EX-10.5 TNP INDEPENDENT DIRECTORS COMPENSATION






EXHIBIT 10.5



 






TNP STRATEGIC RETAIL TRUST, INC.

INDEPENDENT DIRECTORS COMPENSATION PLAN



 





 









 









TNP STRATEGIC RETAIL TRUST, INC.

INDEPENDENT DIRECTORS COMPENSATION PLAN




ARTICLE 1

PURPOSE




     1.1. PURPOSE. The purpose of the Plan is to attract, retain and compensate
highly-qualified individuals who are not employees of TNP Strategic Retail Trust, Inc. (the
“Company”) or any of its subsidiaries or affiliates for service as members of the Board by
providing them with competitive compensation and an ownership interest in the Stock of the Company.
The Company intends that the Plan will benefit the Company and its stockholders by allowing
Independent Directors to have a personal financial stake in the Company through an ownership
interest in the Stock and will closely associate the interests of Independent Directors with that
of the Company’s stockholders.



     1.2. ELIGIBILITY. Independent Directors of the Company who are Eligible Participants
shall automatically be participants in the Plan.



ARTICLE 2

DEFINITIONS




     2.1. DEFINITIONS. Capitalized terms used herein and not otherwise defined shall have
the meanings given such terms in the Incentive Plan. Unless the context clearly indicates
otherwise, the following terms shall have the following meanings:



     “Base
Annual  Retainer” means the annual retainer (excluding Meeting Fees and
expenses) payable by the Company to an Independent Director pursuant to Section 5.1 hereof for
service as a director of the Company (i.e., excluding any Supplemental Annual Retainer), as
such amount may be changed from time to time.



     “Effective
Date” of the Plan has the meaning set forth in Section 9.4 of the Plan.



     “Eligible Participant” means any person who is an Independent Director on the Effective Date
or becomes an Independent Director while this Plan is in effect; except that during any period a
director is prohibited from participating in the Plan by his or her employer or otherwise waives
participation in the Plan, such director shall not be an Eligible Participant.



     “Incentive Plan” means the TNP Strategic Retail Trust, Inc. 2009 Incentive Plan, or any
subsequent equity compensation plan approved by the Board and designated as the Incentive Plan for
purposes of this Plan.



     “Meeting Fees” has the meaning set forth in Section 5.3 of the Plan.



     “Plan” means this TNP Strategic Retail Trust, Inc. Independent Directors
Compensation Plan, as amended from time to time.



 









 





     “Plan Year(s)” means the approximate twelve-month periods between annual meetings of the
stockholders of the Company, which, for purposes of the Plan, are the periods for which annual
retainers are earned.



     “Supplemental Annual  Retainer” means the annual retainer (excluding Meeting Fees and
expenses) payable by the Company to an Independent Director pursuant to Section 5.2 hereof for
service as the chair of the Audit Committee of the Board, as such amount may be changed from time
to time.



ARTICLE 3

ADMINISTRATION




     3.1. ADMINISTRATION. The Plan shall be administered by the Board. Subject to the
provisions of the Plan, the Board shall be authorized to interpret the Plan, to establish, amend
and rescind any rules and regulations relating to the Plan, and to make all other determinations
necessary or advisable for the administration of the Plan. The Board’s interpretation of the Plan,
and all actions taken and determinations made by the Board pursuant to the powers vested in it
hereunder, shall be conclusive and binding upon all parties concerned, including the Company, its
stockholders and persons granted awards under the Plan. The Board may appoint a plan administrator
to carry out the ministerial functions of the Plan, but the administrator shall have no other
authority or powers of the Board.



     3.2. RELIANCE. In administering the Plan, the Board may rely upon any information
furnished by the Company, its public accountants and other experts. No individual will have
personal liability by reason of anything done or omitted to be done by the Company or the Board in
connection with the Plan. This limitation of liability shall not be exclusive of any other
limitation of liability to which any such person may be entitled under the Company’s certificate of
incorporation or otherwise.



     3.3. INDEMNIFICATION. Each person who is or has been a member of the Board or who
otherwise participates in the administration or operation of the Plan shall be indemnified by the
Company against, and held harmless from, any loss, cost, liability or expense that may be imposed
upon or incurred by him or her in connection with or resulting from any claim, action, suit or
proceeding in which such person may be involved by reason of any action taken or failure to act
under the Plan and shall be fully reimbursed by the Company for any and all amounts paid by such
person in satisfaction of judgment against him or her in any such action, suit or proceeding,
provided he or she will give the Company an opportunity, by written notice to the Board, to defend
the same at the Company’s own expense before he or she undertakes to defend it on his or her own
behalf. This right of indemnification shall not be exclusive of any other rights of
indemnification to which any such person may be entitled under the Company’s Charter, bylaws,
contract or Maryland law.



2









 





ARTICLE 4

SHARES




     4.1.
SOURCE OF SHARES FOR THE PLAN. The Options, shares of
stock or other equity  that may be
issued pursuant to the Plan shall be issued under the Incentive Plan, subject to all of the terms
and conditions of the Incentive Plan. The terms contained in the Incentive Plan are incorporated
into and made a part of this Plan with respect to Options, shares of
stock or other equity  granted pursuant
hereto and any such  grant shall be governed by and construed in accordance with the Incentive
Plan. In the event of any actual or alleged conflict between the provisions of the Incentive Plan
and the provisions of this Plan, the provisions of the Incentive Plan shall be controlling and
determinative. This Plan does not constitute a separate source of Shares for the grant of the
Options or stock  described herein.



ARTICLE 5

RETAINERS, MEETING FEES AND EXPENSES




     5.1. BASE ANNUAL  RETAINER. Each Eligible Participant shall be paid a Base Annual
 Retainer for service as a director during each Plan Year, payable in
such form as shall be elected by the Eligible Participant in
accordance with Section 6.1.

 The amount of the Base Annual
Retainer shall be established from time to time by the Board. Until changed by the Board, the Base
Annual  Retainer for a full Plan Year shall be $30,000. The Base Annual  Retainer shall be
payable in approximately equal quarterly installments in advance, beginning on the date of the
annual stockholders meeting. A pro rata Base Annual  Retainer will be paid to any person who
becomes an Eligible Participant on a date other than the beginning of a Plan Year, based on the
number of full months he or she serves as an Independent Director during the Plan Year. Payment of
such prorated Base Annual  Retainer shall begin on the date that the person first becomes an
Eligible Participant, and shall resume on a quarterly basis thereafter. In no event shall any
installment of the Base Annual  Retainer be paid later than March 15 of the year following the
year to which such installment relates.



     5.2. AUDIT COMMITTEE CHAIRPERSON SUPPLEMENTAL ANNUAL  RETAINER. The chairperson
of the Audit Committee of the Board shall be paid a Supplemental Annual  Retainer for his or
her service as such chairperson during a Plan Year, payable in such form as
shall be elected by such chairperson in accordance with Section 6.1
and  payable at the same times as installments of
the Base Annual Cash  Retainer are paid. In no event shall any installment of the Supplemental
Annual  Cash Retainer be paid later than March 15 of the year following the year to which such
retainer relates. The amount of the Supplemental Annual  Retainer for the chairperson of the
Audit Committee shall be established from time to time by the Board. Until changed by the Board,
the Supplemental Annual  Retainer for a full Plan Year for the chairperson of the Audit
Committee shall be $10,000. A pro rata Supplemental Annual  Retainer will be paid to any
Eligible Participant who becomes the chairperson of the Audit Committee of the Board on a date
other than the beginning of a Plan Year, based on the number of full months he or she serves as a
chairperson of the Audit Committee of the Board.



3









 




     5.3. MEETING FEES. Each Independent Director shall be paid meeting fees for attending
meetings of the Board or its committees (“Meeting Fees”)
payable in such form as shall be elected by  the Eligible
Participant in accordance with Section 6.2. The amount of the Meeting Fees shall be
established from time to time by the Board. Until changed by the Board, the Meeting Fee for
attending a meeting of the Board in person shall be $2,500, or $1,000 for participation in a
telephonic meeting of the Board provided that minutes are kept at such telephonic meeting. Until
changed by the Board, the Meeting Fee for attending a meeting of a committee of the Board in person
shall be $2,000, or $1,000 for participation in a telephonic meeting of a committee of the Board
provided that minutes are kept at such telephonic meeting. If an Independent Director attends a
Board meeting and a committee meeting on a single day, he or she shall only receive a Meeting Fee
for the Board meeting attended. For purposes of this provision, casual or unscheduled conferences
among directors shall not constitute an official meeting. Meeting Fees shall be payable on the
date of the applicable meeting to which they relate.



     5.4. TRAVEL EXPENSE REIMBURSEMENT. All Eligible Participants shall be reimbursed for
reasonable travel expenses (including spouse’s expenses to attend events to which spouses are
invited) in connection with attendance at meetings of the Board and its committees, or other
Company functions at which the Chief Executive Officer or chairperson of the Board requests the
Independent Director to participate. Notwithstanding the foregoing, the Company’s reimbursement
obligations pursuant to this Section 5.4 shall be limited to expenses incurred during such
director’s service as an Independent Director. Such payments will be made within 30 days after
delivery of the Independent Director’s written requests for payment, accompanied by such evidence
of expenses incurred as the Company may reasonably require, but in no event later than the last day
of the Independent Director’s tax year following the tax year in which the expense was incurred.
The amount reimbursable in any one tax year shall not affect the amount reimbursable in any other
tax year. Independent Directors’ right to reimbursement pursuant to this Section 5.4 shall not be
subject to liquidation or exchange for another benefit.


ARTICLE 6

ALTERNATIVE FORMS OF PAYMENT FOR BASE ANNUAL RETAINER, 
SUPPLEMENTAL ANNUAL RETAINER AND MEETING FEES




     6.1. PAYMENT OF BASE ANNUAL RETAINER AND SUPPLEMENTAL ANNUAL RETAINER. At the election of each
Eligible Participant, the Base Annual Retainer or the Supplemental Annual Retainer for a given Plan
Year shall be either (i) payable in cash in approximately equal quarterly installments in advance,
beginning on the date of the annual stockholders meeting, or (ii) subject to share availability
under the Incentive Plan, payable by a grant on the day an installment of the Base Annual Retainer
or Supplemental Annual Retainer is normally paid (the “Stock Grant Date”) of that number of shares
of Stock determined by dividing the Base Annual Retainer or Supplemental Annual Retainer
installment otherwise payable by the Fair Market Value per share of Stock on the Stock Grant Date
(rounded up to the nearest whole share). Any shares of Stock granted under the Plan as the Base
Annual Retainer or Supplemental Annual Retainer under clause (ii) above will be 100% vested and
nonforfeitable as of the Stock Grant Date, and the Eligible Participant receiving such shares of
Stock (or his or her custodian, if any) will have immediate rights of ownership in the shares of
Stock, including the right to vote the shares of Stock and the right to receive dividends or other
distributions thereon.



     6.2. PAYMENT OF MEETING FEES. At the election of each Eligible Participant, the
Meeting Fees to be earned during a Plan Year by such Eligible Participant shall be either (i)
payable in cash at each meeting date or such other date(s) on which such fees are normally paid, or
(ii) subject to share availability under the Incentive Plan, payable by a grant on the day
following each meeting date (the “Meeting Fee Stock Grant Date”) of that number of shares of Stock
determined by dividing the Meeting Fees otherwise payable on the meeting date by the Fair Market
Value per share of Stock on the Meeting Fee Stock Grant Date (rounded up to the nearest whole
share). Any shares of Stock granted under the Plan as Meeting Fees under clause (ii) above will be
100% vested and nonforfeitable as of the Meeting Fee Stock Grant Date, and the Eligible Participant
receiving such shares of Stock (or his or her custodian, if any) will have immediate rights of
ownership in the shares of Stock, including the right to vote the shares of Stock and the right to
receive dividends or other distributions thereon.



     6.3. TIMING AND MANNER OF PAYMENT ELECTION. Each Eligible Participant shall elect the
form of payment desired for his or her Base Annual Retainer, Supplemental Annual Retainer (if
applicable) and Meeting Fees for a Plan Year by delivering a valid election form in such form as
the Board or the plan administrator shall prescribe (the “Election Form”) to the Board or the plan
administrator prior to the beginning of such Plan Year, which will be effective as of the first day
of the Plan Year beginning after the Board or the plan administrator receives the Eligible
Participant’s Election Form. The Election Form signed by the Eligible Participant prior to the
Plan Year will be irrevocable for the coming Plan Year. However, prior to the commencement of the
following Plan Year, an Eligible Participant may change his or her election for future Plan Years
by executing and delivering a new Election Form indicating different choices. If an Eligible
Participant fails to deliver a new Election Form prior to the commencement of the new Plan Year,
his or her Election Form in effect during the previous Plan Year shall continue in effect during
the new Plan Year. If no Election Form is filed or effective, or if there are insufficient shares
of Stock in the Incentive Plan, the Base Annual Retainer, Supplemental Annual Retainer (if
applicable) and Meeting Fees will be paid in cash.




ARTICLE
7

EQUITY COMPENSATION




     7.1. INITIAL OPTION GRANT. Subject to share availability under the Incentive Plan,
each Independent Director shall receive on the first date he or she is initially elected or
appointed to the Board, an Option to purchase 10,000 shares of Stock. Notwithstanding the
foregoing, each Independent Director elected or appointed to the Board prior to the date that the
Company raises a minimum of $2,000,000 of subscription proceeds in the Company’s initial public
offering (the “Minimum Offering Date”) and who remains an Independent Director as of the Minimum
Offering Date shall receive such initial Option grant on the Minimum Offering Date.



     7.2. SUBSEQUENT OPTION GRANT. Subject to share availability under the Incentive Plan,
upon subsequent re-election of the Independent Director to the Board, such director shall receive
an Option to purchase 5,000 shares of Stock.



4









 





     7.3. LIMITATION ON OPTION GRANTS. Notwithstanding anything herein to the contrary, no
Option shall be granted pursuant to Section 7.1 or Section 7.2 on a given date if, as a result of
such grant, the total number of Shares subject to Options outstanding as of such date would exceed
10% of the number of Shares outstanding as of such date. In such event, the grant of such Options
shall be delayed until such time as the grant would not violate the
provisions of this Section 7.3
(the “Delayed Grant Date”). The grant of the delayed Options shall be subject to the approval of
the Board and shall be limited to Independent Directors who (a) otherwise would have received a
grant on the original date under Section 7.1 or 7.2, and (b) remain Independent Directors as of the
Delayed Grant Date. For all purposes, the grant date of the delayed Option shall be the Delayed
Grant Date and not the original date provided in Section 7.1 or
Section 7.2.



     7.4.
TERMS AND CONDITIONS OF OPTIONS. Options granted under this Article 7 shall be
evidenced by a written Award Certificate, and shall be subject to the terms and conditions
described below and of the Incentive Plan.




     (i) EXERCISE PRICE. The exercise price per share under an Option shall be
determined by the Board, provided that the exercise price for any Option shall not be less
than the Fair Market Value on the Grant Date of the Option.




     (ii) OPTION TERM. Subject to earlier termination as provided herein or in the
Award Certificate, the Option shall expire on the tenth anniversary of the Grant Date.




     (iii)
VESTING. Each Option granted pursuant to this Article 7 shall, unless
earlier terminated as provided herein or in the Award Certificate, vest and become
exercisable as to one-third (1/3) of the shares on the Grant Date and as to one-third (1/3)
of the shares on each of the first two (2) anniversaries of the Grant Date. Notwithstanding
the foregoing, all Options granted under this Article 7 shall become fully vested and
exercisable on the earlier occurrence of (i) the termination of the optionee’s service as a
director of the Company due to his or her death or Disability, or (ii) a Change in Control
of the Company. If the optionee’s service as a director of the Company (whether or not in
an Independent Director capacity) terminates other than as described in clause (i) of the
foregoing sentence, then the optionee shall forfeit all of his or her right, title and
interest in and to any unvested Options as of the date of such termination from the Board.




     (iv) RESTRICTIONS ON TRANSFER. The limitations on transfer provision of the
Incentive Plan shall apply with respect to equity awards outstanding or to be granted
pursuant to this Plan.



5









 





ARTICLE
8

AMENDMENT, MODIFICATION AND TERMINATION




     8.1. AMENDMENT, MODIFICATION AND TERMINATION. The Board may, at any time and from
time to time, amend, modify or terminate the Plan without stockholder approval; provided, however,
that if an amendment to the Plan would, in the reasonable opinion of the Board, require stockholder
approval under applicable laws, policies or regulations or the applicable listing or other
requirements of a securities exchange on which the Stock is listed or traded, then such amendment
shall be subject to stockholder approval; and provided further, that the Board may condition any
other amendment or modification on the approval of stockholders of the Company for any reason.



ARTICLE
9

GENERAL PROVISIONS




     9.1. ADJUSTMENTS. The adjustment provisions of the Incentive Plan shall apply with
respect to Options or other equity awards outstanding or to be granted pursuant to this Plan.



     9.2. DURATION OF THE PLAN. The Plan shall remain in effect until terminated by the
Board.



     9.3. EXPENSES OF THE PLAN. The expenses of administering the Plan shall be borne by
the Company.



     9.4.
EFFECTIVE DATE. The Plan was originally adopted by the
Board on April 14, 2009 and
shall be effective as of the date  that the Incentive Plan is approved
by both the Board and the stockholders of the Company (the “Effective Date”).



*****




     The foregoing is hereby acknowledged as being the TNP Strategic Retail Trust, Inc. Independent
Directors Compensation Plan as adopted by the Board.



 




	 	 	 	 	 
	 	TNP STRATEGIC RETAIL TRUST, INC.


 	 
	 	By: