Exhibit 10.2

 

PERFORMANCE AWARDS AGREEMENT —

ONE LIBERTY PROPERTIES, INC. AND

 

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THIS AGREEMENT is entered into on July 1, 2019, between One Liberty
Properties, Inc., a Maryland corporation (“Company”), and            ,
(“Participant”).

 

WHEREAS, the stockholders of the Company have adopted the One Liberty
Properties, Inc. 2019 Incentive Plan (“Plan”); and

 

WHEREAS, the Compensation Committee of the Board of Directors (“Committee”) has
granted, pursuant to Section 8 of the Plan, Performance Awards in the form of
restricted stock units (“Units”) to the Participant pursuant to which shares of
the Company’s common stock underlying the Units are issuable upon the attainment
by the Company during the Performance Cycle of the Performance Criteria
established by the Committee as set forth in Exhibit A hereto and made part
hereof;

 

NOW THEREFORE, the parties hereby agree as follows:

 

1.              Incorporation of the Plan.  All provisions of this Agreement and
the rights of Participant hereunder are subject in all respects to the
provisions of the Plan and the powers of the Committee therein provided. 
Capitalized terms used in this Agreement but not defined herein shall have the
meaning set forth in the Plan. The Participant acknowledges receipt of the Plan.

 

2.              Grant Date.  Pursuant to the Plan, the Company, effective as of
July 1, 2019 (the “Grant Date”), grants to the Participant a Performance Based
Award in the form of          Units, subject to the terms and conditions of the
Plan and those set forth herein.

 

3.              Terms and Conditions.  Except as otherwise provided herein, the
Units remain non-vested and subject to substantial risk of forfeiture.  If the
Participant’s relationship with the Company terminates for any reason during the
Performance Cycle (other than as contemplated by Section 5 of this Agreement),
the Units are forfeited by the Participant and will be null and void.

 

4.              Issuance of Shares.  As soon as practicable after the Units
become vested and non-forfeitable, the Participant is entitled to receive one
share (the “Share” or “Shares”) of Company common stock for each vested Unit. 
In the event that a fraction of a Share would be issued, the number of Shares to
be issued shall be rounded to the nearest whole share. Any delivery of Shares
under this Agreement may be made by delivery of a share certificate or by means
of a credit of Shares in book entry form.

 

5.              Vesting.  The Units awarded to the Participant, except as
otherwise provided herein, become vested and non-forfeitable to the extent, but
only to the extent, that the Committee determines that the applicable
Performance Criteria set forth in Exhibit A have been satisfied at the end of
the Performance Cycle (the “Vesting Date”).    Notwithstanding the forfeiture
provision of Section 3 hereof, the interest of the Participant in the Units vest
as follows:

 

(a)                                 a pro rata number of Units upon termination
of the Participant’s relationship with the Company due to death, Disability or
Retirement (collectively a “DDR Event”) during the Performance Cycle, but only
with respect to Units that would otherwise have vested at the end of the
Performance Cycle.  For the

 

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purposes of this Section 5(a), the pro rata number of Units that vest equals the
product obtained by multiplying the total number of Units awarded pursuant to
this Agreement by a fraction, the numerator of which is the number of days
commencing July 1, 2019 and ending on the date of the DDR Event, and the
denominator of which is the total number of days in the Performance Cycle.

 

(b)                                 All of the Units vest upon a Change of
Control if the effective date thereof is after January 1, 2021.  If the
effective date of the Change of Control occurs prior to or on January 1, 2021, a
pro rata number of Units vest upon such Change of Control.    For the purposes
of this Section 5(b), the pro rata number of Units that vest equals the product
obtained by multiplying the total number of Units awarded pursuant to this
Agreement by a fraction, the numerator of which is the number of days commencing
on July 1, 2019 and ending on the effective date of the Change of Control, and
the denominator of which is the total number of days in the period commencing
July 1, 2019 and ending January 1, 2021.

 

(c)                                  If a Participant’s relationship with the
Company terminates due to a DDR Event and subsequent thereto (but prior to
June 30, 2022) there is a Change of Control, then notwithstanding anything to
the contrary herein, the number of Units which vest and the number of Shares
issuable to the Participant, the Participant’s guardian, personal representative
or estate, as the case may be, equals the product obtained by multiplying the
total number of Units subject to this Agreement by a fraction, the numerator of
which is the number of days commencing July 1, 2019 and ending on the date of
the DDR Event, and the denominator of which is the total number of days in the
period commencing on July 1, 2019 and ending on the effective date of the Change
of Control.

 

6.              Restrictions.  The Units awarded pursuant to this Agreement may
not be sold, pledged or otherwise transferred and may not be subject to lien,
garnishment, attachment or other legal process.

 

7.              Rights as a Stockholder.  The Recipient does not have any rights
of a stockholder with respect to the Shares underlying the Units unless and
until the Units vest.

 

8.              Disability of Participant.  In the event of the Disability of
the Participant, the Shares underlying Units which have vested pursuant to this
Agreement will be issued to the Participant if Participant is legally competent
or, if the Participant is not legally competent, to a legally designated
guardian or representative.

 

9.              Death of Participant.  In the event of the Participant’s death,
the Shares underlying the Units which have vested and are issuable pursuant to
this Agreement will be issued to the Participant’s estate, personal
representative, or designated beneficiary.

 

10.       Taxes.  Participant is liable for any and all taxes, including
withholding taxes, arising out of this grant, the vesting of Units and the
issuance of Shares hereunder.

 

11.       Claw-back.  Participant acknowledges and agrees that the grant of the
Units and the issuance of Shares is subject to the applicable provisions of any
claw-back or similar policy implemented by the Company, whether implemented
prior to or after the grant of this Award.

 

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12.       Miscellaneous

 

(a)                                 Neither this Agreement nor the granting or
vesting of Units confers upon the Participant any right to continue in the
employ of the Company or an affiliate, nor does it interfere in any way with the
right of the Company or an affiliate to terminate Participant’s relationship
with the Company at any time.

 

(b)                                 The parties agree to execute such further
documents and instruments and to take such action as may reasonably be necessary
to carry out the intent of this Agreement, including without limitation the
imposition of appropriate legends on the Shares and the issuance of “stop
transfer” orders to implement the restrictions imposed herein.

 

(c)                                  This Award is governed by the laws of the
State of Maryland (without regard to its choice of law principles) and
applicable Federal law.

 

(d)                                 For the purpose of this Agreement, a
Participant’s relationship with the Company is deemed to terminate when the
Participant is no longer serving the Company or its Subsidiaries as an officer,
director, employee or consultant.

 

(e)                                  Except as may otherwise be permitted under
the Plan, the Committee has the right to amend this Agreement, prospectively or
retroactively; provided that no such amendment or alteration shall adversely
affect Participant’s material rights under this Agreement without Participant’s
consent and pursuant to a writing executed by the parties hereto which
specifically states that it is amending this Agreement.

 

(f)                                   This Agreement and the Plan constitute the
entire contract between the parties hereto with regard to the subject matter
hereof.  They supersede any other agreements, representations or understandings
(whether oral or written and whether express or implied) that relate to the
subject matter hereof.

 

(g)                                  Except as expressly stated herein to the
contrary, this Agreement will be binding upon and inure to the benefit of the
respective heirs, legal representatives, successors and assigns of the parties
hereto.

 

(h)                                 The Units granted to the Participant will be
credited to a separate account maintained on the books of the Company (the
“Account”). All amounts credited to Participant’s Account under this Agreement
will continue for all purposes to be a part of the general assets of the
Company. Participant’s interest in the Account makes Participant only a general,
unsecured creditor of the Company.

 

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This Agreement has been executed and delivered by the parties as of the date
hereof.

 

ONE LIBERTY PROPERTIES, INC.

 

 

 

 

 

By:

 

 

 

David W. Kalish, Chief Financial Officer

 

 

 

 

 

 

 

 

Signature of Participant

 

 

 

 

 

 

 

 

Name of Participant

 

 

 

 

 

 

 

 

Participant’s Social Security Number

 

 

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EXHIBIT A

 

PERFORMANCE CRITERIA

 

The number of Restricted Stock Units (“Units”) that shall vest, if any, will be
determined by the Compensation Committee as soon as practicable after the
completion of a three year Performance Cycle (which commences July 1, 2019 and
ends on June 30, 2022), using the following Performance Criteria:

 

Return on Capital:  One-half of the awarded Units, or an aggregate of
             Units, are subject to an average annual return on capital metric
for the period from July 1, 2019 through June 30, 2022.  For all of the Units
subject to the return on capital metric to vest and for the underlying shares of
the Company’s common stock be issued to the Participant, the average of the
annual return on capital during the Performance Cycle must be at least 9.75%. 
For a portion of these Units to vest and for underlying shares of the Company’s
common stock to be issued with respect to the Units which vest, the average of
the annual return on capital for the Performance Cycle must exceed 7%.  If the
average of the annual return on capital exceeds 7%, but is less than 9.75% for
the Performance Cycle, then a pro rata number of Units shall vest and the
underlying shares of the Company’s common stock with respect to the Units which
vest will be issued.  Return on capital means adjusted funds from operations, as
determined below, divided by average capital, as determined below.  Adjusted
funds from operations means funds from operations, determined in accordance with
the National Association of Real Estate Investment Trusts definition, adjusted
for straight-line rent accruals and amortization of lease intangibles, and
adding and deducting gains and losses, respectively, on sales of properties.
Gains and/or losses on property sales shall equal the sales price for a property
less the purchase price, costs of capital improvements and costs of sale.  Such
return shall be calculated for each twelve month period beginning July 1, 2019. 
Average capital is defined as stockholders’ equity, plus depreciation and
amortization, adjusted for intangibles, and for each twelve month period during
the Performance Cycle, shall be measured by reference to the quotient obtained
by dividing (a) the sum of the capital as of July 1 and the following June 30 by
(b) two.  As in the case of the total stockholder return metric, the average
annual return on capital shall be determined for each twelve month period
beginning July 1, 2019, 2020 and 2021, and whether and to the extent an award
vests, will be based on the average of such averages.

 

Total Stockholder Return:  One-half of the awarded Units, or an aggregate of
             Units, are subject to a total stockholder return metric average for
the period from July 1, 2019 through June 30, 2022.  Each year (July 1st through
the following June 30th) total stockholder return for such year shall be
calculated using the following formula:  the closing price per share on the NYSE
of the Company’s common stock at the end of the measuring period (the applicable
June 30th) minus the closing price per share on the NYSE of the Company’s common
stock at the start of the measuring period (the applicable July 1st) plus all
dividends paid during the measuring period shall be divided by the closing price
per share on the NYSE of the Company’s common stock at the commencement of the
measuring period (the applicable July 1st).  Once total stockholder return has
been calculated for each of the three years in the Performance Cycle, an average
of such three year total stockholder return shall be determined.  In order for
all of these Units to vest and the underlying shares of the Company’s common
stock to be issued, the average total stockholder return for the three year
period must be 12.75% or higher, and for a portion of the Units to vest and the
underlying shares of the Company’s common stock be issued, the average total
stockholder return for the three year period must exceed 7%.  If the average
annual total stockholder return exceeds 7%, but is less than 12.75% for the
three year period, then a pro rata number of Units shall vest and the underlying
shares of the Company’s common stock with respect to the Units which vest shall
be issued.

 

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