Justin Smart
Mr. Smarts employment letter agreement provides that, if his employment is terminated by the Company without cause or by
Mr. Smart for good reason (as these terms are defined in his employment letter agreement), he would be entitled to receive the following payments and benefits (together with the Severance Payment (as defined below), the
Termination Benefits
): (i) accrued but unpaid compensation through the date of termination; (ii) in lieu of any annual incentive compensation, a partial year bonus based on actual performance against bonus targets as of the
date of termination; (iii) full vesting of time-based equity awards; (iv) vesting of performance-based cash or equity awards (excluding outperformance incentive awards) as governed by the 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 Payments).
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 employment,
(ii) restrictions on solicitation during his employment and for two years following a termination of his 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 may be required to forfeit equity awards granted to him 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 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.
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KILROY REALTY
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PROXY STATEMENT
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81
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