Exhibit 10.3

CHAMBERS STREET PROPERTIES

AMENDED AND RESTATED

2004 EQUITY INCENTIVE PLAN

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TABLE OF CONTENTS

 

1.

   Definitions      1   

2.

   Effective Date and Termination of Plan      4   

3.

   Administration of Plan      5   

4.

   Shares and Units Subject to the Plan      6   

5.

   Provisions Applicable to Share Options      6   

6.

   Provisions Applicable to Restricted Shares      10   

7.

   Provisions Applicable to Phantom Shares      12   

8.

   Provisions Applicable to Dividend Equivalent Rights      15   

9.

   Other Equity-Based Awards      16   

10.

   Performance Goals      16   

11.

   Tax Withholding      16   

12.

   Regulations and Approvals      17   

13.

   Interpretation and Amendments; Other Rules      18   

14.

   Changes in Capital Structure      18   

15.

   Miscellaneous      20   

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CHAMBERS STREET PROPERTIES

AMENDED AND RESTATED

2004 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 Amended and Restated 2004 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,
Restricted Shares, Phantom Shares, Dividend Equivalent Rights or other forms of
equity-based compensation.

 

1. DEFINITIONS

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

“Award” except where referring to a particular category of grant under the Plan,
shall include Incentive Share Options, Non-Qualified Share Options, Restricted
Shares, Phantom Shares, Dividend Equivalent Rights and other equity-based Awards
as contemplated herein.

“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.

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

(i) 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

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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, and with
respect to any particular Participant, the Participant and any “group” (as such
term is used in Section 13(d)(3) of the Exchange Act) of which the Participant
is a member), 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

(ii) 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); or

(iii) 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

(iv) 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.

 

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“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 8 of the Plan to
receive (or have credited) the equivalent value of dividends paid on Shares.

“Eligible Person” means a key employee, director, Trustee, officer, advisor,
consultant or other 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 affiliates of the Company and
employees of the foregoing 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.

“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, Phantom Shares,
Dividend Equivalent Rights or such other equity-based Awards as may be granted
pursuant to Section 9.

“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 is granted, or the
Successors of the Optionee, as the context so requires.

 

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“Option Price” means the price per Share, determined by the Board or the
Committee, at which an Option may be exercised.

“Participant” means a Grantee or Optionee.

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

“Phantom Share Value,” per Phantom Share, 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.

“Plan” means the Company’s Amended and Restated 2004 Equity Incentive Plan, as
set forth herein and as the same may from time to time be amended.

“Restricted Shares” means an award of Shares that are subject to restrictions
hereunder.

“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.

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

“Settlement Date” means the date determined under Section 7.4(c).

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

“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 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 of the Plan is June 16, 2004. The Plan shall not become
effective unless and until it is approved by the requisite percentage of the
holders of the Common Shares

 

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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 approval of
the Plan by (i) the Board or (ii) the shareholders of the Company; provided,
however, that the Board may at any time prior to that date terminate the Plan.

 

3. ADMINISTRATION OF PLAN

(a) 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(a), 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.

(b) Subject to the provisions of the Plan, the Committee shall in its discretion
as reflected by the terms of the Award Agreements (i) authorize the granting of
Awards to Eligible Persons; and (ii) determine the eligibility of Eligible
Persons to receive an Award, as well as 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.

(c) 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.

 

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4. SHARES AND UNITS SUBJECT TO THE PLAN

(a) Subject to adjustments as provided in Section 14, the total number of Shares
subject to Awards granted under the Plan, in the aggregate, may not exceed the
lesser of (i) 20,000,000 and (ii) 10% of the number of Shares outstanding at the
time of grant. Shares distributed under the Plan may be treasury Shares or
authorized but unissued Shares. Any Shares that have been granted as Restricted
Shares or that have been reserved for distribution in payment for Options,
Phantom Shares or other equity-based Awards but are later forfeited or for any
other reason are not payable under the Plan may again be made the subject of
Awards under the Plan.

(b) 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 the dividends payable on a number of Shares corresponding to the
number of Phantom Shares awarded, shall be subject to the limitation of
Section 4(a). If any Phantom Shares, Dividend Equivalent Rights or other
equity-based Awards under Section 9 are paid out in cash, then, notwithstanding
the first sentence of Section 4(a) above (but subject to the second sentence
thereof) the underlying Shares may again be made the subject of Awards under the
Plan.

(c) 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.

(d) Unless otherwise determined by the Board, no Award may be granted under the
2004 Equity Incentive Plan to any person who, assuming exercise of all Options
and payment of all Awards held by such person, would own or be deemed to own
more than 3% of the outstanding Shares.

 

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; (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) designate each Option
as one intended to be an Incentive Share Option or as a Non-Qualified Share
Option; and (v) determine or impose other conditions to the grant or exercise of
Options under the Plan as it may deem appropriate.

5.2 Option Price. The Option 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. Any particular Award Agreement may provide for
different Option Prices for specified amounts of Shares subject to the Option.

 

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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 shall
have such other term (which may be shorter, but not longer, in the case of
Incentive Share Options) 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 or under the Award
Agreement.

(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, as determined by the Committee at the time of
grant. Unless otherwise provided in the Award Agreement, 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 Optionee.

(a) Subject to provisions of the Award Agreement, 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 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 of the Award Agreement, in the event the Optionee has
a Termination of Service on account of death or Disability or Retirement, the
Option (whether or not otherwise exercisable) 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, 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.

 

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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, and payment in full of the aggregate Option 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 aggregate Option Price shall be paid in full upon the exercise of the
Option. Payment must be made by one of the following methods:

(i) a certified or bank cashier’s check;

(ii) subject to Section 12(e), the proceeds of a Company loan program or
third-party sale program or a notice acceptable to the Committee given as
consideration under such a program, in each case if permitted by the Committee
in its discretion, if such a program has been established and the Optionee is
eligible to participate therein;

(iii) if approved by the Committee in its discretion, Shares of previously owned
Common Shares, which have been previously owned for more than six months, having
an aggregate Fair Market Value on the date of exercise equal to the aggregate
Option Price; or

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

(b) Except in the case of Options exercised by certified or bank cashier’s
check, the Committee may impose limitations and prohibitions on the exercise of
Options as it deems appropriate, including, without limitation, any limitation
or prohibition designed to avoid accounting consequences which may result from
the use of Common Shares as payment upon exercise of an Option.

(c) 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 Share Appreciation Rights. 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

 

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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 Option 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 Option 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 Option 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 (but need not) 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 under which Participants
will have Phantom Shares subject to Section 7 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 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 Option 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.

 

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6. PROVISIONS APPLICABLE TO RESTRICTED SHARES

6.1 Grant of Restricted Shares.

(a) In connection with the grant of Restricted Shares, whether or not
performance goals (as provided for under Section 10) 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 6, the
applicable Award Agreement and the other provisions of the Plan, 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);
(iii) determine the restrictions applicable to Restricted Shares and
(iv) determine or impose other conditions, including any applicable performance
goals, to the grant of Restricted Shares under the Plan as it may deem
appropriate.

6.2 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(c), 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 AMENDED AND RESTATED 2004 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 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 6.3 (and the share power shall be so delivered
or shall be discarded).

 

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6.3 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:

(i) 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 (iii) and (iv) 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.

(ii) Except as provided in the foregoing clause (i), below in this clause (ii),
or in Section 14, 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. The Committee may
provide in the Award Agreement that cash dividends on such Shares shall be held
by the Company (unsegregated as a part of its general assets) until the period
of forfeiture lapses (and forfeited if the underlying Shares are forfeited), and
paid over to the Grantee as soon as practicable after such period lapses (if not
forfeited), or alternatively may provide for other treatment of such dividends
(including without limitation the crediting of Phantom Shares in respect of
dividends or other deferral provisions). 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.

(iii) Except if otherwise provided in the applicable Award Agreement, and
subject to clause (iv) below, if the Grantee has a Termination of Service by the
Company and its Subsidiaries for Cause, or by the Grantee for any reason, during
the applicable period of forfeiture, then (A) all Shares still subject to
restriction shall thereupon, and with no further action, be forfeited by the
Grantee, and (B) 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 for such forfeited Restricted
Shares as contemplated by Section 6.1, and (y) the Fair Market Value on the date
of termination of the forfeited Restricted Shares.

(iv) Subject to the provisions of the Award Agreement, in the event the Grantee
has a Termination of Service on account of death, Disability or Retirement, or
the Grantee has a Termination of Service by the Company and its Subsidiaries for
any reason other than Cause during the applicable period of forfeiture, then
restrictions under the Plan will immediately lapse on all Restricted Shares
granted to the applicable Grantee.

 

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7. PROVISIONS APPLICABLE TO PHANTOM SHARES

7.1 Grant of Phantom Shares. 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 Phantom Shares to Eligible
Persons and (ii) determine or impose other conditions to the grant of Phantom
Shares under the Plan as it may deem appropriate.

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

7.3 Vesting. Phantom Shares shall vest as provided in the applicable Award
Agreement.

7.4 Settlement of Phantom Shares.

(a) Each vested and outstanding Phantom Share shall be settled by the transfer
to the Grantee of one Share; provided that, the Committee at the time of grant
may provide that a Phantom Share may be settled in (i) cash at the applicable
Phantom Share 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) Phantom Shares shall be settled with a single-sum payment by the Company;
provided that, with respect to Phantom Shares of a Grantee which have a common
Settlement Date, the Committee may permit the Grantee to elect in accordance
with procedures established by the Committee to receive installment payments
over a period not to exceed 10 years.

(c) (i) Unless otherwise provided in the applicable Award Agreement, the
“Settlement Date” with respect to a Phantom Share is the first day of the month
to follow the date on which the Phantom Share vests; provided that a Grantee may
elect, in accordance with procedures to be established by the Committee, that
such Settlement Date will be deferred as elected by the Grantee to the first day
of the month to follow the Grantee’s Termination of Service, or such other time
as may be permitted by the Committee. Unless otherwise determined by the
Committee, elections under this Section 7.4(c)(i) must be made at least six
months before, and in the year prior to the year in which, the Settlement Date
would occur in the absence of such election.

(ii) Notwithstanding Section 7.4(c)(i), the Committee may provide that
distributions of Phantom Shares can be elected at any time in those cases in
which the Phantom Share Value is determined by reference to Fair Market Value to
the extent in excess of a base value, rather than by reference to unreduced Fair
Market Value.

(iii) Notwithstanding the foregoing, the Settlement Date, if not earlier
pursuant to this Section 7.4(c), is the date of the Grantee’s death.

(d) Notwithstanding the other provisions of this Section 7, in the event of a
Change in Control, the Settlement Date shall be the date of such Change in
Control and all amounts due with respect to Phantom Shares to a Grantee
hereunder shall be paid as soon as practicable (but in no event more than
30 days) after such Change in Control, unless such Grantee elects otherwise in
accordance with procedures established by the Committee.

 

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(e) Notwithstanding any other provision of the Plan, a Grantee may receive any
amounts to be paid in installments as provided in Section 7.4(b) or deferred by
the Grantee as provided in Section 7.4(c) in the event of an “Unforeseeable
Emergency.” For these purposes, an “Unforeseeable Emergency”, as determined by
the Committee in its sole discretion, is a severe financial hardship to the
Grantee resulting from a sudden and unexpected illness or accident of the
Grantee or “dependent,” as defined in Section 152(a) of the Code, of the
Grantee, loss of the Grantee’s property due to casualty, or other similar
extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the Grantee. The circumstances that will constitute an
Unforeseeable Emergency will depend upon the facts of each case, but, in any
case, payment may not be made to the extent that such hardship is or may be
relieved:

(i) through reimbursement or compensation by insurance or otherwise,

(ii) by liquidation of the Grantee’s assets, to the extent the liquidation of
such assets would not itself cause severe financial hardship, or

(iii) by future cessation of the making of additional deferrals under
Section 7.4(b) and (c).

Without limitation, the need to send a Grantee’s child to college or the desire
to purchase a home shall not constitute an Unforeseeable Emergency.
Distributions of amounts because of an Unforeseeable Emergency shall be
permitted to the extent reasonably needed to satisfy the emergency need.

7.5 Other Phantom Share Provisions.

(a) Rights to payments with respect to Phantom Shares 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
Phantom Share dies, such Phantom Share shall be settled and the Phantom Share
Value in respect of such Phantom Shares paid, and any payments deferred pursuant
to an election under Section 7.4(c) shall be accelerated and paid, as soon as
practicable (but no later than 60 days) after the date of death to such
Grantee’s beneficiary or estate, as applicable.

(c) The Committee may establish a program under which distributions with respect
to Phantom Shares may be deferred for periods in addition to those otherwise
contemplated by foregoing provisions of this Section 7. Such program may
include, without limitation, provisions

 

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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 7, any fractional
Phantom Share will be paid out in cash at the Phantom Share Value as of the
Settlement Date.

(e) No Phantom Share 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 8, 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 Phantom Share.

7.6 Claims Procedures.

(a) To the extent that the Plan is determined by the Committee to be subject to
the Employee Retirement Income Security Act of 1974, as amended, the Grantee, or
his beneficiary hereunder or authorized representative, may file a claim for
payments with respect to Phantom Shares under the Plan by written communication
to the Committee or its designee. A claim is not considered filed until such
communication is actually received. Within 90 days (or, if special circumstances
require an extension of time for processing, 180 days, in which case notice of
such special circumstances should be provided within the initial 90-day period)
after the filing of the claim, the Committee will either:

(i) approve the claim and take appropriate steps for satisfaction of the claim;
or

(ii) if the claim is wholly or partially denied, advise the claimant of such
denial by furnishing to him a written notice of such denial setting forth
(A) the specific reason or reasons for the denial; (B) specific reference to
pertinent provisions of the Plan on which the denial is based and, if the denial
is based in whole or in part on any rule of construction or interpretation
adopted by the Committee, a reference to such rule, a copy of which shall be
provided to the claimant; (C) a description of any additional material or
information necessary for the claimant to perfect the claim and an explanation
of the reasons why such material or information is necessary; and (D) a
reference to this Section 7.6 as the provision setting forth the claims
procedure under the Plan.

(b) The claimant may request a review of any denial of his claim by written
application to the Committee within 60 days after receipt of the notice of
denial of such claim. Within 60 days (or, if special circumstances require an
extension of time for processing, 120 days, in which case notice of such special
circumstances should be provided within the initial 60-day period) after receipt
of written application for review, the Committee will provide the claimant with
its decision in writing, including, if the claimant’s claim is not approved,
specific reasons for the decision and specific references to the Plan provisions
on which the decision is based.

 

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8. PROVISIONS APPLICABLE TO DIVIDEND EQUIVALENT RIGHTS

8.1 Grant of Dividend Equivalent Rights. Subject to the other terms of the Plan,
the Committee shall, in its discretion as reflected by the terms of the Award
Agreements, 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 an
Award is granted, and the date such Award is exercised, 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 intended to be qualified
performance-based compensation for purposes of Section 162(m) of the Code, such
Dividend Equivalent Rights shall be payable regardless of whether such Option 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.

8.2 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 8.4, a Dividend Equivalent Right is exercisable or payable only while
the Participant is an Eligible Person.

(c) Payment of the amount determined in accordance with Section 8.1 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.

8.3 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 8 may be granted to
Participants. For example, and without limitation, the Committee may grant a
dividend equivalent right in respect of each Share subject to an Option or with
respect to a Phantom Share, which right would consist of the right (subject to
Section 8.4) to receive a cash payment in an amount equal to the dividend
distributions paid on a Share from time to time.

8.4 Deferral. The Committee may establish a program under which Participants
(i) will have Phantom Shares credited, subject to the terms of Sections 7.4 and
7.5 as though directly applicable with respect thereto, 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.

 

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9. 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, including,
without limitation, the grant of shares based upon certain conditions, the grant
of securities convertible into Common Shares and the grant of share appreciation
rights.

 

10. PERFORMANCE GOALS

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) 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. In the case of any grant 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), the Committee shall establish goals intended to be
performance goals as contemplated by Section 162(m) and the regulations
thereunder.

 

11. TAX WITHHOLDING

11.1 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, (ii) the
lapsing of any restrictions applicable to any Restricted Shares, (iii) the
receipt of a distribution in respect of Phantom Shares or Dividend Equivalent
Rights or (iv) any other applicable income-recognition event (for example, an
election under Section 83(b) of the Code).

11.2 Share Withholding.

(a) Upon exercise of an Option, 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 liability for such withholding
taxes. In the event that the Optionee makes, and the Committee permits, 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 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.

(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

 

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restriction, or to deliver previously owned Shares (not subject to restrictions
hereunder), in order to satisfy the liability for such withholding taxes. In the
event that the Grantee makes, and the Committee permits, 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.

(c) Upon the making of a distribution in respect of Phantom Shares 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 liability for such withholding taxes. In the event that the
Grantee makes, and the Committee permits, such an election, any Shares so
withheld or delivered shall have an aggregate Fair Market Value on the date of
exercise sufficient to satisfy the applicable withholding taxes.

11.3 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,
Restricted Shares, Phantom Shares or Dividend Equivalent Rights shall be
forfeited upon the failure of the Participant to satisfy such requirements with
respect to, as applicable, (i) the exercise of the Option, (ii) the lapsing of
restrictions on the Restricted Shares (or other income-recognition event) or
(iii) distributions in respect of any Phantom Share or Dividend Equivalent
Right.

 

12. REGULATIONS AND APPROVALS

(a) 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.

(b) 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.

(c) Each grant of Options, Restricted Shares, Phantom Shares (or issuance of
Shares in respect thereof) or Dividend Equivalent Rights (or issuance of Shares
in respect thereof), or other Award under Section 9 (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, Restricted Shares,
Phantom Shares, Dividend Equivalent Rights, other Awards or other Shares, no
payment shall be made, or Phantom Shares 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.

 

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(d) 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.

(e) 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.

 

13. 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, Phantom Shares 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 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. No action which is otherwise permitted under or in
connection with the Plan shall be prohibited hereunder merely because it
constitutes a repricing of an Award, and, in furtherance of the foregoing, the
Committee is expressly authorized and empowered, without limitation, to effect
repricings that are consistent with the terms of the Plan. The Board may amend
the Plan as it shall deem advisable, except that no amendment may adversely
affect a Participant with respect to an Award previously granted 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.

 

14. CHANGES IN CAPITAL STRUCTURE

(a) 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

 

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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:

(x) the maximum aggregate number of Shares which may be made subject to Options
and Dividend Equivalent Rights under the Plan, the maximum aggregate number and
kind of Restricted Shares that may be granted under the Plan, the maximum
aggregate number of Phantom Shares and other Awards which may be granted under
the Plan may be appropriately adjusted by the Committee in its discretion; and

(y) 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, Phantom Shares and Dividend
Equivalent Rights (and, as appropriate, other Awards under Section 9), so that
they are substantially proportionate to the rights existing in such Options,
Phantom Shares and Dividend Equivalent Rights (and other Awards under Section 9)
prior to such event, including, without limitation, adjustments in (A) the
number of Options, Phantom Shares and Dividend Equivalent Rights (and other
Awards under Section 9) granted, (B) the number and kind of shares or other
property to be distributed in respect of Options, Phantom Shares and Dividend
Equivalent Rights (and other Awards under Section 9 as applicable), (C) the
Option Price and Phantom Share Value, and (D) performance-based criteria
established in connection with Awards; provided that, in the discretion of the
Committee, the foregoing clause (D) may also be applied in the case of any event
relating to a Subsidiary if the event would have been covered under this
Section 14(a) 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.

(b) 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 6, including
depositing the certificates therefor with the Company together with a share
power and bearing a legend as provided in Section 6.2(a).

(c) 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 6.3(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 6.2(b), and such shares, securities or other property shall become
subject to the restrictions and requirements imposed by Section 6.3(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 6.2(a).

 

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(d) If a Change in Control shall occur, then the Committee may 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 an adverse economic impact on the Participant as
determined at the time of the adjustments.

(e) The judgment of the Committee with respect to any matter referred to in this
Section 13 shall be conclusive and binding upon each Participant without the
need for any amendment to the Plan.

 

15. MISCELLANEOUS

15.1 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.

15.2 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 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.

15.3 No Fiduciary Relationship. Nothing contained in the Plan (including without
limitation Sections 7.5(c) and 8.4), 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.

15.4 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 Phantom Shares
(including for purposes of this Section 15.4 any accounts established to
facilitate the implementation of Section 7.4(c)) 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

 

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sentence shall apply with respect to such affiliate.) Without limiting the
foregoing, Phantom Shares 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 Phantom Shares and any such other devices is limited to
the right to receive payment, if any, as may herein be provided.

15.5 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 15.5.

15.6 Exculpation and Indemnification. 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.

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

15.8 Governing Law. THE PLAN SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
MARYLAND WITHOUT REFERENCE TO PRINCIPLES OF CONFLICT OF LAWS.

 

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