LIBERTY PROPERTY TRUST STOCK OPTION
Exhibit 10.2
LIBERTY PROPERTY TRUST
THIS STOCK OPTION (the “Option”) is granted as of this day of , 200___by
LIBERTY PROPERTY TRUST, a Maryland real estate investment trust (the “Company”), to «Optionee»,
(the “Optionee”).
W I T N E S S E T H:
1. Grant. The Company hereby grants to the Optionee an Option to purchase on the
terms and conditions hereinafter set forth all or any part of an aggregate of shares of
the Company’s common shares of beneficial interest, $.001 par value per share (the “Option Shares”)
at the purchase price of $ per share (the “Option Price”). This Option is intended to be
an “incentive stock option” within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the “Code”) to the extent permitted under the Code. To the extent that this Option is
exercisable for the first time during any calendar year with respect to Option Shares having a
value (determined using as the per share value the fair market value of an Option Share on the date
hereof) in excess of $100,000, or to the extent this Option is exercised after the period provided
for the exercise of “incentive stock options” under the Code, this Option shall be treated as an
option which is not an “incentive stock option.” This Option is granted pursuant to the Liberty
Property Trust Amended and Restated Share Incentive Plan (the “Plan”).
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2. Term.
(a) General Rule. The Option granted hereunder shall become exercisable with respect
to (1) up to twenty percent (20%) of the Option Shares after the first anniversary of the date
hereof, (2) up to fifty percent (50%) of the Option Shares after the second anniversary of the date
hereof, and (3) one hundred percent (100%) of the Option Shares after the third anniversary of the
date hereof. Notwithstanding, the preceding sentence, upon the Optionee’s termination of services
or employment with the Company or an Affiliate as a result of the Optionee’s death, Disability (as
defined in the Plan), any portion of the Option that is not otherwise exercisable shall become
exercisable upon the date of such termination of services or employment with the Company or an
Affiliate. The Option granted hereunder shall terminate in all events at 5:00 p.m. local
Philadelphia, Pennsylvania time ten years from the date hereof, unless sooner terminated under
subsection 2(e) below.
The Board of Trustees in its administrative capacity with respect to the Plan or, if so
designated, any committee designated by the Board of Trustees to administer the Plan with respect
to persons including Optionee is referred to in this Option as the “Committee”.
(b) Retirement.
(i) Notwithstanding subsection 2(a) above, and subject to subsection 2(c) below, in the event
the Optionee terminates employment or service with the Company or an Affiliate, other than as a
result of Optionee’s death or Disability, after the Optionee has attained age 55 or 56, with at
least 10 years of employment or service
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for the Company or an Affiliate, at a time when the Option granted pursuant to this Award is
not fully exercisable under Section 2(a) above, the portion of the Option that would have become
exercisable within the 12 month period after the Optionee’s termination of employment or service
with the Company or an Affiliate shall become exercisable as of the date of the Optionee’s
termination of employment or service with the Company or an Affiliate.
(ii) Notwithstanding subsection 2(a) above, and subject to subsection 2(c) below, in the event
the Optionee terminates employment or service with the Company or an Affiliate other than as a
result of Optionee’s death or Disability after the Optionee has attained age 57 or 58, with at
least 8 years of employment or service for the Company or an Affiliate or attained age 59 or 60,
with at least 6 years of employment or service for the Company or an affiliate, at a time when the
Option granted pursuant to this Award is not fully exercisable under Section 2(a) above, the
portion of the Option that would have become exercisable within the 24 month period after the
Optionee’s termination of employment or service with the Company or an Affiliate shall become
exercisable as of the date of the Optionee’s termination of employment or service with the Company
or an Affiliate.
(iii) Notwithstanding subsection 2(a) above, and subject to subsection 2(c) below, in the
event the Optionee terminates employment or service with the Company or an Affiliate other than as
a result of Optionee’s death or Disability after the Optionee has attained age 61 or 62, with at
least 4 years of employment or service for the Company or an Affiliate, or attained age 63 or 64,
with at least 2 years of employment or service for the Company or an Affiliate at a time when the
Option
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granted pursuant to this Award is not fully exercisable under Section 2(a) above, the portion
of the Option that would have become exercisable within the 36 month period after the Optionee’s
termination of employment or service with the Company or an Affiliate shall become exercisable as
of the date of the Optionee’s termination of employment or service with the Company or an
Affiliate.
(iv) Notwithstanding subsection 2(a) above, and subject to subsection 2(c) below, in the event
the Optionee terminates employment or service with the Company or an Affiliate other than as a
result of Optionee’s death or Disability after the Optionee has attained age 65 or older, with at
least one year of employment or service for the Company, at a time when the Option granted pursuant
to this Award is not fully exercisable under Section 2(a) above, this Award shall become fully
exercisable as of the date of the Optionee’s termination of employment or service with the Company
or an Affiliate.
(c) Good Faith Retirement Determination. In order for the accelerated vesting
referred to in subsections 2(b)(i)-(iv) above to occur upon the termination of employment or
service of the Optionee with the Company or an Affiliate other than as a result of Optionee’s death
or Disability, the Committee must make an determination, evidenced by an affirmative action on the
part of the Committee, that such termination of employment or service constitutes termination of
employment or other active for-profit service that is undertaken in good faith by the Optionee,
meaning, among other factors that may be taken into account in the sole discretion of the
Committee, that the termination of employment or service is determined by the Committee, in its
sole discretion, (A) not to be materially detrimental to the business interests of the Company;
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(B) not to result in a violation of any obligations of the Optionee to the Company; and (C) to
be motivated by the Optionee’s intention, following such termination, to cease working on a full
time basis, for the Company or any other employer, or to provide any services, whether on a
consulting, independent contractor, employee or other basis to any entity engaged in the business
of owning, operating or developing commercial real estate. Absent such an affirmative action on
the part of the Committee, the accelerated vesting referred to in subsections 2(b)(i)-(iv) above
shall not occur.
(d) Change of Control. Notwithstanding the foregoing, in the event there is a Change
of Control while the Optionee is employed by, or in the service of, the Company or an Affiliate and
subsequently Optionee’s service or employment is terminated by the Company other than “for cause”
within two years following a Change of Control, any portion of the Option that is not otherwise
exercisable shall become exercisable upon the date of such termination of employment or service
with the Company or an Affiliate.
(e) Early Termination of Options. Notwithstanding the provisions of subsection 2 (a),
all right to exercise this Option shall terminate upon the first to occur of the following:
(i) The third month anniversary of the date of termination of the Optionee’s services or
employment with the Company or an Affiliate for any reason other than death, Disability or
Retirement,
(ii) The thirty-sixth month anniversary of the date of termination of the Optionee’s services
or employment with the Company or an Affiliate on account of
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death, Disability or Retirement. Any Option not exercised within the one (1) year period after the
date of termination of the Optionee’s services or employment with the Company or an Affiliate due
to a Disability shall be treated as a Non-Qualified Option. Any Option not exercised within the
three month anniversary date after the termination of the Optionee’s services or employment with
the Company or an Affiliate on accont of Retirement shall be treated as a Non-Qualified Option.
(iii) A finding by the Committee, after full consideration of the facts presented on behalf
of both the Company and the Optionee, that the Optionee has breached his or her employment or
service contract with the Company or an Affiliate, or has been engaged in disloyalty to the Company
or an Affiliate, including, without limitation, fraud, embezzlement, theft, commission of a felony
or proven dishonesty in the course of his or her employment or service, or has disclosed trade
secrets or confidential information of the Company or an Affiliate. In such event, in addition to
immediate termination of the Option, the Optionee shall automatically forfeit all Shares for which
the Company has not yet delivered the Share certificates upon refund by the Company of the Option
Price. Notwithstanding anything herein to the contrary, the Company may withhold delivery of Share
certificates pending the resolution of any inquiry that could lead to a finding resulting in a
forfeiture.
(iv) The date, if any, set by the Board of Trustees as an accelerated expiration date in the
event of the liquidation or dissolution of the Company.
3. Transfers. This Option is not transferable by the Optionee otherwise than by will or
pursuant to the laws of descent and distribution in the event of the Optionee’s death (in which
event the Option may be exercised by the heirs or legal representatives of the Optionee). Except
as expressly set forth above in this Section 3, the Option may be exercised during the lifetime of
the Optionee only by the Optionee. Any attempt at assignment, transfer, pledge or disposition of
the Option contrary to the provisions
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hereof or the levy of any execution, attachment or similar process upon the Option other than as
expressly set forth above in this Section 3 shall be null and void and without effect. Any
exercise of the Option by a person other than the Optionee shall be accompanied by appropriate
proofs of the right of such person to exercise the Option.
4. Method of Exercise and Payment. When exercisable under Section 2, the Option may
be exercised by written notice to the Company’s Treasurer specifying the number of Option Shares to
be purchased and, unless the Option Shares are covered by a then current registration statement or
a Notification under Regulation A under the Securities Act of 1933 (the “Act”), containing the
Optionee’s acknowledgment in form and substance satisfactory to the Company, that the Optionee (a)
is purchasing such Option Shares for investment and not for distribution or resale (other than a
distribution or resale which, in the opinion of counsel satisfactory to the Company, may be made
without violating the registration provisions of the Act), (b) has been advised and understands
that (i) the Option Shares have not been registered under the Act and are “restricted securities”
within the meaning of Rule 144 under the Act and are subject to restrictions on transfer and (ii)
the Company is under no obligation to register the Option Shares under the Act or to take any
action which would make available to the Optionee any exemption from such registration, (c) has
been advised and understands that such Option Shares may not be transferred without compliance with
all applicable federal and state securities laws, and (d) has been advised and understands that an
appropriate legend referring to the restrictions contained in this Option may be endorsed on the
certificate. The notice shall be accompanied by payment of the aggregate Option Price of the
Option Shares being purchased (a) in cash, (b) by certified or cashier’s check payable to the order
of the Company, (c) subject to the terms of the Plan (including without limitation, Section 15 of
the Plan) by payment through a broker in accordance with procedures permitted by Regulation T of
the Federal Reserve Board or (d) by such
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other mode of payment as the Board may approve. Such exercise shall be effective upon the actual
receipt by the Company’s Treasurer of such written notice and payment. In addition, except as
provided below, the Optionee may make payment in whole or in part in common shares of beneficial
interest in the Company. If payment is made in whole or in part in such shares, then the Optionee
shall deliver to the Company certificates registered in the name of the Optionee representing such
shares legally and beneficially owned by the Optionee, free of all liens, claims and encumbrances
of every kind and having a fair market value (as determined under the Plan) on the date of delivery
that is at least as great as the Option Price of the Option Shares with respect to which this
Option is to be exercised by payment in such shares, accompanied by powers duly endorsed in blank
by the Optionee. Notwithstanding the foregoing, the Committee, in its sole discretion, may refuse
to accept Shares in payment of the Option Price or may impose such other limitations and
prohibitions on the use of shares of beneficial interest in the Company to exercise this Option as
it deems appropriate. In the event the Committee refuses to accept Shares in payment of the Option
Price, any certificates representing Shares which were delivered to the Company shall be returned
to the Optionee with notice of the refusal of the Committee to accept such shares in payment of the
Option Price.
5. Adjustments on Changes in Capitalization. In the event that the outstanding
shares of beneficial interest in the Company are changed by reason of a reorganization, merger,
consolidation, recapitalization, reclassification, stock split-up, combination or exchange of
shares and the like (not including the issuance of shares on the conversion of other securities of
the Company which are outstanding on the date of grant and which are convertible into such shares)
or dividends payable in such shares, an equitable adjustment shall be made in the number of Shares
and price per Share subject to this Option in accordance with the applicable provisions of the
Plan.
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6. Legal Requirements. If the listing, inclusion, registration or qualification of
the Option Shares upon any securities exchange, in any automated quotation system, or under any
federal or state law, or the consent or approval of any governmental regulatory body is necessary
as a condition of or in connection with the purchase of any Option Shares, the Company shall not be
obligated to issue or deliver the certificates representing the Option Shares as to which this
Option has been exercised unless and until such listing, inclusion, registration, qualification,
consent or approval shall have been effected or obtained. If registration is considered
unnecessary by the Company, the Company may cause a legend to be placed on the Option Shares being
issued calling attention to their having been acquired for investment and not having been
registered.
7. Plan Provisions; Administration. This Option has been granted pursuant to and is
subject to the terms and provisions of the Plan. Subject to the provisions of the Plan, all
questions of interpretation and application of the Plan and this Option shall be determined by the
Committee. The Committee determination shall be final, binding and conclusive.
8. Notices. Any notice to be given to the Company shall be in writing and shall be
addressed to the Treasurer of the Company at its principal executive office, and any notice to be
given to the Optionee shall be addressed to the Optionee at the address then appearing in the
records of the Company or the Affiliate of the Company relating to addresses of members of the
Board or at such other address as either party hereafter may designate in writing to the other.
Except as otherwise set forth herein, any such notice shall be deemed to have been duly given, made
and received only when personally delivered, or on the day delivery is guaranteed when transmitted,
addressed as aforesaid, to a third party company or governmental entity providing delivery services
in the ordinary course of business, or two days following the day when deposited in the
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United States mails, by registered or certified mail, postage prepaid, return receipt requested,
addressed as aforesaid. Notwithstanding the foregoing, any notice of exercise pursuant to Section
4 shall be deemed to have been duly given, made or received only upon actual receipt by, or upon
tender of delivery to, the addressee of such notice.
9. No Commitment to Retain. Nothing herein contained shall affect the right of the
Company or any Affiliate to terminate the Optionee’s services, responsibilities, duties, or
authority to represent the Company or any Affiliate at any time for any reason whatsoever.
10. Amendment. The Board of Trustees of the Company shall have the right to amend
this Option, subject to the Optionee’s consent if such amendment is not favorable to the Optionee,
except that the consent of the Optionee shall not be required for any amendment made under
Subsection 8(e) (i) (E) or Section 10 of the Plan.
11. Withholding of Taxes. Whenever the Company proposes or is required to deliver or
transfer Option Shares in connection with the exercise of this Option, the Company shall have the
right to (a) require the Optionee to remit to the Company an amount sufficient to satisfy any
federal, state and/or local withholding tax requirements prior to the delivery or transfer of any
certificate or certificates for such Option Shares or (b) take whatever action it deems necessary
to protect its interests with respect to tax liabilities.
12. Notification of Company Upon Early Disposition of Option Shares. If, following
the exercise of this Option in whole or in part, the Optionee disposes of any Option Shares within
two years from the date of grant of this Option or within one year after the transfer of the Option
Shares to the Optionee, the Optionee shall give notice in writing to the
Committee of such disposition and shall provide the Committee with such other information as the
Committee may reasonably request.
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IN WITNESS WHEREOF, the Company has granted this Option on the day and year first above
written.
| LIBERTY PROPERTY TRUST |
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| By: | ||||
| Xxxxxxx X. Xxxxxxxxx | ||||
| President and Chief Executive Officer |
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| ACKNOWLEDGED: |
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| By: | ||||
| Optionee: «Optionee» | ||||
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