Exhibit 10.1

 

 

CHAMBERS STREET PROPERTIES

2013 EQUITY INCENTIVE PLAN

 

 

--------------------------------------------------------------------------------

TABLE OF CONTENTS

 

1.

  Definitions      1   

2.

  Effective Date and Termination of Plan      5   

3.

  Administration of Plan      6   

4.

  Shares and Units Subject to the Plan      7   

5.

  Provisions Applicable to Share Options      7   

6.

  Provisions Applicable to Share Appreciation Rights      11   

7.

  Provisions Applicable to Restricted Shares      13   

8.

  Provisions Applicable to Restricted Share Units      14   

9.

  Provisions Applicable to Dividend Equivalent Rights      15   

10.

  Other Equity-Based Awards      16   

11.

  Performance Goals      17   

12.

  Tax Withholding      18   

13.

  Regulations and Approvals      20   

14.

  Interpretation and Amendments; Other Rules      20   

15.

  Changes in Capital Structure      21   

16.

  Miscellaneous      23   

--------------------------------------------------------------------------------

CHAMBERS STREET PROPERTIES

2013 EQUITY INCENTIVE PLAN

Chambers Street Properties, a Maryland real estate investment trust, wishes to
attract and retain qualified key employees, directors, Trustees, officers,
advisors, consultants and other personnel and encourage them to increase their
efforts to make the Company’s business more successful whether directly or
through its Subsidiaries or other affiliates. In furtherance thereof, the
Chambers Street Properties 2013 Equity Incentive Plan is designed to provide
equity-based incentives to certain Eligible Persons. Awards under the Plan may
be made to Eligible Persons in the form of Options, Share Appreciation Right,
Restricted Shares, Restricted Share Units, Dividend Equivalent Rights or other
forms of equity-based compensation. The Chambers Street Properties 2013 Equity
Incentive Plan is hereby established as a successor to the Chambers Street
Properties Amended and Restated 2004 Equity Incentive Plan.

 

1. DEFINITIONS

Whenever used herein, the following terms shall have the meanings set forth
below:

“2004 Plan” means the Chambers Street Properties Amended and Restated 2004
Equity Incentive Plan.

“Award” except where referring to a particular category of grant under the Plan,
shall include Incentive Share Options, Non-Qualified Share Options, Share
Appreciation Rights, Restricted Shares, Restricted Share Units, Dividend
Equivalent Rights and other equity-based Awards as contemplated herein. For
purposes of Section 4.2 only, Award shall also mean any equity-based award
granted under the 2004 Plan and outstanding on the Effective Date.

“Award Agreement” means a written agreement in a form approved by the Committee
to be entered into between the Company and the Participant as provided in
Section 3.

“Board” means the Board of Trustees of the Company.

“Cause” means, unless otherwise provided in the Participant’s Award Agreement,
(i) engaging in (A) willful or gross misconduct or (B) willful or gross neglect;
(ii) repeatedly failing to adhere to the directions of superiors or the Board or
the written policies and practices of the Company or its Subsidiaries or its
affiliates; (iii) the commission of a felony or a crime of moral turpitude,
dishonesty, breach of trust or unethical business conduct, or any crime
involving the Company or its Subsidiaries, or any affiliate thereof; (iv) fraud,
misappropriation or embezzlement; (v) a material breach of the Participant’s
employment agreement (if any) with the Company, its Subsidiaries, or any
affiliate thereof; (vi) acts or omissions constituting a material failure to
perform substantially and adequately the duties assigned to the Participant;
(vii) any illegal act detrimental the Company, its Subsidiaries, or any
affiliate thereof; or (viii) repeated failure to devote substantially all of the
Participant’s business time and efforts to the Company, its Subsidiaries or any
affiliate thereof if required by the Participant’s employment agreement;
provided, however, that, if at any particular time the Participant is subject to
an effective employment agreement with the Company, then, in lieu of the
foregoing definition, “Cause” shall at that time have such meaning as may be
specified in such employment agreement.

 

- 1 -

--------------------------------------------------------------------------------

“Change in Control” shall mean the happening of any of the following:

(a) any “person,” including a “group” (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act, but excluding the Company, any entity
controlling, controlled by or under common control with the Company, any
trustee, fiduciary or other person or entity holding securities under any
employee benefit plan or trust of the Company or any such entity is or becomes
the “beneficial owner” (as defined in Rule 13(d)(3) under the Exchange Act),
directly or indirectly, of securities of the Company representing 30% or more of
either (A) the combined voting power of the Company’s then outstanding
securities or (B) the then outstanding Shares (in either such case other than as
a result of an acquisition of securities directly from the Company); provided,
however, that, in no event shall a Change in Control be deemed to have occurred
upon an initial public offering of the Common Shares under the Securities Act;
or

(b) any consolidation or merger of the Company where the shareholders of the
Company, immediately prior to the consolidation or merger, would not,
immediately after the consolidation or merger, beneficially own (as such term is
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, shares
representing in the aggregate 50% or more of the combined voting power of the
securities of the corporation issuing cash or securities in the consolidation or
merger (or of its ultimate parent corporation, if any) in substantially the same
proportion as their ownership of the combined voting power of the securities of
the corporation immediately prior to such consolidation or merger; or

(c) there shall occur (A) any sale, lease, exchange or other transfer (in one
transaction or a series of transactions contemplated or arranged by any party as
a single plan) of all or substantially all of the assets of the Company, other
than a sale or disposition by the Company of all or substantially all of the
Company’s assets to an entity, at least 50% of the combined voting power of the
voting securities of which are owned by “persons” (as defined above) in
substantially the same proportion as their ownership of the Company immediately
prior to such sale or (B) the approval by shareholders of the Company of any
plan or proposal for the liquidation or dissolution of the Company; or

(d) the members of the Board at the beginning of any consecutive
24-calendar-month period (the “Incumbent Trustees”) cease for any reason other
than due to death to constitute at least a majority of the members of the Board;
provided that any trustee whose election, or nomination for election by the
Company’s shareholders, was approved or ratified by a vote of at least a
majority of the members of the Board then still in office who were members of
the Board at the beginning of such 24-calendar-month period, shall be deemed to
be an Incumbent Trustee.

“Code” means the Internal Revenue Code of 1986, as amended.

“Committee” means the Compensation Committee of the Board.

“Common Shares” means the shares of the Company which are Common Shares, par
value $.01 per share, either currently existing or authorized hereafter.

“Company” means the Chambers Street Properties, a Maryland real estate
investment trust.

“Covered 162(m) Employee” means an employee who is a “covered employee” within
the meaning of Section 162(m) of the Code.

 

- 2 -

--------------------------------------------------------------------------------

“Disability” means, unless otherwise provided by the Committee in the
Participant’s Award Agreement, a disability which renders the Participant
incapable of performing all of his or her material duties for a period of at
least 180 consecutive or non-consecutive days during any consecutive
twelve-month period.

“Dividend Equivalent Right” means a right awarded under Section 9 of the Plan to
receive (or have credited) the equivalent value of dividends paid on Shares.

“Effective Date” means the date described in Section 2.

“Eligible Person” means a key employee, director, Trustee, officer, advisor,
consultant or other full or part-time personnel of the Company and its
Subsidiaries or other person expected to provide significant services (of a type
expressly approved by the Committee as covered services for these purposes) to
the Company or its Subsidiaries. The Committee may provide that employees of the
Company’s affiliates may be Eligible Persons, and may make such arrangements
with the foregoing entities as it may consider appropriate, in light of tax and
other considerations, in the case of grants directly or indirectly to such
employees.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Exercise Price” means the price per Share, determined by the Board or the
Committee, at which an Option or Share Appreciation Right, as applicable, may be
exercised, which shall not be less than 100% of the Fair Market Value of a Share
on the day the Option or Stock Appreciation Right, as applicable, is granted.

“Fair Market Value” per Share as of a particular date means (i) if Shares are
then listed on a national stock exchange, the closing sales price per Share on
the exchange for the last preceding date on which there was a sale of Shares on
such exchange, as determined by the Committee, (ii) if Shares are not then
listed on a national stock exchange but are then traded on an over-the-counter
market, the average of the closing bid and asked prices for the Shares in such
over-the-counter market for the last preceding date on which there was a sale of
such Shares in such market, as determined by the Committee, or (iii) if Shares
are not then listed on a national stock exchange or traded on an
over-the-counter market, such value as the Committee in its discretion may in
good faith determine; provided that, where the Shares are so listed or traded,
the Committee may make such discretionary determinations where the Shares have
not been traded for 10 trading days.

“Grantee” means an Eligible Person granted Restricted Shares, Restricted Share
Units, Dividend Equivalent Rights or such other equity-based Awards as may be
granted pursuant to Section 10.

“Incentive Share Option” means an “incentive stock option” within the meaning of
Section 422(b) of the Code.

“Non-Qualified Share Option” means an Option which is not an Incentive Share
Option.

“Option” means the right to purchase, at a price and for the term fixed by the
Committee in accordance with the Plan, and subject to such other limitations and
restrictions in the Plan and the applicable Award Agreement, a number of Shares
determined by the Committee.

“Optionee” means an Eligible Person to whom an Option or Share Appreciation
Right is granted, or the Successors of the Optionee, as the context so requires.

“Participant” means a Grantee or Optionee.

 

- 3 -

--------------------------------------------------------------------------------

“Performance Criteria” means the criteria that the Committee selects for
purposes of establishing the Performance Goal or Performance Goals that will
apply to a Qualified Performance-Based Award for a Participant for a Performance
Cycle. The Performance Criteria (which shall be applicable to the organizational
level specified by the Committee, including, but not limited to, the Company or
a unit, division, group, or Subsidiary of the Company) that will be used to
establish Performance Goals are limited to one or more of the following:
earnings before interest, taxes, depreciation and amortization, net income
(loss) (either before or after interest, taxes, depreciation and/or
amortization), changes in the market price of the Shares, economic value-added,
funds from operations or similar measure, sales or revenue, acquisitions or
strategic transactions, increases in revenue, operating income (loss), cash flow
(including, but not limited to, operating cash flow and free cash flow), return
on capital, assets, equity, or investment, shareholder returns, return on sales,
gross or net profit levels, productivity, expense, margins, operating
efficiency, customer satisfaction, working capital, earnings (loss) per share,
rent growth, objectively determinable expense management, capital deployment,
development milestones, dividend coverage, and sales or market shares, any of
which may be measured either in absolute terms, or on an incremental basis, on a
per share basis, or based on results compared to results of a peer group.

“Performance Cycle” means one or more periods of time, which may be of varying
and overlapping durations, as the Committee may select, over which the
attainment of one or more Performance Criteria will be measured for the purpose
of determining a Participant’s right to and the payment of a performance-based
Award.

“Performance Goals” means, for a Performance Cycle, the specific goals
established in writing by the Committee for a Performance Cycle, which (i) must
be based upon the Performance Criteria for any Qualified Performance-Based
Award, and (ii) may be based on the Performance Criteria or any other
performance objectives, as determined by the Committee, for Awards that are not
Qualified Performance-Based Awards.

“Plan” means the Company’s 2013 Equity Incentive Plan, as set forth herein and
as the same may from time to time be amended.

“Qualified Performance-Based Award” has the meaning set forth in Section 11.2 of
the Plan.

“Restricted Shares” means an award of Shares that are subject to restrictions
hereunder. For purposes of Section 4.2 only, Restricted Share shall also mean
any Restricted Share granted under the 2004 Plan and outstanding on the
Effective Date.

“Restricted Share Unit” means a right, pursuant to the Plan, of the Grantee to
payment of the Restricted Share Unit Value.

“Restricted Share Unit Value,” per Restricted Share Unit, means the Fair Market
Value of a Share of Common Shares, 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.

“Restricted Share Unit Vesting Date” means the date determined under
Section 8.4(c)(i).

“Retirement” means, unless otherwise provided by the Committee in the
Participant’s Award Agreement, the Termination of Service (other than for Cause)
of a Participant on or after the Participant’s attainment of age 65 or on or
after the Participant’s attainment of age 55 with five consecutive years of
service with the Company and or its Subsidiaries or its affiliates.

 

- 4 -

--------------------------------------------------------------------------------

“Section 409A” means Section 409A of the Code and the regulations and other
guidance promulgated thereunder.

“Securities Act” means the Securities Act of 1933, as amended.

“Settlement Date” means the date determined under Section 8.4(c)(i).

“Shares” means shares of beneficial interest of the Company.

“Share Appreciation Right” means an Award, pursuant to the Plan, entitling the
Optionee to receive for the term fixed by the Committee in accordance with the
Plan, and subject to such other limitations and restrictions in the Plan and the
applicable Award Agreement, a combination of Shares and cash, or, in the
discretion of the Committee, either Shares or solely in cash, with an aggregate
Fair Market Value (or, to the extent of payment in cash, in an amount) equal to
the excess of the Fair Market Value of the Shares with respect to which the
Share Appreciation Right is being exercised over the aggregate Exercise Price,
as determined as of the day the Share Appreciation Right is exercised.

“Specified Employee” has the meaning ascribed thereto in Section 409A, provided,
however, that, as permitted in such final regulations, the Company’s Specified
Employees and its application of the six-month delay rule of Code
Section 409A(a)(2)(B)(i) shall be determined in accordance with rules adopted by
the Board or the Committee, which shall be applied consistently with respect to
all nonqualified deferred compensation arrangements of the Company, including
this Plan.

“Subsidiary” means any corporation (other than the Company) that is a
“subsidiary corporation” with respect to the Company under Section 424(f) of the
Code. In the event the Company becomes a subsidiary of another company, the
provisions hereof applicable to subsidiaries shall, unless otherwise determined
by the Committee, also be applicable to any company that is a “parent
corporation” with respect to the Company under Section 424(e) of the Code.

“Successor of the Optionee” means the legal representative of the estate of a
deceased Optionee or the person or persons who shall acquire the right to
exercise an Option or Share Appreciation Right, as applicable, by bequest or
inheritance or by reason of the death of the Optionee.

“Termination of Service” means a Participant’s termination of employment or
other service, as applicable, with the Company and its Subsidiaries.

“Trustee” means a non-employee trustee of the Company or its Subsidiaries.

 

2. EFFECTIVE DATE AND TERMINATION OF PLAN

The effective date (the “Effective Date”) of the Plan is the date on which it is
approved by the requisite percentage of the holders of the Common Shares of the
Company. The Plan shall terminate on, and no Award shall be granted hereunder on
or after, the 10-year anniversary of the earlier of the Effective Date;
provided, however, that the Board may at any time prior to that date terminate
the Plan. Following the Effective Date, no further awards shall be granted under
the 2004 Plan. Outstanding grants under the 2004 Plan shall continue in effect
according to their terms as of the date immediately prior to Effective Date
(subject to such amendments as the Committee may determine consistent with the
2004 Plan).

 

- 5 -

--------------------------------------------------------------------------------

3. ADMINISTRATION OF PLAN

3.1. The Plan shall be administered by the Committee appointed by the Board. The
Committee, upon and after such time as it is covered in Section 16 of the
Exchange Act, shall consist of at least two individuals each of whom shall be a
“nonemployee director” as defined in Rule 16b-3 as promulgated by the Securities
and Exchange Commission (“Rule 16b-3”) under the Exchange Act and shall, at such
times as the Company is subject to Section 162(m) of the Code (to the extent
relief from the limitation of Section 162(m) of the Code is sought with respect
to Awards), qualify as “outside directors” for purposes of Section 162(m) of the
Code; provided that no action taken by the Committee (including without
limitation grants) shall be invalidated because any or all of the members of the
Committee fails to satisfy the foregoing requirements of this sentence. The acts
of a majority of the members present at any meeting of the Committee at which a
quorum is present, or acts approved in writing by a majority of the entire
Committee, shall be the acts of the Committee for purposes of the Plan. If and
to the extent applicable, no member of the Committee may act as to matters under
the Plan specifically relating to such member. Notwithstanding the other
foregoing provisions of this Section 3.1, any Award under the Plan to a person
who is a member of the Committee shall be made and administered by the Board. If
no Committee is designated by the Board to act for these purposes, the Board
shall have the rights and responsibilities of the Committee hereunder and under
the Award Agreements.

3.2. Subject to the provisions of the Plan, the Committee shall in its
discretion as reflected by the terms of the Award Agreements or otherwise
(i) authorize the granting of Awards to Eligible Persons; (ii) determine the
eligibility of Eligible Persons to receive an Award; (iii) determine the number
of Shares to be covered under any Award Agreement, considering the position and
responsibilities of the Eligible Persons, the nature and value to the Company of
the Eligible Person’s present and potential contribution to the success of the
Company whether directly or through its Subsidiaries and such other factors as
the Committee may deem relevant; (iv) approve the form of Award Agreement;
(v) determine the terms applicable to each Award, which may differ among
individual Awards and Participants; (vi) accelerate at any time the
exercisability or vesting of all or any portion of any Award; (vii) subject to
the provisions of Section 5.3(a) or 6.3(a), as applicable, extend at any time
the period in which Options or Share Appreciation Rights may be exercised;
(viii) determine the extent to which the transferability of Shares issued or
transferred pursuant to an Award is restricted; (ix) interpret the terms and
provisions of the Plan and any Award; (x) make all determinations it deems
advisable for the administration of the Plan; (xi) decide all disputes arising
in connection with the Plan; and (xii) otherwise supervise the administration of
the Plan.

3.3. The Award Agreement shall contain such other terms, provisions and
conditions not inconsistent herewith as shall be determined by the Committee. In
the event that any Award Agreement or other agreement hereunder provides
(without regard to this sentence) for the obligation of the Company or any
affiliate thereof to purchase or repurchase Shares from a Participant or any
other person, then, notwithstanding the provisions of the Award Agreement or
such other agreement, such obligation shall not apply to the extent that the
purchase or repurchase would not be permitted under governing state law. The
Participant shall take whatever additional actions and execute whatever
additional documents the Committee may in its reasonable judgment deem necessary
or advisable in order to carry out or effect one or more of the obligations or
restrictions imposed on the Participant pursuant to the express provisions of
the Plan and the Award Agreement.

 

- 6 -

--------------------------------------------------------------------------------

4. SHARES AND UNITS SUBJECT TO THE PLAN

4.1. If this Plan is approved, 5 million Shares, plus any Shares returned to the
2004 Plan, as described in Section 4.2, will become available for future grants
under this Plan, subject to adjustments as provided in Section 15, of which
5,000,000 Shares can be issued as Incentive Share Options. Shares distributed
under the Plan may be treasury Shares or authorized but unissued Shares.

4.2. Any Shares that have been granted as Restricted Shares or that have been
reserved for distribution in payment for Options, Share Appreciation Rights,
Restricted Share Units or other equity-based Awards will be subtracted from the
Plan Share reserve as of the date of grant, but may be added back to such
reserve in accordance with this Section 4.2:

(a) Any Shares with respect to Awards that are later cancelled, expire, are
forfeited or lapse for any reason will again be made the subject of Awards under
the Plan.

(b) If any Restricted Share Units, Dividend Equivalent Rights or other
equity-based Awards under Section 10 are paid in cash (other than Stock
Appreciation Rights), then the underlying Shares will again be made the subject
of Awards under the Plan.

(c) Awards granted in substitution, assumption, continuation or adjustment of
outstanding Awards pursuant to Section 15 will not count against the number of
Shares remaining available for issuance under the Plan.

(d) Subject to applicable law, stock exchange rules and plan provisions, shares
available under a shareholder-approved plan of an entity acquired by the Company
(as adjusted) may be issued under the Plan pursuant to Awards granted to
individuals who were not employees of the Company immediately before such
acquisition and will not count against the number of Shares remaining available
for issuance under the Plan.

(e) Shares subject to Dividend Equivalent Rights, other than Dividend Equivalent
Rights based directly on the dividends payable with respect to Shares subject to
Options or Share Appreciation Rights, or the dividends payable on a number of
Shares corresponding to the number of Restricted Share Units awarded, shall be
subject to the limitation of Section 4.1.

4.3. The certificates for Shares issued hereunder may include any legend which
the Committee deems appropriate to reflect any rights of first refusal or other
restrictions on transfer hereunder or under the Award Agreement, or as the
Committee may otherwise deem appropriate.

 

5. PROVISIONS APPLICABLE TO SHARE OPTIONS

5.1. Grant of Option. Subject to the other terms of the Plan, the Committee
shall, in its discretion as reflected by the terms of the applicable Award
Agreement: (i) determine and designate from time to time those Eligible Persons
to whom Options are to be granted and the number of Shares to be optioned to
each Eligible Person; (ii) determine whether to grant Options intended to be
Incentive Share Options, or to grant Non-Qualified Share Options, or both (to
the extent that any Option does not qualify as an Incentive Share Option, it
shall constitute a separate Non-Qualified Share Option); provided that Incentive
Share Options may only be granted to employees of the Company or its
Subsidiaries; (iii) determine the time or times when and the manner and
condition in which each Option shall be exercisable and the duration of the
exercise period; (iv) accelerate

 

- 7 -

--------------------------------------------------------------------------------

at any time the exercisability or vesting of all or any portion of any Option
pursuant to the Award Agreement at the time of grant or thereafter; and
(v) determine or impose other conditions to the grant or exercise of Options
under the Plan as it may deem appropriate.

5.2. Exercise Price. The Exercise Price shall be determined by the Committee on
the date the Option is granted and reflected in the Award Agreement (as the same
may be amended from time to time) and shall not be less than 100% of the Fair
Market Value of a Share on the day the Option is granted. Subject to the
foregoing, any particular Award Agreement may provide for different Exercise
Prices for specified amounts of Shares subject to the Option. Except as provided
in Section 15, (i) the Exercise Price of an outstanding Option right may not be
reduced, directly or indirectly by cancelation, regrant or otherwise, without
shareholder approval, and (ii) an outstanding Option with an Exercise Price in
excess of the then Fair Market Value may not be cancelled for consideration
payable in cash or equity securities of the Company without shareholder
approval.

5.3. Period of Option and Vesting.

(a) Unless earlier expired, forfeited or otherwise terminated, each Option shall
expire in its entirety upon the 10th anniversary of the date of grant or on such
other date (which may be earlier, but not later) as is set forth in the
applicable Award Agreement (except that, in the case of an individual described
in Section 422(b)(6) of the Code (relating to certain 10% owners) who is granted
an Incentive Share Option, the term of such Option shall be no more than five
years from the date of grant). The Option shall also expire, be forfeited and
terminate at such times and in such circumstances as otherwise provided
hereunder, under the Award Agreement at the time of grant, or as determined
thereafter by the Committee.

(b) Each Option, to the extent that the Optionee has not had a Termination of
Service and the Option has not otherwise lapsed, expired, terminated or been
forfeited, shall first become exercisable according to the terms and conditions
set forth in the Award Agreement at the time of grant or as determined
thereafter by the Committee, which may include Performance Goals. Unless
otherwise provided in the Award Agreement at the time of grant or as determined
thereafter by the Committee, no Option (or portion thereof) shall ever be
exercisable if the Optionee has a Termination of Service before the time at
which such Option (or portion thereof) would otherwise have become exercisable,
and any Option that would otherwise become exercisable after such Termination of
Service shall not become exercisable and shall be forfeited upon such
termination. Notwithstanding the foregoing provisions of this Section 5.3(b),
Options exercisable pursuant to the schedule set forth by the Committee at the
time of grant may be fully or more rapidly exercisable or otherwise vested at
any time in the discretion of the Committee. Upon and after the death of an
Optionee, such Optionee’s Options, if and to the extent otherwise exercisable
hereunder or under the applicable Award Agreement after the Optionee’s death,
may be exercised by the Successors of the Optionee.

5.4. Exercisability Upon and After Termination of Service of Optionee.

(a) Subject to provisions set forth in the Award Agreement at the time of grant
or as determined thereafter by the Committee, in the event the Optionee has a
Termination of Service other than by the Company or its Subsidiaries for Cause,
or other than by reason of death, Retirement or Disability, no exercise of an
Option may occur after the expiration of the three-month period to follow the
termination, or if earlier, the expiration of the term of the Option as provided
under Section 5.3(a); provided that, if

 

- 8 -

--------------------------------------------------------------------------------

the Optionee should die after the Termination of Service, such termination being
for a reason other than Disability or Retirement, but while the Option is still
in effect, the Option (if and to the extent otherwise exercisable by the
Optionee at the time of death) may be exercised until the earlier of (i) one
year from the date of the Termination of Service of the Optionee, or (ii) the
date on which the term of the Option expires in accordance with Section 5.3(a).

(b) Subject to provisions set forth in the Award Agreement at the time of grant
or as determined thereafter by the Committee, in the event the Optionee has a
Termination of Service on account of death or Disability or Retirement, the
Option (if and to the extent otherwise exercisable by the Optionee at the time
of the Termination of Service) may be exercised until the earlier of (i) one
year from the date of the Termination of Service of the Optionee, or (ii) the
date on which the term of the Option expires in accordance with Section 5.3.

(c) Notwithstanding any other provision hereof, unless otherwise provided in the
Award Agreement at the time of grant or determined thereafter by the Committee,
if the Optionee has a Termination of Service by the Company for Cause, the
Optionee’s Options, to the extent then unexercised, shall thereupon cease to be
exercisable and shall be forfeited forthwith.

(d) Any Option that is not exercisable at the time of the Termination of Service
or is not exercised within the applicable time periods described in this
Section 5.4 shall cease to be exercisable and shall be forfeited forthwith.

5.5. Exercise of Options.

(a) Subject to vesting, restrictions on exercisability and other restrictions
provided for hereunder or otherwise imposed in accordance herewith, an Option
may be exercised in whole or in part, and payment in full of the Exercise Price
made, by an Optionee only by written notice (in the form prescribed by the
Committee) to the Company specifying the number of Shares to be purchased.

(b) Without limiting the scope of the Committee’s discretion hereunder, the
Committee may impose such other restrictions on the exercise of Incentive Share
Options (whether or not in the nature of the foregoing restrictions) as it may
deem necessary or appropriate.

5.6. Payment.

(a) The Exercise Price shall be paid in full upon the exercise of the Option.
Payment must be made by one of the following methods:

(i) Cash, a certified or bank cashier’s check, or wire transfer;

(ii) if approved by the Committee in its discretion, Shares of previously owned
Common Shares, which are not then subject to restrictions under the Plan or the
2004 Plan, having an aggregate Fair Market Value on the date of exercise equal
to the aggregate Option Price;

(iii) if approved by the Committee in its discretion, by a “net exercise”
arrangement pursuant to which the Company will reduce the number of Shares
issued upon exercise by the largest whole number of Shares with a Fair Market
Value that does not exceed the aggregate Exercise Price; provided, however, that
the Company shall accept a cash or other payment from the Optionee to the

 

- 9 -

--------------------------------------------------------------------------------

extent of any remaining balance of the aggregate Exercise Price not satisfied by
such reduction in the number of whole Shares to be issued; provided further,
however, that Shares will no longer be outstanding under an Option and will not
be exercisable thereafter to the extent that Shares are used to pay the Exercise
Price pursuant to the “net exercise”; or

(iv) by any combination of such methods of payment or any other method
acceptable to the Committee in its discretion.

(b) The Committee may provide that no Option may be exercised with respect to
any fractional Share. Any fractional Shares resulting from an Optionee’s
exercise that is accepted by the Company shall in the discretion of the
Committee be paid in cash.

5.7. Exercise for Cash. The Committee, in its discretion, may also permit the
Optionee to elect to exercise an Option by receiving a combination of Shares and
cash, or, in the discretion of the Committee, either Shares or solely in cash,
with an aggregate Fair Market Value (or, to the extent of payment in cash, in an
amount) equal to the excess of the Fair Market Value of the Shares with respect
to which the Option is being exercised over the aggregate Exercise Price, as
determined as of the day the Option is exercised.

5.8. Exercise by Successors. An Option may be exercised, and payment in full of
the aggregate Exercise Price made, by the Successors of the Optionee only by
written notice (in the form prescribed by the Committee) to the Company
specifying the number of Shares to be purchased. Such notice shall state that
the aggregate Exercise Price will be paid in full, or that the Option will be
exercised as otherwise provided hereunder, in the discretion of the Company or
the Committee, if and as applicable.

5.9. Nontransferability of Option. Each Option granted under the Plan shall be
nontransferable by the Optionee except by will or the laws of descent and
distribution of the state wherein the Optionee is domiciled at the time of his
death; provided, however, that the Committee may permit other transfers, where
the Committee concludes that such transferability (i) does not result in
accelerated U.S. federal income taxation, (ii) does not cause any Option
intended to be an Incentive Share Option to fail to be described in
Section 422(b) of the Code, and (iii) is otherwise appropriate and desirable.

5.10. Deferral. The Committee may establish a program (taking into account,
without limitation, the possible application of Section 409A of the Code, as the
Committee may deem appropriate) under which Participants will have Restricted
Share Units subject to Section 8 credited upon their exercise of Options, rather
than receiving Shares at that time.

5.11. Certain Incentive Share Option Provisions.

(a) The aggregate Fair Market Value, determined as of the date an Option is
granted, of the Common Shares for which any Optionee may be awarded Incentive
Share Options which are first exercisable by the Optionee during any calendar
year under the Plan (or any other stock option plan required to be taken into
account under Section 422(d) of the Code) shall not exceed $100,000.

(b) If Shares acquired upon exercise of an Incentive Share Option are disposed
of in a disqualifying disposition within the meaning of Section 422 of the Code
by an Optionee prior to the expiration of either two years from the date of
grant of such Option or one year from the transfer of Shares to the Optionee
pursuant to the exercise of such Option, or in any other disqualifying
disposition within the meaning of Section 422 of the Code, such Optionee shall
notify the Company in writing as

 

- 10 -

--------------------------------------------------------------------------------

soon as practicable thereafter of the date and terms of such disposition and, if
the Company (or any affiliate thereof) thereupon has a tax-withholding
obligation, shall pay to the Company (or such affiliate) an amount equal to any
withholding tax the Company (or affiliate) is required to pay as a result of the
disqualifying disposition.

(c) The Exercise Price with respect to each Incentive Share Option shall not be
less than 100%, or 110% in the case of an individual described in
Section 422(b)(6) of the Code (relating to certain 10% owners), of the Fair
Market Value of a Share on the day the Option is granted. In the case of an
individual described in Section 422(b)(6) of the Code who is granted an
Incentive Share Option, the term of such Option shall be no more than five years
from the date of grant.

 

6. PROVISIONS APPLICABLE TO SHARE APPRECIATION RIGHTS

6.1. Grant of Share Appreciation Rights. Subject to the other terms of the Plan,
the Committee shall, in its discretion as reflected by the terms of the
applicable Award Agreement: (i) determine and designate from time to time those
Eligible Persons to whom Share Appreciation Rights are to be granted and the
number of Shares subject to such Share Appreciation Rights for each Eligible
Person; (ii) determine the time or times when and the manner and condition in
which each Share Appreciation Right shall be exercisable and the duration of the
exercise period; (iii) accelerate at any time the exercisability or vesting of
all or any portion of any Share Appreciation Right pursuant to the Award
Agreement at the time of grant or thereafter; and (iv) determine or impose other
conditions to the grant or exercise of Share Appreciation Rights under the Plan
as it may deem appropriate. Share Appreciation Rights may be granted by the
Administrator independently of any Option granted pursuant to Section 5 of the
Plan.

6.2. Exercise Price of Share Appreciation Rights. The Exercise Price shall be
determined by the Committee on the date the Share Appreciation Right is granted
and reflected in the Award Agreement (as the same may be amended from time to
time) and shall not be less than 100% of the Fair Market Value of a Share on the
day the Share Appreciation Right is granted. Subject to the foregoing, any
particular Award Agreement may provide for different Exercise Prices for
specified amounts of Shares subject to the Share Appreciation Right. Except as
provided in Section 15, (i) the Exercise Price of an outstanding Share
Appreciation Right may not be reduced, directly or indirectly by cancelation,
regrant or otherwise, without shareholder approval, and (ii) an outstanding
Option with an Exercise Price in excess of the then Fair Market Value may not be
cancelled for consideration payable in cash or equity securities of the Company
without shareholder approval.

6.3. Period of Share Appreciation Right and Vesting.

(a) Unless earlier expired, forfeited or otherwise terminated, each Share
Appreciation Right shall expire in its entirety upon the 10th anniversary of the
date of grant or on such other date (which may be earlier, but not later) as is
set forth in the applicable Award Agreement at the time of grant or as
determined thereafter by the Committee. The Share Appreciation Right shall also
expire, be forfeited and terminate at such times and in such circumstances as
otherwise provided hereunder, under the Award Agreement at the time of grant, or
as determined thereafter by the Committee.

(b) Each Share Appreciation Right, to the extent that the Optionee has not had a
Termination of Service and the Share Appreciation Right has not otherwise
lapsed, expired, terminated or been forfeited, shall first become exercisable
according to the terms and conditions set forth in the Award Agreement at the
time of grant or as determined thereafter by the Committee, which may include
Performance Goals.

 

- 11 -

--------------------------------------------------------------------------------

Unless otherwise provided in the Award Agreement at the time of grant or
determined thereafter by the Committee, no Share Appreciation Right (or portion
thereof) shall ever be exercisable if the Share Appreciation Right has a
Termination of Service before the time at which such Share Appreciation Right
(or portion thereof) would otherwise have become exercisable, and any Share
Appreciation Right that would otherwise become exercisable after such
Termination of Service shall not become exercisable and shall be forfeited upon
such termination. Notwithstanding the foregoing provisions of this
Section 6.4(b), Share Appreciation Rights exercisable pursuant to the schedule
set forth by the Committee at the time of grant may be fully or more rapidly
exercisable or otherwise vested at any time in the discretion of the Committee.
Upon and after the death of an Optionee, such Optionee’s Share Appreciation
Right, if and to the extent otherwise exercisable hereunder or under the
applicable Award Agreement after the Optionee’s death, may be exercised by the
Successors of the Optionee.

6.4. Exercisability of Share Appreciation Rights Upon and After Termination of
Service of Optionee.

(a) Subject to provisions set forth in the Award Agreement at the time of grant
or as determined thereafter by the Committee, in the event the Optionee has a
Termination of Service other than by the Company or its Subsidiaries for Cause,
no exercise of a Share Appreciation Right may occur after the expiration of the
three-month period to follow the termination, or if earlier, the expiration of
the term of the Share Appreciation Right as provided under Section 6.3(a).

(b) Notwithstanding any other provision hereof, unless otherwise provided in the
Award Agreement at the time of grant or determined thereafter by the Committee,
if the Optionee has a Termination of Service by the Company for Cause, the
Optionee’s Share Appreciation Rights, to the extent then unexercised, shall
thereupon cease to be exercisable and shall be forfeited forthwith.

(c) Any Share Appreciation Right that is not exercisable at the time of the
Termination of Service or is not exercised within the applicable time periods
described in this Section 6.4 shall cease to be exercisable and shall be
forfeited forthwith.

6.5. Exercise of Share Appreciation Rights. Subject to vesting, restrictions on
exercisability and other restrictions provided for hereunder or otherwise
imposed in accordance herewith, a Share Appreciation Right may be exercised in
whole or in part by an Optionee only by written notice (in the form prescribed
by the Committee) to the Company specifying the number of Shares underlying the
Share Appreciation Right that will be exercised.

6.6. Exercise by Successors. A Share Appreciation Right may be exercised, and
payment in full of the aggregate Exercise Price made, by the Successors of the
Optionee only by written notice (in the form prescribed by the Committee) to the
Company specifying the number of Shares to be purchased.

6.7. Nontransferability of Share Appreciation Right. Each Share Appreciation
Right granted under the Plan shall be nontransferable by the Optionee except by
will or the laws of descent and distribution of the state wherein the Optionee
is domiciled at the time of his death; provided, however, that the Committee may
permit other transfers, where the Committee concludes that such transferability
does not result in accelerated U.S. federal income taxation, and is otherwise
appropriate and desirable.

6.8. Deferral. The Committee may establish a program (taking into account,
without limitation, the possible application of Section 409A of the Code, as the
Committee may deem appropriate) under which Participants will have Restricted
Share Units subject to Section 8 credited upon their exercise of Share
Appreciation Rights, rather than receiving Shares or a payment in cash at that
time.

 

- 12 -

--------------------------------------------------------------------------------

7. PROVISIONS APPLICABLE TO RESTRICTED SHARES

7.1. Grant of Restricted Shares.

(a) In connection with the grant of Restricted Shares, whether or not
Performance Goals apply thereto, the Committee shall establish one or more
vesting periods with respect to the Restricted Shares granted, the length of
which shall be determined in the discretion of the Committee. Subject to the
provisions of this Section 7, the applicable Award Agreement, the other
provisions of the Plan and achievement of Performance Goals (if applicable),
restrictions on Restricted Shares shall lapse if the Grantee satisfies all
applicable employment or other service requirements through the end of the
applicable vesting period.

(b) Subject to the other terms of the Plan, the Committee may, in its discretion
as reflected by the terms of the applicable Award Agreement: (i) authorize the
granting of Restricted Shares to Eligible Persons; (ii) provide a specified
purchase price for the Restricted Shares (whether or not the payment of a
purchase price is required by any state law applicable to the Company, provided
that no Shares shall be issued for consideration which is less than is required
by any state law applicable); (iii) determine the restrictions applicable to
Restricted Shares; (iv) accelerate at any time vesting of all or any portion of
any Restricted Share pursuant to the Award Agreement at the time of grant or
thereafter; and (v) determine or impose other conditions, including any
applicable Performance Goals, to the grant of Restricted Shares under the Plan
as it may deem appropriate.

7.2. Certificates.

(a) Unless otherwise provided by the Committee, each Grantee of Restricted
Shares shall be issued a share certificate in respect of Restricted Shares
awarded under the Plan. Each such certificate shall be registered in the name of
the Grantee. Without limiting the generality of Section 4.4, the certificates
for Restricted Shares issued hereunder may include any legend which the
Committee deems appropriate to reflect any restrictions on transfer hereunder or
under the Award Agreement, or as the Committee may otherwise deem appropriate,
and, without limiting the generality of the foregoing, shall bear a legend
referring to the terms, conditions, and restrictions applicable to such Award,
substantially in the following form:

THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY ARE
SUBJECT TO THE TERMS AND CONDITIONS (INCLUDING FORFEITURE) OF THE CHAMBERS
STREET PROPERTIES 2013 EQUITY INCENTIVE PLAN AND AN AWARD AGREEMENT ENTERED INTO
BETWEEN THE REGISTERED OWNER AND CHAMBERS STREET PROPERTIES. COPIES OF SUCH PLAN
AND AWARD AGREEMENT ARE ON FILE IN THE OFFICES OF CHAMBERS STREET PROPERTIES, AT
47 HULFISH STREET, SUITE 210, PRINCETON, NJ 08542.

(b) The Committee shall require that any share certificates evidencing such
Shares be held in custody by the Company until the restrictions hereunder shall
have lapsed, and that, as a condition of any Award of Restricted Shares, the
Grantee shall have delivered to the Company a share power, endorsed in blank,
relating to the share covered by such Award. If and when such restrictions so
lapse, the share certificates shall be delivered by the Company to the Grantee
or his or her designee as provided in Section 7.3 (and the share power shall be
so delivered or shall be discarded).

 

- 13 -

--------------------------------------------------------------------------------

7.3. Restrictions and Conditions. Unless otherwise provided by the Committee,
the Restricted Shares awarded pursuant to the Plan shall be subject to the
following restrictions and conditions:

(a) Subject to the provisions of the Plan and the Award Agreements, during a
period commencing with the date of such Award and ending on the date the period
of forfeiture with respect to such Shares lapses, the Grantee shall not be
permitted voluntarily or involuntarily to sell, transfer, pledge, anticipate,
alienate, encumber or assign Restricted Shares awarded under the Plan (or have
such Shares attached or garnished). Subject to the provisions of the Award
Agreements and clauses (c) and (d) below, the period of forfeiture with respect
to Shares granted hereunder shall lapse as provided in the applicable Award
Agreement. Notwithstanding the foregoing, unless otherwise expressly provided by
the Committee, the period of forfeiture with respect to such Shares shall only
lapse as to whole Shares.

(b) Except as provided in the foregoing clause (a), below in this clause (b), or
in Section 15, or otherwise provided in the Award Agreement, the Grantee shall
have, in respect of the Restricted Shares, all of the rights of a shareholder of
the Company, including the right to vote the Shares, and, except as provided
below, the right to receive any cash dividends. Certificates for Shares (not
subject to restrictions hereunder) shall be delivered to the Grantee or his or
her designee promptly after, and only after, the period of forfeiture shall
lapse without forfeiture in respect of such Restricted Shares.

(c) Except if otherwise provided in the applicable Award Agreement at the time
of grant or as determined thereafter by the Committee, if the Grantee has a
Termination of Service for any reason, during the applicable period of
forfeiture, then (i) all Shares still subject to restriction shall thereupon,
and with no further action, be forfeited by the Grantee, and (ii) the Company
shall pay to the Grantee as soon as practicable (and in no event more than
30 days) after such termination an amount equal to the lesser of (x) the amount
paid by the Grantee (if any) for such forfeited Restricted Shares as
contemplated by Section 7.1, and (y) the Fair Market Value on the date of
termination of the forfeited Restricted Shares.

 

8. PROVISIONS APPLICABLE TO RESTRICTED SHARE UNITS

8.1. Grant of Restricted Share Units. Subject to the other terms of the Plan,
the Committee shall, in its discretion as reflected by the terms of the
applicable Award Agreement: (i) authorize the granting of Restricted Share Units
to Eligible Persons; (ii) accelerate at any time vesting of all or any portion
of any Restricted Share Unit pursuant to the Award Agreement at the time of
grant or thereafter; and (iii) determine or impose other conditions to the grant
of Restricted Share Units under the Plan as it may deem appropriate, including
whether Performance Goals (as provided for under Section 11) apply thereto.

8.2. Term. The Committee may provide in an Award Agreement that any particular
Restricted Share Unit shall expire at the end of a specified term.

8.3. Vesting. Restricted Share Units shall vest as provided in the applicable
Award Agreement.

8.4. Settlement of Restricted Share Units.

(a) Each vested and outstanding Restricted Share Unit shall be settled by the
transfer to the Grantee of one Share; provided that, at the time of grant or
thereafter, the Committee may provide that a

 

- 14 -

--------------------------------------------------------------------------------

Restricted Share Unit may be settled in (i) cash at the applicable Restricted
Share Unit Value, (ii) cash or by transfer of Shares as elected by the Grantee
in accordance with procedures established by the Committee or (iii) cash or by
transfer of Shares as elected by the Company.

(b) Restricted Share Units shall be settled with a single payment or transfer by
the Company on the Settlement Date.

(c) Unless otherwise provided in the applicable Award Agreement, the “Settlement
Date” with respect to a Restricted Share Unit is as soon as practicable after
(but not later than the first day of the month to follow) the Restricted Share
Unit Vesting Date. The “Restricted Share Unit Vesting Date” is the date on which
the Restricted Share Unit vests.

8.5. Other Restricted Share Unit Provisions.

(a) Rights to payments with respect to Restricted Share Units granted under the
Plan shall not be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, attachment, garnishment, levy,
execution, or other legal or equitable process, either voluntary or involuntary;
and any attempt to anticipate, alienate, sell, transfer, assign, pledge,
encumber, attach or garnish, or levy or execute on any right to payments or
other benefits payable hereunder, shall be void.

(b) A Grantee may designate in writing, on forms to be prescribed by the
Committee, a beneficiary or beneficiaries to receive any payments payable after
his or her death and may amend or revoke such designation at any time. If no
beneficiary designation is in effect at the time of a Grantee’s death, payments
hereunder shall be made to the Grantee’s estate. If a Grantee with a vested
Restricted Share Unit dies, such Restricted Share Unit shall be settled and the
Restricted Share Unit Value in respect of such Restricted Share Units paid shall
be accelerated and paid.

(c) The Committee may establish a program (taking into account, without
limitation, the possible application of Section 409A of the Code, as the
Committee may deem appropriate) under which distributions with respect to
Restricted Share Units may be deferred. Such program may include, without
limitation, provisions for the crediting of earnings and losses on unpaid
amounts, and, if permitted by the Committee, provisions under which Participants
may select from among hypothetical investment alternatives for such deferred
amounts in accordance with procedures established by the Committee.

(d) Notwithstanding any other provision of this Section 8, any fractional
Restricted Share Unit will be paid out in cash at the Restricted Share Unit
Value as of the Restricted Share Unit Vesting Date.

(e) No Restricted Share Unit shall be construed to give any Grantee any rights
with respect to Shares or any ownership interest in the Company. Except as may
be provided in accordance with Section 9, no provision of the Plan shall be
interpreted to confer upon any Grantee any voting, dividend or derivative or
other similar rights with respect to any Restricted Share Unit.

 

9. PROVISIONS APPLICABLE TO DIVIDEND EQUIVALENT RIGHTS

9.1. Grant of Dividend Equivalent Rights. Subject to the other terms of the
Plan, the Committee may, in its discretion, authorize the granting of Dividend
Equivalent Rights to Eligible Persons based on the regular cash dividends
declared on Common Shares, to be credited as of the dividend payment dates,
during the period between the date a Dividend Equivalent Right is granted, and
the date such a Dividend Equivalent Right

 

- 15 -

--------------------------------------------------------------------------------

vests or expires, as determined by the Committee. Such Dividend Equivalent
Rights shall be converted to cash or additional Shares by such formula and at
such time and subject to such limitation as may be determined by the Committee.
With respect to Dividend Equivalent Rights granted with respect to Options or
Share Appreciation Rights, such Dividend Equivalent Rights shall be payable
regardless of whether such Option or Share Appreciation Right, as applicable, is
exercised. If a Dividend Equivalent Right is granted in respect of another Award
hereunder, then, unless otherwise stated in the Award Agreement, in no event
shall the Dividend Equivalent Right be in effect for a period beyond the time
during which the applicable portion of the underlying Award is in effect.

9.2. Certain Terms.

(a) The term of a Dividend Equivalent Right shall be set by the Committee in its
discretion.

(b) Unless otherwise determined by the Committee, except as contemplated by
Section 9.4, a Dividend Equivalent Right is payable only while the Participant
is an Eligible Person.

(c) Payment of the amount determined in accordance with Section 9.1 shall be in
cash, in Common Shares or a combination of the both, as determined by the
Committee.

(d) The Committee may impose such employment-related conditions on the grant of
a Dividend Equivalent Right as it deems appropriate in its discretion.

(e) A Dividend Equivalent Right granted with respect to a Qualified
Performance-Based Award may not be payable unless and until the Performance
Goals have been achieved.

9.3. Other Types of Dividend Equivalent Rights. The Committee may establish a
program under which Dividend Equivalent Rights of a type whether or not
described in the foregoing provisions of this Section 9 may be granted to
Participants. For example, and without limitation, the Committee may grant a
dividend equivalent right with respect to a Restricted Share Unit, which right
would consist of the right (subject to Section 9.4) to receive a cash payment in
an amount equal to the dividend distributions paid on a Share from time to time.

9.4. Deferral. The Committee may establish a program (taking into account,
without limitation, the possible application of Section 409A of the Code, as the
Committee may deem appropriate) under which Participants (i) will have
Restricted Share Units credited, upon the granting of Dividend Equivalent
Rights, or (ii) will have payments with respect to Dividend Equivalent Rights
deferred. In the case of the foregoing clause (ii), such program may include,
without limitation, provisions for the crediting of earnings and losses on
unpaid amounts, and, if permitted by the Committee, provisions under which
Participants may select from among hypothetical investment alternatives for such
deferred amounts in accordance with procedures established by the Committee.

 

10. OTHER EQUITY-BASED AWARDS

The Board shall have the right to grant other Awards based upon the Common
Shares having such terms and conditions as the Board may determine.

 

- 16 -

--------------------------------------------------------------------------------

11. PERFORMANCE GOALS

11.1. The Committee, in its discretion, (i) may establish one or more
Performance Goals as a precondition to the issuance or vesting of Awards, and
(ii) may provide, in connection with the establishment of the Performance Goals,
for predetermined Awards to those Participants (who continue to meet all
applicable eligibility requirements) with respect to whom the applicable
Performance Goals are satisfied. Except with respect to Qualified
Performance-Based Awards, the Committee may determine that satisfaction of the
Performance Goals will be in its discretion.

11.2. Performance-Based Awards to Covered 162(m) Employees.

(a) In the case of any grant to a Covered 162(m) Employee intended to qualify as
performance-based compensation under Section 162(m) of the Code (including, for
these purposes, grants constituting performance-based compensation, as
determined without regard to certain shareholder approval and disclosure
requirements by virtue of an applicable transition rule) (a “Qualified
Performance-Based Award”), the Committee shall define in an objective fashion
the manner of calculating the Performance Criteria it selects to use for any
Performance Cycle and this Plan shall be interpreted and operated consistent
with that intention. Depending on the Performance Criteria used to establish
such Performance Goals, the Performance Goals may be expressed in terms of
overall Company performance or the performance of a division, business unit, or
Participant.

(b) The Committee may designate any Award as a Qualified Performance-Based Award
upon grant, in each case based upon a determination that (i) the Grantee is or
may be a Covered 162(m) Employee with respect to such Award, and (ii) the
Committee wishes such Award to qualify as performance-based compensation under
Section 162(m) of the Code. The provisions of this Section 11.2 shall apply to
all such Qualified Performance-Based Awards, notwithstanding any other provision
of this Plan other than Section 15. Notwithstanding anything contained in this
Section 11.2 to the contrary, Options and Share Appreciation Rights need not
satisfy the specific Performance Criteria described in this Section 11.2 in
order to qualify as performance-based compensation under Section 162(m) of the
Code.

(c) Each Qualified Performance-Based Award (other than an Option or Share
Appreciation Right) shall be earned, vested and payable (as applicable) only
upon the achievement of one or more Performance Goals, which shall be based upon
the Performance Criteria, together with the satisfaction of any other
conditions, such as continued employment, as the Committee may determine to be
appropriate; provided that (i) the Committee may provide, either in connection
with the grant thereof or by amendment thereafter, that achievement of such
Performance Goals will be waived upon the death or Disability of the Grantee,
and (ii) the provisions of Section 15 shall apply notwithstanding this sentence.

(d) The Committee, in its discretion, may adjust or modify the calculation of
Performance Goals for such Performance Cycle in order to prevent the dilution or
enlargement of the rights of a Participant (i) in the event of, or in
anticipation of, a Change in Control or any unusual or extraordinary corporate
item, transaction, event or development, (ii) in recognition of, or in
anticipation of, any other unusual or nonrecurring events affecting the Company,
or the financial statements of the Company, or (iii) in response to, or in
anticipation of, changes in applicable laws, regulations, accounting principles,
or business conditions.

 

- 17 -

--------------------------------------------------------------------------------

(e) With respect to each Qualified Performance-Based Award, the Committee shall
select, within the first 90 days of a Performance Cycle (or, if shorter, within
the maximum period allowed under Section 162(m) of the Code) the Performance
Criteria for such grant, and the Performance Goals with respect to each
Performance Criterion (including a threshold level of performance below which no
amount will become payable with respect to such Award). Each Qualified
Performance-Based Award will specify the amount payable, or the formula for
determining the amount payable, upon achievement of the various applicable
performance targets. The Performance Criteria established by the Committee may
be (but need not be) different for each Performance Cycle and different
Performance Goals may be applicable to Qualified Performance-Based Awards to
different Covered 162(m) Employees.

(f) Following the completion of a Performance Cycle, the Committee shall meet to
review and certify in writing whether, and to what extent, the Performance Goals
for the Performance Cycle have been achieved and, if so, to calculate and
certify in writing the amount of the Qualified Performance-Based Award earned
for the Performance Cycle. The Committee shall then determine the actual size of
each Covered 162(m) Employee’s Qualified Performance-Based Award, and, in doing
so, may reduce or eliminate the amount of the Qualified Performance-Based Award
for a Covered 162(m) Employee if, in its sole judgment, such reduction or
elimination is appropriate.

(g) The maximum number of Shares payable to any one Covered 162(m) Employee
under the Plan each year is one million Shares (subject to adjustment as
provided in Section 15 hereof) or $10,000,000 in the case of Awards settled in
cash.

 

12. TAX WITHHOLDING

12.1. In General. The Company shall be entitled to withhold from any payments or
deemed payments any amount of tax withholding determined by the Committee to be
required by law. Without limiting the generality of the foregoing, the Committee
may, in its discretion, require the Participant to pay to the Company at such
time as the Committee determines the amount that the Committee deems necessary
to satisfy the Company’s obligation to withhold federal, state or local income
or other taxes incurred by reason of (i) the exercise of any Option or Share
Appreciation Right, (ii) the lapsing of any restrictions applicable to any
Restricted Shares, (iii) the receipt of a distribution in respect of Restricted
Share Units or Dividend Equivalent Rights or (iv) any other applicable
income-recognition event (for example, an election under Section 83(b) of the
Code).

12.2. Share Withholding.

(a) Upon exercise of an Option or Share Appreciation Right, the Optionee may, if
approved by the Committee in its discretion, make a written election to have
Shares then issued withheld by the Company from the Shares otherwise to be
received, or to deliver previously owned Shares, in order to satisfy the minimum
required employer withholding liability for such withholding taxes. In the event
that the Committee permits, and the Optionee makes, such an election, the number
of Shares so withheld or delivered shall have an aggregate Fair Market Value on
the date of exercise sufficient to satisfy the applicable withholding taxes.
Where the exercise of an Option or Share Appreciation Right does not give rise
to an obligation by the Company to withhold federal, state or local income or
other taxes on the date of exercise, but may give rise to such an obligation in
the future, the Committee may, in its discretion, make such arrangements and
impose such requirements as it deems necessary or appropriate.

 

- 18 -

--------------------------------------------------------------------------------

(b) Upon lapsing of restrictions on Restricted Shares (or other
income-recognition event), the Grantee may, if approved by the Committee in its
discretion, make a written election to have Shares withheld by the Company from
the Shares otherwise to be released from restriction, or to deliver previously
owned Shares (not subject to restrictions hereunder), in order to satisfy the
minimum required employer withholding liability for such withholding taxes. In
the event that the Committee permits, and the Grantee makes, such an election,
the number of Shares so withheld or delivered shall have an aggregate Fair
Market Value on the date of the lapsing of restrictions (or other
income-recognition event) sufficient to satisfy the applicable withholding
taxes.

(c) Upon the making of a distribution in respect of Restricted Share Units or
Dividend Equivalent Rights, the Grantee may, if approved by the Committee in its
discretion, make a written election to have amounts (which may include Shares)
withheld by the Company from the distribution otherwise to be made, or to
deliver previously owned Shares (not subject to restrictions hereunder), in
order to satisfy the minimum required employer withholding liability for such
withholding taxes. In the event that the Committee permits, and the Grantee
makes, such an election, any Shares so withheld or delivered shall have an
aggregate Fair Market Value on the date of the distribution (or other
income-recognition event) sufficient to satisfy the applicable withholding
taxes.

(d) Upon the occurrence of any other income-recognition event with respect to an
Award granted under the Plan that occurs upon or concurrently with the issuance
or vesting of, or lapsing of restrictions on, Common Shares, the Grantee may, if
approved by the Committee in its discretion, make a written election to have
Shares withheld by the Company from the Shares otherwise to be issued, vested or
released from restriction, or to deliver previously owned Shares (not subject to
restrictions hereunder), in order to satisfy the minimum required employer
withholding liability for the withholding taxes. In the event that the Committee
permits, and the Grantee makes, such an election, the number of Shares so
withheld or delivered shall have an aggregate Fair Market Value on the date of
such income-recognition event sufficient to satisfy the applicable withholding
taxes.

(e) For purposes of determining the number of Shares to be withheld or delivered
to satisfy the applicable minimum required employer withholding taxes pursuant
to this Section 12.2 of the Plan, the Fair Market Value of the Shares shall be
calculated in the same manner as the Shares are valued for purposes of
determining the amount of withholding taxes due.

12.3. Withholding Required. Notwithstanding anything contained in the Plan or
the Award Agreement to the contrary, the Participant’s satisfaction of any
tax-withholding requirements imposed by the Committee shall be a condition
precedent to the Company’s obligation as may otherwise be provided hereunder to
provide Shares to the Participant and to the release of any restrictions as may
otherwise be provided hereunder, as applicable; and the applicable Option, Share
Appreciation Right, Restricted Share, Restricted Share Units, Dividend
Equivalent Right or other Award shall be forfeited upon the failure of the
Participant to satisfy such requirements with respect to, as applicable, (i) the
exercise of the Option or Share Appreciation Right, (ii) the lapsing of
restrictions on the Restricted Shares (or other income-recognition event),
(iii) distributions in respect of any Restricted Share Unit or Dividend
Equivalent Right or (iv) any other income-recognition event with respect an
Award granted under the Plan.

 

- 19 -

--------------------------------------------------------------------------------

13. REGULATIONS AND APPROVALS

13.1. The obligation of the Company to sell Shares with respect to an Award
granted under the Plan shall be subject to all applicable laws, rules and
regulations, including all applicable federal and state securities laws, and the
obtaining of all such approvals by governmental agencies as may be deemed
necessary or appropriate by the Committee.

13.2. The Committee may make such changes to the Plan as may be necessary or
appropriate to comply with the rules and regulations of any government authority
or to obtain tax benefits applicable to an Award.

13.3. Each grant of Options, Share Appreciation Rights, Restricted Shares,
Restricted Share Units (or issuance of Shares in respect thereof) or Dividend
Equivalent Rights (or issuance of Shares in respect thereof), or other Award
under Section 10 (or issuance of Shares in respect thereof), is subject to the
requirement that, if at any time the Committee determines, in its discretion,
that the listing, registration or qualification of Shares issuable pursuant to
the Plan is required by any securities exchange or under any state or federal
law, or the consent or approval of any governmental regulatory body is necessary
or desirable as a condition of, or in connection with, the issuance of Options,
Share Appreciation Rights, Restricted Shares, Restricted Share Units, Dividend
Equivalent Rights, other Awards or other Shares, no payment shall be made, or
Restricted Share Units or Shares issued or grant of Restricted Shares or other
Award made, in whole or in part, unless listing, registration, qualification,
consent or approval has been effected or obtained free of any conditions in a
manner acceptable to the Committee.

13.4. In the event that the disposition of shares acquired pursuant to the Plan
is not covered by a then current registration statement under the Securities
Act, and is not otherwise exempt from such registration, such Shares shall be
restricted against transfer to the extent required under the Securities Act, and
the Committee may require any individual receiving Shares pursuant to the Plan,
as a condition precedent to receipt of such Shares, to represent to the Company
in writing that such Shares are acquired for investment only and not with a view
to distribution and that such Shares will be disposed of only if registered for
sale under the Securities Act or if there is an available exemption for such
disposition.

13.5. Notwithstanding any other provision of the Plan, the Company shall not be
required to take or permit any action under the Plan or any Award Agreement
which, in the good-faith determination of the Company, would result in a
material risk of a violation by the Company of Section 13(k) of the Exchange
Act.

 

14. INTERPRETATION AND AMENDMENTS; OTHER RULES

The Committee may make such rules and regulations and establish such procedures
for the administration of the Plan as it deems appropriate. Without limiting the
generality of the foregoing, the Committee may (i) determine the extent, if any,
to which Options, Share Appreciation Rights, Restricted Share Units or Shares
(whether or not Restricted Shares) or Dividend Equivalent Rights shall be
forfeited (whether or not such forfeiture is expressly contemplated hereunder);
(ii) interpret the Plan and the Award Agreements hereunder, with such
interpretations to be conclusive and binding on all persons and otherwise
accorded the maximum deference permitted by law; and (iii) take any other
actions and make any other determinations or decisions that it deems necessary
or appropriate in connection with the Plan or the administration or
interpretation thereof. In the event of any dispute or disagreement as to the
interpretation of the Plan or of any rule, regulation or procedure, or as to any
question, right or obligation arising from or related to the Plan, the decision
of the

 

- 20 -

--------------------------------------------------------------------------------

Committee shall be final and binding upon all persons. Unless otherwise
expressly provided hereunder, the Committee, with respect to any grant, may
exercise its discretion hereunder at the time of the Award or thereafter. The
Board may amend the Plan as it shall deem advisable, except that no amendment
may materially and adversely affect a Participant with respect to an Award
previously granted without such Participant’s consent unless such amendments are
required in order to comply with applicable laws; provided, however, that the
Plan may not be amended without shareholder approval in any case in which
amendment in the absence of shareholder approval would cause the Plan to fail to
comply with any applicable legal requirement or applicable exchange or similar
rule. Except as provided in Section 15, (i) the Exercise Price of an outstanding
Option or Share Appreciation Right may not be reduced, directly or indirectly by
cancelation, regrant or otherwise, without shareholder approval, and (ii) an
outstanding Option or Share Appreciation Right with an Exercise Price in excess
of the then Fair Market Value may not be cancelled for consideration payable in
cash or equity securities of the Company without shareholder approval.
Notwithstanding any provision of the Plan to the contrary, in the event that the
Committee determines that any Award may be subject to Section 409A, the
Committee may adopt such amendment to the Plan and the applicable Award
Agreement or adopt other policies and procedures (including amendments, policies
and procedures with retroactive effect), or take any other actions that the
Committee determines are necessary or appropriate, without the consent of the
Participant, to (1) exempt the Award from Section 409A and/or preserve the
intended tax treatment of the benefits provided with respect to the Award or
(2) comply with the requirements of Section 409A.

 

15. CHANGES IN CAPITAL STRUCTURE

15.1. If (i) the Company or its Subsidiaries shall at any time be involved in a
merger, consolidation, dissolution, liquidation, reorganization, exchange of
shares, sale of all or substantially all of the assets or shares of the Company
or its Subsidiaries or a transaction similar thereto, (ii) any share dividend,
share split, reverse share split, share combination, reclassification,
recapitalization or other similar change in the capital structure of the Company
or its Subsidiaries, or any distribution to holders of Common Shares other than
cash dividends, shall occur or (iii) any other event shall occur which in the
judgment of the Committee necessitates action by way of adjusting the terms of
the outstanding Awards, then:

(a) the Committee shall appropriately adjust (i) the maximum aggregate number of
Shares which may be made subject to Options (including Incentive Share Options),
Share Appreciation Rights and Dividend Equivalent Rights under the Plan, the
maximum aggregate number and kind of Restricted Shares that may be granted under
the Plan, and the maximum aggregate number of Restricted Share Units and other
Awards which may be granted under the Plan ; (ii) the maximum number of Options
(including Incentive Share Options), Share Appreciation Rights and Dividend
Equivalent Rights that may be granted to an individual Participant under the
Plan, the maximum number and kind of Restricted Shares that may be granted to an
individual Participant under the Plan, and the maximum number of Restricted
Share Units and other Awards which may be granted to an individual Participant
under the Plan; and (iii) the number and kind of Shares or other securities
subject to any then outstanding Awards under the Plan; and

(b) the Committee may take any such action as in its discretion shall be
necessary to maintain each Participants’ rights hereunder (including under their
Award Agreements) with respect to Options, Share Appreciation Rights, Restricted
Share Units and Dividend Equivalent Rights (and, as appropriate, other Awards
under Section 10), so that they are substantially proportionate to the rights
existing in such Options, Share Appreciation Rights, Restricted Share Units and
Dividend Equivalent Rights (and other Awards under Section 10) prior to such
event, including, without limitation, adjustments in (i) the number of Options,
Share Appreciation Rights, Restricted Share Units and Dividend Equivalent Rights
(and other

 

- 21 -

--------------------------------------------------------------------------------

Awards under Section 10) granted, (ii) the number and kind of shares or other
property to be distributed in respect of Options, Share Appreciation Rights.
Restricted Share Units and Dividend Equivalent Rights (and other Awards under
Section 10 as applicable), (iii) the Exercise Price and Restricted Share Unit
Value, (iv) the repurchase price, if any, per Share subject to each outstanding
Restricted Share, (v) the per-person limits under the Plan, and (vi) Performance
Criteria established in connection with Awards; provided that, in the discretion
of the Committee, the foregoing clause (vi) may also be applied in the case of
any event relating to a Subsidiary if the event would have been covered under
this Section 15.1 had the event related to the Company.

To the extent that such action shall include an increase or decrease in the
number of Shares (or units of other property then available) subject to all
outstanding Awards, the number of Shares (or units) available under Section 4
shall be increased or decreased, as the case may be, proportionately, as may be
determined by the Committee in its discretion.

15.2. Any Shares or other securities distributed to a Grantee with respect to
Restricted Shares or otherwise issued in substitution of Restricted Shares shall
be subject to the restrictions and requirements imposed by Section 7, including
depositing the certificates therefor with the Company together with a share
power and bearing a legend as provided in Section 7.2(a).

15.3. If the Company shall be consolidated or merged with another corporation or
other entity, each Grantee who has received Restricted Shares that is then
subject to restrictions imposed by Section 7.3(a) may be required to deposit
with the successor corporation the certificates, if any, for the shares or
securities or the other property that the Grantee is entitled to receive by
reason of ownership of Restricted Shares in a manner consistent with
Section 7.2(b), and such shares, securities or other property shall become
subject to the restrictions and requirements imposed by Section 7.3(a), and the
certificates therefor or other evidence thereof shall bear a legend similar in
form and substance to the legend set forth in Section 7.2(a).

15.4. If a Change in Control shall occur, then the Committee may, in its sole
discretion, take one or more of the following actions with respect to all or
some outstanding Awards:

(a) Provide that all (or some) outstanding Options and Share Appreciation Rights
that are not exercisable immediately prior to the effective time of the Change
in Control shall (i) become fully or partially exercisable as of the effective
time of the Change in Control or thereafter with respect to any time-based
vesting conditions or restrictions; and/or (ii) all outstanding Options and
Share Appreciation Rights that are not exercisable immediately prior to the
effective time of the Change in Control shall become exercisable as of the
effective time of the Change in Control or thereafter with respect to any
Performance Goals (A) at target levels, (B) based on actual performance achieved
as of the Change in Control or thereafter, or (C) at the greater or lesser of
target levels or actual performance achieved as of the Change in Control or
thereafter, and, in the case of clauses (A), (B) and (C), either (x) based on
the full Performance Cycle or (y) pro-rata based on the time that has elapsed in
the applicable Performance Cycle as of the date of the Change in Control or
thereafter;

(b) Provide that all (or some) outstanding Awards (other than Options and Share
Appreciation Rights) shall (i) become fully or partially vested and
nonforfeitable with respect to any time-based vesting conditions or
restrictions; and/or (ii) become vested and nonforfeitable with respect to any
Performance Goals (A) at target levels, (B) based on actual performance achieved
as of the Change in Control or thereafter, or (C) at the greater or lesser of
target levels or actual performance achieved as of the Change

 

- 22 -

--------------------------------------------------------------------------------

in Control or thereafter, and, in the case of clauses (A), (B) and (C), either
(x) based on the full Performance Cycle or (y) pro-rata based on the time that
has elapsed in the applicable Performance Cycle as of the date of the Change in
Control or thereafter;

(c) Make or provide for a cash payment to the Optionee holding an Option or
Share Appreciation Right, in exchange for the cancellation thereof, in an amount
equal to the difference, if any, between (A) the consideration received by the
shareholders of the Company in connection with the Change in Control multiplied
by the number of Shares subject to such Option or Share Appreciation Right (to
the extent then exercisable (after taking into account any acceleration under
this Section 15 or the applicable Award Agreement) and (B) the aggregate
Exercise Price for the Shares that would be issued pursuant to the exercise of
such Option or Share Appreciation Right;

(d) Permit the Optionee, within a specified period of time prior to the
consummation of the Change in Control, as determined by the Committee, to
exercise such Option or Share Appreciation Right as of, and subject to, the
consummation of such Change in Control (to the extent such Option or Share
Appreciation Right would be exercisable as of the consummation of such Change in
Control (after taking into account any acceleration under this Section 15 or the
applicable Award Agreement);

(e) Provide for the assumption or continuation of an outstanding Award by the
successor entity;

(f) Provide for the substitution of outstanding Awards with new Awards of the
successor entity or parent thereof, with appropriate adjustment as to the number
and kind of shares and, if appropriate, the applicable Exercise Price; or

(g) Make such adjustments as it, in its discretion, determines are necessary or
appropriate in light of the Change in Control, provided that the Committee
determines that such adjustments do not have a material and adverse economic
impact on the Participant as determined at the time of the adjustments.

15.5. Any adjustment made pursuant to this Section 15 applicable to Qualified
Performance-Based Awards shall be consistent with the requirements of
Section 162(m) of the Code (unless the Committee determines that such Qualified
Performance-Based Award shall not longer be qualified performance-based
compensation for purposes of Section 162(m) of the Code).

15.6. The judgment of the Committee with respect to any matter referred to in
this Section 15 shall be conclusive and binding upon each Participant without
the need for any amendment to the Plan.

 

16. MISCELLANEOUS

16.1. No Rights to Employment or Other Service. Nothing in the Plan or in any
grant made pursuant to the Plan shall confer on any individual any right to
continue in the employ or other service of the Company or its Subsidiaries or
interfere in any way with the right of the Company or its Subsidiaries and its
shareholders to terminate the individual’s employment or other service at any
time.

16.2. Right of First Refusal; Right of Repurchase. At the time of grant, the
Committee may provide in connection with any grant made under the Plan that
Shares received hereunder shall be subject to a right of first refusal pursuant
to which the Company shall be entitled to purchase such Shares in the event of a
prospective sale of the Shares, subject to such terms and conditions as the
Committee may specify at the time of

 

- 23 -

--------------------------------------------------------------------------------

grant or (if permitted by the Award Agreement) thereafter, and to a right of
repurchase, pursuant to which the Company shall be entitled to purchase such
Shares at a price determined by, or under a formula set by, the Committee at the
time of grant or (if permitted by the Award Agreement) thereafter.

16.3. No Fiduciary Relationship. Nothing contained in the Plan (including
without limitation Sections 8.5(c) and 9.4), and no action taken pursuant to the
provisions of the Plan, shall create or shall be construed to create a trust of
any kind, or a fiduciary relationship between the Company or its Subsidiaries,
or their officers or the Committee, on the one hand, and the Participant, the
Company, its Subsidiaries or any other person or entity, on the other. No
Participant or any Eligible Participant shall have any claim to be granted any
Award under the Plan. Neither the Company, its Affiliates nor the Committee is
obligated to treat Participants or Eligible Participants uniformly, and
determinations made under the Plan may be made by the Committee selectively
among Eligible Participants who receive, or are eligible to receive, Awards
(whether or not such Eligible Participants are similarly situated).

16.4. No Fund Created. Any and all payments hereunder to any Participant under
the Plan shall be made from the general funds of the Company (or, if applicable,
a Participating Company), no special or separate fund shall be established or
other segregation of assets made to assure such payments, and the Restricted
Share Units and any other similar devices issued hereunder to account for Plan
obligations do not constitute Common Shares and shall not be treated as (or as
giving rise to) property or as a trust fund of any kind; provided, however, that
the Company may establish a mere bookkeeping reserve to meet its obligations
hereunder or a trust or other funding vehicle that would not cause the Plan to
be deemed to be funded for tax purposes or for purposes of Title I of the
Employee Retirement Income Security Act of 1974, as amended. The obligations of
the Company under the Plan are unsecured and constitute a mere promise by the
Company to make benefit payments in the future and, to the extent that any
person acquires a right to receive payments under the Plan from the Company,
such right shall be no greater than the right of a general unsecured creditor of
the Company. (If any affiliate of the Company is or is made responsible with
respect to any Awards, the foregoing sentence shall apply with respect to such
affiliate.) Without limiting the foregoing, Restricted Share Units and any other
similar devices issued hereunder to account for Plan obligations are solely a
device for the measurement and determination of the amounts to be paid to a
Grantee under the Plan, and each Grantee’s right in the Restricted Share Units
and any such other devices is limited to the right to receive payment, if any,
as may herein be provided.

16.5. Notices. All notices under the Plan shall be in writing, and if to the
Company, shall be delivered to the Board or mailed to its principal office,
addressed to the attention of the Board; and if to the Participant, shall be
delivered personally, sent by facsimile transmission or mailed to the
Participant at the address appearing in the records of the Company. Such
addresses may be changed at any time by written notice to the other party given
in accordance with this Section 16.5.

16.6. Exculpation and Indemnification. No member of the Board or the Committee
shall be liable for any act or omission to act in connection with the
performance of such person’s duties, responsibilities and obligations under the
Plan, including any exercise of discretion, except to the extent required by
law. The Company shall indemnify and hold harmless the members of the Board and
the members of the Committee from and against any and all liabilities, costs and
expenses incurred by such persons as a result of any act or omission to act in
connection with the performance of such person’s duties, responsibilities and
obligations under the Plan, to the maximum extent permitted by law.

 

- 24 -

--------------------------------------------------------------------------------

16.7. Captions. The use of captions in this Plan is for convenience. The
captions are not intended to provide substantive rights.

16.8. Governing Law. THE PLAN AND ALL AWARD AGREEMENTS SHALL BE GOVERNED BY THE
LAWS OF THE STATE OF MARYLAND WITHOUT REFERENCE TO PRINCIPLES OF CONFLICT OF
LAWS.

16.9. Section 409A.

(a) Awards granted under the Plan are intended to be exempt from Section 409A.
To the extent that the Plan or any Award is not exempt from the requirements of
Section 409A, the Plan or such Award is intended to comply with the requirements
of Section 409A and shall be limited, construed and interpreted in accordance
with such intent. Notwithstanding the foregoing, in no event whatsoever shall
the Company be liable for any additional tax, interest or penalty that may be
imposed on a Participant by Section 409A or any damages for failing to comply
with Section 409A.

(b) Notwithstanding anything in the Plan or in any Award Agreement to the
contrary, to the extent that any amount or benefit that would constitute
non-exempt “deferred compensation” for purposes of Section 409A would otherwise
be payable or distributable, or a different form of payment (e.g., lump sum or
installment) would be effected, under the Plan or any Award Agreement by reason
of the occurrence of a Change in Control, or the Participant’s Disability or
Termination of Service, such amount or benefit will not be payable or
distributable to the Participant, and/or such different form of payment will not
be effected, by reason of such circumstance unless the circumstances giving rise
to such Change in Control, Disability or Termination of Service meet the
description or definition of “change in control event”, “disability” or
“separation from service”, as applicable, in Section 409A (without giving effect
to any elective provisions that may be available under such definition). This
provision does not prohibit the vesting of any Award upon a Change in Control,
Disability or Termination of Service, however defined. If this provision
prevents the payment or distribution of any amount or benefit, or the
application of a different form of payment of any amount or benefit, such
payment or distribution shall be made at the time and in the form that would
have applied absent the Change in Control, Disability or Termination of Service,
as applicable.

(c) If any one or more Awards granted under the Plan to a Participant could
qualify for any separation pay exemption described in Treas. Reg.
Section 1.409A-1(b)(9), but such Awards in the aggregate exceed the dollar limit
permitted for the separation pay exemptions, the Committee shall determine which
Awards or portions thereof will be subject to such exemptions.

(d) Notwithstanding anything in the Plan or in any Award Agreement to the
contrary, if any amount or benefit that would constitute non-exempt “deferred
compensation” for purposes of Section 409A would otherwise be payable or
distributable under this Plan or any Award Agreement by reason of a
Participant’s Termination of Service during a period in which the Participant is
a Specified Employee, then, subject to any permissible acceleration of payment
by the Committee under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic
relations order), (j) (4)(iii) (conflicts of interest), or (j)(4)(vi) (payment
of employment taxes): (i) the amount of such non-exempt deferred compensation
that would otherwise be payable during the six-month period immediately
following the Participant’s Termination of Service will be accumulated through
and paid or provided on the first day of the seventh month following the
Participant’s Termination of Service (or, if the Participant dies during such
period, within 30 days after the Participant’s death); and (ii) the normal
payment or distribution schedule for any remaining payments or distributions
will resume at the end of such delay period.

 

- 25 -

--------------------------------------------------------------------------------

(e) If, pursuant to an Award, a Participant is entitled to a series of
installment payments, such Participant’s right to the “series of installment
payments” (as described in Treas. Reg. Section 1.409A-2(b)(2)(iii)) shall be
treated as a right to a series of separate payments and not to a single payment.

16.10. Severability. If any provision of this Plan is held to be illegal or
invalid for any reason, that illegality or invalidity shall not affect the
remaining portions of this Plan, but such provision shall be fully severable and
this Plan shall be construed and enforced as if the illegal or invalid provision
had never been included in this Plan. Such an illegal or invalid provision shall
be replaced by a revised provision that most nearly comports to the substance of
the illegal or invalid provision. If any of the terms or provisions of this Plan
or any Award Agreement conflict with the requirements of all applicable laws and
regulations, those conflicting terms or provisions shall be deemed inoperative
to the extent they conflict with any applicable laws or regulations.

16.11. Transferability. Each Award granted under the Plan shall be
nontransferable by the Grantee except by will or the laws of descent and
distribution of the State wherein the Grantee or Optionee is domiciled at the
time of his death; provided, however, that the Committee may permit other
transfers, where the Committee concludes that such transferability (i) does not
result in accelerated U.S. federal income taxation, and (ii) is otherwise
appropriate and desirable.

16.12. Trading Restrictions. All Shares issuable under the Plan are subject to
any stop-transfer orders and other restrictions as the Committee deems necessary
or advisable to comply with federal or state securities laws, rules and
regulations and the rules of any national securities exchange or automated
quotation system on which the Common Shares are listed, quoted, or traded. The
Committee may place legends on any Share certificate or issue instructions to
the transfer agent to reference restrictions applicable to the Shares.

16.13. Clawback. Notwithstanding any provisions in this Plan or any Award
Agreement to the contrary, to the extent required by (i) applicable law,
including, without limitation, the requirements of the Dodd-Frank Wall Street
Reform and Consumer Protection Act of 2010, and/or (ii) any policy that may be
adopted by the Company, amounts paid or payable pursuant to this Plan or any
Award Agreement shall be subject to clawback to the extent necessary to comply
with such law(s) and/or policy, which clawback may include forfeiture of Awards
and/or repayment of amounts paid or payable pursuant to this Plan or any Award
Agreement.

16.14. Other Benefits. No payment or benefit under the Plan shall be taken into
account in determining any benefits under any pension, retirement, savings,
profit sharing, group insurance, welfare or benefit plan of the Company or its
Subsidiaries or other affiliates unless provided otherwise in such other plan.
Nothing contained in the Plan will prevent the Company from adopting other or
additional compensation arrangements, subject to stockholder approval if such
approval is required; and such arrangements may be either generally applicable
or applicable only in specific cases.

16.15. The grant of any Award shall not in any way affect the right or power of
the Company to make adjustments, reclassification or changes in its capital or
business structure or to merge, consolidate, dissolve, liquidate, sell or
transfer all or any part of its business or assets. The Plan shall not restrict
the authority of the Company, for proper corporate purposes, to assume, continue
or substitute awards, other than under the Plan, to

 

- 26 -

--------------------------------------------------------------------------------

or with respect to any person. If the Committee so directs, the Company may
issue or transfer Shares to a Subsidiary or affiliate, for such lawful
consideration as the Committee may specify, upon the condition or understanding
that the Subsidiary or affiliate will transfer such Shares to a Participant in
accordance with the terms of an Award granted to such Participant and specified
by the Committee pursuant to the provisions of the Plan.

 

- 27 -