Exhibit 10.1

 

VORNADO REALTY TRUST
2006 OUTPERFORMANCE PLAN

AWARD AGREEMENT

 

2006 OUTPERFORMANCE PLAN AWARD 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 and the entity through which the Company conducts substantially all
of its operations (the “Partnership”), and the party listed on Schedule A (the
“Grantee”).

 

RECITALS

 

A.                                   The Grantee is an employee of, or a
consultant or advisor to the Company or one of its affiliates and provides
services to the Partnership.

 

B.                                     The Company has adopted the 2006
Outperformance Plan (the “Outperformance Plan”) pursuant to the Vornado Realty
Trust 2002 Omnibus Share Plan, as amended (the “2002 Plan”), to provide certain
key employees of and consultants or advisors to the Company or its affiliates,
including the Grantee, in connection with their employment or other service
relationship with the incentive compensation described in this Award Agreement
(this “Agreement”) and thereby provide additional incentive for them to promote
the progress and success of the business of the Company and its affiliates,
including the Partnership. The Outperformance Plan was adopted by the
Compensation Committee (the “Committee”) of the Board of Trustees of the Company
(the “Board”) pursuant to authority delegated to it by the Board as set forth in
the Committee’s charter, including authority to make grants of equity interests
in the Partnership which may, under certain circumstances, become exchangeable
for shares of the Company’s Common Shares reserved for issuance under the 2002
Plan, or any successor equity plan (as any such plan may be amended, modified or
supplemented from time to time, collectively the “Stock Plan”)) and, upon the
Compensation Committee’s recommendation, was also approved by the Board. This
Agreement evidences an award to the Grantee under the Outperformance Plan (this
“Award”), which is subject to the terms and conditions set forth herein.

 

C.                                     The Grantee was selected by the Committee
to receive this Award and the Committee, effective as of the grant date
specified in Schedule A hereto, awarded to the Grantee the participation
percentage in the Outperformance Pool (as defined herein) set forth in
Schedule A.

 

--------------------------------------------------------------------------------

 

NOW, THEREFORE, the Company, the Partnership and the Grantee agree as follows:

 

1.                                       ADMINISTRATION. THE OUTPERFORMANCE PLAN
AND ALL AWARDS THEREUNDER, INCLUDING THIS AWARD, SHALL BE ADMINISTERED BY THE
COMMITTEE, WHICH IN THE ADMINISTRATION OF THE OUTPERFORMANCE PLAN SHALL HAVE ALL
THE POWERS AND AUTHORITY IT HAS IN THE ADMINISTRATION OF THE STOCK PLAN AS SET
FORTH IN THE STOCK PLAN.

 

2.                                       DEFINITIONS. CAPITALIZED TERMS USED
HEREIN WITHOUT DEFINITIONS SHALL HAVE THE MEANINGS GIVEN TO THOSE TERMS IN THE
STOCK PLAN. IN ADDITION, AS USED HEREIN:

 

“Additional Share Baseline Value” means, with respect to an Additional Share,
the gross proceeds received by the Company or the Partnership upon the issuance
of such Additional Share, which amount shall be deemed to equal, as applicable:
(A) if such Additional Share is issued in a public offering or private
placement, the gross price to the public or to the purchaser(s); and (B) if such
Additional Share is issued in exchange for assets or upon the acquisition of
another entity, the cash value imputed to such Additional Share for purposes of
such transaction by the parties thereto, as determined by the Committee, or, if
no such value was imputed, the Common Share Price as of the date of issuance.
For the avoidance of doubt, if a Common Share is issued after the Effective Date
upon exercise of stock options (whether currently outstanding or granted
hereafter ) or in exchange (directly or indirectly) for OPP Units or other Units
issued to employees, non-employee trustees, consultants, advisors or other
persons or entities as incentive compensation or if such Common Share
constitutes a restricted Common Share issued after the Effective Date to
employees or other persons or entities in exchange for services provided to the
Company, such Common Share will not be considered an Additional Share, and
therefore no Additional Share Baseline Value will be attributed thereto.

 

“Additional Shares” means (without double-counting) the sum of (A) the number of
Common Shares plus (B) the product of the Conversion Factor then in effect
multiplied by the number of Units (other than those issued to the Company), in
the case of each (A) and (B), to the extent issued after March 15, 2006 and on
or before the Valuation Date in a capital raising transaction, in exchange for
assets or upon the acquisition of another entity, but specifically excluding,
without limitation, (i) Common Shares issued upon exercise of stock options or
upon the exchange (directly or indirectly) of OPP Units or other Units issued to
employees, non-employee trustees, consultants, advisors or other persons or
entities as incentive compensation, (ii) restricted Common Shares awarded to
employees or other persons or entities in exchange for services provided to the
Company, (iii) currently unvested restricted Common Shares awarded to employees
or other persons or entities in exchange for services provided to the Company as
they become vested, and (iv) Class A Units issued upon conversion of OPP Units
or other Units issued to employees, non-employee trustees, consultants, advisors
or other persons or entities as compensation (insofar as such shares are not
included in “Initial Shares)”. When used in the

 

2

--------------------------------------------------------------------------------

 

singular, the term “Additional Share” means a Common Share or Unit issued after
March 15, 2006 and included in the definition of “Additional Shares.”

 

“Aggregate Baseline” means, as of the Valuation Date, an amount representing
(without double-counting) the sum of: (A) the Baseline Value multiplied by
(i) the Initial Shares, multiplied by (ii) the sum of 100% plus the Target
Aggregate Return Percentage; plus (B) with respect to each Additional Share, the
product of (i) the Additional Share Baseline Value of such Additional Share,
multiplied by (ii) the sum of (x) 100% plus (y) the product of the Target
Aggregate Return Percentage multiplied by a fraction the numerator of which is
the number of days prior to and including the Valuation Date during which such
Additional Share has been outstanding and the denominator of which is the number
of days from and including March 15, 2006 to and including the Valuation Date;
provided that if the Valuation Date occurs prior to March 14, 2009 as a result
of a Change in Control, then for purposes of this definition in connection with
the calculation of the Outperformance Pool as of the Valuation Date, then (I)
the “Aggregate Baseline” shall be calculated as of the date that such Change of
Control is consummated instead of March 14, 2009 and (II) the Aggregate Target
Return Percentage to be used in such calculation shall be reduced to 30%
multiplied by the CoC Fraction.

 

“Aggregate Distribution Unit Equivalent” has the meaning set forth in Section 3.

 

“Aggregate OPP Unit Equivalent” has the meaning set forth in Section 3.

 

“Aggregate Outperformance Pool” means, as of the Valuation Date, a dollar amount
calculated as follows: (A) subtract the Aggregate Baseline from the Total
Return, in each case as of the Valuation Date, and (B) multiply the resulting
amount (or, if the resulting amount is a negative number, zero) by 10%;
provided, however, that in no event shall the Aggregate Outperformance Pool as
of the Valuation Date exceed the difference between (i) the Maximum Aggregate
Outperformance Pool Amount and (ii) the sum of (I) the Year One Outperformance
Pool and (II) the Year Two Outperformance Pool.

 

“Aggregate Total Unit Equivalent” has the meaning set forth in Section 3.

 

“Award OPP Units” has the meaning set forth in Section 3.

 

“Baseline Value” means $89.17, which the Committee has determined is the average
Fair Market Value of a Common Share over the thirty (30) trading days
immediately preceding the Effective Date.

 

“Cause” for termination of the Grantee’s employment for purposes of Section 4
means: (A) if the Grantee is a party to a Service Agreement, and “cause” is
defined therein, such definition, or (B) if the Grantee is not party to a
Service Agreement or the Grantee’s Service

 

3

--------------------------------------------------------------------------------

 

Agreement does not define “cause”: (i) the Grantee’s conviction of, or plea of
guilty or nolo contendere to, a felony; (ii) the Grantee’s willful and continued
failure to use reasonable best efforts to substantially perform his duties
(other than such failure resulting from the Grantee’s incapacity due to physical
or mental illness or subsequent to the issuance of a notice of termination by
the Grantee for Good Reason) after demand for substantial performance is
delivered by the Company in writing that specifically identifies the manner in
which the Company believes the Grantee has not used reasonable best efforts to
substantially perform his duties; or (iii) the Grantee’s willful misconduct that
is materially economically injurious to the Company or to any entity in control
of, controlled by or under common control with the Company (a “Company
Affiliate”). For purposes of clause (B) of this definition, no act, or failure
to act, by the Grantee shall 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 or any Company Affiliate. Cause shall not exist under
clause (B)(ii) or (B)(iii) above unless and until the Company (I) gives the
Grantee reasonable (but in no event less than fifteen (15) days) notice of a
meeting with the executive officer(s) to whom the Grantee reports for the
purpose of determining whether “cause” for termination exists and an opportunity
for the Grantee, together with his or her counsel, to be heard, and (II)
delivers to the Grantee a written finding that in the good faith opinion of such
executive officer(s), the Grantee was guilty of the conduct set forth in clause
(B)(ii) or (B)(iii) and specifying the particulars thereof in detail.

 

“Change of Control” means:

 

(A)                                  INDIVIDUALS WHO, ON THE EFFECTIVE DATE,
CONSTITUTE THE BOARD (THE “INCUMBENT TRUSTEES”) CEASE FOR ANY REASON TO
CONSTITUTE AT LEAST A MAJORITY OF THE BOARD, PROVIDED THAT ANY PERSON BECOMING A
TRUSTEE SUBSEQUENT TO THE EFFECTIVE 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;  OR

 

(B)                                 ANY “PERSON” (AS SUCH TERM IS DEFINED IN
SECTION 3(A)(9) OF THE EXCHANGE ACT AND AS USED IN SECTIONS 13(D)(3) AND
14(D)(2) OF THE EXCHANGE ACT) IS OR BECOMES, AFTER THE EFFECTIVE 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 (B) SHALL NOT BE DEEMED TO BE
A CHANGE

 

4

--------------------------------------------------------------------------------

 

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 (C)), (E) (I) ANY OF THE PARTNERS (AS OF THE EFFECTIVE 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”), (II) ANY ENTITIES THE MAJORITY OF THE
VOTING INTERESTS OF WHICH ARE BENEFICIALLY OWNED BY THE INTERSTATE PARTNERS, OR
(III) ANY “GROUP” (AS DESCRIBED IN RULE 13D-5(B)(I) UNDER THE EXCHANGE ACT)
INCLUDING THE INTERSTATE PARTNERS (THE PERSONS IN (I), (II) AND (III) SHALL BE
INDIVIDUALLY AND COLLECTIVELY REFERRED TO HEREIN AS, “INTERSTATE HOLDERS”);  OR

 

(c)                                  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 (b) 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

 

(d)                                 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 the Grantee under this
Agreement.

 

“Class A Units” has the meaning set forth in the Partnership Agreement.

 

“CoC Fraction” means the number of calendar days that have elapsed since the
Effective Date to and including the date as of which a Change of Control is
consummated, divided by 1,096.

 

5

--------------------------------------------------------------------------------

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Common Shares” means shares of the Company’s common shares of beneficial
interest, par value $0.04 per share, either currently existing or authorized
hereafter.

 

“Common Share Price” means, as of a particular date, the average of the Fair
Market Value of one Common Share over the thirty (30) trading days ending on,
and including, such date (or, if such date is not a trading day, the most recent
trading day immediately preceding such date).

 

“Conversion Factor” has the meaning given to that term in the Partnership
Agreement (one (1.0) as of the Effective Date).

 

“Disability” means, unless otherwise provided in the Grantee’s Service Agreement
(if any), a disability which renders the Grantee incapable of performing all of
his or her material duties for a period of at least 180 consecutive or
non-consecutive days during any consecutive twelve-month period.

 

“Distribution Value” means, as of a particular date of determination, the
aggregate amount of distributions paid on one Class A Unit that was outstanding
as of the Effective Date between March 15, 2006 and such date of determination
adjusted to take into account any distributions in the form of additional Units
or other Partnership securities as provided in Section 9 hereof.

 

“Effective Date” means March 15, 2006.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Fair Market Value” means, as of any given date, the fair market value of a
Common Share as determined by the Committee using any reasonable method and in
good faith (such determination will be made in a manner that satisfies
Section 409A of the Code and in good-faith as required by Section 422(c)(1) of
the Code); provided that (A) if Common Shares are admitted to trading on a
national securities exchange, the fair market value of a Common Share on any
date shall be the closing sale price reported for such share on the exchange on
such date on which a sale was reported; (B) if Common Shares are admitted to
quotation on the National Association of Securities Dealers Automated Quotation
System (“NASDAQ”) or a successor quotation system and has been designated as a
National Market System (“NMS”) security, fair market value of a Common Share on
any date shall be the closing sale price reported for such share on the system
on such date on which a sale was reported; and (C) if Common Shares are admitted
to quotation on the NASDAQ but have not been designated as an NMS security, fair
market value of a Common Share on any such date shall be the average of the
highest bid and

 

6

--------------------------------------------------------------------------------

 

lowest asked prices for such Common Share on the system on such date on which
both the bid and asked prices were reported.

 

“First Valuation Date” means the earlier of (A) March 14, 2007, or (B) the last
day of a 30 consecutive calendar day period during which, on each day in that
period, the Year One Outperformance Pool would have reached or exceeded the
Maximum Year One Outperformance Pool Amount if such day had been the date of
determination of the Year One Outperformance Pool.

 

“Good Reason” for termination of the Grantee’s employment for purposes of
Section 4 means: (A) if the Grantee is a party to a Service Agreement, and “good
reason” is defined therein, such definition, or (B) if the Grantee is not party
to a Service Agreement or the Grantee’s Service Agreement does not define “good
reason,” so long as the Grantee terminates his or her employment within one
hundred and twenty (120) days after the Grantee has actual knowledge of the
occurrence, without the written consent of the Grantee, of one of the following
events that has not been cured within thirty (30) days after written notice
thereof has been given by Grantee to the Company: (i) the assignment to the
Grantee of duties materially and adversely inconsistent with his or her duties
as of the Effective Date or a material and adverse alteration in the nature of
the Grantee’s duties and/or responsibilities, reporting obligations, titles or
authority; (ii) a material reduction by the Company in the Grantee’s base salary
or a failure by the Company to pay any such amounts when due; (iii) the
relocation of the Grantee’s own office location to a location more than thirty
(30) miles from such location as of the Effective Date without the Grantee’s
consent; (iv) any purported termination of Executive’s employment for Cause
which is not effected substantially in accordance with the definition thereof;
or (v) the Company’s failure to provide benefits comparable to those provided
the Grantee as of the Effective Date, other than any such failure which affects
all officers of a similar level.

 

“Initial Shares” means                         Common Shares and Units (other
than those held by the Company, with the number of Units multiplied by the
Conversion Factor in effect as of March 15, 2006) which are deemed outstanding
as of the Effective Date for purposes of the calculations set forth in Section 3
hereof. For the avoidance of doubt, such number (A) includes
                       currently vested restricted Common Shares previously
granted to employees or other persons or entities in exchange for services
provided to the Company and (B) excludes (i) Common Shares issuable upon
exercise of stock options or upon the exchange (directly or indirectly) of OPP
Units or other Units issued to employees, non-employee trustees, consultants,
advisors or other persons or entities as incentive compensation, and
(ii) currently unvested restricted Common Shares.

 

“Maximum Aggregate Outperformance Pool Amount” means $100,000,000.

 

“Maximum Year One Outperformance Pool Amount” means $20,000,000.

 

7

--------------------------------------------------------------------------------

 

“Maximum Year Two Outperformance Pool Amount” means $40,000,000.

 

“OPP Units” means LTIP Units, as such term is defined in the Partnership
Agreement, awarded under the Outperformance Plan having the rights, voting
powers, restrictions, limitations as to distributions, qualifications and terms
and conditions of redemption set forth in the Partnership Agreement.

 

“Participation Percentage” means the Grantee’s share of the Outperformance Pool
as set forth on Schedule A hereto.

 

“Partnership Agreement” means the Agreement of Limited Partnership of the
Partnership, dated as of October 20, 1997, among the Company, as general
partner, and the limited partners who are parties thereto, as amended from time
to time.

 

“Person” means an individual, corporation, partnership, limited liability
company, joint venture, association, trust, unincorporated organization, other
entity or “group” (as defined in the Exchange Act).

 

“Second Valuation Date” means the earlier of (A) March 14, 2008, or (B) the last
day of a 30 consecutive calendar day period during which, on each day in that
period, the Year Two Outperformance Pool would have reached or exceeded the
Maximum Year Two Outperformance Pool Amount if such day had been the date of
determination of the Year Two Outperformance Pool.

 

“Service Agreement” means, as of a particular date, any employment, consulting
or similar service agreement then in effect between the Grantee, on the one
hand, and the Company or one of its affiliates, on the other hand, as amended or
supplemented through such date.

 

“Target Aggregate Return Percentage” means 30%, except as otherwise defined for
purposes of the definition of Aggregate Baseline in certain circumstances, as
described in such definition.

 

“Target Year One Return Percentage” means 10%.

 

“Target Year Two Return Percentage” means 20%.

 

“Total Return” means (without double-counting), as of a particular date, an
amount equal to the sum of (A) the Total Shares as of such date multiplied by
the Common Share Price as of such date, plus (B) an amount equal to the sum of
the total dividends and other distributions actually paid between March 15, 2006
and such date including dividends and distributions paid in the form of
additional Common Shares or Units, as well as other property or securities and
the proceeds thereof), in respect of (i) the Initial Shares and (ii) the
Additional Shares if and to the

 

8

--------------------------------------------------------------------------------

 

extent that such Additional Shares were outstanding on the record date with
respect to the applicable dividend or distribution so paid.

 

“Total Shares” means (without double-counting), as of a particular date of
determination, the sum of: (A) the Common Shares included in the Initial Shares,
plus (B) the Common Shares included in the Additional Shares, plus (C) the Units
included in Initial Shares and in Additional Shares (other than those held by
the Company), except that such Units shall be multiplied by the Conversion
Factor in effect on such date of determination and not the Conversion Factor (if
different) used in the definition of “Initial Shares” or “Additional Shares.”

 

“Units” means all Partnership Units (as defined in the Partnership Agreement),
including Class A Units, that are outstanding or are issuable upon the
conversion, exercise, exchange or redemption of any securities of any kind
convertible, exercisable, exchangeable or redeemable for Partnership Units;
provided that all Units that are not convertible into or exchangeable for
Class A Units shall be excluded from the definition of “Units.”

 

“Valuation Date” means the earliest of (A) March 14, 2009, (B) the date upon
which a Change of Control shall occur, and (C) the last day of a 30 consecutive
calendar day period during which, on each day in that period, the Aggregate
Outperformance Pool would have reached or exceeded the Maximum Aggregate
Outperformance Pool Amount if such day had been the date of determination of the
Aggregate Outperformance Pool.

 

“Year One Baseline” means, as of the First Valuation Date, an amount
representing (without double-counting) the sum of: (A) the Baseline Value
multiplied by (i) the Initial Shares, and (ii) the sum of 100% plus the Target
Year One Return Percentage; plus (B) with respect to each Additional Share, the
product of (i) the Additional Share Baseline Value of such Additional Share,
multiplied by (ii) the sum of (x) 100% plus (y) the product of the Target Year
One Return Percentage multiplied by a fraction the numerator of which is the
number of days prior to and including March 14, 2007 during which such
Additional Share has been outstanding and the denominator of which is 365.

 

“Year One OPP Unit Equivalent” has the meaning set forth in Section 3.

 

“Year One Outperformance Pool” means, as of the First Valuation Date, a dollar
amount calculated as follows: subtract the Year One Baseline from the Total
Return, in each case as of the First Valuation Date, and multiply the resulting
amount (or, if the resulting amount is a negative number, zero) by 10%;
provided, however, that in no event shall the Year One Outperformance Pool as of
the First Valuation Date exceed the Maximum Year One Outperformance Pool.

 

9

--------------------------------------------------------------------------------

 

“Year Two Baseline” means, as of the Second Valuation Date, an amount
representing (without double-counting) the sum of: (A) the Baseline Value
multiplied by (i) the Initial Shares, and (ii) the sum of 100% plus the Target
Year Two Return Percentage; plus (B) with respect to each Additional Share, the
product of (i) the Additional Share Baseline Value of such Additional Share,
multiplied by (ii) the sum of (x) 100% plus (y) the product of the Target Year
Two Return Percentage multiplied by a fraction the numerator of which is the
number of days prior to and including March 14, 2008 during which such
Additional Share has been outstanding and the denominator of which is 730.

 

“Year Two OPP Unit Equivalent” has the meaning set forth in Section 3.

 

“Year Two Outperformance Pool” means, as of the Second Valuation Date, a dollar
amount calculated as follows: subtract the Year Two Baseline from the Total
Return, in each case as the Second Valuation Date, and multiply the resulting
amount (or, if the resulting amount is a negative number, zero) by 10%;
provided, however, that in no event shall the Year Two Outperformance Pool as of
the Second Valuation Date exceed the difference between (A) the Maximum Year Two
Outperformance Pool and (B) the Year One Outperformance Pool.

 

3.                                       OUTPERFORMANCE AWARD.

 

(A)                                  ON THE TERMS AND CONDITIONS SET FORTH IN
THIS AGREEMENT, AS WELL AS THE TERMS AND CONDITIONS OF THE STOCK PLAN, THE
GRANTEE IS HEREBY GRANTED THIS AWARD CONSISTING OF THE PARTICIPATION PERCENTAGE
IN THE OUTPERFORMANCE POOL SET FORTH ON SCHEDULE A HERETO, WHICH IS INCORPORATED
HEREIN BY REFERENCE. CAPITALIZED TERMS USED HEREIN AND NOT OTHERWISE DEFINED
HAVE THE MEANINGS PROVIDED ON SCHEDULE A HERETO. THE GRANTEE’S AWARD, IF AND
WHEN EARNED, SHALL BE DENOMINATED IN AND SETTLED THROUGH THE ISSUANCE OF OPP
UNITS IN A NUMBER CALCULATED TO RESULT IN THE GRANTEE RECEIVING A VALUE EQUAL TO
THE GRANTEE’S PARTICIPATION PERCENTAGE IN THE YEAR ONE OUTPERFORMANCE POOL, YEAR
TWO OUTPERFORMANCE POOL AND AGGREGATE OUTPERFORMANCE POOL, AS APPLICABLE
(COLLECTIVELY, “AWARD OPP UNITS”) AS OF THE APPLICABLE VALUATION DATE PURSUANT
TO THE CALCULATIONS SET FORTH IN THIS SECTION 3. THE TIMING OF ISSUANCE OF AWARD
OPP UNITS TO THE GRANTEE PURSUANT TO THIS AWARD IS WITHIN THE FULL AND EXCLUSIVE
CONTROL OF THE COMMITTEE, SO LONG AS SUCH ISSUANCE OCCURS ON OR PRIOR TO THE
APPLICABLE DATE AS OF WHICH CALCULATIONS ARE TO BE MADE PURSUANT TO THIS
SECTION 3. WITHOUT LIMITING THE DISCRETION OF THE COMMITTEE, AWARD OPP UNITS
MAY BE ISSUED TO THE GRANTEE AS OF THE DATE OF THIS AGREEMENT OR FROM TIME TO
TIME THEREAFTER, BASED ON A DETERMINATION BY THE COMMITTEE OF THE EXTENT TO
WHICH THE PERFORMANCE OBJECTIVES ESTABLISHED UNDER THE OUTPERFORMANCE PLAN HAVE
BEEN ACHIEVED OR OTHERWISE. AWARD OPP UNITS, WHEN ISSUED, SHALL CONSTITUTE AND
BE TREATED AS THE PROPERTY OF THE GRANTEE, SUBJECT TO THE TERMS OF THIS
AGREEMENT AND THE PARTNERSHIP AGREEMENT. THE ISSUANCE OF AWARD OPP UNITS TO THE
GRANTEE PURSUANT TO THIS AWARD SHALL BE SET FORTH IN MINUTES OF THE MEETINGS OF
THE COMMITTEE AND

 

10

--------------------------------------------------------------------------------

 

COMMUNICATED TO THE GRANTEE IN WRITING PROMPTLY AFTER THE APPROVAL THEREOF BY
THE COMMITTEE. AWARD OPP UNITS WILL BE: (A) SUBJECT TO FORFEITURE OR INCREASE TO
THE EXTENT PROVIDED IN THIS SECTION 3 AS SET FORTH BELOW; AND (B) SUBJECT TO
VESTING AS PROVIDED IN SECTION 4 AND SECTION 8 HEREOF. IN CONNECTION WITH EACH
SUBSEQUENT ISSUANCE OF AWARD OPP UNITS, IF ANY, THE GRANTEE SHALL EXECUTE AND
DELIVER TO THE COMPANY AND THE PARTNERSHIP SUCH DOCUMENTS, COMPARABLE TO THE
DOCUMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS AGREEMENT, AS THE
COMPANY AND/OR THE PARTNERSHIP REASONABLY REQUEST IN ORDER TO COMPLY WITH ALL
APPLICABLE LEGAL REQUIREMENTS, INCLUDING, WITHOUT LIMITATION, FEDERAL AND STATE
SECURITIES LAWS.

 

(B)                                 AS SOON AS PRACTICABLE FOLLOWING THE FIRST
VALUATION DATE, BUT AS OF THE FIRST VALUATION DATE, THE COMMITTEE WILL DETERMINE
THE YEAR ONE OUTPERFORMANCE POOL (IF ANY) AND THEN PERFORM THE FOLLOWING
CALCULATIONS WITH RESPECT TO THIS AWARD: MULTIPLY (W) THE YEAR ONE
OUTPERFORMANCE POOL CALCULATED AS OF THE FIRST VALUATION DATE BY (X) THE
GRANTEE’S PARTICIPATION PERCENTAGE, AND THEN DIVIDE THE RESULT BY THE PRODUCT OF
(Y) THE COMMON SHARE PRICE CALCULATED AS OF THE FIRST VALUATION DATE MULTIPLIED
BY (Z) THE CONVERSION FACTOR ON THE FIRST VALUATION DATE; THE RESULTING NUMBER
IS HEREAFTER REFERRED TO AS THE “YEAR ONE OPP UNIT EQUIVALENT.”  A NUMBER OF
AWARD OPP UNITS EQUAL TO THE YEAR ONE OPP UNIT EQUIVALENT SHALL THEREAFTER NO
LONGER BE SUBJECT TO FORFEITURE PURSUANT TO THIS SECTION 3, BUT SHALL STILL BE
SUBJECT TO VESTING PURSUANT TO SECTION 4 HEREOF. IF THE YEAR ONE OPP UNIT
EQUIVALENT IS SMALLER THAN THE NUMBER OF AWARD OPP UNITS PREVIOUSLY ISSUED TO
THE GRANTEE PURSUANT TO SECTION 3(A) HEREOF, THEN THE BALANCE OF THE AWARD OPP
UNITS SHALL CONTINUE TO BE SUBJECT TO FORFEITURE PURSUANT TO THIS SECTION 3. IF
THE YEAR ONE OPP UNIT EQUIVALENT IS GREATER THAN THE NUMBER OF AWARD OPP UNITS
PREVIOUSLY ISSUED TO THE GRANTEE PURSUANT TO SECTION 3(A) HEREOF, THEN, UPON THE
PERFORMANCE OF THE CALCULATIONS SET FORTH IN THIS SECTION 3(B): (A) THE COMPANY
SHALL CAUSE THE PARTNERSHIP TO ISSUE TO THE GRANTEE, AS OF THE FIRST VALUATION
DATE, A NUMBER OF ADDITIONAL OPP UNITS EQUAL TO THE DIFFERENCE; (B) SUCH
ADDITIONAL OPP UNITS SHALL BE ADDED TO THE AWARD OPP UNITS PREVIOUSLY ISSUED, IF
ANY, AND THEREBY BECOME PART OF THIS AWARD; (C) THE COMPANY AND THE PARTNERSHIP
SHALL TAKE SUCH CORPORATE AND PARTNERSHIP ACTION AS IS NECESSARY TO ACCOMPLISH
THE GRANT OF SUCH ADDITIONAL OPP UNITS; (D) THE GRANTEE SHALL EXECUTE AND
DELIVER IN CONNECTION WITH SUCH GRANT SUCH DOCUMENTS, COMPARABLE TO THE
DOCUMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS AGREEMENT, AS THE
COMPANY AND/OR THE PARTNERSHIP REASONABLY REQUEST IN ORDER TO COMPLY WITH ALL
APPLICABLE REQUIREMENTS, INCLUDING, WITHOUT LIMITATION, FEDERAL AND STATE
SECURITIES LAWS; AND (E) THEREAFTER THE TERM AWARD OPP UNITS WILL REFER
COLLECTIVELY TO THE AWARD OPP UNITS, IF ANY, ISSUED PRIOR TO SUCH ADDITIONAL
GRANT PLUS SUCH ADDITIONAL OPP UNITS.

 

(C)                                  AS SOON AS PRACTICABLE FOLLOWING THE SECOND
VALUATION DATE, BUT AS OF THE SECOND VALUATION DATE, THE COMMITTEE WILL
DETERMINE THE YEAR TWO OUTPERFORMANCE POOL (IF ANY) AND THEN PERFORM THE
FOLLOWING CALCULATIONS WITH RESPECT TO

 

11

--------------------------------------------------------------------------------

 

THIS AWARD: MULTIPLY (W) THE YEAR TWO OUTPERFORMANCE POOL CALCULATED AS OF THE
SECOND VALUATION DATE BY (X) THE GRANTEE’S PARTICIPATION PERCENTAGE, AND THEN
DIVIDE THE RESULT BY THE PRODUCT OF (Y) THE COMMON SHARE PRICE CALCULATED AS OF
THE SECOND VALUATION DATE MULTIPLIED BY (Z) THE CONVERSION FACTOR ON THE SECOND
VALUATION DATE; THE RESULTING NUMBER IS HEREAFTER REFERRED TO AS THE “YEAR TWO
OPP UNIT EQUIVALENT.”  A NUMBER OF AWARD OPP UNITS EQUAL TO THE YEAR TWO OPP
UNIT EQUIVALENT SHALL THEREAFTER NO LONGER BE SUBJECT TO FORFEITURE PURSUANT TO
THIS SECTION 3, BUT SHALL STILL BE SUBJECT TO VESTING PURSUANT TO SECTION 4
HEREOF. IF THE YEAR TWO OPP UNIT EQUIVALENT IS SMALLER THAN THE NUMBER OF AWARD
OPP UNITS PREVIOUSLY ISSUED TO THE GRANTEE PURSUANT TO SECTION 3(A) HEREOF
(INCLUDING THE YEAR ONE OPP UNIT EQUIVALENT, IF ANY), THEN THE BALANCE OF THE
AWARD OPP UNITS SHALL CONTINUE TO BE SUBJECT TO FORFEITURE PURSUANT TO THIS
SECTION 3. IF THE YEAR TWO OPP UNIT EQUIVALENT IS GREATER THAN THE NUMBER OF
AWARD OPP UNITS PREVIOUSLY ISSUED TO THE GRANTEE PURSUANT TO SECTION 3(A) HEREOF
(INCLUDING THE YEAR ONE OPP UNIT EQUIVALENT, IF ANY), THEN, UPON THE PERFORMANCE
OF THE CALCULATIONS SET FORTH IN THIS SECTION 3(C): (A) THE COMPANY SHALL CAUSE
THE PARTNERSHIP TO ISSUE TO THE GRANTEE, AS OF THE SECOND VALUATION DATE, A
NUMBER OF ADDITIONAL OPP UNITS EQUAL TO THE DIFFERENCE; (B) SUCH ADDITIONAL OPP
UNITS SHALL BE ADDED TO THE AWARD OPP UNITS PREVIOUSLY ISSUED, IF ANY, AND
THEREBY BECOME PART OF THIS AWARD; (C) THE COMPANY AND THE PARTNERSHIP SHALL
TAKE SUCH CORPORATE AND PARTNERSHIP ACTION AS IS NECESSARY TO ACCOMPLISH THE
GRANT OF SUCH ADDITIONAL OPP UNITS; (D) THE GRANTEE SHALL EXECUTE AND DELIVER IN
CONNECTION WITH SUCH GRANT SUCH DOCUMENTS, COMPARABLE TO THE DOCUMENTS EXECUTED
AND DELIVERED IN CONNECTION WITH THIS AGREEMENT, AS THE COMPANY AND/OR THE
PARTNERSHIP REASONABLY REQUEST IN ORDER TO COMPLY WITH ALL APPLICABLE
REQUIREMENTS, INCLUDING, WITHOUT LIMITATION, FEDERAL AND STATE SECURITIES LAWS;
AND (E) THEREAFTER THE TERM AWARD OPP UNITS WILL REFER COLLECTIVELY TO THE AWARD
OPP UNITS, IF ANY, ISSUED PRIOR TO SUCH ADDITIONAL GRANT PLUS SUCH ADDITIONAL
OPP UNITS.

 

(D)                                 AS SOON AS PRACTICABLE FOLLOWING THE
VALUATION DATE, BUT AS OF THE VALUATION DATE, THE COMMITTEE WILL DETERMINE THE
AGGREGATE OUTPERFORMANCE POOL (IF ANY) AND THEN PERFORM THE FOLLOWING
CALCULATIONS WITH RESPECT TO THIS AWARD:

 

(I)                                                 MULTIPLY (W) THE AGGREGATE
OUTPERFORMANCE POOL CALCULATED AS OF THE VALUATION DATE BY (X) THE GRANTEE’S
PARTICIPATION PERCENTAGE, AND THEN DIVIDE THE RESULT BY THE PRODUCT OF (Y) THE
COMMON SHARE PRICE CALCULATED AS OF THE VALUATION DATE MULTIPLIED BY (Z) THE
CONVERSION FACTOR AS OF THE VALUATION DATE; THE RESULTING NUMBER IS HEREAFTER
REFERRED TO AS THE “AGGREGATE OPP UNIT EQUIVALENT”;

 

(II)                                              MULTIPLY (W) THE SUM OF (I)
THE AGGREGATE OPP UNIT EQUIVALENT PLUS (II) THE YEAR ONE OPP UNIT EQUIVALENT
PLUS (III) THE YEAR TWO OPP UNITS EQUIVALENT BY (X) THE DISTRIBUTION VALUE AS OF
THE VALUATION DATE, AND THEN DIVIDE THE RESULT BY THE PRODUCT OF (Y) THE COMMON
SHARE PRICE CALCULATED AS OF THE VALUATION DATE MULTIPLIED

 

12

--------------------------------------------------------------------------------

 

BY (Z) THE CONVERSION FACTOR ON THE VALUATION DATE; THE RESULTING NUMBER IS
HEREAFTER REFERRED TO AS THE “AGGREGATE DISTRIBUTION UNIT EQUIVALENT”; AND

 

(III)                                           ADD THE AGGREGATE OPP UNIT
EQUIVALENT TO THE AGGREGATE DISTRIBUTION UNIT EQUIVALENT; THE RESULTING NUMBER
IS HEREAFTER REFERRED TO AS THE “AGGREGATE TOTAL UNIT EQUIVALENT”.

 

IF THE AGGREGATE TOTAL UNIT EQUIVALENT IS SMALLER THAN THE NUMBER OF AWARD OPP
UNITS PREVIOUSLY ISSUED TO THE GRANTEE PURSUANT TO SECTION 3(A) HEREOF
(INCLUDING THE YEAR ONE TOTAL UNIT EQUIVALENT AND YEAR TWO TOTAL UNIT
EQUIVALENT, IF ANY), THEN THE GRANTEE, AS OF THE VALUATION DATE, SHALL FORFEIT A
NUMBER OF AWARD OPP UNITS EQUAL TO THE DIFFERENCE, AND THEREAFTER THE TERM AWARD
OPP UNITS WILL REFER ONLY TO THE REMAINING AWARD OPP UNITS THAT WERE NOT SO
FORFEITED. IF THE AGGREGATE TOTAL UNIT EQUIVALENT IS GREATER THAN THE NUMBER OF
AWARD OPP UNITS PREVIOUSLY ISSUED TO THE GRANTEE PURSUANT TO SECTION 3(A) HEREOF
(INCLUDING THE YEAR ONE TOTAL UNIT EQUIVALENT AND YEAR TWO TOTAL UNIT
EQUIVALENT, IF ANY), THEN, UPON THE PERFORMANCE OF THE CALCULATIONS SET FORTH IN
THIS SECTION 3(D): (A) THE COMPANY SHALL CAUSE THE PARTNERSHIP TO ISSUE TO THE
GRANTEE, AS OF THE VALUATION DATE, A NUMBER OF ADDITIONAL OPP UNITS EQUAL TO THE
DIFFERENCE; (B) SUCH ADDITIONAL OPP UNITS SHALL BE ADDED TO THE AWARD OPP UNITS
PREVIOUSLY ISSUED, IF ANY, AND THEREBY BECOME PART OF THIS AWARD; (C) THE
COMPANY AND THE PARTNERSHIP SHALL TAKE SUCH CORPORATE AND PARTNERSHIP ACTION AS
IS NECESSARY TO ACCOMPLISH THE GRANT OF SUCH ADDITIONAL OPP UNITS; (D) THE
GRANTEE SHALL EXECUTE AND DELIVER IN CONNECTION WITH SUCH GRANT SUCH DOCUMENTS,
COMPARABLE TO THE DOCUMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS
AGREEMENT, AS THE COMPANY AND/OR THE PARTNERSHIP REASONABLY REQUEST IN ORDER TO
COMPLY WITH ALL APPLICABLE REQUIREMENTS, INCLUDING, WITHOUT LIMITATION, FEDERAL
AND STATE SECURITIES LAWS; AND (E) THEREAFTER THE TERM AWARD OPP UNITS WILL
REFER COLLECTIVELY TO THE AWARD OPP UNITS, IF ANY, ISSUED PRIOR TO SUCH
ADDITIONAL GRANT PLUS SUCH ADDITIONAL OPP UNITS. IF THE TOTAL UNIT EQUIVALENT IS
THE SAME AS THE NUMBER OF AWARD OPP UNITS PREVIOUSLY ISSUED TO THE GRANTEE
PURSUANT TO SECTION 3(A) HEREOF (INCLUDING THE YEAR ONE TOTAL UNIT EQUIVALENT
AND YEAR TWO TOTAL UNIT EQUIVALENT, IF ANY), THEN THERE WILL BE NO CHANGE TO THE
NUMBER OF AWARD OPP UNITS UNDER THIS AWARD PURSUANT TO THIS SECTION 3.

 

4.                                       TERMINATION OF GRANTEE’S SERVICE
RELATIONSHIP; VESTING; CHANGE OF CONTROL.

 

(A)                                  IF THE GRANTEE IS A PARTY TO A SERVICE
AGREEMENT AND CEASES TO BE AN EMPLOYEE OF THE COMPANY OR ITS AFFILIATES, THE
PROVISIONS OF SECTIONS 4(B), 4(C) AND 4(D) SHALL GOVERN THE TREATMENT OF THE
GRANTEE’S AWARD OPP UNITS EXCLUSIVELY, UNLESS THE SERVICE AGREEMENT CONTAINS
PROVISIONS THAT EXPRESSLY REFER TO THIS SECTION 4(A) AND PROVIDES THAT THOSE
PROVISIONS OF THE SERVICE AGREEMENT SHALL INSTEAD GOVERN THE TREATMENT OF THE
GRANTEE’S AWARD OPP UNITS. THE FOREGOING SENTENCE WILL BE DEEMED AN

 

13

--------------------------------------------------------------------------------

 

AMENDMENT TO ANY APPLICABLE SERVICE AGREEMENT TO THE EXTENT REQUIRED TO APPLY
ITS TERMS CONSISTENTLY WITH THIS SECTION 4, SUCH THAT, BY WAY OF ILLUSTRATION,
ANY PROVISIONS OF THE SERVICE AGREEMENT WITH RESPECT TO ACCELERATED VESTING OR
PAYOUT OF THE GRANTEE’S BONUS OR INCENTIVE COMPENSATION AWARDS IN THE EVENT OF
CERTAIN TYPES OF TERMINATIONS OF GRANTEE’S SERVICE RELATIONSHIP WITH THE COMPANY
(SUCH AS, FOR EXAMPLE, TERMINATION AT THE END OF THE TERM, TERMINATION WITHOUT
CAUSE BY THE EMPLOYER OR TERMINATION FOR GOOD REASON BY THE EMPLOYEE) SHALL NOT
BE INTERPRETED AS REQUIRING THAT ANY CALCULATIONS SET FORTH IN SECTION 3 HEREOF
BE PERFORMED, OR VESTING OCCUR WITH RESPECT TO THIS AWARD OTHER THAN AS
SPECIFICALLY PROVIDED IN THIS SECTION 4.

 

(B)                                 IN THE EVENT OF TERMINATION OF THE GRANTEE’S
EMPLOYMENT BY THE COMPANY WITHOUT CAUSE OR BY THE GRANTEE WITH GOOD REASON (A
“QUALIFIED TERMINATION) PRIOR TO THE VALUATION DATE THEN (I) WITH RESPECT TO THE
GRANTEE ONLY THE CALCULATIONS PROVIDED IN SECTION 3(D) HEREOF SHALL BE PERFORMED
WITH RESPECT TO THIS AWARD EFFECTIVE AS OF THE DATE OF THE QUALIFIED TERMINATION
AS IF A CHANGE OF CONTROL HAD OCCURRED (WITH RESPECT TO THE GRANTEE ONLY) ON
SUCH DATE, (II) ALL OF THE AWARD OPP UNITS THAT (A) HAVE PREVIOUSLY BECOME
NON-FORFEITABLE PURSUANT TO SECTIONS 3(B) OR 3(C) HEREOF AND/OR (B) BECOME NO
LONGER SUBJECT TO FORFEITURE AS A RESULT OF THE FOREGOING CALCULATIONS PURSUANT
TO SECTION 3(D) HEREOF SHALL AUTOMATICALLY AND IMMEDIATELY VEST, AND (III) THIS
AGREEMENT SHALL THEN AUTOMATICALLY TERMINATE AND NO FURTHER CALCULATIONS
PURSUANT TO SECTION 3 HEREOF SHALL BE PERFORMED. IN THE EVENT OF A QUALIFIED
TERMINATION ON OR AFTER THE VALUATION DATE, THEN ALL OF THE GRANTEE’S AWARD OPP
UNITS THAT HAVE CEASED TO BE SUBJECT TO FORFEITURE PURSUANT TO SECTION 3 HEREOF,
BUT REMAIN UNVESTED AS OF THE TIME OF SUCH QUALIFIED TERMINATION SHALL
AUTOMATICALLY AND IMMEDIATELY VEST. THIS AGREEMENT SHALL AUTOMATICALLY TERMINATE
EFFECTIVE AS OF THE DATE OF SUCH QUALIFIED TERMINATION AFTER GIVING EFFECT TO
THIS SECTION 4(B). NOTWITHSTANDING THE FOREGOING, IN THE EVENT ANY PAYMENT TO BE
MADE HEREUNDER AFTER GIVING EFFECT TO THIS SECTION 4(B) IS DETERMINED TO
CONSTITUTE “NONQUALIFIED DEFERRED COMPENSATION” SUBJECT TO SECTION 409A OF THE
CODE, THEN, TO THE EXTENT THE GRANTEE IS A “SPECIFIED EMPLOYEE” UNDER
SECTION 409A OF THE CODE SUBJECT TO THE SIX-MONTH DELAY THEREUNDER, ANY SUCH
PAYMENTS TO BE MADE DURING THE SIX-MONTH PERIOD COMMENCING ON THE GRANTEE’S
“SEPARATION FROM SERVICE” (AS DEFINED IN SECTION 409A OF THE CODE) SHALL BE
DELAYED UNTIL THE EXPIRATION OF SUCH SIX-MONTH PERIOD.

 

(C)                                  IN THE EVENT OF A TERMINATION OF EMPLOYMENT
BY REASON OF DEATH OR DISABILITY, THE PROVISIONS OF SECTION 8 HEREOF SHALL
APPLY.

 

(D)                                 IN THE EVENT OF A TERMINATION OF EMPLOYMENT
OTHER THAN A QUALIFIED TERMINATION OR BY REASON OF DEATH OR DISABILITY, THIS
AGREEMENT SHALL AUTOMATICALLY TERMINATE EFFECTIVE AS OF THE DATE OF SUCH
TERMINATION AND ALL AWARD OPP UNITS EXCEPT FOR THOSE THAT BOTH (I) HAVE CEASED
TO BE SUBJECT TO FORFEITURE PURSUANT TO SECTION 3 HEREOF AND

 

14

--------------------------------------------------------------------------------

 

(II) ARE THEN VESTED PURSUANT TO SECTION 4(E) HEREOF SHALL AUTOMATICALLY AND
IMMEDIATELY BE FORFEITED BY THE GRANTEE.

 

(E)                                  SUBJECT TO SECTIONS 4(A), 4(B), 4(C),
4(D) AND 8 HEREOF AND THE LAST SENTENCE OF THIS SECTION 4(E), THE GRANTEE’S
AWARD OPP UNITS (INCLUDING THE YEAR ONE OPP UNIT EQUIVALENT AND YEAR TWO OPP
UNIT EQUIVALENT, IF ANY) NOT FORFEITED PURSUANT TO SECTION 3 HEREOF SHALL BECOME
VESTED AS FOLLOWS: (I) THIRTY-THREE AND ONE-THIRD PERCENT (33.34%) OF SUCH AWARD
OPP UNITS SHALL BECOME VESTED ON MARCH 14, 2009; AND (II) AN ADDITIONAL
THIRTY-THREE AND ONE-THIRD PERCENT (33.33%) OF SUCH AWARD OPP UNITS SHALL BECOME
VESTED ON EACH OF MARCH 14, 2010 AND MARCH 14, 2011; PROVIDED, HOWEVER, THAT ALL
UNVESTED AWARD OPP UNITS THAT HAVE NOT PREVIOUSLY BEEN FORFEITED PURSUANT TO
SECTION 3 HEREOF SHALL VEST IMMEDIATELY UPON THE OCCURRENCE OF A CHANGE OF
CONTROL. FOR THE AVOIDANCE OF DOUBT, THE VESTING OF THE AWARD OPP UNITS PURSUANT
TO THIS SECTION 4(E) SHALL BE INDEPENDENT FROM, AND IN NO WAY EFFECT, THE
CALCULATIONS SET FORTH IN SECTION 3 HEREOF. TO THE EXTENT THAT SCHEDULE A
PROVIDES FOR AMOUNTS OR SCHEDULES OF VESTING THAT CONFLICT WITH THE PROVISIONS
OF THIS SECTION 4(E), THE PROVISIONS OF SCHEDULE A WILL GOVERN.  NOTWITHSTANDING
ANYTHING TO THE CONTRARY IN THIS AGREEMENT, THE PORTION OF THE AGGREGATE
DISTRIBUTION UNIT EQUIVALENT CALCULATED PURSUANT TO SECTION3(D)(II) THAT IS
ATTRIBUTABLE TO THE DIVIDEND VALUE ASSOCIATED WITH THE YEAR ONE OPP UNIT
EQUIVALENT AND/OR THE YEAR TWO OPP UNIT EQUIVALENT SHALL NOT BE SUBJECT TO
VESTING PURSUANT TO THIS SECTION 4(E), BUT SHALL BE IMMEDIATELY AND
AUTOMATICALLY VESTED AS SOON AS THE CALCULATION PROVIDED IN SECTION 3(D)(II) IS
PERFORMED.

 

5.                                       PAYMENTS BY AWARD RECIPIENTS. NO AMOUNT
SHALL BE PAYABLE TO THE COMPANY OR THE PARTNERSHIP BY THE GRANTEE AT ANY TIME IN
RESPECT OF THIS AWARD.

 

6.                                       DISTRIBUTIONS. THE HOLDER OF THE AWARD
OPP UNITS SHALL BE ENTITLED TO RECEIVE DISTRIBUTIONS WITH RESPECT TO SUCH AWARD
OPP 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) SHALL BE THE VALUATION DATE, EXCEPT THAT IF THE
PROVISIONS OF SECTION 4(B) OR SECTION 8(A) HEREOF BECOME APPLICABLE TO THE
GRANTEE, THE DISTRIBUTION PARTICIPATION DATE FOR THE GRANTEE SHALL BE
ACCELERATED TO THE DATE THE CALCULATIONS PROVIDED IN SUCH PROVISIONS ARE
PERFORMED WITH RESPECT TO THE AWARD OPP UNITS THAT ARE NO LONGER SUBJECT TO
FORFEITURE.

 

7.                                       RESTRICTIONS ON TRANSFER. NONE OF THE
AWARD OPP 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 OF
1933, AS AMENDED (THE “SECURITIES ACT”)), AND SUCH TRANSFER IS IN ACCORDANCE
WITH THE APPLICABLE TERMS AND CONDITIONS OF THE PARTNERSHIP AGREEMENT. IN
CONNECTION WITH ANY TRANSFER OF AWARD OPP UNITS, THE PARTNERSHIP MAY REQUIRE THE
GRANTEE TO PROVIDE AN OPINION OF COUNSEL, SATISFACTORY TO THE PARTNERSHIP, THAT
SUCH TRANSFER IS IN COMPLIANCE WITH ALL FEDERAL AND STATE SECURITIES LAWS
(INCLUDING, WITHOUT LIMITATION, THE SECURITIES ACT). ANY ATTEMPTED TRANSFER OF
AWARD OPP UNITS NOT IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS
SECTION 7 SHALL BE NULL AND VOID, AND THE PARTNERSHIP SHALL NOT REFLECT ON ITS
RECORDS ANY CHANGE IN RECORD OWNERSHIP OF ANY OPP UNITS AS A

 

15

--------------------------------------------------------------------------------

 

RESULT OF ANY SUCH TRANSFER, SHALL OTHERWISE REFUSE TO RECOGNIZE ANY SUCH
TRANSFER AND SHALL NOT IN ANY WAY GIVE EFFECT TO ANY SUCH TRANSFER OF ANY OPP
UNITS. THIS AGREEMENT IS PERSONAL TO THE GRANTEE, IS NON-ASSIGNABLE AND IS NOT
TRANSFERABLE IN ANY MANNER, BY OPERATION OF LAW OR OTHERWISE, OTHER THAN BY WILL
OR THE LAWS OF DESCENT AND DISTRIBUTION.

 

8.                                       DEATH OR DISABILITY.

 

(A)                                  NOTWITHSTANDING ANY OTHER PROVISION HEREIN,
BUT SUBJECT TO SECTION 8(C) BELOW, IF, PRIOR TO THE VALUATION DATE, THE GRANTEE
SHALL CEASE TO BE AN EMPLOYEE OF THE COMPANY AND ITS AFFILIATES AS A RESULT OF
HIS OR HER DEATH OR DISABILITY, THEN (I) WITH RESPECT TO THE GRANTEE ONLY THE
CALCULATIONS PROVIDED IN SECTION 3(D) HEREOF SHALL BE PERFORMED WITH RESPECT TO
THIS AWARD IMMEDIATELY UPON SUCH CESSATION AS IF A CHANGE OF CONTROL HAD
OCCURRED (WITH RESPECT TO THE GRANTEE ONLY) ON THE DATE OF HIS OR HER DEATH OR
TERMINATION BY REASON OF DISABILITY, (II) ALL OF THE AWARD OPP UNITS THAT
(A) HAVE PREVIOUSLY BECOME NON-FORFEITABLE PURSUANT TO SECTIONS 3(B) OR
3(C) HEREOF AND/OR (B) BECOME NO LONGER SUBJECT TO FORFEITURE AS A RESULT OF
SUCH CALCULATIONS PURSUANT TO SECTION 3(D) HEREOF SHALL AUTOMATICALLY AND
IMMEDIATELY VEST, AND (III) THIS AGREEMENT SHALL THEN AUTOMATICALLY TERMINATE
AND NO FURTHER CALCULATIONS PURSUANT TO SECTION 3 HEREOF SHALL BE PERFORMED.

 

(B)                                 NOTWITHSTANDING ANY OTHER PROVISION HEREIN,
BUT SUBJECT TO SECTION 8(C) HEREOF, IF, ON OR AFTER THE VALUATION DATE, THE
GRANTEE SHALL CEASE TO BE AN EMPLOYEE, CONSULTANT OR ADVISOR, AS APPLICABLE, OF
THE COMPANY AS A RESULT OF HIS DEATH OR DISABILITY, THEN ALL OF THE GRANTEE’S
AWARD OPP UNITS SHALL AUTOMATICALLY AND IMMEDIATELY VEST.

 

(C)                                  NOTWITHSTANDING SECTIONS 8(A) AND
8(B) HEREOF, IN THE EVENT OF ANY CONFLICT BETWEEN THE PROVISIONS OF THE
GRANTEE’S SERVICE AGREEMENT, IF ANY, AND THE PROVISIONS OF THIS AGREEMENT WITH
RESPECT TO DEATH OR DISABILITY, THE PROVISIONS OF SUCH SERVICE AGREEMENT SHALL
GOVERN THE TREATMENT OF THE GRANTEE’S AWARD OPP UNITS IN THE EVENT OF DEATH OR
DISABILITY. AS FURTHER PROVIDED IN SECTION 10(K) HEREOF, NOTHING HEREIN SHALL
IMPLY THAT ANY EMPLOYMENT AGREEMENT EXISTS BETWEEN THE GRANTEE AND THE COMPANY
OR ITS AFFILIATES.

 

9.                                       CHANGES IN CAPITAL STRUCTURE. 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 AWARD, THE OUTPERFORMANCE PLAN OR THE OPP UNITS, THEN THE COMMITTEE SHALL
TAKE SUCH ACTION AS IT DEEMS NECESSARY TO MAINTAIN THE

 

16

--------------------------------------------------------------------------------

 

GRANTEE’S RIGHTS HEREUNDER SO THAT THEY ARE SUBSTANTIALLY PROPORTIONATE TO THE
RIGHTS EXISTING UNDER THIS AWARD, THE OUTPERFORMANCE PLAN AND THE TERMS OF THE
OPP UNITS PRIOR TO SUCH EVENT, INCLUDING, WITHOUT LIMITATION: (A) ADJUSTMENTS IN
THE AWARD OPP UNITS, ADDITIONAL SHARES, INITIAL SHARES, YEAR ONE BASELINE VALUE,
YEAR TWO BASELINE VALUE, AGGREGATE BASELINE VALUE, DISTRIBUTION VALUE, COMMON
SHARE PRICE, MAXIMUM AGGREGATE OUTPERFORMANCE POOL AMOUNT, TOTAL SHARES, TOTAL
RETURN OR OTHER PERTINENT TERMS OF THIS AWARD; AND (B) SUBSTITUTION OF OTHER
AWARDS UNDER THE STOCK PLAN OR OTHERWISE.

 

10.                                 MISCELLANEOUS.

 

(A)                                  AMENDMENTS. THIS AGREEMENT MAY BE AMENDED
OR MODIFIED ONLY WITH THE CONSENT OF THE COMPANY AND THE PARTNERSHIP ACTING
THROUGH THE COMMITTEE; PROVIDED THAT ANY SUCH AMENDMENT OR MODIFICATION
MATERIALLY AND ADVERSELY AFFECTING THE RIGHTS OF THE GRANTEE HEREUNDER MUST BE
CONSENTED TO BY THE GRANTEE TO BE EFFECTIVE AS AGAINST HIM. NOTWITHSTANDING THE
FOREGOING, THIS AGREEMENT MAY BE AMENDED IN WRITING SIGNED ONLY BY THE COMPANY
TO CORRECT ANY ERRORS OR AMBIGUITIES IN THIS AGREEMENT AND/OR TO MAKE SUCH
CHANGES THAT DO NOT MATERIALLY ADVERSELY AFFECT THE GRANTEE’S RIGHTS HEREUNDER.
THIS GRANT SHALL IN NO WAY AFFECT THE GRANTEE’S PARTICIPATION OR BENEFITS UNDER
ANY OTHER PLAN OR BENEFIT PROGRAM MAINTAINED OR PROVIDED BY THE COMPANY.

 

(B)                                 INCORPORATION OF STOCK PLAN; COMMITTEE
DETERMINATIONS. THE PROVISIONS OF THE STOCK PLAN ARE HEREBY INCORPORATED BY
REFERENCE AS IF SET FORTH HEREIN. IN THE EVENT OF A CONFLICT BETWEEN THIS
AGREEMENT AND THE STOCK PLAN, THE STOCK PLAN SHALL GOVERN. THE COMMITTEE WILL
MAKE THE DETERMINATIONS AND CERTIFICATIONS REQUIRED BY THIS AWARD AS PROMPTLY AS
REASONABLY PRACTICABLE FOLLOWING THE OCCURRENCE OF THE EVENT OR EVENTS
NECESSITATING SUCH DETERMINATIONS OR CERTIFICATIONS. IN THE EVENT OF A CHANGE OF
CONTROL, THE COMMITTEE WILL MAKE SUCH DETERMINATIONS WITHIN A PERIOD OF TIME
THAT ENABLES THE COMPANY TO MAKE ANY PAYMENTS DUE HEREUNDER NOT LATER THAN THE
DATE OF CONSUMMATION OF THE CHANGE OF CONTROL.

 

(C)                                  STATUS AS A PARTNER. AS OF THE GRANT DATE
SET FORTH ON SCHEDULE A, THE GRANTEE SHALL BE ADMITTED AS A PARTNER OF THE
PARTNERSHIP WITH BENEFICIAL OWNERSHIP OF THE NUMBER OF AWARD OPP UNITS ISSUED TO
THE GRANTEE AS OF SUCH DATE PURSUANT TO SECTION 3 HEREOF 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). THE
PARTNERSHIP AGREEMENT SHALL BE AMENDED FROM TIME TO TIME AS APPLICABLE TO
REFLECT THE ISSUANCE TO THE GRANTEE OF AWARD OPP UNITS PURSUANT TO SECTION 3
HEREOF, IF ANY, WHEREUPON THE GRANTEE SHALL HAVE ALL THE RIGHTS OF A LIMITED
PARTNER OF THE PARTNERSHIP WITH RESPECT TO THE NUMBER OF OPP UNITS THEN HELD BY
THE GRANTEE, AS SET FORTH IN THE PARTNERSHIP AGREEMENT, SUBJECT, HOWEVER, TO THE
RESTRICTIONS AND CONDITIONS SPECIFIED HEREIN AND IN THE PARTNERSHIP AGREEMENT.

 

17

--------------------------------------------------------------------------------

 

(D)                                 STATUS OF OPP UNITS UNDER THE STOCK PLAN.
INSOFAR AS THE OUTPERFORMANCE PLAN HAS BEEN ESTABLISHED AS AN INCENTIVE PROGRAM
OF THE COMPANY AND THE PARTNERSHIP, THE AWARD OPP UNITS ARE BOTH ISSUED AS
EQUITY SECURITIES OF THE PARTNERSHIP AND GRANTED AS AWARDS UNDER THE STOCK PLAN.
THE COMPANY WILL HAVE THE RIGHT AT ITS OPTION, AS SET FORTH IN THE PARTNERSHIP
AGREEMENT, TO ISSUE COMMON SHARES IN EXCHANGE FOR UNITS INTO WHICH AWARD OPP
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 STOCK PLAN. THE GRANTEE MUST BE
ELIGIBLE TO RECEIVE THE AWARD OPP 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 GRANTEE ACKNOWLEDGES THAT THE GRANTEE WILL HAVE NO RIGHT TO
APPROVE OR DISAPPROVE SUCH DETERMINATION BY THE COMMITTEE.

 

(E)                                  LEGEND. THE RECORDS OF THE PARTNERSHIP
EVIDENCING THE AWARD OPP UNITS SHALL BEAR AN APPROPRIATE LEGEND, AS DETERMINED
BY THE PARTNERSHIP IN ITS SOLE DISCRETION, TO THE EFFECT THAT SUCH OPP UNITS ARE
SUBJECT TO RESTRICTIONS AS SET FORTH HEREIN AND IN THE PARTNERSHIP AGREEMENT.

 

(F)                                    COMPLIANCE WITH LAW. THE PARTNERSHIP AND
THE GRANTEE WILL MAKE REASONABLE EFFORTS TO COMPLY WITH ALL APPLICABLE
SECURITIES LAWS. IN ADDITION, NOTWITHSTANDING ANY PROVISION OF THIS AGREEMENT TO
THE CONTRARY, NO OPP UNITS WILL BECOME VESTED OR BE PAID AT A TIME THAT SUCH
VESTING OR PAYMENT WOULD RESULT IN A VIOLATION OF ANY SUCH LAW.

 

(G)                                 INVESTMENT REPRESENTATIONS; REGISTRATION.
THE GRANTEE 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 AGREEMENT BY
THE GRANTEE. THE PARTNERSHIP WILL HAVE NO OBLIGATION TO REGISTER UNDER THE
SECURITIES ACT ANY OPP UNITS OR ANY OTHER SECURITIES ISSUED PURSUANT TO THIS
AGREEMENT OR UPON CONVERSION OR EXCHANGE OF OPP UNITS. THE GRANTEE AGREES THAT
ANY RESALE OF THE COMMON SHARES RECEIVED UPON THE EXCHANGE OF UNITS INTO WHICH
OPP UNITS MAY BE 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 POLICY. IN ADDITION, ANY RESALE SHALL
BE MADE IN COMPLIANCE WITH THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
OR AN APPLICABLE EXEMPTION THEREFROM, INCLUDING, WITHOUT LIMITATION, THE
EXEMPTION PROVIDED BY RULE 144 PROMULGATED THEREUNDER (OR ANY SUCCESSOR RULE).

 

(H)                                 SECTION 83(B) ELECTION. IN CONNECTION WITH
EACH SEPARATE ISSUANCE OF OPP UNITS UNDER THIS AWARD PURSUANT TO SECTION 3
HEREOF THE GRANTEE HEREBY AGREES TO MAKE AN ELECTION TO INCLUDE IN GROSS INCOME
IN THE YEAR OF TRANSFER THE APPLICABLE AWARD OPP UNITS PURSUANT TO
SECTION 83(B) OF THE CODE SUBSTANTIALLY IN THE FORM ATTACHED HERETO AS EXHIBIT C
AND TO SUPPLY THE NECESSARY INFORMATION IN ACCORDANCE WITH THE REGULATIONS
PROMULGATED THEREUNDER.

 

18

--------------------------------------------------------------------------------

 

(I)                                     SEVERABILITY. IF, FOR ANY REASON, ANY
PROVISION OF THIS AGREEMENT IS HELD INVALID, SUCH INVALIDITY SHALL NOT AFFECT
ANY OTHER PROVISION OF THIS 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 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 AGREEMENT, SHALL TO THE FULL EXTENT CONSISTENT WITH LAW CONTINUE IN FULL
FORCE AND EFFECT.

 

(J)                                     GOVERNING LAW. THIS AGREEMENT IS MADE
UNDER, AND WILL BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OF STATE OF NEW YORK,
WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICT OF LAWS OF SUCH STATE.

 

(K)                                  NO OBLIGATION TO CONTINUE POSITION AS AN
EMPLOYEE, CONSULTANT OR ADVISOR. NEITHER THE COMPANY NOR ANY AFFILIATE IS
OBLIGATED BY OR AS A RESULT OF THIS AGREEMENT TO CONTINUE TO HAVE THE GRANTEE AS
AN EMPLOYEE, CONSULTANT OR ADVISOR AND THIS AGREEMENT SHALL NOT INTERFERE IN ANY
WAY WITH THE RIGHT OF THE COMPANY OR ANY AFFILIATE TO TERMINATE THE GRANTEE’S
SERVICE RELATIONSHIP AT ANY TIME.

 

(L)                                     NOTICES. 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 GRANTEE SHALL BE
ADDRESSED TO THE GRANTEE AT THE GRANTEE’S ADDRESS AS IT APPEARS ON THE
EMPLOYMENT RECORDS OF THE COMPANY, OR AT SUCH OTHER ADDRESS AS THE COMPANY OR
THE GRANTEE MAY HEREAFTER DESIGNATE IN WRITING TO THE OTHER.

 

(M)                               WITHHOLDING AND TAXES. NO LATER THAN THE DATE
AS OF WHICH AN AMOUNT FIRST BECOMES INCLUDIBLE IN THE GROSS INCOME OF THE
GRANTEE FOR INCOME TAX PURPOSES OR SUBJECT TO THE FEDERAL INSURANCE
CONTRIBUTIONS ACT WITHHOLDING WITH RESPECT TO THIS AWARD, THE GRANTEE WILL PAY
TO THE COMPANY OR, IF APPROPRIATE, ANY OF ITS AFFILIATES, OR MAKE ARRANGEMENTS
SATISFACTORY TO THE COMMITTEE REGARDING THE PAYMENT OF, ANY UNITED STATES
FEDERAL, STATE OR LOCAL OR FOREIGN TAXES OF ANY KIND REQUIRED BY LAW TO BE
WITHHELD WITH RESPECT TO SUCH AMOUNT. THE OBLIGATIONS OF THE COMPANY UNDER THIS
AGREEMENT WILL BE CONDITIONAL ON SUCH PAYMENT OR ARRANGEMENTS, AND THE COMPANY
AND ITS AFFILIATES SHALL, TO THE EXTENT PERMITTED BY LAW, HAVE THE RIGHT TO
DEDUCT ANY SUCH TAXES FROM ANY PAYMENT OTHERWISE DUE TO THE GRANTEE.

 

(N)                                 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 AGREEMENT.

 

(O)                                 COUNTERPARTS. THIS AGREEMENT MAY BE EXECUTED
IN 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.

 

19

--------------------------------------------------------------------------------

 

(P)                                 SUCCESSORS AND ASSIGNS. THIS AGREEMENT SHALL
BE BINDING UPON AND INURE TO THE BENEFIT OF THE PARTIES HERETO AND ANY
SUCCESSORS TO THE COMPANY AND THE PARTNERSHIP, ON THE ONE HAND, AND ANY
SUCCESSORS TO THE GRANTEE, ON THE OTHER HAND, BY WILL OR THE LAWS OF DESCENT AND
DISTRIBUTION, BUT THIS AGREEMENT SHALL NOT OTHERWISE BE ASSIGNABLE OR OTHERWISE
SUBJECT TO HYPOTHECATION BY THE GRANTEE.

 

(Q)                                 409A. THIS AGREEMENT SHALL BE CONSTRUED,
ADMINISTERED AND INTERPRETED IN ACCORDANCE WITH A GOOD FAITH INTERPRETATION OF
SECTION 409A OF THE CODE. ANY PROVISION OF THIS AGREEMENT THAT IS INCONSISTENT
WITH SECTION 409A OF THE CODE, OR THAT MAY RESULT IN PENALTIES UNDER
SECTION 409A OF THE CODE, SHALL BE AMENDED, WITH THE REASONABLE COOPERATION OF
THE GRANTEE AND THE COMPANY, TO THE EXTENT NECESSARY TO BRING IT INTO COMPLIANCE
WITH SECTION 409A OF THE CODE.

 

[signature page follows]

 

20

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the undersigned have caused this Award Agreement to be
executed as of the      day of                , 2006.

 

 

 

VORNADO REALTY TRUST

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

 

 

 

 

VORNADO REALTY L.P.

 

 

 

By: Vornado Realty Trust, its general partner

 

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

GRANTEE

 

 

 

 

 

 

Name:

 

21

--------------------------------------------------------------------------------

 

EXHIBIT A

 

FORM OF LIMITED PARTNER SIGNATURE PAGE

 

The Grantee, 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 Grantee 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 Grantee:

 

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 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 AWARD OPP 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.

 

 

Signature Line for Limited Partner:

 

 

 

 

 

 

Name:

 

 

 

Date:

 

, 2006

 

 

 

Address of Limited Partner:

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

EXHIBIT B

 

GRANTEE’S COVENANTS, REPRESENTATIONS AND WARRANTIES

 

The Grantee hereby represents, warrants and covenants as follows:

 

(a)                                  The Grantee 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 Grantee 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 Grantee as a holder
of OPP Units shall not constitute an offer of OPP Units until such determination
of suitability shall be made.

 

(b)                                 The Grantee hereby represents and warrants
that

 

(i)                                     The Grantee 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 Grantee, together with the business and financial experience
of those persons, if any, retained by the Grantee to represent or advise him
with respect to the grant to him of OPP Units, the potential conversion of OPP
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 Grantee (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 Grantee understands that (A) the
Grantee 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 Grantee is or by reason of the
award of OPP Units may become subject, to his particular situation; (B) the
Grantee 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 Grantee 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 Grantee believes to be necessary and
appropriate to make an informed decision to accept this Award of OPP Units; and
(D) an investment in the Partnership and/or the Company involves substantial
risks. The Grantee has been given the opportunity to make a thorough
investigation of matters relevant to the OPP 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 Grantee has been afforded the opportunity to obtain
any additional information (including any exhibits to the Background Documents)
deemed necessary by the Grantee to verify the accuracy of information conveyed
to the Grantee. The Grantee confirms that all documents, records, and books
pertaining to his receipt of OPP Units which were requested by the Grantee have
been made available or delivered to the Grantee. The Grantee 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 OPP Units. The Grantee has relied upon, and is
making its decision solely upon, the Background Documents and other written
information provided to the Grantee by the Partnership or the Company.

 

(iii)                               The OPP Units to be issued, the Common Units
issuable upon conversion of the OPP Units and any REIT Shares issued in
connection with the redemption of any such Common Units will be acquired for the
account of the Grantee 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 participation therein, without prejudice, however, to the
Grantee’s right (subject to the terms of the OPP Units, the Stock Plan and this
Agreement) at all times to sell or otherwise dispose of all or any part of his
OPP 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 Grantee acknowledges that (A) neither the
OPP Units to be issued, nor the Common Units issuable upon conversion of the OPP
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 OPP 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 Grantee
contained herein, (C) such OPP 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 OPP Units and Common Units and
(E) neither the Partnership nor the Company has any obligation or intention to
register such OPP Units or the Common Units issuable upon conversion of the OPP
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 Grantee 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 Grantee hereby
acknowledges that because of the restrictions on transfer or assignment of such
OPP Units acquired hereby and the Common Units issuable upon conversion of the
OPP Units which are set forth in the Partnership Agreement or this Agreement,
the Grantee may have to bear the economic risk of his ownership of the OPP Units
acquired hereby and the Common Units issuable upon conversion of the OPP Units
for an indefinite period of time.

 

(v)                                 The Grantee has determined that the OPP
Units are a suitable investment for the Grantee.

 

(vi)                              No representations or warranties have been
made to the Grantee by the Partnership or the Company, or any officer, director,
shareholder, agent, or affiliate of any of them, and the Grantee has received no
information relating to an investment in the Partnership or the OPP Units except
the information specified in paragraph (b) above.

 

(c)                                  So long as the Grantee holds any OPP Units,
the Grantee shall disclose to the Partnership in writing such information as
may be reasonably requested with respect to ownership of OPP 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 Grantee hereby agrees to make an
election under Section 83(b) of the Code with respect to the OPP Units awarded
hereunder, and has delivered with this Agreement a completed, executed copy of
the election form attached hereto as Exhibit C. The Grantee agrees to file the
election (or to permit the Partnership to file such election on the Grantee’s
behalf) within thirty (30) days after the award of the OPP Units hereunder with
the IRS Service Center at which such Grantee files his personal income tax
returns, and to file a copy of such election with the Grantee’s U.S. federal
income tax return for the taxable year in which the OPP Units are awarded to the
Grantee.

 

--------------------------------------------------------------------------------

 

(e)                                  The address set forth on the signature
page of this Agreement is the address of the Grantee’s principal residence, and
the Grantee 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.

 

--------------------------------------------------------------------------------

 

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

 

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

 

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

 

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

 

(b)                                 The Taxpayer’s OPP Units vest in accordance
with the vesting provisions described in the Schedule attached hereto. Unvested
OPP 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 OPP Units with respect to which
this election is being made was $0 per OPP Unit.

 

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

 

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

 

Dated:

 

 

 

 

 

 

 

Name:

 

--------------------------------------------------------------------------------

 

SCHEDULE TO EXHIBIT C

 

Vesting Provisions of OPP Units

 

The OPP Units are subject to time-based and performance-based vesting with the
final vesting percentage equaling the product of the time-based vesting
percentage and the performance-based vesting percentage. Performance-based
vesting will be from 0-100% based on Vornado Realty Trust’s (the “Company’s”)
per-share total return to shareholders for the period from March 15, 2006 to
March 14, 2009 (or earlier in certain circumstances). Under the time-based
vesting hurdles, thirty-three and one-third percent (33.34%) of the OPP Units
will vest on the last day of the performance period (March 14, 2009) and
thirty-three and one-third percent (33.33%) of the remaining OPP Units will vest
on each of the first and second anniversaries thereof, provided that the
Taxpayer remains an employee of the Company 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 OPP Units are subject to forfeiture in the event of
failure to vest based on the passage of time or the determination of the
performance-based percentage.

 

--------------------------------------------------------------------------------

 

SCHEDULE A TO 2006 OUTPERFORMANCE PLAN AWARD AGREEMENT

 

 

Date of Award Agreement:

 

Name of Grantee:

 

Participation Percentage:

    %

Number of OPP Units Subject to Grant:

 

Grant Date:

 

 

 

 

 

 

 

 

Initials of Company representative:                   

Initials of Grantee:                   

 

--------------------------------------------------------------------------------