trailing 7-day average preceding the Grant Date.

 

(B) “Second Stock Price Hurdle” shall mean the written certification by the Committee that the price per share of Company Common Stock has met or exceeded the target trailing 60-day average closing price of $40.00.

 

(C) “Third Stock Price Hurdle” shall mean the written certification by the Committee that the price per share of Company Common Stock has met or exceeded the target trailing 60-day average closing price of $46.00.

 

(D) “Fourth Stock Price Hurdle” shall mean the written certification by the Committee that the price per share of Company Common Stock has met or exceeded the target trailing 60-day average closing price of $53.00.

 

(E) “Fifth Stock Price Hurdle” shall mean the written certification by the Committee that the price per share of Company Common Stock has met or exceeded the target trailing 60-day average closing price of $60.00.

 

(F) “Sixth Stock Price Hurdle” shall mean the written certification by the Committee that the price per share of Company Common Stock has met or exceeded the target trailing 60-day average closing price of $65.00.

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