EXHIBIT 10.1
LEXINGTON STRATEGIC ASSET CORP.
2005 EQUITY INCENTIVE COMPENSATION PLAN
1. Establishment, Purpose, and Types of Awards
     Lexington Strategic Asset Corp. (the “Company”) hereby establishes this
equity-based incentive compensation plan to be known as the “Lexington Strategic
Asset Corp. 2005 Equity Incentive Compensation Plan” (hereinafter referred to as
the “Plan”), in order to provide incentives and awards to select key management
employees, directors, consultants and advisors of the Company and its
Affiliates.
     The Plan permits the granting of the following types of awards (“Awards”),
according to the Sections of the Plan listed here:

     
Section 6
  Options
Section 7
  Restricted Shares, Restricted Share Units, and Unrestricted Share Awards
Section 8
  Phantom Shares
Section 9
  Dividend Equivalent Rights
Section 10
  Share Appreciation Rights
Section 11
  Deferred Share Units
Section 12
  Performance Awards

     The Plan is not intended to affect and shall not affect any stock options,
equity-based compensation, or other benefits that the Company or its Affiliates
may have provided, or may separately provide in the future pursuant to any
agreement, plan, or program that is independent of this Plan.
2. Defined Terms
     Terms in the Plan that begin with an initial capital letter have the
defined meaning set forth in Appendix A, unless defined elsewhere in this Plan
or the context of their use clearly indicates a different meaning.
3. Shares Subject to the Plan
     Subject to the provisions of Section 16 of the Plan, the maximum number of
Shares that the Company may issue for all Awards is 720,000 Shares (subject to
an increase in the amount of 72,000 Shares if Friedman, Billings, Ramsey & Co.,
Inc. exercises its option to purchase or place additional shares of the
Company’s common stock). For all Awards, the Shares issued pursuant to the Plan
may be authorized but unissued Shares, or Shares that the Company has reacquired
or otherwise holds in treasury.
     Shares that are subject to an Award that for any reason expires, is
forfeited, is cancelled, or becomes unexercisable, and Shares that are for any
other reason not paid or delivered under the

 

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Plan shall again, except to the extent prohibited by Applicable Law, be
available for subsequent Awards under the Plan. In addition, the Committee may
make future Awards with respect to Shares that the Company retains from
otherwise delivering pursuant to an Award either (i) as payment of the exercise
price of an Award, or (ii) in order to satisfy the withholding or employment
taxes due upon the grant, exercise, vesting, or distribution of an Award.
Notwithstanding the foregoing, but subject to adjustments pursuant to Section 16
below and to the extent required under applicable tax laws, the number of Shares
that are available for ISO Awards shall equal the number of Shares designated in
the preceding paragraph reduced by the number of Shares issued pursuant to
Awards, provided that any Shares that are either purchased under the Plan and
forfeited back to the Plan or surrendered in payment of the exercise price for
an Award shall be available for issuance pursuant to ISO Awards.
4. Administration
     (a) General. The Committee shall administer the Plan in accordance with its
terms, provided that the Board may act in lieu of the Committee on any matter.
The Committee shall hold meetings at such times and places as it may determine
and shall make such rules and regulations for the conduct of its business as it
deems advisable. In the absence of a duly appointed Committee or if the Board
otherwise chooses to act in lieu of the Committee, the Board shall function as
the Committee for all purposes of the Plan.
     (b) Committee Composition. The Board shall appoint the members of the
Committee. If and to the extent permitted by Applicable Law, the Committee may
authorize one or more Reporting Persons (or other officers) to make Awards to
Eligible Persons who are not Reporting Persons (or other officers whom the
Committee has specifically authorized to make Awards). The Board may at any time
appoint additional members to the Committee, remove and replace members of the
Committee with or without Cause, and fill vacancies on the Committee however
caused.
     (c) Powers of the Committee. Subject to the provisions of the Plan, the
Committee shall have the authority, in its sole discretion:
     (i) to determine Eligible Persons to whom Awards shall be granted from time
to time and the number of Shares, units, dividend equivalent rights, or SARs to
be covered by each Award;
     (ii) to determine, from time to time, the Fair Market Value of Shares;
     (iii) to determine, and to set forth in Award Agreements, the terms and
conditions of all Awards, including any applicable exercise or purchase price,
the installments and conditions under which an Award shall become vested (which
may be based on performance), terminated, expired, cancelled, or replaced, and
the circumstances for vesting acceleration or waiver of forfeiture restrictions,
and other restrictions and limitations;
     (iv) to approve the forms of Award Agreements and all other documents,
notices and certificates in connection therewith which need not be identical
either as to type of Award or among Participants;

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     (v) to construe and interpret the terms of the Plan and any Award
Agreement, to determine the meaning of their terms, and to prescribe, amend, and
rescind rules and procedures relating to the Plan and its administration;
     (vi) in order to fulfill the purposes of the Plan and without amending the
Plan, modify, cancel, or waive the Company’s rights with respect to any Awards,
to adjust or to modify Award Agreements for changes in Applicable Law, and to
recognize differences in foreign law, tax policies, or customs;
     (vii) to provide in its discretion that (A) all stock issued hereunder be
initially maintained in a separate brokerage account for the Participant at a
brokerage firm selected by, and pursuant to an arrangement with the Company, and
(B) in the case of vested Shares, the Participant may move such Shares to
another brokerage account of the Participant’s choosing or request that a stock
certificate be issued and delivered to him or her; and
     (viii) to make all other interpretations and to take all other actions that
the Committee may consider necessary or advisable to administer the Plan or to
effectuate its purposes.
     Subject to Applicable Law and the restrictions set forth in the Plan, the
Committee may delegate administrative functions to individuals who are Reporting
Persons, officers, or Employees of the Company or its Affiliates.
     (d) Deference to Committee Determinations. The Committee shall have the
discretion to interpret or construe ambiguous, unclear, or implied (but omitted)
terms in any fashion it deems to be appropriate in its sole discretion, and to
make any findings of fact needed in the administration of the Plan or Award
Agreements. The Committee’s prior exercise of its discretionary authority shall
not obligate it to exercise its authority in a like fashion thereafter. The
Committee’s interpretation and construction of any provision of the Plan, or of
any Award or Award Agreement, shall be final, binding, and conclusive. The
validity of any such interpretation, construction, decision or finding of fact
shall not be given de novo review if challenged in court, by arbitration, or in
any other forum, and shall be upheld unless clearly made in bad faith or
materially affected by fraud.
     (e) No Liability; Indemnification. Neither the Board nor any Committee
member, nor any Person acting at the direction of the Board or the Committee,
shall be liable for any act, omission, interpretation, construction or
determination made in good faith with respect to the Plan, any Award or any
Award Agreement. The Company and its Affiliates shall pay or reimburse any
member of the Committee, as well as any Director, Employee, or Consultant who
takes action in connection with the Plan, for all expenses incurred with respect
to the Plan, and to the full extent allowable under Applicable Law shall
indemnify each and every one of them for any claims, liabilities, and costs
(including reasonable attorney’s fees) arising out of their good faith
performance of duties under the Plan. The Company and its Affiliates may obtain
liability insurance for this purpose.
5. Eligibility
     (a) General Rule. The Committee may grant ISOs only to Employees (including
officers who are Employees) of the Company or an Affiliate that is a “parent
corporation” or “subsidiary corporation” within the meaning of Section 424 of
the Code, and may grant all other Awards to any

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Eligible Person. A Participant who has been granted an Award may be granted an
additional Award or Awards if the Committee shall so determine, if such person
is otherwise an Eligible Person and if otherwise in accordance with the terms of
the Plan.
     (b) Grant of Awards. Subject to the express provisions of the Plan, the
Committee shall determine from the class of Eligible Persons those individuals
to whom Awards under the Plan may be granted, the number of Shares subject to
each Award, the price (if any) to be paid for the Shares or the Award and, in
the case of Performance Awards, in addition to the matters addressed in
Section 12 below, the specific objectives, goals and performance criteria that
further define the Performance Award. Each Award shall be evidenced by an Award
Agreement signed by the Company and, if required by the Committee, by the
Participant. The Award Agreement shall set forth the material terms and
conditions of the Award established by the Committee, and each Award shall be
subject to the terms and conditions set forth in Sections 26, 27, and 28 unless
otherwise specifically provided in an Award Agreement.
     (c) Limits on Awards. During the term of the Plan, no Participant may
receive Options and SARs that relate to more than 360,000 Shares. The Committee
will adjust these limitations pursuant to Section 16 below.
     (d) Replacement Awards. Subject to Applicable Laws (including any
associated Shareholder approval requirements), the Committee may, in its sole
discretion and upon such terms as it deems appropriate, require as a condition
of the grant of an Award to a Participant that the Participant surrender for
cancellation some or all of the Awards that have previously been granted to the
Participant under this Plan or otherwise. An Award that is conditioned upon such
surrender may or may not be the same type of Award, may cover the same (or a
lesser or greater) number of Shares as such surrendered Award, may have other
terms that are determined without regard to the terms or conditions of such
surrendered Award, and may contain any other terms that the Committee deems
appropriate. In the case of Options, these other terms may not involve an
Exercise Price that is lower than the Exercise Price of the surrendered Option
unless the Company’s shareholders approve the grant itself or the program under
which the grant is made pursuant to the Plan.
6. Option Awards
     (a) Types; Documentation. The Committee may in its discretion grant
(i) ISOs to any Employee who is a common law employee of the Company or any
“parent corporation” or “subsidiary corporation” as such terms are defined in
Code Section 424, and (ii) Non-ISOs to any Eligible Person. Each Option shall be
evidenced in an Award Agreement that is delivered to the Participant shall be
designated in the Award Agreement as an ISO or a Non-ISO. The same Award
Agreement may grant both types of Options. At the sole discretion of the
Committee, any Option may be exercisable, in whole or in part, immediately upon
the grant thereof, or only after the occurrence of a specified event, or only in
installments, which installments may vary. Options granted under the Plan may
contain such terms and provisions not inconsistent with the Plan that the
Committee shall deem advisable in its sole and absolute discretion.
     (b) ISO $100,000 Limitation. To the extent that the aggregate Fair Market
Value of Shares with respect to which Options designated as ISOs first become
exercisable by a Participant in any calendar year (under this Plan and any other
plan of the Company or any Affiliate) exceeds

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$100,000, such excess Options shall be treated as Non-ISOs. For purposes of
determining whether the $100,000 limit is exceeded, the Fair Market Value of the
Shares subject to an ISO shall be determined as of the Grant Date. In reducing
the number of Options treated as ISOs to meet the $100,000 limit, the most
recently granted Options shall be reduced first. In the event that Section 422
of the Code is amended to alter the limitation set forth therein, the limitation
of this Section 6(b) shall be automatically adjusted accordingly.
     (c) Term of Options. Each Award Agreement shall specify a term at the end
of which the Option automatically expires, subject to earlier termination
provisions contained in Section 6(h) hereof; provided, that, the term of any
Option may not exceed ten years from the Grant Date. In the case of an ISO
granted to an Employee who is a Ten Percent Holder on the Grant Date, the term
of the ISO shall not exceed five years from the Grant Date.
     (d) Exercise Price. The exercise price of an Option shall be determined by
the Committee in its discretion and shall be set forth in the Award Agreement,
subject to the following special rules:
     (i) ISOs. If an ISO is granted to an Employee who on the Grant Date is a
Ten Percent Holder, the per Share exercise price shall not be less than 110% of
the Fair Market Value per Share on such Grant Date. If an ISO is granted to any
other Employee, the per Share exercise price shall not be less than 100% of the
Fair Market Value per Share on the Grant Date.
     (ii) Non-ISOs. The per Share exercise price for the Shares to be issued
pursuant to the exercise of a Non-ISO shall not be less than 100% of the Fair
Market Value per Share on the Grant Date.
     (e) Exercise of Option. The times, circumstances and conditions under which
an Option shall be exercisable shall be determined by the Committee in its sole
discretion and shall be set forth in the Award Agreement. The Committee shall
have the discretion to determine whether and to what extent the vesting of
Options shall be tolled during any unpaid leave of absence; provided, however,
that in the absence of such determination, vesting of Options shall be tolled
during any such leave approved by the Company. Neither the Company nor the
Committee shall, without shareholder approval, allow for a repricing within the
meaning of federal securities laws applicable to proxy statement disclosures.
     (f) Minimum Exercise Requirements. An Option may not be exercised for a
fraction of a Share. The Committee may require in an Award Agreement that an
Option be exercised as to a minimum number of Shares, provided that such
requirement shall not prevent a Participant from purchasing the full number of
Shares as to which the Option is then exercisable.
     (g) Methods of Exercise. Prior to its expiration pursuant to the terms of
the applicable Award Agreement, and subject to the times, circumstances and
conditions for exercise contained in the applicable Award Agreement, each Option
may be exercised, in whole or in part (provided that the Company shall not be
required to issue fractional shares), by delivery of written notice of exercise
to the secretary of the Company accompanied by the full exercise price of the
Shares being purchased. In the case of an ISO, the Committee shall determine the
acceptable methods of payment on the Grant Date and it shall be included in the
applicable Award Agreement. The

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methods of payment that the Committee may in its discretion accept or commit to
accept in an Award Agreement include:
     (i) cash or check payable to the Company (in U.S. dollars);
     (ii) other Shares that (A) are owned by the Participant who is purchasing
Shares pursuant to an Option, (B) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which the
Option is being exercised, (C) were not acquired by such Participant pursuant to
the exercise of an Option, unless such Shares have been owned by such
Participant for at least six months or such other period as the Committee may
determine, (D) are all, at the time of such surrender, free and clear of any and
all claims, pledges, liens and encumbrances, or any restrictions which would in
any manner restrict the transfer of such shares to or by the Company (other than
such restrictions as may have existed prior to an issuance of such Shares by the
Company to such Participant), and (E) are duly endorsed for transfer to the
Company;
     (iii) a cashless exercise program that the Committee may approve, from time
to time in its discretion and in accordance with Applicable Laws, pursuant to
which (A) a Participant’s broker or dealer lends to the Participant and remits
to the Company an amount sufficient to cover the exercise price of the Option
plus all applicable taxes required to be withheld by the Company by reason of
such exercise, and (B) the Company delivers the purchased Shares to the broker
or dealer who immediately sells a sufficient number of Shares to repay the loan
and issues any remaining Shares to the Participant; or
     (iv) any combination of the foregoing methods of payment.
     The Company shall not be required to deliver Shares pursuant to the
exercise of an Option until payment of the full exercise price therefor is
received by the Company.
     (h) Termination of Continuous Service. The Committee may establish and set
forth in the applicable Award Agreement the terms and conditions on which an
Option shall remain exercisable, if at all, following termination of a
Participant’s Continuous Service. The Committee may waive or modify these
provisions at any time. To the extent that a Participant is not entitled to
exercise an Option at the date of his or her termination of Continuous Service,
or if the Participant (or other person entitled to exercise the Option) does not
exercise the Option to the extent so entitled within the time specified in the
Award Agreement or below (as applicable), the Option shall terminate and the
Shares underlying the unexercised portion of the Option shall revert to the Plan
and become available for future Awards. In no event may any Option be exercised
after the expiration of the Option term as set forth in the Award Agreement.
     The following provisions shall apply to the extent an Award Agreement does
not specify the terms and conditions upon which an Option shall terminate when
there is a termination of a Participant’s Continuous Service:
     (i) Termination other than Upon Disability or Death or for Cause. In the
event of termination of a Participant’s Continuous Service (other than as a
result of Participant’s death, disability, retirement or termination for Cause),
the Participant shall have the right to exercise an Option at any time within
90 days following such termination to the extent the Participant was entitled to
exercise such Option at the date of such termination.

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     (ii) Disability. In the event of termination of a Participant’s Continuous
Service as a result of his or her being Disabled, the Participant shall have the
right to exercise an Option at any time within one year following such
termination to the extent the Participant was entitled to exercise such Option
at the date of such termination.
     (iii) Retirement. In the event of termination of a Participant’s Continuous
Service as a result of Participant’s retirement, the Participant shall have the
right to exercise the Option at any time within six months following such
termination to the extent the Participant was entitled to exercise such Option
at the date of such termination.
     (iv) Death. In the event of the death of a Participant during the period of
Continuous Service since the Grant Date of an Option, or within thirty days
following termination of the Participant’s Continuous Service, the Option may be
exercised, at any time within one year following the date of the Participant’s
death, by the Participant’s estate or by a person who acquired the right to
exercise the Option by bequest or inheritance, but only to the extent the right
to exercise the Option had vested at the date of death or, if earlier, the date
the Participant’s Continuous Service terminated.
     (v) Cause. If the Committee determines that a Participant’s Continuous
Service terminated due to Cause, the Participant shall immediately forfeit the
right to exercise any Option, and it shall be considered immediately null and
void.
     (i) Reverse Vesting. The Committee in its sole discretion may allow a
Participant to exercise unvested Options, in which case the Shares then issued
shall be Restricted Shares having analogous vesting restrictions to the unvested
Options.
     (j) Buyout Provisions. The Committee may at any time offer to buy out an
Option, in exchange for a payment in cash or Shares, based on such terms and
conditions as the Committee shall establish and communicate to the Participant
at the time that such offer is made. In addition, but subject to any Shareholder
approval requirement of Applicable Law, if the Fair Market Value for Shares
subject to an Option is more than 33% below their exercise price for more than
30 consecutive business days, the Committee may unilaterally terminate and
cancel the Option either (i) by paying the Participant, in cash or Shares, an
amount not less than the Black-Scholes value of the vested portion of the
Option, (ii) by irrevocably committing to grant, on any date the Committee
designates, a new Award other than an Option or SAR, or (iii) by irrevocably
committing to grant a new Option, on a designated date more than six months
after such termination and cancellation of such Option (but only if the
Participant’s Continuous Service has not terminated prior to such designated
date), on substantially the same terms as the cancelled Option, provided that
the per Share exercise price for the new Option shall equal the per Share Fair
Market Value of a Share on the date the new grant occurs.
7. Restricted Shares, Restricted Share Units, and Unrestricted Shares
     (a) Grants. The Committee may in its discretion grant restricted shares
(“Restricted Shares”) to any Eligible Person and shall evidence such grant in an
Award Agreement that is delivered to the Participant and that sets forth the
number of Restricted Shares, the purchase price for such Restricted Shares (if
any), and the terms upon which the Restricted Shares may become vested. In
addition, the Company may in its discretion grant the right to receive Shares
after certain

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vesting requirements are met (“Restricted Share Units”) to any Eligible Person
and shall evidence such grant in an Award Agreement that is delivered to the
Participant which sets forth the number of Shares (or formula, that may be based
on future performance or conditions, for determining the number of Shares) that
the Participant shall be entitled to receive upon vesting and the terms upon
which the Shares subject to a Restricted Share Unit may become vested. The
Committee may condition any Award of Restricted Shares or Restricted Share Units
to a Participant on receiving from the Participant such further assurances and
documents as the Committee may require to enforce the restrictions. In addition,
the Committee may grant Awards hereunder in the form of unrestricted shares
(“Unrestricted Shares”), which shall vest in full upon the date of grant or such
other date as the Committee may determine or which the Committee may issue
pursuant to any program under which one or more Eligible Persons (selected by
the Committee in its discretion) elect to receive Unrestricted Shares in lieu of
cash bonuses that would otherwise be paid.
     (b) Vesting and Forfeiture. The Committee shall set forth in an Award
Agreement granting Restricted Shares or Restricted Share Units, the terms and
conditions under which the Participant’s interest in the Restricted Shares or
the Shares subject to Restricted Share Units will become vested and
non-forfeitable. Except as set forth in the applicable Award Agreement or the
Committee otherwise determines, upon termination of a Participant’s Continuous
Service for any other reason, the Participant shall forfeit his or her
Restricted Shares and Restricted Share Units; provided that if a Participant
purchases the Restricted Shares and forfeits them for any reason, the Company
shall return the purchase price to the Participant only if and to the extent set
forth in an Award Agreement.
     (c) Issuance of Restricted Shares Prior to Vesting. The Company shall issue
stock certificates that evidence Restricted Shares pending the lapse of
applicable restrictions, and that bear a legend making appropriate reference to
such restrictions. Except as set forth in the applicable Award Agreement or the
Committee otherwise determines, the Company or a third party that the Company
designates shall hold such Restricted Shares and any dividends that accrue with
respect to Restricted Shares pursuant to Section 7(e) below.
     (d) Issuance of Shares upon Vesting. As soon as practicable after vesting
of a Participant’s Restricted Shares (or Shares underlying Restricted Share
Units) and the Participant’s satisfaction of applicable tax withholding
requirements, the Company shall release to the Participant, free from the
vesting restrictions, one Share for each vested Restricted Share (or issue one
Share free of the vesting restriction for each vested Restricted Share Unit),
unless an Award Agreement provides otherwise. No fractional shares shall be
distributed, and cash shall be paid in lieu thereof.
     (e) Dividends Payable on Restricted Shares and Restricted Share Units.
Whenever the Company declares and pays dividends to holders of Shares, a
Participant who has been awarded Restricted Shares shall be entitled to
dividends to the same extent as if the Participant’s Shares were not subject to
any restrictions. Whenever the Shares underlying Restricted Share Units are
issued to a Participant pursuant to Section 7(d) above, such Participant or
duly-authorized transferee shall also be entitled to receive (unless otherwise
provided in the Award Agreement), with respect to each Share issued, an amount
equal to any cash dividends (plus, in the sole discretion of the Committee,
simple interest at a rate as the Committee may determine) and a number of Shares
equal to any stock dividends, which were declared and paid to the holders of
Shares between the Grant Date and the date such Share is issued.

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     (f) Section 83(b) Elections. A Participant may make an election under
Section 83(b) of the Code (the “Section 83(b) Election”) with respect to
Restricted Shares. If a Participant who has received Restricted Share Units
provides the Committee with written notice of his or her intention to make a
Section 83(b) Election with respect to the Shares subject to such Restricted
Share Units, the Committee may in its discretion convert the Participant’s
Restricted Share Units into Restricted Shares, on a one-for-one basis, in full
satisfaction of the Participant’s Restricted Share Unit Award. The Participant
may then make a Section 83(b) Election with respect to those Restricted Shares.
Shares with respect to which a Participant makes a Section 83(b) Election shall
not be eligible for deferral pursuant to Section 11 below.
     (g) Deferral Elections. At any time within the thirty-day period (or other
shorter or longer period that the Committee selects in its sole discretion) in
which an Eligible Person, who either is not an Employee or is an Employee who is
a member of a select group of management or highly compensated Employees,
receives an Award of either Restricted Shares or Restricted Share Units, the
Committee may permit the Participant to irrevocably elect, on a form provided by
and acceptable to the Committee, to defer the receipt of all or a percentage of
the Shares that would otherwise be transferred to the Participant upon the
vesting of such Award. If the Participant makes this election, the Shares
subject to the election, and any associated dividends and interest, shall be
credited to an account established pursuant to Section 11 hereof on the date
such Shares would otherwise have been released or issued to the Participant
pursuant to Section 7(d) above.
8. Phantom Shares.
     (a) Grants. The Committee may in its discretion grant phantom shares
(“Phantom Shares”) to any Eligible Person, and shall evidence each grant in an
Award Agreement that sets forth the number of Shares to which the Award relates,
the terms and conditions under which the Participant’s interest in the Phantom
Shares will become vested and non-forfeitable, and the terms and conditions of
settlement (which shall occur in the form of cash, based on the Fair Market
Value of the underlying Shares). Except as set forth in the applicable Award
Agreement or the Committee otherwise determines, upon termination of a
Participant’s Continuous Service, the Participant shall forfeit his or her
unvested Phantom Shares.
     (b) Timing of Settlement. Unless otherwise provided in an Award Agreement,
the Company shall settle Phantom Shares by making a single-sum cash payment to
the Participant on the first day of the month following the date on which the
Participant earns a vested interest in the Phantom Shares; provided that at any
time within the thirty-day period (or other shorter or longer period that the
Committee selects in its sole discretion) in which an Eligible Person, who
either is not an Employee or is an Employee who is a member of a select group of
management or highly compensated Employees, receives an Award of Phantom Shares,
the Committee may permit the Participant to irrevocably elect, on a form
provided by and acceptable to the Committee (that permits the Participant to
select any combination of a lump sum and annual installments that are completed
no later than ten years following the termination of the Participant’s
Continuous Service or such longer period of time as the Committee may permit),
to defer the settlement of all or a percentage of the Phantom Shares that would
otherwise occur once the Participant vests in the Phantom Shares. The
Participant may change such election through any subsequent election that (i) is
delivered to the Administrator at least one year before the date on which
distributions are otherwise scheduled to commence pursuant to the Participant’s
election, and (ii) defers the

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commencement of distributions by at least five years from the originally
scheduled commencement date.
     (c) Emergency Withdrawals. In the event a Participant suffers an
unforeseeable emergency within the contemplation of Section 11(e) of this Plan
and of Section 409A of the Code, the Participant may apply to the Company for an
immediate distribution of all or a portion of the Participant’s deferred vested
Phantom Shares. The Committee shall determine whether a Participant has a
qualifying unforeseeable emergency and the amount which qualifies for
distribution, if any, in accordance with the terms of Section 11(e) of this Plan
and of Section 409A of the Code.
     (d) Unsecured Rights to Deferred Compensation. A Participant’s rights
associated with an Award of Phantom Shares shall at all times constitute an
unsecured promise of the Company to pay benefits in cash as they come due. The
right of the Participant or the Participant’s duly-authorized transferee to
receive benefits hereunder shall be solely an unsecured claim against the
general assets of the Company. Neither the Participant nor the Participant’s
duly-authorized transferee shall have any claim against or rights in any
specific assets, shares, or other funds of the Company. No provision of the Plan
shall be interpreted to confer upon any Participant any voting, dividend or
derivative or other similar rights with respect to any Share that is subject to
a Phantom Share Award.
9. Dividend Equivalent Rights.
     (a) Grants. The Committee may in its discretion grant dividend equivalent
rights (“Dividend Equivalent Rights”) to any Eligible Person, and shall evidence
each grant in an Award Agreement that sets forth the number of Shares to which
the Award relates, its relationship to any other Award, the terms and conditions
under which the Participant’s rights will become vested and non-forfeitable, and
the timing and form of settlement. A Dividend Equivalent Right shall generally
represent the right of the Participant to receive, at the time or times of
settlement, an amount equal to the regular cash dividends that the Company has
paid on the number of Shares designated in the Award Agreement during the period
between the date the Award is granted and the settlement date applicable to the
Shares. Interest shall not accrue on such amounts, unless an Award Agreement
provides otherwise.
     (b) Settlement. In the Award Agreement, the Committee shall specify the
circumstances under which the Company will settle Dividend Equivalent Rights
(whether by exercise, at vesting, or upon a different settlement date or dates
that the Committee designates in the Award Agreement). Unless an Award Agreement
provides for settlement in cash or a combination of cash or Shares at the
Committee’s discretion, all Dividend Equivalent Rights shall be settled through
the Company’s issuance of Shares having a Fair Market Value equal to the value
of each cash dividend paid with respect to the Shares underlying the
Participant’s Award during the term of the Dividend Equivalent Right that is
being settled.
     (c) Effect on Other Awards. If a Dividend Equivalent Right is granted with
respect to Options that are intended to be qualified performance based
compensation for purposes of Section 162(m) of the Code, such Dividend
Equivalent Rights shall be payable regardless of whether such Options are
exercised. If a Dividend Equivalent Right is granted in respect of any other
Award, then, unless otherwise stated in the Award Agreement, in no event shall
the Dividend

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Equivalent Right be in effect for a period beyond the time during which the
applicable portion of the underlying Award is in effect.
     (d) Other Restrictions. Unless otherwise provided in an Award Agreement, a
Dividend Equivalent Right is exercisable or payable only while the Participant
is an Eligible Person. The Committee may impose any employment-related terms and
conditions on the grant of a Dividend Equivalent Right as it deems appropriate
in its discretion.
10. Share Appreciation Rights (SARs)
     (a) Grants. If the Company’s Shares are traded on an established securities
market, the Committee may in its discretion grant Share Appreciation Rights to
any Eligible Person, in any of the following forms:
     (i) SARs related to Options. The Committee may grant SARs either
concurrently with the grant of an Option or with respect to an outstanding
Option, in which case the SAR shall extend to all or a portion of the Shares
covered by the related Option. An SAR shall entitle the Participant who holds
the related Option, upon exercise of the SAR and surrender of the related
Option, or portion thereof, to the extent the SAR and related Option each were
previously unexercised, to receive payment of an amount determined pursuant to
Section 10(e) below. Any SAR granted in connection with an ISO will contain such
terms as may be required to comply with the provisions of Section 422 of the
Code and the regulations promulgated thereunder.
     (ii) SARs Independent of Options. The Committee may grant SARs which are
independent of any Option subject to such conditions as the Committee may in its
discretion determine, which conditions will be set forth in the applicable Award
Agreement.
     (iii) Limited SARs. The Committee may grant SARs exercisable only upon or
in respect of a Change in Control or any other specified event, and such limited
SARs may relate to or operate in tandem or combination with or substitution for
Options or other SARs, or on a stand-alone basis, and may be payable in cash or
Shares based on the spread between the exercise price of the SAR, and (A) a
price based upon or equal to the Fair Market Value of the Shares during a
specified period, at a specified time within a specified period before, after or
including the date of such event, or (B) a price related to consideration
payable to Company’s shareholders generally in connection with the event.
     (b) Exercise Price. The per Share exercise price of an SAR shall be
determined in the sole discretion of the Committee, shall be set forth in the
applicable Award Agreement, and shall be no less than 100% of the Fair Market
Value of one Share. The exercise price of an SAR related to an Option shall be
the same as the exercise price of the related Option.
     (c) Exercise of SARs. Unless the Award Agreement otherwise provides, an SAR
related to an Option will be exercisable at such time or times, and to the
extent, that the related Option will be exercisable. An SAR may not have a term
exceeding ten years from its Grant Date. An SAR granted independently of any
other Award will be exercisable pursuant to the terms of the Award Agreement.
Whether an SAR is related to an Option or is granted independently, the SAR may
only be exercised when the Fair Market Value of the Shares underlying the SAR
exceeds the exercise price of the SAR.

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     (d) Effect on Available Shares. All SARs that may be settled in shares of
the Company’s stock shall be counted in full against the number of shares
available for award under the Plan, regardless of the number of shares actually
issued upon settlement of the SARs.
     (e) Payment. Upon exercise of an SAR related to an Option and the attendant
surrender of an exercisable portion of any related Award, the Participant will
be entitled to receive payment of an amount determined by multiplying –
     (i) the excess of the Fair Market Value of a Share on the date of exercise
of the SAR over the exercise price per Share of the SAR, by
     (ii) the number of Shares with respect to which the SAR has been exercised.
     Notwithstanding the foregoing, an SAR granted independently of an Option
(i) may limit the amount payable to the Participant to a percentage, specified
in the Award Agreement but not exceeding one-hundred percent (100%), of the
amount determined pursuant to the preceding sentence, and (ii) shall be subject
to any payment or other restrictions that the Committee may at any time impose
in its discretion, including restrictions intended to conform the SARs with
Section 409A of the Code.
     (f) Form and Terms of Payment. Subject to Applicable Law, the Committee
shall settle the amount determined under Section 10(e) above solely in Shares
(valued at their Fair Market Value on the date of exercise of the SAR). In any
event, cash shall be paid in lieu of fractional Shares. All SARs shall be
settled as soon as practicable after exercise.
     (g) Termination of Employment or Consulting Relationship. The Committee
shall establish and set forth in the applicable Award Agreement the terms and
conditions on which an SAR shall remain exercisable, if at all, following
termination of a Participant’s Continuous Service. The provisions of Section
6(h) above shall apply to the extent an Award Agreement does not specify the
terms and conditions upon which an SAR shall terminate when there is a
termination of a Participant’s Continuous Service.
     (h) Repricing and Buy-out. The Committee has the same discretion to reprice
and to buy-out SARs as it has to take such actions pursuant to Section 6(k)
above with respect to Options.
11. Deferred Share Units
     (a) Elections to Defer. The Committee may permit any Eligible Person, who
either is not an Employee or is an Employee who is a member of a select group of
management or highly compensated Employees, to irrevocably elect, on a form
provided by and acceptable to the Committee (the “Election Form”), to forego the
receipt of cash or other compensation (including the Shares deliverable pursuant
to any Award other than Restricted Shares for which a Section 83(b) Election has
been made), and in lieu thereof to have the Company credit to an internal Plan
account (the “Account”) a number of deferred share units (“Deferred Share
Units”) having a Fair Market Value equal to the Shares and other compensation
deferred. These credits will be made at the end of each calendar month (or other
period that the Administrator establishes prospectively) during which
compensation is deferred. Unless, within five business days after the Company
receives an election form, the Company sends the Participant a written notice
explaining why it is invalid, each Election Form shall take effect on the first
day of the next calendar year (or on the first day of the

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next calendar month in the case of an initial election by a Participant who
first becomes eligible to defer hereunder) after its delivery to the Company,
subject to Section 7(g) regarding deferral of Restricted Shares and Restricted
Share Units and to Section 12(e) regarding deferral of Performance Awards.
Notwithstanding the foregoing sentence: (i) Election Forms shall be ineffective
with respect to any compensation that a Participant earns before the date on
which the Company receives the Election Form, and (ii) the Committee may
unilaterally make awards in the form of Deferred Share Units, regardless of
whether or not the Participant foregoes other compensation.
     (b) Vesting. Unless an Award Agreement expressly provides otherwise, each
Participant shall be 100% vested at all times in any Shares subject to Deferred
Share Units.
     (c) Issuances of Shares. The Company shall provide a Participant with one
Share for each Deferred Share Unit in five substantially equal annual
installments that are issued before the last day of each of the five calendar
years that end after the date on which the Participant’s Continuous Service
terminates, unless –
     (i) the Participant has properly elected a different form of distribution,
on a form approved by the Committee, that permits the Participant to select any
combination of a lump sum and annual installments that are completed within ten
years following termination of the Participant’s Continuous Service or such
longer period of time as the Committee may permit on an election form, and
     (ii) the Company received the Participant’s distribution election form at
the time the Participant elects to defer the receipt of cash or other
compensation pursuant to Section 11(a), provided that (subject to any
prospective changes that the Administrator communicates in writing to a
Participant), the Participant may change such election through any subsequent
election that (i) is delivered to the Administrator at least one year before the
date on which distributions are otherwise scheduled to commence pursuant to the
Participant’s election, and (ii) defers the commencement of distributions by at
least five years from the originally scheduled commencement date.
     Fractional shares shall not be issued, and instead shall be paid out in
cash.
     (d) Crediting of Dividends. Whenever Shares are issued to a Participant
pursuant to Section 11(c) above, such Participant shall also be entitled to
receive, with respect to each Share issued, a cash amount equal to any cash
dividends (plus simple interest at a rate of five percent per annum, or such
other reasonable rate as the Committee may determine in an Award Agreement), and
a number of Shares equal to any stock dividends which were declared and paid to
the holders of Shares between the Grant Date and the date such Share is issued.
     (e) Emergency Withdrawals. In the event a Participant suffers an
unforeseeable emergency within the contemplation of this Section and
Section 409A of the Code, the Participant may apply to the Company for an
immediate distribution of all or a portion of the Participant’s Deferred Share
Units. The unforeseeable emergency must result from a sudden and unexpected
illness or accident of the Participant, the Participant’s spouse, or a dependent
(within the meaning of Section 152(a) of the Code) of the Participant, casualty
loss of the Participant’s property, or other similar extraordinary and
unforeseeable conditions beyond the control of the Participant. Examples of
purposes which are not considered unforeseeable emergencies include
post-secondary school expenses or the desire

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to purchase a residence. In no event will a distribution be made to the extent
the unforeseeable emergency could be relieved through reimbursement or
compensation by insurance or otherwise, or by liquidation of the Participant’s
nonessential assets to the extent such liquidation would not itself cause a
severe financial hardship. The amount of any distribution hereunder shall be
limited to the amount necessary to relieve the Participant’s unforeseeable
emergency plus amounts necessary to pay taxes reasonably anticipated as a result
of the distribution. The Committee shall determine whether a Participant has a
qualifying unforeseeable emergency and the amount which qualifies for
distribution, if any. The Committee may require evidence of the purpose and
amount of the need, and may establish such application or other procedures as it
deems appropriate.
     (f) Unsecured Rights to Deferred Compensation. A Participant’s right to
Deferred Share Units shall at all times constitute an unsecured promise of the
Company to pay benefits as they come due. The right of the Participant or the
Participant’s duly-authorized transferee to receive benefits hereunder shall be
solely an unsecured claim against the general assets of the Company. Neither the
Participant nor the Participant’s duly-authorized transferee shall have any
claim against or rights in any specific assets, shares, or other funds of the
Company.
12. Performance Awards
     (a) Performance Units. Subject to the limitations set forth in paragraph
(c) hereof, the Committee may in its discretion grant Performance Units to any
Eligible Person and shall evidence such grant in an Award Agreement that is
delivered to the Participant which sets forth the terms and conditions of the
Award. A Performance Unit is an Award which is based on the achievement of
specific goals with respect to the Company or any Affiliate or individual
performance of the Participant, or a combination thereof, over a specified
period of time.
     (b) Performance Compensation Awards. Subject to the limitations set forth
in paragraph (c) hereof, the Committee may, at the time of grant of a
Performance Unit, designate such Award as a “Performance Compensation Award” in
order that such Award constitutes “qualified performance-based compensation”
under Code Section 162(m), in which event the Committee shall have the power to
grant such Performance Compensation Award upon terms and conditions that qualify
it as “qualified performance-based compensation” within the meaning of Code
Section 162(m). With respect to each such Performance Compensation Award, the
Committee shall establish, in writing within the time required under Code
Section 162(m), a “Performance Period,” “Performance Measure(s)”, and
“Performance Formula(e)” (each such term being hereinafter defined). Once
established for a Performance Period, the Performance Measure(s) and Performance
Formula(e) shall not be amended or otherwise modified to the extent such
amendment or modification would cause the compensation payable pursuant to the
Award to fail to constitute qualified performance-based compensation under Code
Section 162(m).
     A Participant shall be eligible to receive payment in respect of a
Performance Compensation Award only to the extent that the Performance
Measure(s) for such Award is achieved and the Performance Formula(e) as applied
against such Performance Measure(s) determines that all or some portion of such
Participant’s Award has been earned for the Performance Period. As soon as
practicable after the close of each Performance Period, the Committee shall
review and certify in writing whether, and to what extent, the Performance
Measure(s) for the Performance Period have been achieved and, if so, determine
and certify in writing the amount of the Performance Compensation Award to be
paid to the Participant and, in so doing, may use negative discretion to

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decrease, but not increase, the amount of the Award otherwise payable to the
Participant based upon such performance.
     (c) Limitations on Awards. The maximum Performance Unit Award and the
maximum Performance Compensation Award that any one Participant may receive for
any one Performance Period shall not together exceed 250,000 Shares and
$5,000,000 in cash. The Committee shall have the discretion to provide in any
Award Agreement that any amounts earned in excess of these limitations will
either be credited as Deferred Share Units, or as deferred cash compensation
under a separate plan of the Company (provided in the latter case that such
deferred compensation either bears a reasonable rate of interest or has a value
based on one or more predetermined actual investments and such deferral is
permissible under Code Section 409A). Any amounts for which payment to the
Participant is deferred pursuant to the preceding sentence shall be paid to the
Participant in a future year or years not earlier than, and only to the extent
that, the Participant is either not receiving compensation in excess of these
limits for a Performance Period, or is not subject to the restrictions set forth
under Section 162(b) of the Code.
     (d) Definitions.
     (i) “Performance Formula” means, for a Performance Period, one or more
objective formulas or standards established by the Committee for purposes of
determining whether or the extent to which an Award has been earned based on the
level of performance attained or to be attained with respect to one or more
Performance Measure(s). Performance Formulae may vary from Performance Period to
Performance Period and from Participant to Participant and may be established on
a stand-alone basis, in tandem or in the alternative.
     (ii) “Performance Measure” means one or more of the following selected by
the Committee to measure Company, Affiliate, and/or business unit performance
for a Performance Period, whether in absolute or relative terms (including,
without limitation, terms relative to a peer group or index): basic, diluted, or
adjusted earnings per share; sales or revenue; earnings before interest, taxes,
and other adjustments (in total or on a per share basis); basic or adjusted net
income; returns on equity, assets, capital, revenue or similar measure; economic
value added; working capital; total shareholder return; and product development,
product market share, research, licensing, litigation, human resources,
information services, mergers, acquisitions, sales of assets of Affiliates or
business units. Each such measure shall be, to the extent applicable, determined
in accordance with generally accepted accounting principles as consistently
applied by the Company (or such other standard applied by the Committee) and, if
so determined by the Committee, and in the case of a Performance Compensation
Award, to the extent permitted under Code Section 162(m), adjusted to omit the
effects of extraordinary items, gain or loss on the disposal of a business
segment, unusual or infrequently occurring events and transactions and
cumulative effects of changes in accounting principles. Performance Measures may
vary from Performance Period to Performance Period and from Participant to
Participant, and may be established on a stand-alone basis, in tandem or in the
alternative.
     (iii) “Performance Period” means one or more periods of time (of not less
than one fiscal year of the Company), as the Committee may designate, over which
the attainment

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     of one or more Performance Measure(s) will be measured for the purpose of
determining a Participant’s rights in respect of an Award.
     (e) Deferral Elections. At any time prior to the date that is at least six
months before the close of a Performance Period (or shorter or longer period
that the Committee selects) with respect to an Award of either Performance Units
or Performance Compensation, the Committee may permit a Participant who is a
member of a select group of management or highly compensated employees to
irrevocably elect, on a form provided by and acceptable to the Committee, to
defer the receipt of all or a percentage of the cash or Shares that would
otherwise be transferred to the Participant upon the vesting of such Award. If
the Participant makes this election, the cash or Shares subject to the election,
and any associated interest and dividends, shall be credited to an account
established pursuant to Section 11 hereof on the date such cash or Shares would
otherwise have been released or issued to the Participant pursuant to Section
12(a) or Section 12(b) above.
13. Other Stock-Based Awards.
     The Board may authorize the granting of other awards based upon Shares and
subject to terms and conditions as the Board may determine at the time of grant,
including, without limitation, the grant of securities convertible into Shares.
14. Taxes
     (a) General. As a condition to the issuance or distribution of Shares
pursuant to the Plan, or the payment of cash pursuant to any Award, the
Participant (or in the case of the Participant’s death, the person who succeeds
to the Participant’s rights) shall make such arrangements as the Company may
require for the satisfaction of any applicable federal, state, local or foreign
withholding tax obligations that may arise in connection with the Award and the
issuance of Shares. The Company shall not be required to issue any Shares until
such obligations are satisfied. If the Committee allows the withholding or
surrender of Shares to satisfy a Participant’s tax withholding obligations, the
Committee shall not allow Shares to be withheld in an amount that exceeds the
minimum statutory withholding rates for federal and state tax purposes,
including payroll taxes.
     (b) Default Rule for Employees. In the absence of any other arrangement, an
Employee shall be deemed to have directed the Company to withhold or collect
from his or her cash compensation an amount sufficient to satisfy such tax
obligations from the next payroll payment otherwise payable after the date of
the exercise of an Award.
     (c) Special Rules. In the case of a Participant other than an Employee (or
in the case of an Employee where the next payroll payment is not sufficient to
satisfy such tax obligations, with respect to any remaining tax obligations), in
the absence of any other arrangement and to the extent permitted under
Applicable Law, the Participant shall be deemed to have elected to have the
Company withhold from the Shares or cash to be issued pursuant to an Award that
number of Shares having a Fair Market Value determined as of the applicable Tax
Date (as defined below) or cash equal to the amount required to be withheld. For
purposes of this Section 14, the Fair Market Value of the Shares to be withheld
shall be determined on the date that the amount of tax to be withheld is to be
determined under the Applicable Law (the “Tax Date”).
     (d) Surrender of Shares. If permitted by the Committee, in its discretion,
a Participant may satisfy the minimum applicable tax withholding and employment
tax obligations associated with an

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Award by surrendering Shares to the Company (including Shares that would
otherwise be issued pursuant to the Award) that have a Fair Market Value
determined as of the applicable Tax Date equal to the amount required to be
withheld. In the case of Shares previously acquired from the Company that are
surrendered under this Section 14, such Shares must have been owned by the
Participant for more than six months on the date of surrender (or such longer
period of time the Company may in its discretion require).
     (e) Income Taxes and Deferred Compensation. Participants are solely
responsible and liable for the satisfaction of all taxes and penalties that may
arise in connection with Awards (including any taxes arising under Section 409A
of the Code), and the Company shall not have any obligation to indemnify or
otherwise hold any Participant harmless from any or all of such taxes. The
Administrator shall have the discretion to organize any deferral program, to
require deferral election forms, and to grant or to unilaterally modify any
Award in a manner that (i) conforms with the requirements of Section 409A of the
Code, (ii) voids any Participant election to the extent it would violate
Section 409A of the Code, and (iii) for any distribution event or election that
could be expected to violate Section 409A of the Code, make the distribution
only upon the earliest of the first to occur of a “permissible distribution
event” within the meaning of Section 409A of the Code, or a distribution event
that the Participant elects in accordance with Section 409A of the Code. The
Administrator shall have the sole discretion to interpret the requirements of
the Code, including Section 409A, for purposes of the Plan and all Awards.
15. Non-Transferability of Awards
     (a) General. Except as set forth in this Section 15, or as otherwise
approved by the Committee for a select group of management or highly compensated
Employees, Awards may not be sold, pledged, assigned, hypothecated, transferred
or disposed of in any manner other than by will or by the laws of descent or
distribution. The designation of a beneficiary by a Participant will not
constitute a transfer. An Award may be exercised, during the lifetime of the
holder of an Award, only by such holder, the duly-authorized legal
representative of a Participant who is Disabled, or a transferee permitted by
this Section 15.
     (b) Limited Transferability Rights. Notwithstanding anything else in this
Section 15, the Committee may in its discretion provide in an Award Agreement
that an Award, other than an ISO, Phantom Share or Deferred Share Unit, may be
transferred, on such terms and conditions as the Committee deems appropriate,
either (i) by instrument to the Participant’s “Immediate Family” (as defined
below), (ii) by instrument to an inter vivos or testamentary trust (or other
entity) in which the Award is to be passed to the Participant’s designated
beneficiaries, or (iii) by gift to charitable institutions. Any transfer of the
Participant’s rights shall succeed and be subject to all the terms of the
applicable Award Agreement and the Plan. “Immediate Family” means any child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse,
sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, and shall include adoptive
relationships. Any transferee of a Participant’s rights shall succeed to and be
subject to all of the terms of the Plan and the Award Agreement (and any
amendments thereto) granting the transferred Award.

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16. Adjustments Upon Changes in Capitalization, Merger or Certain Other
Transactions
     (a) Changes in Capitalization. The Committee shall equitably adjust the
number of Shares covered by each outstanding Award, and the number of Shares
that have been authorized for issuance under the Plan but as to which no Awards
have yet been granted or that have been returned to the Plan upon cancellation,
forfeiture, or expiration of an Award, as well as the exercise or purchase price
per Share covered by each such outstanding Award, to reflect any increase or
decrease in the number of issued Shares resulting from a stock-split, reverse
stock-split, stock dividend, combination, recapitalization or reclassification
of the Shares, or any other increase or decrease in the number of issued Shares
effected without receipt of consideration by the Company. In the event of any
such transaction or event, the Committee may provide in substitution for any or
all outstanding Options under the Plan such alternative consideration (including
securities of any surviving entity) as it may in good faith determine to be
equitable under the circumstances and may require in connection therewith the
surrender of all Options so replaced. In any case, such substitution of
securities shall not require the consent of any person who is granted Options
pursuant to the Plan. Except as expressly provided herein or in an Award
Agreement, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be required to be made with respect to, the
number or price of Shares subject to any Award.
     (b) Dissolution or Liquidation. In the event of the dissolution or
liquidation of the Company other than as part of a Change of Control, each Award
will terminate immediately prior to the consummation of such action, subject to
the ability of the Committee to exercise any discretion authorized in the case
of a Change in Control.
     (c) Change in Control. In the event of a Change in Control, the Committee
may in its sole and absolute discretion and authority, without obtaining the
approval or consent of the Company’s shareholders or any Participant with
respect to his or her outstanding Awards, take one or more of the following
actions:
     (i) arrange for or otherwise provide that each outstanding Award shall be
assumed or a substantially similar award shall be substituted by a successor
corporation or a parent or subsidiary of such successor corporation (the
“Successor Corporation”);
     (ii) accelerate the vesting of Awards so that Awards shall vest (and, to
the extent applicable, become exercisable) as to the Shares that otherwise would
have been unvested and provide that repurchase rights of the Company with
respect to Shares issued upon exercise of an Award shall lapse as to the Shares
subject to such repurchase right;
     (iii) arrange or otherwise provide for the payment of cash or other
consideration to Participants in exchange for the satisfaction and cancellation
of outstanding Awards;
     (iv) terminate upon the consummation of the transaction, provided that the
Committee may in its sole discretion provide for vesting of all or some
outstanding Awards in full as of a date immediately prior to consummation of the

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Change in Control. To the extent that an Award is not exercised prior to
consummation of a transaction in which the Award is not being assumed or
substituted, such Award shall terminate upon such consummation; or
     (v) make such other modifications, adjustments or amendments to outstanding
Awards or this Plan as the Committee deems necessary or appropriate, subject
however to the terms of Section 18(a) below.
     Notwithstanding the above, in the event a Participant holding an Award
assumed or substituted by the Successor Corporation in a Change in Control is
Involuntarily Terminated by the Successor Corporation in connection with, or
within 12 months following consummation of, the Change in Control, then any
assumed or substituted Award held by the terminated Participant at the time of
termination shall accelerate and become fully vested (and exercisable in full in
the case of Options and SARs), and any repurchase right applicable to any Shares
shall lapse in full, unless an Award Agreement provides for a more restrictive
acceleration or vesting schedule or more restrictive limitations on the lapse of
repurchase rights or otherwise places additional restrictions, limitations and
conditions on an Award. The acceleration of vesting and lapse of repurchase
rights provided for in the previous sentence shall occur immediately prior to
the effective date of the Participant’s termination, unless an Award Agreement
provides otherwise.
     (d) Certain Distributions. In the event of any distribution to the
Company’s shareholders of securities of any other entity or other assets (other
than dividends payable in cash or stock of the Company) without receipt of
consideration by the Company, the Committee may, in its discretion,
appropriately adjust the price per Share covered by each outstanding Award to
reflect the effect of such distribution.
17. Time of Granting Awards.
     The date of grant (“Grant Date”) of an Award shall be the date specifically
set forth in an Award Agreement as the date on which the Committee communicated
the key terms of the Award to the Participant, subject to the Committee’s
discretion to identify a separate date as the Grant Date.
18. Modification of Awards and Substitution of Options.
     (a) Modification, Extension, and Renewal of Awards. Within the limitations
of the Plan, the Committee may modify an Award to accelerate the rate at which
an Option or SAR may be exercised (including without limitation permitting an
Option or SAR to be exercised in full without regard to the installment or
vesting provisions of the applicable Award Agreement or whether the Option or
SAR is at the time exercisable, to the extent it has not previously been
exercised), to accelerate the vesting of any Award, to extend or renew
outstanding Awards, or to accept the cancellation of outstanding Awards to the
extent not previously exercised either for the granting of new Awards or for
other consideration in substitution or replacement thereof. Notwithstanding the
foregoing provision, no modification of an outstanding Award shall materially
and adversely affect such Participant’s rights thereunder, unless either the
Participant provides written consent or there is an express Plan provision
permitting the Committee to act unilaterally to make the modification. The
Committee may limit the modification of Options as it deems necessary to avoid
negative tax affects under Code Section 409A.

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     (b) Substitution of Options. Notwithstanding any inconsistent provisions or
limits under the Plan, in the event the Company or an Affiliate acquires
(whether by purchase, merger or otherwise) all or substantially all of
outstanding capital stock or assets of another corporation or in the event of
any reorganization or other transaction qualifying under Section 424 of the
Code, the Committee may, in accordance with the provisions of that Section,
substitute Options for options under the plan of the acquired company provided
(i) the excess of the aggregate fair market value of the shares subject to an
option immediately after the substitution over the aggregate option price of
such shares is not more than the similar excess immediately before such
substitution and (ii) the new option does not give persons additional benefits,
including any extension of the exercise period.
19. Term of Plan.
     The Plan shall continue in effect for a term of ten years from its
effective date as determined under Section 23 below, unless the Plan is sooner
terminated under Section 20 below.
20. Amendment and Termination of the Plan.
     (a) Authority to Amend or Terminate. Subject to Applicable Laws, the Board
may from time to time amend, alter, suspend, discontinue, or terminate the Plan.
     (b) Effect of Amendment or Termination. No amendment, suspension, or
termination of the Plan shall materially and adversely affect Awards already
granted unless either it relates to an adjustment pursuant to Section 16 above,
or it is otherwise mutually agreed between the Participant and the Committee,
which agreement must be in writing and signed by the Participant and the
Company. Notwithstanding the foregoing, the Committee may amend the Plan to
eliminate provisions which are no longer necessary as a result of changes in tax
or securities laws or regulations, or in the interpretation thereof.
21. Conditions Upon Issuance of Shares.
     Notwithstanding any other provision of the Plan or any agreement entered
into by the Company pursuant to the Plan, the Company shall not be obligated,
and shall have no liability for failure, to issue or deliver any Shares under
the Plan unless such issuance or delivery would comply with Applicable Law, with
such compliance determined by the Company in consultation with its legal
counsel.
22. Reservation of Shares.
     The Company, during the term of this Plan, will at all times reserve and
keep available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.
23. Effective Date.
     This Plan shall become effective on the date of its approval by the Board;
provided that this Plan shall be submitted to the Company’s shareholders for
approval, and if not approved by the shareholders in accordance with Applicable
Law (as determined by the Committee in its discretion) within one year from the
date of approval by the Board, this Plan and any Awards shall be null, void, and
of no force and effect. Awards granted under this Plan before approval of this
Plan by the

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shareholders shall be granted subject to such approval, and no Shares shall be
distributed before such approval.
24. Controlling Law.
     All disputes relating to or arising from the Plan shall be governed by the
internal substantive laws (and not the laws of conflicts of laws) of the State
of Delaware, to the extent not preempted by United States federal law. If any
provision of this Plan is held by a court of competent jurisdiction to be
invalid and unenforceable, the remaining provisions shall continue to be fully
effective.
25. Other Jurisdictions.
     To facilitate the making of any grant of an Award under this Plan, the
Committee may provide for such special terms for Awards to Participants who are
foreign nationals or who are employed by the Company or any Affiliate outside of
the United States of America as the Committee may consider necessary or
appropriate to accommodate differences in local law, tax policy or custom. The
Company may adopt rules and procedures relating to the operation and
administration of this Plan to accommodate the specific requirements of local
laws and procedures of particular countries. Without limiting the foregoing, the
Company is specifically authorized to adopt rules and procedures regarding the
conversion of local currency, taxes, withholding procedures and handling of
stock certificates which vary with the customs and requirements of particular
countries. The Company may adopt sub-plans and establish escrow accounts and
trusts as may be appropriate or applicable to particular locations and
countries.
     26. No Shareholder Rights. Neither a Participant nor any transferee of a
Participant shall have any rights as a shareholder of the Company with respect
to any Shares underlying any Award until the date of issuance of a share
certificate to a Participant or a transferee of a Participant for such Shares in
accordance with the Company’s governing instruments and Applicable Law. Prior to
the issuance of Shares pursuant to an Award, a Participant shall not have the
right to vote or to receive dividends or any other rights as a shareholder with
respect to the Shares underlying the Award, notwithstanding its exercise in the
case of Options and SARs. No adjustment will be made for a dividend or other
right that is determined based on a record date prior to the date the stock
certificate is issued, except as otherwise specifically provided for in this
Plan.
     27. No Employment Rights. The Plan shall not confer upon any Participant
any right to continue an employment, service or consulting relationship with the
Company, nor shall it affect in any way a Participant’s right or the Company’s
right to terminate the Participant’s employment, service, or consulting
relationship at any time, with or without Cause.
28. Termination, Rescission and Recapture.
     (a) Each Award under the Plan is intended to align the Participant’s
long-term interest with those of the Company. If the Participant engages in
certain activities discussed below, either during employment or after employment
with the Company terminates for any reason, the Participant is acting contrary
to the long-term interests of the Company. Accordingly, except as otherwise
expressly provided in the Award Agreement, the Company may terminate any
outstanding, unexercised, unexpired, unpaid, or deferred Awards (“Termination”),
rescind any exercise, payment or delivery pursuant to the Award (“Rescission”),
or recapture any Common

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Stock (whether restricted or unrestricted) or proceeds from the Participant’s
sale of Shares issued pursuant to the Award (“Recapture”), if the Participant
does not comply with the conditions of subsections (b) and (c) hereof
(collectively, the “Conditions”).
     (b) A Participant shall not, without the Company’s prior written
authorization, disclose to anyone outside the Company, or use in other than the
Company’s business, any proprietary or confidential information or material, as
those or other similar terms are used in any applicable patent, confidentiality,
inventions, secrecy, or other agreement between the Participant and the Company
with regard to any such proprietary or confidential information or material.
     (c) Pursuant to any agreement between the Participant and the Company with
regard to intellectual property (including but not limited to patents,
trademarks, copyrights, trade secrets, inventions, developments, improvements,
proprietary information, confidential business and personnel information), a
Participant shall promptly disclose and assign to the Company or its designee
all right, title, and interest in such intellectual property, and shall take all
reasonable steps necessary to enable the Company to secure all right, title and
interest in such intellectual property in the United States and in any foreign
country.
     (d) Upon exercise, payment, or delivery of cash or Common Stock pursuant to
an Award, the Participant shall certify on a form acceptable to the Company that
he or she is in compliance with the terms and conditions of the Plan and, if a
severance of Continuous Service has occurred for any reason, shall state the
name and address of the Participant’s then-current employer or any entity for
which the Participant performs business services and the Participant’s title,
and shall identify any organization or business in which the Participant owns a
greater-than-five-percent equity interest.
     (e) If the Company determines, in its sole and absolute discretion, that
(i) a Participant has violated any of the Conditions or (ii) during his or her
Continuous Service, or within three years after its termination for any reason,
a Participant (a) has rendered services to or otherwise directly or indirectly
engaged in or assisted, any organization or business that, in the judgment of
the Company in its sole and absolute discretion, is or is working to become
competitive with the Company; (b) has solicited any non-administrative employee
of the Company to terminate employment with the Company; or (c) has engaged in
activities which are materially prejudicial to or in conflict with the interests
of the Company, including any breaches of fiduciary duty or the duty of loyalty,
then the Company may, in its sole and absolute discretion, impose a Termination,
Rescission, and/or Recapture with respect to any or all of the Participant’s
relevant Awards, Shares, and the proceeds thereof. Within ten days after
receiving notice from the Company of any such activity, the Participant shall
deliver to the Company the Shares acquired pursuant to the Award, or, if
Participant has sold the Shares, the gain realized, or payment received as a
result of the rescinded exercise, payment, or delivery; provided, that if the
Participant returns Shares that the Participant purchased pursuant to the
exercise of an Option (or the gains realized from the sale of such Common
Stock), the Company shall promptly refund the exercise price, without earnings,
that the Participant paid for the Shares. Any payment by the Participant to the
Company pursuant to this Section 28(e) shall be made either in cash or by
returning to the Company the number of Shares that the Participant received in
connection with the rescinded exercise, payment, or delivery. It shall not be a
basis for Termination, Rescission or Recapture if after termination of a
Participant’s Continuous Service, the Participant purchases, as an investment or
otherwise, stock or other securities of such an organization or business, so
long as (i) such stock or other securities are listed

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upon a recognized securities exchange or traded over-the-counter, and (ii) such
investment does not represent more than a five percent equity interest in the
organization or business.
     (f) Notwithstanding the foregoing provisions of this Section, the Company
has sole and absolute discretion not to require Termination, Rescission and/or
Recapture, and its determination not to require Termination, Rescission and/or
Recapture with respect to any particular act by a particular Participant or
Award shall not in any way reduce or eliminate the Company’s authority to
require Termination, Rescission and/or Recapture with respect to any other act
or Participant or Award. Nothing in this Section shall be construed to impose
obligations on the Participant to refrain from engaging in lawful competition
with the Company after the termination of employment that does not violate
subsections (b) or (c) of this Section, other than any obligations that are part
of any separate agreement between the Company and the Participant or that arise
under applicable law.
     (g) All administrative and discretionary authority given to the Company
under this Section shall be exercised by the most senior human resources
executive of the Company or such other person or committee (including without
limitation the Committee) as the Committee may designate from time to time.
     (h) Notwithstanding any provision of this Section, if any provision of this
Section is determined to be unenforceable or invalid under any applicable law,
such provision will be applied to the maximum extent permitted by applicable
law, and shall automatically be deemed amended in a manner consistent with its
objectives to the extent necessary to conform to any limitations required under
applicable law. Furthermore, if any provision of this Section is illegal under
any applicable law, such provision shall be null and void to the extent
necessary to comply with applicable law.
     Notwithstanding the foregoing, but subject to any contrary terms set forth
in any Award Agreement, this Section shall not be applicable: (i) to any
Participant who is not, on the Award Date, an Employee of the Company or its
Affiliates; and (ii) to any Participant from and after his or her termination of
Continuous Service after a Change in Control.

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Lexington Strategic Asset Corp.
2005 Equity Incentive Compensation Plan
 
Appendix A: Definitions
 
As used in the Plan, the following definitions shall apply:
     “Affiliate” means, with respect to any Person (as defined below), any other
Person that directly or indirectly controls or is controlled by or under common
control with such Person. For the purposes of this definition, “control,” when
used with respect to any Person, means the possession, direct or indirect, of
the power to direct or cause the direction of the management and policies of
such Person or the power to elect directors, whether through the ownership of
voting securities, by contract or otherwise; and the terms “affiliated,”
“controlling” and “controlled” have meanings correlative to the foregoing.
     “Applicable Law” means the legal requirements relating to the
administration of options and share-based plans under applicable U.S. federal
and state laws, the Code, any applicable stock exchange or automated quotation
system rules or regulations, and the applicable laws of any other country or
jurisdiction where Awards are granted, as such laws, rules, regulations and
requirements shall be in place from time to time.
     “Award” means any award made pursuant to the Plan, including awards made in
the form of an Option, an SAR, a Restricted Share, a Restricted Share Unit, an
Unrestricted Share, a Deferred Share Unit and a Performance Award, or any
combination thereof, whether alternative or cumulative, authorized by and
granted under this Plan.
     “Award Agreement” means any written document setting forth the terms of an
Award that has been authorized by the Committee. The Committee shall determine
the form or forms of documents to be used, and may change them from time to time
for any reason.
     “Board” means the Board of Directors of the Company.
     “Cause” for termination of a Participant’s Continuous Service will exist if
the Participant is terminated from employment or other service with the Company
or an Affiliate for any of the following reasons: (i) the Participant’s willful
failure to substantially perform his or her duties and responsibilities to the
Company or deliberate violation of a material Company policy; (ii) the
Participant’s commission of any material act or acts of fraud, embezzlement,
dishonesty, or other willful misconduct; (iii) the Participant’s material
unauthorized use or disclosure of any proprietary information or trade secrets
of the Company or any other party to whom the Participant owes an obligation of
nondisclosure as a result of his or her relationship with the Company; or
(iv) Participant’s willful and material breach of any of his or her obligations
under any written agreement or covenant with the Company.

 

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     The Committee shall in its discretion determine whether or not a
Participant is being terminated for Cause. The Committee’s determination shall,
unless arbitrary and capricious, be final and binding on the Participant, the
Company, and all other affected persons. The foregoing definition does not in
any way limit the Company’s ability to terminate a Participant’s employment or
consulting relationship at any time, and the term “Company” will be interpreted
herein to include any Affiliate or successor thereto, if appropriate.
     “Change in Control” means, unless another definition is set forth in an
Award Agreement, the first of the following to occur after the effective date of
this Plan (as set forth in Section 23 hereto):
     (i) Acquisition of Controlling Interest. Any Person (other than Persons who
are Employees at any time more than one year before a transaction) becomes the
Beneficial Owner, directly or indirectly, of securities of the Company
representing [50%] or more of the combined voting power of the Company’s then
outstanding securities. In applying the preceding sentence, (i) securities
acquired directly from the Company or its Affiliates by or for the Person shall
not be taken into account, and (ii) an agreement to vote securities shall be
disregarded unless its ultimate purpose is to cause what would otherwise be a
Change in Control, as reasonably determined by the Board.
     (ii) Change in Board Control. During a consecutive two-year period
commencing after the date of adoption of this Plan, individuals who constituted
the Board at the beginning of the period (or their approved replacements, as
defined in the next sentence) cease for any reason to constitute a majority of
the Board. A new Director shall be considered an “approved replacement” Director
if his or her election (or nomination for election) was approved by a vote of at
least a majority of the Directors then still in office who either were Directors
at the beginning of the period or were themselves approved replacement
Directors, but in either case excluding any Director whose initial assumption of
office occurred as a result of an actual or threatened solicitation of proxies
or consents by or on behalf of any Person other than the Board.
     (iii) Merger. The Company consummates a merger, or consolidation of the
Company with any other corporation unless: (a) the voting securities of the
Company outstanding immediately before the merger or consolidation would
continue to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least 50% of the combined
voting power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation; and (b) no Person
(other than Persons who are Employees at any time more than one year before a
transaction) becomes the Beneficial Owner, directly or indirectly, of securities
of the Company representing 50% or more of the combined voting power of the
Company’s then outstanding securities.
     (iv) Sale of Assets. The stockholders of the Company approve an agreement
for the sale or disposition by the Company of all, or substantially all, of the
Company’s assets.
     (v) Liquidation or Dissolution. The stockholders of the Company approve a
plan or proposal for liquidation or dissolution of the Company.

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     Notwithstanding the foregoing, a “Change in Control” shall not be deemed to
have occurred by virtue of the consummation of any transaction or series of
integrated transactions immediately following which the record holders of the
common stock of the Company immediately prior to such transaction or series of
transactions continue to have substantially the same proportionate ownership in
an entity which owns all or substantially all of the assets of the Company
immediately following such transaction or series of transactions.
     “Code” means the U.S. Internal Revenue Code of 1986, as amended.
     “Committee” means one or more committees or subcommittees of the Board
appointed by the Board to administer the Plan in accordance with Section 4
above. With respect to any decision involving an Award intended to satisfy the
requirements of Section 162(m) of the Code, the Committee shall consist of two
or more Directors of the Company who are “outside directors” within the meaning
of Section 162(m) of the Code. With respect to any decision relating to a
Reporting Person, the Committee shall consist of two or more Directors who are
disinterested within the meaning of Rule 16b-3.
     “Company” means Lexington Strategic Asset Corp., a Delaware corporation;
provided, however, that in the event the Company reincorporates to another
jurisdiction, all references to the term “Company” shall refer to the Company in
such new jurisdiction.
     “Consultant” means any person, including an advisor, who is engaged by the
Company or any Affiliate to render services and is compensated for such
services.
     “Continuous Service” means the absence of any interruption or termination
of service as an Employee, Director, Consultant or employee of Lexington
Corporate Properties Trust, Lexington Realty Advisors, Inc. or LXP Advisory LLC.
Continuous Service shall not be considered interrupted in the case of: (i) sick
leave; (ii) military leave; (iii) any other leave of absence approved by the
Committee, provided that such leave is for a period of not more than 90 days,
unless reemployment upon the expiration of such leave is guaranteed by contract
or statute, or unless provided otherwise pursuant to Company policy adopted from
time to time; (iv) changes in status from Director to advisory director or
emeritus status; or (iv) in the case of transfers between locations of the
Company or between the Company, its Affiliates (including Lexington Corporate
Properties Trust, Lexington Realty Advisors, Inc. and LXP Advisory LLC) or their
respective successors. Changes in status between service as an Employee,
Director, and a Consultant will not constitute an interruption of Continuous
Service.
     “Deferred Share Units” mean Awards pursuant to Section 11 of the Plan.
     “Director” means a member of the Board, or a member of the board of
directors of an Affiliate.
“Disabled” means a condition under which a Participant —
     (a) is unable to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment which can be expected
to result in death or can be expected to last for a continuous period of not
less than 12 months, or

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     (b) is, by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, received income replacement
benefits for a period of not less than three months under an accident or health
plan covering employees of the Company.
     “Dividend Equivalent Rights” means a right awarded under Section 9 of the
Plan to receive (or have credited) the equivalent value of dividends paid on
Common Stock.
     “Eligible Person” means (i) any Consultant, Director or Employee and
includes non-Employees to whom an offer of employment has been extended, and
(ii) Lexington Corporate Properties Trust, Lexington Realty Advisors, Inc., LXP
Advisory LLC and employees of the foregoing.
     “Employee” means any person whom the Company or any Affiliate classifies as
an employee (including an officer) for employment tax purposes, whether or not
that classification is correct, provided that, for purposes of ISO Awards, an
Employee is a person who is a common law employee of the Company or any “parent
corporation” or “subsidiary corporation” as such terms are defined in Code
Section 424. The payment by the Company of a director’s fee to a Director shall
not be sufficient to constitute “employment” of such Director by the Company.
     “Exchange Act” means the Securities Exchange Act of 1934, as amended.
     “Fair Market Value” means, as of any date (the “Determination Date”) means:
(i) the closing price of a Share on the New York Stock Exchange or the American
Stock Exchange (collectively, the “Exchange”), on the Determination Date, or, if
shares were not traded on the Determination Date, then on the nearest preceding
trading day during which a sale occurred; or (ii) if such stock is not traded on
the Exchange but is quoted on NASDAQ or a successor quotation system, (A) the
last sales price (if the stock is then listed as a National Market Issue under
The Nasdaq National Market System) or (B) the mean between the closing
representative bid and asked prices (in all other cases) for the stock on the
Determination Date as reported by NASDAQ or such successor quotation system; or
(iii) if such stock is not traded on the Exchange or quoted on NASDAQ but is
otherwise traded in the over-the-counter, the mean between the representative
bid and asked prices on the Determination Date; or (iv) if subsections (i)-(iii)
do not apply, the fair market value established in good faith by the Board.
     “Grant Date” has the meaning set forth in Section 14 of the Plan.
     “Incentive Share Option or ISO” hereinafter means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code, as designated in the applicable Award Agreement.
     “Involuntary Termination” means termination of a Participant’s Continuous
Service under the following circumstances occurring on or after a Change in
Control: (i) termination without Cause by the Company or an Affiliate or
successor thereto, as appropriate; or (ii) voluntary termination by the
Participant within 60 days following (A) a material reduction in the
Participant’s job responsibilities, provided that neither a mere change in title
alone nor reassignment to a substantially similar position shall constitute a
material reduction in job responsibilities; (B) an involuntary relocation of the
Participant’s work site to a facility or location more than 50 miles from the
Participant’s principal work site at the time of the Change in Control; or (C) a
material reduction

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in Participant’s total compensation other than as part of an reduction by the
same percentage amount in the compensation of all other similarly-situated
Employees, Directors or Consultants.
     “Non-ISO” means an Option not intended to qualify as an ISO, as designated
in the applicable Award Agreement.
     “Option” means any stock option granted pursuant to Section 6 of the Plan.
     “Participant” means any holder of one or more Awards, or the Shares
issuable or issued upon exercise of such Awards, under the Plan.
     “Performance Awards” mean Performance Units and Performance Compensation
Awards granted pursuant to Section 12.
     “Performance Compensation Awards” mean Awards granted pursuant to Section
12(b) of the Plan.
     “Performance Unit” means Awards granted pursuant to Section 10(a) of the
Plan which may be paid in cash, in Shares, or such combination of cash and
Shares as the Committee in its sole discretion shall determine.
     “Person” means any natural person, association, trust, business trust,
cooperative, corporation, general partnership, joint venture, joint-stock
company, limited partnership, limited liability company, real estate investment
trust, regulatory body, governmental agency or instrumentality, unincorporated
organization or organizational entity.
     “Phantom Shares” means Phantom Shares granted pursuant to Section 8 of the
Plan.
     “Phantom Share Value” means the Fair Market Value of a Share of Class A
Common Stock, or if so provided by the Committee, such Fair Market Value to the
extent in excess of a base value established by the Committee at the time of
grant.
     “Plan” means this Lexington Strategic Asset Corp. 2005 Equity Incentive
Compensation Plan.
     “Reporting Person” means an officer, Director, or greater than ten percent
shareholder of the Company within the meaning of Rule 16a-2 under the Exchange
Act, who is required to file reports pursuant to Rule 16a-3 under the Exchange
Act.
     “Restricted Shares” mean Shares subject to restrictions imposed pursuant to
Section 7 of the Plan.
     “Restricted Share Units” mean Awards pursuant to Section 7 of the Plan.
     “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act, as
amended from time to time, or any successor provision.
     “SAR” or “Share Appreciation Right” means Awards granted pursuant to
Section 10 of the Plan.

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     “Share” means a share of common stock of the Company, par value $0.0001, as
adjusted in accordance with Section 16 of the Plan.
     “Ten Percent Holder” means a person who owns stock representing more than
ten percent (10%) of the combined voting power of all classes of stock of the
Company or any Affiliate.
     “Unrestricted Shares” mean Shares awarded pursuant to Section 7 of the
Plan.

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Lexington Strategic Asset Corp.
2005 Equity Incentive Compensation Plan
As approved by the Board
of Directors on September 9,
2005 and by the shareholders
on September 9, 2009

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