Exhibit 10.2
PARAMOUNT GROUP, INC.
TIME-BASED LTIP UNIT AWARD AGREEMENT
Name of Participant: ________________________________ (the “Participant”)
No. of LTIP Units Awarded: ________________________________
Grant Date: September 8, 2023
RECITALS
A. The Participant is an officer of Paramount Group, Inc., a Maryland corporation (the “Company”) and provides services to Paramount Group Operating Partnership LP, a Delaware limited partnership, through which the Company conducts substantially all of its operations (the “Partnership”).
B. The Company hereby grants the Participant the number of LTIP Units (as defined in the Agreement of Limited Partnership (as amended and supplemented from time to time, the “LP Agreement”) of the Partnership, set forth above and hereby causes the Partnership to issue to the Participant such LTIP Units (the “Award LTIP Units”) 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 LP Agreement. Upon the close of business on the Grant Date pursuant to this LTIP Unit Award Agreement (this “Agreement”), the Participant shall receive the Award LTIP Units, subject to the restrictions and conditions set forth herein, in the LP Agreement and, as set forth in Section 6 of this Agreement, in the Company’s Amended and Restated 2014 Equity Incentive Plan (as amended and supplemented from time to time, the “Plan”). Unless otherwise indicated, capitalized terms used herein but not defined shall have the meanings given to those terms in the Plan.
NOW, THEREFORE, the Company, the Partnership and the Participant agree as follows:
Incremental Number of | Vesting Date |
(50%) | October 1, 2026 |
(50%) | October 1, 2027 |
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10
PARAMOUNT GROUP, INC.
By: |
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| Albert P. Behler |
| Chairman, Chief Executive Officer and President |
PARAMOUNT GROUP OPERATING PARTNERSHIP LP
By: PARAMOUNT GROUP, INC., its General Partner
By: |
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| Albert P. Behler |
| Chairman, Chief Executive Officer and President |
PARTICIPANT
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Name:
Address:
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[Signature Page to Time-Based Unit Award Agreement]
EXHIBIT A
FORM OF LIMITED PARTNER SIGNATURE PAGE
The Participant, desiring to become one of the within named Limited Partners of Paramount Group Operating Partnership LP, hereby becomes a party to the Agreement of Limited Partnership of Paramount Group Operating Partnership LP, as amended through the date hereof (the “Partnership Agreement”). The Participant agrees that this signature page may be attached to any counterpart of the Partnership Agreement.
Signature Line for Limited Partner:
By: |
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| Name: |
| Date: |
Address of Limited Partner:
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EXHIBIT B
ELECTION TO INCLUDE IN GROSS INCOME IN YEAR OF
TRANSFER OF PROPERTY PURSUANT TO SECTION 83(B)
OF THE INTERNAL REVENUE CODE1
The undersigned hereby makes an election pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended, to include in gross income as compensation for services the fair market value of the property described below:
1. The name, address and taxpayer identification number of the undersigned and the taxable year for which this election is being made are:
Name: ______________________ (the “Taxpayer”)
Address: ________________________________________________________
Taxpayer’s Social Security No.: ______________________
Taxable Year: Calendar Year 2023
2. Description of property with respect to which the election is being made:
The election is being made with respect to ________ LTIP Units in Paramount Group Operating Partnership LP (the “Partnership”).
3. The date on which the LTIP Units were transferred is September 8, 2023.
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.
(b) The Taxpayer’s LTIP Units are subject to a risk of forfeiture which lapses with respect to 50 percent of the LTIP Units on each of October 1, 2026, and 2027, in each case subject to acceleration in the event of certain types of employment terminations or extraordinary transactions.
___________________
1The 83(b) Election must be filed no later than 30 days after the date on which the property is transferred with the IRS office with which the taxpayer files his or her tax return. In other contexts, the IRS has indicated that this should be the address listed for the taxpayer’s state under “Are you not including a check or money order . . .” given in Where Do You File in the Instructions for Form 1040 and the Instructions for Form 1040A (this information can also be found by clicking on your state at https://www.irs.gov/filing/where-to-file-paper-tax-returns-with-or-without-a-payment)
5. The fair market value at time of transfer (determined without regard to any restrictions other than nonlapse restrictions as defined in §1.83-3(h) of the Income Tax Regulations) of the LTIP Units with respect to which this election is being made is $0 per LTIP Unit.
6. The amount paid by the Taxpayer for the LTIP Units was $0 per LTIP Unit.
7. The amount to include in gross income is $0.
8. The undersigned taxpayer will file this election with the Internal Revenue Service Center at which taxpayer files his or her annual tax return not later than 30 days after the date of transfer of the property. A copy of this election will be furnished to the Partnership and to its general partner, Paramount Group, Inc. The undersigned is the person performing services in connection with which the LTIP Units were transferred.
Dated: ___________________
__________________________________
Name:
EXHIBIT C
PARTICIPANT’S COVENANTS, REPRESENTATIONS AND WARRANTIES
The Participant hereby represents, warrants and covenants as follows:
(a) The Participant has received and had an opportunity to review the following documents (the “Background Documents”):
The Participant 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 Participant as a holder of Award LTIP Units shall not constitute an offer of Award LTIP Units until such determination of suitability shall be made.
(b) The Participant hereby represents and warrants that
(i) The Participant either (A) is an “accredited investor” as defined in Rule 501(a) under the Securities Act, or (B) by reason of the business and financial experience of the Participant, together with the business and financial experience of those persons, if any, retained by the Participant 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 Stock (“Shares”), has such knowledge, sophistication and experience in financial and business matters and in making investment decisions of this type that the Participant (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 or her own interest or has engaged representatives or advisors to assist him or her in protecting his or her its interests, and (III) is capable of bearing the economic risk of such investment.
(ii) The Participant understands that (A) the Participant 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 Participant is or by reason of the award of LTIP Units may become subject, to his or her particular situation; (B) the Participant 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 Participant provides or will provide 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 Participant 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 Participant 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 Participant has been afforded the opportunity to obtain any additional information (including any exhibits to the Background Documents) deemed necessary by the Participant to verify the accuracy of information conveyed to the Participant. The Participant confirms that all documents, records, and books pertaining to his or her receipt of LTIP Units which were requested by the Participant have been made available or delivered to the Participant. The Participant 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 Participant has relied upon, and is making his or her decision solely upon, the Background Documents and other written information provided to the Participant by the Partnership or the Company. The Participant 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 his or her own advisors in connection with his or her evaluation of the Background Documents and this Agreement and the Participant’s receipt of LTIP Units.
(iii) The LTIP Units to be issued, the Common Units issuable upon conversion of the LTIP Units and any Shares issued in connection with the redemption of any such Common Units will be acquired for the account of the Participant 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 Participant’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 or her LTIP Units, Common Units or 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 Participant 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 Participant 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, the Company may issue Shares under the Plan and pursuant to a Registration Statement on Form S-8 under the Securities Act, to the extent that (I) the Participant is eligible to receive such Shares under the Plan at the time of such issuance and (II) the Company has filed an effective Form S-8 Registration Statement with the Securities and Exchange Commission registering the issuance of such Shares. The Participant 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 and this Agreement, the Participant 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 Participant has determined that the LTIP Units are a suitable investment for the Participant.
(vi) No representations or warranties have been made to the Participant by the Partnership or the Company, or any officer, director, shareholder, agent, or affiliate of any of them, and the Participant has received no information relating to an investment in the Partnership or the LTIP Units except the information specified in this Paragraph (b).
(c) So long as the Participant holds any LTIP Units, the Participant 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 Participant 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 to this Agreement as Exhibit B. The Participant agrees to file the election (or to permit the Partnership to file such election on the Participant’s behalf) within 30 days after the Award of the LTIP Units hereunder with the IRS Service Center at which such Participant files his or her personal income tax returns if no check or money order is included with the returns, and to file a copy of such election with the Participant’s U.S. federal income tax return for the taxable year in which the LTIP Units are awarded to the Participant.
(e) The address set forth on the signature page of this Agreement is the address of the Participant’s principal residence, and the Participant 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.
(f) The representations of the Participant as set forth above are true and complete to the information and belief of the Participant, and the Partnership shall be notified promptly of any changes in the foregoing representations.