Exhibit 10.18

AMENDED AND RESTATED

SPIRIT REALTY CAPITAL, INC. AND SPIRIT REALTY, L.P.

2012 INCENTIVE AWARD PLAN

PERFORMANCE SHARE AWARD GRANT NOTICE

Spirit Realty Capital, Inc., a Maryland corporation, (together with its
successors and assigns, the “Company’), pursuant to the Amended and Restated
Spirit Realty Capital, Inc. and Spirit Realty, L.P. 2012 Incentive Award Plan,
as amended from time to time (the “Plan”). hereby grants to the individual
listed below (the “Participant’’), in consideration of the mutual agreements set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, a Performance Share Award (the
“Performance Shares”). Each Performance Share represents the right to receive
one share of Common Stock (as defined in the Plan) upon the achievement of
certain performance goals (the “Shares”). This award is subject to all of the
terms and conditions set forth herein and in the Performance Share Award
Agreement attached hereto as Exhibit A (the “Performance Share Award Agreement”)
and the Plan, each of which are incorporated herein by reference. Unless
otherwise defined herein, the terms defined in the Plan shall have the same
defined meanings in this Performance Share Award Grant Notice (the “Grant
Notice”) and the Performance Share Award Agreement.

 

Participant:  

Michael Hughes

Grant Date:  

March 29, 2018

Target Number of Performance

Shares: Performance

 

77,320 Shares

Period: Performance

 

April 1, 2018 to April 1, 2021

Goals:

 

Except as otherwise set forth in the Performance Share Award Agreement, the
Participant is eligible to receive Shares based upon the Company’s attainment,
during the Performance Period, of the Performance Goals set forth in Sections
2.2 and 2.3 of the Performance Share Award Agreement.

Termination:  

Except as otherwise set forth in the Performance Share Award Agreement, the
Participant shall forfeit all Performance Shares upon the Participant’s
termination of employment prior to the Valuation Date.

By his or her signature and the Company’s signature below, the Participant
agrees to be bound by the terms and conditions of the Plan, the Performance
Share Award Agreement and this Grant Notice. The Participant has reviewed the
Performance Share Award Agreement, the Plan and this Grant Notice in their
entire!), has had an opportunity to obtain the advice of counsel prior to
executing this Grant Notice and fully understands all provisions of this Grant
Notice, the Performance Share Award Agreement and the Plan. The Participant
hereby agrees to accept as binding, conclusive and final all decisions or
interpretations of the Administrator of the Plan upon any questions arising
under the Plan, this Grant Notice and/or the Performance Share Award Agreement.
In addition, by signing below, the Participant also agrees that the Company or
any Affiliate, in its sole discretion, may satisfy any withholding obligations
in accordance with Section 3.5 of the Performance Share Award Agreement by
(i) withholding shares of Common Stock

 

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otherwise issuable to the Participant in connection with the vesting or payment
of the Performance Shares, (ii) instructing a broker on the Participant’s behalf
to sell shares of Common Stock otherwise issuable to the Participant in
connection with the vesting or payment of the Performance Shares and remit the
proceeds of such sale to the Company, or (iii) using any other method permitted
by Section 3.5 of the Performance Share Award Agreement or the Plan.

Notwithstanding anything to the contrary contained herein, m consideration of
the grant of this award, the Participant agrees that this Award and any payments
hereunder will be subject to forfeiture and/or repayment to the extent provided
for in the Spirit Compensation Claw back Policy, as in effect from time to time,
if it is determined in accordance with the policy that a Restatement or event of
Misconduct (each as defined in such policy) has occurred.    

 

SPIRIT REALTY CAPITAL, INC.:    PARTICIPANT: By:    /s/ Jay Young    By:    /s/
Michael Hughes Print Name:    Jay Young    Print Name:    Michael Hughes Title:
   EVP, General Counsel and Secretary    Address:    3530 Haynie Ave Address:   
2727 N. Harwood, Suite 300       Dallas, TX 75205    Dallas, TX 75201      

LOGO [g838367g0222093354501.jpg]

 

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EXHIBIT A

TO PERFORMANCE SHARE AWARD GRANT NOTICE

PERFORMANCE SHARE AWARD AGREEMENT

Pursuant to the Performance Share Award Grant Notice (the “Grant Notice’’) to
which this Performance Share Award Agreement (this “Agreement’) is attached,
Spirit Realty Capital, Inc., a Maryland corporation (the “Company”), has granted
to the Participant a performance share award (the “Performance Shares”) under
the Amended and Restated Spirit Realty Capital, Inc. and Spirit Realty, L.P.
2012 Incentive Award Plan, as amended from time to time (the “Plan”).

ARTICLE 1.

GENERAL

1.1        Defined Terms. Wherever the following terms are used in this
Agreement they shall have the meanings specified below, unless the context
clearly indicates otherwise. Capitalized terms not specifically defined herein
shall have the meanings specified in the Plan and the Grant Notice.

(a)        “Cause” shall mean “Cause” as defined in, and determined under, the
Participant’s Employment Agreement, dated as of April 1, 2018 (the “Employment
Agreement”).

(b)        “Commencement Date” shall mean April 1, 2018.

(c)        “Common Stock Price” shall mean, as of a particular date, the Fair
Market Value of a share of Common Stock on that date.

(d)        “Disability” shall mean, notwithstanding the definition contained in
the Plan, “Disability” as defined in, and determined under, the Employment
Agreement.

(e)        “Dividend Equivalents Period” shall mean the period commencing on the
Commencement Date and ending on the day immediately preceding the date on which
the Shares underlying the Performance Shares are issued to the Participant
pursuant to Section 2.7 hereof.

(f)        “End Date” shall mean

(g)        “Good Reason” shall mean “Good Reason” as defined in, and determined
under, the Employment Agreement.

(h)        “Maximum TSR” shall mean, with respect to the Performance Period,
Total Shareholder Return of the Company equal to or in excess of the 80th
percentile (as determined in accordance with standard statistical methodology)
of the range of total shareholder returns during the Performance Period of the
constituent companies included in the Peer Group, calculated in a manner
consistent with TSR calculation methodology under this Agreement.

(i)        “Minimum TSR” shall mean, with respect to the Performance Period,
Total Shareholder Return of the Company equal to the 25th percentile (as
determined in accordance with standard statistical methodology) of the range of
total shareholder returns during the Performance Period of the constituent
companies included in the Peer Group, calculated in a manner consistent with TSR
calculation methodology under this Agreement.

 

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(j)        “Peer Group” shall mean the Company’s peer group set forth on Exhibit
B; provided, however, that if a constituent company in the Peer Group ceases to
be actively traded, due, for example, to merger or bankruptcy or the
Administrator otherwise reasonably determines that it is no longer suitable for
the purposes of this Agreement, then the Administrator in its reasonable
discretion may select a comparable company to be added to the Peer Group for
purposes of making the total shareholder return comparison required by
Section 2.2 hereof meaningful and consistent across the relevant measurement
period.

(k)        “Performance Goals” shall mean the total shareholder return goals
described in Section 2.2(b) hereof (including the Minimum TSR, Target TSR and
Maximum TSR) and Section 2.3(c) hereof, each of which shall be measured with
respect to the Performance Period.

(I)        “Performance Period” shall mean the period beginning on the
Commencement Date and ending on the Valuation Date.

(m)        “Performance Share Award Change in Control” shall mean, not
withstanding the definition of “Change in Control” in the Plan, the occurrence
of any of the following events:

(i)        A transaction or series of transactions (other than an offering of
Shares to the general public through a registration statement filed with the
Securities and Exchange Commission) whereby any “person” or related “group” of
“persons” (as such terms are used in Sections 13(d) and 14(d)(2) of the Exchange
Act) (other than the Company, the Partnership or any Subsidiary, an employee
benefit plan maintained by any of the foregoing entities or a “person” that,
prior to such transaction, directly or indirectly controls, is controlled by, or
is under common control with, the Company) directly or indirectly acquires
beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act)
of securities of the Company possessing more than fifty percent (50%) of the
total combined voting power of the Company’s securities outstanding immediately
after such acquisition; or

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

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

(JI)        After which no person or group beneficially owns voting securities
representing fifty percent (50%) or more of the combined voting power of the
Successor Entity; provided, however, that no person or group shall be treated
for purposes of this Section l. l(m)(ii)(ll) as beneficially owning fifty
percent (50%,) or more of the combined voting power of the Successor Entity
solely as a result of the voting power held in the Company prior to the
consummation of the transaction; or

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

 

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(n)        “Primary Net Lease Peer Group” shall mean, collectively, National
Retail Properties, Inc., Realty Income Corporation, STORE Capital Corporation
and VEREIT, Inc.; provided, however, that if any company in the Primary Net
Lease Peer Group ceases to be actively traded, due, for example, to merger or
bankruptcy or the Administrator otherwise reasonably determines that it is no
longer suitable for the purposes of this Agreement, then the Administrator in
its reasonable discretion shall select a comparable company to be added to the
Primary Net Lease Peer Group for purposes of making the total shareholder return
comparison required by Section 2.2(c) hereof meaningful and consistent across
the relevant measurement period.

(o)        “Qualifying Termination” means a termination of employment due to
death or Disability, or by the Company without Cause or by the Participant for
Good Reason or a non-extension by the Company of the Employment Term (as defined
in the Employment Agreement).

(:p) “Share Value” shall mean (i) for the Commencement Date Share Value, the
closing trading price of a share of Common Stock on the principal exchange on
which such shares are then traded for the trading day immediately preceding the
Commencement Date and (ii) for any other particular date, the average of the
closing trading prices of a share of Common Stock on the principal exchange on
which such shares are then traded for each trading day during the twenty
(20) consecutive trading days ending on the applicable date; provided, however,
that in the event that a Performance Share Award Change in Control occurs prior
to the End Date, Share Value shall mean the price per share of Common Stock paid
by the acquirer in the Performance Share Award Change in Control transaction.

(q)         ••Target TSR” shall mean, with respect to the Performance Period,
Total Shareholder Return of the Company equal to the 50th percentile (as
determined in accordance with standard statistical methodology) of the range of
total shareholder returns during the Performance Period of the constituent
companies included in the Peer Group, calculated in a manner consistent with TSR
calculation methodology under this Agreement.

(r)        “Total Shareholder Return” or “TSR” shall mean the Company’s compound
annual total shareholder return for the Performance Period, calculated based on
the Share Value as of the Commencement Date as the beginning stock price and the
Share Value as of the Valuation Date as the ending stock price, and otherwise in
accordance with the total shareholder return calculation methodology used in the
MSCI US REIT Index (and, for the avoidance of doubt, assuming the reinvestment
of alt dividends paid on Common Stock). Additionally, as set forth in, and
pursuant to, Section 3.4 hereof, appropriate adjustments to the Total
Shareholder Return shall be made to take into account all stock dividends, stock
splits, reverse stock splits and the other events set forth in Section 3.4
hereof that occur prior to the Valuation Date.

(s)        “Valuation Date” shall mean the earlier to occur of (i) the End Date
or (ii) the date on which a Performance Share Award Change in Control occurs.

1.2        Incorporation of Terms of Plan. The Performance Shares are subject to
the terms and conditions of the Plan, which are incorporated herein by
reference. Except as expressly indicated herein, in the event of any
inconsistency between the Plan and this Agreement, the terms of the Plan shall
control.

ARTICLE 2.

PERFORMANCE SHARES AND DIVIDEND EQUIVALENTS

2.1        Grant of Performance Shares. In consideration of the Participant’s
past and/or continued employment with or service to the Company or an Affiliate
and for other good and valuable consideration,

 

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effective as of the Grant Date set forth in the Grant Notice (the “Grant Date”),
the Company grants to the Participant an award of Performance Shares (this
“ward”) as set forth in the Grant Notice, upon the terms and conditions set
forth in the Plan and this Agreement.

2.2        Performance-Based Right to Payment.

(a)        Except in the event of a Qualifying Termination during the
Performance Period, the vesting of the Participant’s Performance Shares and the
issuance of Shares with respect thereto is contingent on the attainment of the
Performance Goats. Accordingly, subject to Section 2.4 hereof, the Participant
shall not become entitled to payment with respect to the Performance Shares
subject to this Agreement unless and until the Administrator determines whether
and to what extent the Performance Goals have been attained and the Performance
Shares have vested. Upon such determination by the Administrator and subject to
the provisions of the Plan and this Agreement, the Participant shall be entitled
to vesting and payment of that portion of the Performance Shares as corresponds
to the Performance Goals attained (as determined by the Administrator in its
sole discretion) as set forth in Sections 2.2(b) - (d) and 2.3 hereof.

(b)        Subject to the Participant’s continued employment with the Company
from the Grant Date through the Valuation Date and further subject to Sections
2.2(c), 2.2(d), and 2.3 - 2.5 hereof, the number of Performance Shares that vest
shall be determined as of the Valuation Date, based on the Company’s Total
Shareholder Return, as follows:

(i)        If, as of the Valuation Date, the Company’s TSR with respect to the
Performance Period is Jess than the Minimum TSR, then no Performance Shares
shall vest and the Performance Shares shall thereupon be forfeited.

(ii)        If, as of the Valuation Date, the Company’ s TSR with respect to the
Performance Period is equal to the Minimum TSR, then 66.7% of the Target Number
of Performance Shares set forth on the Grant Notice shall vest.

(iii)        If, as of the Valuation Date, the Company’s TSR with respect to the
Performance Period is equal to the Target TSR, then 100% of the Target Number of
Performance Shares set forth on the Grant Notice shall vest

(iv)        If, as of the Valuation Date, the Company’s TSR with respect to the
Performance Period is equal to the Maximum TSR, then 200% of the Target Number
of Performance Shares set forth on the Grant Notice shall vest.

(v)        If the Company’s Total Shareholder Return is between the Minimum TSR
and the Target TSR or between the Target TSR and the Maximum TSR, then the
number of Performance Shares that shall vest in accordance with this
Section 2.2(b) shall be determined by means of linear interpolation.

(c)        Notwithstanding anything to the contrary contained in Section 2.2(b)
hereof, and subject to Sections 2.2(d) and 2.3 - 2.5 hereof, the number of
Performance Shares that vest hereunder shall be adjusted as follows:

(i)        If, as of the Valuation Date, the Company’s TSR with respect to the
Performance Period is greater than the total shareholder return of each of the
companies in the Primary Net Lease Peer Group, then the number of Performance
Shares that vest and become payable hereunder shall equal the number of
Performance Shares that would have otherwise vested pursuant to Section 2.2(b)

 

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hereof, increased by (A).0S% for each 1 basis point (up to 300 basis points) by
which the Company’s TSR exceeds the total shareholder return of the highest
performing member of the Net Lease Peer Group with respect to total shareholder
return for that period, and (B) by .1% for each 1 basis point (up to 100 basis
points) by which the Company’s TSR exceeds the total shareholder return of the
highest performing member of the Net Lease Peer Group by 300 basis points with
respect to total shareholder return for that period, subject to an aggregate cap
on such increase of 25% in the number of Performance Shares pursuant to this
subsection 2.2(c)(i).

(ii)        If, as of the Valuation Date, the Company’s TSR with respect to the
Performance Period is greater than the total shareholder return of one of the
companies in the Primary Net Lease Peer Group but lower than the total
shareholder return of the other company in the Primary Net Lease Peer Group,
then the number of Performance Shares that vest and become payable hereunder
shall equal the number of vested Performance Shares determined pursuant to
Section 2.2(b) hereof (i.e., no adjustment).

(iii)        If, as of the Valuation Date, the Company’s TSR with respect to the
Performance Period is lower than the total shareholder return of each of the
companies in the Primary Net Lease Peer Group, then the number of Performance
Shares that vest and become payable hereunder shall equal the number of
Performance Shares that would have otherwise vested pursuant to Section 2.2(b)
hereof, decreased by (A).05% for each l basis point (up to 300 basis points) by
which the Company’s TSR is less than the total shareholder return of the lowest
performing member of the Net Lease Peer Group with respect to total shareholder
return for that period, and (B) by .1% for each 1 basis point (up to 100 basis
points) by which the Company’s TSR is less than the total shareholder return of
the lowest performing member of the Net Lease Peer Group by 300 basis points
with respect to total shareholder return for that period, subject to a cap on
such decrease of 25% in the number of Performance Shares pursuant to this
subsection 2.2(c)(iii).

(d)        Notwithstanding anything to the contrary contained herein, in the
event the Company’s TSR with respect to the Performance Period is less than zero
(0), the number of Performance Shares that may vest and become payable hereunder
shall not exceed the Target Number of Performance Shares set forth on the Grant
Notice. In addition, for the av01dance of doubt, the maximum number of
Performance Shares that shall vest and become payable hereunder shall be equal
to 250% of the Target Number of Performance Shares set forth on the Grant Notice
and no additional Performance Shares above 250% of the Target Number of
Performance Shares set forth on the Grant Notice shall vest if the Company’s TSR
exceeds the Maximum TSR.

2.3        Performance Share Award Change in Control. Notwithstanding any
contrary provision of this Agreement, in the event that a Performance Share
Award Change in Control occurs at any time prior to the End Date and the
Participant remains continuously employed as of immediately prior to such
Performance Share Award Change in Control, the number of Performance Shares that
vest and become payable hereunder shall be determined, pursuant to Section 2.2
hereof, based on the Company’s achievement of the Performance Goals as of the
date on which the Performance Share Award Change in Control occurs.

2.4        Termination. In the event that the Participant experiences a
Qualifying Termination prior to the end of the Performance Period, then 100% of
the Target Number of Performance Shares set forth on the Grant Notice shall vest
and become payable hereunder as of the termination date, and no additional
Performance Shares shall vest or become payable thereafter.

 

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2.5        Forfeiture.

(a)        Termination of Employment. In the event that the Participant
experiences a termination of employment during the Performance Period that is
not a Qualifying Termination, all of the Performance Shares shall thereupon
automatically be forfeited by the Participant as of the date of termination and
the Participant’s rights in any such Performance Shares and such portion of the
Award; including without limitation any Dividend Equivalents (as defined below),
shall thereupon lapse and expire.

(b)        Failure to Achieve Performance Goals. Any outstanding Performance
Shares that do not vest in accordance with this Agreement due to the failure by
the Company to achieve the Performance Goals shall automatically be forfeited by
the Participant as of the Valuation Date, and the Participant’s rights in any
such Performance Shares and such portion of the Award, including without
limitation any Dividend Equivalents, shall thereupon lapse and expire.

2.6        Dividend Equivalents. This award of Performance Shares is granted in
tandem with a Dividend Equivalents award (“Dividend Equivalents’’), which
Dividend Equivalents shall remain outstanding from the Grant Date until the
earlier of the payment or forfeiture of the Performance Shares. Pursuant to the
Dividend Equivalents, the Participant shall be entitled to receive a cash
payment in an amount equal to the aggregate dividends declared by the Company
with a record date that occurs during the Dividend Equivalents Period that would
have been payable to the Participant had the Participant held a number of Shares
on such record date equal to of the number of Performance Shares that vest in
accordance with Sections 2.2, 2.3 and 2.4 hereof (if any). The Dividend
Equivalents shall be subject to all of the provisions of this Agreement which
apply to the Performance Shares with respect to which they have been granted and
shall vest and be payable, if at all, at the time and to the extent that the
underlying Performance Shares vest and become payable. Dividend Equivalents
shall not be payable on any Performance Shares that do not vest, or are
forfeited, pursuant to the terms of this Agreement. The Dividend Equivalents and
any amounts that may become payable in respect thereof shall be treated
separately from the Performance Shares and the rights arising in connection
therewith for purposes of Code Section 409A.

2.7        Payment of Shares. As soon as administratively practicable following
the vesting of any Performance Shares pursuant to Sections 2.2, 2.3 and 2.4
hereof, but in no event later than sixty (60) days after such vesting date (for
the avoidance of doubt, this deadline is intended to comply with the “short term
deferral’ exemption from Section 409A of the Code), the Company shall deliver to
the Participant a number of Shares equal to the number of Performance Shares
subject to this Award that vest on the applicable vesting date (either by
delivering one or more certificates for such Shares or by entering such Shares
in book entry form, as determined by the Administrator in its sole discretion),
provided that any such payment made pursuant to Section 2.3 above in the event
of a Performance Share Award Change in Control shall be made or deemed made
immediately preceding and effective upon the occurrence of such Performance
Share Award Change in Control.

2.8        Rights as Stockholder. The holder of the Performance Shares shall not
be, nor have any of the rights or privileges of, a stockholder of the Company,
including, without limitation, voting rights and rights to dividends, in respect
of the Performance Shares and any Shares underlying the Performance Shares and
deliverable hereunder unless and until such Shares shall have been issued by the
Company and held of record by such holder (as evidenced by the appropriate entry
on the books of the Company or of a duly authorized transfer agent of the
Company).

 

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ARTICLE 3.

OTHER PROVISIONS

3.1        Administration. The Administrator shall have the power to interpret
the Plan and this Agreement and to adopt such rules for the administration,
interpretation and application of the Plan and this Agreement as are consistent
therewith and to interpret, amend or revoke any such rules. Without limiting the
generality of the foregoing. all determinations, interpretations and assumptions
relating to the calculation and payment of the Performance Shares (including,
without limitation, determinations, interpretations and assumptions with respect
to TSR and shareholder returns) shall be made by the Administrator. All actions
taken and all interpretations and determinations made by the Administrator in
good faith shall be final and binding upon the Participant, the Company and all
other interested persons. No member of the Committee or the Board shall be
personally liable for any action, determination or interpretation made in good
faith with respect to the Plan, this Agreement or the Performance Shares.

3.2        Grant is Not Transferable. During the lifetime of the Participant,
the Performance Shares may not be sold, pledged, assigned or transferred in any
manner other than by will or the laws of descent and distribution, unless and
until the Shares underlying the Performance Shares have been issued. Neither the
Performance Shares nor any interest or right therein shall be liable for the
debts, contracts or engagements of the Participant or his or her successors in
interest or shall be subject to disposition by transfer, alienation,
anticipation, pledge, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy), and any attempted disposition thereof shall be null and
void and of no effect, except to the extent that such disposition is permitted
by the preceding sentence.

3.3        Binding Agreement. Subject to the limitation on the transferability
of the Performance Shares contained herein, this Agreement shall be binding upon
and inure to the benefit of the heirs, legatees, legal representatives,
successors and assigns of the parties hereto.

3.4        Adjustments Upon Specified Events. This Award, the Performance Shares
and the Dividend Equivalents may be subject to adjustments pursuant to
Section 13.2 of the Plan in connection with the occurrence of certain events
relating to the shares of the Common Stock. In addition, appropriate and
equitable adjustments to the Total Shareholder Return (or TSR) shall be made, in
the sole discretion of the Administrator, to take into account all stock
dividends, stock splits and reverse stock splits that occur prior to the
Valuation Date. The Participant acknowledges that this Award, the Performance
Shares and the Dividend Equivalents are subject to amendment, modification and
termination in certain events as provided in this Agreement and Section 13.2 of
the Plan.

3.5        Tax Withholding. The Company or its Affiliates shall be entitled to
require a cash payment (or to elect, or permit the Participant to elect, such
other form of payment determined in accordance with Section 11.2 of the Plan) by
or on behalf of the Participant and/or to deduct from other compensation payable
to the Participant any sums required by federal, state or local tax law to be
withheld with respect to the grant, vesting or payment of the Award (including
any Dividend Equivalents). With respect to any tax withholding relating to the
Award, unless otherwise determined by the Administrator, the Company or its
Affiliates shall withhold, or cause to be withheld, Shares otherwise vesting or
issuable under the Award having a Fair Market Value equal to the sums to be
withheld. The number of Shares which may be so withheld shall be limited to the
number of Shares which have a Fair Market Value on the date of withholding no
greater than the aggregate amount of such liabilities based on the maximum
statutory withholding rates in the applicable jurisdictions for federal, state,
local and foreign income tax and payroll tax. purposes that are applicable to
such taxable income. Notwithstanding any other provision of this Agreement, the

 

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Company shall not be obligated to deliver any certificate representing Shares to
the Participant or the Participant’s legal representative or to enter any such
Shares in book entry form unless and until the Participant or the Participant’s
legal representative, as applicable, shall have paid or otherwise satisfied in
full the amount of all federal, state and local taxes applicable to the taxable
income of the Participant resulting from the grant or vesting of the Award or
the issuance of Shares hereunder.

3.6        Conditions to Delivery of Shares. The Shares deliverable under this
Award may be either previously authorized but unissued Shares, treasury Shares
or Shares purchased on the open market. Such Shares shalt be fully paid and
nonassessable. The Company shall not be required to issue or deliver any Shares
under this Award prior to fulfillment of the conditions set forth in
Section 11.4 of the Plan.

3.7        Ownership Limits. To ensure compliance with the Common Stock
Ownership Limit, the Aggregate Stock Ownership Limit (each as defined in the
Company’s charter, as amended from time to time), any other provision of
Section 6.2.1(a) of the Company’s charter, and/or Applicable Law and for other
proper purposes, the Company may issue appropriate “stop transfer” and other
instructions to its transfer agent with respect to the Performance Shares.

3.8        Not a Contract of Service Relationship. Nothing in this Agreement or
in the Plan shall confer upon the Participant any right to continue to serve as
an Employee or other service provider of the Company or any of its Affiliates or
shall interfere with or restrict in any way the rights of the Company and its
Affiliates, which rights are hereby expressly reserved, to discharge or
terminate the services of the Participant at any time for any reason whatsoever,
with or without Cause, except to the e1,,.ient expressly provided otherwise in a
written agreement between the Company or an Affiliate and the Participant.

3.9        Governing Law. The laws of the State of Texas shall govern the
interpretation, validity, administration, enforcement and performance of the
terms of this Agreement regardless of the law that might be applied under
principles of conflicts of laws.

3.10        Conformity to Securities Laws. The Participant acknowledges that the
Plan and this Agreement are intended to conform to the extent necessary with all
provisions of the Securities Act and the Exchange Act, and Applicable Law.
Notwithstanding anything herein to the contrary, the Plan shall be administered,
and the Award (including any Dividend Equivalents) is granted, only in such a
manner as to conform to such laws, rules and regulations. To the extent
permitted by Applicable Law, the Plan and this Agreement shall be deemed amended
to the extent necessary to conform to such laws, rules and regulations.

3.11        Amendment, Suspension and Termination. To the extent permitted by
the Plan, this Agreement may be wholly or partially amended or otherwise
modified, suspended or terminated at any time or from time to time by the
Administrator or the Board; provided, however, that, except as may otherwise be
provided by the Plan, no amendment, modification, suspension or termination of
this Agreement shall adversely affect the Award (including any Dividend
Equivalents) in any material way without the prior written consent of the
Participant.

3.12        Notices. Any notice to be given under the terms of this Agreement
shall be addressed to the Company in care of the Secretary of the Company at the
Company’s principal office, and any notice to be given to the Participant shall
be addressed to the Participant at the Participant’s last address reflected on
the Company’s records. Any notice shall be deemed duly given when sent via email
or when sent by reputable overnight courier or by certified mail (return receipt
requested) through the United States Postal Service.

3.13        Successors and Assigns. The Company or any Affiliate may assign any
of its rights under this Agreement to single or multiple assignees, and this
Agreement shall inure to the benefit of the

 

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successors and assigns of the Company and its Affiliates. Subject to the
restrictions on transfer set forth in Section 3.2 hereof, this Agreement shall
be binding upon the Participant and his or her heirs, executors, administrators,
successors and assigns.

3.14        Section 409A. Neither the Performance Shares nor the Dividend
Equivalents are intended to constitute “nonqualified deferred compensation”
within the meaning of Section 409A of the Code (together with any Department of
Treasury regulations and other interpretive guidance issued thereunder,
including without limitation any such regulations or other guidance that may be
issued after the date hereof, “Section 409A”). However, notwithstanding any
other provision of the Plan, the Grant Notice or this Agreement, if at any time
the Administrator determines that the Performance Shares or the Dividend
Equivalents (or, in each case, any portion thereof) may be subject to
Section 409A, the Administrator shall have the right in its sole discretion
(without any obligation to do so or to indemnify the Participant or any other
person for failure to do so) to adopt such amendments to the Plan, the Grant
Notice or this Agreement, or adopt other policies and procedures (including
amendments, policies and procedures with retroactive effect), or take any other
actions, as the Administrator determines are necessary or appropriate either for
the Performance Shares and/or Dividend Equivalents to be exempt from the
application of Section 409A or to comply with the requirements of Section 409A.

3.15        Entire Agreement. The Plan, the Grant Notice and this Agreement
(including all Exhibits thereto, if any) constitute the entire agreement of the
parties and supersede in their entirety all prior undertakings and agreements of
the Company and its Affiliates and the Participant with respect to the subject
matter hereof.

3.16        Limitations Applicable to Section 16 Persons. Notwithstanding any
other provision of the Plan or this Agreement, if the Participant is subject to
Section 16 of the Exchange Act. then the Plan, the Award (including any Dividend
Equivalents) and this Agreement shall be subject to any additional limitations
set forth in any applicable exemptive rule under Section 16 of the Exchange Act
(including any amendment to Rule l 6b-3 of the Exchange Act) that are
requirements for the application of such exemptive rule. To the extent permitted
by Applicable Law, this Agreement shall be deemed amended to the extent
necessary to conform to such applicable exemptive rule.

3.17        Limitation on the Participant’s Rights. Participation in the Plan
confers no rights or interests other than as herein provided. This Agreement
creates only a contractual obligation on the part of the Company as to amounts
payable and shall not be construed as creating a trust. The Plan, in and of
itself, has no assets. The Participant shall have only the rights of a general
unsecured creditor of the Company and its Affiliates with respect to amounts
credited and benefits payable, if any, with respect to the Shares issuable
hereunder.

 

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EXHIBIT B

TO PERFORMANCE SHARE AWARD GRANT NOTICE

PEER GROUP

 

DDR Corp.

  

Lexington Realty Trust

Duke Realty Corporation

  

National Retail Properties, Inc.

EPR Properties

  

Omega Healthcare Investors, Inc,

Federal Realty Investment Trust

  

Realty Income Corporation

Gramercy Property Trust, Inc.

  

STORE Capital Corporation

Healthcare Trust of America, Inc.

  

VERBIT, Inc.

    

W.P. Carey, Inc.

 

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