EXHIBIT 10.6        

CAREY WATERMARK INVESTORS 2 INCORPORATED
2015 EQUITY INCENTIVE PLAN

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TABLE OF CONTENTS
Page

1.
DEFINATIONS.    1

2.
EFFECTIVE DATE AND TERMINATION OF PLAN.    5

3.
ADMINISTRATION OF PLAN.    5

4.
SHARES AND UNITS SUBJECT TO THE PLAN.    6

5.
RESTRICTED STOCK UNITS.    6

6.
DIVIDEND EQUIVALENT RIGHTS.    10

7.
PERFORMANCE GOALS.    11

8.
TAX WITHHOLDING.    11

9.
REGULATIONS AND APPROVALS.    12

10.
INTERPRETATION AND AMENDMENTS; OTHER RULES.    12

11.
CHANGES IN CAPITAL STRUCTURE.    13

12.
MISCELLANEOUS.    14

EXHIBIT A
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CAREY WATERMARK INVESTORS 2 INCORPORATED
2015 EQUITY INCENTIVE PLAN
Carey Watermark Investors 2 Incorporated, a Maryland corporation, wishes to
further align the interests of the Company's stockholders with those of its
non-employee directors and certain employees (if any) and officers of the
Company and others expected to provide significant services to the Company,
whether directly or through Subsidiaries, including the personnel, employees and
officers of the Subadvisor. The objectives of the Plan include to encourage a
proprietary interest of Eligible Persons in the Company, to encourage certain
key personnel to remain in the service of the Company and the Subadvisor and
their respective Affiliates, to attract new personnel with outstanding
qualifications, and to afford additional incentive to personnel to increase
their efforts in providing services to the Company and the Subadvisor and their
respective Affiliates. In furtherance thereof, the Carey Watermark Investors 2
Incorporated 2015 Equity Incentive Plan is designed to provide equity-based
incentives to certain Eligible Persons. Awards under the Plan may be made to
selected Eligible Persons in the form of Restricted Stock Units, Dividend
Equivalent Rights and/or other equity-based awards.
1.
DEFINATIONS.

Whenever used herein, the following terms shall have the meanings set forth
below:
"Advisor" means Carey Lodging Advisors, LLC.
"Affiliate" means any entity other than a Subsidiary that is controlled by or
under common control with the Company that is designated as an "Affiliate" by
the Plan Administrator in its discretion.
"Award," shall include Restricted Stock Units, Dividend Equivalent Rights and/or
other equity-based awards.
"Award Agreement" means a written agreement in a form approved by the Plan
Administrator to be entered into between the Company and the Grantee as provided
in Section 3.
"Board" means the Board of Directors of the Company.
"Cause" means, unless otherwise provided in the Grantee's Award Agreement: (i)
engaging in (A) willful or gross misconduct or (B) willful or gross neglect;
(ii) repeatedly failing to adhere to the directions of superiors or the Board or
the written policies and practices of the Advisor, the Subadvisor, the Company,
any Subsidiaries or their Affiliates; (iii) the commission of a felony or a
crime of moral turpitude, dishonesty, breach of trust or unethical business
conduct, or any crime involving the Advisor, the Subadvisor, the Company or any
Subsidiaries, or any Affiliate thereof; (iv) fraud, misappropriation or
embezzlement; (v) a material breach of the Grantee's employment agreement (if
any) with the Subadvisor, the Company or any Subsidiaries or their Affiliates;
(vi) acts or omissions constituting a material failure to perform substantially
and adequately the duties assigned to the Grantee; (vii) any illegal act
detrimental to the Advisor, the Subadvisor, the Company or any Subsidiaries or
their Affiliates; or (viii) repeated failure to devote the appropriate amount of
Grantee's business time and efforts to the Company, any Subsidiaries or their
Affiliates; provided, however, that, if at any particular time the Grantee is
subject to an effective employment agreement with the Subadvisor or the Company,
then, in lieu of the foregoing definition, "Cause" shall at that time have such
meaning as may be specified in such employment agreement.

 
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"Change in Control" means, unless otherwise provided in the Grantee's Award
Agreement, the happening of any of the following:
(i)
any "person," including a "group" (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act, but excluding the Company, the Advisor or the
Subadvisor, any entity controlling, controlled by or under common control with
the Company, the Advisor, the Subadvisor, any trustee, fiduciary or other person
or entity holding securities under any employee benefit plan or trust of the
Company, the Advisor or the Subadvisor or any such entity, and, with respect to
any particular Grantee, the Grantee and any "group" (as such term is used in
Section 13(d)(3) of the Exchange Act) of which the Grantee is a member), is or
becomes the "beneficial owner" (as defined in Rule 13(d)(3) under the Exchange
Act), directly or indirectly, of securities of the Company representing 50% or
more of either (A) the combined voting power of the Company's then outstanding
securities or (B) the then outstanding Shares (in either such case other than as
a result of an acquisition of securities directly from the Company); provided,
however, that, in no event shall a Change in Control be deemed to have occurred
upon an initial public offering of the Common Stock under the Securities Act; or

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

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

(iv)
the members of the Board at the beginning of any consecutive 24-calendar-month
period (the "Incumbent Directors") cease for any reason other than due to death
to constitute at least a majority of the members of the Board; provided that any
director whose election, or nomination for election by the Company's
stockholders, was approved or ratified by a vote of at least a majority of the
Incumbent Directors shall be deemed to be an Incumbent Director.

Notwithstanding the foregoing, no event or condition described in clauses (i)
through (iv) above shall constitute a Change in Control if it results from (A) a
transaction between the Company and the Advisor or the Subadvisor, or an
Affiliate of the Advisor or the Subadvisor, or (B) a termination of the advisory
agreement by and between the Company and the Advisor for Cause.
Notwithstanding the foregoing, no event or condition shall constitute a Change
in Control to the extent that, if it were, a 20% tax would be imposed upon or
with respect to any Award under Section 409A of the Code; provided that, in such
a case, the event or condition shall continue to constitute a Change in Control
to the

 
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maximum extent possible (e.g., if applicable, in respect of vesting without an
acceleration of distribution) without causing the imposition of such 20% tax.
"Class A Common Stock" means the class A common stock, $.001 par value per
share, of the Company.
"Class C Common Stock" means the class C common stock, $.001 par value per
share, of the Company.
"Code" means the Internal Revenue Code of 1986, as amended, and the regulations
promulgated thereunder.
"Common Stock" means the Class A Common Stock and the Class C Common Stock,
either currently existing or authorized hereafter.
"Company" means Carey Watermark Investors 2 Incorporated, a Maryland
corporation.
"Disability" means that a Grantee is (i) unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment that can be expected to result in death or last for a continuous
period of at least twelve (12) months; or (ii) by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or last for a continuous period of at least twelve (12) months, receiving
income replacement benefits for at least three (3) months under an accident and
health plan covering the Company's, a Subsidiary's or the Subadvisor's
employees. Notwithstanding the foregoing, no circumstances or condition shall
constitute a Disability to the extent that, if it were, a 20% tax would be
imposed upon or with respect to any Award under Section 409A of the Code;
provided that, in such a case, the event or condition shall continue to
constitute a Disability to the maximum extent possible (e.g., if applicable, in
respect of vesting without an acceleration of distribution) without causing the
imposition of such 20% tax.
"Dividend Equivalent Right" means a right awarded under Section 6 of the Plan to
receive (or have credited) the equivalent value of dividends paid on Class A
Common Stock or Class C Common Stock, as applicable.
"Eligible Person" means (i) a non-employee director if the Company, (ii) an
officer or employee (if any) of the Company or its Subsidiaries, (iii) an
officer or employee of the Subadvisor or its Affiliates, which includes
Watermark Capital Partners, LLC or (iv) a Member, or other person expected to
provide significant services (of a type expressly approved by the Plan
Administrator as covered services for these purposes) to the Company or its
Subsidiaries. In the case of the grant of Awards directly or indirectly to
officers or employees of entities described in clause (iii) of the foregoing
sentence, the Plan Administrator may make arrangements with such entities in its
discretion, in light of tax and other considerations. For the avoidance of
doubt, officers and employees of the Advisor and its affiliates are not Eligible
Persons, even if they are also officers or employees of the Company and its
subsidiaries or Members.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" means, with respect to each Class of Common Stock, per Share
as of a particular date (i) if Shares are then listed on a national securities
exchange or quoted or reported on a national quotation system, the closing sales
price per Share on the exchange or system for the applicable date or, if there
are no sales on such date, for the last preceding date on which there was a sale
of Shares on such exchange or system; (ii) if Shares are not then listed on a
national securities exchange or quoted on a national quotation

 
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system but are then traded on an over-the-counter market, the average of the
closing bid and asked prices for the Shares in such over-the-counter market for
the date in question, or, if there are no bid and asked prices on such date, for
the last preceding date on which there was a sale of such Shares in such market;
or (iii) if Shares are not then listed on a national securities exchange, quoted
on a national quotation system or traded on an over-the-counter market, such
value as may be determined by the Plan Administrator in its discretion or as may
be determined in accordance with such methodologies, procedures or other rules
(which may provide, without limitation, that determinations of Fair Market Value
shall be made by an independent third party) as may be established by the Plan
Administrator in its discretion; provided that, where the Shares are so listed
or traded, the Plan Administrator may make such discretionary determinations, or
implement such methodologies, procedures or other rules, where the Shares have
not been traded for 10 trading days.
"Grantee" means an Eligible Person to whom an Award is granted.
"Member" means a non-director member of the investment committee of the Board,
who is not an officer of the Company.
"Performance Goals" has the meaning set forth in Section 7 of the Plan.
"Plan" means the Company's 2015 Equity Incentive Plan, as set forth herein and
as the same may from time to time be amended.
"Plan Administrator" means the independent directors of the Board.
"Restricted Stock Unit" means a right, pursuant to the Plan, of the Grantee to
payment of the Restricted Stock Unit Value in accordance with Section 5.
"Restricted Stock Unit Value," per Restricted Stock Unit, means the Fair Market
Value of a Share or, if so provided by the Plan Administrator, such Fair Market
Value to the extent in excess of a base value established by the Plan
Administrator at the time of grant.
"Retirement" means, unless otherwise provided in the applicable Award Agreement,
the Termination of Service of a Grantee under circumstances which would entitle
the Grantee to an immediate pension under an approved retirement plan of the
Company, the Subadvisor, or, in the absence of such a plan, the Termination of
Service (other than for Cause) of a Grantee on or after the Grantee's attainment
of age 65 or on or after the Grantee's attainment of age 55 with five
consecutive years of service with the Company, the Subadvisor, any Subsidiaries
or their Affiliates.
"Securities Act" means the Securities Act of 1933, as amended.
"Settlement Date" means the date determined under Section 5.4(c).
"Shares" means shares of Class A Common Stock and shares of Class C Common.
"Subadvisor" means CWA 2, LLC, an Illinois limited liability company.
"Subsidiary" means any corporation, partnership or other entity of which at
least 50% of the economic interest in the equity or voting power is owned
(directly or indirectly) by the Company or another subsidiary. In the event the
Company becomes such a subsidiary of another company (directly or indirectly),
the provisions hereof applicable to subsidiaries shall, unless otherwise
determined by the Plan Administrator, also be applicable to such parent company.

 
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"Termination of Service" means a Grantee's termination of services as a
director, or termination of employment or other service, as applicable,
including Disability or Retirement, with the Company, Subsidiaries, the
Subadvisor or their Affiliates. Notwithstanding the foregoing, a Grantee's
Termination of Service shall be a "separation from service" as interpreted
within the meaning of Section 409A of the Code and Treasury Regulation
1.409A-1(h). Unless otherwise provided in the Award Agreement, cessation of
service as director, officer, employee or Member shall not be treated as a
Termination of Service if the Grantee continues without interruption to serve
thereafter in another one (or more) of such other capacities, and Termination of
Service shall be deemed to have occurred when service in the final covered
capacity ceases.
2.
EFFECTIVE DATE AND TERMINATION OF PLAN.

The effective date of the Plan is February 9, 2015; provided, however, that the
Plan shall not become effective unless and until it is approved by the requisite
percentage of the holders of the Common Stock of the Company. The Plan shall
terminate on, and no Award shall be granted hereunder on or after, the 10-year
anniversary of the earlier of the approval of the Plan by (i) the Board or (ii)
the stockholders of the Company; provided, however, that the Board may at any
time prior to that date terminate the Plan.
3.
ADMINISTRATION OF PLAN.

(a)    The Plan shall be administered by the Plan Administrator. The Plan
Administrator, upon and after such time as it is subject to Section 16 of the
Exchange Act, shall consist of at least two individuals each of whom shall be a
"nonemployee director" as defined in Rule 16b-3 as promulgated by the Securities
and Exchange Commission ("Rule 16b-3") under the Exchange Act, and shall, at
such times as the Company is subject to Section 162(m) of the Code (to the
extent relief from the limitation of Section 162(m) of the Code is sought with
respect to Awards), qualify as "outside directors" for purposes of
Section 162(m) of the Code; provided that no action taken by the Plan
Administrator (including, without limitation, grants) shall be invalidated
because any or all of the members of the Plan Administrator fails to satisfy the
foregoing requirements of this sentence. The acts of a majority of the members
present at any meeting of the Plan Administrator at which a quorum is present,
or acts approved in writing by a majority of the Plan Administrator, shall be
the acts of the Plan Administrator for purposes of the Plan. If and to the
extent applicable, no member of the Plan Administrator may act as to matters
under the Plan specifically relating to such member. Notwithstanding the other
foregoing provisions of this Section 3(a), any Award under the Plan to a person
who is a member of the Plan Administrator shall be made and administered by the
Board. If no Plan Administrator is designated by the Board to act for these
purposes, the Board shall have the rights and responsibilities of the Plan
Administrator hereunder and under the Award Agreements.
(b)    Subject to the provisions of the Plan, the Plan Administrator shall in
its discretion as reflected by the terms of the Award Agreements (i) authorize
the granting of Awards to Eligible Persons (or to an entity for the benefit of
Eligible Persons) and (ii) determine the eligibility of an Eligible Person to
receive an Award, as well as determine the number of Shares to be covered under
any Award Agreement, considering the position and responsibilities of the
Eligible Person, the nature and value to the Company of the Eligible Person's
present and potential contribution to the success of the Company, whether
directly or through Subsidiaries, the other compensation and distributions
received by the Subadvisor and its affiliates directly or indirectly from the
Company and its Subsidiaries and such other factors as the Plan Administrator
may deem relevant. In granting Awards under the Plan, the Plan Administrator may
impose conditions on the transfer of Awards received under the Plan, and may
impose other restrictions and requirements as it may deem appropriate.

 
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(c)    The Award Agreement shall contain such other terms, provisions and
conditions not inconsistent herewith as shall be determined by the Plan
Administrator. In the event that any Award Agreement or other agreement
hereunder provides (without regard to this sentence) for the obligation of the
Company or any Affiliate thereof to purchase or repurchase Shares from a Grantee
or any other person, then, notwithstanding the provisions of the Award Agreement
or such other agreement, such obligation shall not apply to the extent that the
purchase or repurchase would not be permitted under Maryland law. The Grantee
shall take whatever additional actions and execute whatever additional documents
the Plan Administrator may in its reasonable judgment deem necessary or
advisable in order to carry out or effect one or more of the obligations or
restrictions imposed on the Grantee pursuant to the express provisions of the
Plan and the Award Agreement.
4.
SHARES AND UNITS SUBJECT TO THE PLAN.

(a)    Subject to adjustments as provided in Section 11 of the Plan, the total
number of Shares subject to Awards granted under the Plan, in the aggregate may
not exceed 2.0% of the shares of Class A Common Stock and Class C Common Stock
outstanding from time to time, on a combined and fully diluted basis, up to a
maximum amount of 2,000,000. Subject to adjustments pursuant to Section 11 of
the Plan, the maximum number of Shares subject to Awards granted under the Plan
in any one year to any Eligible Person, shall not exceed 2,000,000. Shares
distributed under the Plan may be treasury Shares or authorized but unissued
Shares. Any Shares that have been reserved for distribution in payment for
Awards but are later forfeited or for any other reason are not payable under the
Plan may again be made the subject of Awards under the Plan.
(b)    Shares subject to Dividend Equivalent Rights, other than Dividend
Equivalent Rights based directly on the dividends payable on a number of Shares
corresponding to the number of Restricted Stock Units awarded, shall be subject
to the limitation of Section 4(a). Notwithstanding Section 4(a), except in the
case of Awards intended to qualify for relief from the limitations of Section
162(m) of the Code, there shall be no limit on the number of Awards, to the
extent they are paid out in cash, that may be granted under the Plan. If any
Awards are paid out in cash, then, notwithstanding the first sentence of Section
4(a) above (but subject to the second sentence thereof), the underlying Shares
may again be made the subject of Awards under the Plan.
(c)    The certificates for Shares issued hereunder may include any legend which
the Plan Administrator deems appropriate to reflect any restrictions on transfer
hereunder or under the Award Agreement, or as the Plan Administrator may
otherwise deem appropriate.
5.
RESTRICTED STOCK UNITS.

5.1    Grant of Restricted Stock Units.
(a)    Subject to the other terms of the Plan, the Plan Administrator shall, in
its discretion as reflected by the terms of the applicable Award Agreement: (i)
authorize the granting of Restricted Stock Units to Eligible Persons;
(ii) provide a specified purchase price for the Restricted Stock Units (whether
or not the payment of a purchase price is required by any state law applicable
to the Company); (iii) determine the period of forfeiture and related
restrictions, if any, applicable to Restricted Stock Units; and (iv) determine
or impose other conditions, including any applicable Performance Goals, to the
grant of Restricted Stock Units under the Plan as it may deem appropriate.

 
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5.2    Term.
The Plan Administrator may provide in an Award Agreement that any particular
Restricted Stock Unit shall expire at the end of a specified term.
5.3    Vesting.
(a)    In connection with the grant of Restricted Stock Units, whether or not
Performance Goals (as provided for under Section 7 of the Plan) apply thereto,
the Plan Administrator may determine that Restricted Stock Units are vested
immediately upon grant or may establish one or more vesting periods with respect
to the Restricted Stock Units granted, the length of which shall be determined
in the discretion of the Plan Administrator. Subject to the provisions of this
Section 5, the applicable Award Agreement and the other provisions of the Plan,
restrictions on Restricted Stock Units shall lapse if the Grantee satisfies all
applicable employment or other service requirements through the end of the
applicable vesting period.
(b)    Restricted Stock Units shall vest as provided in the applicable Award
Agreement. Unless otherwise stated in the Award Agreement, upon the Grantee's
Termination of Service, all unvested Restricted Stock Units shall be forfeited.
5.4    Settlement of Restricted Stock Units.
(a)    Each vested and outstanding Restricted Stock Unit shall be settled by the
transfer to the Grantee of one Share; provided that the Plan Administrator at
the time of grant (or, in the appropriate case, as determined by the Plan
Administrator, thereafter) may provide that, after consideration of possible
accounting issues, a Restricted Stock Unit may be settled (i) in cash at the
applicable Restricted Stock Unit Value, (ii) in cash or by transfer of Shares as
elected by the Grantee in accordance with procedures established by the Plan
Administrator or (iii) in cash or by transfer of Shares as elected by the
Company.
(b)    Payment (whether of cash or Shares) in respect of Restricted Stock Units
shall be made in a single sum or in periodic payments by the Company, as set
forth in the Award; provided that, with respect to Restricted Stock Units of a
Grantee which have a common Settlement Date, the Plan Administrator may permit
the Grantee to elect in accordance with procedures established by the Plan
Administrator (taking into account, without limitation, Section 409A of the
Code, as the Plan Administrator may deem appropriate) to receive installment
payments over a period not to exceed 10 years, rather than a single-sum payment.
(c)    Regarding the time at which payment in respect of Restricted Stock Units
will be made or commence:
(i)    Unless otherwise provided in the applicable Award Agreement, the
"Settlement Date" with respect to a Restricted Stock Unit is the first day of
the month to follow the date on which the Restricted Stock Unit vests; provided,
however, that a Grantee may elect at or prior to grant, if permitted by and in
accordance with procedures to be established by the Plan Administrator, that
such Settlement Date will be deferred as elected by the Grantee to the first day
of the month to follow the Grantee's Termination of Service, or such other time
as may be permitted by the Plan Administrator. Notwithstanding the prior
sentence, all initial elections to defer the Settlement Date shall be made in
accordance with the requirements of Section 409A of the Code. In addition,
unless otherwise determined by the Plan Administrator, elections under this
Section 5.4(c)(i) must, except as may otherwise be permitted under the rules
applicable under Section 409A of the Code, (A) be effective at least one year
after they are made, or, in the case of payments to commence at a specific time,
be made at least one year before the first scheduled

 
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payment and (B) defer the commencement of distributions (and each affected
distribution) for at least five years.
(ii)    Notwithstanding the foregoing, the Settlement Date, if not earlier
pursuant to this Section 5.4(c), is the date of the Grantee's death.
(d)    Notwithstanding the other provisions of this Section 5, taking into
account, without limitation, the application of Section 409A of the Code, as the
Plan Administrator may deem appropriate, in the event of a Change in Control,
the Settlement Date shall be the date of such Change in Control and all amounts
due with respect to Restricted Stock Units to a Grantee hereunder shall be paid
as soon as practicable (but in no event more than 30 days) after such Change in
Control, unless such Grantee elects otherwise in accordance with procedures
established by the Plan Administrator.
(e)    Notwithstanding any other provision of the Plan, a Grantee may receive
any amounts to be paid in installments as provided in Section 5.4(b) or deferred
by the Grantee as provided in Section 5.4(c) in the event of an "Unforeseeable
Emergency." For these purposes, an "Unforeseeable Emergency," as determined by
the Plan Administrator in its sole discretion, is a severe financial hardship to
the Grantee resulting from (1) a sudden and unexpected illness or accident of
the Grantee or "dependent," as defined in Section 152(a) of the Code, of the
Grantee, (2) loss of the Grantee's property due to casualty, or (3) other
similar extraordinary and unforeseeable circumstances arising as a result of
events beyond the control of the Grantee. The circumstances that will constitute
an Unforeseeable Emergency will depend upon the facts of each case, but, in any
case, payment may not be made to the extent that such hardship is or may be
relieved:
(i)    through reimbursement or compensation by insurance or otherwise,
(ii)    by liquidation of the Grantee's assets, to the extent the liquidation of
such assets would not itself cause severe financial hardship, or
(iii)    by future cessation of the making of additional deferrals under Section
5.4 (b) and (c).
Without limitation, the need to send a Grantee's child to college or the desire
to purchase a home shall not constitute an Unforeseeable Emergency.
Distributions of amounts because of an Unforeseeable Emergency shall be
permitted to the extent reasonably needed to satisfy the emergency need.
5.5    Other Restricted Stock Unit Provisions.
(a)    Except as permitted by the Plan Administrator, rights to payments with
respect to Restricted Stock Units granted under the Plan shall not be subject in
any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment, garnishment, levy, execution, or other legal or
equitable process, either voluntary or involuntary; and any attempt to
anticipate, alienate, sell, transfer, assign, pledge, encumber, attach or
garnish, or levy or execute on any right to payments or other benefits payable
hereunder, shall be void.
(b)    A Grantee may designate in writing, on forms to be prescribed by the Plan
Administrator, a beneficiary or beneficiaries to receive any payments payable
after his or her death and may amend or revoke such designation at any time. If
no beneficiary designation is in effect at the time of a Grantee's death,
payments hereunder shall be made to the Grantee's estate. If a Grantee with a
vested Restricted Stock Unit dies, such Restricted Stock Unit shall be settled
and the Restricted Stock Unit Value in respect of such Restricted Stock Units
paid, and any payments deferred pursuant to an election under

 
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Section 5.4(c) shall be accelerated and paid, as soon as practicable (but no
later than 60 days) after the date of death to such Grantee's beneficiary or
estate, as applicable.
(c)    The Plan Administrator may, taking into account, without limitation, the
application of Section 409A of the Code, as the Plan Administrator may deem
appropriate, establish a program under which distributions with respect to
Restricted Stock Units may be deferred for periods in addition to those
otherwise contemplated by foregoing provisions of this Section 5. Such program
may include, without limitation, provisions for the crediting of earnings and
losses on unpaid amounts, and, if permitted by the Plan Administrator,
provisions under which Grantees may select from among hypothetical investment
alternatives for such deferred amounts in accordance with procedures established
by the Plan Administrator.
(d)    No Restricted Stock Unit shall be construed to give any Grantee any
rights with respect to Shares or any ownership interest in the Company. Except
as may be provided in accordance with Section 6, no provision of the Plan shall
be interpreted to confer upon any Grantee of Restricted Stock Units any voting,
dividend or derivative or other similar rights with respect to any Restricted
Stock Unit.
5.6    Claims Procedures.
(a)    To the extent that the Plan is determined by the Plan Administrator to be
subject to the Employee Retirement Income Security Act of 1974, as amended, the
Grantee, or his beneficiary hereunder or authorized representative, may file a
claim for payments with respect to Restricted Stock Units under the Plan by
written communication to the Plan Administrator or its designee. A claim is not
considered filed until such communication is actually received. Within 90 days
(or, if special circumstances require an extension of time for processing, 180
days, in which case notice of such special circumstances should be provided
within the initial 90-day period) after the filing of the claim, the Plan
Administrator will either:
(iii)    approve the claim and take appropriate steps for satisfaction of the
claim; or
(iv)    if the claim is wholly or partially denied, advise the claimant of such
denial by furnishing to him a written notice of such denial setting forth (A)
the specific reason or reasons for the denial; (B) specific reference to
pertinent provisions of the Plan on which the denial is based and, if the denial
is based in whole or in part on any rule of construction or interpretation
adopted by the Plan Administrator, a reference to such rule, a copy of which
shall be provided to the claimant; (C) a description of any additional material
or information necessary for the claimant to perfect the claim and an
explanation of the reasons why such material or information is necessary; and
(D) a reference to this Section 5.6 as the provision setting forth the claims
procedure under the Plan.
(b)    The claimant may request a review of any denial of his claim by written
application to the Plan Administrator within 60 days after receipt of the notice
of denial of such claim. Within 60 days (or, if special circumstances require an
extension of time for processing, 120 days, in which case notice of such special
circumstances should be provided within the initial 60-day period) after receipt
of written application for review, the Plan Administrator will provide the
claimant with its decision in writing, including, if the claimant's claim is not
approved, specific reasons for the decision and specific references to the Plan
provisions on which the decision is based.

 
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6.
DIVIDEND EQUIVALENT RIGHTS.

6.1    Grant of Dividend Equivalent Rights.
Subject to the other terms of the Plan, the Plan Administrator shall, in its
discretion as reflected by the terms of the Award Agreements, authorize the
granting of Dividend Equivalent Rights to Eligible Persons based on the regular
cash dividends declared on Common Stock, to be credited as of the dividend
payment dates, during the period between the date an Award is granted, and the
date such Award is exercised, vests or expires, as determined by the Plan
Administrator. Such Dividend Equivalent Rights shall be converted to cash or
additional Shares by such formula and at such time and subject to such
limitation as may be determined by the Plan Administrator. If a Dividend
Equivalent Right is granted in respect of an Award hereunder, then, unless
otherwise stated in the Award Agreement, or, in the appropriate case, as
determined by the Plan Administrator, in no event shall the Dividend Equivalent
Right be in effect for a period beyond the time during which the applicable
portion of the underlying Award is in effect.
6.2    Certain Terms.
(c)    The term of a Dividend Equivalent Right shall be set by the Plan
Administrator in its discretion.
(d)    Unless otherwise determined by the Plan Administrator, except as
contemplated by Section 6.4, a Dividend Equivalent Right is exercisable or
payable only while the Grantee is an Eligible Person.
(e)    Payment of the amount determined in accordance with Section 6.1 shall be
in cash, in Common Stock or a combination of the two, as determined by the Plan
Administrator.
(f)    The Plan Administrator may impose such employment-related conditions on
the grant of a Dividend Equivalent Right as it deems appropriate in its
discretion.
6.3    Other Types of Dividend Equivalent Rights.
The Plan Administrator may establish a program under which Dividend Equivalent
Rights of a type whether or not described in the foregoing provisions of this
Section 6 may be granted to Grantees. For example, and without limitation, the
Plan Administrator may grant a Dividend Equivalent Right with respect to a
Restricted Stock Unit, which right would consist of the right (subject to
Section 6.4) to receive a cash payment in an amount equal to the dividend
distributions paid on a Share from time to time.
6.4    Deferral.
The Plan Administrator may establish a program or programs (taking into account,
without limitation, the possible application of Section 409A of the Code, as the
Plan Administrator may deem appropriate) under which Grantees (i) will have
Restricted Stock Units credited, subject to the terms of Sections 5.4 and 5.5 as
though directly applicable with respect thereto, upon the granting of Dividend
Equivalent Rights, or (ii) will have payments with respect to Dividend
Equivalent Rights deferred. In the case of the foregoing clause (ii), such
program may include, without limitation, provisions for the crediting of
earnings and losses on unpaid amounts, and, if permitted by the Plan
Administrator, provisions under which Grantees may select from among
hypothetical investment alternatives for such deferred amounts in accordance
with procedures established by the Plan Administrator.

 
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7.
OTHER AWARDS.

The Plan Administrator shall have the right to grant other Awards based on
Shares having such terms and conditions as the Plan Administrator may determine,
including, without limitation, the grant of Shares (which may be subject to
conditions), the grant of securities convertible with Shares and the grant of
restricted Shares.
8.
PERFORMANCE GOALS.

The Plan Administrator, in its discretion, may, in the case of any Awards
intended to qualify for an exception from the limitation imposed by Section
162(m) of the Code at any time that Section 162(m) applies to the Company, or
otherwise ("Performance-Based Awards"), (i) establish one or more performance
goals ("Performance Goals") as a precondition to the issuance or vesting of
Awards, and (ii) provide, in connection with the establishment of the
Performance Goals, for predetermined Awards to those Grantees (who continue to
meet all applicable eligibility requirements) with respect to whom the
applicable Performance Goals are satisfied. The Performance Goals shall be based
upon the criteria set forth in Exhibit A hereto which is hereby incorporated
herein by reference as though set forth in full. The Performance Goals shall be
established in a timely fashion such that they are considered pre-established
for purposes of the rules governing performance-based compensation under Section
162(m) of the Code at any time that Section 162(m) applies to the Company, and
compliance with such rules is sought. Prior to the award or vesting, as
applicable, of affected Awards hereunder, the Plan Administrator shall have
certified that any applicable Performance Goals, and other material terms of the
Award, have been satisfied. Performance Goals which do not satisfy the foregoing
provisions of this Section 7 may be established by the Plan Administrator with
respect to Awards not intended to qualify for an exception from the limitations
imposed by Section 162(m) of the Code.
9.
TAX WITHHOLDING.

9.1    In General.
The Company, or, a properly designated paying agent, shall be entitled to
withhold from any payments or deemed payments any amount of tax withholding
determined by the Plan Administrator to be required by law. Without limiting the
generality of the foregoing, the Plan Administrator may, in its discretion,
require the Grantee to pay to the Company at such time as the Plan Administrator
determines the amount that the Plan Administrator deems necessary to satisfy the
Company's obligation to withhold federal, state or local income or other taxes
incurred by reason of (i) the receipt of a distribution in respect of Awards or
(ii) any other applicable income-recognition event under the Plan or (iii) the
lapsing of any restrictions applicable to any Awards.
9.2    Share Withholding.
Upon the making of a distribution in respect of Awards, the Grantee may, if
approved (or pre-approved) by the Plan Administrator in its discretion, make a
written election to have amounts (which may include Shares) withheld by the
Company from the distribution otherwise to be made, or to deliver previously
owned Shares (not subject to restrictions hereunder), in order to satisfy the
liability for such withholding taxes. In the event that the Grantee makes, and
the Plan Administrator permits, such an election, any Shares so withheld or
delivered shall have an aggregate Fair Market Value on the date of exercise
sufficient to satisfy the applicable withholding taxes.
9.3    Withholding Required.

 
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Notwithstanding anything contained in the Plan or the Award Agreement to the
contrary, the Grantee's satisfaction of any tax-withholding requirements imposed
by the Plan Administrator shall be a condition precedent to the Company's
obligation as may otherwise be provided hereunder to provide Shares to the
Grantee and to the release of any restrictions as may otherwise be provided
hereunder; and the Awards shall be forfeited upon the failure of the Grantee to
satisfy such requirements with respect to the distributions in respect of any
Award or the lapsing of any restrictions applicable to any Award (or other
income-recognition event).
10.
REGULATIONS AND APPROVALS.

(c)    The obligation of the Company to sell Shares with respect to an Award
granted under the Plan shall be subject to all applicable laws, rules and
regulations, including all applicable federal and state securities laws, and the
obtaining of all such approvals by governmental agencies as may be deemed
necessary or appropriate by the Plan Administrator.
(d)    The Plan Administrator may make such changes to the Plan as may be
necessary or appropriate to comply with the rules and regulations of any
government authority or to obtain tax benefits applicable to an Award.
(e)    Each grant of an Award (or issuance of Shares in respect thereof) is
subject to the requirement that, if at any time the Plan Administrator
determines, in its discretion, that the listing, registration or qualification
of Shares issuable pursuant to the Plan is required by any securities exchange
or under any state or federal law, or the consent or approval of any
governmental regulatory body is necessary or desirable as a condition of, or in
connection with, the issuance of the Award (or Shares in respect thereof), no
payment shall be made, or Award or Shares issued, in whole or in part, unless
listing, registration, qualification, consent or approval has been effected or
obtained free of any conditions in a manner acceptable to the Plan
Administrator.
(f)    In the event that the disposition of stock acquired pursuant to the Plan
is not covered by a then current registration statement under the Securities
Act, and is not otherwise exempt from such registration, such Shares shall be
restricted against transfer to the extent required under the Securities Act, and
the Plan Administrator may require any individual receiving Shares pursuant to
the Plan, as a condition precedent to receipt of such Shares, to represent to
the Company in writing that such Shares are acquired for investment only and not
with a view to distribution and that such Shares will be disposed of only if
registered for sale under the Securities Act or if there is an available
exemption for such disposition.
(g)    Notwithstanding any other provision of the Plan, the Company shall not be
required to take or permit any action under the Plan or any Award Agreement
which, in the good-faith determination of the Company, would result in a
material risk of a violation by the Company of Section 13(k) of the Exchange
Act.
11.
INTERPRETATION AND AMENDMENTS; OTHER RULES.

The Plan Administrator may make such rules and regulations and establish such
procedures for the administration of the Plan as it deems appropriate. Without
limiting the generality of the foregoing, the Plan Administrator may (i)
determine the extent, if any, to which Awards shall be forfeited (whether or not
such forfeiture is expressly contemplated hereunder); (ii) interpret the Plan
and the Award Agreements hereunder, with such interpretations to be conclusive
and binding on all persons and otherwise accorded the maximum deference
permitted by law, provided that the Plan Administrator's interpretation shall
not be entitled to deference on and after a Change in Control except to the
extent that such interpretations are made exclusively

 
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by members of the Plan Administrator who are individuals who served as Plan
Administrator members before the Change in Control; and (iii) take any other
actions and make any other determinations or decisions that it deems necessary
or appropriate in connection with the Plan or the administration or
interpretation thereof. In the event of any dispute or disagreement as to the
interpretation of the Plan or of any rule, regulation or procedure, or as to any
question, right or obligation arising from or related to the Plan, the decision
of the Plan Administrator, except as provided in clause (ii) of the foregoing
sentence, shall be final and binding upon all persons. Unless otherwise
expressly provided hereunder, the Plan Administrator, with respect to any grant,
may exercise its discretion hereunder at the time of the Award or thereafter.
The Board may amend the Plan as it shall deem advisable, except that no
amendment may adversely affect a Grantee with respect to an Award previously
granted without such Grantee's written consent unless such amendments are
required in order to comply with applicable laws; provided, however, that the
Plan may not be amended without stockholder approval (a) to materially increase
the total number of Shares that may be subject to Awards set forth in Section
4(a), (b) to materially modify the requirements of eligibility for participation
in the Plan, (c) to materially increase the benefits accruing to Grantees under
the Plan, or (d) in any other manner that in the absence of stockholder approval
would cause the Plan to fail to comply with any applicable legal requirement or
applicable exchange or similar rule.
12.
CHANGES IN CAPITAL STRUCTURE.

(a)    If (i) the Company or Subsidiaries shall at any time be involved in a
merger, consolidation, dissolution, liquidation, reorganization, exchange of
shares, sale of all or substantially all of the assets or stock of the Company
or Subsidiaries or a transaction similar thereto, (ii) any stock dividend, stock
split, reverse stock split, stock combination, reclassification,
recapitalization or other similar change in the capital structure of the Company
or Subsidiaries, or any distribution to holders of Common Stock other than cash
dividends, shall occur or (iii) any other event shall occur which in the
judgment of the Plan Administrator necessitates action by way of adjusting the
terms of the outstanding Awards, then:
(x)    the maximum aggregate number and kind of Awards which may be granted
and/or subject to Dividend Equivalent Rights under the Plan shall be
appropriately adjusted by the Plan Administrator in its discretion; and
(y)    the Plan Administrator shall take any such action as in its discretion
shall be necessary to maintain each Grantee's rights hereunder (including under
their Award Agreements) so that their respective Awards are substantially
proportionate to the rights existing in such Awards prior to such event,
including, without limitation, adjustments in (A) the number of Restricted Stock
Units, Shares and Dividend Equivalent Rights and other Awards granted, (B) the
number and kind of shares or other property to be distributed in respect of
Awards, (C) the Restricted Stock Unit Value or Fair Market Value of other
Awards, and (D) performance-based criteria established in connection with Awards
(to the extent consistent with Section 162(m) of the Code, as applicable);
provided that, in the discretion of the Plan Administrator, the foregoing clause
(D) may also be applied in the case of any event relating to a Subsidiary if the
event would have been covered under this Section 11(a) had the event related to
the Company.
To the extent that such action shall include an increase or decrease in the
number of Shares (or units of other property then available) subject to all
outstanding Awards, the number of Shares (or units) available under Section 4
shall be increased or decreased, as the case may be, proportionately, as shall
be determined by the Plan Administrator in its discretion.

 
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(b)    If a Change in Control shall occur, then the Plan Administrator, as
constituted immediately before the Change in Control, may make such adjustments
as it, in its discretion, determines are necessary or appropriate in light of
the Change in Control, provided that the Plan Administrator determines that such
adjustments do not have an adverse economic impact on the Grantee as determined
at the time of the adjustments. The Plan Administrator shall have the discretion
to provide that upon a Change in Control, (i) all or a portion of any
outstanding Awards shall become vested and transferable, and all or a portion of
any outstanding Performance-Based Awards will be earned, or (iii) all or a
portion of any outstanding Awards may be cancelled in exchange for a payment of
cash, or all or a portion of any outstanding Awards may be substituted for
Awards that will substantially preserve the otherwise applicable terms of any
affected Awards previously granted under the Plan.
(c)    The judgment of the Plan Administrator with respect to any matter
referred to in this Section 11 shall be conclusive and binding upon each Grantee
without the need for any amendment to the Plan.
13.
MISCELLANEOUS.

13.1    No Rights to Employment or Other Service.
Nothing in the Plan or in any grant made pursuant to the Plan shall confer on
any individual any right to continue in the employ or other service of the
Company, the Subsidiaries, the Advisor, the Subadvisor or their Affiliates, or
interfere in any way with the right of the Company, the Subsidiaries or the
Advisor, the Subadvisor and their stockholders to terminate the individual's
employment or other service at any time.
13.2    No Fiduciary Relationship.
Nothing contained in the Plan (including without limitation Section 5.5(c) and
6.4), and no action taken pursuant to the provisions of the Plan, shall create
or shall be construed to create a trust of any kind, or a fiduciary relationship
between the Company or Subsidiaries or their officers or the Plan Administrator,
on the one hand, and the Grantee, the Company, Subsidiaries or any other person
or entity, on the other.
13.3    Compliance with Section 409A of the Code.
(a)    Any Award Agreement issued under the Plan that is subject to Section 409A
of the Code may include such additional terms and conditions as the Plan
Administrator determines are required to satisfy the requirements of Section
409A of the Code.
(b)    With respect to any Award issued under the Plan that is subject to
Section 409A of the Code, and with respect to which a payment or distribution is
to be made upon a Termination of Service, if the Grantee is determined by the
Company to be a “specified employee” within the meaning of Section
409A(a)(2)(B)(i) of the Code and any of the Company’s stock is publicly traded
on an established securities market or otherwise, such payment or distribution,
to the extent it would constitute a payment of nonqualified deferred
compensation within the meaning of Section 409A of the Code that is ineligible
for an exemption from treatment as such, may not be made before the date which
is six months after the date of Termination of Service (to the extent required
under Section 409A of the Code). Any payments or distributions delayed in
accordance with the prior sentence shall be paid to the Grantee on the first day
of the seventh month following the Grantee’s Termination of Service.

 
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(c)    To the extent compliance with Section 409A of the Code is intended, the
Board and the Plan Administrator shall administer the Plan, and exercise
authority and discretion under the Plan, consistent with the requirements of
Section 409A of the Code or any exemption thereto.    
(d)    The Company makes no representation or warranty and shall have no
liability to any Grantee or any other person if any provisions of this Plan or
any Award Agreement issued pursuant hereto are determined to constitute deferred
compensation subject to Section 409A of the Code but do not satisfy an exemption
from, or the conditions of, such Section.
13.4    No Fund Created.
Any and all payments hereunder to any Grantee shall be made from the general
funds of the Company (or, if applicable, a participating subsidiary), no special
or separate fund shall be established or other segregation of assets made to
assure such payments, and the Restricted Stock Units (including for purposes of
this Section 13.4 any accounts established to facilitate the implementation of
Section 5.4(c)) and any other similar devices issued hereunder to account for
Plan obligations do not constitute Common Stock and shall not be treated as (or
as giving rise to) property or as a trust fund of any kind; provided, however,
that the Company may establish a mere bookkeeping reserve to meet its
obligations hereunder or a trust or other funding vehicle that would not cause
the Plan to be deemed to be funded for tax purposes or for purposes of Title I
of the Employee Retirement Income Security Act of 1974, as amended. The
obligations of the Company under the Plan are unsecured and constitute a mere
promise by the Company to make benefit payments in the future and, to the extent
that any person acquires a right to receive payments under the Plan from the
Company, such right shall be no greater than the right of a general unsecured
creditor of the Company. (If any Affiliate of the Company is or is made
responsible with respect to any Awards, the foregoing sentence shall apply with
respect to such Affiliate.) Without limiting the foregoing, Restricted Stock
Units and any other similar devices issued hereunder to account for Plan
obligations are solely a device for the measurement and determination of the
amounts to be paid to a Grantee under the Plan, and each Grantee's right in the
Restricted Stock Units and any such other devices is limited to the right to
receive payment, if any, as may herein be provided.
13.5    Notices.
All notices under the Plan shall be in writing, and if to the Company, shall be
delivered to the Board or mailed to its principal office, addressed to the
attention of the Board; and if to the Grantee, shall be delivered personally,
sent by facsimile transmission or mailed to the Grantee at the address appearing
in the records of the Company. Such addresses may be changed at any time by
written notice to the other party given in accordance with this Section 13.5.
13.6    Exculpation and Indemnification.
The Company shall indemnify and hold harmless the members of the Board and the
members of the Plan Administrator from and against any and all liabilities,
costs and expenses incurred by such persons as a result of any act or omission
to act in connection with the performance of such person's duties,
responsibilities and obligations under the Plan, to the maximum extent permitted
by law, other than such liabilities, costs and expenses as may result from the
gross negligence, bad faith, willful misconduct or criminal acts of such
persons.
13.7    Captions.

 
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The use of captions in the Plan is for convenience. The captions are not
intended to provide substantive rights.
13.8    Governing Law.
THE PLAN SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF MARYLAND WITHOUT REGARD TO ANY PRINCIPLES OF CONFLICTS OF LAW WHICH
COULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE
OF MARYLAND.
13.9    Gender Neutral.
Wherever used herein, a pronoun in the masculine gender shall be considered as
including the feminine gender unless the context clearly indicates otherwise.

 
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EXHIBIT A

PERFORMANCE CRITERIA
Performance-Based Awards intended to qualify as "performance based" compensation
under Section 162(m) of the Code, may be payable upon the attainment of
objective Performance Goals that are established by the Plan Administrator and
relate to one or more Performance Criteria, in each case on specified date or
over any period, up to 10 years, as determined by the Plan Administrator.
Performance Criteria may (but need not) be based on the achievement of the
specified levels of performance under one or more of the measures set out below
relative to the performance of one or more other corporations or indices.
"Performance Criteria" means the following business criteria (or any combination
thereof) with respect to one or more of the Company, any participating company
or any division or operating unit thereof:
(i)
pre-tax income;

(ii)
after-tax income;

(iii)
net income (meaning net income as reflected in the Company's financial reports
for the applicable period, on an aggregate, diluted and/or per share basis);

(iv)
operating income;

(v)
cash flow;

(vi)
earnings per share;

(vii)
return on equity;

(viii)
return on invested capital or assets;

(ix)
cash and/or funds available for distribution;

(x)
appreciation in the fair market value of the Common Stock;

(xi)
return on investment;

(xii)
total return to stockholders (meaning the aggregate Common Stock price
appreciation and dividends paid (assuming full reinvestment of dividends) during
the applicable period);

(xiii)
net earnings growth;

(xiv)
stock appreciation (meaning an increase in the price or value of the Common
Stock after the date of grant of an award and during the applicable period);

(xv)
related return ratios;

(xvi)
increase in revenues;

(xvii)
net earnings;

 
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(xviii)
changes (or the absence of changes) in the per share or aggregate market price
of the Company's Common Stock;

(xix)
number of securities sold;

(xx)
earnings before any one or more of the following items: interest, taxes,
depreciation, amortization and other non-cash items for the applicable period,
as reflected in the Company's financial reports for the applicable period;

(xxi)
total revenue growth (meaning the increase in total revenues after the date of
grant of an award and during the applicable period, as reflected in the
Company's financial reports for the applicable period);

(xxii)
the Company's published ranking against its peer group of real estate investment
trusts based on total stockholder return;

(xxiii)
funds from operations;

(xxiv)
adjusted funds from operations and operating activities;

(xxv)
adjusted cash flow from operations;

(xxvi)
expense targets;

(xxvii)
completion of asset sales

(xxviii)
completion of asset acquisitions; and

(xxix)
completion of financing transactions.

Performance Goals may be absolute amounts or percentages of amounts, may be
relative to the performance of other companies or of indexes or may be based
upon absolute values or values determined on a per-share basis.
Except as otherwise expressly provided, all financial terms are used as defined
under Generally Accepted Accounting Principles ("GAAP") and all determinations
shall be made in accordance with GAAP, as applied by the Company in the
preparation of its periodic reports to stockholders.
To the extent permitted by Section 162(m) of the Code, unless the Plan
Administrator provides otherwise at the time of establishing the Performance
Goals, for each fiscal year of the Company, there shall be objectively
determinable adjustments, as determined in accordance with GAAP, to any of the
Performance Criteria described above for one or more of the items of gain, loss,
profit or expense: (A) determined to be extraordinary or unusual in nature or
infrequent in occurrence, (B) related to the disposal of a segment of a
business, (C) related to a change in accounting principle under GAAP,
(D) related to discontinued operations that do not qualify as a segment of a
business under GAAP, and (E) attributable to the business operations of any
entity acquired by the Company during the fiscal year.

 
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