TABLE OF CONTENTS
Exhibit 10.1

Great ajax corp.
2016 Equity Incentive Plan
 

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Page
1.

PURPOSE

1
2.

DEFINITIONS

1
3.

ADMINISTRATION OF THE PLAN

5
3.1

Committee

5
3.2

Terms of Awards

6
3.3

Forfeiture; Recoupment

6
3.4

No Repricing

7
3.5

Deferral Arrangement

7
3.6

No Liability

7
3.7

Share Issuance/Book-Entry

7
4.

SHARES SUBJECT TO THE PLAN

7
4.1

Number of Shares Available for Awards

7
4.2

Adjustments in Authorized Shares

8
4.3

Share Usage

8
5.

EFFECTIVE DATE, DURATION AND AMENDMENTS

8
5.1

Effective Date

8
5.2

Term

8
5.3

Amendment and Termination of the Plan

8
6.

AWARD ELIGIBILITY AND LIMITATIONS

8
6.1

Service Providers and Other Persons

8
6.2

Limitation on Shares Subject to Awards and Cash Awards

9
6.3

Stand-Alone, Additional, Tandem and Substitute Awards

9
7.

AWARD AGREEMENT

9
8.

TERMS AND CONDITIONS OF OPTIONS

9
8.1

Option Price

9
8.2

Vesting

10
8.3

Term

10
8.4

Termination of Service

10
8.5

Limitations on Exercise of Option

10
8.6

Method of Exercise

10
8.7

Rights of Holders of Options

10
8.8

Delivery of Share Certificates

10
8.9

Transferability of Options

10
8.10

Family Transfers

11
8.11

Limitations on Incentive Stock Options

11
8.12

Notice of Disqualifying Disposition

11
9.

TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS

11
9.1

Right to Payment and Grant Price

11
9.2

Other Terms

11
9.3

Term

12
9.4

Transferability of SARS

12

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Page
9.5

Family Transfers

12
10.

TERMS AND CONDITIONS OF RESTRICTED STOCK AND STOCK UNITS

12
10.1

Grant of Restricted Stock or Stock Units

12
10.2

Restrictions

12
10.3

Restricted Stock Certificates

12
10.4

Rights of Holders of Restricted Stock

13
10.5

Rights of Holders of Stock Units

13
10.6

Termination of Service

13
10.7

Delivery of Shares

13
11.

TERMS AND CONDITIONS OF UNRESTRICTED STOCK AWARDS AND OTHER EQUITY-BASED AWARDS

14
12.

FORM OF PAYMENT FOR OPTIONS AND RESTRICTED STOCK

14
12.1

General Rule

14
12.2

Surrender of Shares

14
12.3

Cashless Exercise

14
12.4

Other Forms of Payment

14
13.

TERMS AND CONDITIONS OF DIVIDEND EQUIVALENT RIGHTS

15
13.1

Dividend Equivalent Rights

15
13.2

Termination of Service

15
14.

TERMS AND CONDITIONS OF PERFORMANCE AWARDS AND ANNUAL INCENTIVE AWARDS

15
14.1

Grant of Performance Awards and Annual Incentive Awards

15
14.2

Value of Performance Awards and Annual Incentive Awards

15
14.3

Earning of Performance Awards and Annual Incentive Awards

15
14.4

Form and Timing of Payment of Performance Awards and Annual Incentive Awards

15
14.5

Performance Conditions

16
14.6

Performance Awards or Annual Incentive Awards Granted to Designated Covered
Employees

16
14.7

Status of Awards Under Code Section 162(m)

18
15.

TERMS AND CONDITIONS OF LONG-TERM INCENTIVE UNITS

18
15.1

Vesting

18
16.

REQUIREMENTS OF LAW

18
16.1

General

18
16.2

Rule 16b-3

19
17.

EFFECT OF CHANGES IN CAPITALIZATION

19
17.1

Changes in Shares

19
17.2

Reorganization in Which the Company Is the Surviving Entity Which Does not
Constitute
a Change in Control

20
17.3

Change in Control in which Awards are not Assumed

20
17.4

Change in Control in which Awards are Assumed

21
17.5

Adjustments

21
17.6

No Limitations on Company

21
18.

GENERAL PROVISIONS

22

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Page
18.1

Disclaimer of Rights

22
18.2

Nonexclusivity of the Plan

22
18.3

Withholding Taxes

22
18.4

Captions

23
18.5

Other Provisions

23
18.6

Number and Gender

23
18.7

Severability

23
18.8

Governing Law

23
18.9

Code Section 409A

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great ajax corp.
2016 EQUITY INCENTIVE PLAN
Great Ajax Corp., a Maryland corporation (the “Company”), sets forth herein the
terms of its 2016 Equity Incentive Plan (the “Plan”), as follows:
1.

PURPOSE

The Plan is intended to provide (a) incentive to officers, employees, directors,
consultants and other eligible persons to stimulate their efforts towards the
success of the Company and to operate and manage its business in a manner that
will provide for the long term growth and profitability of the Company; and (b)
a means of obtaining, rewarding and retaining key personnel. To this end, the
Plan provides for the grant of stock options, stock appreciation rights,
restricted stock, unrestricted stock, stock units (including deferred stock
units), dividend equivalent rights, long-term incentive units, other
equity-based awards and cash bonus awards. Any of these awards may, but need
not, be made as performance incentives to reward attainment of annual or
long-term performance goals in accordance with the terms hereof. Stock options
granted under the Plan may be non-qualified stock options or incentive stock
options, as provided herein.
2.

DEFINITIONS

For purposes of interpreting the Plan and related documents (including Award
Agreements), the following definitions shall apply:
2.1   “Affiliate” means, with respect to the Company, any company or other trade
or business that controls, is controlled by or is under common control with the
Company within the meaning of Rule 405 of Regulation C under the Securities Act,
including, without limitation, any Subsidiary. For purposes of granting Options
or Stock Appreciation Rights, an entity may not be considered an Affiliate of
the Company unless the Company holds a “controlling interest” in such entity,
where the term “controlling interest” has the same meaning as provided in
Treasury Regulation Section 1.414(c)-2(b)(2)(i), provided that the language “at
least 50 percent” is used instead of  “at least 80 percent” and, provided
further, that where granting of Options or Stock Appreciation Rights is based
upon a legitimate business criterion, the language “at least 20 percent” is used
instead of  “at least 80 percent” each place it appears in Treasury Regulation
Section 1.414(c)-2(b)(2)(i).
2.2   “Annual Incentive Award” means an Award, denominated in cash, made subject
to attainment of performance goals (as described in Section 14) over a
Performance Period of up to one (1) year (which shall correspond to the
Company’s fiscal year, unless otherwise specified by the Committee).
2.3   “Applicable Laws” means the legal requirements relating to the Plan and
the Awards under applicable provisions of the corporate, securities, tax and
other laws, rules, regulations and government orders, and the rules of any
applicable stock exchange or national market system, of any jurisdiction
applicable to Awards granted to residents therein.
2.4   “Award” means a grant of an Option, Stock Appreciation Right, Restricted
Stock, Unrestricted Stock, Stock Unit, Dividend Equivalent Right, Performance
Award, Annual Incentive Award, LTIP Unit, or other equity-based award under the
Plan.
2.5   “Award Agreement” means the agreement between the Company and a Grantee
that evidences and sets out the terms and conditions of an Award.
2.6   “Board” means the Board of Directors of the Company.
2.7   “Cause” means, unless defined otherwise in a Service Provider’s Award
Agreement or employment, consulting or services agreement with the Company or an
Affiliate (in which case such definition shall control), as determined by the
Committee, the Service Provider’s (i) continued failure to substantially perform
duties, or gross negligence or willful misconduct in connection with the
performance of duties; (ii) conviction or plea of guilty or nolo contendere of a
felony; (iii) conviction of any other criminal offense involving an act of
dishonesty intended to result in substantial personal enrichment of such

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Grantee at the expense of the Company or an Affiliate; or (iv) material breach
of any Company policy or term of any employment, consulting or other services,
confidentiality, intellectual property or non-competition agreements, if any,
between the Service Provider and the Company or an Affiliate.
2.8   “Change in Control” means:
(i)   Any “person” as such term is used in Section 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) (other than the
Company, any trustee or other fiduciary holding securities under any employee
benefit plan of the Company or any corporation owned, directly or indirectly, by
the stockholders of the Company in substantially the same proportion as their
ownership of stock of the Company), is or becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 50% or more of the combined voting power
of the Company’s then outstanding voting securities;
(ii)   During any period of twelve consecutive months, individuals who at the
beginning of such period constitute the Board, and any new director (other than
a director designated by a person who has entered into an agreement with the
Company to effect a transaction described in clause (i), (iii) or (iv) hereof)
whose election by the Board or nomination for election by the Company’s
stockholders was approved by a vote of at least a majority of the directors then
still in office who either were directors at the beginning of the period or
whose election or nomination for election was previously so approved, cease for
any reason to constitute at least a majority thereof, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or actual threatened solicitation of proxies or consents
by or on behalf of a person other than the Board;
(iii)   The consummation of a merger or consolidation of the Company with any
other entity or approve the issuance of voting securities in connection with a
merger or consolidation of the Company (or any direct or indirect subsidiary
thereof) pursuant to applicable exchange requirements, other than (A) a merger
or consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving or parent entity) at least 50.1% of the combined voting power of the
voting securities of the Company or such surviving or parent entity outstanding
immediately after such merger or consolidation or (B) a merger or consolidation
effected to implement a recapitalization of the Company (or similar transaction)
in which no “person” (as defined above) is or becomes the beneficial owner,
directly or indirectly, of securities of the Company representing 50% or more of
either of the then outstanding shares of Common Stock or the combined voting
power of the Company’s then outstanding voting securities; or
(iv)   The consummation of the sale or disposition by the Company of all or
substantially all of the Company’s assets (or any transaction or series of
transactions within a period of twelve months ending on the date of the last
sale or disposition having a similar effect).
Notwithstanding the foregoing, if an Award constitutes deferred compensation
within the meaning of Code Section 409A, no payment, settlement or vesting (if
vesting would be deemed a distribution with respect to the Award under Section
409A) shall occur with respect to such Award on account of the Change in Control
transaction or event unless the transaction or event also constitutes a change
in the ownership or effective control of the Company or a change in the
ownership of a substantial portion of the Company’s assets, as those terms are
used in Code Section 409A(a)(2)(c)(v).
2.9   “Code” means the Internal Revenue Code of 1986, as now in effect or as
hereafter amended.
2.10   “Committee” means the Committee constituted under Section 3 to administer
the Plan.
2.11   “Common Stock” means the common stock of the Company, par value $0.01 per
share.
2.12   “Company” means Great Ajax Corp., a Maryland corporation.
2.13   “Covered Employee” means a Grantee who is a covered employee within the
meaning of Code Section 162(m)(3).
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2.14   “Determination Date” means the Grant Date or such other date as of which
the Fair Market Value of a Share is required to be established for purposes of
the Plan.
2.15   “Disability” means the Grantee is unable to perform each of the essential
duties of such Grantee’s position by reason of a medically determinable physical
or mental impairment which is potentially permanent in character or which can be
expected to last for a continuous period of not less than 12 months; provided,
however, that, with respect to rules regarding expiration of an Incentive Stock
Option following termination of the Grantee’s Service, Disability shall mean the
Grantee is unable to engage in any substantial gainful activity by reason of a
medically determinable physical or mental impairment which can be expected to
result in death or which has lasted or can be expected to last for a continuous
period of not less than 12 months.
2.16   “Dividend Equivalent Right” means a right, granted to a Grantee under
Section 13, to receive cash, Shares, other Awards or other property equal in
value to dividends paid with respect to a specified number of Shares, or other
periodic payments.
2.17   “Effective Date” means June 7, 2016, the date the Plan was approved by
the stockholders of the Company.
2.18   “Exchange Act” means the Securities Exchange Act of 1934, as now in
effect or as hereafter amended.
2.19   “Fair Market Value” means the fair market value of a Share for purposes
of the Plan, which shall be determined as of any Determination Date as follows:
(i)   If on such Determination Date the Shares are listed on a Stock Exchange,
or are publicly traded on another established securities market (a “Securities
Market”), the Fair Market Value of a Share shall be the closing price of the
Share as reported on such Stock Exchange or such Securities Market (provided
that, if there is more than one such Stock Exchange or Securities Market, the
Committee shall designate the appropriate Stock Exchange or Securities Market
for purposes of the Fair Market Value determination). If there is no such
reported closing price on such Determination Date, the Fair Market Value of a
Share shall be the closing price of the Share on the most recent date prior to
such Determination Date on which any sale of Shares shall have been reported on
such Stock Exchange or such Securities Market.
(ii)   If on such Determination Date the Shares are not listed on a Stock
Exchange or publicly traded on a Securities Market, the Fair Market Value of a
Share shall be the value of the Share as determined by the Committee in good
faith; provided, however, that if such Fair Market Value is used to determine an
Option Price or a SAR Exercise Price, the Committee shall use a reasonable
application of a reasonable valuation method, in a manner consistent with Code
Section 409A.
2.20   “Family Member” means a person who is a spouse, former spouse, child,
stepchild, grandchild, parent, stepparent, grandparent, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother, sister,
brother-in-law, or sister-in-law, including adoptive relationships, of the
Grantee, any person sharing the Grantee’s household (other than a tenant or
employee), a trust in which any one or more of these persons have more than
fifty percent (50%) of the beneficial interest, a foundation in which any one or
more of these persons (or the Grantee) control the management of assets, and any
other entity in which one or more of these persons (or the Grantee) own more
than fifty percent (50%) of the voting interests.
2.21   “Good Reason” means, unless defined otherwise in a Service Provider’s
Award Agreement or employment, consulting or services agreement with the Company
or an Affiliate (in which case such definition shall control), as determined by
the Committee (i) a material adverse change to the Service Provider’s title or
responsibilities; (ii) a material reduction in the Service Provider’s annual
base salary or annual target bonus opportunity; or (iii) the relocation of the
Service Provider’s principal place of employment to a location more than 35
miles from the Service Provider’s principal place of employment or the Company’s
requiring the Service Provider to be based anywhere other than such principal
place of employment (or permitted relocation thereof) except for required travel
on the Company’s business to an extent substantially consistent with the Service
Provider’s business travel obligations as of immediately prior to the Change in
Control; provided, however, that the Service Provider must provide written
notice to the
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Company of the condition that could constitute a “Good Reason” event within
ninety (90) days of the initial existence of such condition, such condition must
not have been remedied by the Company within thirty (30) days of such written
notice, and the termination must occur within ninety (90) days after such
failure to remedy the event.
2.22   “Grant Date” means, as determined by the Committee, the latest to occur
of  (i) the date as of which the Company completes the action constituting the
Award, (ii) the date on which the recipient of an Award first becomes eligible
to receive an Award under Section 6, or (iii) such other date as may be
specified by the Committee.
2.23   “Grantee” means a natural person who receives or holds an Award under the
Plan.
2.24   “Incentive Stock Option” means an “incentive stock option” within the
meaning of Code Section 422, or the corresponding provision of any subsequently
enacted tax statute, as amended from time to time.
2.25   “Long-Term Incentive Unit” or “LTIP Unit” means an Award under Section 15
of an interest in the operating partnership affiliated with the Company.
2.26   “Non-Qualified Stock Option” means an Option that is not an Incentive
Stock Option.
2.27   “Option” means an option to purchase one or more Shares pursuant to the
Plan.
2.28   “Option Price” means the exercise price for each Share subject to an
Option.
“OP Unit” means the limited partnership units of the Company’s operating
partnership, Great Ajax Operating Partnership L.P., a Delaware limited
partnership.
2.29   “Other Agreement” shall have the meaning set forth in Section 16.
2.30   “Outside Director” means a member of the Board who is not an officer or
employee of the Company.
2.31   “Performance Award” means an Award made subject to the attainment of
performance goals (as described in Section 14) over a Performance Period of up
to ten (10) years.
2.32   “Performance-Based Compensation” means compensation under an Award that
is intended to satisfy the requirements of Code Section 162(m) for “qualified
performance-based compensation” paid to Covered Employees. Notwithstanding the
foregoing, nothing in the Plan shall be construed to mean that an Award which
does not satisfy the requirements for “qualified performance-based compensation”
under Code Section 162(m) does not constitute performance-based compensation for
other purposes, including for purposes of Code Section 409A.
2.33   “Performance Measures” means measures as described in Section 14 on which
the performance goals are based and which have been approved by the Company’s
stockholders pursuant to the Plan in order to qualify Awards as
Performance-Based Compensation.
2.34   “Performance Period” means the period of time during which the
performance goals must be met in order to determine the degree of payout and/or
vesting with respect to an Award.
2.35   “Plan” means this Great Ajax Corp., 2016 Equity Incentive Plan, as
amended from time to time.
2.36   “Purchase Price” means the purchase price for each Share pursuant to a
grant of Restricted Stock, Stock Units or Unrestricted Stock.
2.37   “Restricted Stock” means Shares awarded to a Grantee pursuant to Section
10.
2.38   “SAR Exercise Price” means the per share exercise price of a SAR granted
to a Grantee under Section 9.
2.39   “Securities Act” means the Securities Act of 1933, as now in effect or as
hereafter amended.
2.40   “Service” means service as a Service Provider to the Company or any
Affiliate. Unless otherwise stated in the applicable Award Agreement, a
Grantee’s change in position or duties shall not result in interrupted or
terminated Service, so long as such Grantee continues to be a Service Provider
to the Company or any Affiliate. Subject to the preceding sentence, whether a
termination of Service shall have
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occurred for purposes of the Plan shall be determined by the Committee, which
determination shall be final, binding and conclusive. Notwithstanding any other
provision to the contrary, for any individual providing services solely as a
director, only service to the Company or any of its Subsidiaries constitutes
Service. Except as may otherwise be required to comply with Code Section 409A,
if the Service Provider’s employment or other service relationship is with an
Affiliate and that entity ceases to be an Affiliate, a termination of Service
shall be deemed to have occurred when the entity ceases to be an Affiliate
unless the Service Provider transfers his or her employment or other service
relationship to the Company or its remaining Affiliates.
2.41   “Service Provider” means an employee, officer, director, or a consultant
or adviser (who is a natural person) providing services to the Company or any of
its Affiliates.
2.42   “Share” means a share of Common Stock.
2.43   “Stock Appreciation Right” or “SAR” means a right granted to a Grantee
under Section 9.
2.44   “Stock Units” means a bookkeeping entry representing the equivalent of
one Share awarded to a Grantee pursuant to Section 10.
2.45   “Stock Exchange” means the New York Stock Exchange or another established
national or regional stock exchange.
2.46   “Subsidiary” means any “subsidiary corporation” of the Company within the
meaning of Code Section 424(f).
2.47   “Substitute Award” means an Award granted upon assumption of, or in
substitution for, outstanding awards previously granted by a company or other
entity acquired by the Company or an Affiliate or with which the Company or an
Affiliate combines.
2.48   “Ten Percent Stockholder” means an individual who owns more than ten
percent (10%) of the total combined voting power of all classes of outstanding
voting securities of the Company, its parent or any of its Subsidiaries. In
determining Share ownership, the attribution rules of Code Section 424(d) shall
be applied.
2.49   “Unrestricted Stock” shall have the meaning set forth in Section 11.
Unless the context otherwise requires, all references in the Plan to “including”
shall mean “including without limitation.”
References in the Plan to any Code Section shall be deemed to include, as
applicable, regulations promulgated under such Code Section.
3.

ADMINISTRATION OF THE PLAN

3.1   Committee.
The Plan shall be administered by the Committee, constituted as follows:
(i)   The Committee will consist of the Compensation Committee of the Board or,
in the absence of a Compensation Committee, the Board or such committee as the
Board shall select. Once appointed, the Committee will serve in its designated
capacity until otherwise directed by the Board. The Board may increase the size
of the Committee and appoint additional members, remove members (with or without
cause) and substitute new members, fill vacancies (however caused), or remove
all members of the Committee and thereafter directly administer the Plan.
Notwithstanding the foregoing, unless the Board determines otherwise, while the
Company Shares are registered pursuant to Section 12 of the Exchange Act, the
Plan will be administered only by a committee consisting of no fewer than two
directors of the Company, each of whom is (A) a “non-employee director” within
the meaning of Rule 16b-3 (or any successor rule) of the Exchange Act, (B) an
“outside director” within the meaning of Section 162(m)(4)(C)(i) of the Code,
and (C) an “independent director” for purpose of the rules and regulations of
the Stock Exchange or quotation system on which the Shares are
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principally traded; provided, however, the failure of the Committee to be
composed solely of individuals who are “non-employee directors,” “outside
directors,” and “independent directors” shall not render ineffective or void any
Awards made by, or other actions taken by, such Committee.
(ii)   The Plan may be administered by different bodies with respect to
different Grantees.
(iii)   Decisions of the Committee shall be final, conclusive and binding on all
persons or entities, including the Company, any Grantee, any stockholder and any
employee or any Affiliate. A majority of the members of the Committee may
determine its actions and fix the time and place of its meetings.
(iv)   The Committee may delegate to a committee of one or more Directors of the
Company or, to the extent permitted by Applicable Law, to one or more officers
or a committee of officers, the authority to grant Awards to employees and
officers of the Company and its Affiliates who are not directors, Covered
Employees, or “officers,” as such term is defined by Rule 16a-1(f) of the
Exchange Act.
3.2   Terms of Awards.
Subject to the other terms and conditions of the Plan, the Committee shall have
full and final authority to:
(i)   designate Grantees;
(ii)   determine the type or types of Awards to be made to a Grantee;
(iii)   determine the number of Shares to be subject to an Award;
(iv)   establish the terms and conditions of each Award (including, but not
limited to, the exercise price of any Option, the nature and duration of any
restriction or condition (or provision for lapse thereof) relating to the
vesting, exercise, transfer, or forfeiture of an Award or the Shares subject
thereto, the treatment of an Award in the event of a Change in Control, and any
terms or conditions that may be necessary to qualify Options as Incentive Stock
Options);
(v)   prescribe the form of each Award Agreement evidencing an Award;
(vi)   interpret and administer the Plan and any instrument or agreement entered
into under or in connection with the Plan, including any Award Agreement;
(vii)   correct any defect, supply any omission or reconcile any inconsistency
in the Plan or any Award in the manner and to the extent that the Committee
shall deem desirable to carry it into effect;
(viii)   establish such rules and regulations and appoint such agents as it
shall deem appropriate for the proper administration of the Plan;
(ix)   amend, modify, or reprice (except as such practice is prohibited by
Section 3.4 herein) the terms of any outstanding Award; and
(x)   make any other determination and take any other action that the Committee
deems necessary or desirable for administration of the Plan.
Such authority specifically includes the authority, in order to effectuate the
purposes of the Plan but without amending the Plan, to make or modify Awards to
eligible individuals who are foreign nationals or are individuals who are
employed outside the United States to recognize differences in local law, tax
policy, or custom. Notwithstanding the foregoing, no amendment, modification or
supplement of any Award shall, without the consent of the Grantee, impair the
Grantee’s rights under such Award.
3.3   Forfeiture; Recoupment.
The Company may reserve the right in an Award Agreement to cause a forfeiture of
the gain realized by a Grantee with respect to an Award thereunder on account of
actions taken by, or failed to be taken by, such Grantee in violation or breach
of or in conflict with any (a) employment agreement, (b) non-competition
agreement, (c) agreement prohibiting solicitation of employees or clients of the
Company or any Affiliate, (d) confidentiality obligation with respect to the
Company or any Affiliate, or (e) other
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agreement, as and to the extent specified in such Award Agreement. The Company
may annul an outstanding Award if the Grantee thereof is an employee and is
terminated for Cause as defined in the Plan or the applicable Award Agreement or
for “cause” as defined in any other agreement between the Company or any
Affiliate and such Grantee, as applicable.
If the Company adopts a “clawback” or recoupment policy, any Award will be
subject to repayment to the Company to the extent so provided under the terms of
such policy. Such policy may authorize the Company to recover from a Grantee
incentive-based compensation (including Options awarded as compensation) awarded
to or received by such Grantee during a period of up to three (3) years, as
determined by the Committee, preceding the date on which the Company is required
to prepare an accounting restatement due to material noncompliance by the
Company, as a result of misconduct, with any financial reporting requirement
under the federal securities laws.
3.4   No Repricing.
Except for adjustments to Options or SARs contemplated by Section 17, the
Company may not, without obtaining stockholder approval: (a) amend the terms of
outstanding Options or SARs to reduce the Option Price or SAR Exercise Price of
such outstanding Options or SARs; (b) cancel outstanding Options or SARs in
exchange for or substitution of Options or SARs with an Option Price or SAR
Exercise Price that is less than the exercise price of the original Options or
SARs; (c) cancel outstanding Options or SARs with an Option Price or SAR
Exercise Price above the current Fair Market Value of a Share in exchange for
cash or other securities; or (d) take any other action with respect to Options
or SARS that would be treated as a repricing under the Stock Exchange or
quotation system on which the Shares are principally traded.
3.5   Deferral Arrangement.
The Committee may permit or require the deferral of any award payment into a
deferred compensation arrangement, subject to such rules and procedures as it
may establish, which may include provisions for the payment or crediting of
interest or Dividend Equivalent Rights and, in connection therewith, provisions
for converting such credits into Stock Units and for restricting deferrals to
comply with hardship distribution rules affecting tax-qualified retirement plans
subject to Code Section 401(k)(2)(B)(IV), provided that no Dividend Equivalent
Rights may be granted in connection with, or related to, an Award of Options or
SARs. Any such deferrals shall be made in a manner that complies with Code
Section 409A.
3.6   No Liability.
No member of the Board or the Committee (or any other person to whom
administrative authority has been delegated hereunder) shall be liable for any
action or determination made in good faith with respect to the Plan or any Award
or Award Agreement.
3.7   Share Issuance/Book-Entry.
Notwithstanding any provision of the Plan to the contrary, the issuance of the
Shares under the Plan may be evidenced in such a manner as the Committee, in its
discretion, deems appropriate, including, without limitation, book-entry or
direct registration or issuance of one or more share certificates.
4.

SHARES SUBJECT TO THE PLAN

4.1   Number of Shares Available for Awards.
Subject to adjustment as provided in Section 17, the number of Shares available
for issuance under the Plan (including pursuant to Incentive Stock Options)
shall, in the aggregate, not exceed 5% of the Shares issued and outstanding from
time to time on a fully diluted basis (assuming, if applicable, the exercise of
all outstanding options and the conversion of all warrants and convertible
securities, including OP Units and LTIP Units, into Shares). Shares issued or to
be issued under the Plan shall be authorized but unissued shares or treasury
Shares or any combination of the foregoing, as may be determined from time to
time by the Board or by the Committee. The maximum number of Shares that may be
granted under the Plan pursuant to Incentive Stock Options is 500,000.
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4.2   Adjustments in Authorized Shares.
The Committee shall have the right to substitute or assume Awards in connection
with mergers, reorganizations, separations, or other transactions to which Code
Section 424(a) applies. The number of Shares reserved pursuant to Section 4
shall be increased by the corresponding number of awards assumed and, in the
case of a substitution, by the net increase in the number of Shares subject to
awards before and after the substitution. Available shares under a stockholder
approved plan of an acquired company (as appropriately adjusted to reflect the
transaction) may be used for Awards under the Plan and do not reduce the number
of Shares available under the Plan, subject to requirements of the Stock
Exchange on which the Shares are listed.
4.3   Share Usage.
Shares covered by an Award shall be counted as used as of the Grant Date. Any
Shares that are subject to Awards shall be counted against the limit set forth
in Section 4.1 as one (1) Share for every one (1) Share subject to an Award.
With respect to SARs, the number of Shares subject to an award of SARs will be
counted against the aggregate number of Shares available for issuance under the
Plan regardless of the number of Shares actually issued to settle the SAR upon
exercise. If any Shares covered by an Award granted under the Plan are not
purchased or are forfeited or expire, or if an Award otherwise terminates
without delivery of any Shares subject thereto, then the number of Shares
counted against the aggregate number of Shares available under the Plan with
respect to such Award shall, to the extent of any such forfeiture, termination
or expiration, again be available for making Awards under the Plan in the same
amount as such Shares were counted against the limit set forth in Section 4.1.
The number of Shares available for issuance under the Plan shall not be
increased by (i) any Shares tendered or withheld or Award surrendered in
connection with the purchase of Shares upon exercise of an Option as described
in Section 12.2, (ii) any Shares deducted or delivered from an Award payment in
connection with the Company’s tax withholding obligations as described in
Section 18.3 or (iii) any Shares purchased by the Company with proceeds from
option exercises.
5.

EFFECTIVE DATE, DURATION AND AMENDMENTS

5.1   Effective Date.
The Plan shall be effective as of the Effective Date.
5.2   Term.
The Plan first became effective on the Effective Date. The Plan shall continue
in effect until the day immediately prior to the 10-year anniversary of the
Effective Date, unless sooner terminated on any date as provided in Section 5.3
or extended with approved by the stockholders of the Company.
5.3   Amendment and Termination of the Plan.
The Board may, at any time and from time to time, amend, suspend, or terminate
the Plan as to any Shares as to which Awards have not been made. An amendment
shall be contingent on approval of the Company’s stockholders to the extent
stated by the Board, required by Applicable Laws or required by the Stock
Exchange on which the Shares are listed. No amendment will be made to the
no-repricing provisions of Section 3.4 or the option pricing provisions of
Section 8.1 without the approval of the Company’s stockholders. No amendment,
suspension, or termination of the Plan shall, without the consent of the
Grantee, impair rights or obligations under any Award theretofore awarded under
the Plan.
6.

AWARD ELIGIBILITY AND LIMITATIONS

6.1   Service Providers and Other Persons.
Subject to this Section 6, Awards may be made under the Plan to: (i) any Service
Provider, as the Committee shall determine and designate from time to time and
(ii) any other individual whose participation in the Plan is determined to be in
the best interests of the Company by the Committee.
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6.2   Limitation on Shares Subject to Awards and Cash Awards.
During any time when the Company has a class of equity security registered under
Section 12 of the Exchange Act and the transition period under Treasury
Regulation Section 1.162-27(f)(2) has lapsed or does not apply, Awards intended
to qualify as Performance-Based Compensation shall be subject to the following
limitations:
(i)   the maximum number of Shares subject to Options or SARs that can be
granted under the Plan to any person eligible for an Award under Section 6 is
500,000 Shares in a calendar year (for this purpose, tandem SARs/Options shall
be treated as one Award);
(ii)   the maximum number of Shares that can be granted under the Plan, other
than pursuant to Options or SARs, to any person eligible for an Award under
Section 6 is 500,000 Shares in a calendar year; and
(iii)   the maximum amount that may be paid as an Annual Incentive Award in a
calendar year to any person eligible for an Award shall be $5,000,000 and the
maximum amount that may be paid as a cash-settled Performance Award in respect
of a performance period by any person eligible for an Award shall be $5,000,000.
The preceding limitations in this Section 6.2 are subject to adjustment as
provided in Section 17.
6.3   Stand-Alone, Additional, Tandem and Substitute Awards.
Subject to Section 3.4, Awards granted under the Plan may, in the discretion of
the Committee, be granted either alone or in addition to, in tandem with, or in
substitution or exchange for, any other Award or any award granted under another
plan of the Company, any Affiliate, or any business entity to be acquired by the
Company or an Affiliate, or any other right of a Grantee to receive payment from
the Company or any Affiliate. Such additional, tandem, and substitute or
exchange Awards may be granted at any time. Subject to Section 3.4, if an Award
is granted in substitution or exchange for another Award, the Committee shall
require the surrender of such other Award in consideration for the grant of the
new Award. In addition, Awards may be granted in lieu of cash compensation,
including in lieu of cash amounts payable under other plans of the Company or
any Affiliate. Notwithstanding Section 8.1 and Section 9.1 but subject to
Section 3.4, the Option Price of an Option or the SAR Exercise Price of an SAR
that is a Substitute Award may be less than 100% of the Fair Market Value of a
Share on the original date of grant; provided, that, the Option Price or grant
price is determined in accordance with the principles of Code Section 424 and
the regulations thereunder for any Incentive Stock Option and consistent with
Code Section 409A for any other Option or SAR.
7.

AWARD AGREEMENT

Each Award granted pursuant to the Plan shall be evidenced by an Award
Agreement, in such form or forms as the Committee shall from time to time
determine. Award Agreements granted from time to time or at the same time need
not contain similar provisions but shall be consistent with the terms of the
Plan. Each Award Agreement evidencing an Award of Options shall specify whether
such Options are intended to be Non-Qualified Stock Options or Incentive Stock
Options, and in the absence of such specification such options shall be deemed
Non-Qualified Stock Options.
8.

TERMS AND CONDITIONS OF OPTIONS

8.1   Option Price.
The Option Price of each Option shall be fixed by the Committee and stated in
the Award Agreement evidencing such Option. Except in the case of Substitute
Awards, the Option Price of each Option shall be at least the Fair Market Value
of a Share on the Grant Date; provided, however, that in the event that a
Grantee is a Ten Percent Stockholder, the Option Price of an Option granted to
such Grantee that is intended to be an Incentive Stock Option shall be not less
than one hundred ten percent (110%) of the Fair Market Value of a Share on the
Grant Date. In no case shall the Option Price of any Option be less than the par
value of a Share.
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8.2   Vesting.
Subject to Sections 8.3 and 17.3, each Option granted under the Plan shall
become exercisable at such times and under such conditions as shall be
determined by the Committee and stated in the Award Agreement. For purposes of
this Section 8.2, fractional numbers of Shares subject to an Option shall be
rounded down to the next nearest whole number.
8.3   Term.
Each Option granted under the Plan shall terminate, and all rights to purchase
Shares thereunder shall cease, upon the expiration of ten (10) years from the
date such Option is granted, or under such circumstances and on such date prior
thereto as is set forth in the Plan or as may be fixed by the Committee and
stated in the Award Agreement relating to such Option; provided, however, that
in the event that the Grantee is a Ten Percent Stockholder, an Option granted to
such Grantee that is intended to be an Incentive Stock Option shall not be
exercisable after the expiration of five (5) years from its Grant Date.
8.4   Termination of Service.
Each Award Agreement shall set forth the extent to which the Grantee shall have
the right to exercise the Option following termination of the Grantee’s Service.
Such provisions shall be determined in the sole discretion of the Committee,
need not be uniform among all Options issued pursuant to the Plan, and may
reflect distinctions based on the reasons for termination of Service.
8.5   Limitations on Exercise of Option.
Notwithstanding any other provision of the Plan, in no event may any Option be
exercised, in whole or in part, prior to the date the Plan is approved by the
stockholders of the Company as provided herein or after the occurrence of an
event referred to in Section 17 which results in termination of the Option.
8.6   Method of Exercise.
Subject to the terms of Section 12 and Section 18.3.3, an Option that is
exercisable may be exercised by the Grantee’s delivery to the Company of notice
of exercise on any business day, at the Company’s principal office, on the form
specified by the Company and in accordance with any additional procedures
specified by the Committee. Subject to the terms of Section 12 and Section
18.3.3, such notice shall specify the number of Shares with respect to which the
Option is being exercised and shall be accompanied by payment in full of the
Option Price of the Shares for which the Option is being exercised plus the
amount (if any) of federal and/or other taxes which the Company may, in its
judgment, be required to withhold with respect to an Award.
8.7   Rights of Holders of Options.
Unless otherwise stated in the applicable Award Agreement, an individual or
entity holding or exercising an Option shall have none of the rights of a
stockholder (for example, the right to receive cash or dividend payments or
distributions attributable to the subject Shares or to direct the voting of the
subject Shares or to receive notice of any meeting of the Company’s
stockholders) until the Shares covered thereby are fully paid and issued to him.
Except as provided in Section 17, no adjustment shall be made for dividends,
distributions or other rights for which the record date is prior to the date of
such issuance.
8.8   Delivery of Share Certificates.
Promptly after the exercise of an Option by a Grantee and the payment in full of
the Option Price with respect thereto, such Grantee shall be entitled to receive
such evidence of such Grantee’s ownership of the Shares subject to such Option
as shall be consistent with Section 3.7.
8.9   Transferability of Options.
Except as provided in Section 8.10, during the lifetime of a Grantee, only the
Grantee (or, in the event of legal incapacity or incompetency, the Grantee’s
guardian or legal representative) may exercise an Option. Except as provided in
Section 8.10, no Option shall be assignable or transferable by the Grantee to
whom it is granted, other than by will or the laws of descent and distribution.
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8.10   Family Transfers.
If authorized in the applicable Award Agreement or by the Committee, in its sole
discretion, a Grantee may transfer, not for value, all or part of an Option
which is not an Incentive Stock Option to any Family Member. For the purpose of
this Section 8.10, a “not for value” transfer is a transfer which is (i) a gift,
(ii) a transfer under a domestic relations order in settlement of marital
property rights; or (iii) unless Applicable Law does not permit such transfers,
a transfer to an entity in which more than fifty percent (50%) of the voting
interests are owned by Family Members (or the Grantee) in exchange for an
interest in that entity. Following a transfer under this Section 8.10, any such
Option shall continue to be subject to the same terms and conditions as were
applicable immediately prior to transfer, and Shares acquired pursuant to the
Option shall be subject to the same restrictions on transfer of shares as would
have applied to the Grantee. Subsequent transfers of transferred Options are
prohibited except to Family Members of the original Grantee in accordance with
this Section 8.10 or by will or the laws of descent and distribution. The events
of termination of Service of Section 8.4 shall continue to be applied with
respect to the original Grantee, following which the Option shall be exercisable
by the transferee only to the extent, and for the periods specified, in Section
8.4.
8.11   Limitations on Incentive Stock Options.
An Option shall constitute an Incentive Stock Option only (i) if the Grantee of
such Option is an employee of the Company or any Subsidiary of the Company; (ii)
to the extent specifically provided in the related Award Agreement; and (iii) to
the extent that the aggregate Fair Market Value (determined at the time the
Option is granted) of the Shares with respect to which all Incentive Stock
Options held by such Grantee become exercisable for the first time during any
calendar year (under the Plan and all other plans of the Grantee’s employer and
its Affiliates) does not exceed $100,000. Except to the extent provided in the
regulations under Code Section 422, this limitation shall be applied by taking
Options into account in the order in which they were granted.
8.12   Notice of Disqualifying Disposition.
If any Grantee shall make any disposition of Shares issued pursuant to the
exercise of an Incentive Stock Option under the circumstances described in Code
Section 421(b) (relating to certain disqualifying dispositions), such Grantee
shall notify the Company of such disposition within ten (10) days thereof.
9.

TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS

9.1   Right to Payment and Grant Price.
A SAR shall confer on the Grantee to whom it is granted a right to receive, upon
exercise thereof, the excess of  (A) the Fair Market Value of one Share on the
date of exercise over (B) the SAR Exercise Price as determined by the Committee.
The Award Agreement for a SAR shall specify the SAR Exercise Price, which shall
be at least the Fair Market Value of one (1) Share on the Grant Date. SARs may
be granted in conjunction with all or part of an Option granted under the Plan
or at any subsequent time during the term of such Option, in conjunction with
all or part of any other Award or without regard to any Option or other Award;
provided that a SAR that is granted subsequent to the Grant Date of a related
Option must have a SAR Exercise Price that is no less than the Fair Market Value
of one Share on the SAR Grant Date; and provided further that a Grantee may only
exercise either the SAR or the Option with which it is granted in tandem and not
both.
9.2   Other Terms.
The Committee shall determine on the Grant Date or thereafter, the time or times
at which and the circumstances under which a SAR may be exercised in whole or in
part (including based on achievement of performance goals and/or future service
requirements), the time or times at which SARs shall cease to be or become
exercisable following termination of Service or upon other conditions, the
method of exercise, method of settlement, form of consideration payable in
settlement, method by or forms in which Shares will be delivered or deemed to be
delivered to Grantees, whether or not a SAR shall be in tandem or in combination
with any other Award, and any other terms and conditions of any SAR.
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9.3   Term.
Each SAR granted under the Plan shall terminate, and all rights thereunder shall
cease, upon the expiration of ten (10) years from the date such SAR is granted,
or under such circumstances and on such date prior thereto as is set forth in
the Plan or as may be fixed by the Committee and stated in the Award Agreement
relating to such SAR.
9.4   Transferability of SARS.
Except as provided in Section 9.5, during the lifetime of a Grantee, only the
Grantee (or, in the event of legal incapacity or incompetency, the Grantee’s
guardian or legal representative) may exercise a SAR. Except as provided in
Section 9.5, no SAR shall be assignable or transferable by the Grantee to whom
it is granted, other than by will or the laws of descent and distribution.
9.5   Family Transfers.
If authorized in the applicable Award Agreement and by the Committee, in its
sole discretion, a Grantee may transfer, not for value, all or part of a SAR to
any Family Member. For the purpose of this Section 9.5, a “not for value”
transfer is a transfer which is (i) a gift, (ii) a transfer under a domestic
relations order in settlement of marital property rights; or (iii) unless
Applicable Law does not permit such transfers, a transfer to an entity in which
more than fifty percent (50%) of the voting interests are owned by Family
Members (or the Grantee) in exchange for an interest in that entity. Following a
transfer under this Section 9.5, any such SAR shall continue to be subject to
the same terms and conditions as were applicable immediately prior to transfer,
and Shares acquired pursuant to a SAR shall be subject to the same restrictions
on transfer or shares as would have applied to the Grantee. Subsequent transfers
of transferred SARs are prohibited except to Family Members of the original
Grantee in accordance with this Section 9.5 or by will or the laws of descent
and distribution.
10.

TERMS AND CONDITIONS OF RESTRICTED STOCK AND STOCK UNITS

10.1   Grant of Restricted Stock or Stock Units.
Awards of Restricted Stock or Stock Units may be made for consideration or no
consideration. To the extent required by applicable law, Grantees will be
required to pay the par value of the Shares; provided, however, that, to the
extent permitted by applicable law, par value shall be deemed paid by past
Service or, if so provided in the related Award Agreement or a separate
agreement, the promise by the Grantee to perform future Service to the Company
or an Affiliate of the Company).
10.2   Restrictions.
At the time a grant of Restricted Stock or Stock Units is made, the Committee
may, in its sole discretion, establish a period of time (a “restricted period”)
applicable to such Restricted Stock or Stock Units. Each Award of Restricted
Stock or Stock Units may be subject to a different restricted period. The
Committee may in its sole discretion, at the time a grant of Restricted Stock or
Stock Units is made, prescribe restrictions in addition to or other than the
expiration of the restricted period, including the satisfaction of corporate or
individual performance objectives, which may be applicable to all or any portion
of the Restricted Stock or Stock Units as described in Section 14, and which
shall be set forth in the Award Agreement relating to such grant. Neither
Restricted Stock nor Stock Units may be sold, transferred, assigned, pledged or
otherwise encumbered or disposed of during the restricted period or prior to the
satisfaction of any other restrictions prescribed by the Committee with respect
to such Restricted Stock or Stock Units.
10.3   Restricted Stock Certificates.
Pursuant to Section 3.7, to the extent that ownership of Restricted Stock is
evidenced by a book-entry registration or direct registration, such registration
shall be notated to evidence the restrictions imposed on such Award of
Restricted Stock under the Plan and the applicable Award Agreement. Subject to
Section 3.7 and the immediately following sentence, the Company may issue, in
the name of each Grantee to whom Restricted Stock have been granted, share
certificates representing the total number of Restricted Stock granted to the
Grantee, as soon as reasonably practicable after the Grant Date. The Committee
may provide in an Award Agreement that either (i) the Secretary of the Company
shall hold such certificates for
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the Grantee’s benefit until such time as the shares of Restricted Stock are
forfeited to the Company or the restrictions applicable thereto lapse and such
Grantee shall deliver a stock power to the Company with respect to each
certificate, or (ii) such certificates shall be delivered to the Grantee,
provided, however, that such certificates shall bear a legend or legends that
comply with the applicable securities laws and regulations and make appropriate
reference to the restrictions imposed under the Plan and the Award Agreement.
10.4   Rights of Holders of Restricted Stock.
Unless the Committee otherwise provides in an Award Agreement, holders of
Restricted Stock shall have the right to vote such Shares. Awards of Restricted
Stock may provide for the right to receive any dividends declared or paid with
respect to such Shares; provided, however, that to the extent such dividend
rights are provided with respect to Restricted Stock that vests or is earned
based upon the achievement of performance goals, dividends shall not be paid
currently, but shall, instead, be paid (or, to the extent deemed reinvested into
additional Shares of Restricted Stock, vest) only to the extent (and when) such
Restricted Stock vests. The Award Agreement may provide that dividends are
payable in cash or deemed reinvested in additional Shares of Restricted Stock at
a price per Share equal to the Fair Market Value of a Share on the date that
such dividend is paid. All distributions, if any, received by a Grantee with
respect to Restricted Stock as a result of any stock split, extraordinary
dividend, share dividend, combination of shares, or other similar transaction
shall be subject to the restrictions applicable to the original Grant. Absent
advance written consent by the Committee, holders of Restricted Stock may not
make an election under Code Section 83(b) with regard to the grant of Restricted
Stock, and any holder who attempts to make such an election without first
obtaining such consent shall forfeit the Restricted Stock.
10.5   Rights of Holders of Stock Units.
10.5.1   Voting and Dividend Equivalent Rights.
Holders of Stock Units shall have no rights as stockholders of the Company (for
example, the right to receive cash or dividend payments or distributions
attributable to the Shares subject to such Stock Units, to direct the voting of
the Shares subject to such Stock Units, or to receive notice of any meeting of
the Company’s stockholders); provided, however, that the Committee may provide
in an Award Agreement evidencing a grant of Stock Units that the holder of such
Stock Units shall be entitled to receive Dividend Equivalent Rights.
10.5.2   Creditor’s Rights.
A holder of Stock Units shall have no rights other than those of a general
creditor of the Company. Stock Units represent an unfunded and unsecured
obligation of the Company, subject to the terms and conditions of the applicable
Award Agreement.
10.6   Termination of Service.
Unless the Committee otherwise provides in an Award Agreement or in writing
after the Award Agreement is issued, upon the termination of a Grantee’s
Service, any Restricted Stock or Stock Units held by such Grantee that have not
vested, or with respect to which all applicable restrictions and conditions have
not lapsed, shall immediately be deemed forfeited. Upon forfeiture of Restricted
Stock or Stock Units, the Grantee shall have no further rights with respect to
such Award, including but not limited to any right to vote Restricted Stock or
any right to receive dividends with respect to Restricted Stock or Stock Units.
10.7   Delivery of Shares.
Upon the expiration or termination of any restricted period and the satisfaction
of any other conditions prescribed by the Committee and set forth in the Award
Agreement relating to such Restricted Stock or Stock Units, the restrictions
applicable to Restricted Stock or Stock Units settled in Shares shall lapse,
and, unless otherwise provided in the applicable Award Agreement, a book-entry
or direct registration or a share certificate evidencing ownership of such
Shares shall, consistent with Section 3.7, be issued, free of all such
restrictions, to the Grantee or the Grantee’s beneficiary or estate, as the case
may be. Neither the Grantee, nor the Grantee’s beneficiary or estate, shall have
any further rights with regard to a Stock Unit once the Shares represented by
the Stock Unit has been delivered.
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11.

TERMS AND CONDITIONS OF UNRESTRICTED STOCK AWARDS AND OTHER EQUITY-BASED AWARDS

The Committee may, in its sole discretion, grant (or sell) an Unrestricted Stock
Award to any Grantee pursuant to which such Grantee may receive Shares free of
any restrictions (“Unrestricted Stock”) under the Plan. Unrestricted Stock
Awards may be granted or sold to any Grantee as provided in the immediately
preceding sentence in respect of past or, if so provided in the related Award
Agreement or a separate agreement, the promise by the Grantee to perform future
Service to the Company or an Affiliate or other valid consideration, or in lieu
of, or in addition to, any cash compensation due to such Grantee. To the extent
required by applicable law, Grantees will be required to pay the par value of
any Shares received pursuant to an Award; provided, however, that, to the extent
permitted by applicable law, par value shall be deemed paid by past Service or,
if so provided in the related Award Agreement or a separate agreement, the
promise by the Grantee to perform future Service to the Company or an Affiliate
of the Company).
The Committee may, in its sole discretion, grant Awards to Grantees in the form
of other equity-based awards, as deemed by the Committee to be consistent with
the purposes of the Plan. Awards granted pursuant to this Section 11 may be
granted with vesting, value and/or payment contingent upon the attainment of one
or more performance goals. The Committee shall determine the terms and
conditions of such Awards at the date of grant or thereafter. Unless the
Committee otherwise provides in an Award Agreement or in writing after the Award
Agreement is issued, upon the termination of a Grantee’s Service, any other
equity-based awards held by such Grantee that have not vested, or with respect
to which all applicable restrictions and conditions have not lapsed, shall
immediately be deemed forfeited. Upon forfeiture of other equity-based awards,
the Grantee shall have no further rights with respect to such Award.
12.

FORM OF PAYMENT FOR OPTIONS AND RESTRICTED STOCK

12.1   General Rule.
Payment of the Option Price for the Shares purchased pursuant to the exercise of
an Option or the Purchase Price for Restricted Stock shall be made in cash or in
cash equivalents acceptable to the Company.
12.2   Surrender of Shares.
To the extent the Award Agreement so provides, payment of the Option Price for
Shares purchased pursuant to the exercise of an Option or the Purchase Price for
Restricted Stock may be made all or in part through the tender or attestation to
the Company of Shares, which shall be valued, for purposes of determining the
extent to which the Option Price or Purchase Price has been paid thereby, at
their Fair Market Value on the date of exercise or surrender, as applicable.
12.3   Cashless Exercise.
With respect to an Option only (and not with respect to Restricted Stock), to
the extent permitted by law and to the extent the Award Agreement so provides,
payment of the Option Price for Shares purchased pursuant to the exercise of an
Option may be made all or in part (i) by delivery (on a form acceptable to the
Committee) by the Grantee of an irrevocable direction to a licensed securities
broker acceptable to the Company to sell Shares and to deliver all or part of
the sales proceeds to the Company in payment of the Option Price and any
withholding taxes described in Section 18.3, or, (ii) with the consent of the
Company, by the Grantee electing to have the Company issue to Grantee only that
the number of Shares equal in value to the difference between the Option Price
and the Fair Market Value of the Shares subject to the portion of the Option
being exercised.
12.4   Other Forms of Payment.
To the extent the Award Agreement so provides and/or unless otherwise specified
in an Award Agreement, payment of the Option Price for Shares purchased pursuant
to exercise of an Option or the Purchase Price for Restricted Stock may be made
in any other form that is consistent with Applicable Laws, regulations and
rules, including, without limitation, Service to the Company or an Affiliate or
net exercise.
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13.

TERMS AND CONDITIONS OF DIVIDEND EQUIVALENT RIGHTS

13.1   Dividend Equivalent Rights.
A Dividend Equivalent Right is an Award entitling the recipient to receive
credits based on cash distributions that would have been paid on the Shares
specified in the Dividend Equivalent Right (or other award to which it relates)
if such Shares had been issued to and held by the recipient. A Dividend
Equivalent Right may be granted hereunder to any Grantee, provided that no
Dividend Equivalent Rights may be granted in connection with, or related to, an
Award of Options or SARs, and, provided, further, that to the extent such
Dividend Equivalent Rights are provided with respect to an Award that vests or
is earned based upon the achievement of performance goals, any dividend
equivalent amounts shall not be paid currently, but shall, instead, be paid (or,
to the extent deemed reinvested into additional Shares or Share-based Awards,
issued) only to the extent such Award vest (with the Dividend Equivalent amount
paid or issued, as the case may be, at the same time the cash is paid or Shares
are issued at or after vesting of the Award). The terms and conditions of
Dividend Equivalent Rights shall be specified in the Award Agreement. Dividend
equivalents credited to the holder of a Dividend Equivalent Right may be paid in
cash or may be deemed to be reinvested in additional Shares or Share-based
Awards, which may thereafter accrue additional dividend equivalents. Any such
reinvestment shall be based on the Fair Market Value of a Share on the date the
dividend was paid.
13.2   Termination of Service.
Except as may otherwise be provided by the Committee either in the Award
Agreement or in writing after the Award Agreement is issued, a Grantee’s rights
in all Dividend Equivalent Rights or interest equivalents shall automatically
terminate upon the Grantee’s termination of Service for any reason.
14.

TERMS AND CONDITIONS OF PERFORMANCE AWARDS AND ANNUAL INCENTIVE AWARDS

14.1   Grant of Performance Awards and Annual Incentive Awards.
Subject to the terms and provisions of the Plan, the Committee, at any time and
from time to time, may grant Performance Awards and/or Annual Incentive Awards
to a Plan participant in such amounts and upon such terms as the Committee shall
determine.
14.2   Value of Performance Awards and Annual Incentive Awards.
Each Performance Award and Annual Incentive Award shall have an initial value
that is established by the Committee at the time of grant. The Committee shall
set performance goals in its discretion which, depending on the extent to which
they are met, will determine the value and/or number of Performance Awards that
will be paid out to the Plan participant.
14.3   Earning of Performance Awards and Annual Incentive Awards.
Subject to the terms of the Plan, after the applicable Performance Period has
ended, the holder of Performance Awards or Annual Incentive Awards shall be
entitled to receive payout on the value and number of the Performance Awards or
Annual Incentive Awards earned by the Plan participant over the Performance
Period, to be determined as a function of the extent to which the corresponding
performance goals have been achieved.
14.4   Form and Timing of Payment of Performance Awards and Annual Incentive
Awards.
Payment of earned Performance Awards and Annual Incentive Awards shall be as
determined by the Committee and as evidenced in the Award Agreement. Subject to
the terms of the Plan, the Committee, in its sole discretion, may pay earned
Performance Awards in the form of cash or in Shares (or in a combination
thereof) equal to the value of the earned Performance Awards at the close of the
applicable Performance Period, or as soon as practicable after the end of the
Performance Period; provided that, unless specifically provided in the Award
Agreement pertaining to the grant of the Award, such payment shall occur no
later than the 15th day of the third month following the end of the calendar
year in which the
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Performance Period ends. Any Shares may be granted subject to any restrictions
deemed appropriate by the Committee. The determination of the Committee with
respect to the form of payout of such Awards shall be set forth in the Award
Agreement pertaining to the grant of the Award.
14.5   Performance Conditions.
The right of a Grantee to exercise or receive a grant or settlement of any
Award, and the timing thereof, may be subject to such performance conditions as
may be specified by the Committee. The Committee may use such business criteria
and other measures of performance as it may deem appropriate in establishing any
performance conditions.
14.6   Performance Awards or Annual Incentive Awards Granted to Designated
Covered Employees.
If and to the extent that the Committee determines that a Performance or Annual
Incentive Award to be granted to a Grantee who is designated by the Committee as
likely to be a Covered Employee should qualify as “qualified performance-based
compensation” for purposes of Code Section 162(m), the grant, exercise and/or
settlement of such Award shall be contingent upon achievement of pre-established
performance goals and other terms set forth in this Section 14.6.
14.6.1   Performance Goals Generally.
The performance goals for Performance or Annual Incentive Awards shall consist
of one or more business criteria and a targeted level or levels of performance
with respect to each of such criteria, as specified by the Committee consistent
with this Section 14.6. Performance goals applicable to Awards intended to
qualify as Performance-Based Compensation shall be objective and shall otherwise
meet the requirements of Code Section 162(m) and regulations thereunder
including the requirement that the level or levels of performance targeted by
the Committee result in the achievement of performance goals being
“substantially uncertain.” The Committee may determine that such Awards shall be
granted, exercised and/or settled upon achievement of any one performance goal
or that two or more of the performance goals must be achieved as a condition to
the grant, exercise and/or settlement of such Awards. Performance goals may
differ for Awards granted to any one Grantee or to different Grantees.
14.6.2   Timing For Establishing Performance Goals.
Performance goals applicable to Awards intended to qualify as Performance-Based
Compensation shall be established not later than the earlier of  (i) 90 days
after the beginning of any performance period applicable to such Awards and (ii)
the day on which twenty-five percent (25%) of any performance period applicable
to such Awards has expired, or at such other date as may be required or
permitted for “qualified performance-based compensation” under Code Section
162(m).
14.6.3   Settlement of Awards; Other Terms.
Settlement of such Awards shall be in cash, Shares, other Awards or other
property, in the discretion of the Committee. The Committee may, in its
discretion, reduce the amount of a settlement otherwise to be made in connection
with such Awards. The Committee shall specify the circumstances in which such
Performance or Annual Incentive Awards shall be paid or forfeited in the event
of termination of Service by the Grantee prior to the end of a performance
period or settlement of Awards.
14.6.4   Performance Measures.
The performance goals upon which the payment or vesting of a Performance or
Annual Incentive Award to a Covered Employee that is intended to qualify as
Performance-Based Compensation shall be limited to the following Performance
Measures, with or without adjustment:
(a)   funds from operations;
(b)   adjusted funds from operations;
(c)   earnings before any one or more of the following: interest, taxes,
depreciation, amortization and/or stock compensation;
(d)   operating (or gross) income or profit;
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(e)   pretax income before allocation of corporate overhead and/or bonus;
(f)   operating efficiencies;
(g)   operating income as a percentage of net revenue;
(h)   return on equity, assets, capital, capital employed or investment;
(i)   after tax operating income;
(j)   net income;
(k)   earnings or book value per share;
(l)   financial ratios;
(m)   cash flow(s);
(n)   total rental income or revenues;
(o)   capital expenditures as a percentage of rental income;
(p)   total operating expenses, or some component or combination of components
of total operating expenses, as a percentage of rental income;
(q)   stock price or total stockholder return, including any comparisons with
stock market indices;
(r)   appreciation in or maintenance of the price of the common stock or any of
our publicly-traded securities;
(s)   dividends;
(t)   debt or cost reduction;
(u)   comparisons with performance metrics of peer companies;
(v)   comparisons of our stock price performance to the stock price performance
of peer companies;
(w)   strategic business objectives, consisting of one or more objectives based
on meeting specified cost, acquisition or leasing targets, meeting or reducing
budgeted expenditures, attaining division, group or corporate financial goals,
meeting business expansion goals and meeting goals relating to leasing,
acquisitions, joint ventures or collaborations or dispositions; economic
value-added models; or
(x)   any combination of any of the foregoing.
Business criteria may be (but are not required to be) measured on a basis
consistent with U.S. Generally Accepted Accounting Principles.
Any Performance Measure(s) may be expressed on an absolute and/or relative
basis, may be based on or otherwise employ comparisons based on internal
targets, the performance of the Company, Subsidiary, and/or Affiliate or past
performance or the past performance of any of the Company, Subsidiary, and/or
Affiliate, operating units, business segments or divisions and/or the past or
current performance of other companies, and in the case of earnings based
measures, may use or employ comparisons relating to capital, stockholders’
equity and/or shares outstanding, or to assets or net assets, as the Committee
may deem appropriate. The Committee also has the authority to provide for
accelerated vesting of any Award based on the achievement of performance goals
pursuant to the Performance Measures specified in this Section 14.
14.6.5   Evaluation of Performance.
The Committee may provide in any such Award that any evaluation of performance
may include or exclude any of the following events that occur during a
Performance Period: (a) asset impairments or write-downs; (b) litigation or
claim judgments or settlements; (c) the effect of changes in tax laws,
accounting principles, or other laws or provisions affecting reported results;
(d) accruals for reorganization and restructuring programs; (e) significant,
infrequently occurring items; (f) foreign exchange gains and
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losses, (g) the effect of adverse federal, governmental or regulatory action, or
delays in federal, governmental or regulatory action; and (h) any other event
either not directly related to operations or not within the reasonable control
of management. To the extent such inclusions or exclusions affect Awards to
Covered Employees that are intended to qualify as Performance-Based
Compensation, they shall be prescribed in a form that meets the requirements of
Code Section 162(m) for deductibility.
14.6.6   Adjustment of Performance-Based Compensation.
Awards that are intended to qualify as Performance-Based Compensation may not be
adjusted upward. The Committee shall retain the discretion to adjust such Awards
downward, either on a formula or discretionary basis, or any combination as the
Committee determines.
14.6.7   Board Discretion.
In the event that applicable tax and/or securities laws change to permit Board
discretion to alter the governing Performance Measures without obtaining
stockholder approval of such changes, the Committee shall have sole discretion
to make such changes without obtaining stockholder approval provided the
exercise of such discretion does not violate Code Sections 162(m) or 409A. In
addition, in the event that the Committee determines that it is advisable to
grant Awards that shall not qualify as Performance-Based Compensation, the
Committee may make such grants without satisfying the requirements of Code
Section 162(m) and base vesting on Performance Measures other than those set
forth in Section 14.6.4.
14.7   Status of Awards Under Code Section 162(m).
It is the intent of the Company that Awards under Section 14.6 granted to
persons who are designated by the Committee as likely to be Covered Employees
within the meaning of Code Section 162(m) and regulations thereunder shall, if
so designated by the Committee, constitute “qualified performance-based
compensation” within the meaning of Code Section 162(m) and regulations
thereunder. Accordingly, the terms of Section 14.6, including the definitions of
Covered Employee and other terms used therein, shall be interpreted in a manner
consistent with Code Section 162(m) and regulations thereunder. If any provision
of the Plan or any agreement relating to such Awards does not comply or is
inconsistent with the requirements of Code Section 162(m) or regulations
thereunder, such provision shall be construed or deemed amended to the extent
necessary to conform to such requirements.
15.

TERMS AND CONDITIONS OF LONG-TERM INCENTIVE UNITS

LTIP Units are intended to be profits interests in the operating partnership
affiliated with the Company, if any (such operating partnership, if any, the
“Operating Partnership”), the rights and features of which, if applicable, will
be set forth in the agreement of limited partnership for the Operating
Partnership (the “Operating Partnership Agreement”). Subject to the terms and
provisions of the Plan and the Operating Partnership Agreement, the Committee,
at any time and from time to time, may grant LTIP Units to Plan participants in
such amounts and upon such terms as the Committee shall determine. LTIP Units
must be granted for service to the Operating Partnership. Each LTIP Unit awarded
will be equivalent to an award of one Share for purposes of reducing the number
of Shares available under the Plan on a one-for-one basis pursuant to Section
4.3.
15.1   Vesting.
Subject to Section 18, each LTIP Unit granted under the Plan shall vest at such
times and under such conditions as shall be determined by the Committee and
stated in the Award Agreement.
16.

REQUIREMENTS OF LAW

16.1   General.
No participant in the Plan will be permitted to acquire, or will have any right
to acquire, Shares thereunder if such acquisition would be prohibited by any
share ownership limits contained in charter or bylaws or would impair the
Company’s status as a REIT. The Company shall not be required to offer, sell or
issue any Shares under any Award if the offer, sale or issuance of such Shares
would constitute a violation by the Grantee, any other individual or entity
exercising an Option, or the Company or an Affiliate of any provision of any law
or regulation of any governmental authority, including without limitation any
federal
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or state securities laws or regulations. If at any time the Company shall
determine, in its discretion, that the offering, listing, registration or
qualification of any Shares subject to an Award upon any securities exchange or
under any governmental regulatory body is necessary or desirable as a condition
of, or in connection with, the issuance or purchase of Shares hereunder, no
Shares may be offered, issued or sold to the Grantee or any other individual or
entity exercising an Option pursuant to such Award unless such offering,
listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Company, and
any delay caused thereby shall in no way affect the date of termination of the
Award. Without limiting the generality of the foregoing, in connection with the
Securities Act, upon the exercise of any Option or any SAR that may be settled
in Shares or the delivery of any Shares underlying an Award, unless a
registration statement under such Act is in effect with respect to the Shares
covered by such Award, the Company shall not be required to offer, sell or issue
such Shares unless the Committee has received evidence satisfactory to it that
the Grantee or any other individual or entity exercising an Option or SAR or
accepting delivery of such Shares may acquire such Shares pursuant to an
exemption from registration under the Securities Act. Any determination in this
connection by the Committee shall be final, binding, and conclusive. The Company
may, but shall in no event be obligated to, register any securities covered
hereby pursuant to the Securities Act. The Company shall not be obligated to
take any affirmative action in order to cause the exercise of an Option or a SAR
or the issuance of Shares pursuant to the Plan to comply with any Applicable
Laws. As to any jurisdiction that expressly imposes the requirement that an
Option (or SAR that may be settled in Shares) shall not be exercisable until the
Shares covered by such Option (or SAR) are registered under the securities laws
thereof or are exempt from such registration, the exercise of such Option (or
SAR) under circumstances in which the laws of such jurisdiction apply shall be
deemed conditioned upon the effectiveness of such registration or the
availability of such an exemption.
16.2   Rule 16b-3.
During any time when the Company has a class of equity security registered under
Section 12 of the Exchange Act, it is the intent of the Company that Awards
pursuant to the Plan and the exercise of Options and SARs granted hereunder that
would otherwise be subject to Section 16(b) of the Exchange Act will qualify for
the exemption provided by Rule 16b-3 under the Exchange Act. To the extent that
any provision of the Plan or action by the Committee does not comply with the
requirements of Rule 16b-3, it shall be deemed inoperative with respect to such
Awards to the extent permitted by Applicable Law and deemed advisable by the
Committee, and shall not affect the validity of the Plan. In the event that Rule
16b-3 is revised or replaced, the Board may exercise its discretion to modify
the Plan in any respect necessary to satisfy the requirements of, or to take
advantage of any features of, the revised exemption or its replacement.
17.

EFFECT OF CHANGES IN CAPITALIZATION

17.1   Changes in Shares.
If the number of outstanding Shares is increased or decreased or the Shares are
changed into or exchanged for a different number or kind of Shares or other
securities of the Company on account of any recapitalization, reclassification,
stock split, reverse stock split, spin-off, combination of share, exchange of
shares, share dividend or other distribution payable in capital shares, or other
increase or decrease in such shares effected without receipt of consideration by
the Company occurring after the Effective Date, the number and kinds of shares
for which grants of Options and other Awards may be made under the Plan,
including, without limitation, the limits set forth in Section 6.2, shall be
adjusted proportionately and accordingly by the Company in a manner deemed
equitable by the Committee. In addition, the number and kind of shares for which
Awards are outstanding shall be adjusted proportionately and accordingly so that
the proportionate interest of the Grantee immediately following such event
shall, to the extent practicable, be the same as immediately before such event.
Any such adjustment in outstanding Options or SARs shall not change the
aggregate Option Price or SAR Exercise Price payable with respect to shares that
are subject to the unexercised portion of an outstanding Option or SAR, as
applicable, but shall include a corresponding proportionate adjustment in the
Option Price or SAR Exercise Price per share. The conversion of any convertible
securities of the Company shall not be treated as an increase in shares effected
without receipt of consideration. Notwithstanding the foregoing, in the event of
any distribution to
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the Company’s stockholders of securities of any other entity or other assets
(including an extraordinary dividend but excluding a non-extraordinary dividend
of the Company) without receipt of consideration by the Company, the Company
shall, in such manner as the Company deems appropriate, adjust (i) the number
and kind of shares subject to outstanding Awards and/or (ii) the exercise price
of outstanding Options and Stock Appreciation Rights to reflect such
distribution.
17.2

Reorganization in Which the Company Is the Surviving Entity Which Does not
Constitute a Change in Control.

Subject to Section 17.3, if the Company shall be the surviving entity in any
reorganization, merger, or consolidation of the Company with one or more other
entities which does not constitute a Change in Control, any Option or SAR
theretofore granted pursuant to the Plan shall pertain to and apply to the
securities to which a holder of the number of Shares subject to such Option or
SAR would have been entitled immediately following such reorganization, merger,
or consolidation, with a corresponding proportionate adjustment of the Option
Price or SAR Exercise Price per share so that the aggregate Option Price or SAR
Exercise Price thereafter shall be the same as the aggregate Option Price or SAR
Exercise Price of the Shares remaining subject to the Option or SAR immediately
prior to such reorganization, merger, or consolidation. Subject to any contrary
language in an Award Agreement evidencing an Award, or in another agreement with
the Grantee, or otherwise set forth in writing, any restrictions applicable to
such Award shall apply as well to any replacement shares received by the Grantee
as a result of the reorganization, merger or consolidation. In the event of a
transaction described in this Section 17.2, Performance Awards shall be adjusted
(including any adjustment to the Performance Measures applicable to such Awards
deemed appropriate by the Committee) so as to apply to the securities that a
holder of the number of Shares subject to the Performance Awards would have been
entitled to receive immediately following such transaction.
17.3   Change in Control in which Awards are not Assumed.
Except as otherwise provided in the applicable Award Agreement or in another
agreement with the Grantee, or as otherwise set forth in writing, upon the
occurrence of a Change in Control in which outstanding Options, SARs, Stock
Units, Dividend Equivalent Rights, Restricted Stock, LTIP Units or other
equity-based awards are not being assumed or continued:
(i)   in each case with the exception of any Performance Award, all outstanding
Restricted Stock and LTIP Units shall be deemed to have vested, all Stock Units
shall be deemed to have vested and the Shares subject thereto shall be
delivered, and all Dividend Equivalent Rights shall be deemed to have vested and
the Shares subject thereto shall be delivered, immediately prior to the
occurrence of such Change in Control, and
(ii)   either of the following two actions shall be taken:
(A)   fifteen (15) days prior to the scheduled consummation of a Change in
Control, all Options and SARs outstanding hereunder shall become immediately
exercisable and shall remain exercisable for a period of fifteen (15) days, or
(B)   the Committee may elect, in its sole discretion, to cancel any outstanding
Awards of Options, Restricted Stock, Stock Units, and/or SARs and pay or
deliver, or cause to be paid or delivered, to the holder thereof an amount in
cash or securities having a value (as determined by the Committee acting in good
faith), in the case of Restricted Stock or Stock Units, equal to the formula or
fixed price per share paid to holders of Shares and, in the case of Options or
SARs, equal to the product of the number of Shares subject to the Option or SAR
(the “Award Shares”) multiplied by the amount, if any, by which (I) the formula
or fixed price per share paid to holders of Shares pursuant to such transaction
exceeds (II) the Option Price or SAR Exercise Price applicable to such Award
Shares.
(iii)   for Performance Awards denominated in Shares, Stock Units or LTIP Units,
if less than half of the Performance Period has lapsed, the Awards shall be
converted into Restricted Stock or Stock Units assuming target performance has
been achieved (or Unrestricted Stock if no further restrictions apply). If more
than half the Performance Period has lapsed, the Awards shall be converted into
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Restricted Stock or Stock Units based on actual performance to date (or
Unrestricted Stock if no further restrictions apply). If actual performance is
not determinable, then Performance Awards shall be converted into Restricted
Stock or Stock Units assuming target performance has been achieved, based on the
discretion of the Committee (or Unrestricted Stock if no further restrictions
apply).
(iv)   other equity-based awards shall be governed by the terms of the
applicable Award Agreement.
With respect to the Company’s establishment of an exercise window, (i) any
exercise of an Option or SAR during such fifteen (15)-day period shall be
conditioned upon the consummation of the event and shall be effective only
immediately before the consummation of the event, and (ii) upon consummation of
any Change in Control, the Plan and all outstanding but unexercised Options and
SARs shall terminate. The Committee shall send notice of an event that will
result in such a termination to all individuals and entities that hold Options
and SARs not later than the time at which the Company gives notice thereof to
its stockholders.
17.4   Change in Control in which Awards are Assumed.
Except as otherwise provided in the applicable Award Agreement or in another
agreement with the Grantee, or as otherwise set forth in writing, upon the
occurrence of a Change in Control in which outstanding Awards are being assumed
or continued, the following provisions shall apply to such Award, to the extent
assumed or continued:
The Plan, Options, SARs, Stock Units, Restricted Stock and other equity-based
awards theretofore granted shall continue in the manner and under the terms so
provided in the event of any Change in Control to the extent that provision is
made in writing in connection with such Change in Control for the assumption or
continuation of the Options, SARs, Stock Units, Restricted Stock and other
equity-based awards theretofore granted, or for the substitution for such
Options, SARs, Stock Units, Restricted Stock and other equity-based awards for
new common stock options and stock appreciation rights and new common stock
units, restricted stock and other equity-based awards relating to the stock of a
successor entity, or a parent or subsidiary thereof, with appropriate
adjustments as to the number of shares (disregarding any consideration that is
not common stock) and option and stock appreciation rights exercise prices.
17.5   Adjustments
Adjustments under this Section 17 related to Shares or securities of the Company
shall be made by the Committee, whose determination in that respect shall be
final, binding and conclusive. No fractional shares or other securities shall be
issued pursuant to any such adjustment, and any fractions resulting from any
such adjustment shall be eliminated in each case by rounding downward to the
nearest whole share. The Committee shall determine the effect of a Change in
Control upon Awards other than Options, SARs, Stock Units and Restricted Stock,
and such effect shall be set forth in the appropriate Award Agreement. The
Committee may provide in the Award Agreements at the time of grant, or any time
thereafter with the consent of the Grantee, for different provisions to apply to
an Award in place of those described in Sections 17.1, 17.2, 17.3 and 17.4. This
Section 17 does not limit the Company’s ability to provide for alternative
treatment of Awards outstanding under the Plan in the event of change in control
events that do not constitute a Change in Control.
17.6   No Limitations on Company.
The making of Awards pursuant to the Plan shall not affect or limit in any way
the right or power of the Company to make adjustments, reclassifications,
reorganizations, or changes of its capital or business structure or to merge,
consolidate, dissolve, or liquidate, or to sell or transfer all or any part of
its business or assets (including all or any part of the business or assets of
any Subsidiary or other Affiliate) or engage in any other transaction or
activity.
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18.

GENERAL PROVISIONS

18.1   Disclaimer of Rights.
No provision in the Plan or in any Award or Award Agreement shall be construed
to confer upon any individual or entity the right to remain in the employ or
Service of the Company or an Affiliate, or to interfere in any way with any
contractual or other right or authority of the Company or an Affiliate either to
increase or decrease the compensation or other payments to any individual or
entity at any time, or to terminate any employment or other relationship between
any individual or entity and the Company or an Affiliate. In addition,
notwithstanding anything contained in the Plan to the contrary, unless otherwise
stated in the applicable Award Agreement, in another agreement with the Grantee,
or otherwise in writing, no Award granted under the Plan shall be affected by
any change of duties or position of the Grantee, so long as such Grantee
continues to provide Service. The obligation of the Company to pay any benefits
pursuant to the Plan shall be interpreted as a contractual obligation to pay
only those amounts described herein, in the manner and under the conditions
prescribed herein. The Plan and Awards shall in no way be interpreted to require
the Company to transfer any amounts to a third party trustee or otherwise hold
any amounts in trust or escrow for payment to any Grantee or beneficiary under
the terms of the Plan.
18.2   Nonexclusivity of the Plan.
Neither the adoption of the Plan nor the submission of the Plan to the
stockholders of the Company for approval shall be construed as creating any
limitations upon the right and authority of the Company to adopt such other
incentive compensation arrangements (which arrangements may be applicable either
generally to a class or classes of individuals or specifically to a particular
individual or particular individuals) as it may determine to be desirable.
18.3   Withholding Taxes.
The Company or an Affiliate, as the case may be, shall have the right to deduct
from payments of any kind otherwise due to a Grantee any federal, state, or
local taxes of any kind required by law to be withheld with respect to the
vesting of or other lapse of restrictions applicable to an Award or upon the
issuance of any Shares upon the exercise of an Option or pursuant to an Award.
At the time of such vesting, lapse, or exercise, the Grantee shall pay in cash
to the Company or an Affiliate, as the case may be, any amount that the Company
or an Affiliate may reasonably determine to be necessary to satisfy such
withholding obligation; provided, that if there is a same-day sale of Shares
subject to an Award, the Grantee shall pay such withholding obligation on the
day on which such same-day sale is completed. Subject to the prior approval of
the Company or an Affiliate, which may be withheld by the Company or an
Affiliate, as the case may be, in its sole discretion, the Grantee may elect to
satisfy such obligations, in whole or in part, (i) by causing the Company or an
Affiliate to withhold Shares otherwise issuable to the Grantee or (ii) by
delivering to the Company or an Affiliate Shares already owned by the Grantee.
The Shares so delivered or withheld shall have an aggregate Fair Market Value
equal to such withholding obligations. The Fair Market Value of the Shares used
to satisfy such withholding obligation shall be determined by the Company or an
Affiliate as of the date that the amount of tax to be withheld is to be
determined. A Grantee who has made an election pursuant to this Section 18.3 may
satisfy his or her withholding obligation only with Shares that are not subject
to any repurchase, forfeiture, unfulfilled vesting, or other similar
requirements. The maximum number of Shares that may be withheld from any Award
to satisfy any federal, state or local tax withholding requirements upon the
exercise, vesting, lapse of restrictions applicable to such Award or payment of
Shares pursuant to such Award, as applicable, cannot exceed such number of
Shares having a Fair Market Value equal to the minimum statutory amount required
by the Company or an Affiliate to be withheld and paid to any such federal,
state or local taxing authority with respect to such exercise, vesting, lapse of
restrictions or payment of Shares. Notwithstanding Section 2.19 or this Section
18.3, for purposes of determining taxable income and the amount of the related
tax withholding obligation pursuant to this Section 18.3, for any Shares subject
to an Award that are sold by or on behalf of a Grantee on the same date on which
such shares may first be sold pursuant to the terms of the related Award
Agreement, the Fair Market Value of such shares shall be the sale price of such
shares on such date (or if sales of such shares are effectuated at more than one
sale price, the weighted average sale price of such shares on such date), so
long as such Grantee has provided the Company or an Affiliate, or its designee
or agent, with advance written notice of such sale.
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18.4   Captions.
The use of captions in the Plan or any Award Agreement is for the convenience of
reference only and shall not affect the meaning of any provision of the Plan or
such Award Agreement.
18.5   Other Provisions.
Each Award granted under the Plan may contain such other terms and conditions
not inconsistent with the Plan as may be determined by the Committee, in its
sole discretion.
18.6   Number and Gender.
With respect to words used in the Plan, the singular form shall include the
plural form, the masculine gender shall include the feminine gender, etc., as
the context requires.
18.7   Severability.
If any provision of the Plan or any Award Agreement shall be determined to be
illegal or unenforceable by any court of law in any jurisdiction, the remaining
provisions hereof and thereof shall be severable and enforceable in accordance
with their terms, and all provisions shall remain enforceable in any other
jurisdiction.
18.8   Governing Law.
The validity and construction of the Plan and the instruments evidencing the
Awards hereunder shall be governed by, and construed and interpreted in
accordance with, the laws of the State of Maryland, other than any conflicts or
choice of law rule or principle that might otherwise refer construction or
interpretation of the Plan and the instruments evidencing the Awards granted
hereunder to the substantive laws of any other jurisdiction.
18.9   Code Section 409A.
The Company intends to comply with Code Section 409A, or an exemption to Code
Section 409A, with regard to Awards hereunder that constitute deferred
compensation within the meaning of Code Section 409A, and the Plan and all Award
Agreements shall be interpreted accordingly. To the extent that the Company
determines that a Grantee would be subject to the additional twenty percent
(20%) tax imposed on certain nonqualified deferred compensation plans pursuant
to Code Section 409A as a result of any provision of any Award granted under the
Plan, such provision shall be deemed amended to the minimum extent necessary to
avoid application of such additional tax. The nature of any such amendment shall
be determined by the Board.
*   *   *
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