As filed with the Securities and Exchange Commission on May 16, 2019

Registration No. 333-

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form S-8

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

EMPIRE STATE REALTY TRUST, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Maryland   37-1645259
(State or other jurisdiction of
incorporation or organization)
  (I.R.S. Employer
Identification No.)

 

 

 

111 West 33rd Street

12th Floor

New York, New York 10120

  10065
(Address of principal executive offices)   (Zip code)

EMPIRE STATE REALTY TRUST, INC. EMPIRE STATE REALTY OP, L.P.

2019 EQUITY INCENTIVE PLAN

(Full title of the plan)

 

 

Anthony E. Malkin

Chairman and Chief Executive Officer

c/o Empire State Realty Trust, Inc.

111 West 33rd Street

12th Floor

New York, New York 10120

(212) 687-8700

(Name and address, including zip code, and telephone number, including area code, of agent for service)

 

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer      Accelerated filer  
Non-accelerated filer      Smaller reporting company  
     Emerging growth company  

 

 

CALCULATION OF REGISTRATION FEE

 

 

Title of Each Class of

Securities to be Registered

 

Amount

to be
Registered (1)

  Proposed
Maximum
Offering Price
per Share (2)
 

Proposed
Maximum
Aggregate

Offering Price

 

Amount of

Registration Fee

Class A Common Stock, $0.01 par value per share

  10,960,000   $15.22   $166,811,200   $20,217.52

 

 

(1)

Represents the maximum number of shares of Class A common stock, par value $0.01 per share (“Class A Common Stock”), issuable under the Empire State Realty Trust, Inc. Empire State Realty OP, L.P. 2019 Equity Incentive Plan (the “2019 Equity Incentive Plan”). The 2019 Equity Incentive Plan was approved by the stockholders of the registrant on May 16, 2019. Pursuant to Rule 416 under the Securities Act of 1933, as amended, (the “Securities Act”), this registration statement also covers any additional shares of Common Stock that may become issuable under the 2019 Equity Incentive Plan by reason of certain corporate transactions or events, including any stock dividend, stock split, recapitalization or any other similar transaction effected without the receipt of consideration, which would increase the number of the registrant’s outstanding shares of Class A Common Stock.

(2)

Estimated solely for purposes of determining the registration fee pursuant to the provisions of Rule 457(h) under the Securities Act by averaging the high and low sales prices of the registrant’s Class A Common Stock as reported by the New York Stock Exchange on May 13, 2019.

 

 

 


PART I

INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS

Item 1. Plan Information.*

Item 2. Registrant Information and Employee Plan Annual Information.*

*     The documents containing the information specified in this Part I will be sent or given to participants under the 2019 Equity Incentive Plan as specified by Rule 428(b)(1) of the Securities Act. Such documents need not be filed with the Securities and Exchange Commission (the “SEC”) either as part of this registration statement or as prospectuses or prospectus supplements pursuant to Rule 424 of the Securities Act. These documents and the documents incorporated by reference in this registration statement pursuant to Item 3 of Part II of this registration statement, taken together, constitute a prospectus that meets the requirements of Section 10(a) of the Securities Act.

PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3. Incorporation of Documents by Reference.

The following documents previously filed by Empire State Realty Trust, Inc. (the “Company”, “we”, “our” or “us”) with the SEC are incorporated by reference in this registration statement:

 

   

The Company’s Annual Report on Form 10-K for the year ended December 31, 2018;

 

   

The Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019;

 

   

The Company’s Current Reports on Form 8-K filed with the SEC on March 7, 2019 and May 16, 2019 ;

 

   

The Company’s Proxy Statement filed with the SEC on April 4, 2019; and

 

   

The description of the Class A Common Stock contained in the Company’s Registration Statement on Form 8-A filed with the SEC on September 30, 2013.

In addition, all documents and reports subsequently filed by us pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended, prior to the filing of a post-effective amendment to this registration statement that indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this registration statement and to be part hereof from the date of filing of such documents or reports. Unless specifically stated to the contrary, none of the information that we disclose under Items 2.02 or 7.01 of any Current Report on Form 8-K or 8-K/A that we may from time to time furnish to the SEC or any other document or information deemed to have been furnished and not filed with the SEC will be incorporated by reference into, or otherwise included in, this registration statement.

Any statement contained in a document incorporated or deemed to be incorporated by reference in this registration statement shall be deemed to be modified or superseded for purposes of this registration statement to the extent that a statement contained in this registration statement, or in any other subsequently filed document that also is or is deemed to be incorporated by reference in this registration statement, modifies or supersedes such prior statement. Any statement contained in this registration statement shall be deemed to be modified or superseded to the extent that a statement contained in a subsequently filed document that is or is deemed to be incorporated by reference in this registration statement modifies or supersedes such prior statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this registration statement.

Item 4. Description of Securities.

Not applicable.


Item 5. Interests of Named Experts and Counsel.

Not applicable.

Item 6. Indemnification of Directors and Officers.

Maryland law permits a Maryland corporation to include in its charter a provision limiting the liability of its directors and officers to the corporation and its stockholders for money damages except for liability resulting from (a) actual receipt of an improper benefit or profit in money, property or services or (b) active and deliberate dishonesty established by a final judgment as being material to the cause of action.

Our charter contains such a provision and eliminates the liability of our directors and officers to the maximum extent permitted by Maryland law.

Maryland law requires a Maryland corporation (unless its charter provides otherwise, which our charter does not) to indemnify a director or officer who has been successful, on the merits or otherwise, in the defense of any proceeding to which he or she is made or threatened to be made a party by reason of his or her service in that capacity. Maryland law permits a Maryland corporation to indemnify its present and former directors and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to which they may be made or threatened to be made a party by reason of their service in those or other capacities unless it is established that:

 

   

the act or omission of the director or officer was material to the matter giving rise to the proceeding and (i) was committed in bad faith or (ii) was the result of active and deliberate dishonesty;

 

   

the director or officer actually received an improper personal benefit in money, property or services; or

 

   

in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful.

Under Maryland law, a Maryland corporation also may not indemnify a director or officer in a suit by or on behalf of the corporation in which the director or officer was adjudged liable to the corporation or for a judgment of liability on the basis that a personal benefit was improperly received. A court may order indemnification if it determines that the director or officer is fairly and reasonably entitled to indemnification, even though the director or officer did not meet the prescribed standard of conduct, however, indemnification for an adverse judgment in a suit by us or on our behalf, or for a judgment of liability on the basis that personal benefit was improperly received, is limited to expenses.

In addition, the Maryland General Corporation Law permits a Maryland corporation to advance reasonable expenses to a director or officer upon the corporation’s receipt of:

 

   

a written affirmation by the director or officer of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification by the corporation; and

 

   

a written undertaking by the director or officer or on the director’s or officer’s behalf to repay the amount paid or reimbursed by the corporation if it is ultimately determined that the director or officer did not meet the standard of conduct.

Our charter and bylaws obligate us, to the maximum extent permitted by Maryland law in effect from time to time, to indemnify and, without requiring a preliminary determination of the ultimate entitlement to indemnification, pay or reimburse reasonable expenses in advance of final disposition of a proceeding to:

 

   

any present or former director or officer who is made or threatened to be made a party to the proceeding by reason of his or her service in that capacity; or

 

   

any individual who, while a director or officer of our Company and at our request, serves or has served another corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or any other enterprise as a director, officer, partner, member, manager or trustee of such corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise and who is made or threatened to be made a party to the proceeding by reason of his or her service in that capacity.


Our charter and bylaws also permit us, with the approval of our board of directors, to indemnify and advance expenses to members, managers, shareholders, directors, limited partners, general partners, officers or controlling persons of our predecessor in their capacities as such. In addition, the 2019 Equity Incentive Plan requires us to indemnify our directors and members of our compensation committee in connection with the performance of their duties, responsibilities and obligations under the 2019 Equity Incentive Plan, to the maximum extent permitted by Maryland law.

We have entered into indemnification agreements with each of our directors, executive officers and chairmen emeritus, and certain other parties providing for the indemnification by us for certain liabilities and expenses incurred as a result of actions brought, or threatened to be brought, against (i) our directors, executive officers and chairman emeritus and (ii) our executive officers, chairman emeritus and certain other parties who are former members, managers, shareholders, directors, limited partners, general partners, officers or controlling persons of our predecessor in their capacities as such.

In addition, the partnership agreement of our operating partnership, Empire State Realty OP, L.P., provides that we, as general partner, and our officers and directors are indemnified to the maximum extent permitted by law.

Item 7. Exemption from Registration Claimed.

Not applicable.

Item 8. Exhibits.

 

Exhibit
No.

  

Description

  3.1    Articles of Amendment and Restatement of Empire State Realty Trust, Inc., incorporated by reference to Exhibit 3.1 to Amendment No.  8 to the Company’s Form S-11 (Registration No. 333-179485), filed with the SEC on September 27, 2013
  3.2    Third Amended and Restated Bylaws of Empire State Realty Trust, Inc., incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on March 7, 2019
  5.1*    Opinion of Goodwin Procter LLP (including consent of such firm)
10.1    Empire State Realty Trust, Inc. Empire State Realty OP, L.P. 2019 Equity Incentive Plan, incorporated by reference to Exhibit A to the Company’s Definitive Proxy Statement filed with the SEC on April 4, 2019
23.1*    Consent of Goodwin Procter LLP (included in Exhibit 5.1)
23.2*    Consent of Ernst & Young LLP
99.1*    Form of Restricted Stock Agreement (Time-Based)
99.2*    Form of LTIP Agreement (Performance-Based)
99.3*    Form of LTIP Agreement (Time-Based)

 

*

Filed herewith.

Item 9. Undertakings.

(a)    The undersigned registrant hereby undertakes:

(1)    To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i)    To include any prospectus required by section 10(a)(3) of the Securities Act;

(ii)    To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be


reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;

(iii)    To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; provided , however , that paragraphs (a)(1)(i) and (a)(1)(ii) of this section do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the SEC by the registrant pursuant to section 13 or section 15(d) of the Exchange Act that are incorporated by reference in the registration statement.

(2)    That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3)    To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(b)    The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(c)    Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.


SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on May 16, 2019.

 

EMPIRE STATE REALTY TRUST, INC.
By:     /s/ Anthony E. Malkin
  Name:   Anthony E. Malkin
  Title:   Chairman and Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Anthony E. Malkin, David A. Karp and Andrew J. Prentice, and each of them, with full power to act without the other, such person’s true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign this registration statement, and any and all pre-effective and post-effective amendments thereto as well as any related registration statements (or amendment thereto) filed pursuant to Rule 462(b) promulgated under the Securities Act and to file the same, with exhibits and schedules thereto, and other documents in connection therewith, with the SEC, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing necessary or desirable to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities and on the date indicated.

 

Signature

 

Title

 

Date

By:  

 

/s/ Anthony E. Malkin

Anthony E. Malkin

 

Chairman of the Board of Directors and Chief Executive Officer

(Principal Executive Officer)

 

May 16, 2019

By:

 

/s/ David A. Karp

David A. Karp

 

Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

 

May 16, 2019

By:

 

/s/ Andrew J. Prentice

Andrew J. Prentice

 

Senior Vice President, Chief Accounting Officer and Treasurer

(Principal Accounting Officer)

 

May 16, 2019

By:

 

/s/ William H. Berkman

William H. Berkman

 

Director

 

May 16, 2019

By:

 

/s/ Leslie D. Biddle

Leslie D. Biddle

 

Director

 

May 16, 2019

By:

 

/s/ Thomas J. DeRosa

Thomas J. DeRosa

 

Director

 

May 16, 2019

By:

 

/s/ Steven J. Gilbert

Steven J. Gilbert

 

Director

 

May 16, 2019

By:

 

/s/ S. Michael Giliberto

S. Michael Giliberto

 

Director

 

May 16, 2019

By:

 

/s/ James D. Robinson IV

James D. Robinson IV

  Director  

May 16, 2019

Exhibit 5.1

May 16, 2019

Empire State Realty Trust, Inc.

111 West 33 rd Street

12 th Floor

New York, New York 10120

Re:     Securities Being Registered under Registration Statement on Form S-8

Ladies and Gentlemen:

We have acted as counsel to you in connection with your filing of a Registration Statement on Form S-8 (the “Registration Statement”) pursuant to the Securities Act of 1933, as amended (the “Securities Act”), on or about the date hereof relating to an aggregate of 10,960,000 shares (the “Shares”) of Class A common stock, $0.01 par value per share (“Class A Common Stock”), of Empire State Realty Trust, Inc., a Maryland corporation (the “Company”), that may be issued pursuant to the Empire State Realty Trust, Inc. Empire State Realty OP, L.P. 2019 Equity Incentive Plan (the “Plan”).

We have reviewed such documents and made such examination of law as we have deemed appropriate to give the opinion set forth below. We have relied, without independent verification, on certificates of public officials and, as to matters of fact material to the opinion set forth below, on certificates of officers of the Company.

The opinion set forth below is limited to the Maryland General Corporation Law.

For purposes of the opinion set forth below, we have assumed that no event occurs that causes the number of authorized shares of Class A Common Stock available for issuance by the Company to be less than the number of then unissued Shares.

Based on the foregoing, we are of the opinion that the Shares have been duly authorized and, upon issuance and delivery against payment therefor in accordance with the terms of the Plan, will be validly issued, fully paid and nonassessable.

We hereby consent to the inclusion of this opinion as Exhibit 5.1 to the Registration Statement. In giving our consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations thereunder.

Very truly yours,

/s/ Goodwin Procter LLP

GOODWIN PROCTER LLP

Exhibit 23.2

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the Registration Statement pertaining to the Empire State Realty Trust, Inc. Empire State Realty OP, L.P. 2019 Equity Incentive Plan of our reports dated February 28, 2019, with respect to the consolidated financial statements of Empire State Realty Trust, Inc. and the effectiveness of internal control over financial reporting of Empire State Realty Trust, Inc. included in its Annual Report (Form 10-K) for the year ended December 31, 2018, filed with the Securities and Exchange Commission.

/s/ Ernst & Young LLP

May 16, 2019

New York, New York

Exhibit 99.1

TIME-BASED VESTING RESTRICTED STOCK AGREEMENT

UNDER THE EMPIRE STATE REALTY TRUST, INC.

EMPIRE STATE REALTY OP, L.P.

2019 EQUITY INCENTIVE PLAN

This RESTRICTED STOCK AGREEMENT (this “Agreement”), is entered into on                          (the “Grant Date”), by and between, Empire State Realty Trust, Inc., a Maryland corporation (the “Company”), and                          (“Grantee”). Capitalized terms used but not otherwise defined in this Agreement shall have the respective meanings set forth in the Empire State Realty Trust, Inc. Empire State Realty OP, L.P. 2019 Equity Incentive Plan (the “Plan”).

1.     Number of Shares; Restrictions . The Company hereby grants Grantee an Award of                          shares of Restricted Stock (the “Restricted Shares”) pursuant to the terms of this Agreement and the provisions of the Plan. The Restricted Shares may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of and shall be subject to a risk of forfeiture until the lapse of the restrictions as set forth in this Agreement.

2.     Lapse of Restrictions .

(a)    The restrictions set forth herein with respect to the Restricted Shares shall lapse and the Restricted Shares shall vest as to twenty-five percent (25%) of the Restricted Shares on the one (1) year anniversary of January 1, 20__, and the remainder shall vest in substantially equal annual installments, rounded down to the nearest whole Restricted Share, on each subsequent anniversary for a period of three (3) years thereafter; provided , that , with respect to the last such annual installment, the number of Restricted Shares that vest in the installment shall be such that Grantee will be fully vested in the total number of Restricted Shares granted hereunder as of the applicable annual anniversary. Notwithstanding the foregoing, except as provided in Section 2(b) or Section 3 below or in Section 12(c) of the Plan, the Restricted Shares shall not vest unless Grantee continues to be employed by the Company or any of its Affiliates through the applicable vesting date.

(b)    In the event of a Corporate Event, this Award shall be treated as set forth in Section 12 of the Plan; provided , however , if the Restricted Shares do not remain outstanding or are not replaced with awards of the Company’s successor in a Change in Control, all outstanding Restricted Shares shall become fully vested upon the consummation of the Change in Control.

3.     Termination of Employment .

(a)    In the event of Grantee’s Termination for any reason, except as provided in (b) below, all vesting with respect to the Restricted Shares shall immediately cease, and all Restricted Shares that have not vested at that time will be forfeited to the Company without payment of any consideration by the Company or any of its Affiliates, and neither Grantee nor any of his or her successors, heirs, assigns, or personal representatives will thereafter have any further rights or interests in such Restricted Shares.


(b)    In the event Grantee’s Termination is a result of (i) death, (ii) Disability, (iii) a termination without Cause by the Company or its Affiliates, (iv) a voluntary termination by Grantee that follows the Grantee’s Retirement Eligibility Date, or (v) a termination by Grantee with Good Reason (as defined in Grantee’s Participant Agreement); any restrictions on the Restricted Shares shall lapse and the Restricted Shares, unless earlier terminated or forfeited and to the extent not otherwise vested, shall automatically become fully vested as of such date of Termination.

(c)    Notwithstanding any other provision hereof, if Grantee is a party to an effective Participant Agreement, then the terms of such Participant Agreement shall supersede any contrary provision in this Agreement and the applicable period of forfeiture shall also end if and as may otherwise be required by such Participant Agreement; and nothing herein shall limit any rights Grantee may otherwise have under such Participant Agreement.

4.     Rights of Stockholder . From and after the Grant Date and for so long as the Restricted Shares are held by or for the benefit of Grantee, Grantee shall have all the rights of a stockholder of the Company with respect to the Restricted Shares, including but not limited to the right to (i) receive any and all dividends or other distributions paid with respect to the Restricted Shares of which Grantee is the record owner on the record date for such dividend or other distribution, and (ii) vote any Restricted Shares of which Grantee is the record owner on the record date for such vote.

5.     Certificates . Any certificates issued in respect of the Restricted Shares shall be held by the Company, and any such certificate shall contain a legend substantially in the following form:

THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF STOCK REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS (INCLUDING FORFEITURE) OF THE EMPIRE STATE REALTY TRUST, INC. EMPIRE STATE REALTY OP, L.P. 2019 EQUITY INCENTIVE PLAN AND A RESTRICTED STOCK AGREEMENT ENTERED INTO BETWEEN THE REGISTERED OWNER AND EMPIRE STATE REALTY TRUST, INC. COPIES OF SUCH PLAN AND AGREEMENT ARE ON FILE IN THE OFFICES OF EMPIRE STATE REALTY TRUST, INC.

As soon as practicable following the vesting of any Restricted Shares granted herein, if applicable, the Company shall cause a certificate or certificates covering such vested Restricted Shares, without the aforesaid legend, to be issued and delivered to Grantee. If any Restricted Shares are held in book-entry form, the Company may take such steps as it deems necessary or appropriate to record and manifest the restrictions applicable to such Restricted Shares. Notwithstanding the foregoing, any certificates representing vested Restricted Shares delivered to Grantee shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations, and other requirements of the Securities and Exchange Commission or any stock exchange upon which such shares are listed, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions as the Committee deems appropriate.

 

- 2 -


6.     Certain Tax Matters . Grantee expressly agrees and acknowledges the following:

(a)    Grantee has been advised to confer promptly with a professional tax advisor to consider whether Grantee should make a so-called “83(b) election” with respect to the Restricted Shares. Any such election, to be effective, must be made in accordance with the applicable regulations and filed with the Internal Revenue Service within thirty (30) days following the date this Award is granted, and Grantee must provide the Company with a copy of the 83(b) election. The Company has made no recommendation to Grantee with respect to the advisability of making an election.

(b)    The award or vesting of the Restricted Shares acquired hereunder, and the payment of dividends with respect to such Restricted Shares, may give rise to “wages” subject to withholding. Grantee expressly acknowledges and agrees that his or her rights hereunder are subject to his or her promptly satisfying all taxes required to be withheld in connection with this Award. Grantee may elect to have such tax withholding satisfied, in whole or in part, by (i) authorizing the Company to withhold a number of shares of Stock to be issued pursuant to this Award with a Fair Market Value equal to the amount of the required withholding tax, (ii) transferring to the Company previously owned shares of Stock with a Fair Market Value equal to the amount of the required withholding tax, or (iii) in the event Grantee is an employee of the Company at the time such withholding tax is effected, by withholding from the cash compensation payable to Grantee as of such date, equal to the amount of required withholding tax.

7.     Miscellaneous .

(a)     Incorporation of the Plan . This Agreement is made under and subject to and governed by all of the terms and conditions of the Plan. In the event of any discrepancy or inconsistency between this Agreement and the Plan, the terms and conditions of the Plan shall control. By signing this Agreement, Grantee confirms that he or she has received a copy of the Plan and has had an opportunity to review the contents thereof.

(b)     Clawback . This Award is subject to any incentive compensation clawback or recoupment policy currently in effect or as may be adopted by the Board, and in each case, as may be amended from time to time.

(c)     Waiver . The failure of Grantee or the Company to insist upon strict compliance with any provision of this Agreement or the Plan, or to assert any right Grantee or the Company, respectively, may have under this Agreement or the Plan, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement or the Plan.

(d)     No Right to Continued Employment . Neither the Plan nor this Agreement will give Grantee any right to continue to be in the employ of the Company or any of its Affiliates, affect the right of the Company or any of its Affiliates to discharge or discipline such Grantee at any time, or affect any right of such Grantee to terminate his or her employment at any time.

 

- 3 -


(e)     Assignment and Transfer . Except as expressly permitted under this Agreement or by the Committee pursuant to the Plan, the rights and interests of Grantee under this Agreement may not be sold, assigned, encumbered, pledged, or otherwise transferred except in the event of the death of Grantee, by will or by the laws of descent and distribution. In the event of any attempt by Grantee in breach of the foregoing sentence to sell, assign, encumber, pledge or otherwise transfer its rights and interests hereunder, or in the event of the levy or any attachment, execution or similar process upon the rights or interests hereby conferred, the Company may require Grantee to forfeit the Restricted Shares by notice to Grantee, and the Restricted Shares and all rights hereunder shall thereupon become null and void. The rights and protections of the Company hereunder shall extend to any successors or assigns of the Company.

(f)     Headings . Section, paragraph and other headings and captions are provided solely as a convenience to facilitate reference. Such headings and captions shall not be deemed in any way material or relevant to the construction, meaning or interpretation of this Agreement or any term or provision hereof.

(g)     Severability . In the event that one or more provisions of this Agreement should, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provisions had never been contained herein.

(h)     Counterparts . This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument. Facsimile or electronic submission of any signed original document or retransmission of any signed facsimile or other electronic transmission will be deemed the same as delivery of an original.

(i)     Notices . Notices hereunder shall be mailed or delivered to the Company at its principal place of business and shall be mailed or delivered to Grantee at the address on file with the Company or, in either case, at such other address as one party may subsequently furnish to the other party in writing.

(j)     Consent to Electronic Delivery . Grantee agrees that the Company may deliver by email all documents relating to the Plan or the Restricted Shares (including without limitation, a copy of the Plan) and all other documents that the Company is required to deliver to its security holders (including, without limitation, disclosures that may be required by the Securities and Exchange Commission). Grantee also agrees that the Company may deliver these documents by posting them on a website maintained by the Company or by a third-party under contract with the Company. If the Company posts these documents on a website, it shall notify Grantee by email.

(k)     Amendment . Grantee acknowledges that the Plan may be amended or discontinued in accordance with Section 19 or Section 20 thereof and that this Agreement may be amended or canceled by the Board or the Committee, for the purpose of satisfying changes in law or for any other lawful purpose, provided that no such action shall materially impair Grantee’s rights under this Agreement without Grantee’s written consent.

 

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(l)     Governing Law . This Agreement and all claims or disputes arising out of or based upon this Agreement or relating to the subject matter hereof shall be governed by, and construed in accordance with, the laws of the State of Maryland, applied without regard to conflict of law principles or rules that would cause the application of the domestic substantive laws of any other jurisdiction.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

 

EMPIRE STATE REALTY TRUST, INC.

By:    
Name:  

David A. Karp

Title:

 

Executive Vice President and Chief Financial Officer

The foregoing Agreement is hereby accepted and the terms and conditions thereof hereby agreed to by Grantee.

 

Dated:                                        
     

 

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Exhibit 99.2

PERFORMANCE-BASED VESTING LTIP UNIT VESTING AGREEMENT

UNDER THE

EMPIRE STATE REALTY TRUST, INC.

EMPIRE STATE REALTY OP, L.P.

2019 EQUITY INCENTIVE PLAN

Grantee:

No. of LTIP Units:

Grant Date:

Final Acceptance Date:

Pursuant to the Empire State Realty Trust, Inc. Empire State Realty OP, L.P. 2019 Equity Incentive Plan (the “ Plan ”) and the Amended and Restated Agreement of Limited Partnership, dated as of October 1, 2013, as amended (the “ Partnership Agreement ”), of Empire State Realty OP, L.P., a Delaware limited partnership (the “ Partnership ”), Empire State Realty Trust, Inc., a Maryland corporation and the general partner of the Partnership (the “ Company ”), hereby grants to Grantee named above an other equity-based award (pursuant to Section 11 of the Plan, and referred to herein as an “ Award ”) in the form of, and by causing the Partnership to issue to Grantee named above, LTIP Units (as defined in 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 and in the Partnership Agreement. Thirty-three and one-third percent (33.33%) of the LTIP Units (rounded down to the nearest whole LTIP Unit) shall vest based upon the achievement of SNL Index Percentile Performance (the “ SNL Office Index Percentile Award ”), thirty-three and one-third percent (33.33%) of the LTIP Units (rounded down to the nearest whole LTIP Unit) shall vest based upon the achievement of SNL Index Relative Performance (the “ SNL Office Index Relative Performance Award ”), sixteen and two-thirds percent (16.67%) of the LTIP Units (rounded down to the nearest whole LTIP Unit) shall vest based upon the achievement of MSCI Index Percentile Performance (the “ MSCI Index Percentile Award ”) and sixteen and two-thirds percent (16.67%) of the LTIP Units (rounded down to the nearest whole LTIP Unit) shall vest based upon the achievement of MSCI Index Relative Performance (the “ MSCI Index Relative Performance Award ”). If this LTIP Unit Vesting Agreement (this “ Agreement ”) is accepted prior to the Final Acceptance Date, Grantee shall receive the number of LTIP Units specified above as of the Grant Date, subject to the restrictions and conditions set forth herein, in the Plan and in the Partnership Agreement. All capitalized terms not otherwise defined herein shall have the same meanings as set forth in the Plan.

1.     Acceptance of Agreement . Grantee shall have no rights with respect to this Agreement unless Grantee has accepted this Agreement prior to the close of business on the Final Acceptance Date specified above by (i) signing and delivering to the Partnership a copy of this Agreement and (ii) unless 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 ). If this Agreement is accepted by Grantee prior to the Final Acceptance Date, the Partnership Agreement shall be amended to reflect the issuance to Grantee of the LTIP Units so accepted. Thereupon, Grantee shall have all the rights of a Limited Partner of the Partnership with respect to the number of LTIP Units then issued to Grantee, as set forth in the Partnership Agreement, subject, however, to the restrictions and conditions specified in Section 3 below.

 

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2.     Definitions . The following terms have the following meanings:

(a)    “ Absolute TSR Percentage ” means the compounded annual positive or negative growth rate in value during the Performance Period, expressed as a percentage (rounded to the nearest tenth of a percent (0.1%)), by comparing the Beginning Share Price of one share of Stock with the Ending Share Price, computed with respect to one share of Stock plus any fraction of a share acquired during the Performance Period by reinvestment of dividends as provided herein (such one share plus any such acquired fraction of a share as of any date being collectively “Cumulative Stock”), all on the basis that the pro forma pre-tax amount of each dividend paid during the Performance Period on Cumulative Stock is immediately reinvested in Stock. Where “N” is the number of full calendar years completed during the Performance Period, the Absolute TSR Percentage is calculated as follows:

 

LOGO

(b)    “ Beginning Share Price ” means [$        ], the closing price of a share of Stock on                          .

(c)    “ Earned LTIP Units ” means the sum of (i) Earned MSCI Percentile LTIP Units, (ii) Earned MSCI Relative LTIP Units, (iii) Earned SNL Percentile LTIP Units, and (iv) Earned SNL Relative LTIP Units.

(d)    “ Earned MSCI Percentile LTIP Units ” means (i) the number of LTIP Units subject to the MSCI Index Percentile Award granted herein, multiplied by (ii) the MSCI Index Percentile Rank Vesting Percentage.

(e)    “ Earned MSCI Relative LTIP Units ” means (i) the number of LTIP Units subject to the MSCI Index Relative Performance Award granted herein, multiplied by (ii) the MSCI Index Relative Performance Vesting Percentage.

(f)    “ Earned SNL Percentile LTIP Units ” means (i) the number of LTIP Units subject to the SNL Office Index Percentile Award granted herein, multiplied by (ii) the SNL Index Percentile Rank Vesting Percentage.

(g)    “ Earned SNL Relative LTIP Units ” means (i) the number of LTIP Units subject to the SNL Office Index Relative Performance Award granted herein, multiplied by (ii) the SNL Index Relative Performance Vesting Percentage.

(h)    “ Effective Date ” means                          .

 

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(i)    “ Ending Share Price ” means the average closing price per share of Stock during the twenty (20) consecutive trading days immediately preceding the expiration of the Performance Period.

(j)     “ MSCI Index Percentile Performance ” means a function of the percentile rank of the Company’s Absolute TSR Percentage relative to the MSCI Index TSR Percentage for the Performance Period determined as follows:

 

   

MSCI Index Percentile

Performance

 

MSCI Index Percentile

Rank Vesting Percentage

  At or below the 25 th percentile   0.0%

“Threshold Level”

  Above the 25 th percentile   25.0%

“Target Level”

  Above the 50 th percentile   50.0%

“Maximum Level”

  Above the 75 th percentile   100.0%

In the event that the MSCI Index Percentile Performance falls above the 25 th percentile and below the 50 th percentile, the MSCI Index Percentile Rank Vesting Percentage shall be determined using a straight line linear interpolation between the corresponding vesting percentages shown above and in the event that the MSCI Index Percentile Performance falls above the 50 th percentile and below the 75 th percentile, the MSCI Index Percentile Rank Vesting Percentage shall be determined using a straight line linear interpolation between the corresponding vesting percentages shown above.

(k)    “ MSCI Index Relative Performance ” means the Absolute TSR Percentage less the MSCI Index TSR Percentage, expressed in basis points.

(l)    “ MSCI Index Relative Performance Vesting Percentage ” means a function of the MSCI Index Relative Performance during the Performance Period, and shall be determined as follows:

 

   

MSCI Index Relative

Performance

 

MSCI Index Relative

Performance Vesting

Percentage

  < -450 basis points   0.0%

“Threshold Level”

  -450 basis points   25.0%

“Target Level”

  +50 basis points   50.0%

“Maximum Level”

  ³ +550 basis points   100.0%

In the event that the MSCI Index Relative Performance falls between -450 basis points and +50 basis points, the MSCI Relative Performance Vesting Percentage shall be determined

 

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using a straight line linear interpolation between the corresponding vesting percentages shown above and in the event that the MSCI Index Relative Performance falls between +50 basis points and +550 basis points, the MSCI Relative Performance Vesting Percentage shall be determined using a straight line linear interpolation between the corresponding vesting percentages shown above.

(m)    “ MSCI Index TSR Percentage ” means the compounded annual growth rate, expressed as a percentage (rounded to the nearest tenth of a percent (0.1%)), in the value of the MSCI REIT Index during the Performance Period, calculated in a manner consistent with Section 2(a) above from information publicly available.

(n)    “ MSCI REIT Index ” means the total return version of the MSCI US REIT Index, or, in the event such index is discontinued or its methodology is significantly changed, a comparable index selected by the Committee in good faith. While the presumption is that a REIT needs to be included in the index for the entire Performance Period from and excluding the Effective Date to and including the last day of the Performance Period, it may be appropriate to re-compute the index to include or exclude, prospectively and/or retrospectively, REITs that are not included in the index for such entire period. With respect to the appropriateness of such inclusion or exclusion, as well as related methodologies and calculations, the Committee is entitled to rely on a valuation or other expert.

(o)    “ Performance Period ” means the period commencing, except as provided in Section 5(b) below, on the Effective Date and ending on the earlier of (i)                           and (ii) the date determined in accordance with Section 12(c)(ii) of the Plan.

(p)     “ SNL Index Percentile Performance ” means a function of the percentile rank of the Company’s Absolute TSR Percentage relative to the SNL Office Index TSR Percentage for the Performance Period determined as follows:

 

   

SNL Index Percentile

Performance

 

SNL Index Percentile Rank

Vesting Percentage

  At or below the 25 th percentile   0.0%

“Threshold Level”

  Above the 25 th percentile   25.0%

“Target Level”

  Above the 50 th percentile   50.0%

“Maximum Level”

  Above the 75 th percentile   100.0%

In the event that the SNL Index Percentile Performance falls above the 25 th percentile and below the 50 th percentile, the SNL Index Percentile Rank Vesting Percentage shall be determined using a straight line linear interpolation between the corresponding vesting percentages shown above and in the event that the SNL Index Percentile Performance falls above the 50 th percentile and below the 75 th percentile, the SNL Index Percentile Rank Vesting Percentage shall be determined using a straight line linear interpolation between the corresponding vesting percentages shown above.

 

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(q)     “ SNL Index Relative Performance ” means the Absolute TSR Percentage less the SNL Office Index TSR Percentage, expressed in basis points.

(r)    “ SNL Index Relative Performance Vesting Percentage ” means a function of the SNL Index Relative Performance during the Performance Period, and shall be determined as follows:

 

   

SNL Index Relative

Performance

 

SNL Index Relative

Performance Vesting

Percentage

  < -450 basis points   0.0%

“Threshold Level”

  -450 basis points   25.0%

“Target Level”

  +50 basis points   50.0%

“Maximum Level”

  ³ +550 basis points   100.0%

In the event that the SNL Index Relative Performance falls between -450 basis points and +50 basis points, the SNL Relative Performance Vesting Percentage shall be determined using a straight line linear interpolation between the corresponding vesting percentages shown above and in the event that the SNL Index Relative Performance falls between +50 basis points and +550 basis points, the SNL Relative Performance Vesting Percentage shall be determined using a straight line linear interpolation between the corresponding vesting percentages shown above.

(s)    “ SNL Index TSR Percentage ” means the compounded annual growth rate, expressed as a percentage (rounded to the nearest tenth of a percent (0.1%)), in the value of the SNL Office Index during the Performance Period, calculated in a manner consistent with Section 2(a) above from information publicly available.

(t)    “ SNL Office Index ” means the SNL Office Index, or, in the event such index is discontinued or its methodology is significantly changed, a comparable index selected by the Committee in good faith. While the presumption is that a REIT needs to be included in the index for the entire Performance Period from and excluding the Effective Date to and including the last day of the Performance Period, it may be appropriate to re-compute the index to include or exclude, prospectively and/or retrospectively, REITs that are not included in the index for such entire period. With respect to the appropriateness of such inclusion or exclusion, as well as related methodologies and calculations, the Committee is entitled to rely on a valuation or other expert.

 

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3.     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 hypothecated or otherwise disposed of and shall be subject to a risk of forfeiture until the lapse of restrictions as set forth in this Agreement [including the additional restrictions on transfer set forth in Section 4].

4.     Lapse of Restrictions .

(a)    Following the completion of the Performance Period, the Committee shall determine the Company’s Absolute TSR Percentage and will certify the level of achievement with respect to the MSCI Index Percentile Rank Vesting Percentage, MSCI Index Relative Performance Vesting Percentage, the SNL Index Percentile Rank Vesting Percentage, and the SNL Index Relative Performance Vesting Percentage and the portion of the LTIP Units granted here that have become Earned LTIP Units. Following the Committee’s determination, LTIP Units granted herein which have not become Earned LTIP Units shall be immediately forfeited to the Partnership without any consideration by the Partnership or any of its Affiliates, and neither Grantee nor any of his or her successors, heirs, assigns or personal representatives will thereafter have any further rights or interests in such forfeited LTIP Units.

(b)    The restrictions and conditions in Section 3 of this Agreement with respect to the Earned LTIP Units (if any) shall lapse and the Earned LTIP Units shall vest as to fifty percent (50%) of the Earned LTIP Units, rounded down to the nearest whole LTIP Unit, on the third (3 rd ) anniversary of the Effective Date and as to the remainder of the Earned LTIP Units on the day immediately preceding the fourth (4 th ) anniversary of the Effective Date. Notwithstanding the foregoing, except as provided in Section 4(c) or Section 5 below or in Section 12(c) of the Plan, an Earned LTIP Unit shall not vest on any vesting date unless Grantee continues to be employed by the Company, the Partnership or any of their Affiliates through the vesting date applicable to such LTIP Unit. [No Earned LTIP Unit granted hereunder shall be sold, assigned, transferred, pledged, hypothecated, given away or in any other manner disposed of, or encumbered, whether voluntarily or by operation of law until the second anniversary of the vesting date of such Earned LTIP Unit; provided, that this sentence shall not prevent conversion of an LTIP Unit to a Series PR OP Unit (as defined in the Partnership Agreement) and/or Class A REIT Share (as defined in the Partnership Agreement) if such conversion is otherwise permitted under this Agreement and the Partnership Agreement.]

(c)    In the event of a Corporate Event, this Award shall be treated as set forth in Section 12 of the Plan; provided , however , that if Earned LTIP Units do not remain outstanding or are not replaced with awards of the Company’s successor in a Change in Control, they shall become fully vested upon the consummation of the Change in Control.

 

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5.     Termination of Employment .

(a)    In the event of Grantee’s Termination for any reason, except as provided in (b) below, all vesting with respect to the LTIP Units (whether or not such LTIP Units are Earned LTIP Units) shall immediately cease, and all LTIP Units that have not vested at that time will be forfeited to the Partnership without payment of any consideration by the Partnership or any of its Affiliates, and neither Grantee nor any of his or her successors, heirs, assigns, or personal representatives will thereafter have any further rights or interests in such LTIP Units.

(b)    In the event Grantee’s Termination is a result of (i) death, (ii) Disability, (iii) a termination without Cause by the Company or its Affiliates, (iv) a voluntary termination by Grantee that follows Grantee’s Retirement Eligibility Date, or (v) a termination by Grantee with Good Reason (as defined in Grantee’s Participant Agreement):

(i)    If such Termination occurs following the completion of the Performance Period, any restrictions and conditions on the Earned LTIP Units shall lapse, and the Earned LTIP Units, unless earlier terminated or forfeited and to the extent not otherwise vested, shall automatically become fully vested as of such date of Termination; and

(ii)    If such Termination occurs prior to the expiration of the Performance Period, (A) the end date of the Performance Period shall be the date immediately prior to the Termination and the number of Earned LTIP Units shall be determined as of such date based on the MSCI Index Percentile Rank Vesting Percentage, MSCI Index Relative Performance Vesting Percentage, the SNL Index Percentile Rank Vesting Percentage, and the SNL Index Relative Performance Vesting Percentage during such shortened Performance Period, provided that “N” shall be the number of full or partial calendar years completed during the Performance Period ( e.g. , “N” shall be 2.5 if the termination occurs two-years and six months after the Effective Date), and (B) any restrictions and conditions on the LTIP Units that become Earned LTIP Units as of the Termination shall lapse and the number of Earned LTIP Units, unless earlier terminated or forfeited, that become vested as of such date of Termination shall be determined by multiplying the number of Earned LTIP Units by a fraction, the numerator of which is the number of days in the shortened Performance Period and the denominator of which is 1,096.

(c)    Notwithstanding any other provision hereof, if Grantee is a party to an effective Participant Agreement with the Company, then the terms of such Participant Agreement shall supersede any contrary provision in this Agreement and any restrictions and conditions shall also lapse if and as may otherwise be required by such Participant Agreement; and nothing herein shall limit any rights Grantee may otherwise have under such Participant Agreement.

6.     Distributions . During the Performance Period, Grantee shall be entitled to receive only ten percent (10%) of distributions with respect to the LTIP Units. At the end of the Performance Period, Grantee shall receive an amount equal to one hundred percent (100%) of all distributions paid by the Partnership during the Performance Period with respect to one OP Unit

 

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(as defined in the Partnership Agreement) multiplied by the number of Earned LTIP Units, reduced by the distributions received by Grantee during the Performance Period with respect to the LTIP Units. After the Performance Period, Grantee shall receive all distributions paid by the Partnership with respect to all Earned LTIP Units.

7.     Covenants, Representation and Warranties . Grantee hereby covenants as follows:

(a)    So long as Grantee holds any LTIP Units, 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 Code, as applicable to the Partnership or to comply with the requirements of any other appropriate tax authority.

(b)    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 B . Grantee agrees to file the election within thirty (30) days after the Grant Date with the Internal Revenue Service and to promptly provide a copy of such filed election to the Company.

(c)    Grantee hereby agrees not to dispose of the LTIP Units subject to this Award within two years after the [Grant Date] [vesting date]. The Partnership and Grantee hereby agree to treat Grantee as the owner of the LTIP Units from the Grant Date. Grantee hereby agrees to take into account the distributive share of Partnership income, gain, loss, deduction, and credit associated with the LTIP Units in computing Grantee’s income tax liability for the entire period during which Grantee has the LTIP Units.

(d)    Grantee hereby recognizes that the Internal Revenue Service has proposed regulations under Sections 83 and 704 of the Code that may affect the proper treatment of the LTIP Units for federal income tax purposes. In the event that those proposed regulations are finalized, Grantee hereby agrees to cooperate with the Partnership in amending this Agreement and the Partnership Agreement, and to take such other action as may be required, to conform to such regulations.

(e)    Grantee has received and read a copy of the Partnership Agreement and the Plan and has had his or her tax advisors advise him or her on the application of U.S. federal income tax laws, and the tax laws of any state, local or other taxing jurisdiction to which Grantee is or by reason of the Award may become subject to.

8.     Clawback . This Award is subject to any incentive compensation clawback or recoupment policy currently in effect or as may be adopted by the Board, and in each case, as may be amended from time to time.

9.     Assignment and Transfer . Except as expressly permitted under this Agreement or by the Committee pursuant to the Plan, the rights and interests of Grantee under this Agreement may not be sold, assigned, encumbered, pledged, or otherwise transferred except in the event of the death of Grantee, by will or by the laws of descent and distribution. In the event of any

 

8


attempt by Grantee in breach of the foregoing sentence to sell, assign, encumber, pledge or otherwise transfer its rights and interests hereunder, or in the event of the levy or any attachment, execution or similar process upon the rights or interests hereby conferred, the Company or the Partnership may require Grantee to forfeit the LTIP Units by notice to Grantee, and the LTIP Units and all rights hereunder shall thereupon become null and void. The rights and protections of the Company and the Partnership hereunder shall extend to any successors or assigns of the Company and the Partnership.

10.     Incorporation of the Plan . This Agreement is made under and subject to and governed by all of the terms and conditions of the Plan. In the event of any discrepancy or inconsistency between this Agreement and the Plan, the terms and conditions of the Plan shall control. By signing this Agreement, Grantee confirms that he or she has received a copy of the Plan and has had an opportunity to review the contents thereof. Any shares of Stock issued in exchange for partnership units into which LTIP Units may have been converted pursuant to the Partnership Agreement will be issued under the Plan.

11.     Amendment . Grantee acknowledges that the Plan may be amended or discontinued in accordance with Section 19 or Section 20 thereof and that this Agreement may be amended or canceled by the Board or the Committee, 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 materially impair Grantee’s rights under this Agreement without Grantee’s written consent.

12.     No Right to Continued Employment . Neither the Plan nor this Agreement will give Grantee any right to continue to be in the employ of the Company, the Partnership or any of their Affiliates, affect the right of the Company, the Partnership or any of their Affiliates to discharge or discipline such Grantee at any time, or affect any right of such Grantee to terminate his or her employment at any time.

13.     Waiver . The failure of Grantee or the Company to insist upon strict compliance with any provision of this Agreement or the Plan, or to assert any right Grantee or the Company, respectively, may have under this Agreement or the Plan, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement or the Plan.

14.     Notices . Notices hereunder shall be mailed or delivered to the Partnership at its principal place of business and shall be mailed or delivered to 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.

15.     Consent to Electronic Delivery . Grantee agrees that the Company or the Partnership may deliver by email all documents relating to the Plan or the LTIP Units (including without limitation, a copy of the Plan) and all other documents that the Company or Partnership is required to deliver to its security holders (including, without limitation, disclosures that may be required by the Securities and Exchange Commission). Grantee also agrees that the Company or the Partnership may deliver these documents by posting them on a website maintained by the Company or by a third-party under contract with the Company. If the Company posts these documents on a website, it shall notify Grantee by email.

 

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16.     Counterparts . This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument. Facsimile or electronic submission of any signed original document or retransmission of any signed facsimile or other electronic transmission will be deemed the same as delivery of an original.

17.     Severability . In the event that one or more provisions of this Agreement should, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provisions had never been contained herein.

18.     Headings . Section, paragraph and other headings and captions are provided solely as a convenience to facilitate reference. Such headings and captions shall not be deemed in any way material or relevant to the construction, meaning or interpretation of this Agreement or any term or provision hereof.

19.     Governing Law . This Agreement and all claims or disputes arising out of or based upon this Agreement or relating to the subject matter hereof shall be governed by, and construed in accordance with, the laws of the State of Maryland, applied without regard to conflict of law principles or rules that would cause the application of the domestic substantive laws of any other jurisdiction.

 

10


IN WITNESS WHEREOF, the parties have executed this Agreements as of the date first above written.

 

EMPIRE STATE REALTY TRUST, INC.
By:    
Name:   David A. Karp
Title:   Executive Vice President and Chief Financial Officer

 

EMPIRE STATE REALTY OP, L.P.
By:  

EMPIRE STATE REALTY TRUST, INC.,

its general partner

By:    
Name:   David A. Karp
Title:   Executive Vice President and Chief Financial Officer

The foregoing Agreement is hereby accepted and the terms and conditions thereof hereby agreed to by Grantee.

 

Dated:                             

 

        

 

        

   
      [NAME]

 

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ANNEX A

FORM OF LIMITED PARTNER SIGNATURE PAGE

Grantee, desiring to become one of the within named Limited Partners of Empire State Realty OP, L.P., hereby becomes a party to the Amended and Restated Agreement of Limited Partnership of Empire State Realty OP, L.P., dated as of October 1, 2013, as amended through the date hereof (the “ Partnership Agreement ”). Grantee agrees that this signature page may be attached to any counterpart of the Partnership Agreement.

 

Signature Line for Limited Partner:
Name:    
  [NAME]

 

Date:  
Address of Limited Partner:

 

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ANNEX B

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 of 1986, as amended, to include in gross income in 20      as compensation for services rendered, the fair market value of the property received in connection with his/her services in excess of the amount paid for the property 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 Empire State Realty O.P. L.P. (the “Partnership”).

3.      The date on which the LTIP Units were transferred is [DATE].

4.      The taxable year to which this election relates is calendar year 20      .

5.      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 LTIP Units are subject to both performance-based vesting conditions, which are satisfied based upon the percentage increase in the Company’s total shareholder return over a three (3) year performance period (or a shorter period in the event of a Change in Control or upon certain terminations of employment) and service-based vesting conditions, such that fifty percent (50%) of the LTIP Units that satisfy the performance-based vesting condition will vest on each of the third (3 rd ) and fourth (4 th ) anniversaries of the effective date set by the grant award, provided the undersigned continues employment with the Partnership, its general partner, Empire State Realty Trust, Inc. or any of their respective affiliates through such vesting date, subject to accelerated vesting in certain circumstances.

 

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6.      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.

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

8.      The amount to be included in gross income is $0.

9.      A copy of this statement has been furnished to the Partnership and to its general partner, Empire State Realty Trust, Inc.

The Taxpayer will file this election with the Internal Revenue Service office with which the Taxpayer files his or her annual income tax return no later than 30 days after the date of transfer of the property. The Taxpayer is the person performing the services in connection with which the property was transferred.

 

Dated:    
 
Taxpayer’s Signature

 

B-2

Exhibit 99.3

TIME-BASED VESTING LTIP UNIT VESTING AGREEMENT

UNDER THE

EMPIRE STATE REALTY TRUST, INC.

EMPIRE STATE REALTY OP, L.P.

2019 EQUITY INCENTIVE PLAN

Grantee:

No. of LTIP Units:

Grant Date:

Final Acceptance Date:

Pursuant to the Empire State Realty Trust, Inc. Empire State Realty OP, L.P. 2019 Equity Incentive Plan (the “ Plan ”) and the Amended and Restated Agreement of Limited Partnership, dated as of October 1, 2013, as amended (the “ Partnership Agreement ”), of Empire State Realty OP, L.P., a Delaware limited partnership (the “ Partnership ”), Empire State Realty Trust, Inc., a Maryland corporation and the general partner of the Partnership (the “ Company ”), hereby grants to Grantee named above an other equity-based award (pursuant to Section 11 of the Plan, and referred to herein as an “ Award ”) in the form of, and by causing the Partnership to issue to Grantee named above, LTIP Units (as defined in 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 and in the Partnership Agreement. If this LTIP Unit Vesting Agreement (this “ Agreement ”) is accepted prior to the Final Acceptance Date, Grantee shall receive the number of LTIP Units specified above as of the Grant Date, subject to the restrictions and conditions set forth herein, in the Plan and in the Partnership Agreement. All capitalized terms not otherwise defined herein shall have the same meanings as set forth in the Plan.

1.     Acceptance of Agreement . Grantee shall have no rights with respect to this Agreement unless Grantee has accepted this Agreement prior to the close of business on the Final Acceptance Date specified above by (i) signing and delivering to the Partnership a copy of this Agreement and (ii) unless 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 ). If this Agreement is accepted by Grantee prior to the Final Acceptance Date, the Partnership Agreement shall be amended to reflect the issuance to Grantee of the LTIP Units so accepted. Thereupon, Grantee shall have all the rights of a Limited Partner of the Partnership with respect to the number of LTIP Units then issued to Grantee, as set forth in the Partnership Agreement, subject, however, to the restrictions and conditions specified in Section 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 hypothecated or otherwise disposed of and shall be subject to a risk of forfeiture until the lapse of restrictions as set forth in this Agreement [including the additional restrictions on transfer set forth in Section 3].

3.     Lapse of Restrictions .

(a)    The restrictions and conditions in Section 2 of this Agreement shall lapse and the LTIP Units granted herein shall vest as to twenty-five percent (25%) of the LTIP Units on the one (1) year anniversary of January 1, 20__, and the remainder shall vest in substantially equal annual installments, rounded down to the nearest whole LTIP Unit, on each subsequent anniversary for a period of three (3) years thereafter; provided , that , with respect to the last such annual installment, the number of LTIP Units that vest in the installment shall be such that Grantee will be fully vested in the total number of LTIP Units listed above as of the applicable annual anniversary. Notwithstanding the foregoing, except as provided in Section 3(b) or Section 4 below or in Section 12(c) of the Plan, an LTIP Unit shall not vest on any vesting date unless Grantee continues to be employed by the Company, the Partnership or any of their Affiliates through the vesting date applicable to such LTIP Unit. [No LTIP Unit granted hereunder shall be sold, assigned, transferred, pledged, hypothecated, given away or in any other manner disposed of, or encumbered, whether voluntarily or by operation of law until the second anniversary of the applicable vesting date of such LTIP Unit; provided, that this sentence shall not prevent conversion of an LTIP Unit to a Series PR OP Unit (as defined in the Partnership Agreement) and/or Class A REIT Share (as defined in the Partnership Agreement) if such conversion is otherwise permitted under this Agreement and the Partnership Agreement.]

(b)    In the event of a Corporate Event, this Award shall be treated as set forth in Section 12 of the Plan; provided , however , if the LTIP Units do not remain outstanding or are not replaced with awards of the Company’s successor in a Change in Control, all outstanding LTIP Units shall become fully vested upon the consummation of the Change in Control.

4.     Termination of Employment .

(a)    In the event of Grantee’s Termination for any reason, except as provided in (b) below, all vesting with respect to the LTIP Units shall immediately cease, and all LTIP Units that have not vested at that time will be forfeited to the Partnership without payment of any consideration by the Partnership or any of its Affiliates, and neither Grantee nor any of his or her successors, heirs, assigns, or personal representatives will thereafter have any further rights or interests in such LTIP Units.

(b)    In the event Grantee’s Termination is a result of (i) death, (ii) Disability, (iii) a termination without Cause by the Company or its Affiliates, (iv) a voluntary termination by Grantee that follows the Grantee’s Retirement Eligibility Date, or (v) a termination by Grantee with Good Reason (as defined in Grantee’s Participant Agreement); any restrictions and conditions on all LTIP Units subject to this Agreement shall lapse and the LTIP Units, unless earlier terminated or forfeited and to the extent not otherwise vested, shall automatically become fully vested as of such date of Termination.

 

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(c)    Notwithstanding any other provision hereof, if Grantee is a party to an effective Participant Agreement, then the terms of such Participant Agreement shall supersede any contrary provision in this Agreement and the applicable period of forfeiture shall also end if and as may otherwise be required by such Participant Agreement; and nothing herein shall limit any rights Grantee may otherwise have under such Participant Agreement.

5.     Distributions . Distributions on the LTIP Units shall be paid to Grantee in accordance with the terms of the Partnership Agreement.

6.     Covenants, Representation and Warranties . Grantee hereby covenants as follows:

(a)    So long as Grantee holds any LTIP Units, 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 Code as applicable to the Partnership or to comply with the requirements of any other appropriate tax authority.

(b)    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 B . Grantee agrees to file the election within thirty (30) days after the Grant Date with the Internal Revenue Service, and to promptly provide a copy of such filed election to the Company.

(c)    Grantee hereby agrees not to dispose of the LTIP Units subject to this Award within two years after the [Grant Date] [vesting date]. The Partnership and Grantee hereby agree to treat Grantee as the owner of the LTIP Units from the Grant Date. Grantee hereby agrees to take into account the distributive share of Partnership income, gain, loss, deduction, and credit associated with the LTIP Units in computing Grantee’s income tax liability for the entire period during which Grantee has the LTIP Units.

(d)    Grantee hereby recognizes that the Internal Revenue Service has proposed regulations under Sections 83 and 704 of the Code that may affect the proper treatment of the LTIP Units for federal income tax purposes. In the event that those proposed regulations are finalized, Grantee hereby agrees to cooperate with the Partnership in amending this Agreement and the Partnership Agreement, and to take such other action as may be required, to conform to such regulations.

(e)    Grantee has received and read a copy of the Partnership Agreement and the Plan and has had his or her tax advisors advise him or her on the application of U.S. federal income tax laws, and the tax laws of any state, local or other taxing jurisdiction to which Grantee is or by reason of the Award may become subject to.

 

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7.     Clawback . This Award is subject to any incentive compensation clawback or recoupment policy currently in effect or as may be adopted by the Board, and in each case, as may be amended from time to time.

8.     Assignment and Transfer . Except as expressly permitted under this Agreement or by the Committee pursuant to the Plan, the rights and interests of Grantee under this Agreement may not be sold, assigned, encumbered, pledged, or otherwise transferred except in the event of the death of Grantee, by will or by the laws of descent and distribution. In the event of any attempt by Grantee in breach of the foregoing sentence to sell, assign, encumber, pledge or otherwise transfer its rights and interests hereunder, or in the event of the levy or any attachment, execution or similar process upon the rights or interests hereby conferred, the Company or the Partnership may require Grantee to forfeit the LTIP Units by notice to Grantee, and the LTIP Units and all rights hereunder shall thereupon become null and void. The rights and protections of the Company and the Partnership hereunder shall extend to any successors or assigns of the Company and the Partnership.

9.     Incorporation of the Plan . This Agreement is made under and subject to and governed by all of the terms and conditions of the Plan. In the event of any discrepancy or inconsistency between this Agreement and the Plan, the terms and conditions of the Plan shall control. By signing this Agreement, Grantee confirms that he or she has received a copy of the Plan and has had an opportunity to review the contents thereof. Any shares of Stock issued in exchange for partnership units into which LTIP Units may have been converted pursuant to the Partnership Agreement will be issued under the Plan.

10.     Amendment . Grantee acknowledges that the Plan may be amended or discontinued in accordance with Section 19 or Section 20 thereof and that this Agreement may be amended or canceled by the Board or the Committee, 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 materially impair Grantee’s rights under this Agreement without Grantee’s written consent.

11.     No Right to Continued Employment . Neither the Plan nor this Agreement will give Grantee any right to continue to be in the employ of the Company, the Partnership or any of their Affiliates, affect the right of the Company, the Partnership or any of their Affiliates to discharge or discipline such Grantee at any time, or affect any right of such Grantee to terminate his or her employment at any time.

12.     Waiver . The failure of Grantee or the Company to insist upon strict compliance with any provision of this Agreement or the Plan, or to assert any right Grantee or the Company, respectively, may have under this Agreement or the Plan, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement or the Plan.

13.     Notices . Notices hereunder shall be mailed or delivered to the Partnership at its principal place of business and shall be mailed or delivered to 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.

 

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14.     Consent to Electronic Delivery . Grantee agrees that the Company or the Partnership may deliver by email all documents relating to the Plan or the LTIP Units (including without limitation, a copy of the Plan) and all other documents that the Company or Partnership is required to deliver to its security holders (including, without limitation, disclosures that may be required by the Securities and Exchange Commission). Grantee also agrees that the Company or the Partnership may deliver these documents by posting them on a website maintained by the Company or by a third-party under contract with the Company. If the Company posts these documents on a website, it shall notify Grantee by email.

15.     Counterparts . This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument. Facsimile or electronic submission of any signed original document or retransmission of any signed facsimile or other electronic transmission will be deemed the same as delivery of an original.

16.     Severability . In the event that one or more provisions of this Agreement should, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provisions had never been contained herein.

17.     Headings . Section, paragraph and other headings and captions are provided solely as a convenience to facilitate reference. Such headings and captions shall not be deemed in any way material or relevant to the construction, meaning or interpretation of this Agreement or any term or provision hereof.

18.     Governing Law . This Agreement and all claims or disputes arising out of or based upon this Agreement or relating to the subject matter hereof shall be governed by, and construed in accordance with, the laws of the State of Maryland, applied without regard to conflict of law principles or rules that would cause the application of the domestic substantive laws of any other jurisdiction.

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

 

EMPIRE STATE REALTY TRUST, INC.
By:    
Name:   David A. Karp
Title:   Executive Vice President and Chief Financial Officer

 

EMPIRE STATE REALTY OP, L.P.
By:  

EMPIRE STATE REALTY TRUST, INC.,

its general partner

By:    
Name:   David A. Karp
Title:   Executive Vice President and Chief Financial Officer

The foregoing Agreement is hereby accepted and the terms and conditions thereof hereby agreed to by Grantee.

 

Dated:                             

 

        

 

        

   
      [NAME]

 

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ANNEX A

FORM OF LIMITED PARTNER SIGNATURE PAGE

Grantee, desiring to become one of the within named Limited Partners of Empire State Realty OP, L.P., hereby becomes a party to the Amended and Restated Agreement of Limited Partnership of Empire State Realty OP, L.P., dated as of October 1, 2013, as amended through the date hereof (the “ Partnership Agreement ”). Grantee agrees that this signature page may be attached to any counterpart of the Partnership Agreement.

 

Signature Line for Limited Partner:
Name:    
  [NAME]

 

Date:  
Address of Limited Partner:


ANNEX B

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 of 1986, as amended, to include in gross income in 20      as compensation for services rendered, the fair market value of the property received in connection with his/her services in excess of the amount paid for the property 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: [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 [UNITS] LTIP Units in Empire State Realty O.P. L.P. (the “Partnership”).

3.      The date on which the LTIP Units were transferred is [DATE].

4.      The taxable year to which this election relates is calendar year 20      .

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

 

  (a)

The Taxpayer may not transfer in any manner any unvested portion of the LTIP Units without the consent of the Partnership.

 

  (b)

The LTIP Units are subject to service-based vesting conditions, such that twenty-five percent (25%) of the LTIP Units will vest on each of the first four (4) anniversaries of January 1, 20      , provided the undersigned continues employment with the Partnership, its general partner, Empire State Realty Trust, Inc. or any of their respective affiliates through each such date, subject to accelerated vesting in certain circumstances.

6.      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.


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

8.      The amount to be included in gross income is $0.

9.      A copy of this statement has been furnished to the Partnership and to its general partner, Empire State Realty Trust, Inc.

The Taxpayer will file this election with the Internal Revenue Service office with which the Taxpayer files his or her annual income tax return no later than 30 days after the date of transfer of the property. The Taxpayer is the person performing the services in connection with which the property was transferred.

 

Dated:    
 
Taxpayer’s Signature