Document:

Exhibit 10.5

 

NITROMED, INC.

 

Agreement

 

THIS AGREEMENT by and between NitroMed, Inc., a
Delaware corporation (the “Company”), and                             
(the “Employee”) is made as of the date set forth below (the “Effective Date”).

 

WHEREAS, the Company recognizes that, as is the case
with many publicly-held corporations, the possibility of a change in control of
the Company exists and that such possibility, and the uncertainty and questions
which it may raise among key personnel, may result in the departure
or distraction of key personnel to the detriment of the Company and its
stockholders, and

 

WHEREAS, the Board of Directors of the Company (the “Board”)
has determined that appropriate steps should be taken to reinforce and
encourage the continued employment and dedication of the Company’s key
personnel without distraction from the possibility of a change in control of
the Company and related events and circumstances.

 

NOW, THEREFORE, as an inducement for and in
consideration of the Employee remaining in its employ, the Company agrees that
the Employee shall receive the severance benefits set forth in this Agreement
in the event the Employee’s employment with the Company is terminated under the
circumstances described below subsequent to a Change in Control (as defined in Section 1.1).

 

1.               Key Definitions.

 

As used herein, the following terms shall have the
following respective meanings:

 

1.1                                 “Change
in Control” means an event or occurrence set forth in any one or more of
subsections (a) through (d) below (including an event or occurrence
that constitutes a Change in Control under one of such subsections but is
specifically exempted from another such subsection):

 

(a)                                  the
acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) (a “Person”) of beneficial ownership of any capital stock of the Company
if, after such acquisition, such Person beneficially owns (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) 50% or more of either (x) the then-outstanding
shares of common stock of the Company (the “Outstanding Company Common Stock”)
or (y) the combined voting power of the then-outstanding securities of the
Company entitled to vote generally in the election of directors (the “Outstanding
Company Voting Securities”); provided, however, that for purposes of
this subsection (a), the following acquisitions shall not constitute a
Change in Control: (i) any acquisition directly from the Company
(excluding an acquisition pursuant to the exercise, conversion or exchange of
any security exercisable for, convertible into or exchangeable for common stock
or voting securities of the Company, unless the Person exercising, converting
or exchanging such security acquired such security directly from the Company or
an underwriter or agent of the Company), (ii) any acquisition by the
Company, (iii)

 

 

any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the
Company, or (iv) any acquisition by any corporation pursuant to a
transaction which complies with clauses (i) and (ii) of subsection (c) of
this Section 1.1; or

 

(b)                                 such
time as the Continuing Directors (as defined below) do not constitute a
majority of the Board (or, if applicable, the Board of Directors of a successor
corporation to the Company), where the term “Continuing Director” means at any
date a member of the  Board (i) who
was a member of the Board on the date of the execution of this Agreement or (ii) who
was nominated or elected subsequent to such date by at least a majority of the
directors who were Continuing Directors at the time of such nomination or
election or whose election to the Board was recommended or endorsed by at least
a majority of the directors who were Continuing Directors at the time of such
nomination or election; provided, however, that there shall be
excluded from this clause (ii) any individual whose initial assumption of
office occurred as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents, by or on behalf of a person other than the
Board; or

 

(c)                                  the
consummation of a merger, consolidation, reorganization, recapitalization or
statutory share exchange involving the Company or a sale or other disposition
of all or substantially all of the assets of the Company in one or a series of
transactions (a “Business Combination”), unless, immediately following such
Business Combination, each of the following two conditions is satisfied: (i) all
or substantially all of the individuals and entities who were the beneficial
owners of the Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 50% of the then-outstanding shares of common
stock and the combined voting power of the then-outstanding securities entitled
to vote generally in the election of directors, respectively, of the resulting
or acquiring corporation in such Business Combination (which shall include,
without limitation, a corporation which as a result of such transaction owns
the Company or substantially all of the Company’s assets either directly or
through one or more subsidiaries) (such resulting or acquiring corporation is
referred to herein as the “Acquiring Corporation”) in substantially the same
proportions as their ownership, immediately prior to such Business Combination,
of the Outstanding Company Common Stock and Outstanding Company Voting
Securities, respectively; and (ii) no Person (excluding any employee
benefit plan (or related trust) maintained or sponsored by the Company or by
the Acquiring Corporation) beneficially owns, directly or indirectly, 50% or
more of the then outstanding shares of common stock of the Acquiring
Corporation, or of the combined voting power of the then-outstanding securities
of such corporation entitled to vote generally in the election of directors
(except to the extent that such ownership existed prior to the Business
Combination); or

 

(d)                                 approval
by the stockholders of the Company of a complete liquidation or dissolution of
the Company.

 

1.2                                 “Change
in Control Date” means the first date during the Term (as defined in Section 2)
on which a Change in Control occurs. Anything in this Agreement to the contrary
notwithstanding, if (a) a Change in Control occurs, (b) the Employee’s
employment with the

 

2

 

Company is terminated prior to the date on which the Change in Control
occurs, and (c) it is reasonably demonstrated by the Employee that such
termination of employment (i) was at the request of a third party who has
taken steps reasonably calculated to effect a Change in Control or (ii) otherwise
arose in connection with or in anticipation of a Change in Control, then for
all purposes of this Agreement the “Change in Control Date” shall mean the date
immediately prior to the date of such termination of employment.

 

1.3                                 “Cause”
means:

 

(a)                                  the
Employee’s continued failure to substantially perform his reasonable
assigned duties (other than any such failure resulting from incapacity due to
physical or mental illness or any failure after the Employee gives written
notice of termination for Good Reason), which failure is not cured within 30
days after a written demand for substantial performance is received by the
Employee from the Chief Executive Officer of the Company which specifically
identifies the manner in which the Chief Executive Officer believes the
Employee has not substantially performed the Employee’s duties; or

 

(b)                                 the
Employee’s willful engagement in illegal conduct or gross misconduct which is
materially injurious to the Company.

 

1.4                                 “Good
Reason” means the occurrence, without the Employee’s written consent, of
any of the events or circumstances set forth in clauses (a) through (f) below.
Notwithstanding the occurrence of any such event or circumstance, such
occurrence shall not be deemed to constitute Good Reason if, prior to the Date
of Termination specified in the Notice of Termination (each as defined in Section 3.2(a))
given by the Employee in respect thereof, such event or circumstance has been
fully corrected and the Employee has been reasonably compensated for any losses
or damages resulting therefrom (provided that such right of correction by the
Company shall only apply to the first Notice of Termination for Good Reason
given by the Employee).

 

(a)                                  the
assignment to the Employee of duties which result in a material diminution of
the Employee’s position (including status, offices, titles and reporting
requirements), authority or responsibilities in effect immediately prior to the
earliest to occur of (i) the Change in Control Date, (ii) the date of
the execution by the Company of the initial written agreement or instrument
providing for the Change in Control or (iii) the date of the adoption by
the Board of Directors of a resolution providing for the Change in Control
(with the earliest to occur of such dates referred to herein as the “Measurement
Date”);

 

(b)                                 a
material reduction in the Employee’s annual base salary as in effect on the
Measurement Date or as the same was or may be increased thereafter from
time to time;

 

(c)                                  the
failure by the Company to (i) continue in effect any material compensation
or benefit plan or program (including without limitation any life insurance,
medical, health and accident or disability plan and any vacation or automobile
program or policy) (a “Benefit Plan”) in which the Employee participates or
which is applicable to the Employee immediately prior to the Measurement Date,
unless an equitable arrangement

 

3

 

(embodied in an ongoing substitute or alternative plan) has been made
with respect to such plan or program or (ii) continue the Employee’s
participation therein (or in such substitute or alternative plan) on a basis
not materially less favorable, both in terms of the amount of benefits provided
and the level of the Employee’s participation relative to other participants,
than the basis existing immediately prior to the Measurement Date;

 

(d)                                 a
change by the Company in the location at which the Employee performs his principal
duties for the Company to a new location that is more than 50 miles from the location at which
the Employee performed his principal duties for the Company immediately prior
to the Measurement Date; or a requirement by the Company that the Employee travel
on Company business to a substantially greater extent than required immediately
prior to the Measurement Date;

 

(e)                                  the
failure of the Company to obtain the agreement from any successor to the
Company to assume and agree to perform this Agreement, as required by Section 5.1;
or

 

(f)                                    any
material breach by the Company of this Agreement with the Employee.

 

The Employee’s right to terminate his employment for
Good Reason shall not be affected by his incapacity due to physical or mental
illness.

 

1.5                                 “Disability”
means the Employee’s absence from the full-time performance of the Employee’s
duties with the Company for 180 consecutive calendar days as a result of
incapacity due to mental or physical illness which is determined to be total
and permanent by a physician selected by the Company or its insurers and
acceptable to the Employee or the Employee’s legal representative.

 

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

 

2.               Term of Agreement. This Agreement, and all rights and obligations of
the parties hereunder, shall take effect upon the Effective Date and shall
expire upon the first to occur of (a) the expiration of the Term (as
defined below) if a Change in Control has not occurred during the Term, (b) the
termination of the Employee’s employment with the Company prior to the Change
in Control Date, (c) the date 12 months after the Change in Control Date,
if the Employee is still employed by the Company as of such later date, or (d) the
fulfillment by the Company of all of its obligations under Sections 4 and
5.2 if the Employee’s employment with the Company terminates within 12 months
following the Change in Control Date. “Term” shall mean the period commencing
as of the Effective Date and continuing in effect through December 31,
2008; provided, however, that commencing on January 1, 2009 and each January 1 thereafter, the Term shall be
automatically extended for one additional year unless, not later than 90 days
prior to the scheduled expiration of the Term (or any extension thereof), the
Company shall have given the Employee written notice that the Term will not be
extended.

 

4

 

3.               Employment Status; Termination Following Change in
Control.

 

3.1                                 Not
an Employment Contract. The Employee acknowledges that this Agreement does
not constitute a contract of employment or impose on the Company any obligation
to retain the Employee as an employee and that this Agreement does not prevent
the Employee from terminating employment at any time. If the Employee’s
employment with the Company terminates for any reason and subsequently a Change
in Control shall occur, the Employee shall not be entitled to any benefits
hereunder except as otherwise provided pursuant to Section 1.2.

 

3.2                                 Termination
of Employment.

 

(a)                                  If
the Change in Control Date occurs during the Term, any termination of the
Employee’s employment by the Company or by the Employee within 12 months
following the Change in Control Date (other than due to the death of the
Employee) shall be communicated by a written notice to the other party hereto
(the “Notice of Termination”), given in accordance with Section 6. Any
Notice of Termination shall: (i) indicate the specific termination
provision (if any) of this Agreement relied upon by the party giving such
notice, (ii) to the extent applicable, set forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of the
Employee’s employment under the provision so indicated and (iii) specify
the Date of Termination (as defined below). The effective date of an employment
termination (the “Date of Termination”) shall be the close of business on the
date specified in the Notice of Termination (which date may not be less
than 15 days or more than 120 days after the date of delivery of such Notice of
Termination), in the case of a termination other than one due to the Employee’s
death, or the date of the Employee’s death, as the case may be.

 

(b)                                 The
failure by the Employee or the Company to set forth in the Notice of Termination
any fact or circumstance which contributes to a showing of Good Reason or Cause
shall not waive any right of the Employee or the Company, respectively,
hereunder or preclude the Employee or the Company, respectively, from asserting
any such fact or circumstance in enforcing the Employee’s or the Company’s
rights hereunder.

 

(c)                                  Any
Notice of Termination for Cause given by the Company must be given within 90
days of the occurrence of the event(s) or circumstance(s) which constitute(s)
Cause.

 

(d)                                 Any Notice of Termination for Good Reason
given by the Employee must be given within 90 days of the occurrence of the
event(s) or circumstance(s) which constitute(s) Good Reason.

 

4.               Benefits to Employee.

 

4.1                                 Stock
Acceleration. If the Change in Control Date occurs during the Term and the
Employee’s employment with the Company is terminated by the Company (other than
for Cause, Disability or death) or by the Employee for Good Reason within 12
months following the Change in Control Date,           %
of the then outstanding and unexercisable options to

 

5

 

purchase shares of Common Stock of the Company held by the Employee
shall become immediately exercisable in full.

 

4.2                                 Compensation.
If the Change in Control Date occurs during the Term and the Employee’s
employment with the Company terminates within 12 months following the Change in
Control Date, the Employee shall be entitled to the following benefits:

 

(a)                                  Termination
Without Cause or for Good Reason. If the Employee’s employment with the
Company is terminated by the Company (other than for Cause, Disability or
death) or by the Employee for Good Reason within 12 months following the Change
in Control Date, then, subject to Section 4.4 below, the Employee shall be
entitled to the following benefits:

 

(i)                                     the
Company shall pay to the Employee in a lump sum in cash within 30 days after
the Date of Termination the aggregate of the following amounts:

 

(1)                                  the
sum of (A) the Employee’s base salary through the Date of Termination and (B) 
the amount of any compensation previously deferred by the Employee (together
with any accrued interest or earnings thereon) and any accrued vacation pay, in
each case to the extent not previously paid (the sum of the amounts described in
clauses (A) and (B) shall be hereinafter referred to as the “Accrued
Obligations”); and

 

(2)                                  the
amount equal to (A)         
multiplied by (B) the Employee’s highest annual base salary during the
two-year period prior to the Change in Control Date.

 

(ii)                                  for
         months after the Date of
Termination, or such longer period as may be provided by the terms of the
appropriate plan, program, practice or policy, the Company shall continue to
provide benefits to the Employee and the Employee’s family at least equal to
those which would have been provided to them if the Employee’s employment had
not been terminated, in accordance with the applicable Benefit Plans in effect
on the Measurement Date or, if more favorable to the Employee and his family,
in effect generally at any time thereafter with respect to other peer
executives of the Company; provided, however, that if the Employee
becomes reemployed with another employer and is eligible to receive a
particular type of benefits (e.g., health insurance benefits) from such
employer on terms at least as favorable to the Employee and his family as those
being provided by the Company, then the Company shall no longer be required to
provide those particular benefits to the Employee and his family;

 

(iii)                               to the extent not
previously paid or provided, the Company shall timely pay or provide to the
Employee any other amounts or benefits required to be paid or provided or which
the Employee is eligible to receive following the Employee’s termination of
employment under any plan, program, policy, practice, contract or agreement of
the Company and its affiliated companies (such other amounts and benefits shall
be hereinafter referred to as the “Other Benefits”); and

 

(iv)                              for
purposes of determining eligibility (but not the time of commencement of
benefits) of the Employee for retiree benefits to which the Employee is

 

6

 

entitled, the Employee shall be considered to have remained employed by
the Company until          months after
the Date of Termination.

 

(b)                                 Resignation
without Good Reason; Termination for Death or Disability. If the Employee
voluntarily terminates his employment with the Company within 12 months
following the Change in Control Date, excluding a termination for Good Reason,
or if the Employee’s employment with the Company is terminated by reason of the
Employee’s death or Disability within 12 months following the Change in Control
Date, then the Company shall (i) pay the Employee (or his estate, if
applicable), in a lump sum in cash within 30 days after the Date of
Termination, the Accrued Obligations and (ii) timely pay or provide to the
Employee the Other Benefits.

 

(c)                                  Termination
for Cause. If the Company terminates the Employee’s employment with the
Company for Cause within 12 months following the Change in Control Date, then
the Company shall (i) pay the Employee, in a lump sum in cash within 30
days after the Date of Termination, the sum of (A) the Employee’s annual
base salary through the Date of Termination and (B) the amount of any
compensation previously deferred by the Employee, in each case to the extent
not previously paid, and (ii) timely pay or provide to the Employee the
Other Benefits.

 

4.3                                 Mitigation.
The Employee shall not be required to mitigate the amount of any payment or
benefits provided for in this Section 4 by seeking other employment or
otherwise. Further, except as provided in Section 4.2(a)(ii), the amount
of any payment or benefits provided for in this Section 4 shall not be
reduced by any compensation earned by the Employee as a result of employment by
another employer, by retirement benefits, by offset against any amount claimed
to be owed by the Employee to the Company or otherwise.

 

4.4                                 Section 409A
of the Code. To the extent that any amount to be paid or provided to
Employee in connection with a separation from service pursuant to this
Agreement is subject to Section 409A of the Code and at the time of the
separation from service the Employee is considered a specified employee within
the meaning of Section 409A of the Code, then such payment shall not be
made until the date (the “Payment Date”) that is 6 months and 1 day after such
separation from service (the “Six Month Period”). All amounts which would have
been paid during such Six Month Period will be paid in a lump sum on such
Payment Date.

 

5.               Successors.

 

5.1                                 Successor
to Company. The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company expressly to assume
and agree to perform this Agreement to the same extent that the Company
would be required to perform it if no such succession had taken place. Failure
of the Company to obtain an assumption of this Agreement at or prior to the
effectiveness of any succession shall constitute Good Reason if the Employee
elects to terminate employment, except that for purposes of implementing the
foregoing, the date on which any such succession becomes effective shall be
deemed the Date of Termination. As used in this Agreement, “Company” shall mean
the Company as defined above

 

7

 

and any successor to its business or assets as aforesaid which assumes
and agrees to perform this Agreement, by operation of law or otherwise.

 

5.2                                 Successor
to Employee. This Agreement shall inure to the benefit of and be
enforceable by the Employee’s personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Employee should die while any amount would still be payable to the Employee or
his family hereunder if the Employee had continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to the executors, personal representatives or administrators of
the Employee’s estate.

 

6.               Notice. All notices, instructions and other communications given hereunder or in
connection herewith shall be in writing. Any such notice, instruction or
communication shall be sent either (i) by registered or certified mail,
return receipt requested, postage prepaid, or (ii) prepaid via a reputable
nationwide overnight courier service, in each case addressed to the Company, at
125 Spring Street, Lexington, MA 02421-7801, Attention:  Secretary, with a copy to Steven D. Singer, Esq.,
Wilmer Cutler Pickering Hale and Dorr LLP, 60 State Street, Boston, MA 02109,
and to the Employee at the Employee’s address indicated on the signature page of
this Agreement (or to such other address as either the Company or the Employee may have
furnished to the other in writing in accordance herewith). Any such notice,
instruction or communication shall be deemed to have been delivered five
business days after it is sent by registered or certified mail, return receipt
requested, postage prepaid, or one business day after it is sent via a
reputable nationwide overnight courier service. Either party may give any
notice, instruction or other communication hereunder using any other means, but
no such notice, instruction or other communication shall be deemed to have been
duly delivered unless and until it actually is received by the party for whom
it is intended.

 

7.               Miscellaneous.

 

7.1                                 Employment
by Subsidiary. For purposes of this Agreement, the Employee’s employment
with the Company shall not be deemed to have terminated solely as a result of
the Employee continuing to be employed by a wholly-owned subsidiary of the
Company.

 

7.2                                 Severability.
The invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.

 

7.3                                 Injunctive
Relief. The Company and the Employee agree that any breach of this
Agreement by the Company is likely to cause the Employee substantial and
irrevocable damage and therefore, in the event of any such breach, in addition
to such other remedies which may be available, the Employee shall have the
right to specific performance and injunctive relief.

 

7.4                                 Governing
Law. The validity, interpretation, construction and performance of this
Agreement shall be governed by the internal laws of the Commonwealth of
Massachusetts, without regard to conflicts of law principles.

 

8

 

7.5                                 Waivers.
No waiver by the Employee at any time of any breach of, or compliance with, any
provision of this Agreement to be performed by the Company shall be deemed a
waiver of that or any other provision at any subsequent time.

 

7.6                                 Counterparts.
This Agreement may be executed in counterparts, each of which shall be
deemed to be an original but both of which together shall constitute one and
the same instrument.

 

7.7                                 Tax
Withholding. Any payments provided for hereunder shall be paid net of any
applicable tax withholding required under federal, state or local law.

 

7.8                                 Entire
Agreement. This Agreement sets forth the entire agreement of the parties
hereto in respect of the subject matter contained herein and supersedes all
prior agreements, promises, covenants, arrangements, communications,
representations or warranties, whether oral or written, by any officer,
employee or representative of any party hereto in respect of the subject matter
contained herein; and any prior agreement of the parties hereto in respect of
the subject matter contained herein is hereby terminated and cancelled. For the
avoidance of doubt, this Agreement provides for the payment of benefits to the
Employee, if any, solely in the event of a Change of Control in accordance with
the terms of this Agreement. This Agreement does not provide for the payment of
benefits to the Employee in the event of termination other than in connection
with a Change of Control in accordance with the terms of this Agreement. Accordingly,
in no event will the Employee be entitled to payments pursuant to both Section 4.2
of this Agreement and any other severance agreements, promises, covenants,
arrangements, communications, representations or warranties, whether oral or
written, made by any officer, employee or representative of the Company,
including without limitation either (x) severance arrangements provided for in
an offer letter of employment with the Company or (y) in that certain Executive
Severance Benefit Plan dated March 20, 2006 (the “Severance Plan”), as
such Severance Plan may be superceded, modified or amended by the Company.

 

7.9                                 Amendments.
This Agreement may be amended or modified only by a written instrument
executed by both the Company and the Employee.

 

7.10                           Employee’s
Acknowledgements. The Employee acknowledges that he: (a) has read this
Agreement; (b) has been represented in the preparation, negotiation, and
execution of this Agreement by legal counsel of the Employee’s own choice or
has voluntarily declined to seek such counsel; (c) understands the terms
and consequences of this Agreement; and (d) understands that the law firm
of Wilmer Cutler Pickering Hale and Dorr LLP is acting as counsel to the
Company in connection with the transactions contemplated by this Agreement, and
is not acting as counsel for the Employee.

 

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IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year set forth below.

 

	
   

  	
  NITROMED, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [NAME OF EMPLOYEE]

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:

  	
   

  	
   

  
						

 

10

 

NitroMed, Inc.

 

Schedule of
Executive Officers Party to Form of Agreement Attached Hereto

 

The executive officers of NitroMed, Inc. named
below have entered into the preceding form of Agreement. The following
chart illustrates the material differences in the terms of the form of
Agreement entered into by each such executive officer:

 

	
  Name of

  Executive Officer

  	
   

  	
  Date of

  Agreement

  	
   

  	
  Stock

  Acceleration

  	
   

  	
  Severance

  Payment

  	
   

  	
  Period of

  Continuation

  of Benefits

  	
   

  	
  Period of

  Determining

  Eligibility for

  Retiree Benefits

  
	
  Michael L.

  Sabolinski, M.D.

  	
   

  	
  4/10/06

  	
   

  	
  100% of then outstanding stock options accelerate

  	
   

  	
  100% of highest annual base salary during the
  two-year period prior to the change in control date

  	
   

  	
  12 months after date of termination

  	
   

  	
  12 months after date of termination

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  L. Gordon Letts,

  Ph.D.

  	
   

  	
  4/5/06

  	
   

  	
  100% of then outstanding stock options accelerate

  	
   

  	
  100% of highest annual base salary during the
  two-year period prior to the change in control date

  	
   

  	
  12 months after date of termination

  	
   

  	
  12 months after date of termination

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mark H. Pavao

  	
   

  	
  4/5/06

  	
   

  	
  100% of then outstanding stock options accelerate

  	
   

  	
  100% of highest annual base salary during the
  two-year period prior to the change in control date

  	
   

  	
  12 months after date of termination

  	
   

  	
  12 months after date of termination

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Gerald Bruce

  	
   

  	
  4/26/06

  	
   

  	
  100% of then outstanding stock options accelerate

  	
   

  	
  200% of highest annual base salary during the
  two-year period 

  	
   

  	
  24 months after date of termination

  	
   

  	
  24 months after date of termination

  

 

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  prior to the change in control date

   

  AND

   

  Average of last 2 annual bonuses received or current
  bonus target or bonus guarantee, whichever is higher

   

  AND

   

  Any cost of living payments existing at the time of
  the change in control date

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  James G. Ham, III

  	
   

  	
  4/9/06

  	
   

  	
  50% of then outstanding stock options accelerate

  	
   

  	
  50% of highest annual base salary during the
  two-year period prior to the change in control date

  	
   

  	
  6 months after date of termination

  	
   

  	
  6 months after date of termination

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Jane A. Kramer

  	
   

  	
  4/11/06

  	
   

  	
  50% of then outstanding stock options accelerate

  	
   

  	
  50% of highest annual base salary during the
  two-year period prior to the change in control date

  	
   

  	
  6 months after date of termination

  	
   

  	
  6 months after date of termination

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lisa E. Kelly

  	
   

  	
  4/11/06

  	
   

  	
  50% of then outstanding stock options 

  	
   

  	
  50% of highest annual base 

  	
   

  	
  6 months after date of 

  	
   

  	
  6 months after date of 

  

 

 

	
   

  	
   

  	
   

  	
   

  	
  accelerate

  	
   

  	
  salary during the two-year period prior to the
  change in control date

  	
   

  	
  termination

  	
   

  	
  terminationEXHIBIT 10.50

 

VORNADO REALTY TRUST

 

AMENDMENT NO. 1 TO VORNADO REALTY TRUST
2002 OMNIBUS SHARE PLAN

 

1.          Purpose
Of Amendment.

 

The Vornado Realty Trust 2002 Omnibus Share Plan (the “Plan”)
is hereby amended pursuant to Section 15 thereof to add a new Section 10
providing for awards consisting of “Operating Partnership Units” or “OP units”
as follows:

 

“10. Operating Partnership
Units.

 

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

 

(b)   For purposes of calculating the number of
Shares underlying an award of OP Units relative to the total number of Shares
reserved and available for issuance under the Plan, the Committee shall
establish in good faith the maximum number of Shares to which a Participant
receiving such award of OP Units may be entitled upon fulfillment of all
applicable conditions set forth in the relevant award documentation, including
vesting conditions, partnership capital account allocations, value accretion
factors, conversion ratios, exchange ratios and other similar criteria. If and
when any such conditions are no longer capable of being met, in whole or in
part, the number of Shares underlying such awards of OP Units shall be reduced
accordingly by the Committee and the related Shares shall be added back to the
Shares otherwise available for issuance under the Plan. Awards of OP Units may
be granted either alone or in addition to other awards granted under the Plan. The
Committee shall determine the eligible Participants to whom, and the time or
times at which, awards of OP Units shall be made; the number of OP Units to be
awarded; the price, if any, to be paid by the Participant for the acquisition
of such OP Units; and the restrictions and conditions applicable to such award
of OP Units. Conditions may be based on continuing employment (or other service
relationship), computation of financial metrics and/or achievement of
pre-established performance goals and objectives, with related length of the
service period for vesting, minimum or maximum performance thresholds,
measurement procedures and length of the performance period to be established
by the Committee or the Board of Trustees at the time of grant in their sole
discretion. The Committee may allow awards of OP Units to be held through a
limited partnership, or similar “look-through” entity, and the Committee may
require such limited partnership or similar entity to impose restrictions on
its partners or other beneficial owners that are not inconsistent with the
provisions of this Section 10. The provisions of the grant of OP Units
need not be the same with respect to each Participant.

 

(c)   Awards made pursuant to this Section 10 may
be subject to transfer restrictions, with conditions and limitations as to when
OP Units can be sold, assigned, transferred, pledged or otherwise encumbered
prior to the date on which any applicable vesting, performance or deferral
period lapses to be established by the Committee at the time of grant in its
sole discretion.

 

(d)   Notwithstanding Section 5 of the Plan, the
award agreement or other award documentation in respect of an award of OP Units
may provide that the recipient of an award under this Section 10 shall be
entitled to receive, currently or on a deferred or contingent basis, dividends
or dividend equivalents with respect to the number of Shares underlying the
award or other distributions from the Operating Partnership prior to vesting
(whether based on a period of time or based on attainment of specified
performance conditions), as determined at the time of grant by the Committee in
its sole discretion, and the Committee may provide that such amounts (if any)
shall be deemed to have been reinvested in additional Shares or OP Units.

 

(e)   OP Units awarded under this Section 10 may be
issued for no cash consideration.”

 

2.          Conforming
Changes

 

Sections 10 through 16 of the Plan are hereby
re-numbered as Sections 11 through 17. Provisions of the Plan that list or
refer to available or permitted awards under the Plan are hereby amended to add
to such list or reference, as applicable, “Operating Partnership Units.”

 

 

3.          No
Shareholder Approval Required

 

The Trust has been advised by the New York Stock
Exchange that no shareholder approval of this amendment is required under the
rules of the New York Stock Exchange.

 

4.          Effective
Date

 

This amendment is effective as of March 17, 2006, the
date on which it was approved by the Board of Trustees.

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