Exhibit 10.3

 

VORNADO REALTY TRUST 2002 OMNIBUS SHARE PLAN

RESTRICTED LTIP UNIT AGREEMENT

 

RESTRICTED LTIP UNIT AGREEMENT made as of date set forth on Schedule A hereto
between VORNADO REALTY TRUST, a Maryland real estate investment trust (the
“Company”), its subsidiary Vornado Realty L.P., 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.            In accordance with the Vornado Realty Trust 2002 Omnibus Share
Plan (the “Plan”), the Company desires in connection with the employment of the
Employee, to provide the Employee with an opportunity to acquire LTIP Units (as
defined in the agreement of limited partnership of the Partnership, as amended
(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.

 

B.            Schedule A hereto sets forth certain significant details of the
LTIP Unit grant herein and is incorporated herein by reference. Capitalized
terms used herein and not otherwise defined have the meanings provided on
Schedule A.

 

NOW, THEREFORE, the Company, the Partnership and the Employee hereby agree as
follows:

 

AGREEMENT

 

1.             GRANT OF RESTRICTED LTIP UNITS. ON THE TERMS AND CONDITIONS SET
FORTH BELOW, AS WELL AS THE TERMS AND CONDITIONS OF THE PLAN, THE COMPANY HEREBY
GRANTS TO THE EMPLOYEE SUCH NUMBER OF LTIP UNITS AS IS SET FORTH ON SCHEDULE A
(THE “RESTRICTED LTIP UNITS”).

 

2.             VESTING PERIOD. THE VESTING PERIOD OF THE RESTRICTED LTIP UNITS
(THE “VESTING PERIOD”) BEGINS ON THE GRANT DATE AND CONTINUES UNTIL SUCH DATE AS
IS SET FORTH ON SCHEDULE A AS THE DATE ON WHICH THE RESTRICTED LTIP UNITS ARE
FULLY VESTED. ON THE FIRST ANNUAL VESTING DATE FOLLOWING THE DATE OF THIS
AGREEMENT AND EACH ANNUAL VESTING DATE THEREAFTER, THE NUMBER OF LTIP UNITS
EQUAL TO THE ANNUAL VESTING AMOUNT SHALL BECOME VESTED, SUBJECT TO EARLIER
FORFEITURE AS PROVIDED IN THIS AGREEMENT. TO THE EXTENT THAT SCHEDULE A PROVIDES
FOR AMOUNTS OR SCHEDULES OF VESTING THAT CONFLICT WITH THE PROVISIONS OF THIS
PARAGRAPH, THE PROVISIONS OF SCHEDULE A WILL GOVERN. EXCEPT AS PERMITTED UNDER
SECTION 10, THE RESTRICTED LTIP UNITS FOR WHICH THE APPLICABLE VESTING PERIOD
HAS NOT EXPIRED MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED OF OR ENCUMBERED (WHETHER VOLUNTARY OR INVOLUNTARY OR BY JUDGMENT,
LEVY, ATTACHMENT, GARNISHMENT OR OTHER LEGAL OR EQUITABLE PROCEEDING).

 

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The Employee shall be entitled to receive distributions with respect to
Restricted LTIP Units to the extent provided for in the Partnership Agreement,
as modified hereby, if applicable. The Distribution Participation Date (as
defined in the Partnership Agreement) for the Restricted LTIP Units shall be the
Grant Date. Notwithstanding the foregoing, the Employee shall not have the right
to receive cash distributions paid on Restricted LTIP Units for which the
applicable Vesting Period has not expired unless the Employee is employed by the
Company on the payroll date coinciding with or immediately following the date
any such distributions are payable.

 

The Employee shall have the right to vote the Restricted LTIP Units if and when
voting is allowed under the Partnership Agreement, regardless of whether the
applicable Vesting Period has expired.

 

3.             FORFEITURE OF RESTRICTED LTIP UNITS. IF THE EMPLOYMENT OF THE
EMPLOYEE BY THE COMPANY TERMINATES FOR ANY REASON EXCEPT DEATH, THE RESTRICTED
LTIP UNITS FOR WHICH THE APPLICABLE VESTING PERIOD HAS NOT EXPIRED AS OF THE
DATE OF SUCH TERMINATION SHALL BE FORFEITED AND RETURNED TO THE COMPANY. UPON
THE EMPLOYEE’S DEATH, ALL OF THE RESTRICTED LTIP UNITS (WHETHER OR NOT VESTED)
SHALL BECOME FULLY VESTED AND SHALL NOT BE FORFEITABLE. UPON THE OCCURRENCE OF A
CHANGE IN CONTROL OF THE COMPANY, ANY RESTRICTED LTIP UNITS FOR WHICH THE
APPLICABLE VESTING PERIOD HAS NOT EXPIRED, SHALL BECOME FULLY VESTED AND SHALL
NOT BE FORFEITABLE. FOR PURPOSES OF THIS RESTRICTED LTIP UNIT AGREEMENT, A
“CHANGE IN CONTROL” OF THE COMPANY MEANS THE OCCURRENCE OF ONE OF THE FOLLOWING
EVENTS:

 

(i) individuals who, on the Grant Date, constitute the Board of Trustees of the
Company (the “Incumbent Trustees”) cease for any reason to constitute at least a
majority of the Board of Trustees (the “Board”), provided that any person
becoming a trustee subsequent to the Grant Date whose election or nomination for
election was approved by a vote of at least two-thirds of the Incumbent Trustees
then on the Board (either by a specific vote or by approval of the proxy
statement of the Company in which such person is named as a nominee for trustee,
without objection to such nomination) shall be an Incumbent Trustee; provided,
however, that no individual initially elected or nominated as a trustee of the
Company as a result of an actual or threatened election contest with respect to
trustees or as a result of any other actual or threatened solicitation of
proxies by or on behalf of any person other than the Board shall be an Incumbent
Trustee;

 

(ii) any “person” (as such term is defined in Section 3(a)(9) of the Securities
Exchange Act of 1934 (the “Exchange Act”) and as used in Sections 13(d)(3) and
14(d)(2) of the Exchange Act) is or becomes, after the Grant Date, a “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 30% or more of the
combined voting power of the Company’s then outstanding securities eligible to
vote for the election of the Board (the “Company Voting Securities”); provided,
however, that an event described in this paragraph (ii)

 

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shall not be deemed to be a Change in Control if any of following becomes such a
beneficial owner:  (A) the Company or any majority-owned subsidiary of the
Company (provided that this exclusion applies solely to the ownership levels of
the Company or the majority-owned subsidiary), (B) any tax-qualified,
broad-based employee benefit plan sponsored or maintained by the Company or any
such majority-owned subsidiary, (C) any underwriter temporarily holding
securities pursuant to an offering of such securities, (D) any person pursuant
to a Non-Qualifying Transaction (as defined in paragraph (iii)), (E) (a) any of
the partners (as of the Grant Date) in Interstate Properties (“Interstate”)
including immediate family members and family trusts or family-only partnerships
and any charitable foundations of such partners (the “Interstate Partners”),
(b) any entities the majority of the voting interests of which are beneficially
owned by the Interstate Partners, or (c) any “group” (as described in
Rule 13d-5(b)(i) under the Exchange Act) including the Interstate Partners (the
persons in (a), (b) and (c) shall be individually and collectively referred to
herein as, “Interstate Holders”);

 

(iii) the consummation of a merger, consolidation, share exchange or similar
form of transaction involving the Company or any of its subsidiaries, or the
sale of all or substantially all of the Company’s assets (a “Business
Transaction”), unless immediately following such Business Transaction (a) more
than 50% of the total voting power of the entity resulting from such Business
Transaction or the entity acquiring the Company’s assets in such Business
Transaction (the “Surviving Corporation”) is beneficially owned, directly or
indirectly, by the Interstate Holders or the Company’s shareholders immediately
prior to any such Business Transaction, and (b) no person (other than the
persons set forth in clauses (A), (B), (C), or (F) of paragraph (ii) above or
any tax-qualified, broad-based employee benefit plan of the Surviving
Corporation or its affiliates) beneficially owns, directly or indirectly, 30% or
more of the total voting power of the Surviving Corporation (a “Non-Qualifying
Transaction”); or

 

(iv) Board approval of a liquidation or dissolution of the Company, unless the
voting common equity interests of an ongoing entity (other than a liquidating
trust) are beneficially owned, directly or indirectly, by the Company’s
shareholders in substantially the same proportions as such shareholders owned
the Company’s outstanding voting common equity interests immediately prior to
such liquidation and such ongoing entity assumes all existing obligations of the
Company to Employee under this Restricted Stock Agreement.

 

4.             CERTIFICATES. EACH CERTIFICATE, IF ANY, ISSUED IN RESPECT OF THE
RESTRICTED LTIP UNITS AWARDED UNDER THIS RESTRICTED LTIP UNIT AGREEMENT SHALL BE
REGISTERED IN THE EMPLOYEE’S NAME AND HELD BY THE COMPANY UNTIL THE EXPIRATION
OF THE APPLICABLE VESTING PERIOD. IF CERTIFICATES REPRESENTING THE LTIP UNITS
ARE ISSUED BY THE PARTNERSHIP AT THE TIME, AT THE EXPIRATION OF EACH VESTING
PERIOD, THE COMPANY SHALL DELIVER TO THE EMPLOYEE (OR, IF APPLICABLE, TO THE
EMPLOYEE’S LEGAL REPRESENTATIVES, BENEFICIARIES OR HEIRS) CERTIFICATES
REPRESENTING THE

 

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NUMBER OF LTIP UNITS THAT VESTED UPON THE EXPIRATION OF SUCH VESTING PERIOD. THE
EMPLOYEE AGREES THAT ANY RESALE OF THE LTIP UNITS RECEIVED UPON THE EXPIRATION
OF THE APPLICABLE VESTING PERIOD (OR SHARES OF COMPANY’S COMMON SHARES OF
BENEFICIAL INTEREST, PAR VALUE $0.04 PER SHARE (THE “COMMON SHARES”) RECEIVED
UPON REDEMPTION OF OR IN EXCHANGE FOR LTIP UNITS OR CLASS A UNITS OF THE
PARTNERSHIP INTO WHICH LTIP UNITS MAY HAVE BEEN CONVERTED) SHALL NOT OCCUR
DURING THE “BLACKOUT PERIODS” FORBIDDING SALES OF COMPANY SECURITIES, AS SET
FORTH IN THE THEN APPLICABLE COMPANY EMPLOYEE MANUAL OR INSIDER TRADING
PROPERTY. IN ADDITION, ANY RESALE SHALL BE MADE IN COMPLIANCE WITH THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR AN APPLICABLE EXEMPTION THEREFROM, INCLUDING, WITHOUT
LIMITATION, THE EXEMPTION PROVIDED BY RULE 144 PROMULGATED THEREUNDER (OR ANY
SUCCESSOR RULE).

 

5.             TAX WITHHOLDING. THE COMPANY HAS THE RIGHT TO WITHHOLD FROM CASH
COMPENSATION PAYABLE TO THE EMPLOYEE ALL APPLICABLE INCOME AND EMPLOYMENT TAXES
DUE AND OWING AT THE TIME THE APPLICABLE PORTION OF THE RESTRICTED LTIP UNITS
BECOMES INCLUDIBLE IN THE EMPLOYEE’S INCOME (THE “WITHHOLDING AMOUNT”), AND/OR
TO DELAY DELIVERY OF RESTRICTED LTIP UNITS UNTIL APPROPRIATE ARRANGEMENTS HAVE
BEEN MADE FOR PAYMENT OF SUCH WITHHOLDING. IN THE ALTERNATIVE, THE COMPANY HAS
THE RIGHT TO RETAIN AND CANCEL, OR SELL OR OTHERWISE DISPOSE OF SUCH NUMBER OF
RESTRICTED LTIP UNITS AS HAVE A MARKET VALUE DETERMINED AT DATE THE APPLICABLE
LTIP UNITS VEST, APPROXIMATELY EQUAL TO THE WITHHOLDING AMOUNT WITH ANY EXCESS
PROCEEDS BEING PAID TO EMPLOYEE.

 

6.             CERTAIN ADJUSTMENTS. IF (I) THE COMPANY SHALL AT ANY TIME BE
INVOLVED IN A MERGER, CONSOLIDATION, DISSOLUTION, LIQUIDATION, REORGANIZATION,
EXCHANGE OF SHARES, SALE OF ALL OR SUBSTANTIALLY ALL OF THE ASSETS OR STOCK OF
THE COMPANY OR OTHER TRANSACTION SIMILAR THERETO, (II) ANY STOCK DIVIDEND, STOCK
SPLIT, REVERSE STOCK SPLIT, STOCK COMBINATION, RECLASSIFICATION,
RECAPITALIZATION, SIGNIFICANT REPURCHASES OF STOCK, OR OTHER SIMILAR CHANGE IN
THE CAPITAL STRUCTURE OF THE COMPANY, OR ANY EXTRAORDINARY DIVIDEND OR OTHER
DISTRIBUTION TO HOLDERS OF COMMON SHARES OR CLASS A UNITS OTHER THAN REGULAR
CASH DIVIDENDS SHALL OCCUR, OR (III) ANY OTHER EVENT SHALL OCCUR THAT IN EACH
CASE IN THE GOOD FAITH JUDGMENT OF THE COMMITTEE NECESSITATES ACTION BY WAY OF
APPROPRIATE EQUITABLE ADJUSTMENT IN THE TERMS OF THIS RESTRICTED LTIP UNIT
AGREEMENT, THE PLAN OR THE LTIP UNITS, THEN THE COMMITTEE SHALL TAKE SUCH ACTION
AS IT DEEMS NECESSARY TO MAINTAIN THE EMPLOYEE’S RIGHTS HEREUNDER SO THAT THEY
ARE SUBSTANTIALLY PROPORTIONATE TO THE RIGHTS EXISTING UNDER THIS AGREEMENT AND
THE TERMS OF THE LTIP UNITS PRIOR TO SUCH EVENT, INCLUDING, WITHOUT LIMITATION:
(A) ADJUSTMENTS IN THE LTIP UNITS; AND (B) SUBSTITUTION OF OTHER AWARDS UNDER
THE PLAN OR OTHERWISE. IN THE EVENT OF ANY CHANGE IN THE OUTSTANDING COMMON
SHARES (OR CORRESPONDING CHANGE IN THE CONVERSION FACTOR APPLICABLE TO CLASS A
UNITS OF THE PARTNERSHIP) BY REASON OF ANY SHARE DIVIDEND OR SPLIT,
RECAPITALIZATION, MERGER, CONSOLIDATION, SPIN-OFF, COMBINATION OR EXCHANGE OF
SHARES OR OTHER CORPORATE CHANGE, OR ANY DISTRIBUTION TO COMMON SHAREHOLDERS OF
THE COMPANY OTHER THAN REGULAR CASH DIVIDENDS, ANY CLASS A UNITS, SHARES OR
OTHER SECURITIES RECEIVED BY THE EMPLOYEE WITH RESPECT TO THE APPLICABLE
RESTRICTED LTIP UNITS FOR WHICH THE VESTING PERIOD SHALL NOT HAVE EXPIRED WILL
BE SUBJECT TO THE SAME RESTRICTIONS AS THE RESTRICTED LTIP UNITS WITH RESPECT TO
AN EQUIVALENT NUMBER OF SHARES OR

 

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SECURITIES AND SHALL BE DEPOSITED WITH THE COMPANY.

 

7.             NO RIGHT TO EMPLOYMENT. NOTHING HEREIN CONTAINED SHALL AFFECT THE
RIGHT OF THE COMPANY OR ANY SUBSIDIARY TO TERMINATE THE EMPLOYEE’S SERVICES,
RESPONSIBILITIES AND DUTIES AT ANY TIME FOR ANY REASON WHATSOEVER.

 

8.             NOTICE. ANY NOTICE TO BE GIVEN TO THE COMPANY SHALL BE ADDRESSED
TO THE SECRETARY OF THE COMPANY AT 888 SEVENTH AVENUE, NEW YORK, NEW YORK 10019
AND ANY NOTICE TO BE GIVEN THE EMPLOYEE SHALL BE ADDRESSED TO THE EMPLOYEE AT
THE EMPLOYEE’S ADDRESS AS IT APPEARS ON THE EMPLOYMENT RECORDS OF THE COMPANY,
OR AT SUCH OTHER ADDRESS AS THE COMPANY OR THE EMPLOYEE MAY HEREAFTER DESIGNATE
IN WRITING TO THE OTHER.

 

9.             GOVERNING LAW. THIS RESTRICTED STOCK AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
MARYLAND, WITHOUT REFERENCES TO PRINCIPLES OF CONFLICT OF LAWS.

 

10.           SUCCESSORS AND ASSIGNS. THIS RESTRICTED LTIP UNIT AGREEMENT SHALL
BE BINDING UPON AND INURE TO THE BENEFIT OF THE PARTIES HERETO AND ANY
SUCCESSORS TO THE COMPANY AND ANY SUCCESSORS TO THE EMPLOYEE BY WILL OR THE LAWS
OF DESCENT AND DISTRIBUTION, BUT THIS RESTRICTED STOCK AGREEMENT SHALL NOT
OTHERWISE BE ASSIGNABLE OR OTHERWISE SUBJECT TO HYPOTHECATION BY THE EMPLOYEE.
NONE OF THE LTIP UNITS SHALL BE SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR
OTHERWISE DISPOSED OF OR ENCUMBERED (WHETHER VOLUNTARILY OR INVOLUNTARILY OR BY
JUDGMENT, LEVY, ATTACHMENT, GARNISHMENT OR OTHER LEGAL OR EQUITABLE PROCEEDING)
(EACH SUCH ACTION A “TRANSFER”), OR REDEEMED IN ACCORDANCE WITH THE PARTNERSHIP
AGREEMENT (A) PRIOR TO VESTING AND (B) UNLESS SUCH TRANSFER IS IN COMPLIANCE
WITH ALL APPLICABLE SECURITIES LAWS (INCLUDING, WITHOUT LIMITATION, THE
SECURITIES ACT, AND SUCH TRANSFER IS IN ACCORDANCE WITH THE APPLICABLE TERMS AND
CONDITIONS OF THE PARTNERSHIP AGREEMENT. ANY ATTEMPTED TRANSFER OF LTIP UNITS
NOT IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS SECTION 10 SHALL BE NULL
AND VOID, AND THE PARTNERSHIP SHALL NOT REFLECT ON ITS RECORDS ANY CHANGE IN
RECORD OWNERSHIP OF ANY LTIP UNITS AS A RESULT OF ANY SUCH TRANSFER, AND SHALL
OTHERWISE REFUSE TO RECOGNIZE ANY SUCH TRANSFER.

 

11.           SEVERABILITY. IF, FOR ANY REASON, ANY PROVISION OF THIS RESTRICTED
LTIP UNIT AGREEMENT IS HELD INVALID, SUCH INVALIDITY SHALL NOT AFFECT ANY OTHER
PROVISION OF THIS RESTRICTED LTIP UNIT AGREEMENT NOT SO HELD INVALID, AND EACH
SUCH OTHER PROVISION SHALL TO THE FULL EXTENT CONSISTENT WITH LAW CONTINUE IN
FULL FORCE AND EFFECT. IF ANY PROVISION OF THIS RESTRICTED LTIP UNIT AGREEMENT
SHALL BE HELD INVALID IN PART, SUCH INVALIDITY SHALL IN NO WAY AFFECT THE REST
OF SUCH PROVISION NOT HELD SO INVALID, AND THE REST OF SUCH PROVISION, TOGETHER
WITH ALL OTHER PROVISIONS OF THIS RESTRICTED LTIP UNIT AGREEMENT, SHALL TO THE
FULL EXTENT CONSISTENT WITH LAW CONTINUE IN FULL FORCE AND EFFECT.

 

12.           HEADINGS. THE HEADINGS OF PARAGRAPHS HEREOF ARE INCLUDED SOLELY
FOR CONVENIENCE OF REFERENCE AND SHALL NOT CONTROL THE MEANING OR INTERPRETATION
OF ANY OF THE PROVISIONS OF THIS RESTRICTED LTIP UNIT AGREEMENT.

 

13.           COUNTERPARTS. THIS RESTRICTED LTIP UNIT AGREEMENT MAY BE EXECUTED
IN

 

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MULTIPLE COUNTERPARTS WITH THE SAME EFFECT AS IF EACH OF THE SIGNING PARTIES HAD
SIGNED THE SAME DOCUMENT. ALL COUNTERPARTS SHALL BE CONSTRUED TOGETHER AND
CONSTITUTE THE SAME INSTRUMENT.

 

14.           MISCELLANEOUS. THIS RESTRICTED LTIP UNIT AGREEMENT MAY NOT BE
AMENDED EXCEPT IN WRITING SIGNED BY THE COMPANY AND THE EMPLOYEE.
NOTWITHSTANDING THE FOREGOING, THIS RESTRICTED LTIP UNIT AGREEMENT MAY BE
AMENDED IN WRITING SIGNED ONLY BY THE COMPANY TO:  (A) CORRECT ANY ERRORS OR
AMBIGUITIES IN THIS RESTRICTED LTIP UNIT AGREEMENT; AND/OR (B) TO MAKE SUCH
CHANGES THAT DO NOT MATERIALLY ADVERSELY AFFECT THE EMPLOYEE’S RIGHTS HEREUNDER.
THIS GRANT SHALL IN NO WAY AFFECT THE EMPLOYEE’S PARTICIPATION OR BENEFITS UNDER
ANY OTHER PLAN OR BENEFIT PROGRAM MAINTAINED OR PROVIDED BY THE COMPANY. IN THE
EVENT OF A CONFLICT BETWEEN THIS RESTRICTED LTIP UNIT AGREEMENT AND THE PLAN,
THE PLAN SHALL GOVERN.

 

15.           CONFLICT WITH EMPLOYMENT AGREEMENT . IF (AND ONLY IF) THE EMPLOYEE
AND THE COMPANY OR ITS AFFILIATES HAVE ENTERED INTO AN EMPLOYMENT AGREEMENT, IN
THE EVENT OF ANY CONFLICT BETWEEN ANY OF THE PROVISIONS OF THIS AGREEMENT AND
ANY SUCH EMPLOYMENT AGREEMENT THE PROVISIONS OF SUCH EMPLOYMENT AGREEMENT WILL
GOVERN. AS FURTHER PROVIDED IN SECTION 7, NOTHING HEREIN SHALL IMPLY THAT ANY
EMPLOYMENT AGREEMENT EXISTS BETWEEN THE EMPLOYEE AND THE COMPANY OR ITS
AFFILIATES.

 

16.           STATUS AS A PARTNER. AS OF THE GRANT DATE, THE EMPLOYEE SHALL BE
ADMITTED AS A PARTNER OF THE PARTNERSHIP WITH BENEFICIAL OWNERSHIP OF THE NUMBER
OF LTIP UNITS ISSUED TO THE EMPLOYEE AS OF SUCH DATE PURSUANT TO THIS RESTRICTED
LTIP UNIT AGREEMENT BY: (A) SIGNING AND DELIVERING TO THE PARTNERSHIP A COPY OF
THIS AGREEMENT; AND (B) SIGNING, AS A LIMITED PARTNER, AND DELIVERING TO THE
PARTNERSHIP A COUNTERPART SIGNATURE PAGE TO THE PARTNERSHIP AGREEMENT (ATTACHED
HERETO AS EXHIBIT A).

 

17.           STATUS OF LTIP UNITS UNDER THE PLAN. THE LTIP UNITS ARE BOTH
ISSUED AS EQUITY SECURITIES OF THE PARTNERSHIP AND GRANTED AS AWARDS UNDER THE
PLAN. THE COMPANY WILL HAVE THE RIGHT AT ITS OPTION, AS SET FORTH IN THE
PARTNERSHIP AGREEMENT, TO ISSUE COMMON SHARES IN EXCHANGE FOR CLASS A UNITS INTO
WHICH LTIP UNITS MAY HAVE BEEN CONVERTED PURSUANT TO THE PARTNERSHIP AGREEMENT,
SUBJECT TO CERTAIN LIMITATIONS SET FORTH IN THE PARTNERSHIP AGREEMENT, AND SUCH
COMMON SHARES, IF ISSUED, WILL BE ISSUED UNDER THE PLAN. THE EMPLOYEE MUST BE
ELIGIBLE TO RECEIVE THE LTIP UNITS IN COMPLIANCE WITH APPLICABLE FEDERAL AND
STATE SECURITIES LAWS AND TO THAT EFFECT IS REQUIRED TO COMPLETE, EXECUTE AND
DELIVER CERTAIN COVENANTS, REPRESENTATIONS AND WARRANTIES (ATTACHED AS
EXHIBIT B). THE EMPLOYEE ACKNOWLEDGES THAT THE EMPLOYEE WILL HAVE NO RIGHT TO
APPROVE OR DISAPPROVE SUCH DETERMINATION BY THE COMPANY.

 

18.           INVESTMENT REPRESENTATIONS; REGISTRATION. THE EMPLOYEE HEREBY
MAKES THE COVENANTS, REPRESENTATIONS AND WARRANTIES AND SET FORTH ON EXHIBIT B
ATTACHED HERETO. ALL OF SUCH COVENANTS, WARRANTIES AND REPRESENTATIONS SHALL
SURVIVE THE EXECUTION AND DELIVERY OF THIS RESTRICTED LTIP UNIT AGREEMENT BY THE
EMPLOYEE. THE PARTNERSHIP WILL HAVE NO OBLIGATION TO REGISTER UNDER THE
SECURITIES ACT ANY LTIP UNITS OR ANY OTHER SECURITIES ISSUED PURSUANT TO THIS

 

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RESTRICTED LTIP UNIT AGREEMENT OR UPON CONVERSION OR EXCHANGE OF LTIP UNITS.

 

19.           SECTION 83(B) ELECTION. IN CONNECTION WITH THIS RESTRICTED LTIP
UNIT AGREEMENT THE EMPLOYEE HEREBY AGREES TO MAKE AN ELECTION TO INCLUDE IN
GROSS INCOME IN THE YEAR OF TRANSFER THE APPLICABLE LTIP UNITS PURSUANT TO
SECTION 83(B) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, SUBSTANTIALLY IN
THE FORM ATTACHED HERETO AS EXHIBIT C AND TO SUPPLY THE NECESSARY INFORMATION IN
ACCORDANCE WITH THE REGULATIONS PROMULGATED THEREUNDER.

 

[signature page follows]

 

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IN WITNESS WHEREOF, this Restricted LTIP Unit Agreement has been executed by the
parties hereto as of the date and year first above written.

 

 

VORNADO REALTY TRUST

 

 

 

 

 

By:

 

 

 

Name:

 

Title:

 

 

 

 

 

VORNADO REALTY L.P.

 

 

 

By:  Vornado Realty Trust, its general partner

 

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

Title:

 

 

 

 

 

EMPLOYEE

 

 

 

 

 

 

 

 

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
Vornado Realty L.P., 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 Agreement of Limited Partnership, dated as of
October 20, 1997, of Vornado Realty L.P., 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:

 

1.             The Limited Partner hereby confirms that it has reviewed the
terms of the Partnership Agreement and affirms and agrees that it is bound by
each of the terms and conditions of the Partnership Agreement, including,
without limitation, the provisions thereof relating to limitations and
restrictions on the transfer of Partnership Units.

 

2.             The Limited Partner hereby confirms that it is acquiring the
Partnership Units for its own account as principal, for investment and not with
a view to resale or distribution, and that the Partnership Units may not be
transferred or otherwise disposed of by the Limited Partner otherwise than in a
transaction pursuant to a registration statement filed by the Partnership (which
it has no obligation to file) or that is exempt from the registration
requirements of the Securities Act of 1933, as amended (the “Securities Act”),
and all applicable state and foreign securities laws, and the General Partner
may refuse to transfer any Partnership Units as to which evidence of such
registration or exemption from registration satisfactory to the General Partner
is not provided to it, which evidence may include the requirement of a legal
opinion regarding the exemption from such registration. If the General Partner
delivers to the Limited Partner Common Shares of Beneficial Interest of the
General Partner (“Common Shares”) upon redemption of any Partnership Units, the
Common Shares will be acquired for the Limited Partner’s own account as
principal, for investment and not with a view to resale or distribution, and the
Common Shares may not be transferred or otherwise disposed of by the Limited
Partner otherwise than in a transaction pursuant to a registration statement
filed by the General Partner with respect to such Common Shares (which it has no
obligation under the Partnership Agreement to file) or that is exempt from the
registration requirements of the Securities Act and all applicable state and
foreign securities laws, and the General Partner may refuse to transfer any
Common Shares as to which evidence of such registration or exemption from such
registration satisfactory to the General Partner is not provided to it, which
evidence may include the requirement of a legal opinion regarding the exemption
from such registration.

 

3.             The Limited Partner hereby affirms that it has appointed the
General Partner, any Liquidator and authorized officers and attorneys-in-fact of
each, and each of those acting singly, in each case with full power of
substitution, as its true and lawful agent and attorney-in-fact, with full power
and authority in its name, place and stead, in accordance with Section 15.11 of
the Partnership Agreement, which section is hereby incorporated by reference.
The foregoing power of attorney is hereby declared to be irrevocable and a power
coupled with an interest, and it shall

 

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survive and not be affected by the death, incompetency, dissolution, disability,
incapacity, bankruptcy or termination of the Limited Partner and shall extend to
the Limited Partner’s heirs, executors, administrators, legal representatives,
successors and assigns.

 

4.             The Limited Partner hereby confirms that, notwithstanding any
provisions of the Partnership Agreement to the contrary, the LTIP Units shall
not be redeemable by the Limited Partner pursuant to Section 8.6 of the
Partnership Agreement.

 

5.             a.             The Limited Partner hereby irrevocably consents in
advance to any amendment to the Partnership Agreement, as may be recommended by
the General Partner, intended to avoid the Partnership being treated as a
publicly-traded partnership within the meaning of Section 7704 of the Internal
Revenue Code, including, without limitation, (x) any amendment to the provisions
of Section 8.6 of the Partnership Agreement intended to increase the waiting
period between the delivery of a Notice of Redemption and the Specified
Redemption Date and/or the Valuation Date to up to sixty (60) days or (y) any
other amendment to the Partnership Agreement intended to make the redemption and
transfer provisions, with respect to certain redemptions and transfers, more
similar to the provisions described in Treasury Regulations Section 1.7704-1(f).

 

b.             The Limited Partner hereby appoints the General Partner, any
Liquidator and authorized officers and attorneys-in-fact of each, and each of
those acting singly, in each case with full power of substitution, as its true
and lawful agent and attorney-in-fact, with full power and authority in its
name, place and stead, to execute and deliver any amendment referred to in the
foregoing paragraph 5(a) on the Limited Partner’s behalf. The foregoing power of
attorney is hereby declared to be irrevocable and a power coupled with an
interest, and it shall survive and not be affected by the death, incompetency,
dissolution, disability, incapacity, bankruptcy or termination of the Limited
Partner and shall extend to the Limited Partner’s heirs, executors,
administrators, legal representatives, successors and assigns.

 

6.             The Limited Partner agrees that it will not transfer any interest
in the Partnership Units (x) through (i) a national, non-U.S., regional, local
or other securities exchange, (ii) PORTAL or (iii) an over-the-counter market
(including an interdealer quotation system that regularly disseminates firm buy
or sell quotations by identified brokers or dealers by electronic means or
otherwise) or (y) to or through (a) a person, such as a broker or dealer, that
makes a market in, or regularly quotes prices for, interests in the Partnership
or (b) a person that regularly makes available to the public (including
customers or subscribers) bid or offer quotes with respect to any interests in
the Partnership and stands ready to effect transactions at the quoted prices for
itself or on behalf of others.

 

7.             The Limited Partner acknowledges that the General Partner shall
be a third party beneficiary of the representations, covenants and agreements
set forth in Sections 4 and 6 hereof. The Limited Partner agrees that it will
transfer, whether by assignment or otherwise, Partnership Units only to the
General Partner or to transferees that provide the Partnership and the General
Partner with the representations and covenants set forth in Sections 4 and 6
hereof.

 

8.             This Acceptance shall be construed and enforced in accordance
with and governed by the laws of the State of Delaware, without regard to the
principles of conflicts of law.

 

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Signature Line for Limited Partner:

 

 

 

 

 

Name:

 

 

 

Date:

 

 

 

, 2006

 

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:

 

(a)           The Employee has received and had an opportunity to review the
following documents (the “Background Documents”):

 

(i)            The Company’s latest Annual Report to Stockholders;

 

(ii)           The Company’s Proxy Statement for its most recent Annual Meeting
of Stockholders;

 

(iii)          The Company’s Report on Form 10-K for the fiscal year most
recently ended;

 

(iv)          The Company’s Form 10-Q, if any, for the most recently ended
quarter filed by the Company with the Securities and Exchange Commission since
the filing of the Form 10-K described in clause (iii) above;

 

(v)           Each of the Company’s Current Report(s) on Form 8-K, if any, filed
since the end of the fiscal year most recently ended for which a Form 10-K has
been filed by the Company;

 

(vi)          The Partnership Agreement;

 

(vii)         The Stock Plan; and

 

(viii)        The Company’s Declaration of Trust, as amended.

 

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 LTIP Units shall not constitute an offer of LTIP Units until such
determination of suitability shall be made.

 

(b)           The Employee hereby represents and warrants that

 

(i)            The Employee either (A) is an “accredited investor” as defined in
Rule 501(a) under the Securities Act of 1933, as amended (the “Securities Act”),
or (B) by reason of the business and financial experience of the Employee,
together with the business and financial experience of those persons, if any,
retained by the Employee to represent or advise him with respect to the grant

 

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to him of LTIP Units, the potential conversion of LTIP Units into Class A Units
of the Partnership (“Common Units”) and the potential redemption of such Common
Units for the Company’s Common Shares (“REIT Shares”), has such knowledge,
sophistication and experience in financial and business matters and in making
investment decisions of this type that the Employee (I) is capable of evaluating
the merits and risks of an investment in the Partnership and potential
investment in the Company and of making an informed investment decision, (II) is
capable of protecting his own interest or has engaged representatives or
advisors to assist him in protecting his interests, and (III) is capable of
bearing the economic risk of such investment.

 

(ii)           The Employee understands that (A) the Employee is responsible for
consulting his own tax advisors with respect to the application of the U.S.
federal income tax laws, and the tax laws of any state, local or other taxing
jurisdiction to which the Employee is or by reason of the award of LTIP Units
may become subject, to his particular situation; (B) the Employee has not
received or relied upon business or tax advice from the Company, the Partnership
or any of their respective employees, agents, consultants or advisors, in their
capacity as such; (C) the Employee provides services to the Partnership on a
regular basis and in such capacity has access to such information, and has such
experience of and involvement in the business and operations of the Partnership,
as the Employee believes to be necessary and appropriate to make an informed
decision to accept this award of LTIP Units; and (D) an investment in the
Partnership and/or the Company involves substantial risks. The Employee has been
given the opportunity to make a thorough investigation of matters relevant to
the LTIP Units and has been furnished with, and has reviewed and understands,
materials relating to the Partnership and the Company and their respective
activities (including, but not limited to, the Background Documents). The
Employee has been afforded the opportunity to obtain any additional information
(including any exhibits to the Background Documents) deemed necessary by the
Employee to verify the accuracy of information conveyed to the Employee. The
Employee confirms that all documents, records, and books pertaining to his
receipt of LTIP Units which were requested by the Employee have been made
available or delivered to the Employee. The Employee has had an opportunity to
ask questions of and receive answers from the Partnership and the Company, or
from a person or persons acting on their behalf, concerning the terms and
conditions of the LTIP Units. The Employee has relied upon, and is making its
decision solely upon, the Background Documents and other written information
provided to the Employee by the Partnership or the Company.

 

(iii)          The LTIP Units to be issued, the Common Units issuable upon
conversion of the LTIP Units and any REIT Shares issued in connection with the
redemption of any such Common Units will be acquired for the account of the
Employee for investment only and not with a current view to, or with any
intention of, a distribution or resale thereof, in whole or in part, or the
grant of any

 

13

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participation therein, without prejudice, however, to the Employee’s right
(subject to the terms of the LTIP Units, the Stock Plan and this Agreement) at
all times to sell or otherwise dispose of all or any part of his LTIP Units,
Common Units or REIT Shares in compliance with the Securities Act, and
applicable state securities laws, and subject, nevertheless, to the disposition
of his assets being at all times within his control.

 

(iv)          The Employee acknowledges that (A) neither the LTIP Units to be
issued, nor the Common Units issuable upon conversion of the LTIP Units, have
been registered under the Securities Act or state securities laws by reason of a
specific exemption or exemptions from registration under the Securities Act and
applicable state securities laws and, if such LTIP Units or Common Units are
represented by certificates, such certificates will bear a legend to such
effect, (B) the reliance by the Partnership and the Company on such exemptions
is predicated in part on the accuracy and completeness of the representations
and warranties of the Employee contained herein, (C) such LTIP Units or Common
Units, therefore, cannot be resold unless registered under the Securities Act
and applicable state securities laws, or unless an exemption from registration
is available, (D) there is no public market for such LTIP Units and Common Units
and (E) neither the Partnership nor the Company has any obligation or intention
to register such LTIP Units or the Common Units issuable upon conversion of the
LTIP Units under the Securities Act or any state securities laws or to take any
action that would make available any exemption from the registration
requirements of such laws, except, that, upon the redemption of the Common Units
for REIT Shares, the Company may issue such REIT Shares under the Stock Plan and
pursuant to a Registration Statement on Form S-8 under the Securities Act, to
the extent that (I) the Employee is eligible to receive such REIT Shares under
the Stock Plan at the time of such issuance, (II) the Company has filed a
Form S-8 Registration Statement with the Securities and Exchange Commission
registering the issuance of such REIT Shares and (III) such Form S-8 is
effective at the time of the issuance of such REIT Shares. The Employee hereby
acknowledges that because of the restrictions on transfer or assignment of such
LTIP Units acquired hereby and the Common Units issuable upon conversion of the
LTIP Units which are set forth in the Partnership Agreement or this Agreement,
the Employee may have to bear the economic risk of his ownership of the LTIP
Units acquired hereby and the Common Units issuable upon conversion of the LTIP
Units for an indefinite period of time.

 

(v)           The Employee has determined that the LTIP Units are a suitable
investment for the Employee.

 

(vi)          No representations or warranties have been made to the Employee by
the Partnership or the Company, or any officer, director, shareholder, agent, or
affiliate of any of them, and the Employee has received no

 

14

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information relating to an investment in the Partnership or the LTIP Units
except the information specified in paragraph (b) above.

 

(c)           So long as the Employee holds any LTIP Units, the Employee shall
disclose to the Partnership in writing such information as may be reasonably
requested with respect to ownership of LTIP Units as the Partnership may deem
reasonably necessary to ascertain and to establish compliance with provisions of
the Code, applicable to the Partnership or to comply with requirements of any
other appropriate taxing authority.

 

(d)           The Employee hereby agrees to make an election under
Section 83(b) of the Code with respect to the LTIP Units awarded hereunder, and
has delivered with this Agreement a completed, executed copy of the election
form attached hereto as Exhibit C. The Employee agrees to file the election (or
to permit the Partnership to file such election on the Employee’s behalf) within
thirty (30) days after the award of the LTIP Units hereunder with the IRS
Service Center at which such Employee files his personal income tax returns, and
to file a copy of such election with the Employee’s U.S. federal income tax
return for the taxable year in which the LTIP Units are awarded to the Employee.

 

(e)           The address set forth on the signature page of this Agreement is
the address of the Employee’s principal residence, and the Employee has no
present intention of becoming a resident of any country, state or jurisdiction
other than the country and state in which such residence is sited.

 

15

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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                          LTIP Units
in Vornado Realty L.P. (the “Partnership”).

 

3.             The date on which the LTIP Units were transferred is
                     , 2006. The taxable year to which this election relates is
calendar year 2006.

 

4.             Nature of restrictions to which the LTIP Units are subject:

 

(a)           With limited exceptions, until the LTIP Units vest, the Taxpayer
may not transfer in any manner any portion of the LTIP Units without the consent
of the Partnership.

 

(b)           The Taxpayer’s LTIP Units vest in accordance with the vesting

 

16

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provisions described in the Schedule attached hereto. Unvested 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 restrictions which by their terms will
never lapse) of the LTIP Units with respect to which this election is being made
was $0 per LTIP Unit.

 

6.             The amount paid by the Taxpayer for the LTIP Units was $0 per
LTIP Unit.

 

7.             A copy of this statement has been furnished to the Partnership
and Vornado Realty Trust.

 

Dated:                                            

 

 

Name:

 

17

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SCHEDULE TO EXHIBIT C

 

Vesting Provisions of LTIP Units

 

The LTIP Units are subject to time-based vesting with              percent
(      %) vesting on each anniversary of the date of grant provided that the
Taxpayer remains an employee of the Company or its subsidiares through such
dates, subject to acceleration in the event of certain extraordinary
transactions or termination of the Taxpayer’s service relationship with the
Company under specified circumstances. Unvested LTIP Units are subject to
forfeiture in the event of failure to vest based on the passage of time and
continued aemployment.

 

 

 

VORNADO REALTY TRUST

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

Employee

 

18

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SCHEDULE A TO RESTRICTED LTIP UNIT AGREEMENT

 

(Terms being defined are in quotation marks.)

 

Date of Restricted LTIP Unit Agreement:

 

 

 

Name of Employee:

 

 

 

Number of LTIP Units Subject to Grant:

 

 

 

Grant Date:

 

 

 

Date on Which Restricted LTIP Units are Fully Vested:

 

 

Vesting Period:

 

 

 

“Annual Vesting Amount”
Insert the number of LTIP Units that vest each year or other applicable vesting
schedule.

 

 

 

 

“Annual Vesting Date” (or if such date is not
a business day, on the next succeeding business day):
Insert the calendar date of each year on which LTIP Units will vest or other
appropriate vesting schedule.

 

 

 

Additional Matters:

 

 

Initials of Company representative:                    

 

Initials of Employee:                    

 

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