Document:

Exhibit 10.3

 

VORNADO REALTY TRUST 2002 OMNIBUS
SHARE PLAN

RESTRICTED LTIP UNIT AGREEMENT

 

RESTRICTED LTIP UNIT AGREEMENT made as of
date set forth on Schedule A hereto between VORNADO REALTY TRUST, a
Maryland real estate investment trust (the “Company”), its subsidiary
Vornado Realty L.P., a Delaware limited partnership (the Partnership”), and the
employee of the Company or one of its affiliates listed on Schedule A
(the “Employee”).

 

RECITALS

 

A.            In
accordance with the Vornado Realty Trust 2002 Omnibus Share Plan (the “Plan”),
the Company desires in connection with the employment of the Employee, to
provide the Employee with an opportunity to acquire LTIP Units (as defined in
the agreement of limited partnership of the Partnership, as amended (the “Partnership
Agreement”)) having the rights, voting powers, restrictions, limitations as
to distributions, qualifications and terms and conditions of redemption and
conversion set forth herein, in the Plan and in the Partnership Agreement, and
thereby provide additional incentive for the Employee to promote the progress
and success of the business of the Company, the Partnership and its
subsidiaries.

 

B.            Schedule A
hereto sets forth certain significant details of the LTIP Unit grant herein and
is incorporated herein by reference. Capitalized terms used herein and not
otherwise defined have the meanings provided on Schedule A.

 

NOW, THEREFORE, the Company, the Partnership
and the Employee hereby agree as follows:

 

AGREEMENT

 

1.             Grant of
Restricted LTIP Units. On the terms and conditions set forth below, as well as
the terms and conditions of the Plan, the Company hereby grants to the Employee
such number of LTIP Units as is set forth on Schedule A (the “Restricted
LTIP Units”).

 

2.             Vesting
Period. The vesting period of the Restricted LTIP Units (the “Vesting
Period”) begins on the Grant Date and continues until such date as is set
forth on Schedule A as the date on which the Restricted LTIP Units
are fully vested. On the first Annual Vesting Date following the date of this
Agreement and each Annual Vesting Date thereafter, the number of LTIP Units
equal to the Annual Vesting Amount shall become vested, subject to earlier
forfeiture as provided in this Agreement. To the extent that Schedule A
provides for amounts or schedules of vesting that conflict with the provisions
of this paragraph, the provisions of Schedule A will govern. Except
as permitted under Section 10, the Restricted LTIP Units for which the
applicable Vesting Period has not expired may not be sold, assigned,
transferred, pledged or otherwise disposed of or encumbered (whether voluntary
or involuntary or by judgment, levy, attachment, garnishment or other legal or
equitable proceeding).

 

 

The Employee shall be entitled to receive
distributions with respect to Restricted LTIP Units to the extent provided for
in the Partnership Agreement, as modified hereby, if applicable. The
Distribution Participation Date (as defined in the Partnership Agreement) for
the Restricted LTIP Units shall be the Grant Date. Notwithstanding the
foregoing, the Employee shall not have the right to receive cash distributions
paid on Restricted LTIP Units for which the applicable Vesting Period has not
expired unless the Employee is employed by the Company on the payroll date
coinciding with or immediately following the date any such distributions are
payable.

 

The Employee shall have the right to vote the
Restricted LTIP Units if and when voting is allowed under the Partnership
Agreement, regardless of whether the applicable Vesting Period has expired.

 

3.             Forfeiture
of Restricted LTIP Units. If the employment of the Employee by the Company
terminates for any reason except death, the Restricted LTIP Units for which the
applicable Vesting Period has not expired as of the date of such termination
shall be forfeited and returned to the Company. Upon the Employee’s death, all
of the Restricted LTIP Units (whether or not vested) shall become fully vested
and shall not be forfeitable. Upon the occurrence of a Change in Control of the
Company, any Restricted LTIP Units for which the applicable Vesting Period has
not expired, shall become fully vested and shall not be forfeitable. For
purposes of this Restricted LTIP Unit Agreement, a “Change in Control”
of the Company means the occurrence of one of the following events:

 

(i) individuals who, on the Grant Date,
constitute the Board of Trustees of the Company (the “Incumbent Trustees”)
cease for any reason to constitute at least a majority of the Board of Trustees
(the “Board”), provided that any person becoming a trustee
subsequent to the Grant Date whose election or nomination for election was
approved by a vote of at least two-thirds of the Incumbent Trustees then on the
Board (either by a specific vote or by approval of the proxy statement of the
Company in which such person is named as a nominee for trustee, without
objection to such nomination) shall be an Incumbent Trustee; provided, however,
that no individual initially elected or nominated as a trustee of the Company
as a result of an actual or threatened election contest with respect to
trustees or as a result of any other actual or threatened solicitation of
proxies by or on behalf of any person other than the Board shall be an
Incumbent Trustee;

 

(ii) any “person” (as such term is
defined in Section 3(a)(9) of the Securities Exchange Act of 1934
(the “Exchange Act”) and as used in Sections 13(d)(3) and
14(d)(2) of the Exchange Act) is or becomes, after the Grant Date, a “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 30% or more of the
combined voting power of the Company’s then outstanding securities eligible to
vote for the election of the Board (the “Company Voting Securities”); provided,
however, that an event described in this paragraph (ii)

 

2

 

shall not be deemed to be a Change in Control if any of following
becomes such a beneficial owner:  (A) the Company or any
majority-owned subsidiary of the Company (provided that this exclusion
applies solely to the ownership levels of the Company or the majority-owned
subsidiary), (B) any tax-qualified, broad-based employee benefit plan
sponsored or maintained by the Company or any such majority-owned subsidiary, (C) any
underwriter temporarily holding securities pursuant to an offering of such
securities, (D) any person pursuant to a Non-Qualifying Transaction (as
defined in paragraph (iii)), (E) (a) any of the partners (as of the
Grant Date) in Interstate Properties (“Interstate”) including immediate
family members and family trusts or family-only partnerships and any charitable
foundations of such partners (the “Interstate Partners”), (b) any
entities the majority of the voting interests of which are beneficially owned
by the Interstate Partners, or (c) any “group” (as described in Rule 13d-5(b)(i) under
the Exchange Act) including the Interstate Partners (the persons in (a), (b) and
(c) shall be individually and collectively referred to herein as, “Interstate
Holders”);

 

(iii) the consummation of a merger,
consolidation, share exchange or similar form of transaction involving the
Company or any of its subsidiaries, or the sale of all or substantially all of
the Company’s assets (a “Business Transaction”), unless immediately
following such Business Transaction (a) more than 50% of the total voting
power of the entity resulting from such Business Transaction or the entity
acquiring the Company’s assets in such Business Transaction (the “Surviving
Corporation”) is beneficially owned, directly or indirectly, by the
Interstate Holders or the Company’s shareholders immediately prior to any such
Business Transaction, and (b) no person (other than the persons set forth
in clauses (A), (B), (C), or (F) of paragraph (ii) above or any
tax-qualified, broad-based employee benefit plan of the Surviving Corporation
or its affiliates) beneficially owns, directly or indirectly, 30% or more of
the total voting power of the Surviving Corporation (a “Non-Qualifying
Transaction”); or

 

(iv) Board approval of a liquidation or
dissolution of the Company, unless the voting common equity interests of an
ongoing entity (other than a liquidating trust) are beneficially owned,
directly or indirectly, by the Company’s shareholders in substantially the same
proportions as such shareholders owned the Company’s outstanding voting common
equity interests immediately prior to such liquidation and such ongoing entity
assumes all existing obligations of the Company to Employee under this
Restricted Stock Agreement.

 

4.             Certificates. Each
certificate, if any, issued in respect of the Restricted LTIP Units awarded
under this Restricted LTIP Unit Agreement shall be registered in the Employee’s
name and held by the Company until the expiration of the applicable Vesting
Period. If certificates representing the LTIP Units are issued by the
Partnership at the time, at the expiration of each Vesting Period, the Company
shall deliver to the Employee (or, if applicable, to the Employee’s legal
representatives, beneficiaries or heirs) certificates representing the 

 

3

 

number of LTIP
Units that vested upon the expiration of such Vesting Period. The Employee
agrees that any resale of the LTIP Units received upon the expiration of the
applicable Vesting Period (or shares of Company’s common shares of beneficial
interest, par value $0.04 per share (the “Common Shares”) received upon
redemption of or in exchange for LTIP Units or Class A Units of the
Partnership into which LTIP Units may have been converted) shall not occur
during the “blackout periods” forbidding sales of Company securities, as set
forth in the then applicable Company employee manual or insider trading
property. In addition, any resale shall be made in compliance with the
registration requirements of the Securities Act of 1933, as amended (the “Securities
Act”), or an applicable exemption therefrom, including, without limitation,
the exemption provided by Rule 144 promulgated thereunder (or any
successor rule).

 

5.             Tax
Withholding. The Company has the right to withhold from cash
compensation payable to the Employee all applicable income and employment taxes
due and owing at the time the applicable portion of the Restricted LTIP Units
becomes includible in the Employee’s income (the “Withholding Amount”),
and/or to delay delivery of Restricted LTIP Units until appropriate
arrangements have been made for payment of such withholding. In the
alternative, the Company has the right to retain and cancel, or sell or otherwise
dispose of such number of Restricted LTIP Units as have a market value
determined at date the applicable LTIP Units vest, approximately equal to the
Withholding Amount with any excess proceeds being paid to Employee.

 

6.             Certain
Adjustments. If (i) the Company shall at any time be involved
in a merger, consolidation, dissolution, liquidation, reorganization, exchange
of shares, sale of all or substantially all of the assets or stock of the
Company or other transaction similar thereto, (ii) any stock dividend,
stock split, reverse stock split, stock combination, reclassification,
recapitalization, significant repurchases of stock, or other similar change in
the capital structure of the Company, or any extraordinary dividend or other
distribution to holders of Common Shares or Class A Units other than
regular cash dividends shall occur, or (iii) any other event shall occur
that in each case in the good faith judgment of the Committee necessitates
action by way of appropriate equitable adjustment in the terms of this
Restricted LTIP Unit Agreement, the Plan or the LTIP Units, then the Committee
shall take such action as it deems necessary to maintain the Employee’s rights
hereunder so that they are substantially proportionate to the rights existing
under this Agreement and the terms of the LTIP Units prior to such event,
including, without limitation: (A) adjustments in the LTIP Units; and (B) substitution
of other awards under the Plan or otherwise. In the event of any change in the
outstanding Common Shares (or corresponding change in the Conversion Factor
applicable to Class A Units of the Partnership) by reason of any share
dividend or split, recapitalization, merger, consolidation, spin-off,
combination or exchange of shares or other corporate change, or any
distribution to common shareholders of the Company other than regular cash
dividends, any Class A Units, shares or other securities received by the
Employee with respect to the applicable Restricted LTIP Units for which the
Vesting Period shall not have expired will be subject to the same restrictions
as the Restricted LTIP Units with respect to an equivalent number of shares or

 

4

 

securities and
shall be deposited with the Company.

 

7.             No Right to
Employment. Nothing herein contained shall affect the right of the
Company or any subsidiary to terminate the Employee’s services,
responsibilities and duties at any time for any reason whatsoever.

 

8.             Notice. Any
notice to be given to the Company shall be addressed to the Secretary of the
Company at 888 Seventh Avenue, New York, New York 10019 and any notice to be
given the Employee shall be addressed to the Employee at the Employee’s address
as it appears on the employment records of the Company, or at such other
address as the Company or the Employee may hereafter designate in writing
to the other.

 

9.             Governing
Law. This Restricted Stock Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Maryland, without
references to principles of conflict of laws.

 

10.           Successors
and Assigns. This Restricted LTIP Unit Agreement shall be binding
upon and inure to the benefit of the parties hereto and any successors to the
Company and any successors to the Employee by will or the laws of descent and distribution,
but this Restricted Stock Agreement shall not otherwise be assignable or
otherwise subject to hypothecation by the Employee. None of the LTIP Units
shall be sold, assigned, transferred, pledged or otherwise disposed of or
encumbered (whether voluntarily or involuntarily or by judgment, levy,
attachment, garnishment or other legal or equitable proceeding) (each such
action a “Transfer”), or redeemed in accordance with the Partnership
Agreement (a) prior to vesting and (b) unless such Transfer is in
compliance with all applicable securities laws (including, without limitation,
the Securities Act, and such Transfer is in accordance with the applicable
terms and conditions of the Partnership Agreement. Any attempted Transfer of
LTIP Units not in accordance with the terms and conditions of this Section 10
shall be null and void, and the Partnership shall not reflect on its records
any change in record ownership of any LTIP Units as a result of any such
Transfer, and shall otherwise refuse to recognize any such Transfer.

 

11.           Severability. If, for
any reason, any provision of this Restricted LTIP Unit Agreement is held
invalid, such invalidity shall not affect any other provision of this
Restricted LTIP Unit Agreement not so held invalid, and each such other
provision shall to the full extent consistent with law continue in full force
and effect. If any provision of this Restricted LTIP Unit Agreement shall be
held invalid in part, such invalidity shall in no way affect the rest of such
provision not held so invalid, and the rest of such provision, together with
all other provisions of this Restricted LTIP Unit Agreement, shall to the full
extent consistent with law continue in full force and effect.

 

12.           Headings. The
headings of paragraphs hereof are included solely for convenience of reference
and shall not control the meaning or interpretation of any of the provisions of
this Restricted LTIP Unit Agreement.

 

13.           Counterparts. This
Restricted LTIP Unit Agreement may be executed in

 

5

 

multiple
counterparts with the same effect as if each of the signing parties had signed
the same document. All counterparts shall be construed together and constitute
the same instrument.

 

14.           Miscellaneous. This
Restricted LTIP Unit Agreement may not be amended except in writing signed
by the Company and the Employee. Notwithstanding the foregoing, this Restricted
LTIP Unit Agreement may be amended in writing signed only by the Company
to:  (a) correct any errors or
ambiguities in this Restricted LTIP Unit Agreement; and/or (b) to make
such changes that do not materially adversely affect the Employee’s rights
hereunder. This grant shall in no way affect the Employee’s participation or
benefits under any other plan or benefit program maintained or provided by the
Company. In the event of a conflict between this Restricted LTIP Unit Agreement
and the Plan, the Plan shall govern.

 

15.           Conflict
With Employment Agreement . If (and only if) the Employee and the Company or its
affiliates have entered into an employment agreement, in the event of any
conflict between any of the provisions of this Agreement and any such
employment agreement the provisions of such employment agreement will govern. As
further provided in Section 7, nothing herein shall imply that any
employment agreement exists between the Employee and the Company or its
affiliates.

 

16.           Status as a
Partner. As of the Grant Date, the Employee shall be admitted as
a partner of the Partnership with beneficial ownership of the number of LTIP
Units issued to the Employee as of such date pursuant to this Restricted LTIP
Unit Agreement by: (A) signing and delivering to the Partnership a copy of
this Agreement; and (B) signing, as a Limited Partner, and delivering to
the Partnership a counterpart signature page to the Partnership
Agreement (attached hereto as Exhibit A).

 

17.           Status of
LTIP Units under the Plan. The LTIP Units are both issued as equity securities of
the Partnership and granted as awards under the Plan. The Company will have the
right at its option, as set forth in the Partnership Agreement, to issue Common
Shares in exchange for Class A Units into which LTIP Units may have
been converted pursuant to the Partnership Agreement, subject to certain
limitations set forth in the Partnership Agreement, and such Common Shares, if
issued, will be issued under the Plan. The Employee must be eligible to receive
the LTIP Units in compliance with applicable federal and state securities laws
and to that effect is required to complete, execute and deliver certain
covenants, representations and warranties (attached as Exhibit B).
The Employee acknowledges that the Employee will have no right to approve or
disapprove such determination by the Company.

 

18.           Investment
Representations; Registration. The Employee hereby makes the covenants,
representations and warranties and set forth on Exhibit B attached
hereto. All of such covenants, warranties and representations shall survive the
execution and delivery of this Restricted LTIP Unit Agreement by the Employee. The
Partnership will have no obligation to register under the Securities Act any
LTIP Units or any other securities issued pursuant to this

 

6

 

Restricted LTIP
Unit Agreement or upon conversion or exchange of LTIP Units.

 

19.           Section 83(b) Election. In
connection with this Restricted LTIP Unit Agreement the Employee hereby agrees
to make an election to include in gross income in the year of transfer the applicable
LTIP Units pursuant to Section 83(b) of the Internal Revenue Code of
1986, as amended, substantially in the form attached hereto as Exhibit C
and to supply the necessary information in accordance with the regulations
promulgated thereunder.

 

[signature page follows]

 

7

 

IN WITNESS WHEREOF, this Restricted LTIP Unit
Agreement has been executed by the parties hereto as of the date and year first
above written.

 

	
   

  	
  VORNADO
  REALTY TRUST

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  VORNADO
  REALTY L.P.

  
	
   

  	
   

  
	
   

  	
  By:  Vornado Realty Trust, its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  
							

 

8

 

EXHIBIT A

 

FORM OF
LIMITED PARTNER SIGNATURE PAGE

 

The Employee, desiring to
become one of the within named Limited Partners of Vornado Realty L.P., hereby
accepts all of the terms and conditions of (including, without limitation, the
provisions related to powers of attorney), and becomes a party to, the
Agreement of Limited Partnership, dated as of October 20, 1997, of Vornado
Realty L.P., as amended (the “Partnership Agreement”). The Employee
agrees that this signature page may be attached to any counterpart of
the Partnership Agreement and further agrees as follows (where the term “Limited
Partner” refers to the Employee:

 

1.             The
Limited Partner hereby confirms that it has reviewed the terms of the
Partnership Agreement and affirms and agrees that it is bound by each of the
terms and conditions of the Partnership Agreement, including, without
limitation, the provisions thereof relating to limitations and restrictions on
the transfer of Partnership Units.

 

2.             The
Limited Partner hereby confirms that it is acquiring the Partnership Units for
its own account as principal, for investment and not with a view to resale or
distribution, and that the Partnership Units may not be transferred or
otherwise disposed of by the Limited Partner otherwise than in a transaction
pursuant to a registration statement filed by the Partnership (which it has no
obligation to file) or that is exempt from the registration requirements of the
Securities Act of 1933, as amended (the “Securities Act”), and all
applicable state and foreign securities laws, and the General Partner may refuse
to transfer any Partnership Units as to which evidence of such registration or
exemption from registration satisfactory to the General Partner is not provided
to it, which evidence may include the requirement of a legal opinion
regarding the exemption from such registration. If the General Partner delivers
to the Limited Partner Common Shares of Beneficial Interest of the General
Partner (“Common Shares”) upon redemption of any Partnership Units, the
Common Shares will be acquired for the Limited Partner’s own account as
principal, for investment and not with a view to resale or distribution, and
the Common Shares may not be transferred or otherwise disposed of by the
Limited Partner otherwise than in a transaction pursuant to a registration statement
filed by the General Partner with respect to such Common Shares (which it has
no obligation under the Partnership Agreement to file) or that is exempt from
the registration requirements of the Securities Act and all applicable state
and foreign securities laws, and the General Partner may refuse to
transfer any Common Shares as to which evidence of such registration or
exemption from such registration satisfactory to the General Partner is not
provided to it, which evidence may include the requirement of a legal
opinion regarding the exemption from such registration.

 

3.             The
Limited Partner hereby affirms that it has appointed the General Partner, any
Liquidator and authorized officers and attorneys-in-fact of each, and each of
those acting singly, in each case with full power of substitution, as its true
and lawful agent and attorney-in-fact, with full power and authority in its
name, place and stead, in accordance with Section 15.11 of the Partnership
Agreement, which section is hereby incorporated by reference. The
foregoing power of attorney is hereby declared to be irrevocable and a power
coupled with an interest, and it shall

 

 

survive and not be affected by the death,
incompetency, dissolution, disability, incapacity, bankruptcy or termination of
the Limited Partner and shall extend to the Limited Partner’s heirs, executors,
administrators, legal representatives, successors and assigns.

 

4.             The
Limited Partner hereby confirms that, notwithstanding any provisions of the
Partnership Agreement to the contrary, the LTIP Units shall not be redeemable
by the Limited Partner pursuant to Section 8.6 of the Partnership
Agreement.

 

5.             a.             The
Limited Partner hereby irrevocably consents in advance to any amendment to the
Partnership Agreement, as may be recommended by the General Partner,
intended to avoid the Partnership being treated as a publicly-traded
partnership within the meaning of Section 7704 of the Internal Revenue
Code, including, without limitation, (x) any amendment to the provisions
of Section 8.6 of the Partnership Agreement intended to increase the
waiting period between the delivery of a Notice of Redemption and the Specified
Redemption Date and/or the Valuation Date to up to sixty (60) days or
(y) any other amendment to the Partnership Agreement intended to make the
redemption and transfer provisions, with respect to certain redemptions and
transfers, more similar to the provisions described in Treasury Regulations Section 1.7704-1(f).

 

b.             The Limited Partner
hereby appoints the General Partner, any Liquidator and authorized officers and
attorneys-in-fact of each, and each of those acting singly, in each case with
full power of substitution, as its true and lawful agent and attorney-in-fact,
with full power and authority in its name, place and stead, to execute and
deliver any amendment referred to in the foregoing paragraph 5(a) on the
Limited Partner’s behalf. The foregoing power of attorney is hereby declared to
be irrevocable and a power coupled with an interest, and it shall survive and
not be affected by the death, incompetency, dissolution, disability,
incapacity, bankruptcy or termination of the Limited Partner and shall extend
to the Limited Partner’s heirs, executors, administrators, legal
representatives, successors and assigns.

 

6.             The
Limited Partner agrees that it will not transfer any interest in the
Partnership Units (x) through (i) a national, non-U.S., regional, local or
other securities exchange, (ii) PORTAL or (iii) an over-the-counter
market (including an interdealer quotation system that regularly disseminates
firm buy or sell quotations by identified brokers or dealers by electronic
means or otherwise) or (y) to or through (a) a person, such as a broker or
dealer, that makes a market in, or regularly quotes prices for, interests in
the Partnership or (b) a person that regularly makes available to the
public (including customers or subscribers) bid or offer quotes with respect to
any interests in the Partnership and stands ready to effect transactions at the
quoted prices for itself or on behalf of others.

 

7.             The
Limited Partner acknowledges that the General Partner shall be a third party
beneficiary of the representations, covenants and agreements set forth in
Sections 4 and 6 hereof. The Limited Partner agrees that it will transfer,
whether by assignment or otherwise, Partnership Units only to the General
Partner or to transferees that provide the Partnership and the General Partner
with the representations and covenants set forth in Sections 4 and 6 hereof.

 

8.             This
Acceptance shall be construed and enforced in accordance with and governed by
the laws of the State of Delaware, without regard to the principles of
conflicts of law.

 

 

	
   

  	
  Signature Line for Limited Partner:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  	
   

  	
   

  	
  , 2006

  
	
   

  	
  Address of Limited Partner:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
								

 

 

EXHIBIT B

 

EMPLOYEE’S COVENANTS, REPRESENTATIONS AND
WARRANTIES

 

The Employee hereby represents, warrants and
covenants as follows:

 

(a)           The
Employee has received and had an opportunity to review the following documents
(the “Background Documents”):

 

(i)            The
Company’s latest Annual Report to Stockholders;

 

(ii)           The
Company’s Proxy Statement for its most recent Annual Meeting of Stockholders;

 

(iii)          The
Company’s Report on Form 10-K for the fiscal year most recently ended;

 

(iv)          The
Company’s Form 10-Q, if any, for the most recently ended quarter filed by
the Company with the Securities and Exchange Commission since the filing of the
Form 10-K described in clause (iii) above;

 

(v)           Each
of the Company’s Current Report(s) on Form 8-K, if any, filed since the
end of the fiscal year most recently ended for which a Form 10-K has been
filed by the Company;

 

(vi)          The
Partnership Agreement;

 

(vii)         The
Stock Plan; and

 

(viii)        The
Company’s Declaration of Trust, as amended.

 

The Employee also acknowledges
that any delivery of the Background Documents and other information relating to
the Company and the Partnership prior to the determination by the Partnership
of the suitability of the Employee as a holder of LTIP Units shall not
constitute an offer of LTIP Units until such determination of suitability shall
be made.

 

(b)           The
Employee hereby represents and warrants that

 

(i)            The
Employee either (A) is an “accredited investor” as defined in Rule 501(a) under
the Securities Act of 1933, as amended (the “Securities Act”), or (B) by
reason of the business and financial experience of the Employee, together with
the business and financial experience of those persons, if any, retained by the
Employee to represent or advise him with respect to the grant

 

 

to him of LTIP Units, the potential conversion of LTIP
Units into Class A Units of the Partnership (“Common Units”) and
the potential redemption of such Common Units for the Company’s Common Shares (“REIT
Shares”), has such knowledge, sophistication and experience in financial
and business matters and in making investment decisions of this type that the
Employee (I) is capable of evaluating the merits and risks of an investment in
the Partnership and potential investment in the Company and of making an informed
investment decision, (II) is capable of protecting his own interest or has
engaged representatives or advisors to assist him in protecting his interests,
and (III) is capable of bearing the economic risk of such investment.

 

(ii)           The
Employee understands that (A) the Employee is responsible for consulting
his own tax advisors with respect to the application of the U.S. federal income
tax laws, and the tax laws of any state, local or other taxing jurisdiction to
which the Employee is or by reason of the award of LTIP Units may become
subject, to his particular situation; (B) the Employee has not received or
relied upon business or tax advice from the Company, the Partnership or any of
their respective employees, agents, consultants or advisors, in their capacity
as such; (C) the Employee provides services to the Partnership on a
regular basis and in such capacity has access to such information, and has such
experience of and involvement in the business and operations of the
Partnership, as the Employee believes to be necessary and appropriate to make
an informed decision to accept this award of LTIP Units; and (D) an
investment in the Partnership and/or the Company involves substantial risks. The
Employee has been given the opportunity to make a thorough investigation of
matters relevant to the LTIP Units and has been furnished with, and has
reviewed and understands, materials relating to the Partnership and the Company
and their respective activities (including, but not limited to, the Background
Documents). The Employee has been afforded the opportunity to obtain any
additional information (including any exhibits to the Background Documents)
deemed necessary by the Employee to verify the accuracy of information conveyed
to the Employee. The Employee confirms that all documents, records, and books
pertaining to his receipt of LTIP Units which were requested by the Employee
have been made available or delivered to the Employee. The Employee has had an
opportunity to ask questions of and receive answers from the Partnership and
the Company, or from a person or persons acting on their behalf, concerning the
terms and conditions of the LTIP Units. The Employee has relied
upon, and is making its decision solely upon, the Background Documents and
other written information provided to the Employee by the Partnership or the
Company.

 

(iii)          The
LTIP Units to be issued, the Common Units issuable upon conversion of the LTIP
Units and any REIT Shares issued in connection with the redemption of any such
Common Units will be acquired for the account of the Employee for investment
only and not with a current view to, or with any intention of, a distribution
or resale thereof, in whole or in part, or the grant of any

 

13

 

participation therein, without prejudice, however, to
the Employee’s right (subject to the terms of the LTIP Units, the Stock Plan
and this Agreement) at all times to sell or otherwise dispose of all or any part of
his LTIP Units, Common Units or REIT Shares in compliance with the Securities
Act, and applicable state securities laws, and subject, nevertheless, to the
disposition of his assets being at all times within his control.

 

(iv)          The
Employee acknowledges that (A) neither the LTIP Units to be issued, nor
the Common Units issuable upon conversion of the LTIP Units, have been
registered under the Securities Act or state securities laws by reason of a
specific exemption or exemptions from registration under the Securities Act and
applicable state securities laws and, if such LTIP Units or Common Units are
represented by certificates, such certificates will bear a legend to such
effect, (B) the reliance by the Partnership and the Company on such
exemptions is predicated in part on the accuracy and completeness of the
representations and warranties of the Employee contained herein, (C) such
LTIP Units or Common Units, therefore, cannot be resold unless registered under
the Securities Act and applicable state securities laws, or unless an exemption
from registration is available, (D) there is no public market for such
LTIP Units and Common Units and (E) neither the Partnership nor the
Company has any obligation or intention to register such LTIP Units or the
Common Units issuable upon conversion of the LTIP Units under the Securities
Act or any state securities laws or to take any action that would make
available any exemption from the registration requirements of such laws,
except, that, upon the redemption of the Common Units for REIT Shares, the
Company may issue such REIT Shares under the Stock Plan and pursuant to a
Registration Statement on Form S-8 under the Securities Act, to the extent
that (I) the Employee is eligible to receive such REIT Shares under the Stock
Plan at the time of such issuance, (II) the Company has filed a Form S-8
Registration Statement with the Securities and Exchange Commission registering
the issuance of such REIT Shares and (III) such Form S-8 is effective at
the time of the issuance of such REIT Shares. The Employee hereby acknowledges
that because of the restrictions on transfer or assignment of such LTIP Units
acquired hereby and the Common Units issuable upon conversion of the LTIP Units
which are set forth in the Partnership Agreement or this Agreement, the
Employee may have to bear the economic risk of his ownership of the LTIP
Units acquired hereby and the Common Units issuable upon conversion of the LTIP
Units for an indefinite period of time.

 

(v)           The
Employee has determined that the LTIP Units are a suitable investment for the
Employee.

 

(vi)          No
representations or warranties have been made to the Employee by the Partnership
or the Company, or any officer, director, shareholder, agent, or affiliate of
any of them, and the Employee has received no 

 

14

 

information relating to an investment in the
Partnership or the LTIP Units except the information specified in paragraph (b) above.

 

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

 

(d)           The
Employee hereby agrees to make an election under Section 83(b) of the
Code with respect to the LTIP Units awarded hereunder, and has delivered with
this Agreement a completed, executed copy of the election form attached
hereto as Exhibit C. The Employee agrees to file the election (or
to permit the Partnership to file such election on the Employee’s behalf)
within thirty (30) days after the award of the LTIP Units hereunder with
the IRS Service Center at which such Employee files his personal income tax
returns, and to file a copy of such election with the Employee’s U.S. federal
income tax return for the taxable year in which the LTIP Units are awarded to
the Employee.

 

(e)           The
address set forth on the signature page of this Agreement is the address
of the Employee’s principal residence, and the Employee has no present
intention of becoming a resident of any country, state or jurisdiction other
than the country and state in which such residence is sited.

 

15

 

EXHIBIT C

 

ELECTION
TO INCLUDE IN GROSS INCOME IN YEAR OF

 

TRANSFER
OF PROPERTY PURSUANT TO SECTION 83(B)

 

OF THE
INTERNAL REVENUE CODE

 

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

 

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

 

Name:                                                                                       
(the “Taxpayer”)

 

Address: 

 

 

 

Social Security No./Taxpayer
Identification No.: 

 

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

 

The election is being made with respect to                         
LTIP Units in Vornado Realty L.P. (the “Partnership”).

 

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

 

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

 

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

 

(b)           The
Taxpayer’s LTIP Units vest in accordance with the vesting

 

16

 

provisions
described in the Schedule attached hereto. Unvested LTIP Units are
forfeited in accordance with the vesting provisions described in the Schedule attached
hereto.

 

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

 

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

 

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

 

Dated: 
                                          

 

 

Name:

 

17

 

SCHEDULE TO EXHIBIT C

 

Vesting Provisions of LTIP Units

 

The LTIP Units are subject to time-based vesting with             
percent (      %) vesting on each anniversary of
the date of grant provided that the Taxpayer remains an employee of the Company
or its subsidiares through such dates, subject to acceleration in the event of
certain extraordinary transactions or termination of the Taxpayer’s service
relationship with the Company under specified circumstances. Unvested LTIP
Units are subject to forfeiture in the event of failure to vest based on the
passage of time and continued aemployment.

 

 

	
   

  	
  VORNADO REALTY TRUST

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Employee

  

 

18

 

SCHEDULE A
TO RESTRICTED LTIP UNIT AGREEMENT

 

(Terms being
defined are in quotation marks.)

 

	
  Date of Restricted LTIP Unit Agreement:

  	
   

  
	
   

  	
   

  
	
  Name of Employee:

  	
   

  
	
   

  	
   

  
	
  Number of LTIP Units Subject to Grant:

  	
   

  
	
   

  	
   

  
	
  Grant Date:

  	
   

  
	
   

  	
   

  
	
  Date on Which Restricted LTIP Units are
  Fully Vested:

   

  	
   

  
	
  Vesting Period:

  	
   

  
	
   

  	
   

  
	
  “Annual Vesting Amount”

  Insert the number of LTIP Units that vest
  each year or other applicable vesting schedule.

   

  	
   

  
	
   

  	
   

  
	
  “Annual Vesting Date” (or if such
  date is not

  a business day, on the next succeeding business day):

  Insert the calendar date of each year on
  which LTIP Units will vest or other appropriate vesting schedule.

  	
   

  
	
   

  	
   

  
	
  Additional Matters:

  	
   

  

 

Initials of Company representative:                    

 

Initials of Employee:                    

 

19Exhibit 4.01

 

[FACE OF NOTE]

 

Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to the issuer or its agent for registration of transfer, exchange or
payment, and any certificate issued is registered in the name of Cede &
Co. or such other name as requested by an authorized representative of The
Depository Trust Company and any payment is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL since the registered owner hereof, Cede & Co., has an
interest herein.

 

	
  REGISTERED

  	
  CUSIP: 225434AW9

  
	
   

  	
   

  
	
  NO. 1

  	
  PRINCIPAL
  AMOUNT: $2,600,000

  

 

CREDIT SUISSE (USA), INC.

Reverse Convertible Securities Linked to the Performance of Norfolk Southern
Corp.

due April 27, 2007

 

CREDIT SUISSE (USA), INC., a Delaware corporation (the
“Company”, which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to Cede &
Co., or registered assigns, at the office or agency of the Company in New York,
New York, the Redemption Amount (as defined on the reverse hereof) on the
Maturity Date (as defined on the reverse hereof), in the coin or currency of
the United States and to pay a coupon of 8.5% per annum on the
principal amount from April 27, 2006. 
The coupon payment will be payable quarterly in arrears on July 27,
2006, October 27, 2006, January 27, 2007, and April 27, 2007.

 

Reference is hereby made to the further provisions of
this Note set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

 

This Note shall not be valid or become obligatory for
any purpose until the certificate of authentication hereon shall have been
manually signed by the Trustee under the Indenture referred to on the reverse
hereof.

 

F-1

 

IN WITNESS WHEREOF, the Company has caused this Note
to be duly executed under its corporate seal.

 

	
   

  	
  CREDIT SUISSE (USA),
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  [SEAL]

  	
  By:

  	
  /s/ Peter Feeney

  	
   

  
	
   

  	
   

  	
  Name: Peter Feeney

  
	
   

  	
   

  	
  Title: Authorized
  Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CREDIT SUISSE (USA),
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Grace Koo

  	
   

  
	
   

  	
   

  	
  Name: Grace Koo

  
	
   

  	
   

  	
  Title: Authorized
  Signatory

  

 

CERTIFICATE OF AUTHENTICATION

 

This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.

 

Dated:  April 27,
2006

 

	
   

  	
  JPMORGAN CHASE, N.A.,

  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ignazio Tamburello

  	
   

  
	
   

  	
   

  	
  Name:  Ignazio Tamburello

  
	
   

  	
   

  	
  Title:   Authorized Signatory

  

 

F-2

 

[REVERSE OF NOTE]

 

CREDIT SUISSE (USA), INC.

Reverse Convertible Securities Linked to the Performance of Norfolk Southern
Corp.

due April 27, 2007

 

This
Note is one of a duly authorized issue of debentures, notes, bonds or other
evidences of indebtedness of the Company (the “Securities”) of the series
hereinafter specified, all issued or to be issued under and pursuant to a
senior indenture, dated as of June 1, 2001 (the “Indenture”), between the
Company and JPMorgan Chase Bank, as trustee (the “Trustee”), to which Indenture
and all indentures supplemental thereto reference is hereby made for a
description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company, and the Holders of the
Securities.  The Securities may be issued
in one or more series, which different series may be issued in various
aggregate principal amounts, may mature at different times, may bear interest (if
any) at different rates, may be subject to different redemption provisions (if
any), may be subject to different sinking, purchase or analogous funds (if any)
and may otherwise vary as provided in the Indenture.  This Note is one of a series designated as
the Reverse Convertible Securities Linked to the Performance of Norfolk
Southern Corp., due April 27, 2007 (the “Note”).

 

A coupon will be payable on this Note of
8.5% per annum on the principal amount from April 27, 2006.  The coupon payment will be payable quarterly
in arrears on July 27, 2006, October 27, 2006, January 27, 2007,
and April 27, 2007.

 

This Note is payable in the manner, with the effect
and subject to the conditions provided in the Indenture.

 

If a payment date is not a business day as defined in
the Indenture at a place of payment, payment may be made at that place on the
next succeeding day that is a business day, and no interest shall accrue for
the intervening period.

 

The Indenture provides that, without prior notice to
any Holders, the Company and the Trustee may amend the Indenture and the
Securities of any series with the written consent of the Holders of a majority
in principal amount of the outstanding Securities of all series affected by
such amendment (all such series voting as one class), and the Holders of a
majority in principal amount of the outstanding Securities of all series
affected thereby (all such series voting as one class) may waive future
compliance by the Company with any provision of the Indenture or the Securities
of such series by written notice to the Trustee; provided that, without the
consent of each Holder of the Securities of each series affected thereby, an
amendment or waiver, including a waiver of past defaults, may not: (i) extend
the stated maturity of the Principal of, or any sinking fund obligation or any
installment of interest on, such Holder’s Security, or reduce the principal
amount thereof or the rate of interest thereon (including any amount in respect
of original issue discount), or any premium payable with respect thereto, or
adversely affect the rights of such Holder under any mandatory redemption or
repurchase provision or any right of redemption or repurchase at the option of
such Holder, or reduce the amount of the Principal of an Original Issue
Discount Security that would be due and payable upon an acceleration of the
maturity thereof or the amount thereof provable in bankruptcy, or

 

R-1

 

change any place of
payment where, or the currency in which, any Security of such series or any
premium or the interest thereon is payable, or impair the right to institute
suit for the enforcement of any such payment on or after the due date therefor;
(ii) reduce the percentage in principal amount of outstanding Securities
of the relevant series the consent of whose Holders is required for any such
supplemental indenture, for any waiver of compliance with certain provisions of
the Indenture or certain Defaults and their consequences provided for in the Indenture;
(iii) waive a Default in the payment of Principal of or interest on any
Security of such Holder; or (iv) modify any of the provisions of the
Indenture governing supplemental indentures with the consent of Securityholders
except to increase any such percentage or to provide that certain other
provisions of the Indenture cannot be modified or waived without the consent of
the Holder of each outstanding Security affected thereby.

 

The Indenture provides that, subject to certain
conditions, the Holders of at least a majority in principal amount (or, if any
Securities are Original Issue Discount Securities, such portion of the
Principal as is then accelerable) of the outstanding Securities of all series
affected (voting as a single class), by notice to the Trustee, may waive an
existing Default or Event of Default with respect to the Securities of such
series and its consequences, except a Default in the payment of Principal of or
interest on any Security or in respect of a covenant or provision of the Indenture
which cannot be modified or amended without the consent of the Holder of each
outstanding Security affected.  Upon any
such waiver, such Default shall cease to exist, and any Event of Default with
respect to the Securities of such series arising therefrom shall be deemed to
have been cured, for every purpose of the Indenture; but no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
right consequent thereto.

 

The Indenture provides that a series of Securities may
include one or more tranches (each a “tranche”) of Securities, including
Securities issued in a Periodic Offering. 
The Securities of different tranches may have one or more different
terms, including authentication dates and public offering prices, but all the
Securities within each such tranche shall have identical terms, including
authentication date and public offering price. 
Notwithstanding any other provision of the Indenture, subject to certain
exceptions, with respect to sections of the Indenture concerning the execution,
authentication and terms of the Securities, redemption of the Securities,
Events of Default of the Securities, defeasance of the Securities and amendment
of the Indenture, if any series of Securities includes more than one tranche,
all provisions of such sections applicable to any series of Securities shall be
deemed equally applicable to each tranche of any series of Securities in the
same manner as though originally designated a series unless otherwise provided
with respect to such series or tranche pursuant to a board resolution or a
supplemental indenture establishing such series or tranche.

 

No reference herein to the Indenture and no provision
of this Note or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the Redemption Amount of this Note
in the manner, at the place, at the time and in the coin or currency herein
prescribed.

 

The Securities are issuable initially only in
registered form without coupons in denominations of $1,000 and any integral
multiples of $1,000 in excess of that amount at the office or agency of the
Company in the Borough of Manhattan, The City of New York, and in the manner
and subject to the limitations provided in the Indenture.

 

R-2

 

The Securities will not be redeemable at the option of
the Company prior to maturity.

 

The Company will not be required to pay any Additional
Amounts on the Securities.

 

Maturity
Date

 

The Maturity Date of the Securities is April 27, 2007 (the “Maturity
Date”); however, if a market disruption event exists on the Valuation Date, as
determined by the Calculation Agent, the Maturity Date will be the later of April 27,
2007, and the third business day following the date on which the closing price
for the reference shares is calculated.

 

Redemption
Amount

 

The Company will redeem
the Securities at maturity for a redemption amount in cash that will be based
on the performance of the reference shares during the term of the Securities
(the “redemption amount”):

 

(1)          If the closing price of
the reference shares on the New York Stock Exchange (the “relevant exchange”)
is not less than the knock-in level, which is 80% of the Initial Share Price,
on any day from but not including April 25, 2006, which is the initial
setting date, to and including April 23, 2007 (the “Valuation Date”), the
redemption amount will equal a cash payment equal to 100% of the principal
amount of the Securities.

 

(2)          If (i) the closing
price of the reference shares on the relevant exchange is less than the
knock-in level on any day from but not including April 25, 2006, which is
the initial setting date, to and including the Valuation Date and (ii) the
closing price of the reference shares on the relevant exchange on the Valuation
Date, which we refer to as the final share price, is greater than or equal to
the Initial Share Price, the redemption amount will equal a cash payment equal
to 100% of the principal amount of the Securities.

 

(3)          Otherwise, the
redemption amount will be the physical delivery amount.  The physical delivery amount will be the
number of reference shares per $1,000 principal amount of Securities equal to
$1,000 divided by the Initial Share Price. 
The market value of the physical delivery amount will be less than the
principal amount of the Securities and may be zero.

 

The “Initial Share Price”
is $56.67.

 

A “business day” means a
day, other than a Saturday, Sunday or a day on which banking institutions in
New York, New York are generally authorized or obligated by law, regulation or
executive order to close and that is also a Trading Day.

 

A “trading day” means any
day, as determined by the Calculation Agent, on which trading is generally
conducted for reference shares (or, but for the occurrence of a market
disruption event, would have been generally conducted) on the relevant exchange
and for options

 

R-3

 

and other derivative instruments on the reference
shares on the Chicago Mercantile Exchange and the Chicago Board Options
Exchange, which we refer to collectively as the related exchanges, other than a
day on which the relevant exchange or the related exchanges are scheduled to
close prior to their regular weekday closing time.

 

Market
Disruption Events

 

If no final share price is available on the Valuation
Date because of a market disruption event, as determined by the Calculation
Agent in its sole discretion, the Calculation Agent may postpone the
calculation of the final share price until the earlier of the date such market
disruption event has ceased or three trading days after the Valuation Date, as
the case may be.  On such third trading
day, in the event there still exists a market disruption event, the Calculation
Agent will determine the final share price using its good faith estimate of the
value for the reference shares as of the closing time on the relevant exchange
on such date.  If a market disruption
event exists on the Valuation Date, the Maturity Date of the Securities will be
the later of the original Maturity Date and the third business day following
the day on which the final share price is calculated.  No interest will accrue or other payment be
payable because of any postponement of the Maturity Date.

 

A “market disruption event” means the occurrence or
existence of any suspension of or limitation imposed on trading (by reason of
movements in price exceeding limits permitted by any relevant exchange or
market or otherwise) of, or the unavailability, through a recognized system of
public dissemination of transaction information, of accurate price, volume or
related information in respect of (a) the reference shares or (b) any
options or futures contracts, or any options on such futures contracts,
relating to the reference shares if, in each case, in the determination of the
Calculation Agent, in its sole discretion, any such suspension, limitation or
unavailability is material.

 

For purposes of determining whether a market
disruption event has occurred:  (1) a
limitation on the hours or number of days of trading will not constitute a
market disruption event if it results from an announced change in the regular
business hours of the relevant exchange; (2) a decision permanently to
discontinue trading in the relevant options or futures contract will not
constitute a market disruption event; (3) limitations pursuant to New York
Stock Exchange Rule 80A—Index Arbitrage Trading Restrictions (or any
applicable rule or regulation enacted or promulgated by the New York Stock
Exchange, any other self-regulatory organization or the SEC of similar scope as
determined by the Calculation Agent) on trading during significant market
fluctuations will constitute a market disruption event; (4) a suspension
of trading in an options contract on the reference shares by the primary
securities market trading in such options, if available, by reason of (x) a
price change exceeding limits set by such securities exchange or market, (y) an
imbalance of orders relating to such contracts or (z) a disparity in bid and
ask quotes relating to such contracts will constitute a suspension or material
limitation of trading in options contracts related to the reference shares
notwithstanding that such suspension or material limitation is less than two
hours; (5) a suspension, absence or material limitation of trading on the
primary securities market on which options contracts related to the reference
shares are traded will not include any time when such securities market is
itself closed for trading under ordinary circumstances; and (6) a “suspension
or material limitation” on an exchange or in a market will include a suspension
or material limitation of trading by one class

 

R-4

 

of investors provided
that such suspension continues for more than two hours of trading or during the
last one-half hour period preceding the close of trading on the relevant
exchange or market (but will not include limitations imposed on certain types
of trading under New York Stock Exchange Rule 80A or any applicable rule or
regulation enacted or promulgated by the New York Stock Exchange, NASDAQ, any
other self-regulatory organization or the SEC of a similar scope or as a
replacement for Rule 80A, as determined by the Calculation Agent) and will
not include any time when such exchange or market is closed for trading as part
of such exchange’s or market’s regularly scheduled business hours.

 

Based on the information currently available to us, on
October 27, 1997, the New York Stock Exchange suspended all trading during
the one-half hour period preceding the close of trading pursuant to New York
Stock Exchange Rule 80B and, on each of September 11, 12, 13 and 14,
2001, the New York Stock Exchange suspended all trading for the entire day due
to certain terrorist activity.  If any
such suspension of trading occurred during the term of the Securities, it would
constitute a market disruption event. 
The existence or non-existence of these circumstances, however, is not
necessarily indicative of the likelihood of these circumstances arising or not
arising in the future.

 

Antidilution
Adjustments

 

General

 

The Calculation Agent will adjust
the Initial Share Price and the physical delivery amount if certain corporate
actions and other events described below (each of which, an “adjustment event”),
occur, and the Calculation Agent determines that such adjustment event has a
diluting or concentrative effect on the theoretical value of the reference
shares.  Set forth below are examples of
how adjustment events may lead to adjustments to the Initial Share Price and
the physical delivery amount.

 

Upon the occurrence of an
adjustment event that the Calculation Agent determines has a diluting or
concentrative effect on the theoretical value of the reference shares, for
purposes only of determining whether (i) the price of the reference shares
is less than or equal to the knock-in level and (ii) the final share price
is less than or equal to the Initial Share Price, the Calculation Agent will
typically adjust the Initial Share Price according to the following formula:

 

	
  adjusted initial share price = initial share price X

  	
  prior
  physical delivery amount

  	
   

  
	
  adjusted physical delivery amount

  	
   

  

 

The physical delivery amount will
be adjusted by the Calculation Agent as set forth in the specific examples
below.

 

The adjustments described below do
not cover all events that could affect the value of the Securities.

 

R-5

 

Adjustments

 

If an adjustment event occurs and the Calculation Agent
determines that the event has a diluting or concentrative effect on the
theoretical value of the reference shares, the Calculation Agent will calculate
a corresponding adjustment to the Initial Share Price and the physical delivery
amount as the Calculation Agent determines appropriate to account for that
diluting or concentrative effect.  The
Calculation Agent will also determine the effective date of that adjustment,
and the replacement of the reference shares, if applicable, in the event of
consolidation or merger.  Upon making any
such adjustment, the Calculation Agent will give notice as soon as practicable
to the Trustee, stating the adjustment of the Initial Share Price and physical
delivery amount.

 

If more than one adjustment event occurs, the Calculation
Agent will make an adjustment for each such adjustment event in the order in
which they occur, and on a cumulative basis. 
Accordingly, having adjusted the Initial Share Price and the physical
delivery amount for the first such adjustment event, the Calculation Agent will
adjust the Initial Share Price and the physical delivery amount for the second
adjustment event, applying the required adjustment to the Initial Share Price
and the physical delivery amount as already adjusted for the first adjustment
event, and so on for each subsequent adjustment event.

 

The Calculation Agent will not have to adjust the Initial
Share Price and the physical delivery amount for any adjustment event unless the adjustment would result in a
change to the Initial Share Price or the physical delivery amount of at least
0.1% in the Initial Share Price or the physical delivery amount that would
apply without the adjustment.  The
Initial Share Price and the physical delivery amount resulting from any adjustment
would be rounded up or down, as appropriate, to, in the case of the Initial
Share Price, the nearest cent, and, in the case of the physical delivery
amount, the nearest thousandth, with one-half cent and five ten-thousandths,
respectively, being rounded upwards.

 

If an adjustment event requiring antidilution adjustment
occurs, the Calculation Agent will make any adjustments with a view to
offsetting, to the extent practical, any change in the Holders’ economic
position relative to the Securities that results solely from that event.  The Calculation Agent may, in its sole
discretion, modify any antidilution adjustments as necessary to ensure an
equitable result.

 

The Calculation Agent has sole discretion in making all
determinations with respect to antidilution adjustments, including any
determination as to whether an adjustment event requiring an antidilution
adjustment has occurred, as to the nature of the adjustment required and how it
will be made.  In the absence of manifest
error, those determinations will be conclusive for all purposes and will be
binding on the Holders and the Company, without any liability on the part of
the Calculation Agent.  Upon written
request, the Calculation Agent will provide information about any adjustments
it makes.

 

R-6

 

Events requiring an antidilution
adjustment

 

The following is a list of adjustment events that may
require an antidilution adjustment:

 

(a)                                  a subdivision, consolidation
or reclassification of the reference shares or a free distribution or dividend
of any reference shares to existing holders of reference shares by way of
bonus, capitalization or similar issue;

 

(b)                                 a dividend or other
distribution to existing holders of reference shares of (i) the reference
shares, (ii) other share capital or securities granting the right to
payment of dividends equally or proportionately with such payments to holders
of the reference shares or (iii) any other type of securities, rights or
warrants in any case for payment (in cash or otherwise) at less than the
prevailing market price as determined by the Calculation Agent;

 

(c)                                  the declaration by the
issuer of the reference shares of an extraordinary or special dividend or other
distribution whether in cash or reference shares or other assets;

 

(d)                                 a repurchase of its common
stock by the issuer of the reference shares whether out of profits or capital
and whether the consideration for such repurchase is cash, securities or
otherwise;

 

(e)                                  a consolidation of the
issuer of the reference shares with another company or merger of the issuer of
the reference shares with another company; and

 

(f)                                    any other similar event that
may have a diluting or concentrative effect on the theoretical value of the
reference shares.

 

Certain adjustment events are discussed in
greater detail below.

 

Stock splits

 

A stock split is an increase in the
number of a corporation’s outstanding shares of stock without any change in its
stockholders’ equity.  As a result of a
stock split, each outstanding share will be worth less.

 

If the reference shares are subject to a stock split, the
Calculation Agent will adjust the physical delivery amount to equal the sum of
the prior physical delivery amount—i.e., the physical delivery amount before
that adjustment—and the product of (i) the number of additional shares
issued in the stock split with respect to each of the reference shares times (ii) the
prior physical delivery amount.

 

Reverse stock splits

 

A reverse stock split is a decrease in the number of a
corporation’s outstanding shares of stock without any change in its
stockholders’ equity.  As a result of a
reverse stock split, each outstanding share will be worth more.

 

If the reference shares are subject to a reverse stock
split, the Calculation Agent will adjust the physical delivery amount to equal
the product of the prior physical delivery amount and the quotient of (i) the
number of reference shares outstanding immediately after the reverse

 

R-7

 

stock split becomes effective divided by (ii) the
number of reference shares outstanding immediately before the reverse stock
split becomes effective.

 

Stock dividends

 

In a stock dividend, a corporation issues additional shares
of its stock to all holders of its outstanding stock in proportion to the
shares they own.  As a result of a stock
dividend, each outstanding share will be worth less.

 

If the reference shares are subject to a stock dividend
payable in the reference shares, then the Calculation Agent will adjust the
physical delivery amount to equal the sum of the prior physical delivery amount
and the product of (i) the number of additional shares issued in the stock
dividend with respect to each of the reference shares times (ii) the prior
physical delivery amount.

 

Other dividends and distributions

 

If the issuer of the reference shares declares a dividend
to be distributed to holders of record of the reference shares as of a date
falling in the period that begins on the day immediately following the
Valuation Date and ends on the day immediately prior to the Maturity Date, any
such dividend will not be paid to Holders.

 

The physical delivery amount will not be adjusted to
reflect any dividends or distributions paid with respect to the reference
shares, other than (i) stock dividends described above; (ii) issuances
of transferable rights and warrants as described in “—Transferable rights and
warrants” below; and (iii) extraordinary dividends as described below.

 

A dividend or other distribution with respect to the reference
shares will be deemed to be an “extraordinary dividend” if its per share value
exceeds that of the immediately preceding non-extraordinary dividend, if any,
for the reference shares by an amount equal to at least 10.00% of the market
price of the reference shares on the business day before the extraordinary
dividend date.  The ex dividend date for
any dividend or other distribution is the first day on which the reference
shares trade without the right to receive that dividend or distribution.  If an extraordinary dividend occurs, the
Calculation Agent will adjust the physical delivery amount to equal the product
of (1) the prior physical delivery amount times (2) a fraction, the
numerator of which is the market price of the reference shares on the business
day before the ex dividend date and the denominator of which is the amount by
which that market price exceeds the extraordinary dividend adjustment
amount.  The “extraordinary dividend
adjustment amount” with respect to an extraordinary dividend for the reference
shares equals:  (i) for an
extraordinary dividend that is paid in lieu of a regular quarterly dividend,
the amount of the extraordinary dividend per share of the reference shares
minus the amount per share of the immediately preceding dividend, if any, that
was not an extraordinary dividend for the reference shares, or (ii) for an
extraordinary dividend that is not paid in lieu of a regular quarterly
dividend, the amount per share of the extraordinary dividend.

 

To the extent an extraordinary dividend is not paid in
cash, the value of the non-cash component will be determined by the Calculation
Agent.  A distribution on the reference
shares that is a dividend payable in the reference shares, an issuance of
rights or warrants or a spin-off

 

R-8

 

event and that is also an extraordinary dividend will
result in an adjustment to the physical delivery amount only as described in “Stock
dividends” above, “Transferable rights and warrants” below or “Reorganization
events” below, as the case may be, and not as described here.

 

Transferable rights and warrants

 

If the issuer of the reference shares issues transferable
rights or warrants to all holders of the reference shares to subscribe for or
purchase the reference shares at an exercise price per share that is less than
the market price of the reference shares on the business day before the
extraordinary dividend date for the issuance, then the physical delivery amount
will be adjusted by multiplying the prior physical delivery amount by the
following fraction:  (i) the
numerator will be the sum of the number of reference shares outstanding at the
close of business on the day before that ex dividend date and the total number
of additional reference shares offered for subscription or purchase under those
transferable rights or warrants, and (ii) the denominator will be the sum
of the number of reference shares outstanding at the close of business on the
day before that ex dividend date and the product of (1) the total number
of additional reference shares offered for subscription or purchase under the
transferable rights or warrants times (2) the exercise price of those
transferable rights or warrants divided by the market price on the business day
before that extraordinary dividend date.

 

Reorganization events

 

Each of the following may be a reorganization event:  (i) the reference shares are
reclassified or changed; (ii) the issuer of the reference shares has been
subject to a merger, consolidation or other combination and either is not the
surviving entity or is the surviving entity but all outstanding reference
shares are exchanged for or converted into other property; (iii) a
statutory share exchange involving outstanding reference shares and the
securities of another entity occurs, other than as part of an event described
above; (iv) the issuer of the reference shares effects a spin-off (i.e.,
issues to all holders of reference shares common stock equity securities of
another issuer) other than as part of an event described above; (v) the
issuer of the reference shares sells or otherwise transfers its property and
assets as an entirety or substantially as an entirety to another entity (each
of the events in clauses (i) through (v) above, a “merger event”); (vi) a
takeover offer, tender offer, exchange offer, solicitation, proposal or other
event by any entity or person that results in such entity or person purchasing,
or otherwise obtaining or having the right to obtain, by conversion or other
means, not less than a majority of the outstanding voting reference shares as
determined by the Calculation Agent, based upon the making of filings with
governmental or self-regulatory agencies or such other information as the
Calculation Agent deems relevant, which we refer to as a tender offer; (vii) the
exchange on which the reference shares trade announces that pursuant to the rules of
such exchange, the reference shares cease (or will cease) to be listed, traded
or publicly quoted on it for any reason (other than a merger event or tender
offer) and are not immediately re-listed, re-traded or re-quoted on another
major U.S. exchange or quotation system (a “delisting event”); and (viii) the
issuer of the reference shares is liquidated, dissolved or wound up or is subject
to a proceeding under any applicable bankruptcy, insolvency or other similar
law (each, an “insolvency event”).

 

R-9

 

Adjustments for reorganization events

 

If a merger event occurs and a holder of the reference
shares that makes no election, vote or decision in connection with such merger
event would receive as full or partial consideration ordinary or common shares
of any person (other than the issuer of the reference shares) that are publicly
quoted, traded or listed on any major U.S. exchange or quotation system (the “new
shares”), then the Calculation
Agent will adjust the physical delivery amount so as to consist of the amount
and type of property distributed in the reorganization event in respect of the
prior physical delivery amount.  In this
instance, if more than one type of property is distributed, the physical
delivery amount will be adjusted so as to consist of each type of property
distributed, in a proportionate amount, so that the value of each type of
property comprising the new physical delivery amount as a percentage of the
total value of the new physical delivery amount equals the value of that type
of property as a percentage of the total value of all of the property
distributed in the reorganization event.

 

If a tender offer occurs, and the holder of the reference
shares can elect to receive new shares as full or partial consideration in
respect of such tender offer, then the Calculation Agent will adjust the
physical delivery amount in accordance with the preceding paragraph.

 

If a merger event occurs, and the consideration in respect
of such event does not consist in full or in part of new shares (or in the case
of a tender offer, a holder of the reference shares would not be able to elect
to receive in full or in part any new shares as consideration in respect of
such tender offer), then the Calculation Agent will accelerate the Maturity
Date to the day which is four business days after the approval date (as defined
below).  The amount payable at maturity
will be determined as described below under “Events of default and
acceleration.”  The approval date is the
closing date of a merger event or, in the case of a tender offer, the date on
which the person or entity making the tender offer acquires or acquires the
right to obtain the relevant percentage of reference shares.

 

If a delisting event or an insolvency event occurs, the
Calculation Agent will accelerate the Maturity Date to the day which is four
business days after the announcement date (as defined below).  On the Maturity Date, the Company will pay to
each Holder the physical delivery amount and for the purposes of such
calculation, the final share price will be deemed to be the closing price of
the reference shares on the business day immediately prior to the announcement
date.  The announcement date means, in
the case of a delisting event, the day of the first public announcement by the
relevant exchange that the reference shares will cease to trade or be publicly
quoted on such exchange, or, in the case of an insolvency event, the day of the
first public announcement of the institution of a proceeding or presentation of
a petition or passing of a resolution (or other analogous procedure in any
jurisdiction) that leads to an insolvency event with respect to the issuer of
the reference shares.

 

If a merger event or tender offer occurs, coupon payment
amounts will accrue on the Securities through the approval date and be paid on
the accelerated Maturity Date.  Such
coupon payments will be calculated using a 360-day year comprised of twelve 30-day
months.  If a delisting event or an
insolvency event occurs, the Company will pay all remaining scheduled unpaid
coupon payments due to a Holder through the scheduled Maturity Date on the
accelerated Maturity Date.

 

R-10

 

For the purposes of making an adjustment required by a
reorganization event, the Calculation Agent will determine the value of each
type of property distributed in the distribution, in its sole discretion.  For any property distributed consisting of
new shares, the Calculation Agent will use the closing price of the new shares
on the approval date.  The Calculation
Agent may value other types of property in any manner it determines, in its
sole discretion, to be appropriate.  If a
holder of the common stock of the issuer of the reference shares elects to
receive different types or combinations of types of property in the
reorganization event, such property will consist of the types and amounts of
each type distributed to a holder that makes no election, as determined by the
Calculation Agent.

 

If a reorganization event occurs and the Calculation Agent
adjusts the physical delivery amount to consist of the property distributed in
the reorganization event as described above, the Calculation Agent will make
further antidilution adjustments for later events that affect such property, or
any component of such property, comprising the new physical delivery amount.  The Calculation Agent will do so to the same
extent that it would make adjustments if the common stock of the issuer of the
reference shares was outstanding and was affected by the same kinds of
events.  If a subsequent reorganization
event affects only a particular component of the physical delivery amount, the
required adjustment will be made with respect to that component, as if it alone
were the physical delivery amount.  For
example, if the issuer of the reference shares merges into another company and
each share of its common stock is converted into the right to receive two new
shares of the surviving company and a specified amount of cash, the physical
delivery amount will be adjusted to consist of two new shares and the specified
amount of cash per reference share.  The
Calculation Agent will adjust the common share component of the new physical
delivery amount to reflect any later stock split or other event, including any
later reorganization event, that affects the new shares, to the extent
described in this section entitled “Antidilution adjustments” as if the
new shares were the common stock of the issuer of the reference shares.  In that event, the cash component will not be
adjusted but will continue to be a component of the physical delivery amount.  Consequently, Holders who receive reference
shares at maturity will be entitled to receive, for each $1,000 of the
outstanding principal amount of the Securities being exchanged, all components
of the physical delivery amount in effect on the exchange date, with each component
having been adjusted on a sequential and cumulative basis for all relevant
events requiring adjustment on or before the exchange date.

 

If a reorganization event occurs,
the property distributed in the event will be substituted for the common stock
of the issuer of the reference shares as described above.  Consequently, references to the common stock
of the issuer of the reference shares mean any property that is distributed in
a reorganization event and comprises the adjusted physical delivery
amount.  Similarly, references to the
issuer of the reference shares mean any successor entity in a reorganization
event.

 

Events
of Default and Acceleration

 

In case an Event of Default (as defined in the
Indenture) with respect to the Securities shall have occurred and be
continuing, the amount declared due and payable upon any acceleration of the
Securities (in accordance with the acceleration provisions set forth in the

 

R-11

 

prospectus) will be
determined by the Calculation Agent and will equal, for each security, the
arithmetic average, as determined by the Calculation Agent, of the fair market
value of the Securities as determined by at least three but not more than five
broker-dealers (which may include Credit Suisse Securities (USA) LLC or any of
the Company’s other subsidiaries or affiliates) as will make such fair market
value determinations available to the Calculation Agent.

 

The Company, the Trustee and any agent of the Company
or the Trustee may deem and treat the registered Holder hereof as the absolute
owner of this Note (whether or not this Note shall be overdue and
notwithstanding any notation of ownership or other writing hereon) for the
purpose of receiving payment of, or on account of, the redemption amount
hereof, and for all other purposes, and neither the Company nor the Trustee nor
any agent of the Company or the Trustee shall be affected by any notice to the
contrary.

 

No recourse under or upon any obligation, covenant or
agreement contained in the Indenture or any indenture supplemental thereto or
in any Note, or because of any indebtedness evidenced thereby, shall be had
against any incorporator as such, or against any past, present or future
stockholder, officer, director or employee, as such, of the Company or of any
successor, either directly or through the Company or any successor, under any rule of
law, statute or constitutional provision or by the enforcement of any
assessment or by any legal or equitable proceeding or otherwise, all such liability
being expressly waived and released by the acceptance hereof and as part of the
consideration for the issue hereof.

 

The Calculation Agent for the Securities (the “Calculation
Agent”) is Credit Suisse International. 
The calculations and determinations of the Calculation Agent will be
final and binding upon all parties (except in the case of manifest error).  The Calculation Agent will have no
responsibility for good faith errors or omissions in its calculations and
determinations, whether caused by negligence or otherwise.

 

Terms used herein that are defined in the Indenture
and not otherwise defined herein shall have the respective meanings assigned
thereto in the Indenture.

 

The laws of the State of New York (without regard to
conflicts of laws principles thereof) shall govern this Note.

 

R-12

 

FOR VALUE RECEIVED, the
undersigned hereby sell(s), assign(s) and transfer(s) unto

[PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE]

[PLEASE PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE]

the within Note and all rights thereunder, hereby irrevocably constituting and
appointing

                                                                                                                                                                                             Attorney
to transfer such Note on the books of the Issuer, with full power of
substitution in the premises.

 

	
   

  	
  Signature:

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  NOTICE: The signature
  to this assignment must correspond with the name as written upon the face of
  the within Note in every particular without alteration or enlargement or any
  change whatsoever.

  
				

 

R-13

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