Exhibit 10.5

 

 

Urban Edge Properties

 

Form of 2015 Omnibus Share Plan

 

(As approved by shareholders on January 7, 2015)

 

 

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Table of Contents

 

1.

Purpose

2

 

 

 

2.

Shares Available for Awards

2

 

 

 

3.

Administration

3

 

 

 

4.

Eligibility

4

 

 

 

5.

Awards

4

 

 

 

6.

Stock Options

5

 

 

 

7.

Stock Appreciation Rights

5

 

 

 

8.

Performance Shares

6

 

 

 

9.

Restricted Stock

6

 

 

 

10.

Other Stock-Based Awards

6

 

 

 

11.

Operating Partnership Units

8

 

 

 

12.

Award Agreements

9

 

 

 

13.

Withholding

9

 

 

 

14.

Nontransferability

10

 

 

 

15.

No Right to Employment

10

 

 

 

16.

Adjustment of and Changes in Shares

10

 

 

 

17.

Amendment

11

 

 

 

18.

Section 409A

11

 

 

 

19.

Effective Date

11

 

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1.                                      Purpose

 

The purpose of the 2015 Omnibus Share Plan of Urban Edge Properties, as amended
from time to time (the “Plan”), is to promote the financial interests of Urban
Edge Properties (the “Trust”), including its growth and performance, by
encouraging employees of the Trust and its subsidiaries, including officers
(together, the “Employees”), its non-employee trustees of the Trust and
non-employee directors of its subsidiaries (together, the “Non-Employee
Trustees”), and certain non-employee advisors and consultants that provide bona
fide services to the Trust or its subsidiaries (together, the “Consultants”) to
acquire an ownership position in the Trust, enhancing the ability of the Trust
and its subsidiaries to attract and retain Employees, Non-Employee Trustees and
Consultants of outstanding ability, and providing Employees, Non-Employee
Trustees and Consultants with a way to acquire or increase their proprietary
interest in the Trust’s success and to further align the interests of the
Employees, Non-Employee Trustees and Consultants with shareholders of the Trust.

 

2.                                      Shares Available for Awards

 

Subject to the provisions of this Section 2 or any adjustment as provided in
Section 16, awards may be granted under the Plan with respect to 7,500,000 Share
Equivalents (as defined below), which, in accordance with the share counting
provisions of this Section 2, would result in the issuance of up to a maximum of
7,500,000 common shares, par value $.01, of beneficial interest in the Trust
(the “Shares”) if all awards granted under the Plan were Full Value Awards (as
defined below) and 15,000,000 Shares if all awards granted under the Plan were
not Full Value Awards.  No Participant (as defined in Section 3) who is an
Employee shall be granted during any period of 12 consecutive months stock
options, stock appreciation rights or any award intended to be
“performance-based compensation” (as that term is used in Section 162(m) of the
Internal Revenue Code of 1986, as amended (the “Code”)) with respect to more
than 15,000,000 Shares (subject to adjustment as provided in Section 16).  The
Shares issued under the Plan may be authorized and unissued Shares or treasury
Shares, as the Trust may from time to time determine.  Any Shares that are
subject to awards that are not Full Value Awards shall be counted against the
number of Share Equivalents available for the grant of awards under the Plan, as
set forth in the first sentence of this Section 2, as one-half Share Equivalent
for every Share granted pursuant to an award; any Shares that are subject to
awards that are Full Value Awards shall be counted as one Share Equivalent for
every Share granted pursuant to an award.  “Full Value Award” means an award
under the Plan other than a stock option, stock appreciation right or other
award that does not deliver to a Participant on the grant date of such award the
full value of the underlying Shares.  “Share Equivalent” shall be the measuring
unit for purposes of the Plan to determine the number of Shares that may be
subject to awards hereunder, which number of Shares shall not in any event
exceed 15,000,000, subject to the provisions of this Section 2 or any adjustment
as provided in Section 16.

 

The Committee (as defined in Section 3) may, without affecting the number of
Share Equivalents available pursuant to this Section 2, authorize the issuance
or assumption of benefits under the Plan in connection with any merger,
consolidation, acquisition of property or stock, reorganization or similar
transaction upon such terms and conditions as it may deem appropriate, subject
to compliance with Section 409A (as defined in Section 16) and any other
applicable provisions of the Code.

 

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Shares subject to an award granted under the Plan that expires unexercised, that
is forfeited, terminated or cancelled, in whole or in part, or is paid in cash
in lieu of Shares, shall thereafter again be available for grant under the Plan;
provided, however, that the number of Share Equivalents that shall again be
available for the grant under the Plan shall be increased by one Share
Equivalent for each Share that is subject to a Full Value Award at the time such
Full Value Award expires or is forfeited, terminated or cancelled and by
one-half Share Equivalent for each Share that is subject to an award that is not
a Full Value Award at the time such award expires or is forfeited, terminated or
cancelled.  Awards that use Shares as a reference but that are paid or settled
in whole or in part in cash shall not affect the number of Share Equivalents
available under the Plan pursuant to this Section 2 to the extent paid or
settled in cash.  The number of Share Equivalents available for the purpose of
awards under the Plan shall be reduced by (i) one-half of the gross number of
Shares for which stock options or stock appreciation rights are exercised,
regardless of whether any of the Shares underlying such awards are not actually
issued to the Participant as the result of a net settlement and (ii) one-half of
any Shares withheld to satisfy any tax withholding obligation with respect to
any award that is not a Full Value Award and one Share for each Share withheld
to satisfy any tax withholding obligation with respect to any Full Value Award,
as described further in Section 13.

 

The maximum aggregate number of Shares that may be issued under the Plan
pursuant to the exercise of incentive stock options within the meaning of
Section 422 of the Code shall not exceed 15,000,000 Shares (as adjusted pursuant
to the provisions of Section 16).

 

3.                                      Administration

 

The Plan shall be administered by the Compensation Committee (the “Committee”)
of the Board of Trustees of the Trust.  A majority of the Committee shall
constitute a quorum, and the acts of a majority shall be the acts of the
Committee.  Notwithstanding anything to the contrary contained herein, the Board
of Trustees may, in its sole discretion, at any time and from time to time,
grant awards or administer the Plan.  In any such case, the Board of Trustees
will have all of the authority and responsibility granted to the Committee
herein.

 

Subject to the provisions of the Plan, the Committee shall select the Employees,
Non-Employee Trustees and Consultants who will be participants in the Plan
(together, the “Participants”).  The Committee shall (i) determine the type of
awards to be made to Participants, determine the Shares or share units subject
to awards, and (ii) have the authority to interpret the Plan, to establish,
amend, and rescind any rules and regulations relating to the Plan, to determine
the terms and provisions of any agreements entered into hereunder, and to make
all other determinations necessary or advisable for the administration of the
Plan, based on, among other things, information made available to the Committee
by the management of the Trust.  The Committee may correct any defect, supply
any omission or reconcile any inconsistency in the Plan or in any award in the
manner and to the extent it shall deem desirable to carry it into effect.  The
determinations of the Committee in its administration of the Plan, as described
herein, shall be final and conclusive.

 

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4.                                      Eligibility

 

All Employees who have demonstrated significant management potential or who have
the capacity for contributing in a substantial measure to the successful
performance of the Trust, as determined by the Committee, and Non-Employee
Trustees and Consultants, as determined by the Committee, are eligible to be
Participants in the Plan.

 

5.                                      Awards

 

Awards under the Plan may consist of the following:  stock options (either
incentive stock options within the meaning of Section 422 of the Code or
non-qualified stock options), stock appreciation rights, performance shares,
grants of restricted stock and other-stock based awards, including OP Units (as
defined in Section 11).  Awards of performance shares, restricted stock or share
units and other-stock based awards may provide the Participant with dividends or
dividend equivalents and voting rights prior to vesting (whether based on a
period of time or based on attainment of specified performance conditions). 
Unless the Committee otherwise specifies in the award agreement, if dividends or
dividend equivalent rights are granted, dividends and dividend equivalents shall
be paid to the Participant at the same time as the Trust pays dividends to
common shareholders (even if the Shares subject to the underlying award are held
by the Trust) but not less than annually and not later than the fifteenth day of
the third month following the end of the calendar year in which the dividends or
dividend equivalents are credited (or, if later, the fifteenth day of the third
month following the end of the calendar year in which the dividends or dividend
equivalents are no longer subject to a “substantial risk of forfeiture” within
the meaning of Section 409A (as defined in Section 16)); provided, however, that
dividend and dividend equivalent payments in the case of an award that is
subject to performance vesting conditions shall be treated as unvested so long
as such award remains unvested, and any such dividend and dividend equivalent
payments that would otherwise have been paid during the vesting period shall
instead be accumulated (and, if paid in cash, reinvested in additional Shares
based on the Surrender Value (as defined in Section 6) of the Shares on the date
of reinvestment) and paid within 30 days following the date on which such award
is determined by the Committee to have satisfied such performance vesting
conditions.  Any dividends or dividend equivalents that are accumulated and paid
after the date specified in the preceding sentence may be treated separately
from the right to other amounts under the award.

 

Notwithstanding any other provision of the Plan to the contrary, Full Value
Awards (a) that vest on the basis of the Participant’s continued employment or
service shall be subject to a minimum vesting schedule of at least three years
(with no more than one-third of the Shares subject thereto vesting earlier than
a date 60 days prior to the first anniversary of the date on which such award is
granted and on each of the next two anniversaries of such initial vesting date)
and (b) that vest on the basis of the attainment of performance goals shall
provide for a performance period that ends no earlier than 60 days prior to the
first anniversary of the commencement of the period over which performance is
evaluated; provided, however, that the foregoing limitations shall not preclude
the acceleration of vesting of any such award upon the death, disability or
retirement of the Participant or upon an actual change in control (and not, for
example, the commencement of a tender offer for the Trust’s shares or
shareholder approval of a transaction that, if consummated, would result in an
actual change in control).  Notwithstanding the foregoing, (i) Full Value Awards
with respect to 5% of the maximum

 

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aggregate number of Share Equivalents available for the purpose of awards under
the Plan pursuant to Section 2 may be granted under the Plan to any one or more
Participants without respect to such minimum vesting provisions and (ii) Full
Value Awards granted in connection with the Spinoff (as defined in Section 19)
pursuant to a legally binding right that existed prior to the Spinoff shall not
be subject to the provisions of this paragraph and shall not be counted against
the 5% exception in clause (i).

 

6.                                      Stock Options

 

The Committee shall establish the option price at the time each stock option is
granted, which price shall not be less than 100% of the Fair Market Value (as
defined below) of the Shares on that date.  Stock options shall be exercisable
for such period as specified by the Committee but in no event may options be
exercisable more than ten years after their date of grant.  No stock option
shall be exercisable earlier than a date 60 days prior to the first anniversary
of the date on which such award is granted, except in the event of the
Participant’s retirement, death or disability or an actual change in control. 
The option price of each Share as to which a stock option is exercised shall be
paid in full at the time of such exercise.  Such payment shall be made (i) in
cash, (ii) by tender of Shares owned by the Participant valued at Surrender
Value as of the date of exercise, (iii) to the extent approved by the Committee
in its sole discretion, by surrender of all or part of the Shares issuable upon
exercise of the option by the largest whole number of Shares with a Surrender
Value that does not exceed the aggregate exercise price; provided, however, that
the Trust shall accept a cash or other payment from the Participant to the
extent of any remaining balance of the aggregate exercise price not satisfied by
such reduction in the number of whole Shares to be issued, (iv) in such other
consideration as the Committee deems appropriate, or (v) by a combination of
cash, Shares and such other consideration.

 

For purposes of the Plan, (i) “Fair Market Value” means, with respect to a
Share, the average of the high and the low prices reported for the Shares on the
applicable date as reported on the New York Stock Exchange or, if not so
reported, as determined in accordance with a valuation methodology approved by
the Committee in a manner consistent with Section 409A, unless determined as
otherwise specified herein; provided that the “Fair Market Value” for purposes
of any award granted in connection with the Spinoff pursuant to a legally
binding right that existed prior to the Spinoff may be determined based on the
volume-weighted average trading price of the Shares for up to 20 trading days
following (but not including) the date of the Spinoff, and (ii) “Surrender
Value” means, with respect to a Share, the closing price reported for the Shares
on the applicable date as reported on the New York Stock Exchange or, if not so
reported, as determined in accordance with a valuation methodology approved by
the Committee in a manner consistent with Section 409A, unless determined as
otherwise specified herein.  For purposes of the grant of any award, the
applicable date will be the trading day on which the award is granted or, if the
date the award is granted is not a trading day, the trading day immediately
prior to the date the award is granted.  For purposes of the exercise of any
award, the applicable date is the date a notice of exercise is received by the
Trust or, if such date is not a trading day, the trading day immediately
following the date a notice of exercise is received by the Trust.

 

7.                                      Stock Appreciation Rights

 

Stock appreciation rights may be granted in tandem with a stock option, in
addition to a stock option, or may be freestanding and unrelated to a stock
option.  Stock appreciation rights granted in tandem with or in addition to a
stock option may be granted either at the same time as the stock option or at a
later time.  The Committee shall establish the grant price of each stock
appreciation right granted at the time each such

 

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stock appreciation right is granted, which price shall not be less than 100% of
the Fair Market Value of the Shares subject to such award on that date.  No
stock appreciation right shall be exercisable earlier than a date 60 days prior
to the first anniversary of the date on which such award is granted, except in
the event of the Participant’s retirement, death or disability or an actual
change in control, or later than 10 years from the grant date of such award.  A
stock appreciation right shall entitle the Participant to receive from the Trust
an amount equal to the increase of the Fair Market Value of the Shares on the
exercise of the stock appreciation right over the grant price.  The Committee,
in its sole discretion, shall determine whether the stock appreciation right
shall be settled in cash, Shares or a combination of cash and Shares.

 

8.                                      Performance Shares

 

Performance shares may be granted in the form of actual Shares or share units
having a value equal to an identical number of Shares.  In the event that a
certificate is issued in respect of Shares subject to a grant of performance
shares, such certificate shall be registered in the name of the Participant but
shall be held by the Trust until the time the Shares subject to the grant of
performance shares are earned.  The performance conditions and the length of the
performance period shall be determined by the Committee.  The Committee, in its
sole discretion, shall determine whether performance shares granted in the form
of share units shall be paid in cash, Shares, or a combination of cash and
Shares.

 

Notwithstanding anything to the contrary herein, performance shares granted
under this Section 8 may, at the discretion of the Committee, be granted in a
manner which is intended to be deductible by the Trust under Section 162(m) of
the Code.  In such event, the Committee shall follow procedures substantially
equivalent to those set forth in Section 10 for Performance-Based Awards (as
defined in Section 10).

 

9.                                      Restricted Stock

 

Restricted stock may be granted in the form of actual Shares or share units
having a value equal to an identical number of Shares.  In the event that a
certificate is issued in respect of Shares subject to a grant of restricted
stock, such certificate shall be registered in the name of the Participant but
shall be held by the Trust until the end of the restricted period.  The
employment conditions and the length of the period for vesting of restricted
stock shall be established by the Committee at time of grant.  The Committee, in
its sole discretion, shall determine whether restricted stock granted in the
form of share units shall be paid in cash, Shares, or a combination of cash and
Shares.

 

Notwithstanding anything to the contrary herein, restricted stock granted under
this Section 9 may, at the discretion of the Committee, be granted in a manner
which is intended to be deductible by the Trust under Section 162(m) of the
Code.  In such event, the Committee shall follow procedures substantially
equivalent to those set forth in Section 10 for Performance-Based Awards.

 

10.                               Other Stock-Based Awards

 

Other types of equity-based or equity-related awards (including the grant or
offer for sale of unrestricted Shares and performance stock and performance
units settled in

 

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shares or cash) may be granted under such terms and conditions as may be
determined by the Committee in its sole discretion.

 

Notwithstanding anything to the contrary herein, any other stock-based awards
may, at the discretion of the Committee, be granted in a manner that is intended
to be deductible by the Trust under Section 162(m) of the Code (a
“Performance-Based Award”).  In such event, the Committee shall follow the
following procedures:

 

A Participant’s Performance-Based Award shall be determined based on the
attainment of written objective performance goals approved by the Committee for
a performance period generally of one year established by the Committee
(i) while the outcome for that performance period is substantially uncertain and
(ii) no more than 90 days after the commencement of the performance period to
which the performance goal relates or, if less, the number of days which is
equal to 25% of the relevant performance period.  At the same time as the
performance goals are established, the Committee will prescribe a formula to
determine the amount of the Performance-Based Award that may be payable based
upon the level of attainment of the performance goal during the performance
period.

 

The performance goals shall be based on one or more of the following business
criteria (either separately or in combination) with regard to the Trust (or a
subsidiary, division, other operational unit or administrative department of the
Trust):  (i) pre-tax income, (ii) after-tax income, (iii) net income (meaning
net income as reflected in the Trust’s financial reports for the applicable
period, on an aggregate, diluted and/or per share basis), (iv) operating income,
(v) cash flow, (vi) earnings per share, (vii) return on equity, (viii) return on
invested capital or assets, (ix) cash and/or funds available for distribution,
(x) appreciation in the Fair Market Value of Shares, (xi) return on investment,
(xii) total return to shareholders, (xiii) net earnings growth, (xiv) stock
appreciation (meaning an increase in the price or value of the Shares after the
date of grant of an award and during the applicable period), (xv) related return
ratios, (xvi) increase in revenues, (xvii) net earnings, (xviii) changes (or the
absence of changes) in the per share or aggregate market price of the Shares,
(xix) number of securities sold, (xx) earnings before any one or more of the
following items:  interest, taxes, depreciation or amortization for the
applicable period, as reflected in the Trust’s financial reports for the
applicable period, (xxi) total revenue growth (meaning the increase in total
revenues after the date of grant of an award and during the applicable period,
as reflected in the Trust’s financial reports for the applicable period),
(xxii) total shareholder return, (xxiii) funds from operations, as determined
and reported by the Trust in its financial reports and (xxiv) increase in net
asset value per Share.

 

Performance criteria may be absolute amounts or percentages of amounts or may be
relative to the performance of a peer group of real estate investment trusts or
other corporations or indices.

 

Except as otherwise expressly provided, all financial terms are used as defined
under Generally Accepted Accounting Principles (“GAAP”) and all determinations
shall be made in accordance with GAAP, as applied by the Trust in the
preparation of its periodic reports to shareholders.

 

In addition, the performance goals may be based upon the attainment of specified
levels of Trust (or subsidiary, division, other operational unit or
administrative department

 

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of the Trust) performance under one or more of the measures described above
relative to the performance of other real estate investment trusts or the
historic performance of the Trust.  To the extent permitted by Section 162(m) of
the Code, unless the Committee provides otherwise at the time of establishing
the performance goals, for each fiscal year of the Trust, the Committee may
(i) designate additional business criteria on which the performance goals may be
based or (ii) provide for objectively determinable adjustments, modifications or
amendments, as determined in accordance with GAAP, to any of the performance
criteria described above for one or more of the items of gain, loss, profit or
expense:  (A) determined to be extraordinary or unusual in nature or infrequent
in occurrence, (B) related to the disposal of a segment of a business,
(C) related to a change in accounting principle under GAAP, (D) related to
discontinued operations that do not qualify as a segment of business under GAAP,
and (E) attributable to the business operations of any entity acquired by the
Trust during the fiscal year.

 

Following the completion of each performance period, the Committee shall have
the sole discretion to determine, based on information made available to the
Committee by the management of the Trust, whether the applicable performance
goals have been met with respect to a given Participant and, if they have, shall
so certify and ascertain the amount of the applicable Performance-Based Award. 
No Performance-Based Awards will be paid for such performance period until such
certification is made by the Committee.  The amount of the Performance-Based
Award actually paid to a given Participant may be less (but not more) than the
amount determined by the applicable performance goal formula, at the discretion
of the Committee.  The amount of the Performance-Based Award determined by the
Committee for a performance period shall be paid to the Participant at such time
as determined by the Committee in its sole discretion, after the end of such
performance period and after the Committee’s certification described above.

 

11.                               Operating Partnership Units

 

Awards may be granted under the Plan in the form of undivided fractional limited
partnership interests in Urban Edge Properties LP (together with any successor
entity, the “Operating Partnership”), a Delaware limited partnership, the entity
through which the Trust conducts its business and an entity that has elected to
be treated as a partnership for federal income tax purposes, of one or more
classes (“OP Units”) established pursuant to the Operating Partnership’s
agreement of limited partnership, as amended from time to time.  Awards of OP
Units shall be valued by reference to, or otherwise determined by reference to
or based on, Shares.  OP Units awarded under the Plan may be (1) convertible,
exchangeable or redeemable for other limited partnership interests in the
Operating Partnership (including OP Units of a different class or series) or
Shares, or (2) valued by reference to the book value, fair value or performance
of the Operating Partnership.  Awards of OP Units are intended to qualify as
“profits interests” within the meaning of IRS Revenue Procedure 93-27, as
clarified by IRS Revenue Procedure 2001-43, with respect to a Participant in the
Plan who is rendering services to or for the benefit of the Operating
Partnership, including its subsidiaries.

 

For purposes of calculating the number of Shares underlying an award of OP Units
relative to the total number of Share Equivalents available for issuance under
the Plan, the Committee shall establish in good faith the maximum number of
Shares to which a Participant receiving such award of OP Units may be entitled
upon fulfillment of all applicable conditions set forth in the relevant award
documentation, including vesting conditions, partnership capital account
allocations, value accretion factors, conversion

 

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ratios, exchange ratios and other similar criteria.  If and when any such
conditions are no longer capable of being met, in whole or in part, the number
of Shares underlying such awards of OP Units shall be reduced accordingly by the
Committee, and the number of Share Equivalents shall be increased by one Share
Equivalent for each Share so reduced.  Awards of OP Units may be granted either
alone or in addition to other awards granted under the Plan.  The Committee
shall determine the eligible Participants to whom, and the time or times at
which, awards of OP Units shall be made; the number of OP Units to be awarded;
the price, if any, to be paid by the Participant for the acquisition of such OP
Units; and the restrictions and conditions applicable to such award of OP
Units.  Conditions may be based on continuing employment (or other service
relationship), computation of financial metrics and/or achievement of
pre-established performance goals and objectives, with related length of the
service period for vesting, minimum or maximum performance thresholds,
measurement procedures and length of the performance period to be established by
the Committee at the time of grant, in its sole discretion.  The Committee may
allow awards of OP Units to be held through a limited partnership, or similar
“look-through” entity, and the Committee may require such limited partnership or
similar entity to impose restrictions on its partners or other beneficial owners
that are not inconsistent with the provisions of this Section 11.  The
provisions of the grant of OP Units need not be the same with respect to each
Participant.

 

Notwithstanding Section 5 of the Plan, the award agreement or other award
documentation in respect of an award of OP Units may provide that the recipient
of an award under this Section 11 shall be entitled to receive, currently or on
a deferred or contingent basis, dividends or dividend equivalents with respect
to the number of Shares underlying the award or other distributions from the
Operating Partnership prior to vesting (whether based on a period of time or
based on attainment of specified performance conditions), as determined at the
time of grant by the Committee, in its sole discretion, and the Committee may
provide that such amounts (if any) shall be deemed to have been reinvested in
additional Shares or OP Units.

 

OP Units awarded under this Section 11 may be issued for no cash consideration.

 

12.                               Award Agreements

 

Each award under the Plan shall be evidenced by an agreement setting forth the
terms and conditions, as determined by the Committee, which shall apply to such
award, in addition to the terms and conditions specified in the Plan.

 

13.                              Withholding

 

The Trust shall have the right to deduct from any payment to be made pursuant to
the Plan, or to require prior to the issuance or delivery of any Shares or the
payment of cash under the Plan, any taxes required by law to be withheld
therefrom.  The Committee, in its sole discretion, may permit a Participant who
is an employee of the Trust or its subsidiaries to elect to satisfy such
withholding obligation by having the Trust retain the number of Shares whose
Fair Market Value equals the minimum statutory amount of taxes required by
applicable law to be withheld.  Any fraction of a Share required to satisfy such
obligation shall be disregarded, and the amount due shall instead be paid in
cash to or by the Participant, as the case may be.

 

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14.                               Nontransferability

 

No award under the Plan shall be assignable or transferable except by will or
the laws of descent and distribution, and no right or interest of any
Participant shall be subject to any lien, obligation or liability of the
Participant.  Notwithstanding the foregoing, the Committee may determine, at the
time of grant or thereafter, that an award (other than stock options intended to
be incentive stock options within the meaning of Section 422 of the Code) is
transferable by the Participant to such Participant’s immediate family members
(or trusts, partnerships, or limited liability companies established for such
immediate family members).  For this purpose, immediate family member means,
except as otherwise defined by the Committee, the Participant’s children,
stepchildren, grandchildren, parents, stepparents, grandparents, spouse,
siblings (including half brothers and sisters), in-laws and persons related by
reason of legal adoption.  Such transferees may transfer an award only by will
or the laws of descent or distribution.  An award transferred pursuant to this
Section 14 shall remain subject to the provisions of the Plan, and shall be
subject to such other rules as the Committee shall determine.  Upon transfer of
a stock option, any related stock appreciation right shall be canceled.  Except
in the case of a holder’s incapacity, an award shall be exercisable only by the
holder thereof.

 

15.                               No Right to Employment

 

No person shall have any claim or right to be granted an award, and the grant of
an award shall not be construed as giving a Participant any right to continue
his or her service to the Trust or its subsidiaries as an Employee, Non-Employee
Trustee or Consultant.  Further, the Trust and its subsidiaries expressly
reserve the right at any time to dismiss a Participant free from any liability,
or any claim under the Plan, except as provided herein or in any agreement
entered into hereunder.

 

16.                               Adjustment of and Changes in Shares

 

In the event of any change in the outstanding Shares by reason of any share
dividend or split, reverse split, recapitalization, merger, consolidation,
spinoff, combination or exchange of Shares or other corporate change, or any
distributions to common shareholders other than regular cash dividends, the
Committee shall make such substitution or adjustment, if any, as it deems to be
equitable, as to (i) the number of Share Equivalents for which awards may be
granted under the Plan, (ii) the number or kind of Shares or other securities
issued or reserved for issuance pursuant to outstanding awards, (iii) the
individual Participant limitation set forth in Section 2, and (iv) the number of
Shares set forth in Section 2 that can be issued through incentive stock options
within the meaning of Section 422 of the Code; provided, however, that no such
substitution or adjustment shall be required if the Committee determines that
such action could cause an award to fail to satisfy the conditions of an
applicable exception from the requirements of Section 409A of the Code
(“Section 409A”) or otherwise could subject a Participant to the additional tax
imposed under Section 409A in respect of an outstanding award; and further
provided that no Participant shall have the right to require the Committee to
make any adjustment or substitution under this Section 16 or have any claim or
right whatsoever against the Trust or any of its subsidiaries or affiliates or
any of their respective trustees, directors, officer or employees in respect of
any action taken or not taken under this Section 16.

 

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17.                               Amendment

 

The Committee may amend or terminate the Plan or any portion thereof from time
to time, provided that no amendment shall be made without shareholder approval
if such amendment (i) would increase the maximum aggregate number of Shares that
may be issued under the Plan (other than pursuant to Section 16), (ii) would
materially modify the requirements for participation in the Plan, (iii) would
result in a material increase in the benefits accrued to Participants under the
Plan, (iv) would reduce the exercise price of outstanding stock options or stock
appreciation rights or cancel outstanding stock options or stock appreciation
rights in exchange for cash, other awards or stock options or stock appreciation
rights with an exercise price that is less than the exercise price of the
original stock options or stock appreciation rights (other than pursuant to
Section 16) or (v) requires shareholder approval to comply with any applicable
laws, regulations or rules, including the rules of a securities exchange or
self-regulatory agency.

 

18.                               Section 409A

 

It is the Trust’s intent that awards under the Plan be exempt from, or comply
with, the requirements of Section 409A, and that the Plan be administered and
interpreted accordingly.  If and to the extent that any award made under the
Plan is determined by the Trust to constitute “non-qualified deferred
compensation” subject to Section 409A and is payable to a Participant by reason
of the Participant’s termination of employment, then (a) such payment or benefit
shall be made or provided to the Participant only upon a “separation from
service” as defined for purposes of Section 409A under applicable regulations
and (b) if the Participant is a “specified employee” (within the meaning of
Section 409A and as determined by the Trust), such payment or benefit shall not
be made or provided before the date that is six months after the date of the
Participant’s separation from service (or the Participant’s earlier death).

 

19.                               Effective Date

 

The Plan was adopted on October 23, 2014 by the Compensation Committee of the
Board of Trustees of Vornado Realty Trust, subject to the approval of Vornado
Realty L.P. (as the sole shareholder of the Trust), and shall be effective as of
the date the Trust is separated (the “Spinoff”) from Vornado Realty Trust (the
“Effective Date”).  Subject to earlier termination pursuant to Section 17, the
Plan shall have a term of ten years from the Effective Date; provided, however,
that all awards made under the Plan before its termination, and the Committee’s
authority to administer the terms of such awards, will remain in effect until
such awards have been satisfied or terminated in accordance with the terms and
provisions of the Plan and the applicable award agreements.

 

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