Exhibit 10.3

 

SL GREEN REALTY CORP.
2011 LONG-TERM OUTPERFORMANCE PLAN

AWARD AGREEMENT

 

Name of Grantee:                                             (“Grantee”)
No. of LTIP Units:                                                  
Maximum Award Dollar Amount:  $      
Grant Date:                          , 2012

 

RECITALS

 

A.            The Grantee is an employee of SL Green Realty Corp. (“SL Green” or
the “Company”) and its subsidiary SL Green Operating Partnership, L.P., through
which SL Green conducts substantially all of its operations (the “Partnership”).

 

B.            The Company has adopted the 2011 Long-Term Outperformance Plan
(the “Outperformance Plan”) to provide the Company’s employees with incentive
compensation.  The Outperformance Plan was adopted effective as of August 31,
2011 by the Compensation Committee (the “Committee”) of the Board of Directors
of SL Green (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 SL Green common stock reserved for issuance
under the SL Green Realty Corp. Second Amended and Restated 2005 Stock Option
and Incentive Plan (as amended, modified or supplemented from time to time, the
“Option Plan”).  This award agreement (this “Agreement”) evidences an award to
the Grantee under the Outperformance Plan (the “Award”), which is subject to the
terms and conditions set forth herein.

 

C.            The Grantee was selected by the Committee to receive the Award and
effective as of [                  ], 2012, caused the Partnership to (1) issue
to the Grantee the number of LTIP Units (as defined herein) set forth above and
(2) to award the Grantee the percentage of the Outperformance Pool (as defined
herein) set forth above.

 

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 Option Plan as set forth in the
Option Plan.

 

2.             Definitions.  Capitalized terms used herein without definitions
shall have the meanings given to those terms in the Option Plan. In addition, as
used herein:

 

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“Additional Share Baseline Value” means, with respect to an Additional Share,
the gross proceeds received by SL Green or the Partnership upon the issuance of
such Additional Share, which amount shall be deemed to equal the price to the
public if such Additional Share is issued in a public offering or, 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 can be imputed, the Common Stock Price on the date of issuance.

 

“Additional Shares” means, as of a particular date, the sum of (a) the number of
shares of Common Stock plus (b) the product of the Conversion Factor then in
effect multiplied by the number of Units (other than those issued to SL Green),
in the case of each (a) and (b), to the extent issued after September 1, 2011
and on or before such date in a capital raising transaction, in exchange for
assets or upon the acquisition of another entity, but specifically excluding,
without limitation, shares of Common Stock issued upon exercise of stock options
and restricted shares of Common Stock issued to employees or other persons or
entities in exchange for services provided to SL Green.

 

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

 

“Baseline” means, as of a particular date, an amount representing (a) the
Baseline Value multiplied by (i) the Initial Shares, and (ii) the sum of 100%
plus the Target 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 (A) 100% plus (B) the product of the Target
Return Percentage multiplied by a fraction the numerator of which is the number
of days from the issuance of such Additional Share to and including the
Measurement Date and the denominator of which is the number of days from and
including September 1, 2011 to and including the Measurement Date; provided that
if the Valuation Date occurs prior to August 31, 2014 as a result of a Change of
Control, then for purposes of this definition in connection with the calculation
of the Outperformance Pool as of the Valuation Date, the Measurement Date shall
be the date on which such Change of Control occurs and the Target Return
Percentage shall equal 25% multiplied by the Fraction.

 

“Baseline Value” means $73.38.

 

“Change of Control” means:

 

(a)           any “person,” including a “group” (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act), together with all “affiliates”
and “associates” (as such terms are defined in Rule 12b-2 under the Exchange
Act) of such person, becoming the “beneficial owner” (as such term is defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing 25% or more of either (i) the combined voting power of the
Company’s then outstanding securities having the right to vote in an election of
the Board (“Voting Securities”) or (ii) the then outstanding shares of all
classes of stock of the Company (in either such case other than as a result of
the acquisition of securities directly from the Company); or

 

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(b)           the members of the Board at the beginning of any consecutive
24-calendar-month period commencing on or after the initial effective date of
the Outperformance Plan (the “Incumbent Directors”) ceasing for any reason
including without limitation, as a result of a tender offer, proxy contest,
merger or similar transaction, to constitute at least a majority of the Board;
provided that any person becoming a director of the Company whose election or
nomination was approved by a vote of at least a majority of the then Incumbent
Directors, shall, for purposes hereof, be considered an Incumbent Director; or

 

(c)           there is consummated (i) any consolidation or merger of the
Company or any subsidiary that would result in the Voting Securities of the
Company outstanding immediately prior to such merger or consolidation
representing (either by remaining outstanding or by being converted into voting
securities of the surviving entity) less than 50% of the total voting power of
the voting securities of the surviving entity outstanding immediately after such
merger or consolidation or ceasing to have the power to elect at least a
majority of the board of directors or other governing body of such surviving
entity or (ii) any sale, lease, exchange or other transfer (in one transaction
or a series of transactions contemplated or arranged by any party as a single
plan) of all or substantially all of the assets of the Company, other than a
sale, lease, exchange or other transfer to an entity, at least 50% of the
combined voting power of the voting securities of which are owned by “persons”
(as defined above) in substantially the same proportion as their ownership of
the Company immediately prior to such sale, lease, exchange or other transfer;
or

 

(d)           the shareholders of the Company approving any plan or proposal for
the liquidation or dissolution of the Company.

 

Notwithstanding the foregoing clause (a), an event described in clause (a) shall
not be a Change of Control if such event occurs solely as the result of an
acquisition of securities by the Company which, by reducing the number of shares
of stock or other Voting Securities outstanding, increases (x) the proportionate
number of shares of stock of the Company beneficially owned by any “person” (as
defined above) to 25% or more of the shares of stock then outstanding or (y) the
proportionate voting power represented by the Voting Securities beneficially
owned by any “person” (as defined above) to 25% or more of the combined voting
power of all then outstanding Voting Securities; provided, however, that if any
“person” referred to in clause (x) or (y) of this sentence shall thereafter
become the beneficial owner of any additional stock of the Company or other
Voting Securities (other than pursuant to a share split, stock dividend, or
similar transaction), then a Change of Control shall be deemed to have occurred
for purposes of the foregoing clause (a).

 

“Class A Units” has the meaning given to that term in the Partnership Agreement.

 

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

 

“Common Stock” means SL Green’s Common Stock, par value $.01 per share, either
currently existing or authorized hereafter.

 

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“Common Stock Price” means, as of a particular date, the average of the Fair
Market Value of one share of the Common Stock for 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); provided that if such
date is the date upon which a Transactional Change of Control occurs, the Common
Stock Price as of such date shall be equal to the fair market value in cash, as
determined by the Committee, of the total consideration paid or payable in the
transaction resulting in the Transactional Change of Control for one share of
Common Stock.

 

“Conversion Factor” has the meaning given to that term in the Partnership
Agreement.

 

“Disability” means, unless otherwise provided in any Employment Agreement, a
disability which renders the Grantee incapable of performing all of his or her
material duties for a period of at least 150 consecutive or non-consecutive days
during any consecutive twelve-month period.

 

“Dividend Value” means, as of a particular date, the aggregate amount of
dividends and other distributions paid on one share of Common Stock between
September 1, 2011 and such date (excluding dividends and distributions paid in
the form of additional shares of Common Stock unless adjustment is otherwise
made pursuant to Section 8 hereof).

 

“Effective Date” means September 1, 2011.

 

“Employment Agreement” means, as of a particular date, the Grantee’s employment
agreement with the Company in effect as of that date.

 

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

 

“Fair Market Value” of the Common Stock as of a particular date means (a) if
shares of Common Stock are then listed on a national stock exchange, the closing
sales price per share on the principal national stock exchange on which shares
of Common Stock are listed on such date (or, if such date is not a trading date
on which there was a sale of such shares on such exchange, the last preceding
date on which there was a sale of shares of Common Stock on such exchange),
(b) if shares of Common Stock are not then listed on a national stock exchange
but are then traded on an over-the-counter market, the average of the closing
bid and asked prices for the shares of Common Stock in the principal
over-the-counter market on which such shares are traded on such date (or, if
such date is not a trading date on which there was a sale of such shares on such
market, for the last preceding date on which there was a sale of such shares in
such market), or (c) if shares of Common Stock are not then listed on a national
stock exchange or traded on an over-the-counter market, such value as the
Committee in its discretion may in good faith determine; provided that, where
shares of Common Stock are so listed or traded, the Committee may make such
discretionary determinations where the shares of such stock have not been traded
for 10 trading days.

 

“Family Member”, of a Grantee, means the Grantee’s child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-

 

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law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including
adoptive relationships, any person sharing the Grantee’s household (other than a
tenant of the Grantee), a trust in which these persons (or the Grantee) own more
than 50 percent of the beneficial interest, a foundation in which these persons
(or the Grantee) control the management of assets, and any other entity in which
these persons (or the Grantee) own more than 50 percent of the voting interests.

 

“First Interim Valuation Date” has the meaning set forth in Section 3 hereof.

 

“Fraction” means the number of whole calendar months that have elapsed since the
Effective Date divided by 36.

 

“Initial Shares” means the Total Shares less the Additional Shares.

 

“LTIP Units” means Partnership Units, as such term is defined in the Partnership
Agreement, issued pursuant to award agreements as profits interests under the
Outperformance Plan having the rights, voting powers, restrictions, limitations
as to distributions, qualifications and terms and conditions of redemption set
forth herein and in the Partnership Agreement.

 

“Maximum Award Dollar Amount” means the amount set forth as such above the
recitals in this Agreement.

 

“Maximum Outperformance Pool Amount” means, as of a particular date, the
aggregate maximum award dollar amount of all awards granted and not forfeited
under the Outperformance Plan as of such date, which amount shall not exceed
$85,000,000.

 

“Measurement Date” means August 31, 2014, except as otherwise defined for
purposes of the definition of Baseline in certain circumstances, as described in
such definition.

 

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

 

“Outperformance Pool” means, as of a particular date, a dollar amount calculated
as follows: subtract the Baseline from the Total Return, in each case as of such
date, and multiply the resulting amount (or, if the resulting amount would be
negative, zero) by 10%; provided, however, that in no event shall the
Outperformance Pool as of such date exceed the Maximum Outperformance Pool
Amount as of such date.  Notwithstanding the foregoing, if the date as of which
the Outperformance Pool is being calculated is the date upon which a Change of
Control occurs and is on or after September 1, 2012, then the Outperformance
Pool shall be increased to equal (a) the amount of the Outperformance Pool
calculated in accordance with the preceding sentence multiplied by (b) the
lesser of (i) 200% or (ii) the sum of 100% plus a fraction the numerator of
which is 36 less the number of whole calendar months that have elapsed since the
Effective Date and the denominator of which is the number of whole calendar
months that have elapsed since the Effective Date.

 

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“Participation Percentage” means, as of a particular date, the Maximum Award
Dollar Amount divided by Maximum Outperformance Pool Amount as of such date.

 

“Partnership Agreement” means the First Amended and Restated Agreement of
Limited Partnership of the Partnership dated as of August 20, 1997 among the
Company and the limited partners party thereto, as amended from time to time.

 

“Second Interim Valuation Date” has the meaning set forth in Section 3 hereof.

 

“Target Return Percentage” means 25%, except as otherwise defined for purposes
of the definition of Baseline in certain circumstances, as described in such
definition.

 

“Total Return” means, as of a particular date, an amount equal to the sum of
(a) the Total Shares as of such date multiplied by (i) if such date is the date
upon which a Transactional Change of Control occurs, the Common Stock Price on
such date or (ii) in all other circumstances, the highest Common Stock Price
where each of the days included in the 30-day period used to calculate such
Common Stock Price is within the period of one hundred and twenty (120) days
immediately preceding such date, plus (b) the Dividend Value, as of such date,
multiplied by the Initial Shares, plus (c) an amount equal to the total of all
dividends and other distributions in respect of Additional Shares actually paid
between September 1, 2011 and such date (excluding dividends and distributions
paid in the form of additional shares of Common Stock or Units).

 

“Total Shares” means, as of a particular date, the sum of (a) the number of
shares of Common Stock plus (b) the product of the Conversion Factor then in
effect multiplied by the number of Units (other than those owned by SL Green),
in the case of each (a) and (b), to the extent outstanding on such date.

 

“Transactional Change of Control” means (a) a Change of Control described in
clause (a) of the definition thereof where the “person” or “group” makes a
tender offer for Common Stock, or (b) a Change of Control described in clauses
(c)(i) or (ii) of the definition thereof.

 

“Units” means all Class A Units, Class B Units (as defined in the Partnership
Agreement) and other Partnership Units (as defined in the Partnership Agreement)
with economic attributes substantially similar to Class A Units or Class B Units
as determined by the Committee, outstanding or issuable upon the conversion,
exercise, exchange or redemption of any securities of any kind convertible,
exercisable, exchangeable or redeemable for Class A Units, Class B Units or such
other Partnership Units (other than LTIP Units issued under the Outperformance
Plan or LTIP Units issued under any similar outperformance program prior to the
determination of any performance based vesting hurdles with respect thereto).

 

“Valuation Date” means the earliest of (a) the Measurement Date and (b) the date
upon which a Change of Control shall occur.

 

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3.             Outperformance Award.

 

(a)           The Grantee is hereby granted an Award consisting of the number of
LTIP Units set forth above (“Award LTIP Units”), which (i) will be subject to
forfeiture or increase to the extent provided in this Section 3 as set forth
below and (ii) will be subject to vesting as provided in Section 4 hereof.

 

(b)           In order to determine the number of Award LTIP Units earned by the
Grantee as of the Valuation Date, the First Interim Valuation Date (as defined
below) or the Second Interim Valuation Date (as defined below), the Committee
will determine the Outperformance Pool (if any) as of such date and calculate
the “OPP Unit Equivalent” by multiplying (w) the Outperformance Pool calculated
as of such date by (x) the Grantee’s Participation Percentage as of such date,
then divide the result by the product of (y) the Common Stock Price calculated
as of such date multiplied by (z) the Conversion Factor on such date.

 

(c)           In the event the Outperformance Pool would have reached the
Maximum Outperformance Pool Amount on each day of a period of forty-five (45)
consecutive days ending on or after the first (1st) anniversary of the Effective
Date but prior to the second (2nd) anniversary of the Effective Date (assuming
that all awards forfeited at any time during any such period were forfeited as
of the beginning of such period), then, as of the last day (the “First Interim
Valuation Date”) of the first such period that occurs, the Grantee shall earn a
number of Award LTIP Units equal to one-third (1/3) of the OPP Unit Equivalent
calculated as of the First Interim Valuation Date pursuant to the calculation
provided in Section 3(b).

 

(d)           In the event the Outperformance Pool would have reached the
Maximum Outperformance Pool Amount on each day of a period of forty-five (45)
consecutive days ending on or after the second (2nd) anniversary of the
Effective Date but prior to the third (3rd) anniversary of the Effective Date
(assuming that all awards forfeited at any time during any such period were
forfeited as of the beginning of such period), then, as of the last day (the
“Second Interim Valuation Date”) of the first such period that occurs, the
Grantee shall earn a number of Award LTIP Units equal to two-thirds (2/3) of the
OPP Unit Equivalent calculated as of the Second Interim Valuation Date pursuant
to the calculation provided in Section 3(b) (or if Award LTIP Units were
previously earned by the Grantee pursuant to Section 3(c), an additional number
of Award LTIP Units equal to the greater of (i) one-third (1/3) of the OPP Unit
Equivalent calculated as of the Second Interim Valuation Date or (ii) two-thirds
(2/3) of the OPP Unit Equivalent calculated as of the Second Interim Valuation
Date minus the number of Award LTIP Units previously earned by the Grantee
pursuant to Section 3(c) above).

 

(e)           As of the Valuation Date, the Committee shall perform the final
calculation pursuant to Section 3(b) to determine the number of Award LTIP Units
earned by the Grantee.  As of the Valuation Date, the Grantee shall earn a
number of Award LTIP Units equal to the OPP Unit Equivalent as of the Valuation
Date (or (i) if Award LTIP Units were previously earned by the Grantee pursuant
to Section 3(c) but not Section 3(d), an additional number of Award LTIP Units
equal to the greater of (A) two-thirds (2/3) of the OPP Unit Equivalent
calculated as of the Valuation Date or (B) the OPP Unit Equivalent calculated as
of the Valuation Date minus the number of Award LTIP Units previously earned by
the Grantee pursuant to

 

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Section 3(c); or (ii) if Award LTIP Units were previously earned by the Grantee
pursuant to Section 3(d), an additional number of Award LTIP Units equal to the
greater of (A) one-third (1/3) of the OPP Unit Equivalent calculated as of the
Valuation Date or (B) the OPP Unit Equivalent calculated as of the Valuation
Date minus the number of Award LTIP Units previously earned by the Grantee
pursuant to Sections 3(c) and 3(d).  As of the Valuation Date, the Grantee shall
automatically forfeit any Award LTIP Units that are not earned as of or prior to
the Valuation Date pursuant to Sections 3(c), 3(d) or 3(e).

 

(f)            If the Grantee earns any Award LTIP Units as of the First Interim
Valuation Date, the Second Interim Valuation Date or the Valuation Date pursuant
to Section 3(c), 3(d) or 3(e) above, respectively, then, as of the date on which
such Award LTIP Units are earned, the Grantee will also earn an additional
number of Award LTIP Units equal to the result of performing the following
calculation, which will be performed by the Committee:

 

(W*X)-Y

Z

 

Where:

 

W= the number of Award LTIP Units earned as of such date pursuant to
Section 3(c), 3(d) or 3(e) above, as applicable, multiplied by the Conversion
Factor on such date;

 

X= the Dividend Value as of such date;

 

Y= the Special LTIP Unit Distribution (as defined in Exhibit F to the
Partnership Agreement) payable with respect to the number of Award LTIP Units
earned as of such date (including pursuant to this Section 3(f)); and

 

Z= the Common Stock Price calculated as of such date multiplied by the
Conversion Factor on such date.

 

(g)           If the total number of Award LTIP Units earned as of the First
Interim Valuation Date, the Second Interim Valuation Date or the Valuation Date
is greater than the number of Award LTIP Units that have not previously been
earned hereunder, then, upon the Committee’s determination that such Award LTIP
Units have been earned:  (i) the Grantee, as of such date, shall be
automatically granted a number of additional LTIP Units equal to the difference,
and such additional LTIP Units shall be added to the Award LTIP Units and
thereby become part of this Award, (ii) the Partnership shall pay to the Grantee
an amount in cash equal to 10% of the product of (A) the number of additional
LTIP Units granted pursuant to clause (i) above, multiplied by (B) the
Conversion Factor on the date such additional LTIP Units are granted and (C) the
Dividend Value on the date such additional LTIP Units are granted, (iii) the
Company and the Partnership shall take such corporate or partnership action as
is necessary to accomplish the grant of such additional LTIP Units, (iv) the
Grantee shall execute and deliver in connection with such grant such documents,
comparable to the documents executed and

 

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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
and (v) thereafter the term Award LTIP Units will refer collectively to the
Award LTIP Units prior to such additional grant plus such additional LTIP Units.

 

(h)           The Grantee shall have no rights to Award LTIP Units earned
pursuant to this Section 3 until the number of such Award LTIP Units are
determined by the Committee; provided that the Committee shall make the
determination of the number of Award LTIP Units earned as of the Valuation Date,
the First Interim Valuation Date and the Second Interim Valuation Date
reasonably promptly following such date and, following such determination, any
Award LTIP Units earned will be deemed to have been earned as of the Valuation
Date, the First Interim Valuation Date and/or the Second Interim Valuation Date,
as applicable, for purposes of determining the Grantee’s rights hereunder.

 

4.             Vesting; Termination of Grantee’s Employment; Change of Control;
Death and Disability.

 

(a)           Subject to the provisions set forth below, the LTIP Units earned
pursuant to Section 3 shall become vested as follows: (i) one-half (1/2) of the
Award LTIP Units shall become vested on August 31, 2014; and (ii) one-half (1/2)
of the Award LTIP Units shall become vested on August 31, 2015.  Except as
provided in Sections 4(b) and 4(c) below, if at any time the Grantee shall cease
to be an employee of the Company for any reason, then all Award LTIP Units that
remain unvested at such time shall automatically and immediately be forfeited by
the Grantee.

 

(b)           If at any time the Grantee shall cease to be an employee of the
Company due to (A) a termination without Cause (as defined in the Employment
Agreement) by the Company or (B) a termination with Good Reason (as defined in
the Employment Agreement), the Grantee shall be treated for all purposes of this
Agreement (including, without limitation, the provisions of this Agreement
relating to the vesting of the Award LTIP Units) as if he had remained as an
employee of the Company for (and ceased to be an employee of the Company as of
the date that is) 12 months after the date of termination.

 

(c)           If, prior to the Valuation Date, the Grantee shall cease to be an
employee of the Company as a result of his death or Disability, then (i) with
respect to the Grantee the calculations provided in Section 3(b) shall be
performed with respect to this Award as if a Change of Control had occurred
(with respect to the Grantee only) on the date of his death or Disability and
(ii) all of the Award LTIP Units comprising this Award (after giving effect to
the issuance of additional LTIP Units or forfeiture of Award LTIP Units pursuant
to Section 3(e) and any Award LTIP Units previously earned pursuant to Sections
3(c) and 3(d)) shall automatically and immediately vest.  Notwithstanding any
other provision herein, if, on or after the Valuation Date, the Grantee shall
cease to be an employee of the Company as a result of his death or Disability,
then all of the Grantee’s Award LTIP Units not otherwise forfeited pursuant to
Section 3 on the Valuation Date shall automatically and immediately vest.

 

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(d)           Upon the occurrence of a Change of Control, all unvested Award
LTIP Units that have not previously been forfeited (after giving effect to any
forfeiture of Award LTIP Units pursuant to Section 3 hereof occurring in
connection with such Change of Control) shall vest immediately.

 

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; Allocations.  The holder of the Award LTIP Units
shall be entitled to receive distributions with respect to such Award LTIP Units
to the extent provided for in the Partnership Agreement; provided, that the
Distribution Participation Date (as defined in the Partnership Agreement) with
respect to any Award LTIP Unit shall be the date as of which such Award LTIP
Unit is earned pursuant to Section 3 hereof. The Distribution Measurement Date
(as defined in Exhibit F to the Partnership Agreement) with respect to the Award
LTIP Units shall be the Effective Date and all of the Award LTIP Units granted
pursuant to the Agreement shall be deemed to have been issued as part of the
Same Award (as defined in Exhibit F to the Partnership Agreement). The Special
LTIP Unit Sharing Percentage (as defined in the Partnership Agreement) with
respect to each Award LTIP Unit shall be 10% prior to the Distribution
Participation Date with respect to such Award LTIP Unit.

 

7.             Restrictions on Transfer.  None of the Award LTIP Units granted
hereunder nor any of the Class A Units of the Partnership into which such Award
LTIP Units may be converted (the “Award Common Units”) shall be sold, assigned,
transferred, pledged, hypothecated, given away or in any other manner disposed
of or encumbered, whether voluntarily or by operation of law (each such action a
“Transfer”) and the Redemption Right (as defined in the Partnership Agreement)
may not be exercised with respect to the Award Common Units, provided that, at
any time after the date that (a) the Award LTIP Units vest and (b) is two (2)
years after the Grant Date, (i) Award LTIP Units or Award Common Units may be
Transferred to the Grantee’s Family Members by gift or domestic relations order,
provided that the transferee agrees in writing with the Company and the
Partnership to be bound by all the terms and conditions of this Agreement and
that subsequent transfers shall be prohibited except those in accordance with
this Section 7 and (ii) the Redemption Right may be exercised with respect to
Award Common Units, and Award Common Units may be Transferred to the Partnership
or the Company in connection with the exercise of the Redemption Right, in
accordance with and to the extent otherwise permitted by the terms of the
Partnership Agreement.  Additionally, all Transfers of Award LTIP Units or Award
Common Units must be in compliance with all applicable securities laws
(including, without limitation, the Securities Act of 1933, as amended (the
“Securities Act”)) and the applicable terms and conditions of the Partnership
Agreement.  In connection with any Transfer of Award LTIP Units or Award Common
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 LTIP Units or Award Common 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 Award LTIP Units or Award

 

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Common Units as a 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 Award LTIP Units or Award Common 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.             Changes in Capital Structure.  If (a) 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 a transaction similar thereto, (b) 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 distribution to holders of Common
Stock other than regular cash dividends, shall occur or (c) any other event
shall occur which in the judgment of the Committee necessitates action by way of
adjusting the terms of the Award, then the Committee shall take such action as
in its discretion shall be necessary to maintain the Grantee’s rights hereunder
so that they are substantially proportionate to the rights existing under this
Agreement prior to such event, including, without limitation, adjustments in
Award LTIP Units, Additional Shares, Baseline Value, Dividend Value, Common
Stock Price, Maximum Outperformance Pool Amount, Total Shares and Total Return.

 

9.             Miscellaneous.

 

(a)           Amendments.  This Agreement may be amended or modified only with
the consent of the Partnership acting through the Committee; provided that any
such amendment or modification adversely affecting the rights of the Grantee
hereunder must be consented to by the Grantee to be effective as against him.

 

(b)           Incorporation of Option Plan.  The provisions of the Option Plan
are hereby incorporated by reference as if set forth herein.  If and to the
extent that any provision contained in this Agreement is inconsistent with the
Option Plan, this Agreement shall govern.

 

(c)           Effectiveness.  The Grantee shall be admitted as a partner of the
Partnership with beneficial ownership of the Award LTIP Units as of the grant
date set forth above by (i) signing and delivering to the Partnership a copy of
this Agreement, and (ii) signing, as a Limited Partner, and delivering to the
Partnership a counterpart signature page to the Partnership Agreement (attached
hereto as Exhibit A). Exhibit A to the Partnership Agreement shall be amended to
reflect the issuance to the Grantee of the Award LTIP Units, whereupon the
Grantee shall have all the rights of a Limited Partner of the Partnership with
respect to the number of LTIP Units specified above, as set forth in the
Partnership Agreement, subject, however, to the restrictions and conditions
specified herein and in the Partnership Agreement.

 

(d)           Status of LTIP Units under the Option Plan.  The Award LTIP Units
are being granted as equity securities under the Option Plan.  The Company will
have the right, as set forth in the Partnership Agreement, to issue shares of
Common Stock in exchange for Class A Units into which such Award LTIP Units may
have been converted pursuant to the Partnership

 

11

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Agreement, subject to certain limitations set forth in the Partnership
Agreement, and such shares of Common Stock will be issued under the Option
Plan.  The Grantee must be eligible to receive the Award LTIP Units in
compliance with applicable federal and state securities laws and to that effect
is required to complete, execute and deliver certain covenants, representations
and warranties (attached as Exhibit B).

 

(e)           Legend.  The records of the Partnership evidencing the Award LTIP
Units shall bear an appropriate legend, as determined by the Partnership in its
sole discretion, to the effect that such LTIP 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 LTIP 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 Representation; 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
LTIP Units or any other securities issued pursuant to this Agreement or upon
conversion or exchange of LTIP Units.

 

(h)           Section 83(b) Election.  The Grantee hereby agrees to make an
election to include in gross income in the year of transfer the Award LTIP 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.

 

(i)            Severability.  In the event that one or more of the provisions of
this Agreement may be invalidated for any reason by a court, any provision so
invalidated will be deemed to be separable from the other provisions hereof, and
the remaining provisions hereof will continue to be valid and fully enforceable.

 

(j)            Governing Law.  This Agreement is made under, and will be
construed in accordance with, the laws of the State of New York, without giving
effect to the principle of conflict of laws of such State.

 

(k)           No Obligation to Continue Position as an Officer or to Employ. 
Neither the Company nor any affiliate is obligated by or as a result of this
Agreement to continue to have the Grantee as an officer or to employ the Grantee
and this Agreement shall not interfere in any way with the right of the Company
or any affiliate to terminate the Grantee as an officer or employee at any time.

 

(l)            Notices.  Notices hereunder shall be mailed or delivered to the
Partnership at its principal place of business and shall be mailed or delivered
to the Grantee at the address on

 

12

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file with the Partnership or, in either case, at such other address as one party
may subsequently furnish to the other party in writing.

 

(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 the 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)           Successors and Assigns.  This Agreement shall be binding upon the
Partnership’s successors and assigns, whether or not this Agreement is expressly
assumed.

 

(o)           Employment Agreement.  Except as specifically provided otherwise
in this Agreement, any provisions in the Employment Agreement relating to
accelerated vesting or that would otherwise modify the vesting provisions set
forth herein in connection with a termination of employment, a Change of Control
or in any other circumstance shall not apply to this Agreement or the Award LTIP
Units granted hereunder, and the specific terms of this Agreement shall
supersede such provisions.

 

[signature page follows]

 

13

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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as
of the      day of                  , 2012.

 

 

SL GREEN REALTY CORP.

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

SL GREEN OPERATING PARTNERSHIP, L.P.

 

 

 

By: SL Green Realty Corp., its general partner

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

Grantee

 

 

 

 

 

Name:

 

14

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EXHIBIT A

 

FORM OF LIMITED PARTNER SIGNATURE PAGE

 

The Grantee, desiring to become one of the within named Limited Partners of SL
Green Operating Partnership, L.P., hereby accepts all of the terms and
conditions of (including, without limitation, the provisions of Section 15.11
titled “Power of Attorney”), and becomes a party to, the First Amended and
Restated Agreement of Limited Partnership, dated as of August 20, 1997, of SL
Green Operating Partnership, L.P., as amended through the date hereof (the
“Partnership Agreement”).  The Grantee agrees that this signature page may be
attached to any counterpart of the Partnership Agreement.

 

 

Signature Line for Limited Partner:

 

 

 

 

 

 

 

Name:

 

 

Date:                       , 2012

 

 

 

Address of Limited Partner:

 

 

 

 

 

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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 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 Option Plan; and

 

(viii)        The Company’s Certificate of Incorporation, 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 LTIP Units shall not constitute an offer of LTIP 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 LTIP Units, the potential conversion of LTIP Units into Class A Units of
the Partnership (“Common Units”) and the potential redemption of such Common
Units for shares of Common Stock (“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

 

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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 LTIP 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 LTIP 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 LTIP
Units and has been furnished with, and has reviewed and understands, materials
relating to the Partnership and the Company and their respective activities
(including, but not limited to, the Background Documents).  The 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 LTIP 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 LTIP 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 LTIP Units to be issued, the Common Units issuable upon
conversion of the LTIP Units and any REIT Shares issued in connection with the
redemption of any such Common Units will be acquired for the account of the
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 LTIP Units, the Option Plan and this
Agreement) at all times to sell or otherwise dispose of all or any part of his
LTIP Units, Common Units or REIT Shares in compliance with the Securities Act,
and applicable state securities laws, and subject, nevertheless, to the
disposition of his assets being at all times within his control.

 

(iv)          The Grantee acknowledges that (A) neither the LTIP Units to be
issued, nor the Common Units issuable upon conversion of the LTIP Units, have
been registered under the Securities Act or state securities laws by reason of a
specific exemption or exemptions from registration under the Securities Act and
applicable state securities laws and, if such LTIP Units or Common Units are
represented by certificates, such certificates will bear a legend to such
effect, (B) the reliance by the Partnership and

 

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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 LTIP Units, or Common Units, therefore, cannot be resold unless
registered under the Securities Act and applicable state securities laws, or
unless an exemption from registration is available, (D) there is no public
market for such LTIP Units and Common Units and (E) neither the Partnership nor
the Company has any obligation or intention to register such LTIP Units or the
Common Units issuable upon conversion of the LTIP Units under the Securities Act
or any state securities laws or to take any action that would make available any
exemption from the registration requirements of such laws, except, that, upon
the redemption of the Common Units for REIT Shares, the Company may issue such
REIT Shares under the Option 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 Option 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 LTIP Units acquired hereby and the Common Units
issuable upon conversion of the LTIP Units which are set forth in the
Partnership Agreement or this Agreement, the Grantee may have to bear the
economic risk of his ownership of the LTIP Units acquired hereby and the Common
Units issuable upon conversion of the LTIP Units for an indefinite period of
time.

 

(v)           The Grantee has determined that the LTIP 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 LTIP Units except the information
specified in Paragraph (b) above.

 

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

 

(d)           The Grantee hereby agrees to make an election under
Section 83(b) of the Code with respect to the LTIP Units awarded hereunder, and
has delivered with this Agreement a completed, executed copy of the election
form attached hereto as Exhibit C.  The 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 LTIP 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 LTIP Units are awarded to the Grantee.

 

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(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.

 

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EXHIBIT C

 

ELECTION TO INCLUDE IN GROSS INCOME IN YEAR OF

TRANSFER OF PROPERTY PURSUANT TO SECTION 83(B)

OF THE INTERNAL REVENUE CODE

 

The undersigned hereby makes an election pursuant to Section 83(b) of the
Internal Revenue Code with respect to the property described below and supplies
the following information in accordance with the regulations promulgated
thereunder:

 

1.                                      The name, address and taxpayer
identification number of the undersigned are:

 

Name:                                                            (the
“Taxpayer”)

 

Address:                                                         

 

 

Social Security No./Taxpayer Identification No.:

 

2.                                      Description of property with respect to
which the election is being made:

 

The election is being made with respect to                       LTIP Units in
SL Green Operating Partnership, L.P. (the “Partnership”).

 

3.                                      The date on which the LTIP Units were
transferred is                     , 2012.  The taxable year to which this
election relates is calendar year 2012.

 

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

 

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

 

(b)                                 The Taxpayer’s LTIP Units vest in accordance
with the vesting provisions described in the Schedule attached hereto.  Unvested
LTIP Units are forfeited in accordance with the vesting provisions described in
the Schedule attached hereto.

 

5.                                      The fair market value at time of
transfer (determined without regard to any restrictions other than restrictions
which by their terms will never lapse) of the LTIP Units with respect to which
this election is being made was $0 per LTIP Unit.

 

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

 

7.                                      A copy of this statement has been
furnished to the Partnership and SL Green Realty Corp.

 

Dated:

 

 

 

 

 

 

 

 

Name:

 

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SCHEDULE A

 

Vesting Provisions of LTIP Units

 

The LTIP 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 SL Green Realty Corp.’s (the “Company’s”)
per-share total return to shareholders for the period from September 1, 2011 to
August 31, 2014 (or earlier in certain circumstances).  Under the time-based
vesting hurdles, one-half of the LTIP Units will vest on August 31, 2014 and
one-half will vest on August 31, 2015, 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 status as
an employee under specified circumstances.  Unvested LTIP 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.

 

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