2008 LONG TERM INCENTIVE
PLAN
TARGET UNIT AWARD
AGREEMENT
This TARGET UNIT AWARD AGREEMENT (the
“Award Agreement”), dated as of
_____, 20 _____ (the “Award Date”),
is delivered by Liberty Property Trust, a Maryland real estate
investment trust (the “Company”), to
(the “Participant”).
A. The Liberty Property Trust 2008 Long
Term Incentive Plan (the “Plan”) provides for the grant
of Target Units.
B. The Compensation Committee of the Board
of Directors (the “Committee”) has decided to make a
Target Unit Award to the Participant as an inducement for the
Participant to promote the best interests of the Company and its
shareholders. The Participant may receive a copy of the Plan by
contacting
, at
.
NOW, THEREFORE, the parties to this Award,
intending to be legally bound hereby, agree as follows:
1.
Grant of Target Units . Subject to the terms and conditions
set forth in this Award Agreement, the Company hereby grants to the
Participant up to an aggregate maximum of
units (the “Target Units”), based on the achievement of
the performance goals established by the Committee and set forth on
the attached Exhibit A (the “Performance
Goals”). Each Target Unit shall be a phantom right and shall
be equivalent to one common share of beneficial ownership, par
value $0.001 per share, of the Company (the “Common
Share”) on the Redemption Date (as defined below). The Target
Units granted hereunder are intended to qualify as “qualified
performance-based compensation” under section 162(m) of the
Internal Revenue Code of 1986, as amended (the “Code”).
The number of Target Units set forth in this Paragraph 1 is
the maximum number of Common Shares payable under this Award
Agreement. The actual number of Common Shares that may be paid to
the Participant pursuant to this Award Agreement will depend on
whether the Performance Goals are achieved and the satisfaction of
other conditions as set forth below. The Committee shall not have
discretion to increase the number of Common Shares payable based
upon achievement of the Performance Goals, but the Committee may
reduce the number of Common Shares that are payable based upon the
Committee’s assessment.
2.
Target Unit Account . The Company shall establish and
maintain a Target Unit account as a bookkeeping account on its
records (the “Target Unit Account”) for the Participant
and shall record in such Target Unit Account the number of Target
Units granted to the Participant. The Participant shall not have
any interest in any fund or specific assets of the Company by
reason of this grant or the Target Unit Account established for the
Participant.
(a) Except as provided in subparagraph
(b) below, in order to become vested in the Target Units, the
Participant must continue to be employed by, or providing service
to the Employer (as defined in the Plan) from the Award Date
through the Redemption Date (as defined below); provided ,
however , that the number of Target Units that shall become
vested shall be determined based on satisfaction of the Performance
Goals. No vesting of the Target Units shall occur until the
Committee has certified the level of achievement of the Performance
Goals, which certification shall occur as soon as administratively
practicable after the end of the applicable performance period, but
not later than sixty (60) days following the end of the
applicable performance period (the “Certification
Date”). Any portion of the Target Units that do not become
vested because of the failure to fully satisfy the Performance
Goals shall be forfeited as of the Certification Date and the
Participant shall have no rights with respect to redemption of the
portion of the Target Units that have become forfeited.
(b) Except as provided in subparagraphs
(c) and (d) below, if at any time prior to the Redemption
Date the Participant’s employment or service with the
Employer terminates for any reason other than death, Disability (as
defined in the Plan) or Retirement (as defined in the Plan), all of
the Target Units subject to this Award Agreement will be
immediately forfeited and the Participant shall have no rights with
respect to the redemption of any portion of the Target
Units.
(i) Notwithstanding any provision to the
contrary herein, if the Participant’s employment or service
with the Company is terminated on account of the
Participant’s Retirement and the Committee makes the
determination described in clause (ii) of this subparagraph
(c), then the Participant shall continue to be eligible to earn the
Target Units, subject to and based on the level of achievement of
the Performance Goals as certified by the Committee, and shall be
eligible to receive payment of the Target Units as set forth
herein; provided , that the portion of the
Participant’s Target Units that the Participant shall be
eligible to receive shall be determined based on the
Participant’s age and term of employment with or service to
the Company or an Affiliate of the Company, as set forth in the
following clauses (1) — (6):
(1) In the event the Participant’s
Retirement occurs after the Participant has attained age 55 or 56,
with at least 10 years of employment or service for the
Company or an Affiliate, the participant shall remain eligible to
receive any Target Units as to which the applicable Redemption Date
had already occurred at the date of Retirement or will occur prior
to or on the first anniversary of the date of
Retirement.
(2) In the event the Participant’s
Retirement occurs after the Participant has attained age 57 or 58,
with at least 8 years of employment or service for the Company
or an Affiliate, the participant shall remain eligible to receive
any Target Units as to which the applicable Redemption Date had
already occurred at the date of Retirement or will occur prior to
or on the second anniversary of the date of Retirement.
2
(3) In the event the Participant’s
Retirement occurs after the Participant has attained age 59 or 60,
with at least 6 years of employment or service for the Company
or an Affiliate, the participant shall remain eligible to receive
any Target Units as to which the applicable Redemption Date had
already occurred at the date of Retirement or will occur prior to
or on the third anniversary of the date of Retirement.
(4) In the event the Participant’s
Retirement occurs after the Participant has attained age 61 or 62,
with at least 4 years of employment or service for the Company
or an Affiliate, the participant shall remain eligible to receive
any Target Units as to which the applicable Redemption Date had
already occurred at the date of Retirement or will occur prior to
or on the third anniversary of the date of Retirement.
(5) In the event the Participant’s
Retirement occurs after the Participant has attained age 63 or 64,
with at least 2 years of employment or service for the Company
or an Affiliate, the participant shall remain eligible to receive
any Target Units as to which the applicable Redemption Date had
already occurred at the date of Retirement or will occur prior to
or on the third anniversary of the date of Retirement.
(6) In the event the Participant’s
Retirement occurs after the Participant has attained age 65 or
older, the participant shall remain eligible to receive any Target
Units as to which the applicable Redemption Date had already
occurred at the date of Retirement or will occur prior to or on the
third anniversary of the date of Retirement.
(ii) In order for the Participant to
continue to remain eligible to earn the Target Units following the
Participant’s termination of employment or service on account
of Retirement as set forth in this subparagraph (c), the Committee
must make a 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
Participant, meaning, among other factors that may be taken into
account in the sole discretion of the Committee, that the
termination of em
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