Exhibit 10.1

  

LIBERTY PROPERTY TRUST –

 

SENIOR OFFICER SEVERANCE PLAN

 

   

 

  

TABLE OF CONTENTS

  

    Page       SECTION 1. PURPOSE 1       SECTION 2. DEFINITIONS 1       2.1
“409A Change of Control” 1       2.2 “Administrative Claim” 1       2.3
“Applicable Multiplier” 1       2.4 “Board of Trustees” 1       2.5 “Cause” 1  
    2.6 A “Change of Control” 1       2.7 “Change of Control Period” 2       2.8
“Claimant” 2       2.9 “Common Shares” 2       2.10 “Company” 2       2.11
“Compensation Committee” 2       2.12 “Effective Date” 2       2.13 “Disability”
3       2.14 “Employee” 3       2.15 “Excise Tax” 3       2.16 “Extended Leave
of Absence” 3       2.17 “Good Reason” 3       2.18 “Judicial Claim” 3      
2.19 “Liberty Property Limited Partnership” 3       2.20 “Liberty Property
Trust” 3       2.21 “Notice of Termination” 3       2.22 “Paid Time Off” 3      
2.23 “Pay” 3       2.24 “Payment” 3       2.25 “Plan” 3       2.26 “Pro-Rata
Bonus” 4       2.27 “Reduced Amount” 4       2.28 “Referee” 4

  

 -i- 

 

  

TABLE OF CONTENTS
(continued)

 

    Page       2.29 “Release” 4       2.30 “Severance Pay” 4       2.31
“Subsidiary” 4       2.32 “Target Bonus” 4       2.33 “Termination Date” 4      
2.34 “Three-Year Average Bonus” 4       2.35 “Year of Pay” 4       SECTION 3.
ELIGIBILITY 5       3.1 Eligible Employees 5       3.2 Disability or Extended
Leave of Absence 5       3.3 Cause 5       3.4 Good Reason 6       3.5
Termination of Employment 6       3.6 Disqualification 7       SECTION 4.
SEVERANCE BENEFIT AMOUNT 7       4.1 Severance Pay 7       4.2 Increases to
Severance Pay 8       4.3 Unemployment Compensation 8       4.4 Sickness;
Disability 8       4.5 Reduction of Severance Pay 8       4.6 Effect of Section
280G(b) of Code 9       4.7 Further Actions 10       SECTION 5. DISTRIBUTION OF
BENEFITS 10       5.1 Payment 10       5.2 Deceased Employees 10       SECTION
6. PLAN ADMINISTRATION 11       6.1 Compensation Committee 11       6.2
Determinations Conclusive 11       6.3 Disputes 11       6.4 Exhaustion and Time
Limit to Bring a Judicial Claim 12

  

 -ii- 

 

 

TABLE OF CONTENTS
(continued)

 

    Page       6.5 Payment of Fees 12       SECTION 7. PLAN MODIFICATION OR
TERMINATION 12       7.1 Termination 12       7.2 Modifications and Amendments
12       7.3 Determination of Claims 13       SECTION 8. GENERAL PROVISIONS 13  
    8.1 No Right to Employment 13       8.2 Vacancies on Compensation Committee
13       8.3 Assignments 13       8.4 Plan Unfunded 13       8.5 No Set Off; No
Mitigation 13       8.6 Governing Law 14       8.7 Welfare Plan 14       8.8
Section 409A of the Code 14       8.9 Recoupment Policy 15

 

 -iii- 

 

 

SECTION 1.

PURPOSE

 

The Company considers it essential to its best interests to foster the optimum
performance of its management employees. The Company recognizes the possibility
that a Change of Control of the Company or one or more Subsidiaries may occur,
or that the Company may engage in certain other transactions which may affect
its management employees, and that such possibility, and the uncertainty and
questions which it may raise, may result in the distraction of management to the
detriment of the Company.

 

In order to encourage management employees to maintain their continued attention
and dedication to their duties and responsibilities, the Company originally
adopted the Plan, effective as of December 13, 2001. The Plan was re-named and
amended and restated to reflect certain design changes, effective September 30,
2015, and was further amended effective September 27, 2018. The Plan is hereby
amended and restated effective October 27, 2019.

 

SECTION 2.

DEFINITIONS

 

As hereinafter used:

 

2.1          “409A Change of Control” has the meaning set forth in Section 5.1.

 

2.2          “Administrative Claim” has the meaning set forth in Section 6.3.

 

2.3          “Applicable Multiplier” with respect to each Employee, which shall
be either 2.0 or 3.0, shall be set forth opposite the name of such Employee on
Exhibit “A.”

 

2.4          “Board of Trustees” means the Board of Trustees of Liberty Property
Trust.

 

2.5          “Cause” has the meaning set forth in Section 3.3.

 

2.6          A “Change of Control” shall be deemed to have occurred upon the
earliest to occur of the following events:

 

(a)               the date on which the shareholders of the Company (or the
Board of Trustees, if shareholder action is not required) approve a plan or
other arrangement pursuant to which the Company will be dissolved or liquidated,
or

 

(b)               the date on which the transactions contemplated by a
definitive agreement to sell or otherwise dispose of substantially all of the
assets of the Company are consummated, other than a transaction in which the
holders of the Common Shares immediately prior to the transaction will have at
least fifty percent (50%) of the voting power of the acquiring entity’s voting
securities immediately after such transaction (without regard to such holders’
ownership of such acquiring entity’s voting securities immediately before or
contemporaneously with such transaction), which voting securities are to be held
by such holders immediately following such transaction in substantially the same
proportion among themselves as such holders’ ownership of the Common Shares
immediately before such transaction, or

 

  

 

 

(c)               the first date on which (i) the transactions contemplated by a
definitive agreement to merge or consolidate the Company with or into the other
constituent entity, or to merge such other entity with or into the Company, have
been consummated, other than, in any such case, a merger or consolidation of the
Company in which the holders of the Common Shares immediately prior to the
merger or consolidation will have at least fifty percent (50%) of the voting
power of the surviving entity’s voting securities immediately after such merger
or consolidation (without regard to such holders’ ownership of such acquiring
entity’s voting securities immediately before or contemporaneously with such
merger or consolidation), which voting securities are to be held by such holders
immediately following such merger or consolidation in substantially the same
proportion among themselves as such holders’ ownership of the Common Shares
immediately before such merger or consolidation, and (ii) members of the Board
of Trustees prior to the consummation of such merger or consolidation cease to
constitute a majority of the Board of Trustees, or

 

(d)               the date on which any entity, person or group, within the
meaning of Section 13(d)(3) or Section 14(d)(2) of the Securities Exchange Act
of 1934, as amended (other than the Company or any Subsidiary or any employee
benefit plan sponsored or maintained by the Company or any Subsidiary), shall
have become the beneficial owner of, or shall have obtained voting control over,
more than twenty percent (20%) of the outstanding Common Shares (without regard
to any contractual or other restriction on the conversion or other exchange of
securities into or for Common Shares), or

 

(e)               the first day after the date on which the Plan is effective
when a majority of the members of the Board of Trustees shall have been members
of the Board of Trustees for less than two (2) years, unless the nomination for
election of each new trustee who was not a trustee at the beginning of such two
(2)-year period was approved by a vote of at least two-thirds of the trustees
then still in office who were trustees at the beginning of such period.

 

2.7          “Change of Control Period” means the period of time commencing six
(6) months prior to a Change of Control and ending two (2) years after a Change
of Control.

 

2.8          “Claimant” has the meaning set forth in Section 6.3.

 

2.9          “Common Shares” means the Common Shares of Beneficial Interest,
$0.001 par value, of the Company and any other securities evidencing the common
equity beneficial interest in the Company.

 

2.10        “Company” means Liberty Property Trust and/or Liberty Property
Limited Partnership, and any successor in interest thereto.

 

2.11        “Compensation Committee” means the compensation committee of the
Board of Trustees.

 

2.12        “Effective Date” of the Plan is September 30, 2015.

 

 2 

 

  

2.13        “Disability” has the meaning set forth in Section 3.2.

 

2.14        “Employee” means a person:

 

(a)               whose name is listed in Exhibit “A” hereto, as such Exhibit
may be amended or supplemented by the Compensation Committee from time to time,
or who has been designated in writing by the Compensation Committee to
participate in the Plan (even if such person’s name is not listed in Exhibit “A”
hereto). It is intended that the Compensation Committee will review Exhibit “A”
annually and update such Exhibit as needed; and

 

(b)               who is employed by the Company or a Subsidiary during the six
(6) month period preceding a change of a Change of Control and is not ineligible
to participate in the Plan as set forth in Section 3.6.

 

2.15        “Excise Tax” has the meaning set forth in Section 4.6.

 

2.16        “Extended Leave of Absence” has the meaning set forth in Section
3.2.

 

2.17        “Good Reason” has the meaning set forth in Section 3.4.

 

2.18        “Judicial Claim” has the meaning set forth in Section 6.3.

 

2.19        “Liberty Property Limited Partnership” means Liberty Property
Limited Partnership, a Pennsylvania limited partnership.

 

2.20        “Liberty Property Trust” means Liberty Property Trust, a Maryland
real estate investment trust.

 

2.21        “Notice of Termination” has the meaning set forth in Section 3.5.

 

2.22        “Paid Time Off” means time when, in accordance with the regular
payroll practices and procedures applicable immediately preceding the earlier of
the Termination Date or the date of the Change of Control, the Employee is
entitled to receive remuneration without reporting for work.

 

2.23        “Pay” means the base salary of an eligible Employee at his or her
stated weekly, monthly or annual rate as of the Employee’s Termination Date, or,
if a higher amount, as of the date of the Change of Control. “Pay” does not
include overtime pay, bonuses of any kind, commissions, incentive pay or any
other remuneration. A “Year of Pay” shall be calculated in accordance with the
regular payroll practices and procedures applicable immediately preceding the
Change of Control.

 

2.24        “Payment” has the meaning set forth in Section 4.6.

 

2.25        “Plan” means this Senior Officer Severance Plan as set forth herein,
and as may be amended from time to time.

  

 3 

 

 

2.26        “Pro-Rata Bonus” means the Employee’s Three-Year Average Bonus,
multiplied by a fraction in which the numerator is the number of days in the
applicable calendar year in which the Employee was employed by the Company or a
Subsidiary and the denominator is the total number of days in the applicable
calendar year.

 

2.27        “Reduced Amount” has the meaning set forth in Section 4.6.

 

2.28        “Referee” has the meaning set forth in Section 4.6.

 

2.29        “Release” means the Company’s standard form of agreement and general
release in a form substantially similar to the General Release Agreement
attached hereto as Exhibit “B,” subject only to revisions necessary to comply
with applicable law, that is executed by the Employee and the Company in
connection with the termination of the Employee’s employment with the Company or
a Subsidiary.

 

2.30        “Severance Pay” is a payment made to an eligible Employee pursuant
to Section 3.1. All Severance Pay due to an eligible Employee must be paid to
the eligible Employee within two (2) years after the date that the first
Severance Pay payment is made to such Employee.

 

2.31        “Subsidiary” means Liberty Property Limited Partnership and each
other subsidiary of Liberty Property Trust.

 

2.32        “Target Bonus” means the highest target annual incentive bonus for a
full fiscal year for an eligible Employee during the Change of Control Period.
Target Bonus does not include commissions and or other bonuses awarded by the
Company other than on an annual basis (such as one-time grants of restricted
stock).

 

2.33        “Termination Date” means the date upon which the Employee’s
employment ceases with the Company or any Subsidiary, as the case may be.

 

2.34        “Three-Year Average Bonus” means the average annual cash incentive
award paid to the Employee under the Company’s annual incentive compensation
plan for the prior three fiscal years immediately preceding the Termination
Date. If the Employee has been employed for less than three (3) fiscal years at
the Termination Date, the Three-Year Average Bonus will be based on the average
annual cash incentive award paid to the Employee under the Company’s annual
incentive compensation plan for the completed fiscal years from the date the
Employee commenced employment with the Company to the Termination Date. If no
annual cash incentive award has been paid for a prior fiscal year because the
Employee has not been employed with the Company long enough to have received an
annual cash incentive award, then the Three-Year Average Bonus will be the
Employee’s Target Bonus.

 

2.35        “Year of Pay” has the meaning set forth in Section 2.23.

 

 

 4 

 

 

SECTION 3.

ELIGIBILITY

 

3.1          Eligible Employees. An Employee shall be eligible to receive
Severance Pay if and only if the Employee’s employment terminates during the
Change of Control Period, unless such termination is: (i) as a result of such
Employee’s death, or such Employee’s Disability or Extended Leave of Absence in
accordance with Section 3.2, (ii) by the Employer for Cause or (iii) by the
Employee other than for Good Reason. In the event an individual’s employment is
terminated prior to the occurrence of a Change of Control, such individual shall
be entitled to benefits under the Plan only if a Change of Control actually
occurs.

 

3.2          Disability or Extended Leave of Absence. If, as a result of an
Employee’s incapacity due to physical or mental illness (a “Disability”), or as
a result of any other leave of absence (an “Extended Leave of Absence”), the
Employee shall have been absent from the full-time performance of his or her
duties for longer than six (6) consecutive months, the Employee shall not be
entitled to any benefits under the Plan.

 

3.3          Cause. The Employee shall not be entitled to any benefits under the
Plan if his or her employment is terminated by the Employer for Cause. For
purposes of the Plan, “Cause” means the occurrence of one or more of the
following events:

 

(a)               The Employee’s conviction of, or entry of a plea of nolo
contendere (or similar disposition) in respect of, any felony or any crime
involving moral turpitude;

 

(b)               The Employee’s engagement in disloyalty to the Company
including fraud, embezzlement, theft, misappropriation or proven dishonesty;

 

(c)               The Employee’s breach of any written confidentiality,
non-competition, non-solicitation agreement, or material Company policy, in each
case, regardless of whether such act or omission is materially injurious to the
Company;

 

(d)               The Employee’s continued failure to substantially perform his
or her duties, which failure the Employee fails to cure (other than any such
failure resulting from incapacity due to physical or mental illness, Disability
or an Extended Leave of Absence or the Employee’s termination of his or her
employment for Good Reason) within ten (10) days after a written demand for
substantial performance is delivered to the Employee by the Company or the
Subsidiary by which he or she is employed, which demand describes in reasonable
detail the manner in which the Company or such Subsidiary believes that the
Employee has not substantially performed his or her duties; or

 

(e)               The Employee’s willful engagement in conduct which is
materially injurious to the Company and/or any Subsidiary, monetarily or
otherwise. For purposes of this Section 3.3, no act, or failure to act, on the
Employee’s part shall be deemed “willful” unless done, or omitted to be done, by
the Employee in bad faith and without reasonable belief that his or her action
or omission was in, or not opposed to, the best interests of the Company and/or
any Subsidiary.

 

 5 

 

 

(f)                Notwithstanding the foregoing, the Employee shall not be
deemed to have been terminated for Cause unless and until there shall have been
delivered to the Employee a copy of a written determination of the Compensation
Committee issued pursuant to a meeting of the Compensation Committee (after
reasonable notice to the Employee and an opportunity for the Employee, together
with his or her counsel, to be heard before the Compensation Committee) finding
that in the good faith opinion of the Compensation Committee the Employee was
guilty of conduct constituting Cause, as set forth in this Section 3.3, and
describing such conduct in reasonable detail.

 

3.4          Good Reason. The Employee shall be entitled to terminate his or her
employment for Good Reason. For purposes of this Section 3.4 “Good Reason” shall
mean, without the Employee’s express written consent, the occurrence during the
Change of Control Period of any of the following circumstances:

 

(a)               a material diminution in the Employee’s annual total target
compensation (including base salary, annual incentive and long-term incentives);

 

(b)               a material diminution in the authority, duties or
responsibilities held by the Employee;

 

(c)               a material change in the geographic location at which the
Employee must perform services, which for purposes of this Plan means the
requirement that Employee must perform services at a location that is fifty (50)
miles from the current office of the Company at which the Employee principally
performed his or her services, other than on travel reasonably required to carry
out Employee’s obligations under this Agreement, provided that such change in
geographic location increases the Employee’s round-trip commute by more than
forty (40) miles; or

 

(d)               any material breach of this Plan by the Company.

 

Provided, however, that a termination by Employee for Good Reason shall be
effective only if (i) the Employee has provided a Notice of Termination to the
Company within ninety (90) days after the initial existence of the event
constituting Good Reason that an event constituting Good Reason has occurred,
(ii) within thirty (30) days following the delivery of such notice of
termination by Employee to the Company, the Company has failed to cure the
circumstances giving rise to Good Reason, and (iii) Employee’s Termination Date
occurs within thirty (30) days following the end of the thirty (30)-day cure
period set forth above.

 

3.5          Termination of Employment. Any purported termination of the
Employee’s employment by the Company or by the Employee during the Change of
Control Period shall be communicated by written Notice of Termination to the
other party. “Notice of Termination” shall mean a notice that shall indicate the
specific termination provision in the Plan relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of Employee’s employment under the provision so indicated. Any
Notice of Termination to the Company shall be directed to the Compensation
Committee at the address set forth in Section 6.3. All Notices of Termination
shall be sent (i) by certified or registered mail and shall be deemed received
three (3) business days after the date of mailing; (ii) by Federal Express or
similar overnight courier and shall be deemed received one (1) business day
after delivery to Federal Express or similar overnight courier; or (iii) by
personal service and shall be deemed received on the same day as service.

 

 6 

 

 

3.6          Disqualification. An Employee may not receive Severance Pay if any
of the following disqualifying events occur:

 

(a)               The Employee is already receiving or is entitled to receive
severance pay under an agreement, severance plan or policy of the Company, other
than as contemplated under Section 4.5;

 

(b)               The Employee has signed an agreement prior to the commencement
of a Change of Control Period pursuant to which his or her employment will
terminate in the future on a date certain;

 

(c)               The Employee is a party to an agreement which excludes him or
her from participation in the Plan;

 

(d)               Termination of his or her employment does not occur during the
Change of Control Period;

 

(e)               The Company does not undergo a Change of Control;

 

(f)                The Employee does not timely execute and return to the
Company a valid Release which remains unrevoked by the Employee for the seven
(7) day revocation period, if applicable; or

 

(g)               The Employee voluntarily terminates his or her employment with
the Company, other than for Good Reason during the Change of Control Period.

 

SECTION 4.

SEVERANCE BENEFIT AMOUNT

 

4.1          Severance Pay. Except as otherwise provided in this Section 4, the
Severance Pay to be paid to an eligible Employee in accordance with Section 5
shall be an amount equal to the sum of (A) the product of the Applicable
Multiplier for such Employee multiplied by the sum of one (1) Year of Pay for
such Employee plus such Employee’s Target Bonus, plus (B) the Pro-Rata Bonus. In
addition, except as otherwise provided in this Section 4:

 

(a)               Notwithstanding anything to the contrary in the applicable
grant agreement, all of such Employee’s options or other rights to acquire
Common Shares or partnership interests in Liberty Property Limited Partnership
and all restricted stock, restricted stock units or other equity compensation
granted to such Employee shall vest immediately upon the later of the
Termination Date or the date of the Change of Control; provided, however, that
if the vesting of restricted stock, restricted stock units or other equity
compensation is to be calculated based on future performance of the Company or
other future events or circumstances, such stock or units or other equity
compensation shall be valued based on the performance of the Company (as
measured against the relevant performance test or tests) as of the date of
Change of Control, or the status of the relevant events or circumstances as of
the date of Change of Control, without regard to performance of the Company or
other events and circumstances occurring after the date of Change of Control. To
the extent the Employee’s Termination Date is during the Change of Control
Period but prior to the Change of Control, the unvested portion of the
applicable awards will be deemed suspended and no vesting shall occur unless and
until a Change of Control occurs during the six (6) month period following the
Employee’s Termination Date. If a Change of Control does not occur during the
six (6) month period following the Termination Date, the unvested portion of the
applicable award will be forfeited automatically on the date that is six (6)
months following the Termination Date, unless otherwise provided in the
applicable grant agreements;

 

 7 

 

 

(b)               the Company shall make a lump sum payment of $10,000 in lieu
of continued coverage under the Company’s life insurance, accident or disability
plans; and

 

(c)               the Company shall make a lump sum payment equal to one and
one-half (1.5) times the Employee’s monthly cost (calculated as described below)
to continue medical and dental coverage under the Company’s applicable benefit
plans for the Employee, and, where applicable, the Employee’s spouse and
dependents, for the eighteen (18) month period following the Termination Date.
For this purpose, the monthly cost shall be determined as 100% of the applicable
monthly cost of medical and dental coverage through COBRA for the Employee and,
where applicable, the Employee’s spouse and dependents, less the monthly premium
charge that is paid by active Company employees for similar coverage as in
effect at the Employee’s Termination Date. The Employee may elect COBRA
continuation coverage according to the terms of the Company’s applicable benefit
plans.

 

4.2          Increases to Severance Pay. The Company, in its sole discretion,
may increase the Severance Pay to an amount in excess of that specified in
Section 4.1, subject to the limitations of Section 4.6. Any increase in
severance pay must be expressly authorized in writing by the Compensation
Committee.

 

4.3          Unemployment Compensation. If an Employee applies for and receives
unemployment compensation payments for any period of time during or for which
Severance Pay is being paid, any Severance Pay remaining to be paid shall not be
reduced by the amount of any such unemployment compensation payments.

 

4.4          Sickness; Disability. If an Employee due to sickness or injury
receives short-term disability payments, worker’s compensation or long-term
disability payments after the Employee’s Termination Date and before Severance
Pay is paid hereunder, any Severance Pay to be paid shall be reduced by the
amount of any such short-term disability, worker’s compensation or long-term
disability payments.

 

4.5          Reduction of Severance Pay. The severance benefit provided for in
the Plan is the maximum benefit that the Company will pay for severance. To the
extent that a federal, state or local law might require the Company to make a
payment to an Employee because of that Employee’s involuntary termination (other
than with respect to unemployment compensation), the benefit payable under the
Plan shall be correspondingly reduced. To the extent that an Employee receives
severance pay in connection with the cessation of his or her employment other
than pursuant to the Plan (whether pursuant to a contract or other severance
plan or policy), the benefit payable under the Plan shall be correspondingly
reduced. Any overpayments made under the Plan shall be promptly repaid after
written request. Severance Pay that will be offset under this Section 4.5 does
not include payments received by an Employee due to his or her participation in
any other benefit plan which is not a severance plan, or payments made to an
Employee for his or her accrued, but unused vacation or Paid Time Off days.

 

 8 

 

 

4.6          Effect of Section 280G(b) of Code.

 

(a)              Reduction in Payments. In the event any Payment (as defined
below) would constitute an “excess parachute payment” within the meaning of
Section 280G of the Code, the aggregate present value of the Payments payable to
the Employee pursuant to the terms of this Plan shall be reduced (but not below
zero) to the Reduced Amount (as defined below), if reducing the Payments payable
to the Employee pursuant to the terms of this Plan will provide the Employee
with a greater net after-tax amount than would be the case if no reduction was
made. If reducing the Payments payable to the Employee would not provide the
Employee with a greater net after-tax amount than if no reduction was made, then
no reduction will be made and the full amount of the Payments will be made to
the Employee.

 

(b)              Determining Net After-Tax Amounts. In determining whether a
reduction in Payments payable to the Employee pursuant to the terms of this Plan
will provide the Employee with a greater net after-tax amount, the following
computations shall be made:

 

(i)               The net after-tax benefit to the Employee without any
reduction in Payments shall be determined by reducing the Payments by the amount
of federal, state, local and other applicable taxes (including the Excise Tax
(as defined below)) applicable to the Payments. For these purposes, the tax
rates shall be determined using the maximum marginal rate applicable to such
Employee for each year in which the Payments shall be paid.

 

(ii)              The net after-tax benefit to the Employee with a reduction in
the Payments to the Reduced Amount shall be determined by applying the tax rates
under subsection (i) above, with the exception of the Excise Tax.

 

(c)              Reduction Methodology. In the event a reduction in the Payments
to the Reduced Amount will provide the Employee with a greater net after-tax
amount, any reduction shall be made in a manner consistent with the requirements
of Section 409A of the Code.

 

(d)              Definitions. For purposes of this Section 4.6, the following
definitions shall apply:

 

(i)              “Payment” shall mean an amount that is received by the Employee
or paid by the Company or the Subsidiary that employs the Employee on his
behalf, or represents any property, or any other benefit provided to the
Employee under this Plan or under any other plan, arrangement or agreement with
the Company or any other person, and such amount is treated as contingent on a
change in control, as provided under Section 280G of the Code.

 

 9 

 

 

(ii)             “Reduced Amount” shall mean an amount, as determined under
Section 280G of the Code, which does not cause any Payment to be subject to the
Excise Tax.

 

(iii)           “Excise Tax” shall mean the excise tax imposed under Section
4999 of the Code.

 

(e)              Determination of Reduction. All determinations to be made under
this Section 4.6 shall be made by the tax counsel and Company’s independent
public accountant immediately prior to the Change of Control (which may be the
Company’s auditors) (the “Referee”), which firm(s) shall provide its
determinations and any supporting calculations both to the Company and the
Employee within ten days following the later of the Change of Control or the
Employee’s Termination Date. Any such determination by the Referee shall be
binding upon the Company and the Employee. All fees and expenses of the Referee
in performing the determinations referred to above shall be borne solely by the
Company.

 

(f)               Indemnification of Referee. The Company agrees to indemnify
and hold harmless the Referee of and from any and all claims, damages and
expenses resulting from or relating to its determinations pursuant to this
Section 4.6, except for claims, damages or expenses resulting from the gross
negligence or willful misconduct of the Referee.

 

4.7          Further Actions. The Company shall have the right to take such
action as it deems necessary or appropriate to satisfy any requirements under
federal, state or other laws to withhold or to make deductions from any benefits
payable under the Plan.

 

SECTION 5.

DISTRIBUTION OF BENEFITS

 

5.1          Payment. Except as otherwise specifically provided in this Plan,
payments will be made in a single lump sum payment as follows:

 

(a)               If the Termination Date occurs prior to the Change of Control
during the Change of Control Period, payments will be made within 60 days
following the date of the Change of Control if the Change of Control constitutes
a “change of control event” under Section 409A of the Code (“409A Change of
Control”), provided the Employee has executed and not revoked the Release.

 

(b)               If the Termination Date occurs prior to the Change of Control
during the Change of Control Period and the Change of Control is not a 409A
Change of Control, payments will be made on the date within 60 days following
the date that is six months following the Termination Date, provided the
Employee has executed and not revoked the Release.

 

(c)               If the Termination Date occurs on or after the Change of
Control, payments will be made within 60 days following the Termination Date,
provided the Employee has executed and not revoked the Release.

 

5.2          Deceased Employees. Severance Pay shall be paid to the estate of
any eligible Employee who dies before the entire amount due hereunder is paid.

 

 10 

 

 

SECTION 6.

PLAN ADMINISTRATION

 

6.1          Compensation Committee. The Plan shall be administered by the
Compensation Committee, which shall have complete authority to prescribe, amend
and rescind rules and regulations relating to the Plan, and to make
modifications and amendments to the Plan in accordance with Section 7.2 hereof.

 

6.2          Determinations Conclusive. The determinations by the Compensation
Committee prior to a Change of Control on the matters referred to such Committee
shall be conclusive. Prior to a Change of Control, the Compensation Committee
shall have full discretionary authority, the maximum discretion allowed by law,
to administer, interpret and apply the terms of the Plan, and to determine any
and all questions or disputes hereunder, including but not limited to
eligibility for benefits and the amount of benefits due. Subsequent to a Change
of Control the Compensation Committee shall not have full discretionary
authority; rather, its determinations shall be made strictly in accordance with
the terms of the Plan and shall be subject to de novo review by a court of
competent jurisdiction.

 

6.3          Disputes. In the event of a claim by any person, including but not
limited to any Employee (the “Claimant”), as to whether such person is entitled
to any benefit under the Plan, the amount of any distribution or its method of
payment, such Claimant shall present the reason for his or her claim in writing
to the Compensation Committee. Such claim must be filed within ninety (90) days
following the date upon which the Claimant first learns of his or her claim. All
claims shall be in writing, signed and dated and shall briefly explain the basis
for the claim. The claim shall be mailed to the Compensation Committee by
certified mail at the following address:

 

Liberty Property Trust

650 East Swedesford Road, Suite 400,

Wayne, PA 19087

Attention: General Counsel's Office

Compensation Committee for the

Liberty Property Trust Senior Officer Severance Plan

 

The Compensation Committee shall, within ninety (90) days after receipt of such
written claim, decide the claim and send written notification to the Claimant as
to its disposition; provided that the Compensation Committee may elect to extend
such period for an additional ninety (90) days if special circumstances so
warrant and the Claimant is so notified in writing prior to the expiration of
the original ninety (90)-day period. In the event the claim is wholly or
partially denied, such written notification shall (a) state the specific reason
or reasons for the denial; (b) make specific reference to pertinent Plan
provisions on which the denial is based; (c) provide a description of any
additional material or information necessary for the Claimant to perfect the
claim and an explanation of why such material or information is necessary; and
(d) set forth the procedure by which the Claimant may appeal the denial of his
or her claim. The Claimant may request a review of such denial by making
application in writing to the Compensation Committee within sixty (60) days
after receipt of such denial. Such application must be via certified mail. The
named appeals fiduciary is the Compensation Committee or the person(s) named by
the Compensation Committee to review the Claimant’s appeal. Such Claimant (or
his or her duly authorized representative) may, upon written request to the
Compensation Committee, review any documents pertinent to his or her claim, and
submit in writing issues and comments in support of his or her claim or
position. Within sixty (60) days after receipt of a written appeal, the named
appeals fiduciary shall decide the appeal and notify the Claimant of the final
decision; provided that the named appeals fiduciary may elect to extend such
sixty (60)-day period to up to one hundred twenty (120) days after receipt of
the written appeal. The final decision shall be in writing and shall include
specific reasons for the decision, written in a manner calculated to be
understood by the Claimant, and specific references to the pertinent Plan
provisions on which the decision is based.

 

 11 

 

 

 

6.4          Exhaustion and Time Limit to Bring a Judicial Claim.

 

(a)               A claim or action (i) to recover benefits allegedly due under
the Plan or by reason of any law, (ii) to enforce rights under the Plan, (iii)
to clarify rights to future benefits under the Plan, or (iv) that relates to the
Plan and seeks a remedy, ruling or judgment of any kind against the Plan or a
Plan fiduciary or party in interest (collectively, a “Judicial Claim”), may not
be commenced in any court or forum until after the claimant has exhausted the
Plan’s claims and appeals procedures set forth in Section 6.3 above (an
“Administrative Claim”). Any Judicial Claim must be commenced in the appropriate
court or forum no later than two years from the earliest of (i) the date the
first benefit payment was made or allegedly due; or (ii) the date the
Compensation Committee or its delegate first denied the claimant’s request;
provided, however, that, if the claimant commences an Administrative Claim
before the expiration of such two-year period, the period for commencing a
Judicial Claim shall expire on the later of the end of the two-year period and
the date that is three months after the claimant’s appeal of the initial denial
of his Administrative Claim is finally denied, such that the claimant has
exhausted the Plan’s claims and appeals procedures. Any claim or action that is
commenced, filed or raised, whether a Judicial Claim or an Administrative Claim,
after expiration of such two-year period (or, if applicable, expiration of the
three-month period following exhaustion of the Plan’s claims and appeals
procedures) shall be time-barred.

 

6.5          Payment of Fees. All reasonable legal fees and expenses of the
Claimant incurred in pursuing a claim in accordance with Section 6.3 shall be
reimbursed to such Claimant by the Company, but only if the Claimant
substantially prevails with respect to such claim.

 

SECTION 7.

PLAN MODIFICATION OR TERMINATION

 

7.1          Termination. The Plan shall continue in effect until terminated by
the Company’s Board of Trustees.

 

7.2          Modifications and Amendments. Prior to a Change of Control, the
Compensation Committee may, in its sole discretion, make any modifications or
amendments to the Plan that it deems desirable; provided that if a Change of
Control occurs within six (6) months after such modification or amendment, the
modification will be deemed null and void ab initio except for such
modifications or amendments which do not adversely affect the rights or reduce
the amount of severance benefits payable to any Employee under the Plan or which
are required by applicable law. If a Change of Control occurs, the Plan may not
be modified, amended or terminated until two (2) years after the Change of
Control occurs, except for such modifications or amendments which do not
adversely affect the rights or reduce the amount of severance benefits payable
to of any Employee under the Plan.

 12 

 

 

7.3          Determination of Claims. All claims for benefits hereunder, even if
raised after termination of the Plan, shall be determined pursuant to Section
6.3, and when acting pursuant thereto, the Compensation Committee shall retain
the authority provided in Section 6. Notwithstanding any termination of the
Plan, if a Change of Control has occurred, all Employees who are eligible before
the date of termination to receive Severance Pay pursuant to the Plan shall
remain entitled to receive said benefit under the terms and conditions of the
Plan.

 

SECTION 8.

GENERAL PROVISIONS

 

8.1          No Right to Employment. Nothing herein contained shall be deemed to
give any Employee the right to be retained in the employ of the Company or to
interfere with the right of the Company to discharge him or her at any time,
with or without cause.

 

8.2          Vacancies on Compensation Committee. If any of the positions on the
Compensation Committee becomes vacant, either the Chairman of the Board or
President of the Company may appoint such person or persons as he or she
determines, to carry out the responsibilities assigned to such position under
the Plan, so long as, if a Change of Control has occurred within two (2) years
prior to such appointment, such person was employed by the Company or was a
member of the Board of Trustees prior to such Change of Control.

 

8.3          Assignments. Except as otherwise provided by law, no right or
interest of any Employee under the Plan shall be assignable or transferable, in
whole or in part, either directly or by operation of law or otherwise, including
without limitation by execution, levy, garnishment, attachment, pledge or in any
other manner, but excluding adjudication of incompetency; no attempted
assignment or transfer thereof shall be effective; and no right or interest of
any Employee under the Plan shall be liable for, or subject to, any obligation
or liability of such Employee, except to the extent specifically provided for
herein.

 

8.4          Plan Unfunded. The Plan is unfunded.

 

8.5          No Set Off; No Mitigation. Except as provided herein, the Company’s
obligation to make the payments provided for in the Plan and otherwise to
perform its obligations hereunder shall not be affected by any circumstances,
including without limitation any set-off, counterclaim, recoupment, defense or
other right which the Company may have against Employee or others. In no event
shall Employee be obligated to seek other employment or take any other action by
way of mitigation of the amounts payable to Employee under any of the provisions
of the Plan, and such amounts shall not be reduced whether or not Employee
obtains other employment.

 

 13 

 

 

8.6          Governing Law. The Plan shall be governed by and construed in
accordance with the Employee Retirement Income Security Act of 1974, as amended,
and to the extent not preempted, the laws of the Commonwealth of Pennsylvania.

 

8.7          Welfare Plan. The Plan is intended to constitute a "welfare plan"
under the Employee Retirement Income Security Act of 1974, as amended, and any
ambiguities in the Plan shall be construed to effect that intent.

 

8.8          Section 409A of the Code.

 

(a)               Interpretation. Notwithstanding the other provisions hereof,
this Plan is intended to comply with the requirements of Section 409A of the
Code, to the extent applicable, and this Plan shall be interpreted to avoid any
penalty sanctions under Section 409A of the Code. Accordingly, all provisions
herein, or incorporated by reference, shall be construed and interpreted to
comply with Section 409A of the Code and, if necessary, any such provision shall
be deemed amended to comply with Section 409A of the Code. If any payment or
benefit cannot be provided or made at the time specified herein without
incurring sanctions under Section 409A of the Code, then such benefit or payment
shall be provided in full at the earliest time thereafter when such sanctions
will not be imposed. For purposes of Section 409A of the Code, all payments to
be made upon a termination of employment under this Plan may only be made upon a
“separation from service” within the meaning of such term under Section 409A of
the Code, each payment made under this Plan shall be treated as a separate
payment and the right to a series of installment payments under this Plan is to
be treated as a right to a series of separate payments. In no event shall
Employee, directly or indirectly, designate the calendar year of payment by the
timing of execution of a Release or otherwise. If a payment under the Plan is
subject to Section 409A of the Code and payment could be made or could commence
in two calendar years based on when the Employee executes the Release, payment
shall be made or shall commence in the later calendar year.

 

(b)               Payment Delay. To the maximum extent permitted under Section
409A of the Code, the severance benefits payable under this Plan are intended to
comply with the “short-term deferral exception” under Treas. Reg.
§1.409A-1(b)(4), and any remaining amount is intended to comply with the
“separation pay exception” under Treas. Reg. §1.409A-1(b)(9)(iii); provided,
however, if on the date of Employee’s termination of employment Company’s stock
(or stock of any other company required to be aggregated with Company for
purposes of Section 409A of the Code) is publicly-traded on an established
securities market or otherwise and Employee is a “specified employee” (as such
term is defined in Section 409A(a)(2)(B)(i) of the Code and its corresponding
regulations) as determined by the Company’s Board of Directors (or its delegate)
in its sole discretion in accordance with its “specified employee” determination
policy, then all cash severance payments payable to Employee under this Plan
that are deemed as deferred compensation subject to the requirements of Section
409A of the Code and payable within six (6) months following Employee’s
“separation from service” shall be postponed for a period of six (6) months
following Employee’s “separation from service” with Company, if required by
Section 409A of the Code. The postponed amounts shall be paid to Employee in a
lump sum within thirty (30) days after the date that is six (6) months following
Employee’s “separation from service” with Company. If Employee dies during such
six (6) month period and prior to payment of the postponed cash amounts
hereunder, the amounts delayed on account of Section 409A of the Code shall be
paid to the personal representative of Employee’s estate within sixty (60) days
after Employee’s death.

 

 14 

 

 

(c)               Reimbursements. All reimbursements and provision of in-kind
benefits provided under this Plan shall be made or provided in accordance with
the requirements of Section 409A of the Code, including, where applicable, the
requirement that (i) any reimbursement is for expenses incurred during
Employee’s lifetime (or during a shorter period of time specified in this Plan),
(ii) the amount of expenses eligible for reimbursement, or the amount of in-kind
benefits provided, during a calendar year may not affect the expenses eligible
for reimbursement in any other calendar year, (iii) the reimbursement of an
eligible expense or provision of in-kind benefits will be made on or before the
last day of the taxable year following the year in which the expense is incurred
or payment becomes due, and (iv) the right to reimbursement or in-kind benefits
is not subject to liquidation or exchange for another benefit. Any tax gross up
payments to be made hereunder shall be made not later than the end of Employee’s
taxable year next following Employee’s taxable year in which the related taxes
are remitted to the taxing authority.

 

8.9          Recoupment Policy. The Employee and any Severance Pay or benefits
to which the Employee shall be entitled to under the Plan shall be subject to
any compensation, clawback and recoupment policies as required by applicable law
or regulation, or otherwise that may be applicable to the Employee as an
employee of the Company, as in effect from time to time and as approved by the
Board of Directors, the Compensation Committee or a duly authorized committee
thereof prior to the Change of Control.

  

 15 

 

 

Exhibit A

  

 16 

 

  

Exhibit B

  

LIBERTY PROPERTY TRUST

 

GENERAL RELEASE AGREEMENT1

 

I, «Name», enter into this Release of Claims Agreement (“Agreement”) in favor of
LIBERTY PROPERTY TRUST (the “Company”) any and all of its respective
predecessors, successors, assigns, subsidiaries, parents, branches, divisions,
affiliates, related entities and present and former officers, directors,
employees, stockholders and agents of same both in the United States and abroad
acting in their capacity for the Company, in exchange for the benefits I will
receive from the Company that are described below, and state as follows:

 

I.Termination Date. I understand and acknowledge that the effective date of
termination of my employment with the Company is «Termination Date» (the
“Termination Date”).

 

II.Eligibility to Receive Plan Benefits. By executing and providing a copy of
this Agreement within the timeframe set forth below in Section V, I acknowledge
that I have met the eligibility requirements, as set forth in Section 3.1 of the
“Liberty Property Trust Senior Officer Severance Plan,” attached as Attachment A
(the “Plan Benefits”). Furthermore, I acknowledge that I understand I will be
ineligible to receive Plan Benefits if any of the disqualifying events, as set
forth in Sections 3.2, 3.3 and 3.6 of Attachment A, occur.

 

 

1 Note: There is a separate release for UK employees.

 

   

 

  

III.Release. In consideration for my receipt of the Plan Benefits, which I
acknowledge I would not otherwise be entitled to receive, I hereby fully,
irrevocably and unconditionally release any and all known and unknown claims
that I presently have against the Company, any and all of their respective
predecessors, successors, assigns, subsidiaries, parents, branches, divisions,
affiliates, related entities and present and former officers, directors,
employees, stockholders and agents of same both in the United States and abroad
acting in their capacity for the Company (individually and collectively the
“Released Parties”), through the date of execution of this Agreement, including,
but not limited to: all claims available under federal, state or local law
against the Company and the directors, officers, employees, employee benefit
plans and agents of the Company arising out of my employment with the Company or
the termination of that employment, including but not limited to all claims
arising under the Americans with Disabilities Act, the Civil Rights Act of 1991,
the Employee Retirement Income Security Act, the Equal Pay Act, the Genetic
Information Non-Discrimination Act, the Family and Medical Leave Act, Section
1981 of U.S.C. Title VII of the Civil Rights Act, and the Pennsylvania Human
Relations Act, Pennsylvania Equal Pay Law, Pennsylvania Whistleblower Law,
Pennsylvania Pregnancy Guidelines of the Human Relations Commission [Insert
Additional Applicable State Laws Based on State of Residence], or any other
statutory or common law limitation or regulation of the employment relationship
of state or federal law. Also included in the released Claims are all wrongful
termination claims, breach of contract claims, discrimination claims, harassment
claims, retaliation claims, whistleblower claims (to the fullest extent they may
be released under applicable law), defamation or other tort claims, and claims
for attorneys’ fees and costs. In addition, I acknowledge that I hereby waive
all claims available against the Released Parties arising out of my employment
with the Company or termination of that employment under the Age Discrimination
in Employment Act and the Older Workers Benefits Protection Act (collectively,
the “Claims”). I acknowledge that I am not waiving my right to vested benefits
under the written terms of the Company’s 401(K) Plan, claims for unemployment or
workers’ compensation benefits, any medical claim or any judgment or monetary
awards or settlements that may arise related to medical benefits under the group
health plan sponsored by the Company, [any right to indemnification under the
bylaws of the Company, or under any directors and officers insurance policy,
with respect to the performance of my duties as an employee or officer of the
Company,]2 claims arising after the date on which I sign this Agreement, or
claims that are not otherwise waivable under applicable law.

  

IV.Complaints. I hereby certify that I have not filed any complaint against any
Released Party with any local, state or federal court and agree not to do so in
the future for any Claims against the Released Parties, subject to the
exceptions set forth in Section VII below.

 

V.Consideration Period. By executing this agreement and releasing the Claims
against the Released Parties, I acknowledge that:

 

a.I have read this Agreement and understand the terms set forth herein;

  

b.I am signing this Agreement voluntarily in order to release the Claims against
the Released Parties, in exchange for the Plan Benefits which I otherwise would
not have received;

 

c.I am signing this Agreement after the date of my separation from the Company,
and I was offered at least forty-five (45) days to consider my choice to sign
the Agreement;

  

d.The Company advises me to consult with an attorney;

  

e.I am aware that I can revoke this Agreement within seven (7) days of signing
it and that the Agreement does not become effective until the seven (7)-day
period has passed. I understand that if I wish to revoke this Agreement within
the seven (7)-day period, I must contact [CONTACT NAME];

  

 

2 Note: To be included for those employees who have a right to indemnification.

 

   

 

 

 

f.I agree that I have received an attachment to this Agreement (Schedule 1) that
identifies the decisional unit, which means the class, unit, or group of
individuals covered by the offer of the Plan Benefits in consideration for
signing this Agreement as a part of a group termination, the factors the Company
used to determine who was eligible or selected for the employment termination
program, the time limits for the employment termination program, the job titles
and ages of all individuals within the decisional unit who were made eligible or
selected, and the job titles and ages of all individuals within the decisional
unit who were not selected or made eligible; and3

 

g.I agree that any changes to this Agreement before its execution, whether
material or immaterial, do not restart the time the Company has provided me to
review the Agreement.

 

VI.Confidentiality of Agreement Terms. Subject to the exceptions set forth
herein, I agree that the existence and terms of this Agreement are confidential,
and agree not to disclose the existence of or information contained in this
Agreement, except (a) to my attorney, accountant, income tax advisor or similar
professional, or spouse or domestic/civil union partner, (b) pursuant to a
lawful subpoena, or (c) as otherwise permitted by law.

 

VII.Reports to Government Entities. I acknowledge that nothing in this Agreement
restricts or prohibits me from initiating communications directly with,
responding to any inquiries from, providing testimony before, providing
confidential information to, reporting possible violations of law or regulation
to, or filing a claim or assisting with an investigation directly with a
self-regulatory authority or a government agency or entity, including the U.S.
Equal Employment Opportunity Commission, the Department of Labor, the National
Labor Relations Board, the Department of Justice, the Securities and Exchange
Commission, Congress, and any agency Inspector General (collectively, the
“Regulators”), or from making other disclosures that are protected under the
whistleblower provisions of state or federal law or regulation. However, to the
maximum extent permitted by law, I am waiving my right to receive any individual
monetary relief from the Company or any other Released Parties resulting from
such claims or conduct, regardless of whether you or another party has filed
them, and in the event you obtain such monetary relief the Company will be
entitled to an offset for the payments made pursuant to this Agreement. This
Agreement does not limit my right to receive an award from any Regulator that
provides awards for providing information relating to a potential violation of
law. I acknowledge and understand that I do not need the prior authorization of
the Company to engage in conduct protected by this clause, and I do not need to
notify the Company that I have engaged in such conduct.

 

VIII.Section 409A. It is intended that the payments and benefits under this
Agreement, including the Plan Benefits as described in Attachment A, shall be
exempt from, or comply with, Section 409A of the Internal Revenue Code of 1986,
as amended, and accordingly, to the maximum extent permitted, this Agreement
shall be interpreted and administered to be in accordance therewith. Each
payment hereunder is a separate payment. All amounts payable hereunder are
intended to meet first, the short-term deferral exemption, to the extent
applicable, and second, the separation pay exemption, to the extent applicable.
The terms of Section 8.8 of the Plan are hereby incorporated by reference.

 

 

3 Note: To be included for employees 40 and older.

 

   

 

  

IX.Successors. This Agreement is for the benefit of and is binding upon me and
my heirs, administrators, representatives, executors, successors, beneficiaries
and assigns, and is also for the benefit of the Released Parties and their
successors and assigns.

 

X.Entire Agreement and Amendment. This Agreement sets forth the entire agreement
between the Parties hereto and fully supersedes any prior agreements or
understandings between the parties, except with respect to certain provisions or
other prior agreements specifically incorporated by reference herein, including
but not limited to Attachment A. Each Party acknowledges that such Party has not
relied on any representations, promises, or agreements of any kind made to such
party in connection with the other party’s decision to enter into this
Agreement, except for those set forth in this Agreement.

 

XI.Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania without regard to
choice of law principles, and except as preempted by federal law. Any court of
competent jurisdiction within Pennsylvania shall have jurisdiction to hear and
decide any controversy between the Parties under or relating to this Agreement.

 

XII.Non-Admission of Liability. I acknowledge that I understand that this
Agreement and release of Claims against the Released Parties is not an admission
of liability on the part of the Released Parties.

 

XIII.Assignment. I hereby certify that I have not assigned or transferred, or
purported to assign or transfer, to any person or entity, any claim or any
portion thereof or interest therein. I acknowledge that I understand the Company
may assign its rights under this Agreement.

 

XIV.Severability. The Parties agree that if any provision of this Agreement or
the application thereof is held invalid, the invalidity shall not affect other
provisions or applications of the Agreement, which can be given their intended
effect without the invalid provisions or applications and to this end the
provisions of this Agreement are declared to be severable.

 

XV.Notices. All notices required by this Agreement shall be in writing and shall
be deemed to have been duly delivered in person or when mailed by certified
mail, return receipt requested, as follows:

 

·To Employee: to «Address1» «Address2», «City», «State», «Zip» or to the last
address I provide to the Company.

·To the Company: 650 East Swedesford Road, Ste 400, Wayne, PA 19087, Attn:
General Counsel.

  

   

 

 

Schedule 14

 

 

4 Note: To be included for employees 40 and older.

  

   

 

 

ACCEPTANCE

 

I hereby agree to the terms and conditions set forth above in the Agreement and
in Attachment A. I hereby state that I know and understand that by accepting the
Plan Benefits described herein and in Attachment A, and by signing the
Agreement, I am giving up any right I might have to bring a Claim against the
Released Parties.

 

 

TEAM MEMBER:  «Name»                     Date:   (Signature)     EMP ID:  «ID»