RESTRICTED STOCK AWARD AGREEMENT - EMPLOYEE

 

This RESTRICTED STOCK AWARD AGREEMENT, dated as of this __________, by and
between Monmouth Real Estate Investment Corporation, a Maryland corporation (the
“Company”), and _________, an individual employed by the Company (the
“Participant”).

 

WITNESSETH:

 

WHEREAS, the Company has adopted, through appropriate action of its Board of
Directors and its shareholders, the Monmouth Real Estate Investment Corporation
Stock Option and Stock Award Plan (the “Plan”); and

 

WHEREAS, the Company desires to grant a Restricted Stock Award to the
Participant under the Plan on the terms and conditions hereinafter set forth;
and

 

WHEREAS, the Participant desires to accept such Restricted Stock Award from the
Company subject to the terms and conditions of this Agreement and the Plan;

 

NOW, THEREFORE, in consideration of the promises and the mutual covenants
hereinafter contained, and other good and valuable consideration, receipt of
which is hereby acknowledged, the Company and the Participant do mutually
covenant and agree as follows:

 

1.        Grant of Restricted Stock. Subject to the terms and conditions
hereinafter set forth, the Participant is hereby granted a Restricted Stock
Award of ______ shares of common stock, par value $.01 per share, of the Company
(the “Restricted Stock”).

 

2.        Issuance of Restricted Stock. The number of shares of Restricted Stock
granted under Section 1 hereof shall be recorded on the books of the Company in
the name of the Participant. The Company shall instruct its stock transfer agent
to place a stop transfer order on the Restricted Stock until such time as the
Restrictions thereon shall lapse. In the event that the Participant shall
forfeit all or any portion of the Restricted Stock, the shares which are
forfeited automatically shall be transferred back to the Company. The
Restrictions shall be those described in Sections 3 and 8 below, and any such
others as the Board of Directors or the Committee may deem appropriate.

 

3.        Vesting. The Participant shall vest in the Restricted Stock Award
granted hereunder, and all Restrictions thereon shall lapse over five years, 20%
each year (rounded down to the nearest whole number of shares), with the first
vesting commencing on _____________, hereunder if the Participant is still
employed by the Company and/or any Subsidiary on that date. Except as provided
in Section 4(c) and (d) below, prior to such anniversary, no portion of the
Restricted Stock Award shall be vested.

 

4.        Termination as an Employee.

 

In the event that during the term of the Restricted Period the Participant’s
status as an employee of the Company terminates:

 

(a)

for Cause, the Participant shall forfeit any and all Restricted Stock Awards
whose Restrictions have not lapsed; or,

 

(b) for any reason (other than death, disability, termination for cause or
involuntary termination (other than for Cause) after meeting the definition of
Retirement), the Participant shall forfeit any and all Restricted Stock Awards
whose Restrictions have not lapsed; or,

 

   

 

 

(c) due to death or disability, the Restrictions on any and all then outstanding
Restricted Stock Awards shall lapse on the date of such termination; or,     (d)

except to the extent that this Restricted Stock Award is intended to constitute
“performance based compensation” (within the meaning of Section 162(m) of the
Code and Treasury regulation section 1.162-27(e)), the Restrictions on any and
all then outstanding Restricted Stock Awards shall lapse on the date of any
Termination of Service that constitutes an involuntary termination of employment
(other than for Cause) with the Company and its Subsidiaries on or after the
Participant has met the definition of Retirement. The Committee in its sole
discretion shall have the ability to determine whether any Termination of
Service is voluntary or involuntary. Notwithstanding the immediately foregoing,
if any such involuntary termination (other than for Cause) following such time
as the Participant meets the definition of Retirement occurs prior to the first
anniversary of the Grant Date, then the total number of Shares subject to this
Award shall be reduced to an amount equal to the total number of Shares subject
to this Award multiplied by a fraction, the numerator of which shall be equal to
the number of months or partial months that have elapsed between the Grant Date
of this Award and the date of Retirement followed by such involuntary
termination and the denominator of which shall be insert a number equal to the
number of months in the vesting period.

 

5.        Forfeiture. All shares of non-vested Restricted Stock shall be
automatically forfeited to the Company if the Board of Directors of the Company
determines that the Participant has breached a material obligation to the
Company, including without limitation, material provisions in any employment or
confidentiality agreement.

 

6.       Rights of a Stockholder. So long as a Restricted Stock Award granted
hereunder remains outstanding, the Participant shall be entitled to all rights
of a stockholder with respect to the Restricted Stock, including the right to
vote the Restricted Stock granted hereunder and to receive any dividends and
other distributions payable with respect to such Shares of Restricted Stock
beginning from and after the Grant Date, provided however, any such dividend or
payment shall be reinvested in additional Shares of Restricted Stock which shall
be transferred to the Participant, free of any Restrictions, if and when the
Restrictions with respect to the corresponding Shares of Restricted Stock
granted hereunder shall have lapsed.

 

7.        Withholding Tax Liability. The Company shall have the right to
withhold any income or other taxes due upon transfer of shares to the
Participant or the lapse of Restrictions, including the right to withhold shares
or sell shares where appropriate.

 

8.        Transfer Restrictions. During the Restricted Period, the shares of
Restricted Stock may not be transferred, assigned, pledged, hypothecated or
otherwise encumbered, and shall not be subject to execution, attachment,
garnishment or other similar legal processes. Upon any attempt to transfer,
assign, pledge, hypothecate or otherwise encumber or dispose of such shares, the
shares immediately shall be forfeited to the Company.

 

9.        Construction; No Contract of Continuing Engagement. Nothing contained
in this Agreement, nor the granting of the Restricted Stock Award hereunder,
shall be construed as giving the Participant or any other person any legal or
equitable rights against the Company or any subsidiary or any director, officer,
employee or agent thereof, except for those rights as are herein provided. Under
no circumstances shall this Agreement be construed as an express or implied
contract of continuing employment for the Participant, nor shall the Restricted
Stock Award granted hereunder in any manner obligate the Company, or any
subsidiary or affiliate of the Company, to continue the employment of the
Participant.

 

   

 

 

10.        Failure to Enforce Not a Waiver. The failure of the Company to
enforce at any time any provision of this Agreement shall in no way be construed
to be a waiver of such provision or of any other provision hereof.

 

11.        Amendments. This Restricted Stock Award may be amended or modified at
any time by an instrument in writing signed by the parties hereto, subject to
any approvals required under the Company’s Charter or By-laws.

 

12.        Miscellaneous. This Agreement is subject to the terms and conditions
of the Plan, as the Plan may be from time to time amended. The provisions of the
Plan are incorporated herein by reference, and the capitalized terms used but
undefined herein shall have the same meanings as set forth in the Plan. The
Participant acknowledges receipt of a copy of the Plan and agrees to be bound by
all the terms and provisions thereof. Any inconsistency between this Agreement
and the Plan shall be resolved in favor of the Plan.

 

13.       Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the heirs, legatees, legal representatives, successors and
assigns of the parties hereto.

 

14.       Section 409A. It is intended that awards under the Plan shall be and
shall remain largely exempt from Section 409A of the Code. However, if Section
409A of the Code is deemed to apply to the Plan or any payments or awards
hereunder, then the Plan, payments or Awards shall be structured, interpreted
and administered by the Committee to be consistent with the requirements of
Section 409A of the Code. Any provisions of Section 409A of the Code (or any
guidance thereunder) which are required to be in the Plan, and which are not
already contained herein, are hereby incorporated by reference.

 

15.       Specified Employees. In the event any Participant is deemed to be a
Specified Employee, as described in Section 409A of the Code, and the Committee
determines that Section 409A of the Code would require a six-month delay with
respect to any payment hereunder to avoid the imposition of any additional taxes
under Section 409A with respect to such Specified Employee, such payment subject
to such delay shall be paid at the earliest date permitted under Section 409A of
the Code.

 

16.       Capitalized Terms; Conflict with Plan or Employment Agreement.
Capitalized terms not defined herein shall have the meaning set forth in the
Plan. In case of conflict between the Restricted Stock Award Agreement and the
Plan, the Plan shall govern. In case of conflict between the Restricted Stock
Award Agreement and/or the Plan on the one hand and any written employment
agreement on the other, the former shall prevail, except and only to the extent
that the employment agreement expressly provides otherwise.

 

   

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year
first above written.

 

  COMPANY: MONMOUTH REAL ESTATE INVESTMENT CORPORATION             By:
                             Title:               The undersigned hereby accepts
and agrees to all the terms and provisions of the foregoing Agreement and to all
the terms and provisions of the Plan herein incorporated by reference.          
PARTICIPANT: