applicable plans, programs and agreements, but (unless otherwise provided in an applicable award agreement) with the objectives of such awards deemed to be met at the greater of (a) target
on the date of termination or (b) actual performance as of the date of termination and reasonably anticipated performance through the remainder of the year; (v) all payments due under any other compensatory or benefit plan, including any
deferrals; and (vi) payment of the premiums charged for Mr. Smart, his spouse and his eligible dependents to continue medical coverage under COBRA for two years after the date of termination. In addition, Mr. Smart would be entitled
to receive a cash severance payment (the Severance Payment) equal to the sum of (i) two times his annual base salary and (ii) two times the average of his two highest target annual incentives (that is, the
sum of the short-term incentive award and the annual stock award (determined based on the target level of the award) as detailed in Mr. Smarts employment letter agreement) during the three preceding full performance years.
If Mr. Smarts employment is terminated due to his death, he would be entitled to receive the Termination Benefits described above, except that
(i) his Severance Payment described above will be determined using a multiplier of one instead of two, and (ii) the payment of the premiums to continue medical coverage under COBRA for Mr. Smart, his spouse and
his dependents, as applicable, will be for one year after the date of termination.
If Mr. Smarts employment is terminated due to his
disability, he would be entitled to receive the Termination Benefits described above, except that the payment of the premiums to continue medical coverage under COBRA for Mr. Smart, his spouse and his dependents, as applicable, will be for one
year after the date of termination.
The employment agreement requires Mr. Smart to sign a general release of claims in favor of the Company in
order to receive benefits in connection with a termination of employment described above (including the Severance Payment).
Non-Competition, Non-Solicitation and Non-Disclosure Agreements
Each of the NEOs has entered into a Non-Competition, Non-Solicitation and Non-Disclosure Agreement, or a Non-Solicitation and Non-Disclosure Agreement, as the case may be, with the Company. Under their
respective agreements, each of them has agreed to (i) restrictions on competitive activities during his or her employment, (ii) restrictions on solicitation during his or her employment and for two years following a termination of his or
her employment, (iii) restrictions on disclosure of confidential information, (iv) restrictions on disparaging the Company and its affiliates, and (v) certain cooperation with the Company regarding any litigation to which the Company
may be party. If the executive fails to comply with the restrictions on non-competition, non-solicitation and non-disclosure of
confidential information under the agreement, he or she may be required to forfeit equity awards granted to him or her by the Company after the date that is three years before the breach of the obligation.
Equity Awards
Under the terms of
the 2006 Plan, if there is a change in control of the Company, each NEOs outstanding awards granted under the plan will not automatically accelerate and become vested under the terms of the 2006 Plan. If, however, the awards will not continue,
be substituted for, or assumed after the change in control event (that is, the awards are to be terminated in connection with the change in control event), the awards would generally become fully vested and, in the case of options, exercisable. The
Committee also has discretion to establish other change in control provisions with respect to awards granted under the 2006 Plan.
The annual
long-term incentive award agreement generally provides that upon a termination of the NEOs employment by the Company without cause, by the NEO for good reason, or due to the NEOs death, disability or
retirement (as such terms are defined in the NEOs employment agreement), subject to the NEO providing a general release of claims in favor of the Company, the time-based RSU award will fully vest and the time-based vesting
requirements of performance-based RSU award will be deemed satisfied.
Our outstanding annual performance-based RSU awards granted to the NEOs
generally provide that, in the event the NEO is entitled to accelerated vesting of the award in connection with a termination of the NEOs employment described above or in the event of a change in control of the Company, the performance period
will be deemed to end in connection with such event and the number of shares subject to the award in such circumstances will be determined: (1) if the termination or change in control occurs in the first three months in the performance period
applicable to the award, the FFO Per Share goal, the Average Debt to EBITDA Ratio goal and, in the case of a qualifying termination of employment, the TSR Percentile Ranking goal shall each be deemed to be satisfied at the applicable
target levels; (2) if the termination or change in control occurs after the first three
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KILROY REALTY |
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PROXY STATEMENT |
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