Exhibit 10.2
LONG TERM INCENTIVE PLAN (LTIP)
UNIT VESTING AGREEMENT
UNDER THE BOSTON PROPERTIES, INC.
1997 STOCK OPTION AND INCENTIVE PLAN
Name of Grantee:_____________________
No. of LTIP Units:________________________
Purchase Price per Unit: $.25 per unit
Grant Date:__________________, 200_
Final Acceptance Date:_________________, 200_
Pursuant to the Boston Properties, Inc. 1997 Stock Option and Incentive
Plan (the "PLAN") as amended through the date hereof and the Second Amended and
Restated Agreement of Limited Partnership of Boston Properties Limited
Partnership, dated as of June 29, 1998, as amended through the date hereof (the
"PARTNERSHIP AGREEMENT"), of Boston Properties Limited Partnership, a Delaware
limited partnership (the "PARTNERSHIP"), Boston Properties, Inc., a Delaware
corporation and the general partner of the Partnership (the "COMPANY") hereby
grants to the Grantee named above an Other Stock-Based Award (an "AWARD") in the
form of, and by causing the Partnership to issue to the Grantee named above, a
Partnership Interest (as defined in the Second Amended and Restated Agreement of
Limited Partnership (the "PARTNERSHIP AGREEMENT") of the Partnership, as
amended) having the rights, voting powers, restrictions, limitations as to
distributions, qualifications and terms and conditions of redemption and
conversion set forth herein and in the Forty-Seventh Amendment to the
Partnership Agreement, such Partnership Interest to be expressed as a number of
Partnership Units (as defined in the Partnership Agreement) which shall be
referred to as Long Term Incentive Units ("LTIP UNITS"). Upon acceptance of this
Long Term Incentive Plan (LTIP) Unit Vesting Agreement (this "AGREEMENT"), the
Grantee shall receive the number of LTIP Units specified above, subject to the
restrictions and conditions set forth herein, in the Plan and in the Partnership
Agreement.
1. ACCEPTANCE OF AGREEMENT. The Grantee shall have no rights with respect
to this Agreement unless he or she shall have accepted this Agreement prior to
the close of business on the Final Acceptance Date specified above by (i) making
a contribution to the capital of the Partnership by certified or bank check or
other instrument acceptable to the Administrator (as defined in Section 2 of the
Plan), of the Purchase Price per Unit specified above, times the number of LTIP
Units to be issued to the Grantee as part of this Award, (ii) signing and
delivering to the Partnership a copy of this Agreement and (iii) unless the
Grantee is already a Limited Partner (as defined in the Partnership Agreement),
signing, as a Limited Partner, and delivering to the Partnership a counterpart
signature page to the Partnership Agreement (attached hereto as ANNEX A). The
Purchase Price per Unit paid by the Grantee shall be deemed a contribution to
the capital of the Partnership upon the terms and conditions set forth herein
and in the Partnership Agreement. Upon acceptance of this Agreement by the
Grantee, the Partnership Agreement shall be amended to reflect the issuance to
the Grantee of the LTIP Units so accepted
and the Partnership shall deliver to the Grantee a certificate of the Company
certifying the number of LTIP Units then issued to the Grantee. Thereupon, the
Grantee shall have all the rights of a Limited Partner of the Partnership with
respect to the number of LTIP Units specified above, as set forth in the
Partnership Agreement, subject, however, to the restrictions and conditions
specified in Paragraph 2 below.
2. RESTRICTIONS AND CONDITIONS.
(a) The records of the Partnership evidencing the LTIP Units granted
herein shall bear an appropriate legend, as determined by the Partnership in its
sole discretion, to the effect that such LTIP Units are subject to restrictions
as set forth herein, in the Plan and in the Partnership Agreement.
(b) LTIP Units granted herein may not be sold, assigned, transferred,
pledged or otherwise encumbered or disposed of by the Grantee prior to vesting.
(c) If the Grantee ceases to be a Director of the Company for any
reason, subject to Section 13 of the Plan, prior to vesting of the LTIP Units
granted herein, the Partnership shall have the right, at the discretion of the
Administrator, to repurchase such LTIP Units from the Grantee or the Grantee's
legal representative at the Purchase Price per Unit. The Partnership must
exercise such right of repurchase or forfeiture by written notice to the Grantee
or the Grantee's legal representative not later than 90 days following such
cessation of Grantee's tenure as Director.
3. VESTING OF LTIP UNITS. The restrictions and conditions in Paragraph 2
of this Agreement shall lapse on the Vesting Date or Dates specified in the
following schedule so long as the Grantee remains an employee of the Company or
one of its Subsidiaries on such Vesting Date or Dates. If a series of Vesting
Dates is specified, then the restrictions and conditions in Paragraph 2 shall
lapse only with respect to the percentage of LTIP Units accepted by the Grantee
hereunder that is specified as vested on such date.
Percentage of LTIP Units Vesting Date
------------------------ ------------
Vested
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50% __________, 200_
50% __________, 200_
Subsequent to such Vesting Date or Dates, the LTIP Units on which all
restrictions and conditions have lapsed shall no longer be deemed restricted.
4. ACCELERATION OF VESTING IN SPECIAL CIRCUMSTANCES. If (i) the Grantee
ceases to be a Director of the Company by reason of death, incapacity due to
physical or mental illness or disability or (ii) a Change of Control (as defined
in Section 16 of the Plan) occurs, any restrictions and conditions on all LTIP
Units subject to this Award shall be deemed waived by the Administrator and all
LTIP Units granted hereby shall automatically become fully vested.
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Anything to the contrary in the Plan notwithstanding, in the event a
Transaction (as defined in Section 3(c) of the Plan) occurs, the Board (as
defined in the Plan), or the board of directors of any corporation assuming the
obligations of the Company ("ACQUIROR") shall have the right to take the action
specified in Section 3(c) of the Plan ("MERGER-RELATED ACTION") subject to the
following limitations and qualifications:
(a) if (i) all LTIP Units awarded to the Grantee hereunder are
eligible, as of the time of the Merger-Related Action (and giving effect to the
anticipated consummation of the Transaction as provided in Section 8.8 of the
Partnership Agreement), for conversion into Common Units (as defined in the
Partnership Agreement) and (ii) the Grantee is afforded the opportunity to
effect such conversion and receive, in consideration for the Common Units into
which his or her LTIP Units shall have been converted, the same kind and amount
of consideration as other holders of Common Units in connection with the
Transaction, then Merger-Related Action of the kind specified in either clause
(i) or clause (ii) of Section 3(c) of the Plan shall be permitted and available
to the Company and the Acquiror;
(b) if (i) some or all of the LTIP Units awarded to the Grantee
hereunder are not, as of the time of the Merger-Related Action, so eligible for
conversion into Common Units, and (ii) the acquiring or succeeding entity is
itself, or has a subsidiary which is organized as a partnership or limited
liability company (consisting of a so called "UPREIT" or other structure similar
in purpose or effect to that of the Company and the Partnership), then
Merger-Related Action of the kind specified in clause (i) of Section 3(c) of the
Plan must be taken by the Acquiror with respect to all LTIP Units which are not
so convertible at the time, whereby (A) all such LTIP Units covered by this
Award shall be assumed by the acquiring or succeeding entity, or equivalent
awards shall be substituted by the acquiring or succeeding entity, and (B) the
acquiring or succeeding entity shall preserve with respect to the assumed LTIP
Units or any securities to be substituted for such LTIP Units, as far as
reasonably possible under the circumstances, the distribution, special
allocation, conversion and other rights set forth in the Partnership Agreement
for the benefit of the holders of LTIP Units; and
(c) if (i) some or all of the LTIP Units awarded to the Grantee
hereunder are not, as of the time of the Merger-Related Action, so eligible for
conversion into Common Units, and (ii) the conditions set forth in Section 4(b)
above cannot be satisfied after exercise of reasonable commercial efforts by the
Company and/or Acquiror, then Merger-Related Action of the kind specified in
clause (ii) of Section 3(c) of the Plan must be taken by the Company or the
Acquiror, in which case such action shall be based on the principle that the
settlement of the terminated award of LTIP Units which are not convertible into
Common Units requires a payment of the same kind and amount of consideration
payable in connection with the Transaction to a holder of the number of Common
Units into which the LTIP Units to be terminated could be converted (including
the right to make elections as to the type of consideration) if the Transaction
were of a nature that permitted a revaluation of the Grantee's capital account
balance under the terms of the Partnership Agreement, as determined by the
Administrator in good faith in accordance with the Plan.
5. DISTRIBUTIONS. Distributions on the LTIP Units shall be paid
currently to the Grantee in accordance with the terms of the Partnership
Agreement. The right to distributions set forth in this Section 5 shall be
deemed a Dividend Equivalent Right for purposes of the Plan.
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6. INCORPORATION OF PLAN. Notwithstanding anything herein to the
contrary, this Agreement shall be subject to and governed by all the terms and
conditions of the Plan. Capitalized terms used in this Agreement shall have the
meaning specified in the Plan, unless a different meaning is specified herein.
7. COVENANTS, REPRESENTATION AND WARRANTIES. The Grantee hereby makes
the covenants, representations and warranties and set forth on ANNEX B attached
hereto. All of such covenants, warranties and representations shall survive the
execution and delivery of this Agreement by the Grantee. The Grantee shall
immediately notify the Partnership upon discovering that any of the
representations or warranties set forth on ANNEX B were false when made or have,
as a result of changes in circumstances, become false.
8. TRANSFERABILITY. This Agreement is personal to the Grantee, is
non-assignable and is not transferable in any manner, by operation of law or
otherwise, other than by will or the laws of descent and distribution.
9. AMENDMENT. The Grantee acknowledges that the Plan may be amended or
discontinued in accordance with Section 14 thereof and that this Agreement may
be amended or canceled by the Administrator, on behalf of the Partnership, for
the purpose of satisfying changes in law or for any other lawful purpose,
provided that no such action shall adversely affect the Grantee's rights under
this Agreement without the Grantee's written consent. The provisions of Section
4 of this Agreement applicable to the termination of the LTIP Units covered by
this Award in connection with a Transaction (as defined in the Plan) pursuant to
Section 3(b) of the Plan shall apply, MUTATIS MUTANDI to amendments,
discontinuance or cancellation pursuant to this Section 9 or Section 14 of the
Plan.
10. NO OBLIGATION TO CONTINUE AS DIRECTOR. This Award does not confer
upon the Grantee any right to continue as a Director.
11. NOTICES. Notices hereunder shall be mailed or delivered to the
Partnership at its principal place of business and shall be mailed or delivered
to the Grantee at the address on file with the Partnership or, in either case,
at such other address as one party may subsequently furnish to the other party
in writing.
12. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of
Delaware, applied without regard to
conflict of law principles.
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BOSTON PROPERTIES, INC.
By:
---------------------------------
Name:
Title:
BOSTON PROPERTIES LIMITED
PARTNERSHIP
By: Boston Properties, Inc., its general
partner
By:
----------------------------
Name:
Title:
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The foregoing Agreement is hereby accepted and the terms and conditions thereof
hereby agreed to by the Grantee.
Dated:
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Grantee's Signature
Grantee's name and address:
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ANNEX A
FORM OF LIMITED PARTNER SIGNATURE PAGE
FOR PARTNERS ADMITTED AFTER JUNE 29, 1998
The Grantee, desiring to become one of the within named Limited Partners of
Boston Properties Limited Partnership, hereby becomes a party to the Second
Amended and Restated Agreement of Limited Partnership of Boston Properties
Limited Partnership by and among Boston Properties, Inc. and such Limited
Partners, dated as of June 29, 1998, as amended. The Grantee agrees that this
signature page may be attached to any counterpart of said Agreement of Limited
Partnership.
Signature Line for Limited Partner:
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Name:
Date:
Address of Limited Partner:
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ANNEX B
GRANTEE'S COVENANTS, REPRESENTATIONS AND WARRANTIES
The Grantee hereby represents, warrants and covenants as follows:
(a) One or more of the following categories correctly describes the
Grantee, and the Grantee has so indicated by marking in the boxes beside the
category or categories which so describe the Grantee.
CHECK ALL BOXES THAT APPLY
/ / (i) The Grantee is an individual with a net worth (or net worth
with his or her spouse) in excess of $1 million.
/ / (ii) The Grantee is an individual with income (without including any
income of the Grantee's spouse) in excess of $200,000, or joint
income with the Grantee's spouse, in excess of $300,000, in
each of the two most recent years, and the Grantee reasonably
expects to reach the same income level in the current year.
/ / (iii) The Grantee is a natural person who is a director or executive
officer (as defined below) of either or both of the Partnership
or the Company, the general partner of the Partnership. As used
herein, "executive officer" shall mean the president, any vice
president in charge of a principal business unit, division or
function (such as sales, administration or finance), any other
officer who performs a policy-making function, or any other
person who performs similar policy-making functions for the
Partnership or the Company.
(b) The Grantee has received and had an opportunity to review the
following documents (the "BACKGROUND DOCUMENTS"):
(i) The Company's latest Annual Report to Stockholders;
(ii) The Company's Proxy Statement for its most recent Annual
Meeting of Stockholders;
(iii) The Company's Report on Form 10-K for the fiscal year most
recently ended;
(iv) The Company's Form 10-Q for the most recently ended quarter if
one has been filed by the Company with the Securities and
Exchange Commission since the filing of the report 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;
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(vi) The Partnership Agreement;
(vii) The Plan; and
(viii) The Company's Amended and Restated Certificate of
Incorporation.
The Grantee also acknowledges that any delivery of the Background Documents
and other information relating to the Company and the Partnership prior to the
determination by the Partnership of the suitability of the Grantee as an LTIP
Unitholder shall not constitute an offer of LTIP Units until such determination
of suitability shall be made.
(c) The Grantee hereby represents and warrants that
(i) The Grantee either (i) is an "accredited investor" as defined
in Rule 501(a) under the Securities Act of 1933, as amended (the
"Securities Act"), or (ii) by reason of his or her business and financial
experience, together with the business and financial experience of those
persons, if any, retained by the Grantee to represent or advise him or her
with respect to the grant to him or her of LTIP Units, the potential
conversion of LTIP Units into Common Units of the Partnership ("COMMON
UNITS") and the potential redemption of such Common Units for shares of
common stock of the Company ("REIT SHARES"), has such knowledge,
sophistication and experience in financial and business matters and in
making investment decisions of this type that he or she (A) 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, (B) is capable of protecting his or her own interest or has
engaged representatives or advisors to assist him or her in protecting his
or her interests, and (C) is capable of bearing the economic risk of such
investment.
(ii) The Grantee understands that (A) the award of LTIP Units under
the Plan involves risks different from, and in certain circumstances
substantially greater than those involved in an award of a comparable
number of REIT Shares as a "Restricted Stock Award" under the Plan; (B) the
Grantee is responsible for consulting his or her own tax advisors with
respect to the application of the U.S. federal income tax laws, and the tax
laws of any state, local or other taxing jurisdiction to which the Grantee
is or by reason of the award of LTIP Units may become subject, to his or
her particular situation; (C) the Grantee has not received or relied upon
business or tax advice from the Company, the Partnership or any of their
respective employees, agents, consultants or advisors; (D) the Grantee
provides services to the Partnership on a regular basis and in such
capacity has access to such information, and has such experience of and
involvement in the business and operations of the Partnership, as the
Grantee believes to be necessary and appropriate to make an informed
decision to accept this Award of LTIP Units; and (E) an investment in the
Partnership and/or the Company involves substantial risks. The Grantee has
been given the opportunity to make a thorough investigation of matters
relevant to the LTIP Units and has been furnished with, and has reviewed
and understands, materials relating to the Partnership and the Company and
their respective activities (including, but not limited to, the Background
Documents). The Grantee has been afforded the opportunity to obtain
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any additional information (including any exhibits to the Background
Documents) deemed necessary by the Grantee to verify the accuracy of
information conveyed to the Grantee. The Grantee confirms that all
documents, records, and books pertaining to his or her receipt of LTIP
Units which were requested by the Grantee have been made available or
delivered to the Grantee. The Grantee has had an opportunity to ask
questions of and receive answers from the Partnership and the Company, or
from a person or persons acting on their behalf, concerning the terms and
conditions of the LTIP Units. THE GRANTEE HAS RELIED UPON, AND IS MAKING
ITS DECISION SOLELY UPON, THE BACKGROUND DOCUMENTS AND OTHER WRITTEN
INFORMATION PROVIDED TO THE GRANTEE BY THE PARTNERSHIP OR THE COMPANY. The
Grantee did not receive any tax, legal or financial advice from the
Partnership or the Company and, to the extent it deemed necessary, has
consulted with its own advisors in connection with its evaluation of the
Background Documents and this Agreement and the Grantee's receipt of LTIP
Units.
(iii) The LTIP Units to be issued, the Common Units issuable upon
conversion of the LTIP Units and any REIT Shares issued in connection with
the redemption of any such Common Units will be acquired for the account of
the Grantee for investment only and not with a current view to, or with any
intention of, a distribution or resale thereof, in whole or in part, or the
grant of any participation therein, without prejudice, however, to the
Grantee's right (subject to the terms of the LTIP Units, the Plan and this
Agreement) at all times to sell or otherwise dispose of all or any part of
his or her 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 or her assets being at all times
within his or her control.
(iv) The Grantee acknowledges that (A) neither the LTIP Units to be
issued, nor the Common Units issuable upon conversion of the LTIP Units,
have been registered under the Securities Act or state securities laws by
reason of a specific exemption or exemptions from registration under the
Securities Act and applicable state securities laws and, if such LTIP Units
or Common Units are represented by certificates, such certificates will
bear a legend to such effect, (B) the reliance by the Partnership and the
Company on such exemptions is predicated in part on the accuracy and
completeness of the representations and warranties of the Grantee contained
herein, (C) such LTIP Units, or Common Units, therefore, cannot be resold
unless registered under the Securities Act and applicable state securities
laws, or unless an exemption from registration is available, (D) there is
no public market for such LTIP Units and Common Units and (E) neither the
Partnership nor the Company has any obligation or intention to register
such LTIP Units or the Common Units issuable upon conversion of the LTIP
Units under the Securities Act or any state securities laws or to take any
action that would make available any exemption from the registration
requirements of such laws, except, that, upon the redemption of the Common
Units for REIT Shares, the Company currently intends to issue such REIT
Shares under the Plan and pursuant to a Registration Statement on Form S-8
under the Securities Act, to the extent that the Grantee is eligible to
receive such REIT Shares under the Plan at the time of such issuance, the
Company has filed a Form S-8 Registration Statement with the Securities and
Exchange Commission registering the issuance of such REIT Shares and such
Form S-8 is effective at the time of the issuance of such REIT Shares. The
Grantee hereby
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acknowledges that because of the restrictions on transfer or assignment of
such LTIP Units acquired hereby and the Common Units issuable upon
conversion of the LTIP Units which are set forth in the Partnership
Agreement or this Agreement, the Grantee may have to bear the economic risk
of his or her ownership of the LTIP Units acquired hereby and the Common
Units issuable upon conversion of the LTIP Units for an indefinite period
of time.
(v) The Grantee has determined that the LTIP Units are a suitable
investment for the Grantee.
(vi) No representations or warranties have been made to the Grantee
by the Partnership or the Company, or any officer, director, shareholder,
agent, or affiliate of any of them, and the Grantee has received no
information relating to an investment in the Partnership or the LTIP Units
except the information specified in Paragraph (b) above.
(e) So long as the Grantee holds any LTIP Units, the Grantee shall
disclose to the Partnership in writing such information as may be reasonably
requested with respect to ownership of LTIP Units as the Partnership may deem
reasonably necessary to ascertain and to establish compliance with provisions of
the Internal Revenue Code of 1986, as amended (the "CODE"), applicable to the
Partnership or to comply with requirements of any other appropriate taxing
authority.
(f) The Grantee hereby agrees to make an election under Section 83(b) of
the Code with respect to the LTIP Units awarded hereunder, and has delivered
with this Agreement a completed, executed copy of the election form attached
hereto as ANNEX C. The Grantee agrees to file the election (or to permit the
Partnership to file such election on the Grantee's behalf) within thirty (30)
days after the award of the LTIP Units hereunder with the IRS Service Center at
which such Grantee files his or her personal income tax returns, and to file a
copy of such election with the Grantee's U.S. federal income tax return for the
taxable year in which the LTIP Units are awarded to the Grantee.
(g) The address set forth on the signature page of this Agreement is the
address of the Grantee's principal residence, and the Grantee has no present
intention of becoming a resident of any country, state or jurisdiction other
than the country and state in which such residence is sited.
(h) The representations of the Grantee as set forth above are true and
complete to the best of the information and belief of the Grantee, and the
Partnership shall be notified promptly of any changes in the foregoing
representations.
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ANNEX 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. __________________________________________
2. Description of property with respect to which the election is being
made:
The election is being made with respect to ________ LTIP Units in
Boston Properties Limited Partnership (the "PARTNERSHIP").
3. The date on which the LTIP Units were transferred is _________, 200_.
The taxable year to which this election relates is calendar year 200_.
4. Nature of restrictions to which the LTIP Units are subject:
(a) Until the LTIP Units vest, the Taxpayer may not transfer in any
manner any portion of the LTIP Units without the consent of the
Partnership.
(b) The Taxpayer's LTIP Units vest in accordance with the vesting
provisions described in the Schedule attached hereto. Unvested
LTIP Units are forfeited in accordance with the vesting
provisions described in the Schedule attached hereto.
5. The fair market value at time of transfer (determined without regard
to any restrictions other than restrictions which by their terms will
never lapse) of the LTIP Units with respect to which this election is
being made was $0.25 per LTIP Unit.
6. The amount paid by the Taxpayer for the LTIP Units was $0.25 per LTIP
Unit.
7. A copy of this statement has been furnished to the Partnership and its
general partner, Boston Properties, Inc. (the "Company").
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Dated:____________, 200_
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Name:
SPOUSAL CONSENT
The undersigned hereby consents to the making, by the undersigned's spouse,
of the foregoing election pursuant to Section 83(b) of the Internal Revenue
Code.
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(Signature)
(Type or Print Spouse's Name)
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SCHEDULE TO SECTION 83(b) ELECTION -VESTING PROVISIONS OF LTIP UNITS
LTIP Units are subject to time-based vesting with 50% vesting on _________,
200_ and 50% vesting on _________, 200_, subject to acceleration in the event of
certain extraordinary transactions or the Taxpayer ceasing to be a director of
the Company in certain circumstances. Generally, unvested LTIP Units are subject
to repurchase at cost in the event that the Taxpayer ceases to be a director of
the Company.
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