Form of 2024 AO LTIP Unit Agreement
Exhibit 10.52
FORM OF JBG SMITH PROPERTIES
2017 OMNIBUS SHARE PLAN
APPRECIATION-ONLY LTIP UNIT AGREEMENT
This APPRECIATION-ONLY LTIP UNIT AGREEMENT (the “Award Agreement”) is made as of the Grant Date set forth on Schedule A hereto between JBG SMITH Properties, a Maryland real estate investment trust (the “Company”), its subsidiary JBG SMITH Properties LP, a Delaware limited partnership (the “Partnership”), and the employee of the Company or one of its affiliates listed on Schedule A (the “Employee”).
RECITALS
A.The Employee is an employee of the Company or of a subsidiary of the Company and provides services to the Partnership (and/or its subsidiaries), through which the Company conducts substantially all of its operations.
B.In accordance with the JBG SMITH Properties 2017 Omnibus Share Plan, as it may be amended from time to time (the “Plan”), the Company desires to provide the Employee with an opportunity to acquire Appreciation-Only LTIP Units (as defined in that certain Second Amended and Restated Limited Partnership Agreement, dated December 17, 2020 of the Partnership, as amended from time to time (the “Partnership Agreement”)) having the rights, voting powers, restrictions, limitations as to distributions, qualifications and terms and conditions of redemption and conversion set forth herein, in the Plan and in the Partnership Agreement, and thereby provide additional incentive for the Employee to promote the progress and success of the business of the Company, the Partnership and its subsidiaries.
C.Schedule A hereto sets forth certain significant details of the Appreciation-Only LTIP Unit grant herein and is incorporated herein by reference. Capitalized terms used herein and not otherwise defined have the meanings provided in the Partnership Agreement and on Schedule A.
NOW, THEREFORE, the Company, the Partnership and the Employee hereby agree as follows:
AGREEMENT
The Employee shall have the right to vote the AO LTIP Units if and when voting is allowed under the Partnership Agreement, regardless of whether the applicable Vesting Period has expired.
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For purposes of this Award Agreement, the following terms will have the meaning given to them by any employment agreement between the Employee and the Company, and if there is no such agreement, the meanings below:
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“Cause” means the Employee’s: (a) conviction of, or plea of guilty or nolo contendere to, a felony, (b) willful and continued failure to use reasonable efforts to perform in all material respects his employment duties (other than such failure resulting from the Employee’s incapacity due to physical or mental illness) that the Employee fails to remedy within 30 days after written notice is delivered by the Company to the Employee that specifically identifies in reasonable detail the manner in which the Company believes the Employee has not used reasonable efforts to perform in all material respects his duties hereunder, or (c) willful misconduct that is materially economically injurious to the Company. For purposes of this paragraph, no act, or failure to act, by the Employee will be considered “willful” unless committed in bad faith and without a reasonable belief that the act or omission was in the best interests of the Company.
“Disability” means a termination of employment by the Company or an affiliate as a result of the Employee having been substantially unable to perform his duties for a continuous period of 180 days due to incapacity caused by physical or mental illness and within 30 days after receiving written Notice of such termination of employment after such 180-day period, the Employee shall not have returned to the substantial performance of his duties on a full-time basis.
“Good Reason” means (a) a material reduction by the Company in the Employee’s base salary, (b) a material diminution in the Employee’s position, authority, duties or responsibilities, (c) a relocation of the Employee’s location of employment to a location outside of the Washington D.C. metropolitan area, or (d) a material breach of the Agreement; provided, in each of clauses (a) and (b), in connection with or after a Change in Control any reduction or any diminution (regardless of materiality) shall be deemed to satisfy such clauses, and in each of clauses (a) through (d), that the Employee terminates employment within 90 days after the Employee has actual knowledge of the occurrence, without the written consent of Employee, of one of the foregoing events that has not been cured within 30 days after written notice thereof has been given by the Employee to the Company setting forth in reasonable detail the basis of the event (provided such notice must be given to the Company within 30 days of the Employee becoming aware of such condition).
“Retirement” means the termination of employment of the Employee after the Employee has met all of the following conditions: (a) the Employee has attained at least age 50, (b) the Employee has completed at least ten (10) years of service with the Company and its affiliates (including any predecessors thereto), (c) the sum of his or her age and years of service with the Company and its affiliates (including any predecessors thereto) equals or exceeds seventy (70) and (d) the Employee has provided at least six (6) months’ notice of his or her termination of employment to the Company or its applicable affiliate.
“Service Agreement” means, as of a particular date, any employment, consulting or similar service agreement then in effect between the Employee, on the one hand, and the Employer, on the other hand, as amended or supplemented through such date.
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[signature page follows]
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IN WITNESS WHEREOF, this Award Agreement has been executed by the parties hereto as of the date and year first above written.
| JBG SMITH PROPERTIES, a Maryland real estate investment trust | ||
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| By: | ||
| | Name: | Steven Museles |
| | Title: | Chief Legal Officer and Secretary |
| JBG SMITH PROPERTIES LP, a Delaware limited partnership By:JBG SMITH Properties GP LLC, a Delaware limited liability company, its general partner | |||
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| By: | |||
| | Name: | Steven Museles | |
| | Title: | Chief Legal Officer and Secretary |
| EMPLOYEE | |||
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| Name: | |||
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EXHIBIT A
FORM OF LIMITED PARTNER SIGNATURE PAGE
The Employee, desiring to become one of the within named Limited Partners of JBG SMITH Properties LP, hereby accepts all of the terms and conditions of (including, without limitation, the provisions related to powers of attorney), and becomes a party to, the Second Amended and Restated Limited Partnership Agreement, dated December 17, 2020, of JBG SMITH Properties LP, as amended (the “Partnership Agreement”). The Employee agrees that this signature page may be attached to any counterpart of the Partnership Agreement and further agrees as follows (where the term “Limited Partner” refers to the Employee). Capitalized terms used but not defined herein have the meaning ascribed thereto in the Partnership Agreement.
| | Signature Line for Limited Partner: |
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| Name: | |
| Date: | , 2024 |
| | Address of Limited Partner: |
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EXHIBIT B
EMPLOYEE’S COVENANTS, REPRESENTATIONS AND WARRANTIES
The Employee hereby represents, warrants and covenants as follows:
The Employee also acknowledges that any delivery of the Background Documents and other information relating to the Company and the Partnership prior to the determination by the Partnership of the suitability of the Employee as a holder of AO LTIP Units shall not constitute an offer of AO LTIP Units until such determination of suitability shall be made.
EXHIBIT C
ELECTION TO INCLUDE IN GROSS INCOME IN YEAR OF TRANSFER OF PROPERTY PURSUANT TO SECTION 83(B) OF THE INTERNAL REVENUE CODE
The undersigned hereby makes an election pursuant to Section 83(b) of the Internal Revenue Code with respect to the property described below and supplies the following information in accordance with the regulations promulgated thereunder:
1. | The name, address and taxpayer identification number of the undersigned are: |
Name: [__________] (the “Taxpayer”)
Address:
Social Security No./Taxpayer Identification No.:
2. | Description of property with respect to which the election is being made: |
The election is being made with respect to AO LTIP Units in JBG SMITH Properties LP (the “Partnership”).
3. | The date on which the AO LTIP Units were transferred is January 2, 2024. The taxable year to which this election relates is calendar year 2024. |
4. | Nature of restrictions to which the AO LTIP Units are subject: |
(a) | With limited exceptions, until the AO LTIP Units vest, the Taxpayer may not transfer in any manner any portion of the AO LTIP Units without the consent of the Partnership. |
(b) | The Taxpayer’s AO LTIP Units vest in accordance with the vesting provisions described in the Schedule attached hereto. Unvested AO LTIP Units are forfeited in accordance with the vesting provisions described in the Schedule attached hereto. |
5. | The fair market value at time of transfer (determined without regard to any restrictions other than a nonlapse restriction as defined in Treasury Regulations Section 1.83-3(h)) of the AO LTIP Units with respect to which this election is being made was $0 per AO LTIP Unit. |
6. | The amount paid by the Taxpayer for the AO LTIP Units was $0 per AO LTIP Unit. |
7. | A copy of this statement has been furnished to the Partnership and JBG SMITH Properties. |
Dated: | | |
Name: _______________________ | |
SCHEDULE TO EXHIBIT C
Vesting Provisions of AO LTIP Units
The AO LTIP Units are subject to a combination of time and performance-based vesting, based on relative total shareholder return, over a period commencing on the day after the Grant Date and ending on the fourth anniversary of the Grant Date, provided that the Taxpayer remains an employee of JBG SMITH Properties or its affiliates through the vesting period, subject to acceleration in the event of certain extraordinary transactions or termination of the Taxpayer’s service relationship with JBG SMITH Properties (or its affiliate) under specified circumstances. Unvested AO LTIP Units are subject to forfeiture in the event of failure to vest based on the passage of time and continued employment.
| JBG SMITH PROPERTIES, a Maryland real estate investment trust | |
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| By: | |
| | Name: Steven Museles |
| | Title: Chief Legal Officer and Secretary |
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| Employee |
SCHEDULE A TO AWARD AGREEMENT
(Terms being defined are in quotation marks.)
Date of Award Agreement: | January 2, 2024 |
Name of Employee: | |
Maximum Number of AO LTIP Units Subject to Grant: Target Number of AO LTIP Units Subject to Grant | |
“Grant Date”: | January 2, 2024 |
“Formation Unit Participation Threshold”: | $[__], which amount represents the greater of the Value on the Grant Date and 110% of the Fair Market Value of a Common Share on the Grant Date. |
“Formation Unit Fraction”: | 10% |
“Vesting Amount”: 50% of the AO LTIP Units that become Earned AO LTIP Units | “Vesting Dates”/“Vesting Period”: 1. The third anniversary of the Grant Date |
50% of the AO LTIP Units that become Earned AO LTIP Units) | 2. The fourth anniversary of the Grant Date |
“Earned AO LTIP Units”: The number of AO LTIP Units that will become Earned AO LTIP Units will be determined by the Committee as soon as practicable following the expiration of the Calculation Period based on the Company’s Relative Total Shareholder Return as follows: ● If the Company’s Relative Total Shareholder Return is at or above the 25th percentile and at or below the 75th percentile, the number of AO LTIP Units that will become Earned AO LTIP Units is the Target Number. ● If the Company’s Relative Total Shareholder Return is below the 25th percentile, the number of AO LTIP Units that will become Earned AO LTIP Units will be determined by reducing the Target Number of AO LTIP Units by 25%. |
● If the Company’s Relative Total Shareholder Return is above the 75th percentile, the number of AO LTIP Units that will become Earned AO LTIP Units will be determined by increasing the Target Number of AO LTIP Units by 25%. For purposes of calculating the Earned AO LTIP Units, the following definitions shall apply: “Baseline Value” for each of the Company and the Peer Companies means the dollar amount representing the average of the Fair Market Value of one share of common stock of such company over the five consecutive trading days ending on, and including, the first day of the Calculation Period. “Calculation Period” means the period commencing on the Grant Date and ending on the third anniversary of the Grant Date. “Common Share Price” means, with respect to the Company and each of the Peer Companies, as of a particular date, the average of the Fair Market Value of one share of common stock of such company over all trading days beginning immediately after the first day of the Calculation Period and ending on, and including, such date (or, if such date is not a trading day, the most recent trading day immediately preceding such date); provided, however, that if such date is the date upon which a Transactional Change of Control occurs, the Common Share Price of a share of common stock as of such date shall be equal to the fair value, as determined by the Committee, of the total consideration paid or payable in the transaction resulting in the Transactional Change of Control for one Share, while the Common Share Price as determined in accordance with the remainder of this definition will be used to determine the Common Share Price for the rest of the Peer Companies. “Fair Market Value” of a security means, as of any given date, the closing sale price reported for such security on the principal stock exchange or, if applicable, any other national exchange on which the security is traded or admitted to trading on such date on which a sale was reported. If there are no market quotations for such date, the determination shall be made by reference to the last day preceding such date for which there are market quotations. “Peer Companies” means the companies in the FTSE NAREIT Equity Office Index with a market capitalization at the beginning of the Calculation Period greater than $400 million, but excluding Alexandria Real Estate Equities. “Relative Total Shareholder Return” means the Company’s Total Shareholder Return over the Calculation Period relative to the Total Shareholder Return of the Peer Companies over the Calculation Period expressed as a percentile calculated by dividing the number of such Peer Companies with a Total Shareholder Return less than the Company’s Total Shareholder Return by the total number of such Peer Companies. “Total Shareholder Return” means, for each of the Company and the Peer Companies, with respect to the Calculation Period, the total return (expressed as a percentage) that would have been realized by a shareholder who (a) bought one share of common stock of such company at the Baseline Value on the first day of the Calculation Period, (b) reinvested |
each dividend and other distribution declared during such Calculation Period with respect to such share (and any other shares, or fractions thereof, previously received upon reinvestment of dividends or other distributions or on account of stock dividends), without deduction for any taxes with respect to such dividends or other distributions or any charges in connection with such reinvestment, in additional shares at a price per share equal to (i) the Fair Market Value on the trading day immediately preceding the ex-dividend date for such dividend or other distribution less (ii) the amount of such dividend or other distribution, and (c) sold such shares on the last day of the Calculation Period at the Common Share Price, without deduction for any taxes with respect to any gain on such sale or any charges in connection with such sale. As set forth in, and pursuant to, Section 9 of this Agreement, appropriate adjustments to the Total Shareholder Return shall be made to take into account all stock dividends, stock splits, reverse stock splits and the other events set forth in Section 9 that occur during the Calculation Period. “Transactional Change of Control” means a Change of Control resulting from any person or group making a tender offer for the Shares, a merger or consolidation where the Company is not the acquirer or surviving entity or consisting of a sale, lease, exchange or other transfer to an unrelated party of all or substantially all of the assets of the Company. |