Exhibit 10.1

DIGITAL REALTY TRUST, INC., DIGITAL SERVICES, INC.

AND DIGITAL REALTY TRUST, L.P.

2014 INCENTIVE AWARD PLAN

ARTICLE 1.

PURPOSE

The purpose of the Digital Realty Trust, Inc., Digital Services, Inc. and
Digital Realty Trust, L.P. 2014 Incentive Award Plan (the “Plan”) is to promote
the success and enhance the value of Digital Realty Trust, Inc., a Maryland
corporation (the “Company”), Digital Services, Inc. (the “Services Company”) and
Digital Realty Trust, L.P. (the “Partnership”) by linking the individual
interests of Employees, Consultants and members of the Board and Services
Company Directors to those of the Company’s stockholders and by providing such
individuals with an incentive for outstanding performance to generate superior
returns to the Company’s stockholders. The Plan is further intended to provide
flexibility to the Company, the Services Company, the Partnership and their
subsidiaries in their ability to motivate, attract, and retain the services of
those individuals upon whose judgment, interest, and special effort the
successful conduct of the Company’s, the Services Company’s and the
Partnership’s operation is largely dependent.

ARTICLE 2.

DEFINITIONS AND CONSTRUCTION

Wherever the following terms are used in the Plan they shall have the meanings
specified below, unless the context clearly indicates otherwise. The singular
pronoun shall include the plural where the context so indicates.

2.1 “Administrator” shall mean the entity that conducts the general
administration of the Plan as provided in Article 12 hereof. With reference to
the duties of the Administrator under the Plan which have been delegated to one
or more persons pursuant to Section 12.6 hereof, or which the Board has assumed,
the term “Administrator” shall refer to such person(s) unless the Committee or
the Board has revoked such delegation or the Board has terminated the assumption
of such duties.

2.2 “Affiliate” shall mean the Partnership, the Services Company, any Parent or
any Subsidiary.

2.3 “Applicable Accounting Standards” shall mean Generally Accepted Accounting
Principles in the United States, International Financial Reporting Standards or
such other accounting principles or standards as may apply to the Company’s
financial statements under United States federal securities laws from time to
time.

2.4 “Applicable Law” shall mean any applicable law, including without
limitation, (a) provisions of the Code, the Securities Act, the Exchange Act and
any rules or regulations thereunder; (b) corporate, securities, tax or other
laws, statutes, rules, requirements or regulations, whether federal, state,
local or foreign; and (c) rules of any securities exchange or automated
quotation system on which the Shares are listed, quoted or traded.

2.5 “Award” shall mean an Option, a Restricted Stock award, a Performance Award,
a Dividend Equivalent award, a Stock Payment award, a Restricted Stock Unit
award, a Performance Share award, an Other Incentive Award, a Profits Interest
Unit award or a Stock Appreciation Right, which may be awarded or granted under
the Plan.

2.6 “Award Agreement” shall mean any written notice, agreement, contract or
other instrument or document evidencing an Award, including through electronic
medium, which shall contain such terms and conditions with respect to an Award
as the Administrator shall determine, consistent with the Plan.

 

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2.7 “Board” shall mean the Board of Directors of the Company.

2.8 “Change in Control” shall mean the occurrence of any of the following
events:

(a) A transaction or series of transactions (other than an offering of Shares to
the general public through a registration statement filed with the Securities
and Exchange Commission) whereby any “person” or related “group” of “persons”
(as such terms are used in Sections 13(d) and 14(d)(2) of the Exchange Act)
(other than the Company, the Services Company, the Partnership or any
Subsidiary, an employee benefit plan maintained by any of the foregoing entities
or a “person” that, prior to such transaction, directly or indirectly controls,
is controlled by, or is under common control with, the Company) directly or
indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 under
the Exchange Act) of securities of the Company possessing more than thirty-five
percent (35%) of the total combined voting power of the Company’s securities
outstanding immediately after such acquisition; or

(b) Individuals who, as of the Effective Date, constitute the Board together
with any new director(s) (other than a director designated by a person who shall
have entered into an agreement with the Company to effect a transaction
described in Section 2.8(a) or Section 2.8(c) hereof) whose election by the
Board or nomination for election by the Company’s stockholders was approved by a
vote of at least a majority of the directors then still in office who either
were directors as of the Effective Time or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority thereof; or

(c) The consummation by the Company (whether directly involving the Company or
indirectly involving the Company through one or more intermediaries) of (x) a
merger, consolidation, reorganization, or business combination, (y) a sale or
other disposition of all or substantially all of the Company’s assets in any
single transaction or series of related transactions or (z) the acquisition of
assets or stock of another entity, in each case, other than a transaction:

(i) Which results in the Company’s voting securities outstanding immediately
before the transaction continuing to represent (either by remaining outstanding
or by being converted into voting securities of the Company or the person that,
as a result of the transaction, controls, directly or indirectly, the Company or
owns, directly or indirectly, all or substantially all of the Company’s assets
or otherwise succeeds to the business of the Company (the Company or such
person, the “Successor Entity”)) directly or indirectly, at least a majority of
the combined voting power of the Successor Entity’s outstanding voting
securities immediately after the transaction, and

(ii) After which no person or group beneficially owns voting securities
representing thirty-five percent (35%) or more of the combined voting power of
the Successor Entity; provided, however, that no person or group shall be
treated for purposes of this Section 2.8(c)(ii) as beneficially owning
thirty-five percent (35%) or more of the combined voting power of the Successor
Entity solely as a result of the voting power held in the Company prior to the
consummation of the transaction; or

(d) Approval by the Company’s stockholders of a liquidation or dissolution of
the Company.

Notwithstanding the foregoing, if a Change in Control constitutes a payment
event with respect to any Award (or any portion of an Award) that provides for
the deferral of compensation that is subject to Section 409A of the Code, to the
extent required to avoid the imposition of additional taxes under Section 409A
of the Code, the transaction or event described in subsection (a), (b), (c) or
(d) with respect to such Award (or portion thereof) shall only constitute a
Change in Control for purposes of the payment timing of such Award if such
transaction also constitutes a “change in control event” (within the meaning of
Section 409A of the Code). Consistent with the terms of this Section 2.8, the
Administrator shall have full and final authority to determine conclusively
whether a Change in Control of the Company has occurred pursuant to the above
definition, the date of the occurrence of such Change in Control and any
incidental matters relating thereto.

 

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2.9 “Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time, together with the regulations and official guidance promulgated
thereunder, whether issued prior or subsequent to the grant of any Award.

2.10 “Committee” shall mean the Compensation Committee of the Board, or another
committee or subcommittee of the Board described in Article 12 hereof.

2.11 “Common Stock” shall mean the common stock of the Company, par value $0.01
per share.

2.12 “Company” shall mean Digital Realty Trust, Inc., a Maryland corporation.

2.13 “Consultant” shall mean any consultant or advisor of the Company, the
Services Company, the Partnership or any Subsidiary who qualifies as a
consultant or advisor under the applicable rules of Form S-8 Registration
Statement.

2.14 “Covered Employee” shall mean any Employee who is, or could become, a
“covered employee” within the meaning of Section 162(m) of the Code.

2.15 “Director” shall mean a member of the Board, as constituted from time to
time.

2.16 “Dividend Equivalent” shall mean a right to receive the equivalent value
(in cash or Shares) of dividends paid on Shares, awarded under Section 9.2
hereof.

2.17 “DRO” shall mean a “domestic relations order” as defined by the Code or
Title I of the Employee Retirement Income Security Act of 1974, as amended from
time to time, or the rules thereunder.

2.18 “Effective Date” shall mean the date of the 2014 annual meeting of
stockholders of the Company, provided that the Plan is approved by the Company’s
stockholders on such date.

2.19 “Eligible Individual” shall mean any person who is an Employee, a
Consultant or a Non-Employee Director, as determined by the Administrator.

2.20 “Employee” shall mean any officer or other employee (within the meaning of
Section 3401(c) of the Code) of the Company, the Services Company, the
Partnership or any Subsidiary.

2.21 “Equity Restructuring” shall mean a nonreciprocal transaction between the
Company and its stockholders, such as a stock dividend, stock split, spin-off,
rights offering or recapitalization through a large, nonrecurring cash dividend,
that affects the number or kind of Shares (or other securities of the Company)
or the share price of Common Stock (or other securities) and causes a change in
the per share value of the Common Stock underlying outstanding stock-based
Awards.

2.22 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended
from time to time.

2.23 “Fair Market Value” shall mean, as of any given date, the value of a Share
determined as follows:

(a) If the Common Stock is (i) listed on any established securities exchange
(such as the New York Stock Exchange, the NASDAQ Global Market and the NASDAQ
Global Select Market), (ii) listed on any national market system or
(iii) listed, quoted or traded on any automated quotation system, its Fair
Market Value shall be the closing sales price for a Share as quoted on such
exchange or system for such date or, if there is no closing sales price for a
Share on the date in question, the closing sales price for a Share on the last
preceding date for which such quotation exists, as reported in The Wall Street
Journal or such other source as the Administrator deems reliable;

 

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(b) If the Common Stock is not listed on an established securities exchange,
national market system or automated quotation system, but the Common Stock is
regularly quoted by a recognized securities dealer, its Fair Market Value shall
be the mean of the high bid and low asked prices for such date or, if there are
no high bid and low asked prices for a Share on such date, the high bid and low
asked prices for a Share on the last preceding date for which such information
exists, as reported in The Wall Street Journal or such other source as the
Administrator deems reliable; or

(c) If the Common Stock is neither listed on an established securities exchange,
national market system or automated quotation system nor regularly quoted by a
recognized securities dealer, its Fair Market Value shall be established by the
Administrator in good faith.

2.24 “Greater Than 10% Stockholder” shall mean an individual then-owning (within
the meaning of Section 424(d) of the Code) more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company or any
“parent corporation” or “subsidiary corporation” (as defined in Sections 424(e)
and 424(f) of the Code, respectively).

2.25 “Incentive Stock Option” shall mean an Option that is intended to qualify
as an incentive stock option and conforms to the applicable provisions of
Section 422 of the Code.

2.26 “Individual Award Limit” shall mean the cash and share limits applicable to
Awards granted under the Plan, as set forth in Section 3.3 hereof.

2.27 “Non-Employee Director” shall mean a Director of the Company or a Services
Company Director, in either case, who is not an Employee.

2.28 “Non-Qualified Stock Option” shall mean an Option that is not an Incentive
Stock Option or which is designated as an Incentive Stock Option but does not
meet the applicable requirements of Section 422 of the Code.

2.29 “Option” shall mean a right to purchase Shares at a specified exercise
price, granted under Article 6 hereof. An Option shall be either a Non-Qualified
Stock Option or an Incentive Stock Option; provided, however, that Options
granted to Non-Employee Directors and Consultants shall only be Non-Qualified
Stock Options.

2.30 “Other Incentive Award” shall mean an Award denominated in, linked to or
derived from Shares or value metrics related to Shares, granted pursuant to
Section 9.6 hereof.

2.31 “Parent” shall mean any entity (other than the Company), whether domestic
or foreign, in an unbroken chain of entities ending with the Company if each of
the entities other than the Company beneficially owns, at the time of the
determination, securities or interests representing more than fifty percent
(50%) of the total combined voting power of all classes of securities or
interests in one of the other entities in such chain.

2.32 “Participant” shall mean a person who has been granted an Award pursuant to
the Plan.

2.33 “Partnership” shall mean Digital Realty Trust, L.P.

2.34 “Partnership Agreement” shall mean the Twelfth Amended and Restated
Agreement of Limited Partnership of Digital Realty Trust, L.P., as the same may
be amended, modified or restated from time to time.

2.35 “Performance Award” shall mean an Award that is granted under Section 9.1
hereof.

2.36 “Performance-Based Compensation” shall mean any compensation that is
intended to qualify as “performance-based compensation” as described in
Section 162(m)(4)(C) of the Code.

 

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2.37 “Performance Criteria” shall mean the criteria (and adjustments) that the
Committee selects for an Award for purposes of establishing the Performance Goal
or Performance Goals for a Performance Period, determined as follows:

(a) The Performance Criteria that shall be used to establish Performance Goals
are limited to the following: (i) net earnings (either before or after one or
more of the following: (A) interest, (B) taxes, (C) depreciation,
(D) amortization, and (E) non-cash equity-based compensation expense);
(ii) gross or net sales or revenue; (iii) net income (either before or after
taxes); (iv) adjusted net income; (v) operating earnings or profit; (vi) cash
flow (including, but not limited to, operating cash flow, free cash flow and
cash flow return on capital); (vii) return on assets; (viii) return on net
assets; (ix) return on capital or return on invested capital; (x) return on
stockholders’ equity; (xi) total stockholder return; (xii) return on sales;
(xiii) gross or net profit or operating margin; (xiv) costs; (xv) funds from
operations; (xvi) adjusted funds from operations; (xvii) core funds from
operations; (xviii) cash available for distribution; (xvix) productivity;
(xx) expenses; (xxi) margins; (xxii) working capital; (xxiii) earnings per
share; (xxiv) adjusted earnings per share; (xxv) price per Share; (xxvi) leasing
activity; (xxvii) implementation or completion of critical projects;
(xxviii) market share; (xxix) economic value (as determined by the
Administrator); (xxx) debt levels or reduction; (xxxi) sales-related goals;
(xxxii) comparisons with other stock market indices; (xxxiii) operating
efficiency; (xxxiv) financing and other capital raising transactions;
(xxxv) recruiting and maintaining personnel; (xxxvi) year-end cash;
(xxxvii) acquisition activity; (xxxviii) investment sourcing activity;
(xxxix) customer service; (xxxx) customer satisfaction; (xxxxi) employee
satisfaction; and (xxxxii) marketing initiatives, any of which may be measured
either in absolute terms for the Company or any operating unit of the Company or
as compared to any incremental increase or decrease, or on a relative basis, or
as compared to results of a peer group or to market performance indicators or
indices.

(b) The Administrator may, in its sole discretion, provide that one or more
objectively determinable adjustments shall be made to one or more of the
Performance Goals. Such adjustments may include, but are not limited to, one or
more of the following: (i) items related to a change in accounting principle;
(ii) items relating to financing activities; (iii) expenses for restructuring or
productivity initiatives; (iv) other non-operating items; (v) items related to
acquisitions; (vi) items attributable to the business operations of any entity
acquired by the Company during the Performance Period; (vii) items related to
the sale or disposition of a business or segment of a business; (viii) items
related to discontinued operations that do not qualify as a segment of a
business under Applicable Accounting Standards; (ix) items attributable to any
stock dividend, stock split, combination or exchange of stock occurring during
the Performance Period; (x) any other items of significant income or expense
which are determined to be appropriate adjustments; (xi) items relating to
unusual or extraordinary corporate transactions, events or developments;
(xii) items related to amortization of acquired intangible assets; (xiii) items
that are outside the scope of the Company’s core, on-going business activities;
(xiv) items related to acquired in-process research and development; (xv) items
relating to changes in tax laws; (xvi) items relating to major licensing or
partnership arrangements; (xvii) items relating to asset impairment charges;
(xviii) items relating to gains or losses for litigation, arbitration and
contractual settlements; or (xix) items relating to any other unusual or
nonrecurring events or changes in Applicable Law, accounting principles or
business conditions. For all Awards intended to qualify as Performance-Based
Compensation, such determinations shall be made within the time prescribed by,
and otherwise in compliance with, Section 162(m) of the Code.

2.38 “Performance Goals” shall mean, for a Performance Period, one or more goals
established in writing by the Administrator for the Performance Period based
upon one or more Performance Criteria. Depending on the Performance Criteria
used to establish such Performance Goals, the Performance Goals may be expressed
in terms of overall performance of the Company, the Services Company, the
Partnership, any Subsidiary, any division or business unit thereof or an
individual. The achievement of each Performance Goal shall be determined in
accordance with Applicable Accounting Standards.

 

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2.39 “Performance Period” shall mean one or more periods of time, which may be
of varying and overlapping durations, as the Administrator may select, over
which the attainment of one or more Performance Goals will be measured for the
purpose of determining a Participant’s right to, and the payment of, a
Performance Award.

2.40 “Performance Share” shall mean a contractual right awarded under
Section 9.5 hereof to receive a number of Shares or the Fair Market Value of
such number of Shares in cash based on the attainment of specified Performance
Goals or other criteria determined by the Administrator.

2.41 “Permitted Transferee” shall mean, with respect to a Participant, any
“family member” of the Participant, as defined under the General Instructions to
Form S-8 Registration Statement under the Securities Act or any successor Form
thereto, or any other transferee specifically approved by the Administrator,
after taking into account Applicable Law.

2.42 “Plan” shall mean this Digital Realty Trust, Inc., Digital Services, Inc.
and Digital Realty Trust, L.P. 2014 Incentive Award Plan, as it may be amended
from time to time.

2.43 “Prior Plan” shall mean the First Amended and Restated Digital Realty
Trust, Inc., Digital Services, Inc. and Digital Realty Trust, L.P. 2004
Incentive Award Plan, as amended from time to time.

2.44 “Profits Interest Unit” shall mean a “Profits Interest Unit” of the
Partnership (as defined in the Partnership Agreement) that is granted pursuant
to Section 9.7 hereof and is intended to constitute a “profits interest” within
the meaning of the Code.

2.45 “Program” shall mean any program adopted by the Administrator pursuant to
the Plan containing the terms and conditions intended to govern a specified type
of Award granted under the Plan and pursuant to which such type of Award may be
granted under the Plan.

2.46 “REIT” shall mean a real estate investment trust within the meaning of
Sections 856 through 860 of the Code.

2.47 “Restricted Stock” shall mean an award of Shares made under Article 8
hereof that is subject to certain restrictions and may be subject to risk of
forfeiture.

2.48 “Restricted Stock Unit” shall mean a contractual right awarded under
Section 9.4 hereof to receive in the future a Share or the cash value of a
Share.

2.49 “Securities Act” shall mean the Securities Act of 1933, as amended.

2.50 “Services Company” shall mean Digital Services, Inc.

2.51 “Services Company Director” shall mean a member of the Board of Directors
of the Services Company.

2.52 “Share Limit” shall have the meaning provided in Section 3.1(a) hereof.

2.53 “Shares” shall mean shares of Common Stock.

2.54 “Stock Appreciation Right” shall mean a stock appreciation right granted
under Article 10 hereof.

2.55 “Stock Payment” shall mean a payment in the form of Shares awarded under
Section 9.3 hereof.

 

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2.56 “Subsidiary” shall mean (a) a corporation, association or other business
entity of which fifty percent (50%) or more of the total combined voting power
of all classes of capital stock is owned, directly or indirectly, by the
Company, the Services Company, the Partnership and/or by one or more
Subsidiaries, (b) any partnership or limited liability company of which fifty
percent (50%) or more of the equity interests are owned, directly or indirectly,
by the Company, the Partnership, the Services Company and/or by one or more
Subsidiaries, and (c) any other entity not described in clauses (a) or (b) above
of which fifty percent (50%) or more of the ownership and the power (whether
voting interests or otherwise), pursuant to a written contract or agreement, to
direct the policies and management or the financial and the other affairs
thereof, are owned or controlled by the Company, the Partnership, the Services
Company and/or by one or more Subsidiaries.

2.57 “Substitute Award” shall mean an Award granted under the Plan in connection
with a corporate transaction, such as a merger, combination, consolidation or
acquisition of property or stock, in any case, upon the assumption of, or in
substitution for, an outstanding equity award previously granted by a company or
other entity that is a party to such transaction; provided, however, that in no
event shall the term “Substitute Award” be construed to refer to an award made
in connection with the cancellation and repricing of an Option or Stock
Appreciation Right.

2.58 “Successor Entity” shall have the meaning provided in Section 2.8(c)(i)
hereof.

2.59 “Termination of Service” shall mean:

(a) As to a Consultant, the time when the engagement of a Participant as a
Consultant to the Company and its Affiliates is terminated for any reason, with
or without cause, including, without limitation, by resignation, discharge,
death or retirement, but, unless otherwise determined by the Administrator,
excluding terminations where the Consultant simultaneously commences or remains
in employment and/or service as an Employee and/or Director with the Company or
any Affiliate.

(b) As to a Non-Employee Director, the time when a Participant who is a
Non-Employee Director ceases to be a Director for any reason, including, without
limitation, a termination by resignation, failure to be elected, death or
retirement, but, unless otherwise determined by the Administrator, excluding
terminations where the Participant simultaneously commences or remains in
employment and/or service as an Employee and/or Consultant with the Company or
any Affiliate.

(c) As to an Employee, the time when the employee-employer relationship between
a Participant and the Company and its Affiliates is terminated for any reason,
including, without limitation, a termination by resignation, discharge, death,
disability or retirement, but, unless otherwise determined by the Administrator,
excluding terminations where the Participant simultaneously commences or remains
in service as a Consultant and/or Director with the Company or any Affiliate.

The Administrator, in its sole discretion, shall determine the effect of all
matters and questions relating to any Termination of Service, including, without
limitation, whether a Termination of Service has occurred, whether any
Termination of Service resulted from a discharge for cause and whether any
particular leave of absence constitutes a Termination of Service; provided,
however, that, with respect to Incentive Stock Options, unless the Administrator
otherwise provides in the terms of any Program, Award Agreement or otherwise, or
as otherwise required by Applicable Law, a leave of absence, change in status
from an employee to an independent contractor or other change in the
employee-employer relationship shall constitute a Termination of Service only
if, and to the extent that, such leave of absence, change in status or other
change interrupts employment for the purposes of Section 422(a)(2) of the Code.
For purposes of the Plan, unless otherwise determined by the Administrator, a
Participant’s employee-employer relationship or consultancy relationship shall
be deemed to be terminated in the event that the Affiliate employing or
contracting with such Participant ceases to remain an Affiliate following any
merger, sale of stock or other corporate transaction or event (including,
without limitation, a spin-off).

 

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ARTICLE 3.

SHARES SUBJECT TO THE PLAN

3.1 Number of Shares.

(a) Subject to Section 3.1(b) and Section 13.2 hereof, the aggregate number of
Shares which may be issued or transferred pursuant to Awards under the Plan
shall equal the sum of (i) 1,700,000 Shares, (ii) the number of Shares which, as
of the Effective Date, remain available for issuance under the Prior Plan and
(iii) any Shares subject to awards outstanding under the Prior Plan as of the
Effective Date which, on or after the Effective Date, are forfeited or otherwise
terminate or expire for any reason without the issuance of shares to the holder
thereof (the “Share Limit”). In order that the applicable regulations under the
Code relating to Incentive Stock Options be satisfied, the maximum number of
Shares that may be issued under the Plan upon the exercise of Incentive Stock
Options shall be 1,700,000 Shares. Subject to Section 13.2 hereof, each Profits
Interest Unit issued pursuant to an Award shall count as one Share for purposes
of calculating the aggregate number of Shares available for issuance under the
Plan as set forth in this Section 3.1(a) and for purposes of calculating the
Individual Award Limit set forth in Section 3.3 hereof.

(b) If any Shares subject to an Award are forfeited or expire or such Award is
settled for cash (in whole or in part), the Shares subject to such Award shall,
to the extent of such forfeiture, expiration or cash settlement, again be
available for future grants of Awards under the Plan and shall be added back to
the Share Limit in the same number of Shares as were debited from the Share
Limit in respect of the grant of such Award (as may be adjusted in accordance
with Section 13.2 hereof). Notwithstanding anything to the contrary contained
herein, the following Shares shall not be added back to the Share Limit and will
not be available for future grants of Awards: (i) Shares tendered by a
Participant or withheld by the Company in payment of the exercise price of an
Option; (ii) Shares tendered by the Participant or withheld by the Company to
satisfy any tax withholding obligation with respect to an Award; (iii) Shares
subject to a Stock Appreciation Right that are not issued in connection with the
stock settlement of the Stock Appreciation Right on exercise thereof; and
(iv) Shares purchased on the open market with the cash proceeds from the
exercise of Options. Any Shares repurchased by the Company under Section 8.4
hereof at the same price paid by the Participant so that such Shares are
returned to the Company will again be available for Awards. The payment of
Dividend Equivalents in cash in conjunction with any outstanding Awards shall
not be counted against the Shares available for issuance under the Plan.
Notwithstanding the provisions of this Section 3.1(b), no Shares may again be
optioned, granted or awarded if such action would cause an Incentive Stock
Option to fail to qualify as an incentive stock option under Section 422 of the
Code.

(c) Substitute Awards shall not reduce the Shares authorized for grant under the
Plan. Additionally, in the event that a company acquired by the Company or any
Affiliate, or with which the Company or any Affiliate combines, has shares
available under a pre-existing plan approved by its stockholders and not adopted
in contemplation of such acquisition or combination, the shares available for
grant pursuant to the terms of such pre-existing plan (as adjusted, to the
extent appropriate, using the exchange ratio or other adjustment or valuation
ratio or formula used in such acquisition or combination to determine the
consideration payable to the holders of common stock of the entities party to
such acquisition or combination) may be used for Awards under the Plan and shall
not reduce the Shares authorized for grant under the Plan, to the extent that
grants of Awards using such available shares are permitted without stockholder
approval under the rules of the principal securities exchange on which the
Common Stock is then listed and made only to individuals who were not employed
by or providing services to the Company or its Affiliates immediately prior to
such acquisition or combination.

3.2 Stock Distributed. Any Shares distributed pursuant to an Award may consist,
in whole or in part, of authorized and unissued Common Stock or Common Stock
purchased on the open market.

3.3 Limitation on Number of Shares Subject to Awards. Notwithstanding any
provision in the Plan to the contrary, and subject to Section 13.2 hereof,
(a) the maximum aggregate number of Shares with respect to one or

 

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more Awards that may be granted to any one person during any calendar year shall
be 1,500,000 Shares, (b) the maximum aggregate amount of cash that may be paid
in cash during any calendar year with respect to one or more Awards payable in
cash shall be $10,000,000, and (c) the maximum aggregate value (determined as of
the date of grant under Applicable Accounting Standards), determined as of the
date of grant, of Awards that may be granted to any Non-Employee Director during
any calendar year shall be $500,000 (together, the “Individual Award Limits”).

ARTICLE 4.

GRANTING OF AWARDS

4.1 Participation. The Administrator may, from time to time, select from among
all Eligible Individuals, those to whom one or more Awards shall be granted and
shall determine the nature and amount of each Award, which shall not be
inconsistent with the requirements of the Plan. No Eligible Individual shall
have any right to be granted an Award pursuant to the Plan.

4.2 Award Agreement. Each Award shall be evidenced by an Award Agreement stating
the terms and conditions applicable to such Award, consistent with the
requirements of the Plan and any applicable Program.

4.3 Limitations Applicable to Section 16 Persons. Notwithstanding anything
contained herein to the contrary, with respect to any Award granted or awarded
to any individual who is then subject to Section 16 of the Exchange Act, the
Plan, any applicable Program and the applicable Award Agreement shall be subject
to any additional limitations set forth in any applicable exemptive rule under
Section 16 of the Exchange Act (including Rule 16b-3 of the Exchange Act and any
amendments thereto) that are requirements for the application of such exemptive
rule, and such additional limitations shall be deemed to be incorporated by
reference into such Award to the extent permitted by Applicable Law.

4.4 At-Will Service. Nothing in the Plan or in any Program or Award Agreement
hereunder shall confer upon any Participant any right to continue as an
Employee, Director or Consultant of the Company or any Affiliate, or shall
interfere with or restrict in any way the rights of the Company or any
Affiliate, which rights are hereby expressly reserved, to discharge any
Participant at any time for any reason whatsoever, with or without cause, and
with or without notice, or to terminate or change all other terms and conditions
of any Participant’s employment or engagement, except to the extent expressly
provided otherwise in a written agreement between the Participant and the
Company or any Affiliate.

4.5 Foreign Participants. Notwithstanding any provision of the Plan to the
contrary, in order to comply with the laws in other countries in which the
Company and its Affiliates operate or have Employees, Non-Employee Directors or
Consultants, or in order to comply with the requirements of any foreign
securities exchange, the Administrator, in its sole discretion, shall have the
power and authority to: (a) determine which Affiliates shall be covered by the
Plan; (b) determine which Eligible Individuals outside the United States are
eligible to participate in the Plan; (c) modify the terms and conditions of any
Award granted to Eligible Individuals outside the United States to comply with
applicable foreign laws or listing requirements of any such foreign securities
exchange; (d) establish subplans and modify exercise procedures and other terms
and procedures, to the extent such actions may be necessary or advisable;
provided, however, that no such subplans and/or modifications shall increase the
Share Limit or Individual Award Limits contained in Sections 3.1 and 3.3 hereof,
respectively; and (e) take any action, before or after an Award is made, that it
deems advisable to obtain approval or comply with any necessary local
governmental regulatory exemptions or approvals or listing requirements of any
such foreign securities exchange. Notwithstanding the foregoing, the
Administrator may not take any actions hereunder, and no Awards shall be
granted, that would violate Applicable Law.

 

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4.6 Stand-Alone and Tandem Awards. Awards granted pursuant to the Plan may, in
the sole discretion of the Administrator, be granted either alone, in addition
to, or in tandem with, any other Award granted pursuant to the Plan. Awards
granted in addition to or in tandem with other Awards may be granted either at
the same time as or at a different time from the grant of such other Awards.

ARTICLE 5.

PROVISIONS APPLICABLE TO AWARDS INTENDED TO QUALIFY AS

PERFORMANCE-BASED COMPENSATION

5.1 Purpose. The Committee, in its sole discretion, may determine whether any
Award is intended to qualify as Performance-Based Compensation. If the
Committee, in its sole discretion, decides to grant an Award to an Eligible
Individual that is intended to qualify as Performance-Based Compensation, then
the provisions of this Article 5 shall control over any contrary provision
contained in the Plan. The Administrator may in its sole discretion grant Awards
to Eligible Individuals that are based on Performance Criteria or Performance
Goals but that do not satisfy the requirements of this Article 5 and that are
not intended to qualify as Performance-Based Compensation. Unless otherwise
specified by the Committee at the time of grant, the Performance Criteria with
respect to an Award intended to be Performance-Based Compensation payable to a
Covered Employee shall be determined on the basis of Applicable Accounting
Standards.

5.2 Applicability. The grant of an Award to an Eligible Individual for a
particular Performance Period shall not require the grant of an Award to such
Eligible Individual in any subsequent Performance Period and the grant of an
Award to any one Eligible Individual shall not require the grant of an Award to
any other Eligible Individual in such period or in any other period.

5.3 Procedures with Respect to Performance-Based Awards. To the extent necessary
to comply with the requirements of Section 162(m)(4)(C) of the Code, with
respect to any Award which is intended to qualify as Performance-Based
Compensation, no later than ninety (90) days following the commencement of any
Performance Period or any designated fiscal period or period of service (or such
earlier time as may be required under Section 162(m) of the Code), the Committee
shall, in writing, (a) designate one or more Eligible Individuals; (b) select
the Performance Criteria applicable to the Performance Period; (c) establish the
Performance Goals, and amounts of such Awards, as applicable, which may be
earned for such Performance Period based on the Performance Criteria; and
(d) specify the relationship between Performance Criteria and the Performance
Goals and the amounts of such Awards, as applicable, to be earned by each
Covered Employee for such Performance Period. Following the completion of each
Performance Period, the Committee shall certify in writing whether and the
extent to which the applicable Performance Goals have been achieved for such
Performance Period. In determining the amount earned under such Awards, unless
otherwise provided in an Award Agreement, the Committee shall have the right to
reduce or eliminate (but not to increase) the amount payable at a given level of
performance to take into account additional factors that the Committee may deem
relevant, including the assessment of individual or corporate performance for
the Performance Period.

5.4 Payment of Performance-Based Awards. Unless otherwise provided in the
applicable Program or Award Agreement (and only to the extent otherwise
permitted by Section 162(m)(4)(C) of the Code), the holder of an Award that is
intended to qualify as Performance-Based Compensation must be employed by the
Company or an Affiliate throughout the applicable Performance Period. Unless
otherwise provided in the applicable Performance Goals, Program or Award
Agreement, a Participant shall be eligible to receive payment pursuant to such
Awards for a Performance Period only if and to the extent the Performance Goals
for such Performance Period are achieved.

5.5 Additional Limitations. Notwithstanding any other provision of the Plan and
except as otherwise determined by the Administrator, any Award which is granted
to an Eligible Individual and is intended to qualify

 

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as Performance-Based Compensation shall be subject to any additional limitations
imposed by Section 162(m) of the Code that are requirements for qualification as
Performance-Based Compensation, and the Plan, the Program and the Award
Agreement shall be deemed amended to the extent necessary to conform to such
requirements.

ARTICLE 6.

GRANTING OF OPTIONS

6.1 Granting of Options to Eligible Individuals. The Administrator is authorized
to grant Options to Eligible Individuals from time to time, in its sole
discretion, on such terms and conditions as it may determine which shall not be
inconsistent with the Plan.

6.2 Qualification of Incentive Stock Options. No Incentive Stock Option shall be
granted to any person who is not an Employee of the Company or any “parent
corporation” or “subsidiary corporation” of the Company (as defined in Sections
424(e) and 424(f) of the Code, respectively). No person who qualifies as a
Greater Than 10% Stockholder may be granted an Incentive Stock Option unless
such Incentive Stock Option conforms to the applicable provisions of Section 422
of the Code. Any Incentive Stock Option granted under the Plan may be modified
by the Administrator, with the consent of the Participant, to disqualify such
Option from treatment as an “incentive stock option” under Section 422 of the
Code. To the extent that the aggregate fair market value of stock with respect
to which “incentive stock options” (within the meaning of Section 422 of the
Code, but without regard to Section 422(d) of the Code) are exercisable for the
first time by a Participant during any calendar year under the Plan and all
other plans of the Company or any “parent corporation” or “subsidiary
corporation” of the Company (as defined in Section 424(e) and 424(f) of the
Code, respectively) exceeds one hundred thousand dollars ($100,000), the Options
shall be treated as Non-Qualified Stock Options to the extent required by
Section 422 of the Code. The rule set forth in the preceding sentence shall be
applied by taking Options and other “incentive stock options” into account in
the order in which they were granted and the Fair Market Value of stock shall be
determined as of the time the respective options were granted. In addition, to
the extent that any Options otherwise fail to qualify as Incentive Stock
Options, such Options shall be treated as Nonqualified Stock Options.

6.3 Option Exercise Price. The exercise price per Share subject to each Option
shall be set by the Administrator, but shall not be less than one hundred
percent (100%) of the Fair Market Value of a Share on the date the Option is
granted (or, as to Incentive Stock Options, on the date the Option is modified,
extended or renewed for purposes of Section 424(h) of the Code). In addition, in
the case of Incentive Stock Options granted to a Greater Than 10% Stockholder,
such price shall not be less than one hundred ten percent (110%) of the Fair
Market Value of a Share on the date the Option is granted (or the date the
Option is modified, extended or renewed for purposes of Section 424(h) of the
Code).

6.4 Option Term. The term of each Option shall be set by the Administrator in
its sole discretion; provided, however, that the term shall not be more than ten
(10) years from the date the Option is granted, or five (5) years from the date
an Incentive Stock Option is granted to a Greater Than 10% Stockholder. The
Administrator shall determine the time period, including the time period
following a Termination of Service, during which the Participant has the right
to exercise the vested Options, which time period may not extend beyond the
stated term of the Option. Except as limited by the requirements of Section 409A
or Section 422 of the Code, subject to the limitations set forth in the first
sentence of this Section 6.4, the Administrator may extend the term of any
outstanding Option, and may extend the time period during which vested Options
may be exercised, in connection with any Termination of Service of the
Participant, and may amend any other term or condition of such Option relating
to such a Termination of Service.

 

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6.5 Option Vesting.

(a) The terms and conditions pursuant to which an Option vests in the
Participant and becomes exercisable shall be determined by the Administrator and
set forth in the applicable Award Agreement. Such vesting may be based on
service with the Company or any Affiliate, any of the Performance Criteria, or
any other criteria selected by the Administrator. At any time after the grant of
an Option, the Administrator may, in its sole discretion and subject to whatever
terms and conditions it selects, accelerate the vesting of the Option.

(b) No portion of an Option which is unexercisable at a Participant’s
Termination of Service shall thereafter become exercisable, except as may be
otherwise provided by the Administrator either in an applicable Program, the
applicable Award Agreement or by action of the Administrator following the grant
of the Option.

6.6 Substitute Awards. Notwithstanding the foregoing provisions of this Article
6 to the contrary, in the case of an Option that is a Substitute Award, the
price per Share of the Shares subject to such Option may be less than the Fair
Market Value per share on the date of grant, provided, however, that the
exercise price of any Substitute Award shall be determined in accordance with
the applicable requirements of Sections 424 and 409A of the Code.

6.7 Substitution of Stock Appreciation Rights. The Administrator may, in its
sole discretion, substitute an Award of Stock Appreciation Rights for an
outstanding Option at any time prior to or upon exercise of such Option;
provided, however, that such Stock Appreciation Rights shall be exercisable with
respect to the same number of Shares for which such substituted Option would
have been exercisable, and shall also have the same exercise price and remaining
term as the substituted Option.

ARTICLE 7.

EXERCISE OF OPTIONS

7.1 Partial Exercise. An exercisable Option may be exercised in whole or in
part. However, an Option shall not be exercisable with respect to fractional
shares and the Administrator may require that, by the terms of the Option, a
partial exercise must be with respect to a minimum number of Shares.

7.2 Manner of Exercise. All or a portion of an exercisable Option shall be
deemed exercised upon delivery of all of the following to the Secretary of the
Company, or such other person or entity designated by the Administrator, or his
or its office, as applicable:

(a) A written or electronic notice complying with the applicable rules
established by the Administrator stating that the Option, or a portion thereof,
is exercised. The notice shall be signed by the Participant or other person then
entitled to exercise the Option or such portion of the Option;

(b) Such representations and documents as the Administrator, in its sole
discretion, deems necessary or advisable to effect compliance with Applicable
Law. The Administrator may, in its sole discretion, also take such additional
actions as it deems appropriate to effect such compliance including, without
limitation, placing legends on share certificates and issuing stop-transfer
notices to agents and registrars;

(c) In the event that the Option shall be exercised pursuant to Section 11.3
hereof by any person or persons other than the Participant, appropriate proof of
the right of such person or persons to exercise the Option, as determined in the
sole discretion of the Administrator; and

(d) Full payment of the exercise price and applicable withholding taxes to the
stock administrator of the Company for the Shares with respect to which the
Option, or portion thereof, is exercised, in a manner permitted by the
Administrator in accordance with Sections 11.1 and 11.2 hereof.

 

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7.3 Notification Regarding Disposition. The Participant shall give the Company
prompt written or electronic notice of any disposition of Shares acquired by
exercise of an Incentive Stock Option which occurs within (a) two (2) years
after the date of granting (including the date the Option is modified, extended
or renewed for purposes of Section 424(h) of the Code) of such Option to such
Participant, or (b) one (1) year after the date of transfer of such Shares to
such Participant.

ARTICLE 8.

RESTRICTED STOCK

8.1 Award of Restricted Stock.

(a) The Administrator is authorized to grant Restricted Stock to Eligible
Individuals, and shall determine the terms and conditions, including the
restrictions applicable to each award of Restricted Stock, which terms and
conditions shall not be inconsistent with the Plan, and may impose such
conditions on the issuance of such Restricted Stock as it deems appropriate.

(b) The Administrator shall establish the purchase price, if any, and form of
payment for Restricted Stock; provided, however, that if a purchase price is
charged, such purchase price shall be no less than the par value of the Shares
to be purchased, unless otherwise permitted by Applicable Law. In all cases,
legal consideration shall be required for each issuance of Restricted Stock to
the extent required by Applicable Law.

8.2 Rights as Stockholders. Subject to Section 8.4 hereof, upon issuance of
Restricted Stock, the Participant shall have, unless otherwise provided by the
Administrator, all the rights of a stockholder with respect to said shares,
subject to the restrictions in an applicable Program or in the applicable Award
Agreement, including the right to receive all dividends and other distributions
paid or made with respect to the shares; provided, however, that, in the sole
discretion of the Administrator, any extraordinary distributions with respect to
the shares shall be subject to the restrictions set forth in Section 8.3 hereof.

8.3 Restrictions. All shares of Restricted Stock (including any shares received
by Participants thereof with respect to shares of Restricted Stock as a result
of stock dividends, stock splits or any other form of recapitalization) shall,
in the terms of an applicable Program or the applicable Award Agreement, be
subject to such restrictions and vesting requirements as the Administrator shall
provide. Such restrictions may include, without limitation, restrictions
concerning voting rights and transferability and such restrictions may lapse
separately or in combination at such times and pursuant to such circumstances or
based on such criteria as selected by the Administrator, including, without
limitation, criteria based on the Participant’s continued employment,
directorship or consultancy with the Company, the Performance Criteria, Company
or Affiliate performance, individual performance or other criteria selected by
the Administrator. By action taken after the Restricted Stock is issued, the
Administrator may, on such terms and conditions as it may determine to be
appropriate, accelerate the vesting of such Restricted Stock by removing any or
all of the restrictions imposed by the terms of any Program or by the applicable
Award Agreement. Restricted Stock may not be sold or encumbered until all
restrictions are terminated or expire.

8.4 Repurchase or Forfeiture of Restricted Stock. If no purchase price was paid
by the Participant for the Restricted Stock, upon a Termination of Service, the
Participant’s rights in unvested Restricted Stock then subject to restrictions
shall lapse and be forfeited, and such Restricted Stock shall be surrendered to
the Company and cancelled without consideration. If a purchase price was paid by
the Participant for the Restricted Stock, upon a Termination of Service the
Company shall have the right to repurchase from the Participant the unvested
Restricted Stock then-subject to restrictions at a cash price per share equal to
the price paid by the Participant for such Restricted Stock or such other amount
as may be specified in an applicable Program or the applicable Award Agreement.
The Administrator in its sole discretion may provide that, upon certain events,
including

 

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without limitation a Change in Control, the Participant’s death, retirement or
disability, any other specified Termination of Service or any other event, the
Participant’s rights in unvested Restricted Stock shall not terminate, such
Restricted Stock shall vest and cease to be forfeitable and, if applicable, the
Company shall cease to have a right of repurchase.

8.5 Certificates for Restricted Stock. Restricted Stock granted pursuant to the
Plan may be evidenced in such manner as the Administrator shall determine.
Certificates or book entries evidencing shares of Restricted Stock must include
an appropriate legend referring to the terms, conditions, and restrictions
applicable to such Restricted Stock, and the Company may, in its sole
discretion, retain physical possession of any stock certificate until such time
as all applicable restrictions lapse.

ARTICLE 9.

PERFORMANCE AWARDS; DIVIDEND EQUIVALENTS; STOCK PAYMENTS;

RESTRICTED STOCK UNITS; PERFORMANCE SHARES; OTHER INCENTIVE

AWARDS; PROFITS INTEREST UNITS

9.1 Performance Awards.

(a) The Administrator is authorized to grant Performance Awards to any Eligible
Individual and to determine whether such Performance Awards shall be
Performance-Based Compensation. The value of Performance Awards may be linked to
any one or more of the Performance Criteria or other specific criteria
determined by the Administrator, in each case on a specified date or dates or
over any period or periods determined by the Administrator.

(b) Without limiting Section 9.1(a) hereof, the Administrator may grant
Performance Awards to any Eligible Individual in the form of a cash bonus
payable upon the attainment of objective Performance Goals, or such other
criteria, whether or not objective, which are established by the Administrator,
in each case on a specified date or dates or over any period or periods
determined by the Administrator. Any such bonuses paid to a Participant which
are intended to be Performance-Based Compensation shall be based upon
objectively determinable bonus formulas established in accordance with the
provisions of Article 5 hereof.

9.2 Dividend Equivalents.

(a) Subject to Section 9.2(b) hereof, Dividend Equivalents may be granted by the
Administrator, either alone or in tandem with another Award, based on dividends
declared on the Common Stock, to be credited as of dividend payment dates during
the period between the date the Dividend Equivalents are granted to a
Participant and the date such Dividend Equivalents terminate or expire, as
determined by the Administrator. Such Dividend Equivalents shall be converted to
cash or additional Shares by such formula and at such time and subject to such
limitations as may be determined by the Administrator. In addition, Dividend
Equivalents with respect to Shares covered by a Performance Award shall only be
paid out to the Participant at the same time or times and to the same extent
that the vesting conditions, if any, are subsequently satisfied and the
Performance Award vests with respect to such Shares.

(b) Notwithstanding the foregoing, no Dividend Equivalents shall be payable with
respect to Options or Stock Appreciation Rights.

9.3 Stock Payments. The Administrator is authorized to make one or more Stock
Payments to any Eligible Individual. The number or value of Shares of any Stock
Payment shall be determined by the Administrator and may be based upon one or
more Performance Criteria or any other specific criteria, including service to
the Company or any Affiliate, determined by the Administrator. Stock Payments
may, but are not required to be made in lieu of base salary, bonus, fees or
other cash compensation otherwise payable to such Eligible Individual.

 

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9.4 Restricted Stock Units. The Administrator is authorized to grant Restricted
Stock Units to any Eligible Individual. The number and terms and conditions of
Restricted Stock Units shall be determined by the Administrator. The
Administrator shall specify the date or dates on which the Restricted Stock
Units shall become fully vested and nonforfeitable, and may specify such
conditions to vesting as it deems appropriate, including conditions based on one
or more Performance Criteria or other specific criteria, including service to
the Company or any Affiliate, in each case, on a specified date or dates or over
any period or periods, as determined by the Administrator. The Administrator
shall specify, or may permit the Participant to elect, the conditions and dates
upon which the Shares underlying the Restricted Stock Units shall be issued,
which dates shall not be earlier than the date as of which the Restricted Stock
Units vest and become nonforfeitable and which conditions and dates shall be
consistent with the applicable provisions of Section 409A of the Code or an
exemption therefrom. On the distribution dates, the Company shall issue to the
Participant one unrestricted, fully transferable Share (or the Fair Market Value
of one such Share in cash) for each vested and nonforfeitable Restricted Stock
Unit.

9.5 Performance Share Awards. Any Eligible Individual selected by the
Administrator may be granted one or more Performance Share awards which shall be
denominated in a number of Shares and the vesting of which may be linked to any
one or more of the Performance Criteria, other specific performance criteria (in
each case on a specified date or dates or over any period or periods determined
by the Administrator) and/or time-vesting or other criteria, as determined by
the Administrator.

9.6 Other Incentive Awards. The Administrator is authorized to grant Other
Incentive Awards to any Eligible Individual, which Awards may cover Shares or
the right to purchase Shares or have a value derived from the value of, or an
exercise or conversion privilege at a price related to, or that are otherwise
payable in or based on, Shares, shareholder value or shareholder return, in each
case, on a specified date or dates or over any period or periods determined by
the Administrator. Other Incentive Awards may be linked to any one or more of
the Performance Criteria or other specific performance criteria determined
appropriate by the Administrator.

9.7 Profits Interest Units. The Administrator is authorized to grant Profits
Interest Units in such amount and subject to such terms and conditions as may be
determined by the Administrator; provided, however, that Profits Interest Units
may only be issued to a Participant for the performance of services to or for
the benefit of the Partnership (a) in the Participant’s capacity as a partner of
the Partnership, (b) in anticipation of the Participant becoming a partner of
the Partnership, or (c) as otherwise determined by the Administrator, provided
that the Profits Interest Units are intended to constitute “profits interests”
within the meaning of the Code, including, to the extent applicable, Revenue
Procedure 93-27, 1993-2 C.B. 343 and Revenue Procedure 2001-43, 2001-2 C.B. 191.
The Administrator shall specify the conditions and dates upon which the Profits
Interest Units shall vest and become nonforfeitable. Profits Interest Units
shall be subject to the terms and conditions of the Partnership Agreement and
such other restrictions, including restrictions on transferability, as the
Administrator may impose. These restrictions may lapse separately or in
combination at such times, pursuant to such circumstances, in such installments,
or otherwise, as the Administrator determines at the time of the grant of the
Award or thereafter.

9.8 Granting of Profits Interest Units to Non-Employee Directors.

(a) Pro-Rata Grant. During the term of the Plan, commencing after the Effective
Date, each person who first becomes a Non-Employee Director of the Company on a
date other than the date of an annual meeting of the Company’s stockholders
shall, on the date of such person first becoming a Non-Employee Director of the
Company, be granted a number of Profits Interest Units equal to the product of
(A) the quotient obtained by dividing (x) $100,000 by (y) the Fair Market Value
of a Share on such date, multiplied by (B) the quotient obtained by dividing
(x) twelve (12) minus the number of whole months that have elapsed since the
immediately preceding annual meeting of the Company’s stockholders, by
(y) twelve (12) (the “Pro-Rata Grant”).

(b) Annual Grant. During the term of the Plan, commencing as of the 2014 Annual
Meeting, each person who first becomes a Non-Employee Director of the Company at
such annual meeting and each person who otherwise continues to be a Non-Employee
Director of the Company immediately following such annual

 

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meeting shall, on the date of the 2014 Annual Meeting and on each subsequent
annual meeting occurring thereafter, be granted a number of Profits Interest
Units equal to the quotient obtained by dividing (x) $100,000 by (y) the Fair
Market Value of a Share on the date of such annual meeting (the “Annual Grant”).
A Director who is also an Employee who subsequently incurs a termination of
employment and remains on the Board will not receive a Pro-Rata Grant, but, to
the extent such Director is otherwise eligible, will receive Annual Grants after
such termination of his status as an Employee.

(c) Stock in Lieu of Profits Interests. Notwithstanding the foregoing, effective
with respect to any grant of Profits Interest Units to a Non-Employee Director
of the Company pursuant to this Section 9.8, such Non-Employee Director of the
Company may elect in advance to receive in lieu thereof an equivalent number of
Shares in the form of a Stock Payment or Restricted Stock, as applicable, which
shall be subject to the same vesting schedule (if any) that would have applied
to the corresponding grant of Profits Interest Units. Notwithstanding the
foregoing, in the event that a Non-Employee Director of the Company does not
qualify as an “accredited investor” within the meaning of Regulation D of the
Securities Act, on the date of any grant of Profits Interest Units to such
Non-Employee Director of the Company pursuant to this Section 9.8, then such
Non-Employee Director of the Company shall not receive such grant of Profits
Interest Units and in lieu thereof shall automatically be granted an equivalent
number of Shares in the form of a Stock Payment or Restricted Stock, as
applicable, which shall be subject to the same vesting schedule (if any) as
would have applied to the corresponding grant of Profits Interest Units.

(d) Vesting. Each Annual Grant and Pro-Rata Grant shall be fully vested on the
date of grant. Consistent with the foregoing, the terms and conditions of such
Profits Interest Units (including, without limitation, any transfer restrictions
related thereto) shall be set forth in an Award Agreement to be entered into by
the Company and each Non-Employee Director of the Company which shall evidence
the grant of the Profits Interest Units.

(e) As of the Effective Date, (i) Awards made to Non-Employee Directors of the
Company pursuant to this Section 9.8 shall be in lieu of all future Awards to
Non-Employee Directors of the Company under Section 8.10 of the Prior Plan, and
(ii) with respect to future Awards, the provisions of this Section 9.8 shall
replace and supersede the relevant provisions of Section 8.10 of the Prior Plan.

9.9 Other Terms and Conditions. All applicable terms and conditions of each
Award described in this Article 9, including without limitation, as applicable,
the term, vesting conditions and exercise/purchase price applicable to the
Award, shall be set by the Administrator in its sole discretion, provided,
however, that the value of the consideration paid by a Participant for an Award
shall not be less than the par value of a Share, unless otherwise permitted by
Applicable Law.

9.10 Exercise upon Termination of Service. Awards described in this Article 9
are exercisable or distributable, as applicable, only while the Participant is
an Employee, Director or Consultant, as applicable. The Administrator, however,
in its sole discretion may provide that such Award may be exercised or
distributed subsequent to a Termination of Service as provided under an
applicable Program, Award Agreement, payment deferral election and/or in certain
events, including without limitation, a Change in Control, the Participant’s
death, retirement or disability or any other specified Termination of Service.

ARTICLE 10.

STOCK APPRECIATION RIGHTS

10.1 Grant of Stock Appreciation Rights.

(a) The Administrator is authorized to grant Stock Appreciation Rights to
Eligible Individuals from time to time, in its sole discretion, on such terms
and conditions as it may determine consistent with the Plan.

 

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(b) A Stock Appreciation Right shall entitle the Participant (or other person
entitled to exercise the Stock Appreciation Right pursuant to the Plan) to
exercise all or a specified portion of the Stock Appreciation Right (to the
extent then-exercisable pursuant to its terms) and to receive from the Company
an amount determined by multiplying the difference obtained by subtracting the
exercise price per Share of the Stock Appreciation Right from the Fair Market
Value on the date of exercise of the Stock Appreciation Right by the number of
Shares with respect to which the Stock Appreciation Right shall have been
exercised, subject to any limitations the Administrator may impose. Except as
described in Section 10.1(c) hereof, the exercise price per Share subject to
each Stock Appreciation Right shall be set by the Administrator, but shall not
be less than one hundred percent (100%) of the Fair Market Value on the date the
Stock Appreciation Right is granted.

(c) Notwithstanding the foregoing provisions of Section 10.1(b) hereof to the
contrary, in the case of a Stock Appreciation Right that is a Substitute Award,
the price per share of the shares subject to such Stock Appreciation Right may
be less than 100% of the Fair Market Value per share on the date of grant;
provided, however, that the exercise price of any Substitute Award shall be
determined in accordance with the applicable requirements of Sections 424 and
409A of the Code.

10.2 Stock Appreciation Right Vesting.

(a) The Administrator shall determine the period during which the Participant
shall vest in a Stock Appreciation Right and have the right to exercise such
Stock Appreciation Rights (subject to Section 10.4 hereof) in whole or in part.
Such vesting may be based on service with the Company or any Affiliate, any of
the Performance Criteria or any other criteria selected by the Administrator. At
any time after grant of a Stock Appreciation Right, the Administrator may, in
its sole discretion and subject to whatever terms and conditions it selects,
accelerate the period during which the Stock Appreciation Right vests.

(b) No portion of a Stock Appreciation Right which is unexercisable at
Termination of Service shall thereafter become exercisable, except as may be
otherwise provided by the Administrator either in an applicable Program or Award
Agreement or by action of the Administrator following the grant of the Stock
Appreciation Right.

10.3 Manner of Exercise. All or a portion of an exercisable Stock Appreciation
Right shall be deemed exercised upon delivery of all of the following to the
stock administrator of the Company, or such other person or entity designated by
the Administrator, or his or its office, as applicable:

(a) A written or electronic notice complying with the applicable rules
established by the Administrator stating that the Stock Appreciation Right, or a
portion thereof, is exercised. The notice shall be signed by the Participant or
other person then-entitled to exercise the Stock Appreciation Right or such
portion of the Stock Appreciation Right;

(b) Such representations and documents as the Administrator, in its sole
discretion, deems necessary or advisable to effect compliance with all
applicable provisions of the Securities Act and any other federal, state or
foreign securities laws or regulations. The Administrator may, in its sole
discretion, also take whatever additional actions it deems appropriate to effect
such compliance;

(c) In the event that the Stock Appreciation Right shall be exercised pursuant
to this Section 10.3 by any person or persons other than the Participant,
appropriate proof of the right of such person or persons to exercise the Stock
Appreciation Right; and

(d) Full payment of the applicable withholding taxes for the Shares with respect
to which the Stock Appreciation Rights, or portion thereof, are exercised, in a
manner permitted by the Administrator in accordance with Sections 11.1 and 11.2
hereof.

10.4 Stock Appreciation Right Term. The term of each Stock Appreciation Right
shall be set by the Administrator in its sole discretion; provided, however,
that the term shall not be more than ten (10) years from

 

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the date the Stock Appreciation Right is granted. The Administrator shall
determine the time period, including the time period following a Termination of
Service, during which the Participant has the right to exercise the vested Stock
Appreciation Rights, which time period may not extend beyond the expiration date
of the Stock Appreciation Right term. Except as limited by the requirements of
Section 409A of the Code, subject to the limitations set forth in the first
sentence of this Section 10.4, the Administrator may extend the term of any
outstanding Stock Appreciation Right, and may extend the time period during
which vested Stock Appreciation Rights may be exercised, in connection with any
Termination of Service of the Participant, and may amend any other term or
condition of such Stock Appreciation Right relating to such a Termination of
Service.

ARTICLE 11.

ADDITIONAL TERMS OF AWARDS

11.1 Payment. The Administrator shall determine the methods by which payments by
any Participant with respect to any Awards granted under the Plan shall be made,
including, without limitation: (a) cash or check, (b) Shares (including, in the
case of payment of the exercise price of an Award, Shares issuable pursuant to
the exercise of the Award) held for such period of time as may be required by
the Administrator in order to avoid adverse accounting consequences, in each
case, having a Fair Market Value on the date of delivery equal to the aggregate
payments required, (c) delivery of a written or electronic notice that the
Participant has placed a market sell order with a broker with respect to Shares
then-issuable upon exercise or vesting of an Award, and that the broker has been
directed to pay a sufficient portion of the net proceeds of the sale to the
Company in satisfaction of the aggregate payments required; provided, however,
that payment of such proceeds is then made to the Company upon settlement of
such sale, or (d) other form of legal consideration acceptable to the
Administrator. The Administrator shall also determine the methods by which
Shares shall be delivered or deemed to be delivered to Participants.
Notwithstanding any other provision of the Plan to the contrary, no Participant
who is a Director or an “executive officer” of the Company within the meaning of
Section 13(k) of the Exchange Act shall be permitted to make payment with
respect to any Awards granted under the Plan, or continue any extension of
credit with respect to such payment with a loan from the Company or a loan
arranged by the Company in violation of Section 13(k) of the Exchange Act.

11.2 Tax Withholding. The Company and its Affiliates shall have the authority
and the right to deduct or withhold, or require a Participant to remit to the
Company or an Affiliate, an amount sufficient to satisfy federal, state, local
and foreign taxes (including the Participant’s social security, Medicare and any
other employment tax obligation) required by law to be withheld with respect to
any taxable event concerning a Participant arising in connection with any Award.
The Administrator may in its sole discretion and in satisfaction of the
foregoing requirement allow a Participant to satisfy such obligations by any
payment means described in Section 11.1 hereof, including without limitation, by
allowing such Participant to elect to have the Company or an Affiliate withhold
Shares otherwise issuable under an Award (or allow the surrender of Shares). The
number of Shares which may be so withheld or surrendered shall be limited to the
number of Shares which have a Fair Market Value on the date of withholding or
repurchase no greater than the aggregate amount of such liabilities based on the
minimum statutory withholding rates for federal, state, local and foreign income
tax and payroll tax purposes that are applicable to such supplemental taxable
income. The Administrator shall determine the fair market value of the Shares,
consistent with applicable provisions of the Code, for tax withholding
obligations due in connection with a broker-assisted cashless Option or Stock
Appreciation Right exercise involving the sale of Shares to pay the Option or
Stock Appreciation Right exercise price or any tax withholding obligation.

11.3 Transferability of Awards.

(a) Except as otherwise provided in Section 11.3(b) or (c) hereof:

(i) No Award under the Plan may be sold, pledged, assigned or transferred in any
manner other than by will or the laws of descent and distribution or, subject to
the consent of the Administrator, pursuant to a

 

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DRO, unless and until such Award has been exercised, or the Shares underlying
such Award have been issued, and all restrictions applicable to such Shares have
lapsed;

(ii) No Award or interest or right therein shall be subject to the debts,
contracts or engagements of the Participant or his successors in interest or
shall be subject to disposition by transfer, alienation, anticipation, pledge,
hypothecation, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy) unless and until such Award has been exercised, or the
Shares underlying such Award have been issued, and all restrictions applicable
to such Shares have lapsed, and any attempted disposition of an Award prior to
the satisfaction of these conditions shall be null and void and of no effect,
except to the extent that such disposition is permitted by clause (i) of this
provision; and

(iii) During the lifetime of the Participant, only the Participant may exercise
an Award (or any portion thereof) granted to him under the Plan, unless it has
been disposed of pursuant to a DRO; after the death of the Participant, any
exercisable portion of an Award may, prior to the time when such portion becomes
unexercisable under the Plan or the applicable Program or Award Agreement, be
exercised by his personal representative or by any person empowered to do so
under the deceased Participant’s will or under the then-applicable laws of
descent and distribution.

(b) Notwithstanding Section 11.3(a) hereof, the Administrator, in its sole
discretion, may determine to permit a Participant or a Permitted Transferee of
such Participant to transfer an Award other than an Incentive Stock Option
(unless such Incentive Stock Option is to become a Non-Qualified Stock Option)
to any one or more Permitted Transferees of such Participant, subject to the
following terms and conditions: (i) an Award transferred to a Permitted
Transferee shall not be assignable or transferable by the Permitted Transferee
(other than to another Permitted Transferee of the applicable Participant) other
than by will or the laws of descent and distribution; (ii) an Award transferred
to a Permitted Transferee shall continue to be subject to all the terms and
conditions of the Award as applicable to the original Participant (other than
the ability to further transfer the Award); and (iii) the Participant (or
transferring Permitted Transferee) and the Permitted Transferee shall execute
any and all documents requested by the Administrator, including without
limitation, documents to (A) confirm the status of the transferee as a Permitted
Transferee, (B) satisfy any requirements for an exemption for the transfer under
applicable federal, state and foreign securities laws and (C) evidence the
transfer. In addition, and further notwithstanding Section 11.3(a) hereof, the
Administrator, in its sole discretion, may determine to permit a Participant to
transfer Incentive Stock Options to a trust that constitutes a Permitted
Transferee if, under Section 671 of the Code and applicable state law, the
Participant is considered the sole beneficial owner of the Incentive Stock
Option while it is held in the trust.

(c) Notwithstanding Section 11.3(a) hereof, a Participant may, in the manner
determined by the Administrator, designate a beneficiary to exercise the rights
of the Participant and to receive any distribution with respect to any Award
upon the Participant’s death. A beneficiary, legal guardian, legal
representative, or other person claiming any rights pursuant to the Plan is
subject to all terms and conditions of the Plan and any Program or Award
Agreement applicable to the Participant, except to the extent the Plan, the
Program and the Award Agreement otherwise provide, and to any additional
restrictions deemed necessary or appropriate by the Administrator. If the
Participant is married or a domestic partner in a domestic partnership qualified
under Applicable Law and resides in a “community property” state, a designation
of a person other than the Participant’s spouse or domestic partner, as
applicable, as his beneficiary with respect to more than fifty percent (50%) of
the Participant’s interest in the Award shall not be effective without the prior
written or electronic consent of the Participant’s spouse or domestic partner.
If no beneficiary has been designated or survives the Participant, payment shall
be made to the person entitled thereto pursuant to the Participant’s will or the
laws of descent and distribution. Subject to the foregoing, a beneficiary
designation may be changed or revoked by a Participant at any time provided the
change or revocation is delivered to the Administrator prior to the
Participant’s death.

 

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11.4 Conditions to Issuance of Shares.

(a) Notwithstanding anything herein to the contrary, neither the Company nor its
Affiliates shall be required to issue or deliver any certificates or make any
book entries evidencing Shares pursuant to the exercise of any Award, unless and
until the Administrator has determined, with advice of counsel, that the
issuance of such Shares is in compliance with Applicable Law, and the Shares are
covered by an effective registration statement or applicable exemption from
registration. In addition to the terms and conditions provided herein, the
Administrator may require that a Participant make such reasonable covenants,
agreements, and representations as the Administrator, in its discretion, deems
advisable in order to comply with any such Applicable Law.

(b) All Share certificates delivered pursuant to the Plan and all Shares issued
pursuant to book entry procedures are subject to any stop-transfer orders and
other restrictions as the Administrator deems necessary or advisable to comply
with Applicable Law. The Administrator may place legends on any Share
certificate or book entry to reference restrictions applicable to the Shares.

(c) The Administrator shall have the right to require any Participant to comply
with any timing or other restrictions with respect to the settlement,
distribution or exercise of any Award, including a window-period limitation, as
may be imposed in the sole discretion of the Administrator.

(d) No fractional Shares shall be issued and the Administrator shall determine,
in its sole discretion, whether cash shall be given in lieu of fractional Shares
or whether such fractional Shares shall be eliminated by rounding down.

(e) Notwithstanding any other provision of the Plan, unless otherwise determined
by the Administrator or required by Applicable Law, the Company and/or its
Affiliates may, in lieu of delivering to any Participant certificates evidencing
Shares issued in connection with any Award, record the issuance of Shares in the
books of the Company (or, as applicable, its transfer agent or stock plan
administrator).

11.5 Forfeiture and Claw-Back Provisions.

(a) Pursuant to its general authority to determine the terms and conditions
applicable to Awards under the Plan, the Administrator shall have the right to
provide, in the terms of Awards made under the Plan, or to require a Participant
to agree by separate written or electronic instrument, that: (i) any proceeds,
gains or other economic benefit actually or constructively received by the
Participant upon any receipt or exercise of the Award, or upon the receipt or
resale of any Shares underlying the Award, must be paid to the Company, and
(ii) the Award shall terminate and any unexercised portion of the Award (whether
or not vested) shall be forfeited, if (x) a Termination of Service occurs prior
to a specified date, or within a specified time period following receipt or
exercise of the Award, (y) the Participant at any time, or during a specified
time period, engages in any activity in competition with the Company, or which
is inimical, contrary or harmful to the interests of the Company, as further
defined by the Administrator or (z) the Participant incurs a Termination of
Service for cause; and

(b) All Awards (including any proceeds, gains or other economic benefit actually
or constructively received by the Participant upon any receipt or exercise of
any Award or upon the receipt or resale of any Shares underlying the Award)
shall be subject to the applicable provisions of any claw-back policy
implemented by the Company, whether implemented prior to or after the grant of
such Award, including without limitation, any claw-back policy adopted to comply
with the requirements of Applicable Law, including without limitation, the
Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or
regulations promulgated thereunder, to the extent set forth in such claw-back
policy and/or in the applicable Award Agreement.

11.6 Prohibition on Repricing. Subject to Section 13.2 hereof, the Administrator
shall not, without the approval of the stockholders of the Company,
(a) authorize the amendment of any outstanding Option or Stock

 

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Appreciation Right to reduce its price per share, or (b) cancel any Option or
Stock Appreciation Right in exchange for cash or another Award when the Option
or Stock Appreciation Right price per share exceeds the Fair Market Value of the
underlying Shares. Subject to Section 13.2 hereof, the Administrator shall have
the authority, without the approval of the stockholders of the Company, to amend
any outstanding award to increase the price per share or to cancel and replace
an Award with the grant of an Award having a price per share that is greater
than or equal to the price per share of the original Award.

11.7 Cash Settlement. Without limiting the generality of any other provision of
the Plan, the Administrator may provide, in an Award Agreement or subsequent to
the grant of an Award, in its discretion, that any Award may be settled in cash,
Shares or a combination thereof.

11.8 Leave of Absence. Unless the Administrator provides otherwise, vesting of
Awards granted hereunder shall not be suspended during any unpaid leave of
absence. A Participant shall not cease to be considered an Employee,
Non-Employee Director or Consultant, as applicable, in the case of any (a) leave
of absence approved by the Company, (b) transfer between locations of the
Company or between the Company and any of its Affiliates or any successor
thereof, or (c) change in status (Employee to Director, Employee to Consultant,
etc.), provided that such change does not affect the specific terms applying to
the Participant’s Award.

11.9 Terms May Vary Between Awards. The terms and conditions of each Award shall
be determined by the Administrator in its sole discretion and the Administrator
shall have complete flexibility to provide for varied terms and conditions as
between any Awards, whether of the same or different Award type and/or whether
granted to the same or different Participants (in all cases, subject to the
terms and conditions of the Plan).

ARTICLE 12.

ADMINISTRATION

12.1 Administrator. The Committee (or another committee or a subcommittee of the
Board assuming the functions of the Committee under the Plan) shall administer
the Plan (except as otherwise permitted herein) and, unless otherwise determined
by the Board, shall consist solely of two or more Non-Employee Directors of the
Company appointed by and holding office at the pleasure of the Board, each of
whom is intended to qualify as a “non-employee director” as defined by Rule
16b-3 of the Exchange Act, an “outside director” for purposes of Section 162(m)
of the Code and an “independent director” under the rules of any securities
exchange or automated quotation system on which the Shares are listed, quoted or
traded, in each case, to the extent required under such provision; provided,
however, that any action taken by the Committee shall be valid and effective,
whether or not members of the Committee at the time of such action are later
determined not to have satisfied the requirements for membership set forth in
this Section 12.l or otherwise provided in the Company’s charter or bylaws or
any charter of the Committee. Except as may otherwise be provided in any charter
of the Committee, appointment of Committee members shall be effective upon
acceptance of appointment, Committee members may resign at any time by
delivering written or electronic notice to the Board, and vacancies in the
Committee may only be filled by the Board. Notwithstanding the foregoing,
(a) the full Board, acting by a majority of its members in office, shall conduct
the general administration of the Plan with respect to Awards granted to
Non-Employee Directors of the Company and (b) the Board or Committee may
delegate its authority hereunder to the extent permitted by Section 12.6 hereof.

12.2 Duties and Powers of Administrator. It shall be the duty of the
Administrator to conduct the general administration of the Plan in accordance
with its provisions. The Administrator shall have the power to interpret the
Plan and all Programs and Award Agreements, and to adopt such rules for the
administration, interpretation and application of the Plan and any Program as
are not inconsistent with the Plan, to interpret, amend or revoke any such rules
and to amend any Program or Award Agreement provided that the rights or
obligations of the holder of the Award that is the subject of any such Program
or Award Agreement are not affected adversely by

 

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such amendment, unless the consent of the Participant is obtained or such
amendment is otherwise permitted under Section 13.13 hereof. Any such grant or
award under the Plan need not be the same with respect to each Participant. Any
such interpretations and rules with respect to Incentive Stock Options shall be
consistent with the provisions of Section 422 of the Code. In its sole
discretion, the Board may at any time and from time to time exercise any and all
rights and duties of the Committee under the Plan except with respect to matters
which under Rule 16b-3 under the Exchange Act, Section 162(m) of the Code, or
the rules of any securities exchange or automated quotation system on which the
Shares are listed, quoted or traded are required to be determined in the sole
discretion of the Committee.

12.3 Action by the Committee. Unless otherwise established by the Board or in
the Committee’s charter, the Company’s charter or bylaws or as required by
Applicable Law, a majority of the Committee shall constitute a quorum and the
acts of a majority of the members present at any meeting at which a quorum is
present, and acts approved in writing by all members of the Committee in lieu of
a meeting, shall be deemed the acts of the Committee. Each member of the
Committee is entitled to, in good faith, rely or act upon any report or other
information furnished to that member by any officer or other employee of the
Company or any Affiliate, the Company’s independent certified public
accountants, or any executive compensation consultant or other professional
retained by the Company to assist in the administration of the Plan.

12.4 Authority of Administrator. Subject to any specific designation in the Plan
and Applicable Law, the Administrator has the exclusive power, authority and
sole discretion to:

(a) Designate Eligible Individuals to receive Awards;

(b) Determine the type or types of Awards to be granted to each Eligible
Individual;

(c) Determine the number of Awards to be granted and the number of Shares to
which an Award will relate;

(d) Determine the terms and conditions of any Award granted pursuant to the
Plan, including, but not limited to, the exercise price, grant price, or
purchase price, any performance criteria, any reload provision, any restrictions
or limitations on the Award, any schedule for vesting, lapse of forfeiture
restrictions or restrictions on the exercisability of an Award, and
accelerations or waivers thereof, and any provisions related to non-competition
and recapture of gain on an Award, based in each case on such considerations as
the Administrator in its sole discretion determines;

(e) Determine whether, to what extent, and under what circumstances an Award may
be settled in, or the exercise price of an Award may be paid in cash, Shares,
other Awards, or other property, or an Award may be canceled, forfeited, or
surrendered;

(f) Prescribe the form of each Award Agreement, which need not be identical for
each Participant;

(g) Determine as between the Company, the Services Company, the Partnership and
any Subsidiary which entity will make payments with respect to an Award,
consistent with applicable securities laws and other Applicable Law;

(h) Decide all other matters that must be determined in connection with an
Award;

(i) Establish, adopt, or revise any rules and regulations as it may deem
necessary or advisable to administer the Plan;

(j) Interpret the terms of, and any matter arising pursuant to, the Plan, any
Program or any Award Agreement; and

 

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(k) Make all other decisions and determinations that may be required pursuant to
the Plan or as the Administrator deems necessary or advisable to administer the
Plan.

12.5 Decisions Binding. The Administrator’s interpretation of the Plan, any
Awards granted pursuant to the Plan, any Program, any Award Agreement and all
decisions and determinations by the Administrator with respect to the Plan are
final, binding, and conclusive on all parties.

12.6 Delegation of Authority. To the extent permitted by Applicable Law, the
Board or Committee may from time to time delegate to a committee of one or more
members of the Board or one or more officers of the Company the authority to
grant or amend Awards or to take other administrative actions pursuant to this
Article 12; provided, however, that in no event shall an officer of the Company
be delegated the authority to grant Awards to, or amend Awards held by, the
following individuals: (a) individuals who are subject to Section 16 of the
Exchange Act, (b) Covered Employees with respect to Awards intended to
constitute Performance-Based Compensation, or (c) officers of the Company (or
Directors) to whom authority to grant or amend Awards has been delegated
hereunder; provided, further, that any delegation of administrative authority
shall only be permitted to the extent it is permissible under Section 162(m) of
the Code and other Applicable Law. Any delegation hereunder shall be subject to
the restrictions and limits that the Board or Committee specifies at the time of
such delegation, and the Board or Committee, as applicable, may at any time
rescind the authority so delegated or appoint a new delegatee. At all times, the
delegatee appointed under this Section 12.6 shall serve in such capacity at the
pleasure of the Board and the Committee.

ARTICLE 13.

MISCELLANEOUS PROVISIONS

13.1 Amendment, Suspension or Termination of the Plan. Except as otherwise
provided in this Section 13.1, the Plan may be wholly or partially amended or
otherwise modified, suspended or terminated at any time or from time to time by
the Board. However, without approval of the Company’s stockholders given within
twelve (12) months before or after the action by the Administrator, no action of
the Administrator may, except as provided in Section 13.2 hereof, (i) increase
the Share Limit or any Individual Award Limit, (ii) reduce the price per share
of any outstanding Option or Stock Appreciation Right granted under the Plan, or
(iii) cancel any Option or Stock Appreciation Right in exchange for cash or
another Award in violation of Section 11.6 hereof. Except as provided in
Section 13.13 hereof, no amendment, suspension or termination of the Plan shall,
without the consent of the Participant, impair any rights or obligations under
any Award theretofore granted or awarded, unless the Award itself otherwise
expressly so provides. Notwithstanding anything herein to the contrary, no
Incentive Stock Option shall be granted under the Plan after the tenth
(10th) anniversary of the Effective Date.

13.2 Changes in Common Stock or Assets of the Company, Acquisition or
Liquidation of the Company and Other Corporate Events.

(a) In the event of any stock dividend, stock split, combination or exchange of
shares, merger, consolidation or other distribution (other than normal cash
dividends) of Company assets to stockholders, or any other change affecting the
shares of the Company’s stock or the share price of the Company’s stock other
than an Equity Restructuring, the Administrator may make equitable adjustments,
if any, to reflect such change with respect to (i) the aggregate number and kind
of shares that may be issued under the Plan (including, but not limited to,
adjustments of the Share Limit and Individual Award Limits); (ii) the number and
kind of Shares (or other securities or property) subject to outstanding Awards;
(iii) the terms and conditions of any outstanding Awards (including, without
limitation, any applicable performance targets or criteria with respect
thereto); and/or (iv) the grant or exercise price per share for any outstanding
Awards under the Plan. Any adjustment affecting an Award intended as
Performance-Based Compensation shall be made consistent with the requirements of
Section 162(m) of the Code unless otherwise determined by the Administrator.

 

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(b) In the event of any transaction or event described in Section 13.2(a) hereof
or any unusual or nonrecurring transactions or events affecting the Company, any
Affiliate, or the financial statements of the Company or any Affiliate, or of
changes in Applicable Law or accounting principles, the Administrator, in its
sole discretion, and on such terms and conditions as it deems appropriate,
either by the terms of the Award or by action taken prior to the occurrence of
such transaction or event, is hereby authorized to take any one or more of the
following actions whenever the Administrator determines that such action is
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan or with respect
to any Award under the Plan, to facilitate such transactions or events or to
give effect to such changes in laws, regulations or principles:

(i) To provide for either (A) termination of any such Award in exchange for an
amount of cash and/or other property, if any, equal to the amount that would
have been attained upon the exercise of such Award or realization of the
Participant’s rights (and, for the avoidance of doubt, if as of the date of the
occurrence of the transaction or event described in this Section 13.2, the
Administrator determines in good faith that no amount would have been attained
upon the exercise of such Award or realization of the Participant’s rights, then
such Award may be terminated by the Company without payment) or (B) the
replacement of such Award with other rights or property selected by the
Administrator in its sole discretion;

(ii) To provide that such Award be assumed by the successor or survivor
corporation, or a parent or subsidiary thereof, or shall be substituted for by
similar options, rights or awards covering the stock of the successor or
survivor corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number and kind of shares and prices;

(iii) To make adjustments in the number and type of securities subject to
outstanding Awards and Awards which may be granted in the future and/or in the
terms, conditions and criteria included in such Awards (including the grant or
exercise price, as applicable);

(iv) To provide that such Award shall be exercisable or payable or fully vested
with respect to all securities covered thereby, notwithstanding anything to the
contrary in the Plan or an applicable Program or Award Agreement; and

(v) To provide that the Award cannot vest, be exercised or become payable after
such event.

(c) In connection with the occurrence of any Equity Restructuring, and
notwithstanding anything to the contrary in Sections 13.2(a) and 13.2(b) hereof:

(i) The number and type of securities subject to each outstanding Award and the
exercise price or grant price thereof, if applicable, shall be equitably
adjusted; and/or

(ii) The Administrator shall make such equitable adjustments, if any, as the
Administrator in its discretion may deem appropriate to reflect such Equity
Restructuring with respect to the aggregate number and kind of shares that may
be issued under the Plan (including, but not limited to, adjustments to the
Share Limit and the Individual Award Limits).

The adjustments provided under this Section 13.2(c) shall be nondiscretionary
and shall be final and binding on the affected Participant and the Company.

(d) Except as may otherwise be provided in any applicable Award Agreement or
other written agreement entered into between the Company (or an Affiliate) and a
Participant, if a Change in Control occurs and a Participant’s outstanding
Awards are not continued, converted, assumed, or replaced by the surviving or
successor entity in such Change in Control, then immediately prior to the Change
in Control such outstanding Awards, to the extent not continued, converted,
assumed, or replaced, shall become fully vested and, as applicable, exercisable,
and all forfeiture, repurchase and other restrictions on such Awards shall
lapse. Upon, or

 

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in anticipation of, a Change in Control, the Administrator may cause any and all
Awards outstanding hereunder to terminate at a specific time in the future,
including but not limited to the date of such Change in Control, and shall give
each Participant the right to exercise such Awards during a period of time as
the Administrator, in its sole and absolute discretion, shall determine. For the
avoidance of doubt, if the value of an Award that is terminated in connection
with this Section 13.2(d) is zero or negative at the time of such Change in
Control, such Award shall be terminated upon the Change in Control without
payment of consideration therefor.

(e) The Administrator may, in its sole discretion, include such further
provisions and limitations in any Award, agreement or certificate, as it may
deem equitable and in the best interests of the Company that are not
inconsistent with the provisions of the Plan.

(f) With respect to Awards which are granted to Covered Employees and are
intended to qualify as Performance-Based Compensation, no adjustment or action
described in this Section 13.2 or in any other provision of the Plan shall be
authorized to the extent that such adjustment or action would cause such Award
to fail to so qualify as Performance-Based Compensation, unless the
Administrator determines that the Award should not so qualify. No adjustment or
action described in this Section 13.2 or in any other provision of the Plan
shall be authorized to the extent that such adjustment or action would cause the
Plan to violate Section 422(b)(1) of the Code. Furthermore, no such adjustment
or action shall be authorized with respect to any Award to the extent such
adjustment or action would result in short-swing profits liability under
Section 16 of the Exchange Act or violate the exemptive conditions of Rule 16b-3
of the Exchange Act unless the Administrator determines that the Award is not to
comply with such exemptive conditions.

(g) The existence of the Plan, any Program, any Award Agreement and/or any Award
granted hereunder shall not affect or restrict in any way the right or power of
the Company, the stockholders of the Company or any Affiliate to make or
authorize any adjustment, recapitalization, reorganization or other change in
the Company’s or such Affiliate’s capital structure or its business, any merger
or consolidation of the Company or any Affiliate, any issue of stock or of
options, warrants or rights to purchase stock or of bonds, debentures, preferred
or prior preference stocks whose rights are superior to or affect the Common
Stock, the securities of any Affiliate or the rights thereof or which are
convertible into or exchangeable for Common Stock or securities of any
Affiliate, or the dissolution or liquidation of the Company or any Affiliate, or
any sale or transfer of all or any part of its assets or business, or any other
corporate act or proceeding, whether of a similar character or otherwise.

(h) No action shall be taken under this Section 13.2 which shall cause an Award
to fail to comply with Section 409A of the Code or an exemption therefrom, in
either case, to the extent applicable to such Award, unless the Administrator
determines any such adjustments to be appropriate.

(i) In the event of any pending stock dividend, stock split, combination or
exchange of shares, merger, consolidation or other distribution (other than
normal cash dividends) of Company assets to stockholders, or any other change
affecting the Shares or the share price of the Common Stock including any Equity
Restructuring, for reasons of administrative convenience, the Company in its
sole discretion may refuse to permit the exercise of any Award during a period
of thirty (30) days prior to the consummation of any such transaction.

13.3 Approval of Plan by Stockholders. The Plan shall be submitted for the
approval of the Company’s stockholders within twelve (12) months after the date
of the Board’s initial adoption of the Plan. Awards may be granted or awarded
prior to such stockholder approval, provided, however, that such Awards shall
not be exercisable, shall not vest and the restrictions thereon shall not lapse
and no Shares shall be issued pursuant thereto prior to the time when the Plan
is approved by the Company’s stockholders, and provided, further, that if such
approval has not been obtained at the end of such twelve (12)-month period, all
such Awards previously granted or awarded under the Plan shall thereupon be
canceled and become null and void.

 

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13.4 No Stockholders Rights. Except as otherwise provided herein or in an
applicable Program or Award Agreement, a Participant shall have none of the
rights of a stockholder with respect to Shares covered by any Award until the
Participant becomes the record owner of such Shares.

13.5 Paperless Administration. In the event that the Company establishes, for
itself or using the services of a third party, an automated system for the
documentation, granting or exercise of Awards, such as a system using an
internet website or interactive voice response, then the paperless
documentation, granting or exercise of Awards by a Participant may be permitted
through the use of such an automated system.

13.6 Section 83(b) Election. No Participant may make an election under
Section 83(b) of the Code with respect to any Award under the Plan without the
consent of the Administrator, which the Administrator may grant or withhold in
its sole discretion. If, with the consent of the Administrator, a Participant
makes an election under Section 83(b) of the Code to be taxed with respect to
the Restricted Stock as of the date of transfer of the Restricted Stock rather
than as of the date or dates upon which the Participant would otherwise be
taxable under Section 83(a) of the Code, the Participant shall be required to
deliver a copy of such election to the Company promptly after filing such
election with the Internal Revenue Service.

13.7 Grant of Awards to Certain Employees or Consultants. The Company, the
Partnership or any Subsidiary may provide through the establishment of a formal
written policy or otherwise for the method by which Shares or other securities
of the Company or the Partnership may be issued and by which such Shares or
other securities and/or payment therefor may be exchanged or contributed among
such entities, or may be returned upon any forfeiture of Shares or other
securities by the Participant.

13.8 REIT Status. The Plan shall be interpreted and construed in a manner
consistent with the Company’s status as a REIT. No Award shall be granted or
awarded, and with respect to any Award granted under the Plan, such Award shall
not vest, be exercisable or be settled:

(a) to the extent that the grant, vesting, exercise or settlement of such Award
could cause the Participant or any other person to be in violation of the Common
Stock Ownership Limit or the Aggregate Stock Ownership Limit (each as defined in
the Company’s charter, as amended from time to time) or any other provision of
Section 6.2.1 of the Company’s charter; or

(b) if, in the discretion of the Administrator, the grant, vesting, exercise or
settlement of such Award could impair the Company’s status as a REIT.

13.9 Effect of Plan upon Other Compensation Plans. The adoption of the Plan
shall not affect any other compensation or incentive plans in effect for the
Company or any Affiliate. Nothing in the Plan shall be construed to limit the
right of the Company or any Affiliate: (a) to establish any other forms of
incentives or compensation for Employees, Directors or Consultants of the
Company or any Affiliate or (b) to grant or assume options or other rights or
awards otherwise than under the Plan in connection with any proper corporate
purpose including without limitation, the grant or assumption of options in
connection with the acquisition by purchase, lease, merger, consolidation or
otherwise, of the business, stock or assets of any corporation, partnership,
limited liability company, firm or association.

13.10 Compliance with Laws. The Plan, the granting and vesting of Awards under
the Plan, the issuance and delivery of Shares and Profits Interest Units and the
payment of money under the Plan or under Awards granted or awarded hereunder are
subject to compliance with all Applicable Law and to such approvals by any
listing, regulatory or governmental authority as may, in the opinion of counsel
for the Company, be necessary or advisable in connection therewith. Any
securities delivered under the Plan shall be subject to such restrictions, and
the person acquiring such securities shall, if requested by the Company, provide
such assurances and representations to the Company as the Company may deem
necessary or desirable to assure compliance with all Applicable Law. To the
extent permitted by Applicable Law, the Plan and Awards granted or awarded
hereunder shall be deemed amended to the extent necessary to conform to such
Applicable Law.

 

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13.11 Titles and Headings, References to Sections of the Code or Exchange Act.
The titles and headings of the sections in the Plan are for convenience of
reference only and, in the event of any conflict, the text of the Plan, rather
than such titles or headings, shall control. References to sections of the Code
or the Exchange Act shall include any amendment or successor thereto.

13.12 Governing Law. The Plan and any Programs or Award Agreements hereunder
shall be administered, interpreted and enforced under the internal laws of the
State of California without regard to conflicts of laws thereof.

13.13 Section 409A. To the extent that the Administrator determines that any
Award granted under the Plan is subject to Section 409A of the Code, the Plan,
any applicable Program and the Award Agreement covering such Award shall be
interpreted in accordance with Section 409A of the Code. Notwithstanding any
provision of the Plan to the contrary, in the event that, following the
Effective Date, the Administrator determines that any Award may be subject to
Section 409A of the Code, the Administrator may adopt such amendments to the
Plan, any applicable Program and the Award Agreement or adopt other policies and
procedures (including amendments, policies and procedures with retroactive
effect), or take any other actions, that the Administrator determines are
necessary or appropriate to avoid the imposition of taxes on the Award under
Section 409A of the Code, either through compliance with the requirements of
Section 409A of the Code or with an available exemption therefrom.

13.14 No Rights to Awards. No Eligible Individual or other person shall have any
claim to be granted any Award pursuant to the Plan, and neither the Company nor
the Administrator is obligated to treat Eligible Individuals, Participants or
any other persons uniformly.

13.15 Unfunded Status of Awards. The Plan is intended to be an “unfunded” plan
for incentive compensation. With respect to any payments not yet made to a
Participant pursuant to an Award, nothing contained in the Plan or any Program
or Award Agreement shall give the Participant any rights that are greater than
those of a general creditor of the Company or any Affiliate.

13.16 Indemnification. To the extent allowable pursuant to Applicable Law and
the Company’s charter and bylaws, each member of the Board and any officer or
other employee to whom authority to administer any component of the Plan is
delegated shall be indemnified and held harmless by the Company from any loss,
cost, liability, or expense that may be imposed upon or reasonably incurred by
such member in connection with or resulting from any claim, action, suit, or
proceeding to which he may be a party or in which he may be involved by reason
of any action or failure to act pursuant to the Plan and against and from any
and all amounts paid by him in satisfaction of judgment in such action, suit, or
proceeding against him or her; provided, however, that he gives the Company an
opportunity, at its own expense, to handle and defend the same before he
undertakes to handle and defend it on his own behalf. The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification to
which such persons may be entitled pursuant to the Company’s charter or bylaws,
as a matter of law, or otherwise, or any power that the Company may have to
indemnify them or hold them harmless.

13.17 Relationship to other Benefits. No payment pursuant to the Plan shall be
taken into account in determining any benefits under any pension, retirement,
savings, profit sharing, group insurance, welfare or other benefit plan of the
Company or any Affiliate except to the extent otherwise expressly provided in
writing in such other plan or an agreement thereunder.

13.18 Expenses. The expenses of administering the Plan shall be borne by the
Company and its Affiliates.

*  *  *  *  *

 

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I hereby certify that the foregoing Plan was duly adopted by the Board of
Directors of Digital Realty Trust, Inc. on March 18, 2014.

*  *  *  *  *

I hereby certify that the foregoing Plan was approved by the stockholders of
Digital Realty Trust, Inc. on April 28, 2014.

[SIGNATURE PAGE FOLLOWS]

 

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Executed on this 28th day of April, 2014.

 

/s/ Joshua A. Mills

Joshua A. Mills

Senior Vice President, General Counsel and Assistant Secretary

[Signature Page to 2014 Incentive Award Plan]

 

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