Exhibit 10.2

 

NORTHSTAR HEALTHCARE INCOME, INC.

 

AMENDED AND RESTATED

LONG TERM INCENTIVE PLAN

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

 

ARTICLE 1 PURPOSE

1

1.1.

GENERAL

1

 

 

 

ARTICLE 2 DEFINITIONS

1

2.1.

DEFINITIONS

1

 

 

 

ARTICLE 3 PLAN EFFECTIVE DATE; TERMINATION OF PLAN

6

3.1.

PLAN EFFECTIVE DATE

6

3.2.

TERMINATION OF PLAN

6

 

 

 

ARTICLE 4 ADMINISTRATION

6

4.1.

COMMITTEE

6

4.2.

ACTION AND INTERPRETATIONS BY THE COMMITTEE

6

4.3.

AUTHORITY OF COMMITTEE

7

4.4.

AWARD CERTIFICATES

7

 

 

 

ARTICLE 5 SHARES SUBJECT TO THE PLAN

7

5.1.

NUMBER OF SHARES

7

5.2.

SHARE COUNTING

8

5.3.

STOCK DISTRIBUTED

8

 

 

 

ARTICLE 6 ELIGIBILITY

9

6.1.

GENERAL

9

 

 

 

ARTICLE 7 STOCK OPTIONS

9

7.1.

GENERAL

9

7.2.

INCENTIVE STOCK OPTIONS

9

 

 

 

ARTICLE 8 RESTRICTED STOCK, RESTRICTED STOCK UNITS AND DEFERRED STOCK UNITS

10

8.1.

GRANT OF RESTRICTED STOCK, RESTRICTED STOCK UNITS AND DEFERRED STOCK UNITS

10

8.2.

ISSUANCE AND RESTRICTIONS

10

8.3.

FORFEITURE

10

8.4.

DELIVERY OF RESTRICTED STOCK

10

 

 

 

ARTICLE 9 PERFORMANCE AWARDS

10

9.1.

GRANT OF PERFORMANCE AWARDS

10

9.2.

PERFORMANCE GOALS

11

 

 

 

ARTICLE 10 OTHER AWARDS

11

10.1.

GRANT OF OTHER AWARDS

11

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

 

ARTICLE 11 PROVISIONS APPLICABLE TO AWARDS

11

11.1.

TERM OF AWARD

11

11.2.

FORM OF PAYMENT FOR AWARDS

11

11.3.

LIMITS ON TRANSFER

12

11.4.

BENEFICIARIES

12

11.5.

STOCK TRADING RESTRICTIONS

12

11.6.

ACCELERATION UPON DEATH OR DISABILITY

12

11.7.

ACCELERATION UPON A CHANGE IN CONTROL

13

11.8.

ACCELERATION FOR ANY REASON

13

11.9.

FORFEITURE EVENTS

13

11.10.

SUBSTITUTE AWARDS

13

 

 

 

ARTICLE 12 CHANGES IN CAPITAL STRUCTURE

14

12.1.

MANDATORY ADJUSTMENTS

14

12.2.

DISCRETIONARY ADJUSTMENTS

14

12.3.

GENERAL

14

 

 

ARTICLE 13 AMENDMENT, MODIFICATION AND TERMINATION

14

13.1.

AMENDMENT, MODIFICATION AND TERMINATION

14

13.2.

AWARDS PREVIOUSLY GRANTED

15

13.3.

COMPLIANCE AMENDMENTS

15

 

 

 

ARTICLE 14 GENERAL PROVISIONS

16

14.1.

RIGHTS OF PARTICIPANTS

16

14.2.

WITHHOLDING

16

14.3.

SPECIAL PROVISIONS RELATED TO SECTION 409A OF THE CODE

16

14.4.

UNFUNDED STATUS OF AWARDS

17

14.5.

RELATIONSHIP TO OTHER BENEFITS

17

14.6.

EXPENSES

18

14.7.

TITLES AND HEADINGS

18

14.8.

GENDER AND NUMBER

18

14.9.

FRACTIONAL SHARES

18

14.10.

GOVERNMENT AND OTHER REGULATIONS.

18

14.11.

GOVERNING LAW

18

14.12.

ADDITIONAL PROVISIONS

18

14.13.

NO LIMITATIONS ON RIGHTS OF COMPANY

19

14.14.

INDEMNIFICATION

19

 

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NORTHSTAR HEALTHCARE INCOME, INC.

AMENDED AND RESTATED LONG TERM INCENTIVE PLAN

 

ARTICLE 1
PURPOSE

 

1.1.                            GENERAL.  The purpose of the NorthStar
Healthcare Income, Inc. Amended and Restated Long Term Incentive Plan (the
“Plan”) is to enable NorthStar Healthcare Income, Inc. (the “Company”) and its
Affiliates (as defined below) to (1) provide an incentive to employees,
officers, directors, consultants and advisors to increase the value of the
Company’s common stock, (2) give such persons a stake in the Company’s future
that corresponds to the stake of each of the Company’s stockholders, and
(3) obtain or retain the services of these persons who are considered essential
to the Company’s long-term success, by offering such persons an opportunity to
participate in the Company’s growth through ownership of the Company’s common
stock or through other equity-related awards. Accordingly, the Plan permits the
grant of incentive awards from time to time to selected employees, officers,
directors, consultants and advisors of the Company and its Affiliates.

 

ARTICLE 2
DEFINITIONS

 

2.1.                            DEFINITIONS.  When a word or phrase appears in
this Plan with the initial letter capitalized, and the word or phrase does not
commence a sentence, the word or phrase shall generally be given the meaning
ascribed to it in this Section or in Section 1.1 unless a clearly different
meaning is required by the context.  The following words and phrases shall have
the following meanings:

 

(a)                                 “Affiliate” means (i) any Subsidiary or
Parent, or (ii) an entity that directly or through one or more intermediaries
controls, is controlled by or is under common control with, the Company, as
determined by the Committee.

 

(b)                                 “Award” means any Option, Restricted Stock,
Restricted Stock Unit, Deferred Stock Unit, Performance Award, Other Award, or
any other right or interest relating to Stock, granted to a Participant under
the Plan.

 

(c)                                  “Award Certificate” means a written
document, in such form as the Committee prescribes from time to time, setting
forth the terms and conditions of an Award.  Award Certificates may be in the
form of individual award agreements or certificates or a program document
describing the terms and provisions of an Award or series of Awards under the
Plan.  The Committee may provide for the use of electronic, internet or other
non-paper Award Certificates, and the use of electronic, internet or other
non-paper means for the acceptance thereof and actions thereunder by a
Participant.

 

(d)                                 “Beneficial Owner” shall have the meaning
given such term in Rule 13d-3 of the General Rules and Regulations under the
1934 Act.

 

(e)                                  “Board” means the Board of Directors of the
Company.

 

(f)                                   “Cause” as a reason for a Participant’s
termination of employment shall have the meaning assigned such term in the
employment, severance or similar agreement, if any, between such Participant and
the Company or an Affiliate; provided, however, that if there is no such
employment, severance or similar agreement in which such term is defined, and
unless otherwise defined in the applicable Award Certificate, “Cause” shall mean
any of the following acts by the

 

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Participant, as determined by the Committee: gross neglect of duty, prolonged
absence from duty without the consent of the Company, material breach by the
Participant of any published Company code of conduct or code of ethics; or
willful misconduct, misfeasance or malfeasance of duty which is reasonably
determined to be detrimental to the Company. With respect to a Participant’s
termination of directorship, “Cause” means an act or failure to act that
constitutes cause for removal of a director under applicable Maryland law.  The
determination of the Committee as to the existence of “Cause” shall be
conclusive on the Participant and the Company.

 

(g)                                  “Change in Control” means and includes the
occurrence of any one of the following events but shall specifically exclude a
Public Offering:

 

(i)                                     individuals who, on the Plan Effective
Date, constitute the Board (the “Incumbent Directors”) cease for any reason to
constitute at least a majority of such Board, provided that any person becoming
a director after the Plan Effective Date and whose election or nomination for
election was approved by a vote of at least a majority of the Incumbent
Directors then on the Board shall be an Incumbent Director; provided, however,
that no individual initially elected or nominated as a director of the Company
as a result of an actual or threatened election contest with respect to the
election or removal of directors (“Election Contest”) or other actual or
threatened solicitation of proxies or consents by or on behalf of any Person
other than the Board (“Proxy Contest”), including by reason of any agreement
intended to avoid or settle any Election Contest or Proxy Contest, shall be
deemed an Incumbent Director; or

 

(ii)                                  any Person becomes a Beneficial Owner,
directly or indirectly, of either (A) 35% or more of the then-outstanding shares
of common stock of the Company (“Company Common Stock”) or (B) securities of the
Company representing 35% or more of the combined voting power of the Company’s
then outstanding securities eligible to vote for the election of directors (the
“Company Voting Securities”); provided, however, that for purposes of this
subsection (ii), the following acquisitions of Company Common Stock or Company
Voting Securities shall not constitute a Change in Control: (w) an acquisition
directly from the Company, (x) an acquisition by the Company or a Subsidiary,
(y) an acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any Subsidiary, or (z) an acquisition pursuant to a
Non-Qualifying Transaction (as defined in subsection (iii) below); or

 

(iii)                               the consummation of a reorganization,
merger, consolidation, statutory share exchange or similar form of corporate
transaction involving the Company or a Subsidiary (a “Reorganization”), or the
sale or other disposition of all or substantially all of the Company’s assets (a
“Sale”) or the acquisition of assets or stock of another corporation or other
entity (an “Acquisition”), unless immediately following such Reorganization,
Sale or Acquisition: (A) all or substantially all of the individuals and
entities who were the Beneficial Owners, respectively, of the outstanding
Company Common Stock and outstanding Company Voting Securities immediately prior
to such Reorganization, Sale or Acquisition beneficially own, directly or
indirectly, more than 35% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the case
may be, of the entity resulting from such Reorganization, Sale or Acquisition
(including, without limitation, an entity which as a result of such transaction
owns the Company or all or substantially all of the Company’s assets or stock
either directly or through one or more subsidiaries, the “Surviving Entity”) in

 

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substantially the same proportions as their ownership, immediately prior to such
Reorganization, Sale or Acquisition, of the outstanding Company Common Stock and
the outstanding Company Voting Securities, as the case may be, and (B) no Person
(other than (x) the Company or any Subsidiary, (y) the Surviving Entity or its
ultimate parent entity, or (z) any employee benefit plan (or related trust)
sponsored or maintained by any of the foregoing) is the Beneficial Owner,
directly or indirectly, of 35% or more of the total common stock or 35% or more
of the total voting power of the outstanding voting securities eligible to elect
directors of the Surviving Entity, and (C) at least a majority of the members of
the board of directors of the Surviving Entity were Incumbent Directors at the
time of the Board’s approval of the execution of the initial agreement providing
for such Reorganization, Sale or Acquisition (any Reorganization, Sale or
Acquisition which satisfies all of the criteria specified in (A), (B) and
(C) above shall be deemed to be a “Non-Qualifying Transaction”); or

 

(iv)                              approval by the stockholders of the Company of
a complete liquidation or dissolution of the Company.

 

(h)                                 “Charter” means the articles of
incorporation of the Company, as such articles of incorporation may be amended
from time to time.

 

(i)                                     “Code” means the Internal Revenue Code
of 1986, as amended from time to time.  For purposes of this Plan, references to
sections of the Code shall be deemed to include references to any applicable
regulations thereunder and any successor or similar provision.

 

(j)                                    “Committee” means the committee of the
Board described in Article 4.

 

(k)                                 “Company” means NorthStar Healthcare
Income, Inc., a Maryland corporation, or any successor corporation.

 

(l)                                     “Continuous Status as a Participant”
means the absence of any interruption or termination of service as an employee,
officer, director, consultant or advisors of the Company or any Affiliate, as
applicable; provided, however, that for purposes of an Incentive Stock Option
“Continuous Status as a Participant” means the absence of any interruption or
termination of service as an employee of the Company or any Parent or
Subsidiary, as applicable, pursuant to applicable tax regulations.  Continuous
Status as a Participant shall not be considered interrupted in the following
cases: (i) a Participant transfers employment between the Company and an
Affiliate or between Affiliates, or (ii) in the discretion of the Committee as
specified at or prior to such occurrence, in the case of a spin-off, sale or
disposition of the Participant’s employer from the Company or any Affiliate, or
(iii) any leave of absence authorized in writing by the Company prior to its
commencement; provided, however, that for purposes of Incentive Stock Options,
no such leave may exceed 90 days, unless reemployment upon expiration of such
leave is guaranteed by statute or contract.  If reemployment upon expiration of
a leave of absence approved by the Company is not so guaranteed, on the 91st day
of such leave any Incentive Stock Option held by the Participant shall cease to
be treated as an Incentive Stock Option and shall be treated for tax purposes as
a Nonstatutory Stock Option.  Whether military, government or other service or
other leave of absence shall constitute a termination of Continuous Status as a
Participant shall be determined in each case by the Committee at its discretion,
and any determination by the Committee shall be final and conclusive.

 

(m)                             “Deferred Stock Unit” means a right granted to a
Participant under Article 8 to receive Shares (or the equivalent value in cash
or other property if the Committee so provides) at

 

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a future time as determined by the Committee, or as determined by the
Participant within guidelines established by the Committee in the case of
voluntary deferral elections.

 

(n)                                 “Disability” of a Participant means that the
Participant (i) is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than 12 months, or (ii) is, by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than 12 months, receiving
income replacement benefits for a period of not less than three months under an
accident and health plan covering employees of the Participant’s employer.  If
the determination of Disability relates to an Incentive Stock Option, Disability
means Permanent and Total Disability as defined in Section 22(e)(3) of the
Code.  In the event of a dispute, the determination of whether a Participant is
Disabled will be made by the Committee and may be supported by the advice of a
physician competent in the area to which such Disability relates.

 

(o)                                 “Eligible Participant” means an employee,
officer, consultant or director of the Company or any Affiliate.

 

(p)                                 “Exchange” means any national securities
exchange on which the Stock may from time to time be listed or traded.

 

(q)                                 “Fair Market Value,” on any date, means
(i) if the Stock is listed on a securities exchange, the closing sales price on
such exchange or over such system on such date or, in the absence of reported
sales on such date, the closing sales price on the immediately preceding date on
which sales were reported, or (ii) if the Stock is not listed on a securities
exchange, the mean between the bid and offered prices as quoted by the
applicable interdealer quotation system for such date, provided that if the
Stock is not quoted on such interdealer quotation system or it is determined
that the fair market value is not properly reflected by such quotations, Fair
Market Value will be determined by such other method as the Committee determines
in good faith to be reasonable and in compliance with Code Section 409A.

 

(r)                                    “Grant Date” of an Award means the first
date on which all necessary corporate action has been taken to approve the grant
of the Award as provided in the Plan, or such later date as is determined and
specified as part of that authorization process.  Notice of the grant shall be
provided to the grantee within a reasonable time after the Grant Date.

 

(s)                                   “Incentive Stock Option” means an Option
that is intended to be an incentive stock option and meets the requirements of
Section 422 of the Code or any successor provision thereto.

 

(t)                                    “Independent Director” means a director
of the Company who is not a common law employee of the Company and who meets the
additional requirements set forth for an “independent director” in the Charter.

 

(u)                                 “Nonstatutory Stock Option” means an Option
that is not an Incentive Stock Option.

 

(v)                                 “NSHCOP” means NorthStar Healthcare Income
Operating Partnership, LP, a Delaware limited partnership of which the Company
is the sole general partner.

 

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(w)                               “NSHCOP Interests” means limited partnership
interests in NSHCOP that may be exchanged or redeemed for Shares on a
one-for-one basis, or any profits interest in NSHCOP that may be exchanged or
converted into such limited partnership interests.

 

(x)                                 “Option” means a right granted to a
Participant under Article 7 of the Plan to purchase Stock at a specified price
during specified time periods.  An Option may be either an Incentive Stock
Option or a Nonstatutory Stock Option.

 

(y)                                 “Other Award” means a right granted to a
Participant under Article 10.

 

(z)                                  “Parent” means a corporation, limited
liability company, partnership or other entity which owns or beneficially owns a
majority of the outstanding voting stock or voting power of the Company.
Notwithstanding the above, with respect to an Incentive Stock Option, Parent
shall have the meaning set forth in Section 424(e) of the Code.

 

(aa)                          “Participant” means a person who, as an employee,
officer, director or consultant of the Company or any Affiliate, has been
granted an Award under the Plan; provided that in the case of the death of a
Participant, the term “Participant” refers to a beneficiary designated pursuant
to Section 11.4 or the legal guardian or other legal representative acting in a
fiduciary capacity on behalf of the Participant under applicable state law and
court supervision.

 

(bb)                          “Performance Award” means any award granted under
the Plan pursuant to Article 9.

 

(cc)                            “Person” means any individual, entity or group,
within the meaning of Section 3(a)(9) of the 1934 Act and as used in
Section 13(d)(3) or 14(d)(2) of the 1934 Act.

 

(dd)                          “Plan” means the NorthStar Healthcare Income, Inc.
Amended and Restated Long Term Incentive Plan, as amended from time to time.

 

(ee)                            “Plan Effective Date” has the meaning assigned
such term in Section 3.1.

 

(ff)                              “Public Offering” shall occur on the closing
date of a public offering of any class or series of the Company’s equity
securities pursuant to a registration statement filed by the Company under the
1933 Act.

 

(gg)                            “Restricted Stock” means Stock granted to a
Participant under Article 8 that is subject to certain restrictions and to risk
of forfeiture.

 

(hh)                          “Restricted Stock Unit” means a right granted to a
Participant under Article 8 to receive shares of Stock (or the equivalent value
in cash or other property if the Committee so provides) in the future, which
right is subject to certain restrictions and to risk of forfeiture.

 

(ii)                                  “Shares” means shares of the Company’s
Stock.  If there has been an adjustment or substitution pursuant to Section
12.1, the term “Shares” shall also include any shares of stock or other
securities that are substituted for Shares or into which Shares are adjusted
pursuant to Section 12.1.

 

(jj)                                “Stock” means the $0.01 par value common
stock of the Company and such other securities of the Company as may be
substituted for Stock pursuant to Section 12.1.

 

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(kk)                          “Subsidiary” means any corporation, limited
liability company, partnership or other entity of which a majority of the
outstanding voting stock or voting power is beneficially owned directly or
indirectly by the Company. Notwithstanding the above, with respect to an
Incentive Stock Option, Subsidiary shall have the meaning set forth in Section
424(f) of the Code.

 

(ll)                                  “1933 Act” means the Securities Act of
1933, as amended from time to time.

 

(mm)                  1934 Act” means the Securities Exchange Act of 1934, as
amended from time to time.

 

ARTICLE 3
PLAN EFFECTIVE DATE; TERMINATION OF PLAN

 

3.1.                            PLAN EFFECTIVE DATE.  The Plan shall be
effective as of the date it is approved by both the Board and the stockholders
of the Company (the “Plan Effective Date”).

 

3.2.                            TERMINATION OF PLAN.  The Plan shall terminate
on the tenth anniversary of the Plan Effective Date unless earlier terminated as
provided herein.  The termination of the Plan on such date shall not affect the
validity of any Award outstanding on the date of termination, which shall
continue to be governed by the applicable terms and conditions of this Plan. 
Notwithstanding the foregoing, no Incentive Stock Options may be granted more
than ten (10) years after the earlier of (a) adoption of this Plan by the Board,
or (b) the Plan Effective Date.

 

ARTICLE 4
ADMINISTRATION

 

4.1.                            COMMITTEE.  The Plan shall be administered by a
Committee appointed by the Board (which Committee shall consist of at least two
directors) or, at the discretion of the Board from time to time, the Plan may be
administered by the Board.  The members of the Committee shall be appointed by,
and may be changed at any time and from time to time in the discretion of, the
Board.  It is intended that at least two of the directors appointed to serve on
the Committee shall be “non-employee directors” (within the meaning of
Rule 16b-3 promulgated under the 1934 Act) and that any such members of the
Committee who do not so qualify shall abstain from participating in any decision
to make or administer Awards that are made to Eligible Participants who at the
time of consideration for such Award are persons subject to the short-swing
profit rules of Section 16 of the 1934 Act.  However, the mere fact that a
Committee member shall fail to qualify as a “non-employee director” or shall
fail to abstain from such action shall not invalidate any Award made by the
Committee which Award is otherwise validly made under the Plan.  The members of
the Committee shall be appointed by, and may be changed at any time and from
time to time in the discretion of, the Board.  The Board may reserve to itself
any or all of the authority and responsibility of the Committee under the Plan
or may act as administrator of the Plan for any and all purposes.  To the extent
the Board has reserved any authority and responsibility or during any time that
the Board is acting as administrator of the Plan, it shall have all the powers
of the Committee hereunder, and any reference herein to the Committee (other
than in this Section 4.1) shall include the Board.  To the extent any action of
the Board under the Plan conflicts with actions taken by the Committee, the
actions of the Board shall control.

 

4.2.                            ACTION AND INTERPRETATIONS BY THE COMMITTEE. 
For purposes of administering the Plan, the Committee may from time to time
adopt rules, regulations, guidelines and procedures for carrying out the
provisions and purposes of the Plan and make such other determinations,

 

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not inconsistent with the Plan, as the Committee may deem appropriate.  The
Committee’s interpretation of the Plan, any Awards granted under the Plan, any
Award Certificate and all decisions and determinations by the Committee with
respect to the Plan are final, binding, and conclusive on all parties.  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 or an Affiliate’s
independent certified public accountants, Company counsel or any executive
compensation consultant or other professional retained by the Company to assist
in the administration of the Plan.

 

4.3.                            AUTHORITY OF COMMITTEE.  The Committee has the
exclusive power, authority and discretion to:

 

(a)         grant Awards;

 

(b)         designate Participants;

 

(c)          determine the type or types of Awards to be granted to each
Participant;

 

(d)         determine the number of Awards to be granted and the number of
Shares, NSHCOP Interests or dollar amount to which an Award will relate;

 

(e)          determine the terms and conditions of any Award granted under the
Plan;

 

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

 

(g)          decide all other matters that must be determined in connection with
an Award;

 

(h)         establish, adopt or revise any rules, regulations, guidelines or
procedures as it may deem necessary or advisable to administer the Plan;

 

(i)             make all other decisions and determinations that may be required
under the Plan or as the Committee deems necessary or advisable to administer
the Plan;

 

(j)            amend the Plan or any Award Certificate as provided herein; and

 

(k)         adopt such modifications, procedures, and subplans as may be
necessary or desirable to comply with provisions of the laws of non-U.S.
jurisdictions in which the Company or any Affiliate may operate, in order to
assure the viability of the benefits of Awards granted to participants located
in such other jurisdictions and to meet the objectives of the Plan.

 

4.4.                            AWARD CERTIFICATES.  Each Award shall be
evidenced by an Award Certificate.  Each Award Certificate shall include such
provisions, not inconsistent with the Plan, as may be specified by the
Committee.

 

ARTICLE 5
SHARES SUBJECT TO THE PLAN

 

5.1.                            NUMBER OF SHARES.  Subject to adjustment as
provided in Sections 5.2 and Section 12.1, the aggregate number of Shares
reserved and available for issuance pursuant to Awards granted

 

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under the Plan shall be 2,000,000.  The maximum number of Shares that may be
issued upon exercise of Incentive Stock Options granted under the Plan shall be
2,000,000. The maximum number of Shares that may be issued upon the exercise or
grant of an Award granted under the Plan shall not exceed, in the aggregate, an
amount equal to five percent (5%) of the outstanding Shares on the Grant Date;
provided, however, that the initial grant of Restricted Stock to the Company’s
Independent Directors, as set forth in Section 7.1 of the Company’s Amended and
Restated Independent Directors Compensation Plan, shall be excluded from such
limitation.

 

5.2.                            SHARE COUNTING.  Shares covered by an Award
shall be subtracted from the Plan share reserve as of the date of grant, but
shall be added back to the Plan share reserve in accordance with this
Section 5.2.

 

(a)                                 To the extent that an Award is canceled,
terminates, expires, is forfeited or lapses for any reason, any unissued or
forfeited Shares subject to the Award will again be available for issuance
pursuant to Awards granted under the Plan.

 

(b)                                 Shares subject to Awards settled in cash
will again be available for issuance pursuant to Awards granted under the Plan.

 

(c)                                  Shares withheld from an Award or delivered
by a Participant to satisfy minimum tax withholding requirements will again be
available for issuance pursuant to Awards granted under the Plan.

 

(d)                                 If the exercise price of an Option is
satisfied by delivering Shares to the Company (by either actual delivery or
attestation), only the number of Shares issued to the Participant in excess of
the Shares tendered (by delivery or attestation) shall be considered for
purposes of determining the number of Shares remaining available for issuance
pursuant to Awards granted under the Plan.

 

(e)                                  To the extent that the full number of
Shares subject to an Option is not issued upon exercise of the Option for any
reason, including by reason of net-settlement of the Award, only the number of
Shares issued and delivered upon exercise of the Option shall be considered for
purposes of determining the number of Shares remaining available for issuance
pursuant to Awards granted under the Plan.

 

(f)                                   To the extent that the full number of
Shares subject to an Award other than an Option is not issued for any reason,
including by reason of failure to achieve maximum performance goals, only the
number of Shares issued and delivered shall be considered for purposes of
determining the number of Shares remaining available for issuance pursuant to
Awards granted under the Plan.

 

(g)                                  Substitute Awards granted pursuant to
Section 11.10 of the Plan shall not count against the Shares otherwise available
for issuance under the Plan under Section 5.1.

 

5.3.                            STOCK DISTRIBUTED.  Any Stock distributed
pursuant to an Award may consist, in whole or in part, of authorized and
unissued Stock, treasury Stock or Stock purchased on the open market.

 

8

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ARTICLE 6
ELIGIBILITY

 

6.1.                            GENERAL.  Awards may be granted only to Eligible
Participants.  Incentive Stock Options may be granted only to Eligible
Participants who are employees of the Company or a Parent or Subsidiary as
defined in Section 424(e) and (f) of the Code.  Eligible Participants who are
service providers to an Affiliate may be granted Options under this Plan only if
the Affiliate qualifies as an “eligible issuer of service recipient stock”
within the meaning of §1.409A-1(b)(5)(iii)(E) of the final regulations under
Code Section 409A.

 

ARTICLE 7
STOCK OPTIONS

 

7.1.                            GENERAL.  The Committee is authorized to grant
Options to Participants on the following terms and conditions:

 

(a)                                 EXERCISE PRICE.  The exercise price per
Share under an Option shall be determined by the Committee, provided that the
exercise price for any Option (other than an Option issued as a substitute Award
pursuant to Section 11.10) shall not be less than the Fair Market Value as of
the Grant Date.

 

(b)                                 PROHIBITION ON REPRICING.  Except as
otherwise provided in Section 12.1, the exercise price of an Option may not be
reduced, directly or indirectly by cancellation and regrant or otherwise,
without the prior approval of the stockholders of the Company.

 

(c)                                  TIME AND CONDITIONS OF EXERCISE.  The
Committee shall determine the time or times at which an Option may be exercised
in whole or in part, subject to Section 7.1(e).  The Committee shall also
determine the performance or other conditions, if any, that must be satisfied
before all or part of an Option may be exercised or vested.

 

(d)                                 PAYMENT.  The Committee shall determine the
methods by which the exercise price of an Option may be paid, the form of
payment, including, without limitation, cash, Shares, or other property
(including “cashless exercise” arrangements), and the methods by which Shares
shall be delivered or deemed to be delivered to Participants.

 

(e)                                  EXERCISE TERM.  Except for Nonstatutory
Options granted to Participants outside the United States, no Option granted
under the Plan shall be exercisable for more than ten years from the Grant Date.

 

(f)                                   NO DEFERRAL FEATURE.  No Option shall
provide for any feature for the deferral of compensation other than the deferral
of recognition of income until the exercise or disposition of the Option.

 

7.2.                            INCENTIVE STOCK OPTIONS.  The terms of any
Incentive Stock Options granted under the Plan must comply with the requirements
of Section 422 of the Code.  If all of the requirements of Section 422 of the
Code are not met, the Option shall automatically become a Nonstatutory Stock
Option.

 

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ARTICLE 8
RESTRICTED STOCK, RESTRICTED STOCK UNITS
AND DEFERRED STOCK UNITS

 

8.1.                            GRANT OF RESTRICTED STOCK, RESTRICTED STOCK
UNITS AND DEFERRED STOCK UNITS.  The Committee is authorized to make Awards of
Restricted Stock, Restricted Stock Units or Deferred Stock Units to Participants
in such amounts and subject to such terms and conditions as may be selected by
the Committee.  An Award of Restricted Stock, Restricted Stock Units or Deferred
Stock Units shall be evidenced by an Award Certificate setting forth the terms,
conditions, and restrictions applicable to the Award.

 

8.2.                            ISSUANCE AND RESTRICTIONS.  Restricted Stock,
Restricted Stock Units or Deferred Stock Units shall be subject to such
restrictions on transferability and other restrictions as the Committee may
impose (including, without limitation, limitations on the right to vote
Restricted Stock or the right to receive dividends on the Restricted Stock). 
These restrictions may lapse separately or in combination at such times, under
such circumstances, in such installments, upon the satisfaction of performance
goals or otherwise, as the Committee determines at the time of the grant of the
Award or thereafter.  Except as otherwise provided in an Award Certificate or
any special Plan document governing an Award, the Participant shall have all of
the rights of a stockholder with respect to the Restricted Stock, and the
Participant shall have none of the rights of a stockholder with respect to
Restricted Stock Units or Deferred Stock Units until such time as Shares of
Stock are paid in settlement of the Restricted Stock Units or Deferred Stock
Units.  Unless otherwise provided in the applicable Award Certificate, awards of
Restricted Stock will be entitled to full dividend rights and any dividends paid
thereon will be paid or distributed to the holder no later than the end of the
calendar year in which the dividends are paid to stockholders or, if later, the
15th day of the third month following the date the dividends are paid to
stockholders.

 

8.3.                            FORFEITURE.  Except as otherwise determined by
the Committee at the time of the grant of the Award or thereafter, upon
termination of Continuous Status as a Participant during the applicable
restriction period or upon failure to satisfy a performance goal during the
applicable restriction period, Restricted Stock or Restricted Stock Units that
are at that time subject to restrictions shall be forfeited.

 

8.4.                            DELIVERY OF RESTRICTED STOCK.  Shares of
Restricted Stock shall be delivered to the Participant at the time of grant
either by book-entry registration or by delivering to the Participant, or a
custodian or escrow agent (including, without limitation, the Company or one or
more of its employees) designated by the Committee, a stock certificate or
certificates registered in the name of the Participant.  If physical
certificates representing shares of Restricted Stock are registered in the name
of the Participant, such certificates must bear an appropriate legend referring
to the terms, conditions, and restrictions applicable to such Restricted Stock.

 

ARTICLE 9
PERFORMANCE AWARDS

 

9.1.                            GRANT OF PERFORMANCE AWARDS.  The Committee is
authorized to grant any Award under this Plan with performance-based vesting
criteria, on such terms and conditions as may be selected by the Committee.  The
Committee shall have the complete discretion to determine the number of
Performance Awards granted to each Participant and to designate the provisions
of such Performance Awards as provided in Section 4.3.  All Performance Awards
shall be evidenced by an Award Certificate or a written program established by
the Committee, pursuant to which Performance Awards are awarded under the Plan
under uniform terms, conditions and restrictions set forth in such written
program.

 

10

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9.2.                            PERFORMANCE GOALS.  The Committee may establish
performance goals for Performance Awards which may be based on any criteria
selected by the Committee.  Such performance goals may be described in terms of
Company-wide objectives or in terms of objectives that relate to the performance
of the Participant, an Affiliate or a division, region, department or function
within the Company or an Affiliate. If the Committee determines that a change in
the business, operations, corporate structure or capital structure of the
Company or the manner in which the Company or an Affiliate conducts its
business, or other events or circumstances render performance goals to be
unsuitable, the Committee may modify such performance goals in whole or in part,
as the Committee deems appropriate.  If a Participant is promoted, demoted or
transferred to a different business unit or function during a performance
period, the Committee may determine that the performance goals or performance
period are no longer appropriate and may (i) adjust, change or eliminate the
performance goals or the applicable performance period as it deems appropriate
to make such goals and period comparable to the initial goals and period, or
(ii) make a cash payment to the participant in an amount determined by the
Committee.

 

ARTICLE 10
OTHER AWARDS

 

10.1.                     GRANT OF OTHER AWARDS.  The Committee is authorized,
subject to limitations under applicable law, to grant to Participants such other
Awards that are payable in, valued in whole or in part by reference to, or
otherwise based on or related to Shares, as deemed by the Committee to be
consistent with the purposes of the Plan, including without limitation, NSHCOP
Interests, membership interests in a Subsidiary or operating partnership, Shares
awarded purely as a “bonus” and not subject to any restrictions or conditions,
convertible or exchangeable debt securities, other rights convertible or
exchangeable into Shares, and Awards valued by reference to book value of Shares
or the value of securities of or the performance of specified Parents or
Subsidiaries.  The Committee shall determine the terms and conditions of such
Awards. For purposes of calculating the number of Shares underlying an Other
Award relative to the total number of Shares of Stock reserved and available for
issuance under Section 5.1 hereof, the Committee shall establish in good faith
the maximum number of Shares to which a grantee of such Other Award may be
entitled upon fulfillment of all applicable conditions set forth in the relevant
Award Certificate, including vesting, accretion factors, conversion ratios,
exchange ratios and the like. If and when any such conditions are no longer
capable of being met, in whole or in part, the number of Shares underlying such
Other Award shall be reduced accordingly by the Committee and the related Shares
shall be added back to the Shares of Stock available for issuance under the
Plan.  The Committee may require that Other Awards be held through a limited
partnership, or similar “look-through” entity, and the Committee may require
such limited partnership or similar entity to impose restrictions on its
partners or other beneficial owners that are not inconsistent with the
provisions of this Section 10.1. The provisions of the grant of Other Awards
need not be the same with respect to each Participant.

 

ARTICLE 11
PROVISIONS APPLICABLE TO AWARDS

 

11.1.                     TERM OF AWARD.  The term of each Award shall be for
the period as determined by the Committee, provided that in no event shall the
term of any Option exceed a period of ten years from its Grant Date.

 

11.2.                     FORM OF PAYMENT FOR AWARDS.  At the discretion of the
Committee, payment of Awards may be made in cash, Stock, a combination of cash
and Stock, or any other form of property as the Committee shall determine.  In
addition, payment of Awards may include such terms, conditions, restrictions
and/or limitations, if any, as the Committee deems appropriate, including, in
the case of

 

11

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Awards paid in the form of Stock, restrictions on transfer and forfeiture
provisions.  Further, payment of Awards may be made in the form of a lump sum,
or in installments, as determined by the Committee.

 

11.3.                     LIMITS ON TRANSFER.  No right or interest of a
Participant in any unexercised or restricted Award may be pledged, encumbered,
or hypothecated to or in favor of any party other than the Company or an
Affiliate, or shall be subject to any lien, obligation, or liability of such
Participant to any other party other than the Company or an Affiliate.  No
unexercised or restricted Award shall be assignable or transferable by a
Participant other than by will or the laws of descent and distribution;
provided, however, that the Committee may (but need not) permit other transfers
(other than transfers for value) where the Committee concludes that such
transferability (i) does not result in accelerated taxation, (ii) does not cause
any Option intended to be an Incentive Stock Option to fail to be described in
Code Section 422(b), and (iii) is otherwise appropriate and desirable, taking
into account any factors deemed relevant, including without limitation, state or
federal tax or securities laws applicable to transferable Awards.

 

11.4.                     BENEFICIARIES.  Notwithstanding Section 11.3, a
Participant may, in the manner determined by the Committee, 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 under the Plan is subject to all terms and conditions of the Plan and any
Award Certificate applicable to the Participant, except to the extent the Plan
and Award Certificate otherwise provide, and to any additional restrictions
deemed necessary or appropriate by the Committee.  If no beneficiary has been
designated or survives the Participant, payment shall be made to the
Participant’s estate.  Subject to the foregoing, a beneficiary designation may
be changed or revoked by a Participant at any time provided the change or
revocation is filed with the Committee.

 

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

 

11.6.                     ACCELERATION UPON DEATH OR DISABILITY.  Except as
otherwise provided in the Award Certificate or any special Plan document
governing an Award, upon the termination of a person’s Continuous Status as a
Participant by reason of death or Disability:

 

(i)                                     all of that Participant’s outstanding
Options shall become fully exercisable;

 

(ii)                                  all time-based vesting restrictions on
that Participant’s outstanding Awards shall lapse as of the date of termination;
and

 

(iii)                               the payout opportunities attainable under
all of that Participant’s outstanding performance-based Awards shall be deemed
to have been fully earned as of the date of termination as follows:

 

(A)       if the date of termination occurs during the first half of the
applicable performance period, all relevant performance goals will be deemed to
have been achieved at the “target” level, and

 

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(B)       if the date of termination occurs during the second half of the
applicable performance period, the actual level of achievement of all relevant
performance goals against target will be measured as of the end of the calendar
quarter immediately preceding the date of termination, and

 

(C)       in either such case, there shall be a pro rata payout to the
Participant or his or her estate within sixty (60) days following the date of
termination (unless a later date is required by Section 14.3 hereof), based upon
the length of time within the performance period that has elapsed prior to the
date of termination.

 

To the extent that this provision causes Incentive Stock Options to exceed the
dollar limitation set forth in Code Section 422(d), the excess Options shall be
deemed to be Nonstatutory Stock Options.

 

11.7.                     ACCELERATION UPON A CHANGE IN CONTROL.  Except as
otherwise provided in the Award Certificate or any special Plan document
governing an Award, upon the occurrence of a Change in Control, (i) all
outstanding Options and other Awards in the nature of rights that may be
exercised shall become fully exercisable, and (ii) all time-based vesting
restrictions on outstanding Awards shall lapse.  Except as otherwise provided in
the Award Certificate or any special Plan document governing an Award, upon the
occurrence of a Change in Control, the target payout opportunities attainable
under all outstanding performance-based Awards shall be deemed to have been
fully earned as of the effective date of the Change in Control based upon an
assumed achievement of all relevant performance goals at the “target” level and
there shall be a pro rata payout to Participants within thirty (30) days
following the effective date of the Change in Control based upon the length of
time within the performance period that has elapsed prior to the Change in
Control.

 

11.8.                     ACCELERATION FOR ANY REASON.  The Committee may in its
sole discretion at any time determine that all or a portion of a Participant’s
Options and other Awards in the nature of rights that may be exercised shall
become fully or partially exercisable, that all or a part of the time-based
vesting restrictions on all or a portion of the outstanding Awards shall lapse,
and/or that any performance-based criteria with respect to any Awards shall be
deemed to be wholly or partially satisfied, in each case, as of such date as the
Committee may, in its sole discretion, declare.  The Committee may discriminate
among Participants and among Awards granted to a Participant in exercising its
discretion pursuant to this Section 11.8.  Notwithstanding anything in the Plan,
including this Section 11.8, the Committee may not accelerate the payment of any
Award if such acceleration would violate Section 409A(a)(3) of the Code.

 

11.9.                     FORFEITURE EVENTS.  The Committee may specify in an
Award Certificate that the Participant’s rights, payments and benefits with
respect to an Award shall be subject to reduction, cancellation, forfeiture or
recoupment upon the occurrence of certain specified events, in addition to any
otherwise applicable vesting or performance conditions of an Award. Such events
shall include, but shall not be limited to, termination of employment for Cause,
violation of material Company or Affiliate policies, breach of noncompetition,
confidentiality or other restrictive covenants that may apply to the
Participant, or other conduct by the Participant that is detrimental to the
business or reputation of the Company or any Affiliate.

 

11.10.              SUBSTITUTE AWARDS.  The Committee may grant Awards under the
Plan in substitution for stock and stock-based awards held by employees of
another entity who become employees of the Company or an Affiliate as a result
of a merger or consolidation of the former employing entity with the Company or
an Affiliate or the acquisition by the Company or an Affiliate of property or
stock of the former employing corporation.  The Committee may direct that the
substitute

 

13

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awards be granted on such terms and conditions as the Committee considers
appropriate in the circumstances.

 

ARTICLE 12
CHANGES IN CAPITAL STRUCTURE

 

12.1.                     MANDATORY ADJUSTMENTS.  In the event of a
nonreciprocal transaction between the Company and its stockholders that causes
the per-share value of the Stock to change (including, without limitation, any
stock dividend, stock split, spin-off, rights offering, or large nonrecurring
cash dividend), the authorization limits under Section 5.1 shall be adjusted
proportionately, and the Committee shall make such adjustments to the Plan and
Awards as it deems necessary, in its sole discretion, to prevent dilution or
enlargement of rights immediately resulting from such transaction.  Action by
the Committee may include: (i) adjustment of the number and kind of shares that
may be delivered under the Plan; (ii) adjustment of the number and kind of
shares subject to outstanding Awards; (iii) adjustment of the exercise price of
outstanding Awards or the measure to be used to determine the amount of the
benefit payable on an Award; and (iv) any other adjustments that the Committee
determines to be equitable.  Notwithstanding the foregoing, the Committee shall
not make any adjustments to outstanding Options that would constitute a
modification or substitution of the stock right under Treas. Reg. Sections
1.409A-1(b)(5)(v) that would be treated as the grant of a new stock right or
change in the form of payment for purposes of Code Section 409A.  Without
limiting the foregoing, in the event of a subdivision of the outstanding Stock
(stock-split), a declaration of a dividend payable in Shares, or a combination
or consolidation of the outstanding Stock into a lesser number of Shares, the
authorization limits under Section 5.1 shall automatically be adjusted
proportionately, and the Shares then subject to each Award shall automatically,
without the necessity for any additional action by the Committee, be adjusted
proportionately without any change in the aggregate purchase price therefor.

 

12.2.                     DISCRETIONARY ADJUSTMENTS.  Upon the occurrence or in
anticipation of any corporate event or transaction involving the Company
(including, without limitation, any merger, reorganization, recapitalization,
combination or exchange of shares, or any transaction described in
Section 12.1), the Committee may, in its sole discretion, provide (i) that
Awards will be settled in cash rather than Stock, (ii) that Awards will become
immediately vested and exercisable and will expire after a designated period of
time to the extent not then exercised, (iii) that Awards will be assumed by
another party to a transaction or otherwise be equitably converted or
substituted in connection with such transaction, (iv) that outstanding Awards
may be settled by payment in cash or cash equivalents equal to the excess of the
Fair Market Value of the underlying Stock, as of a specified date associated
with the transaction, over the exercise price of the Award, (v) that performance
targets and performance periods for Performance Awards will be modified, or
(vi) any combination of the foregoing.  The Committee’s determination need not
be uniform and may be different for different Participants whether or not such
Participants are similarly situated.

 

12.3.                     GENERAL.  Any discretionary adjustments made pursuant
to this Article 12 shall be subject to the provisions of Section 13.2.  To the
extent that any adjustments made pursuant to this Article 12 cause Incentive
Stock Options to cease to qualify as Incentive Stock Options, such Options shall
be deemed to be Nonstatutory Stock Options.

 

ARTICLE 13
AMENDMENT, MODIFICATION AND TERMINATION

 

13.1.                     AMENDMENT, MODIFICATION AND TERMINATION.  The Board or
the Committee may, at any time and from time to time, amend, modify or terminate
the Plan without stockholder approval; provided, however, that if an amendment
to the Plan would, in the reasonable

 

14

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opinion of the Board or the Committee, either (i) materially increase the number
of Shares available under the Plan, (ii) expand the types of awards under the
Plan, (iii) materially expand the class of participants eligible to participate
in the Plan, (iv) materially extend the term of the Plan, or (v) otherwise
constitute a material change requiring stockholder approval under applicable
laws, policies or regulations or the applicable listing or other requirements of
an Exchange, then such amendment shall be subject to stockholder approval; and
provided, further, that the Board or Committee may condition any other amendment
or modification on the approval of stockholders of the Company for any reason,
including by reason of such approval being necessary or deemed advisable (i) to
comply with the listing or other requirements of an Exchange, or (ii) to satisfy
any other tax, securities or other applicable laws, policies or regulations.

 

13.2.                     AWARDS PREVIOUSLY GRANTED.  At any time and from time
to time, the Committee may amend, modify or terminate any outstanding Award
without approval of the Participant; provided, however:

 

(a)                                 Subject to the terms of the applicable Award
Certificate, such amendment, modification or termination shall not, without the
Participant’s consent, reduce or diminish the value of such Award determined as
if the Award had been exercised, vested, cashed in or otherwise settled on the
date of such amendment or termination (with the per-share value of an Option for
this purpose being calculated as the excess, if any, of the Fair Market Value as
of the date of such amendment or termination over the exercise or base price of
such Award);

 

(b)                                 The original term of an Option may not be
extended without the prior approval of the stockholders of the Company;

 

(c)                                  Except as otherwise provided in
Section 12.1, the exercise price of an Option may not be reduced, directly or
indirectly, without the prior approval of the stockholders of the Company; and

 

(d)                                 No termination, amendment, or modification
of the Plan shall adversely affect any Award previously granted under the Plan,
without the written consent of the Participant affected thereby.  An outstanding
Award shall not be deemed to be “adversely affected” by a Plan amendment if such
amendment would not reduce or diminish the value of such Award determined as if
the Award had been exercised, vested, cashed in or otherwise settled on the date
of such amendment (with the per-share value of an Option for this purpose being
calculated as the excess, if any, of the Fair Market Value as of the date of
such amendment over the exercise or base price of such Award).

 

13.3.                     COMPLIANCE AMENDMENTS.  Notwithstanding anything in
the Plan or in any Award Certificate to the contrary, the Board may amend the
Plan or an Award Certificate, to take effect retroactively or otherwise, as
deemed necessary or advisable for the purpose of conforming the Plan or Award
Certificate to any present or future law relating to plans of this or similar
nature (including, but not limited to, Section 409A of the Code), and to the
administrative regulations and rulings promulgated thereunder.  By accepting an
Award under this Plan, a Participant agrees to any amendment made pursuant to
this Section 13.3 to any Award granted under the Plan without further
consideration or action.

 

15

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ARTICLE 14
GENERAL PROVISIONS

 

14.1.                     RIGHTS OF PARTICIPANTS.

 

(a)                                 No Participant or any Eligible Participant
shall have any claim to be granted any Award under the Plan.  Neither the
Company, its Affiliates nor the Committee is obligated to treat Participants or
Eligible Participants uniformly, and determinations made under the Plan may be
made by the Committee selectively among Eligible Participants who receive, or
are eligible to receive, Awards (whether or not such Eligible Participants are
similarly situated).

 

(b)                                 Nothing in the Plan, any Award Certificate
or any other document or statement made with respect to the Plan, shall
interfere with or limit in any way the right of the Company or any Affiliate to
terminate any Participant’s employment or status as an officer, or any
Participant’s service as a director, at any time, nor confer upon any
Participant any right to continue as an employee, officer, or director of the
Company or any Affiliate, whether for the duration of a Participant’s Award or
otherwise.

 

(c)                                  Neither an Award nor any benefits arising
under this Plan shall constitute an employment contract with the Company or any
Affiliate and, accordingly, subject to Article 13, this Plan and the benefits
hereunder may be terminated at any time in the sole and exclusive discretion of
the Committee without giving rise to any liability on the part of the Company or
an of its Affiliates.

 

(d)                                 No Award gives a Participant any of the
rights of a stockholder of the Company unless and until Shares are in fact
issued to such person in connection with such Award.

 

14.2.                     WITHHOLDING.  The Company or any Affiliate shall have
the authority and the right to deduct or withhold, or require a Participant to
remit to the Company, an amount sufficient to satisfy federal, state, and local
taxes (including the Participant’s FICA obligation) required by law to be
withheld with respect to any exercise, lapse of restriction or other taxable
event arising as a result of the Plan.  With respect to withholding required
upon any taxable event under the Plan, the Committee may, at the time the Award
is granted or thereafter, require or permit that any such withholding
requirement be satisfied, in whole or in part, by withholding from the Award
Shares having a Fair Market Value on the date of withholding equal to the
minimum amount (and not any greater amount) required to be withheld for tax
purposes, all in accordance with such procedures as the Committee establishes. 
All such elections shall be subject to any restrictions or limitations that the
Committee, in its sole discretion, deems appropriate.

 

14.3.                     SPECIAL PROVISIONS RELATED TO SECTION 409A OF THE
CODE.

 

(a)                                 General.  It is intended that the payments
and benefits provided under the Plan and any Award shall either be exempt from
the application of, or comply with, the requirements of Section 409A of the
Code.  The Plan and all Award Certificates shall be construed in a manner that
effects such intent.  Nevertheless, the tax treatment of the benefits provided
under the Plan or any Award is not warranted or guaranteed.  Neither the
Company, its Affiliates nor their respective directors, officers, employees or
advisers shall be held liable for any taxes, interest, penalties or other
monetary amounts owed by any Participant or other taxpayer as a result of the
Plan or any Award.

 

(b)                                 Definitional Restrictions. Notwithstanding
anything in the Plan or in any Award Certificate to the contrary, to the extent
that any amount or benefit that would constitute non-exempt “deferred
compensation” for purposes of Section 409A of the Code would otherwise be
payable or distributable, or a different form of payment (e.g., lump sum or
installment) would be effected, under the Plan or any Award Certificate by
reason of the occurrence of a Change in Control, or the Participant’s Disability
or separation from service, such amount or benefit will not be payable or
distributable to the Participant, and/or such different form of payment will not
be effected, by reason of such circumstance unless the circumstances giving rise
to such Change in Control, Disability or separation from service meet

 

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any description or definition of “change in control event”, “disability” or
“separation from service”, as the case may be, in Section 409A of the Code and
applicable regulations (without giving effect to any elective provisions that
may be available under such definition).  This provision does not prohibit the
vesting of any Award upon a Change in Control, Disability or separation from
service, however defined.  If this provision prevents the payment or
distribution of any amount or benefit, such payment or distribution shall be
made on the next earliest payment or distribution date or event specified in the
Award Certificate that is permissible under Section 409A of the Code.  If this
provision prevents the application of a different form of payment of any amount
or benefit, such payment shall be made in the same form as would have applied
absent such designated event or circumstance.

 

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

 

(d)                                 Six-Month Delay in Certain Circumstances. 
Notwithstanding anything in the Plan or in any Award Certificate to the
contrary, if any amount or benefit that would constitute non-exempt “deferred
compensation” for purposes of Section 409A of the Code would otherwise be
payable or distributable under this Plan or any Award Certificate by reason of a
Participant’s separation from service during a period in which the Participant
is a Specified Employee (as defined below), then, subject to any permissible
acceleration of payment by the Committee under Treas. Reg.
Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of
interest), or (j)(4)(vi) (payment of employment taxes):

 

(i) the amount of such non-exempt deferred compensation that would otherwise be
payable during the six-month period immediately following the Participant’s
separation from service will be accumulated through and paid or provided on the
first day of the seventh month following the Participant’s separation from
service (or, if the Participant dies during such period, within 30 days after
the Participant’s death) (in either case, the “Required Delay Period”), and

 

(ii) the normal payment or distribution schedule for any remaining payments or
distributions will resume at the end of the Required Delay Period.

 

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

 

14.4.                     UNFUNDED STATUS OF AWARDS.  The Plan is intended to be
an “unfunded” plan for incentive and deferred compensation.  With respect to any
payments not yet made to a Participant pursuant to an Award, nothing contained
in the Plan or any Award Certificate shall give the Participant any rights that
are greater than those of a general creditor of the Company or any Affiliate.
 This Plan is not intended to be subject to ERISA.

 

14.5.                     RELATIONSHIP TO OTHER BENEFITS.  No payment under the
Plan shall be taken into account in determining any benefits under any pension,
retirement, savings, profit sharing, group insurance, welfare or benefit plan of
the Company or any Affiliate unless provided otherwise in such other plan.

 

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14.6.                     EXPENSES.  The expenses of administering the Plan
shall be borne by the Company and its Affiliates.

 

14.7.                     TITLES AND HEADINGS.  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.

 

14.8.                     GENDER AND NUMBER.  Except where otherwise indicated
by the context, any masculine term used herein also shall include the feminine;
the plural shall include the singular and the singular shall include the plural.

 

14.9.                     FRACTIONAL SHARES.  No fractional Shares shall be
issued and the Committee shall determine, in its discretion, whether cash shall
be given in lieu of fractional Shares or whether such fractional Shares shall be
eliminated by rounding up or down.

 

14.10.              GOVERNMENT AND OTHER REGULATIONS.

 

(a)                                 Notwithstanding any other provision of the
Plan, no Participant who acquires Shares pursuant to the Plan may, during any
period of time that such Participant is an affiliate of the Company (within the
meaning of the rules and regulations of the Securities and Exchange Commission
under the 1933 Act), sell such Shares, unless such offer and sale is made
(i) pursuant to an effective registration statement under the 1933 Act, which is
current and includes the Shares to be sold, or (ii) pursuant to an appropriate
exemption from the registration requirement of the 1933 Act, such as that set
forth in Rule 144 promulgated under the 1933 Act.

 

(b)                                 Notwithstanding any other provision of the
Plan, if at any time the Committee shall determine that the registration,
listing or qualification of the Shares covered by an Award upon any Exchange or
under any foreign, federal, state or local law or practice, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition of, or in connection with, the granting of such Award or the purchase
or receipt of Shares thereunder, no Shares may be purchased, delivered or
received pursuant to such Award unless and until such registration, listing,
qualification, consent or approval shall have been effected or obtained free of
any condition not acceptable to the Committee.  Any Participant receiving or
purchasing Shares pursuant to an Award shall make such representations and
agreements and furnish such information as the Committee may request to assure
compliance with the foregoing or any other applicable legal requirements.  The
Company shall not be required to issue or deliver any certificate or
certificates for Shares under the Plan prior to the Committee’s determination
that all related requirements have been fulfilled.  The Company shall in no
event be obligated to register any securities pursuant to the 1933 Act or
applicable state or foreign law or to take any other action in order to cause
the issuance and delivery of such certificates to comply with any such law,
regulation or requirement.

 

14.11.              GOVERNING LAW.  To the extent not governed by federal law,
the Plan and all Award Certificates shall be construed in accordance with and
governed by the laws of the State of Maryland.

 

14.12.              ADDITIONAL PROVISIONS.  Each Award Certificate may contain
such other terms and conditions as the Committee may determine; provided that
such other terms and conditions are not inconsistent with the provisions of the
Plan.

 

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14.13.              NO LIMITATIONS ON RIGHTS OF COMPANY.  The grant of any Award
shall not in any way affect the right or power of the Company to make
adjustments, reclassification or changes in its capital or business structure or
to merge, consolidate, dissolve, liquidate, sell or transfer all or any part of
its business or assets.  The Plan shall not restrict the authority of the
Company, for proper corporate purposes, to draft or assume awards, other than
under the Plan, to or with respect to any person.  If the Committee so directs,
the Company may issue or transfer Shares to an Affiliate, for such lawful
consideration as the Committee may specify, upon the condition or understanding
that the Affiliate will transfer such Shares to a Participant in accordance with
the terms of an Award granted to such Participant and specified by the Committee
pursuant to the provisions of the Plan.

 

14.14.              INDEMNIFICATION.  Each person who is or shall have been a
member of the Committee or of the Board shall be indemnified and held harmless
by the Company against and from any loss, cost, liability, or expense that may
be imposed upon or reasonably incurred by him or her in connection with or
resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action taken or
failure to act under the Plan and against and from any and all amounts paid by
him or her in settlement thereof, with the Company’s approval, or paid by him or
her in satisfaction of any judgment in any such action, suit, or proceeding
against him or her, provided he or she shall give the Company an opportunity, at
its own expense, to handle and defend the same before he or she undertakes to
handle and defend it on his or her own behalf, unless such loss, cost,
liability, or expense is a result of his or her own willful misconduct or except
as expressly provided by statute.  The foregoing right of indemnification shall
not be exclusive of any other rights of indemnification to which such persons
may be entitled under 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.

 

********************

 

The foregoing is hereby acknowledged as being the NorthStar Healthcare
Income, Inc. Amended and Restated Long Term Incentive Plan as adopted by the
Board on February 4, 2013, and by the stockholders on February 4, 2013.

 

 

 

NORTHSTAR HEALTHCARE INCOME, INC.

 

 

 

 

 

By:

/s/ Ronald J. Lieberman

 

Name:

Ronald J. Lieberman

 

Title:

Executive Vice President, General Counsel and Secretary

 

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