Exhibit 10.1

 

BRT REALTY TRUST 2009 INCENTIVE PLAN,

As Amended March 8, 2010

 

1.                                      Purpose.

 

The purpose of the BRT Realty Trust 2009 Incentive Plan is to advance the
interests and promote the success of BRT Realty Trust by providing an
opportunity to officers, trustees, selected employees, and consultants of the
Trust to purchase shares of beneficial interest $3.00 par value, of the Trust
and/or to receive stock awards provided for in the Plan. By encouraging such
share ownership, the Trust seeks to attract, retain and motivate officers,
trustees, employees and consultants of experience and ability. It is intended
that this purpose will be effected by the granting of the following share-based
incentives: (a) Non-statutory Stock Options; (b) Incentive Stock Options
intended to qualify under Section 422 of the Internal Revenue Code of 1986, as
amended; (c) Restricted Shares; and (d) Performance Based Awards.

 

2.                                      Definitions.

 

Capitalized terms not defined elsewhere in the Plan shall have the following
meanings (whether used in the singular or plural).

 

“Affiliate” of the Trust means any corporation, partnership, or other business
association that, directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with the Trust.

 

“Approved Transaction” means any transaction in which the Board (or, if approval
of the Board is not required as a matter of law, the shareholders of the Trust)
shall approve (i) any consolidation or merger of the Trust, or binding share
exchange, pursuant to which Beneficial Shares would be changed or converted into
or exchanged for cash, securities, or other property, other than any such
transaction in which the holders of Beneficial Shares of the Trust immediately
prior to such transaction have the same proportionate ownership of the common
stock of, and voting power with respect to, the surviving entity immediately
after such transaction, (ii) any merger, consolidation, or binding share
exchange to which the Trust is a party as a result of which the Persons who are
holders of Beneficial Shares of the Trust immediately prior thereto have less
than a majority of the combining voting power of the outstanding capital stock
of the surviving entity ordinarily (and apart from the rights accruing under
special circumstances) having the right to vote in the election of Trustees
(directors) immediately following such merger, consolidation, or binding share
exchange, (iii) the adoption of any plan or proposal for the liquidation or
dissolution of the Trust, or (iv) any sale, lease, exchange, or other transfer
(in one transaction or a series of related transactions) of all, or
substantially all, of the assets of the Trust.

 

“Award” means a grant of Options, Restricted Shares or Performance-Based Awards
under this Plan.

 

“Beneficial Shares” means shares of beneficial interest, $3.00 par value of the
Trust.

 

“Board” means the Board of Trustees of the Trust.

 

“Board Change” means, during any period of two consecutive years, individuals
who at the beginning of such period constituted the entire Board cease for any
reason to constitute a majority thereof unless the election, or the nomination
for election, of each new director was approved by a vote of at least two-thirds
of the Trustees then still in office who were Trustees at the beginning of the
period.

 

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“Code” means the Internal Revenue Code of 1986, as amended from time to time, or
any successor statute or statutes thereto. Reference to any specific Code
section shall include any successor section.

 

“Committee” means the committee of the Board appointed to administer the Plan.

 

“Control Purchase” means any transaction (or series of related transactions) in
which (i) any person (as such term is defined in Sections 13(d)(3) and
14(d)(2) of the Exchange Act), corporation, or other entity (other than the
Trust, any Subsidiary of the Trust, or any employee benefit plan sponsored by
the Trust or any Subsidiary of the Trust) shall purchase any Beneficial Shares
of the Trust (or securities convertible into Beneficial Shares of the Trust) for
cash, securities, or any other consideration pursuant to a tender offer or
exchange offer, without the prior consent of the Board, or (ii) any person (as
such term is so defined), corporation, or other entity (other than the Trust,
any Subsidiary of the Trust, any employee benefit plan sponsored by the Trust or
any Subsidiary of the Trust or any Exempt Person (as defined below)) shall
become the “beneficial owner” (as such term is defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Trust representing
20% or more of the combined voting power of the then outstanding securities of
the Trust ordinarily (and apart from the rights accruing under special
circumstances) having the right to vote in the election of Trustees (calculated
as provided in Rule 13d-3(d) under the Exchange Act in the case of rights to
acquire the Trust’s securities), other than in a transaction (or series of
related transactions) approved by the Board. For purposes of this definition,
“Exempt Person” means each of Gould Investors L.P. and Fredric H. Gould, Jeffrey
A. Gould, Matthew J. Gould, and the respective successors and assigns, family
members, estates, and heirs of an Exempt Person and any trust or other
investment vehicle for the primary benefit of any Exempt Person or their family
members or heirs. As used with respect to any Person, the term “family member”
means the spouse, siblings, and lineal descendants of such Person and lineal
descendants of siblings.

 

“Disability” means the inability to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment which can
be expected to result in death or which has lasted or can be expected to last
for a continuous period of not less than 12 months.

 

“Domestic Relations Order” means a domestic relations order as defined by the
Code or Title I of the Employee Retirement Income Security Act, or the
rules thereunder.

 

“Effective Date” means the date the Plan is approved by the Trust’s
shareholders. The Plan shall become effective immediately upon such approval.

 

“Equity Security” shall have the meaning ascribed to such term in
Section 3(a)(11) of the Exchange Act, and an equity security of an issuer shall
have the meaning ascribed thereto in Rule 16a-1 promulgated under the Exchange
Act, or any successor Rule.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time
to time, or any successor statute or statutes thereto. Reference to any specific
Exchange Act section shall include any successor section.

 

“Fair Market Value” of Beneficial Shares on any day means the last sale price
(or, if no last sale price is reported, the average of the high bid and low
asked prices) for a Beneficial Share on such day (or, if such day is not a
trading day, on the next preceding trading day) as reported on the principal
national securities exchange on which Beneficial Shares are listed on such day
or if such shares are not then listed on a national securities exchange, then as
reported on Nasdaq or, if such shares are not then listed or quoted on Nasdaq,
then as quoted by the National Quotation Bureau Incorporated. If for any day the
Fair Market Value of a Beneficial Share is not determinable by any of the
foregoing means, then the Fair Market Value for such day shall be determined in
good faith by the Committee on the basis of such quotations and other
considerations as the Committee deems appropriate.

 

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“Holder” means a Person who has received an Award under this Plan.

 

“Incentive Stock Option” means an Option intended to meet the requirements of
Section 422 of the Code.

 

“Nasdaq” means The Nasdaq Stock Market

 

“Non-statutory Stock Option” means an option not intended to meet the
requirements of Section 422 of the Code.

 

“Option” means either an Incentive Stock Option meeting the requirements of
Section 422 of the Code or a Non-statutory Stock Option which are not intended
to meet the requirements of Section 422 of the Code.

 

“Participant” means an officer, employee, director or consultant of the Trust
who has been granted an Award under the Plan.

 

“Performance-Based Award” means any Restricted Stock Award or Performance Share
Award granted to a Participant that qualifies as “performance based
compensation” under Section 162(m) of the Code.

 

“Performance Criteria” shall mean any, a combination of, or all of the
following: revenue, earnings, earnings per share, share price, costs, return on
equity, shareholders’ equity (book value), per share shareholders’ equity (per
share book value), asset growth, net operating income (NOI), cash available for
distribution (CAD), CAD per share, total shareholder return on an absolute or a
peer comparable basis (TSR), return on assets, revenue growth, or goals relating
to loan originations or property sales. Performance Goals need not be the same
with respect to all Participants and may be established separately for the Trust
as a whole, or on a per share basis, and may be based on performance compared to
performance by businesses specified by the Committee, or compared to any prior
period. All calculations and financial accounting matters relevant to this Plan
shall be determined in accordance with GAAP, except as otherwise directed by the
Committee.

 

“Performance Cycle” means one or more periods of time which may be of varying
and overlapping durations, as the Committee may select, over which the
attainment of one or more Performance Goals will be measured for the purpose of
determining a Participant’s right to and the payment of a Performance-Based
Award. A Performance Cycle shall not be less then twelve months.

 

“Performance Goals” means for a Performance Cycle, the specific goals
established by the Committee for a Performance Cycle based upon the Performance
Criteria.

 

“Person” means an individual, corporation, limited liability company,
partnership, trust, incorporated or unincorporated association, joint venture or
other entity of any kind.

 

“Plan” means this BRT Realty Trust 2009 Incentive Plan, as amended from time to
time.

 

“Restricted Shares” means Beneficial Shares awarded in accordance with the terms
ascribed in Section 9.

 

“Restriction Period” means the period during which Restricted Shares awarded
hereunder are subject to a substantial risk of forfeiture. Such restrictions may
be based on the passage of time, the achievement of Performance Goals or the
occurrence of other events as determined by the Committee.

 

“Subsidiary” of a Person means any present or future subsidiary (as defined in
Section 424(f) of the Code) of such Person or any business entity in which such
Person owns, directly or indirectly, 50% or more of the voting, capital, or
profits interests. An entity shall be deemed a subsidiary of a Person for
purposes of this definition only for such periods as the requisite ownership or
control relationship is maintained.

 

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“Trust” means BRT Realty Trust, a Massachusetts Business Trust.

 

3.                                      Shares Subject to the Plan.

 

(a)                                  The maximum number of Beneficial Shares
with respect to which Awards may be granted under the Plan shall not exceed
500,000 Beneficial Shares, subject to adjustment as provided in
paragraph 3(c) hereof. Any Beneficial Share subject to an Award which for any
reason (i) expires, is cancelled or is forfeited prior to becoming vested, or
(ii) is terminated unexercised, shall again be available for purposes of the
Plan. The Beneficial Shares delivered pursuant to Awards granted under the Plan
may, in whole or in part, be authorized but unissued shares, treasury shares, or
any other issued shares subsequently reacquired by the Trust, including shares
purchased in the open market.

 

(b)                                 The Committee may impose such restrictions
on any Beneficial Shares acquired hereunder as it may deem advisable or
appropriate, including, but not limited to, restrictions related to applicable
Federal securities laws, the requirements of any national securities exchange or
system upon which the Beneficial Shares are then listed or traded, and any blue
sky or state securities laws.

 

(c)                                  If the Trust subdivides its outstanding
Beneficial Shares into a greater number of Beneficial Shares (by stock dividend,
stock split, reclassification, or otherwise) or combines its outstanding
Beneficial Shares into a smaller number of Beneficial Shares (by reverse stock
split, reclassification, or otherwise) or if the Committee determines that any
stock dividend, extraordinary cash dividend, reclassification, recapitalization,
reorganization, split-up, spin-off, combination, exchange of shares, warrants or
rights offering to purchase Beneficial Shares, or other similar corporate event
(including mergers or consolidations other than those which constitute Approved
Transactions, adjustments with respect to which shall be governed by
paragraph 11(b)) affects any Beneficial Shares so that an adjustment is required
to preserve the benefits or potential benefits intended to be made available
under this Plan, then the Committee, in its sole discretion and in such manner
as the Committee may deem equitable and appropriate, may make such adjustments
to any or all of (i) the number and kind of shares of stock which thereafter may
be awarded, optioned, or otherwise made subject to the benefits contemplated by
the Plan, (ii) the number and kind of shares of stock subject to outstanding
Awards, and (iii) the purchase or exercise price with respect to any of the
foregoing, provided, however, that the number of shares subject to any Award
shall always be a whole number. Notwithstanding the foregoing, if all Beneficial
Shares are redeemed, then each outstanding Award shall be adjusted to substitute
for the shares subject thereto the kind and amount of cash, securities or other
assets issued or paid in the redemption of the equivalent number of Beneficial
Shares and otherwise the terms of such Award, including in the case of Options
or similar rights, the total exercise price shall remain constant before and
after the substitution (unless otherwise determined by the Committee and
provided in the applicable Agreement). The Committee may, if deemed appropriate,
provide for a cash payment to any Holder of an Award in connection with any
adjustment made pursuant to this paragraph 3(c). Any such numerical limitations
shall be subject to adjustment under this Section only to the extent such
adjustment will not affect the status of any Award intended to qualify as
“performance-based compensation” under section 162(m) of the Code or the ability
to grant or the qualification of Incentive Stock Options under the Plan.

 

4.                                      Administration.

 

The Plan shall be administered by the Compensation Committee of the Board unless
a different committee is appointed by the Board. The Board may from time to time
appoint members of the Committee in substitution for and in addition to members
previously appointed and may fill vacancies and may remove members of the
Committee. All of the members of the Committee must be Trustees of the Trust.
All of the members of the compensation committee or any different Committee
approved by the board must be non-employee and outside trustees (directors)
under (Treasury Regulation 162(m) and Section 16b-3 of the Exchange Act. The
Committee shall have the exclusive authority to administer

 

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and construe the Plan in accordance with its provisions. The Committee’s
authority shall include, without limitation, the power to (a) determine persons
eligible for Awards, (b) prescribe the terms and conditions of the Awards,
(c) construe and interpret the Plan, the Awards and any Award Agreement,
(d) adopt rules for the administration, interpretation and application of the
Plan as are consistent therewith and (e) establish, interpret, amend or revoke
any such rules. With respect to any Award that is intended to qualify as
“performance-based compensation” within the meaning of section 162(m) of the
Code, the Committee shall have no discretion to increase the amount of
compensation that otherwise would be due upon attainment of a Performance Goal,
although the Committee may have discretion to deny an Award or to adjust
downward the compensation payable pursuant to an Award, as the Committee
determines in its sole judgment. All determinations and decisions made by the
Committee and any of its delegates pursuant to this Section 4 shall be final,
conclusive and binding on all Holders, and shall be given the maximum deference
permitted by law.

 

5.                                      Eligible Persons.

 

In its sole discretion, the Committee may grant (i) Incentive Stock Options,
Non-statutory Stock Options, Restricted Shares, or Performance Based Awards, and
any combination of the foregoing, to such officers, Trustees, employees and
consultants providing services to the Trust or its Subsidiaries (“Eligible
Persons”) as are selected by the Committee. The maximum number of Beneficial
Shares with respect to which Options may be granted to any Eligible Person under
this Plan during any calendar year shall be 40,000 Beneficial Shares, the
maximum number of Beneficial Shares to which Performance Based Awards may be
granted to any Eligible Person under this Plan is 40,000 and the maximum number
of Beneficial Shares with respect to which all other Awards may be granted to
any Eligible Person under this Plan during any calendar year shall be 30,000, in
each case, subject to adjustment as provided in Paragraph 3(c) hereof.

 

6.                                      Duration of the Plan.

 

The Plan shall terminate when all Beneficial Shares that may be made subject to
Awards under the Plan have been acquired and, in the case of Incentive Stock
Options only, ten years from the effective date of this Plan, if earlier, unless
terminated earlier pursuant to paragraph 11(j) hereof, and no Awards may be
granted thereafter.

 

7.                                      Stock Options.

 

(a)                                  Subject to the limitations of the Plan, the
Committee shall designate from time to time those Eligible Persons to be granted
Options, the time when each Option shall be granted to such Eligible Persons,
the number of Beneficial Shares subject to such Options, and, subject to
paragraph 7(b), the purchase price of the Beneficial Shares subject to such
Option.

 

(b)                                 The price at which shares may be purchased
upon exercise of an Option shall be fixed by the Committee and subject to
paragraph 8 hereof may not be less than the Fair Market Value of the Beneficial
Shares subject to the Option as of the date the Option is granted.

 

(c)                                  Subject to the provisions of the Plan with
respect to death, retirement, and termination of employment and subject to
paragraph 8 hereof, the term of each Option shall be for such period as the
Committee shall determine as set forth in the applicable Agreement.

 

(d)                                 An Option granted under the Plan shall
become (and remain) exercisable during the term of the Option to the extent
provided in the applicable Agreement and this Plan and, unless the Agreement
otherwise provides, may be exercised to the extent exercisable, in whole or in
part, at any time and from time to time during such term; provided, however,
that subsequent to the grant of an Option, the Committee, at any time before
complete termination of such Option, may accelerate the

 

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time or times at which such Option may be exercised in whole or in part (without
reducing the term of such Option).

 

(e)                                  (i) An Option shall be exercised by written
notice to the Trust upon such terms and conditions as the Agreement may provide
and in accordance with such other procedures for the exercise of Options as the
Committee may establish from time to time. The method or methods of payment of
the purchase price for the shares to be purchased upon exercise of an Option and
of any amounts required by paragraph 11(m) shall be determined by the Committee
and may consist of (A) cash, (B) check, (C) whole Beneficial Shares, or (D) any
combination of the foregoing methods of payment. The permitted method or methods
of payment of the amounts payable upon exercise of an Option, if other than in
cash or check, shall be set forth in the applicable Agreement and may be subject
to such conditions as the Committee deems appropriate.

 

(ii)                                  Unless otherwise determined by the
Committee and provided in the applicable Agreement, any Beneficial Shares
delivered in payment of all or any part of the amounts payable in connection
with the exercise of an Option, and Beneficial Shares withheld for payment,
shall be valued for such purpose at their Fair Market Value as of the exercise
date.

 

(iii)                               The Trust shall effect the issuance or
transfer of the Beneficial Shares purchased under the Option as soon as
practicable after the exercise thereof and payment in full of the purchase price
thereof and of any amounts required by paragraph 11(m), and within a reasonable
time thereafter, such issuance or transfer shall be evidenced on the books of
the Trust. Unless otherwise determined by the Committee and provided in the
applicable Agreement, (A) no Holder or other Person exercising an Option shall
have any of the rights of a shareholder of the Trust with respect to shares
subject to an Option granted under the Plan until due exercise and full payment
has been made, and (B) no adjustment shall be made for cash dividends or other
rights for which the record date is prior to the date of such due exercise and
full payment.

 

(f)                                    Unless otherwise determined by the
Committee and provided in the applicable Agreement, Options shall not be
transferable other than by will or the laws of descent and distribution or
pursuant to a Domestic Relations Order, and, except as otherwise required
pursuant to a Domestic Relations Order, Options may be exercised during the
lifetime of the Holder thereof only by such Holder (or his or her
court-appointed legal representative).

 

(g)                                 Without shareholder approval, (i) the Trust
will not reprice, replace or regrant an outstanding Option either in connection
with the cancellation of such Option or by amending an Award Agreement to lower
the exercise price of such Option, and (ii) the Trust will not cancel
outstanding Options in exchange for cash or other Awards.

 

8.                                      Restrictions on Options.

 

(a)                                  The aggregate Fair Market Value of the
Beneficial Shares with respect to which Incentive Stock Options are exercisable
for the first time by an individual during any calendar year shall not exceed
$100,000. If an Incentive Stock Option is granted pursuant to which the
aggregate Fair Market Value of shares with respect to which it first becomes
exercisable in any calendar year by an individual exceeds the aforementioned
$100,000 limitation, the portion of such option which is in excess of the
$100,000 limitation shall be treated as a Non-statutory Stock Option pursuant to
Section 422(d)(1) of the Code. In the event that an individual is eligible to
participate in any other share option plan of the Trust or any parent or
Subsidiary of the Trust which is also intended to comply with the provisions of
Section 422 of the Code, the $100,000 limitation shall, to the extent provided
under Section 422 of the Code, apply to the aggregate number of shares for which
Incentive Stock Options may be granted under all such plans.

 

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(b)                                 Subject to the conditions in
paragraph 8(c) hereof, if applicable, the purchase price per share payable upon
the exercise of each Incentive Stock Option granted hereunder shall be as
determined by the Committee in its discretion, but shall be at least 100% of the
Fair Market Value on the date of grant.

 

(c)                                  If any Participant, on the date of grant,
is the owner of shares (as determined under Sections 422(b)(6) and 424(d) of the
Code) possessing more than 10% of the total combined voting power of all classes
of shares of the Trust or any parent or Subsidiary of the Trust, then the option
price per share subject to such Incentive Stock Option shall not be less than
110% of the Fair Market Value, and the term of the option shall not exceed five
years after the date of such grant.

 

(d)                                 The purchase price per share payable upon
the exercise of each non-statutory Option granted hereunder shall be determined
by the Committee in its discretion, and shall be at least 85% of the Fair Market
Value on the date of grant.

 

9.                                      Restricted Shares.

 

(a)                                  Subject to the limitations of the Plan, the
Committee shall designate those Eligible Persons to be granted awards of
Restricted Shares, and shall determine the time when each such Award shall be
granted. Beneficial Shares covered by awards of Restricted Shares will be issued
at the beginning of the Restriction Period. The Committee shall designate the
vesting date or vesting dates for each award of Restricted Shares, and may
prescribe other restrictions, terms, and conditions applicable to the vesting of
such Restricted Shares in addition to those provided in the Plan. The Committee
shall determine the price, if any, to be paid by the Holder for the Restricted
Shares. All determinations made by the Committee pursuant to this
paragraph 9(a) shall be specified in the Agreement.

 

(b)                                 The stock certificate or certificates
representing Restricted Shares shall be registered in the name of the Holder to
whom such Restricted Shares shall have been awarded. During the Restriction
Period, certificates representing the Restricted Shares shall bear a restrictive
legend to the effect that ownership of the Restricted Shares, and the enjoyment
of all rights appurtenant thereto, are subject to the restrictions, terms, and
conditions provided in the Plan and the applicable Agreement. Such certificates
shall remain in the custody of the Trust or its designee, and the Holder shall
deposit with the custodian stock powers or other instruments of assignment, each
endorsed in blank, so as to permit retransfer to the Trust of all or any portion
of the Restricted Shares that shall be forfeited or otherwise not become vested
in accordance with the Plan and the applicable Agreement.

 

(c)                                  Restricted Shares shall constitute issued
and outstanding Beneficial Shares. The Holder will have the right to vote such
Restricted Shares, to receive and retain cash dividends and cash distributions,
paid or distributed on such Restricted Shares, and to exercise all other rights,
powers, and privileges of a Holder of Beneficial Shares with respect to such
Restricted Shares; except, that, unless otherwise determined by the Committee
and provided in the applicable Agreement, (i) the Holder will not be entitled to
delivery of the stock certificate or certificates representing such Restricted
Shares until the Restriction Period shall have expired and unless all other
vesting requirements with respect thereto shall have been fulfilled or waived;
(ii) the Trust or its designee will retain custody of the stock certificate or
certificates representing the Restricted Shares during the Restriction Period as
provided in paragraph 9(b) above; (iii) other than cash dividends and cash
distributions as provided in this paragraph 9(c) distributions of Beneficial
Shares as a dividend in lieu of a cash dividend distribution and as the
Committee may designate, the Trust or its designee will retain custody of all
distributions (“Retained Distributions”) made or declared with respect to the
Restricted Shares (and such Retained Distributions will be subject to the same
restrictions, terms and vesting, and other conditions as are applicable to the
Restricted Shares) until such time, if ever, as the Restricted Shares with
respect to which such Retained Distributions shall have been made, paid, or
declared shall have become vested, and such Retained Distributions shall not
bear interest or be segregated in a separate account; (iv) the

 

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Holder may not sell, assign, transfer, pledge, exchange, encumber, or dispose of
the Restricted Shares or any Retained Distributions or his interest in any of
them during the Restriction Period; and (v) a breach of any restrictions, terms,
or conditions provided in the plan or established by the Committee with respect
to any Restricted Shares or Retained Distributions will cause a forfeiture of
such Restricted Shares and any Retained Distributions with respect thereto.

 

(d)                                 Upon the expiration of the Restriction
Period with respect to each award of Restricted Shares and the satisfaction of
any other applicable restrictions, terms, and conditions, (i) all or the
applicable portion of such Restricted Shares shall become vested, and (ii) any
Retained Distributions with respect to such Restricted Shares shall become
vested to the extent that the Restricted Shares related thereto shall have
become vested, all in accordance with the terms of the applicable Agreement. Any
such Restricted Shares and Retained Distributions, that shall not become vested
shall be forfeited to the Trust, and the Holder shall not thereafter have any
rights (including dividend and voting rights) with respect to such Restricted
Shares and Retained Distributions that shall have been so forfeited.

 

(e)                                  For purposes of qualifying grants of
Restricted Shares as “performance-based compensation” under Section 162(m) of
the Code, the Committee, in its sole discretion, may set restrictions based upon
the achievement of Performance Goals. The Performance Goals shall be set by the
Committee on or before the latest date permissible to enable the Restricted
Shares to qualify as “performance-based compensation” under section 162(m) of
the Code. In granting Restricted Shares that are intended to qualify under
section 162(m) of the Code, the Committee shall follow any procedures determined
by it in its sole discretion from time to time to be necessary, advisable or
appropriate to ensure qualification of the Restricted Shares under
section 162(m) of the Code.

 

10.                               Performance-Based Awards.

 

(a)                                  Eligible Persons selected by the Committee
may be granted one or more Performance Based-Awards upon the attainment of the
Performance Goals that are established by the Committee and related to one or
more of the Performance Criteria, in each case on a specified date or dates or
over a Performance Cycle determined by the Committee. The Committee, in its sole
discretion, shall determine whether or not a Performance Award is to qualify as
“performance based compensation” under Section 162(m) of the Code. The Committee
shall define the manner of calculating the Performance Criteria it selects to
use for any Performance Cycle. Depending on the Performance Criteria used to
establish such Performance Goals, the Performance Goals may be expressed in
terms of the overall performance of the Trust or the performance of an
individual. The Committee, in its sole discretion, may adjust or modify the
calculation of Performance Goals for such Performance Cycle in order to prevent
the dilution or enlargement of the rights of an individual (i) in the event of,
or in anticipation of, any unusual or extraordinary corporate item, transaction,
event or development, (ii) in recognition of, or in anticipation of, any other
unusual or nonrecurring events affecting the Trust, or the financial statements
of the Trust, or (iii) in response to, or in anticipation of, changes in
applicable laws, regulations, accounting principles, or business conditions;
provided however, that the Committee may not exercise such discretion in a
manner that would increase the Performance-Based Award granted to a Holder. Each
Performance-Based Award shall comply with the provisions set forth below.

 

(b)                                 With respect to each Performance-Based Award
granted to a Holder, if intended by the Committee to qualify as “performance
based compensation” under Section 162(m) of the Code, the Committee shall
select, within the first 90 days of a Performance Cycle, the Performance
Criteria for such grant, and the Performance Goals with respect to each
Performance Criteria (including a threshold level of performance below which no
amount will become payable with respect to such Award). Each Performance-Based
Award will specify the amount payable, or the formula for determining the amount
payable, upon achievement of the various applicable Performance Goals. The
Performance Criteria established by the Committee may be different for each
Performance Cycle and different Performance Goals may be applicable to
Performance-Based Awards to different Eligible Holders.

 

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(c)                                  Following the completion of a Performance
Cycle, the Committee shall meet to review and certify in writing whether, and to
what extent, the Performance Goals for the Performance Cycle have been achieved
and, if achieved, to calculate and certify in writing the amount of the
Performance-Based Awards earned for the Performance Cycle. The Committee shall
then determine the actual size of each Participant’s Performance-Based Award,
and, in doing so, may reduce or eliminate the amount of the Performance-Based
Award for a Participant if, in its sole judgment, such reduction or elimination
is appropriate.

 

(d)                                 The maximum number of shares of Beneficial
Interest underlying a Performance-Based Award granted to any one Eligible Person
for a Performance Cycle is an aggregate of 40,000 Beneficial Shares (subject to
adjustment as provided in Sections 3(c) and 10(a) hereof).

 

11.                               General Provisions.

 

(a)                                  If a Holder’s employment or other
relationship with the Trust shall terminate by reason of death or Disability,
unless the applicable Agreement provides otherwise: (i) each outstanding Option
granted under the Plan shall immediately become exercisable in full in respect
of the aggregate number of shares covered thereby; and (ii) the Restriction
Period applicable to each Award of Restricted Shares shall be deemed to have
expired and all such Restricted Shares and any related Retained Distributions
shall become vested; however with respect to a Performance Based Award, the
Performance Based Award shall vest only if the Performance Goals shall have been
satisfied and only to the extent set forth in the applicable Agreement.

 

(b)                                 In the event of any Approved Transaction,
Board Change or Control Purchase, notwithstanding any contrary waiting period,
installment period, vesting schedule, Restriction Period or Performance Goals in
any Agreement or in the Plan, unless the applicable Agreement provides
otherwise: (i) in the case of an Option, each such outstanding Option granted
under the Plan shall become exercisable in full in respect of the aggregate
number of shares covered thereby; and (ii) in the case of Restricted Shares, the
Restriction Period applicable to each such Award of Restricted Shares shall be
deemed to have expired and all such Restricted Shares and any related Retained
Distributions shall become vested; however, with respect to a Performance Based
Award, the Performance Based Award shall vest only as shall be provided in the
applicable Agreement. Notwithstanding the foregoing, unless otherwise provided
in the applicable Agreement, the Committee may, in its discretion, determine
that any or all outstanding Awards of any or all types granted pursuant to the
Plan will not vest or become exercisable on an accelerated basis in connection
with an Approved Transaction if effective provision has been made for the taking
of such action which, in the opinion of the Committee, is equitable and
appropriate to substitute a new Award for such Award or to assume such Award and
to make such new or assumed Award, as nearly as may be practicable, equivalent
to the old Award (before giving effect to any acceleration of the vesting or
exercisability thereof), taking into account, to the extent applicable, the kind
and amount of securities, cash, or other assets into or for which the Beneficial
Shares may be changed, converted, or exchanged in connection with the Approved
Transaction.

 

(c)                                  If a Holder’s employment shall terminate
for any reason, other than death and disability prior to the complete exercise
of an Option or during the Restriction Period with respect to any Restricted
Shares or during a Performance Cycle with respect to Performance Based Awards,
then such Option shall thereafter be exercisable, and the Holder’s rights to any
unvested Restricted Shares and Retained Distributions, and the Holder’s rights
to the Beneficial Shares underlying the Performance Based Awards shall
thereafter vest, in each case only if and to the extent provided in the
applicable Agreement; provided, however, that, unless otherwise determined by
the Committee and provided in the applicable Agreement, (i) no Option may be
exercised after the scheduled expiration date thereof; (ii) the Option shall
remain exercisable for a period of at least one year following such termination

 

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(but not later than the scheduled expiration of such Option); and (iii) any
termination of the Holder’s employment for cause will be treated in accordance
with the provisions of paragraph 11(d).

 

(d)                                 If a Holder’s employment or relationship
with the Trust or a Subsidiary of the Trust shall terminate for cause by the
Trust or such Subsidiary during the Restriction Period with respect to any
Restricted Shares, or prior to the expiration of a Performance Cycle with
respect to any Performance Based Awards or prior to the exercise of any Option
(for these purposes, cause shall have the meaning ascribed thereto in any
employment agreement to which such Holder is a party or, in the absence thereof,
shall include, but not limited to, insubordination, dishonesty, incompetence,
moral turpitude, other misconduct of any kind, and the refusal to perform his
duties and responsibilities for any reason (other than illness or incapacity)
then, unless otherwise determined by the Committee and provided in the
applicable Agreement, (i) all Options shall immediately terminate and (ii) such
Holder’s rights to all Restricted Shares and Retained Distributions and all
shares underlying Performance Based Awards shall be forfeited immediately.

 

(e)                                  Unless otherwise determined by the
Committee and provided in the applicable Agreement, Awards made under the Plan
shall not be affected by any change of employment so long as the Holder
continues to be an employee of the Trust or any Subsidiary of the Trust.

 

(f)                                    Nothing contained in the Plan or in any
Award, and no action of the Trust or the Committee with respect thereto, shall
confer or be construed to confer on any Holder any right to continue in the
employ of the Trust or any of its Subsidiaries or interfere in any way with the
right of the Trust or any Subsidiary of the Trust to terminate the employment of
the Holder at any time, with or without cause, subject, however, to the
provisions of any employment agreement between the Holder and the Trust or any
Subsidiary of the Trust.

 

(g)                                 Except as set forth herein, no right or
benefit under the Plan shall be subject to anticipation, alienation, sale,
assignment, hypothecation, pledge, exchange, transfer, encumbrance, or charge,
and any attempt to anticipate, alienate, sell, assign, hypothecate, pledge,
exchange, transfer, encumber or charge the same shall be void. No right or
benefit hereunder shall in any manner be liable for or subject to the debts,
contracts, liabilities, or torts of the Person entitled to such benefits.

 

(h)                                 Each grant of an Option under the Plan shall
be evidenced by a stock option agreement; each award of Restricted Shares shall
be evidenced by a restricted shares agreement; and each Performance Based Award
shall be evidenced by a Performance Based Award Agreement, each in such form and
containing such terms and provisions not inconsistent with the provisions of the
Plan as the Committee from time to time shall approve; provided, however, that
if more than one type of Award is made to the same Holder, such Awards may be
evidenced by a single Agreement with such Holder. Each grantee of an Option,
Restricted Shares or Performance Based Awards shall be notified promptly of such
grant, and a written Agreement shall be executed and delivered by the Trust. Any
such written Agreement may contain (but shall not be required to contain) such
provisions as the Committee deems appropriate (i) to insure that the penalty
provisions of Section 4999 of the Code will not apply to any stock or cash
received by the Holder from the Trust or (ii) to provide cash payments to the
Holder to mitigate the impact of such penalty provisions upon the Holder. Any
such Agreement may be supplemented or amended from time to time as approved by
the Committee as contemplated by paragraph 11(j) (ii).

 

(i)                                     Every Holder may designate a beneficiary
or beneficiaries and may change such designation from time to time by filing a
written designation of beneficiary or beneficiaries with the Committee on a form
to be prescribed by it, provided that no such designation shall be effective
unless so filed prior to the death of such Holder.

 

(j)                                     (i) Unless the Plan shall theretofore
have been terminated as hereinafter provided, no Awards may be made under the
Plan on or after the tenth anniversary of the Effective Date. The Plan may be
terminated at any time prior to the tenth anniversary of the Effective Date and
may, from time to time,

 

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be suspended or discontinued or modified or amended if such action is deemed
advisable by the Committee.

 

(ii)                                  No termination, modification or amendment
of the Plan may, without the consent of the Holder to whom any Award shall
theretofore have been granted, adversely affect the rights of such Holder with
respect to such Award. No modification, extension, renewal, or other change in
any Award granted under the Plan shall be made after the grant of such Award,
unless the same is consistent with the provisions of the Plan. With the consent
of the Holder and subject to the terms and conditions of the Plan, the Committee
may amend outstanding Agreements with any Holder, including, without limitation,
any amendment which would (A) accelerate the time or times at which the Award
may be exercised and/or (B) extend the scheduled expiration date of the Award.
Without limiting the generality of the foregoing, the Committee may, but solely
with the Holder’s consent unless otherwise provided in the Agreement, agree to
cancel any Award under the Plan and grant a new Award in substitution therefore,
provided that the Award so substituted shall satisfy all of the requirements of
the Plan as of the date such new Award is made. Nothing contained in the
foregoing provisions of this paragraph 11(j)(ii) shall be construed to prevent
the Committee from providing in any Agreement that the rights of the Holder with
respect to the Award evidenced thereby shall be subject to such rules and
regulations as the Committee may, subject to the express provisions of the Plan,
adopt from time to time or impair the enforceability of any such provision.

 

(k)                                  The amendment, suspension or termination of
the Plan shall not, without the consent of the Holder, alter or impair any
rights or obligations under any Award theretofore granted to such Holder. No
Award may be granted during any period of suspension or after termination of the
Plan.

 

(l)                                     The obligation of the Trust with respect
to Awards shall be subject to all applicable laws, rules, and regulations and
such approvals by any governmental agencies as may be required, including,
without limitation, the effectiveness of any registration statement required
under the Securities Act of 1933, and the rules and regulations of any
securities exchange or association on which the Beneficial Shares may be listed
or quoted. For so long as any Beneficial Shares are registered under the
Exchange Act, the Company shall use its reasonable efforts to comply with any
legal requirements (i) to maintain a registration statement in effect under the
Securities Act of 1933 with respect to all Beneficial Shares that may be issued
to Holders under the Plan and (ii) to file in a timely manner all reports
required to be filed by it under the Exchange Act.

 

(m)                               The Trust’s obligation to deliver Beneficial
Shares or pay cash in respect of any Award under the Plan shall be subject to
applicable federal, state, and local tax withholding requirements. Federal,
state, and local withholding tax due at the time of an Award, upon the exercise
of any Option or upon the vesting of, or expiration of restrictions with respect
to, Restricted Shares may, in the discretion of the Committee, be paid in
Beneficial Shares already owned by the Holder or through the withholding of
shares otherwise issuable to such Holder, upon such terms and conditions as the
Committee shall determine. If the Holder shall fail to pay, or make arrangements
satisfactory to the Committee for the payment to the Trust of, all such federal,
state and local taxes required to be withheld by the Trust, then the Trust
shall, to the extent permitted by law, have the right to deduct from any payment
of any kind otherwise due to such Holder an amount equal to any federal, state,
or local taxes of any kind required to be withheld by the Trust with respect to
such Award.

 

(n)                                 The adoption of the Plan by the Board shall
not be construed as creating any limitations on the power of the Board to adopt
such other incentive arrangements as it may deem desirable, including, without
limitation, the granting of stock options and the awarding of stock and cash
otherwise than under the Plan, and such arrangements may be either generally
applicable or applicable only in specific cases.

 

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(o)                                 By acceptance of an Award, unless otherwise
provided in the applicable Agreement, each Holder shall be deemed to have agreed
that such Award is special incentive compensation that will not be taken into
account, in any manner, as salary, compensation, or bonus in determining the
amount of any payment under any pension, retirement, or other employee benefit
plan, program, or policy of the Trust or any Subsidiary of the Trust. In
addition, each beneficiary of a deceased Holder shall be deemed to have agreed
that such Award will not affect the amount of any life insurance coverage, if
any, provided by the Trust on the life of the Holder which is payable to such
beneficiary under any life insurance plan covering employees of the Trust or any
Subsidiary of the Trust.

 

(p)                                 Neither the Trust nor any Subsidiary of the
Trust shall be required to segregate any cash or any Beneficial Shares which may
at any time be represented by Awards, and the Plan shall constitute an
“unfunded” plan of the Trust. Neither the Trust nor any Subsidiary of the Trust
shall, by any provisions of the Plan, be deemed to be a trustee of any
Beneficial Shares or any other property, and the liabilities of the Trust and
any Subsidiary of the Trust to any employee pursuant to the Plan shall be those
of a debtor pursuant to such contract obligations as are created by or pursuant
to the Plan, and the rights of any employee, former employee, or beneficiary
under the Plan shall be limited to those of a general creditor of the Trust or
the applicable Subsidiary of the Trust as the case may be. In its sole
discretion, the Board may authorize the creation of trusts or other arrangements
to meet the obligations of the Trust under the Plan, provided, however, that the
existence of such trusts or other arrangements is consistent with the unfunded
status of the Plan.

 

(q)                                 The Plan shall be governed by, and construed
in accordance with, the laws of the Commonwealth of Massachusettes.

 

(r)                                    The delivery of any Beneficial Shares and
the payment of any amount in respect of an Award shall be for the account of the
Trust or the applicable Subsidiary of the Trust, as the case may be, and any
such delivery or payments shall not be made until the recipient shall have paid
or made satisfactory arrangements for the payment of any applicable withholding
taxes as provided in Paragraph 11(m).

 

(s)                                  Each certificate evidencing Beneficial
Shares subject to an Award shall bear such legends as the Committee deems
necessary or appropriate to reflect or refer to any terms, conditions, or
restrictions of the Award applicable to such shares, including, without
limitation, any to the effect that the shares represented thereby may not be
disposed of unless the Trust has received an opinion of counsel, acceptable to
the Trust, that such disposition will not violate any federal or state
securities laws.

 

(t)                                    The grant of Awards pursuant to the Plan
shall not affect in any way the right of power of the Trust to make
reclassifications, reorganizations, or other changes of or to its capital or
business structure or to merge, consolidate, liquidate, sell, or otherwise
dispose of all or any part of its business or assets.

 

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