EX-10.44






EXHIBIT 10.44




 





COLONIAL PROPERTIES TRUST




2008 OMNIBUS INCENTIVE PLAN




 





 









 





EXHIBIT
10.44



COLONIAL PROPERTIES TRUST

2008 OMNIBUS INCENTIVE PLAN




          Colonial Properties Trust, an Alabama real estate investment trust (the “Company”), sets forth
herein the terms of its 2008 Omnibus Incentive Plan (the “Plan”), as follows:




1. PURPOSE




          The Plan is intended to enhance the Company’s and its Affiliates’ (as defined herein) ability
to attract and retain highly qualified officers, trustees, key employees, and other persons, and to
motivate such persons to serve the Company and its Affiliates and to expend maximum effort to
improve the business results and earnings of the Company, by providing to such persons an
opportunity to acquire or increase a direct proprietary interest in the operations and future
success of the Company. To this end, the Plan provides for the grant of share options, share
appreciation rights, restricted shares, share units (including deferred share units), and
unrestricted shares. Any of these awards may, but need not, be made as performance incentives to
reward attainment of annual or long-term performance goals in accordance with the terms hereof.
Share options granted under the Plan may be non-qualified share options or incentive share options,
as provided herein, except that share options granted to outside trustees and any consultants or
advisers providing services to the Company or an Affiliate shall in all cases be non-qualified
share options.




2. DEFINITIONS




          For purposes of interpreting the Plan and related documents (including Award Agreements), the
following definitions shall apply:




     2.1 “Affiliate” means, with respect to the Company, any company or other trade or business
that controls, is controlled by or is under common control with the Company within the meaning of
Rule 405 of Regulation C under the Securities Act, including, without limitation, any Subsidiary.
For purposes of granting share options or share appreciation rights, an entity may not be
considered an Affiliate unless the Company holds a “controlling interest” in such entity, where the
term “controlling interest” has the same meaning as provided in Treasury Regulation
1.414(c)-2(b)(2)(i), provided that the language “at least 50 percent” is used instead of “at least
80 percent” and, provided further, that where granting of share options or share appreciation
rights is based upon a legitimate business criteria, the language “at least 20 percent” is used
instead of “at least 80 percent” each place it appears in Treasury Regulation 1.414(c)-2(b)(2)(i).



     2.2 “Award” means a grant of an Option, Share Appreciation Right, Restricted Share,
Unrestricted Share, Share Unit, Performance Share, or Performance Unit under the Plan.



     2.3 “Award Agreement” means the agreement between the Company and a Grantee that evidences and
sets out the terms and conditions of an Award.



     2.4 “Benefit Arrangement” shall have the meaning set forth in Section 15 hereof.



     2.5 “Board” means the Board of Trustees of the Company.



     2.6 “Cause” means, as determined by the Board and unless otherwise provided in an applicable
agreement with the Company or an Affiliate, (i) gross negligence or willful misconduct in
connection with the performance of duties; (ii) conviction of a criminal offense (other than minor
traffic offenses); or (iii) material breach of any term of any employment, consulting or other
services, confidentiality, intellectual property or non-competition agreements, if any, between the
Service Provider and the Company or an Affiliate.



     2.7 “Code” means the Internal Revenue Code of 1986, as now in effect or as hereafter amended.



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     2.8 “Committee” means a committee of, and designated from time to time by resolution of, the
Board, which shall be constituted as provided in Section 3.2.



     2.9 “Company” means Colonial Properties Trust.



     2.10 “Corporate Transaction” means (i) the dissolution or liquidation of the Company or a
merger, consolidation, or reorganization of the Company with one or more other entities in which
the Company is not the surviving entity, (ii) a sale of substantially all of the assets of the
Company to another person or entity, or (iii) any transaction (including without limitation a
merger or reorganization in which the Company is the surviving entity) which results in any person
or entity owning 50% or more of the combined voting power of all classes of shares of the Company.



     2.11 “Covered Employee” means a Grantee who is a covered employee within the meaning of
Section 162(m)(3) of the Code.



     2.12 “Disability” means the Grantee is unable to perform each of the essential duties of such
Grantee’s position by reason of a medically determinable physical or mental impairment which is
potentially permanent in character or which can be expected to last for a continuous period of not
less than 12 months; provided, however, that, with respect to rules regarding expiration of an
Incentive Share Option following termination of the Grantee’s Service, Disability shall mean the
Grantee is unable to engage in any substantial gainful activity by reason of a medically
determinable physical or mental impairment which can be expected to result in death or which has
lasted or can be expected to last for a continuous period of not less than 12 months.



     2.13 “Effective Date” means March 7, 2008, the date the Plan was approved by the Board.



     2.14 “Exchange Act” means the Securities Exchange Act of 1934, as now in effect or as
hereafter amended.



     2.15 “Fair Market Value” means the value of a Share, determined as follows: if on the Grant
Date or other determination date the Shares are listed on an established national or regional stock
exchange, or are publicly traded on an established securities market, the Fair Market Value of a
Share shall be the closing price of the Shares on such exchange or in such market (if there is more
than one such exchange or market the Board shall determine the appropriate exchange or market) on
the Grant Date or such other determination date (or if there is no such reported closing price, the
Fair Market Value shall be the mean between the highest bid and lowest asked prices or between the
high and low sale prices on such trading day) or, if no sale of Shares is reported for such trading
day, on the next preceding day on which any sale shall have been reported. If the Shares are not
listed on such an exchange or traded on such a market, Fair Market Value shall be the value of the
Shares as determined by the Board by the reasonable application of a reasonable valuation method,
in a manner consistent with Code Section 409A.



     2.16 “Family Member” means a person who is a spouse, former spouse, child, stepchild,
grandchild, parent, stepparent, grandparent, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother, sister, brother-in-law, or sister-in-law, including adoptive
relationships, of the Grantee, any person sharing the Grantee’s household (other than a tenant or
employee), a trust in which any one or more of these
persons have more than fifty percent of the beneficial interest, a foundation in which any one
or more of these persons (or the Grantee) control the management of assets, and any other entity in
which one or more of these persons (or the Grantee) own more than fifty percent of the voting
interests.



     2.17 “General Partner” means Colonial Properties Trust, the general partner of Colonial Realty
Limited Partnership.



     2.18 “Grant Date” means, as determined by the Board, the latest to occur of (i) the date as of
which the Board approves an Award, (ii) the date on which the recipient of an Award first becomes
eligible to receive an Award under Section 6 hereof, or (iii) such other date as may be specified
by the Board.



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     2.19 “Grantee” means a person who receives or holds an Award under the Plan.



     2.20 “Incentive Share Option” means an “incentive stock option” within the meaning of Section
422 of the Code, or the corresponding provision of any subsequently enacted tax statute, as amended
from time to time.



     2.21 “Non-qualified Share Option” means an Option that is not an Incentive Share Option.



     2.22
“Operating Partnership” means Colonial Realty Limited Partnership.



     2.23 “Option” means an
option to purchase one or more Shares pursuant to the Plan.



     2.24 “Option Price” means the
exercise price for each Share subject to an Option.



     2.25 “Other Agreement” shall have the
meaning set forth in Section 15 hereof.



     2.26 “Outside Trustee” means a member of the Board who is not an officer or employee of the
Company.



     2.27 “Partnership Agreement” means the Third Amended and Restated Agreement of Limited
Partnership of Colonial Realty Limited Partnership, as amended and/or restated from time to time.



     2.28 “Performance Period” means the period of time during which the performance goals must be
met in order to determine the degree of payout and/or vesting with respect to an Award.



     2.27 “Performance Share” means an Award under Section 14 herein and subject to the terms of
this Plan, denominated in Shares, the value of which at the time it is payable is determined as a
function of the extent to which corresponding performance criteria have been achieved.



     2.28 “Performance Unit” means an Award under Section 14 herein and subject to the terms of
this Plan, denominated in units, the value of which at the time it is payable is determined as a
function of the extent to which corresponding performance criteria have been achieved.



     2.29 “Plan” means this Colonial Properties Trust 2008 Omnibus Incentive Plan.



     2.30 “Prior Plans” means the Company’s Third Amended and Restated Employee Share Option and
Restricted Share Plan, the Non-Employee Trustee Share Plan and the Trustee Share Option Plan.



     2.31 “Purchase Price” means the purchase price for each Share pursuant to a grant of
Restricted Shares or Unrestricted Shares.



     2.32 “Reporting Person” means a person who is required to file reports under Section 16(a) of
the Exchange Act.



     2.33 “Restricted Shares” means Shares awarded to a Grantee pursuant to Section 11 hereof.



     2.34 “SAR Exercise Price” means the per share exercise price of a SAR granted to a Grantee
under
Section 10 hereof.



     2.35 “Securities Act” means the Securities Act of 1933, as now in effect or as hereafter
amended.



     2.36 “Service” means service as a Service Provider to the Company or an Affiliate. Unless
otherwise stated in the applicable Award Agreement, a Grantee’s change in position or duties shall
not result in interrupted or terminated Service, so long as such Grantee continues to be a Service
Provider to the



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Company or an Affiliate. Subject to the preceding sentence, whether a termination of Service shall
have occurred for purposes of the Plan shall be determined by the Board, which determination shall
be final, binding and conclusive.



     2.37 “Service Provider” means an employee, officer or trustee of the Company or an Affiliate,
or a consultant or adviser (who is a natural person) currently providing services to the Company or
an Affiliate.



     2.38 “Share” means a common share of beneficial interest, par value $.01 per share, of the
Company.



     2.39 “Share Appreciation Right” or “SAR” means a right granted to a Grantee under Section 10
hereof.



     2.40 “Share Unit” means a bookkeeping entry representing the equivalent of one Share awarded
to a Grantee pursuant to Section 11 hereof.



     2.41 “Subsidiary” means any “subsidiary corporation” of the Company within the meaning of
Section 424(f) of the Code.



     2.42 “Substitute Awards” means Awards granted upon assumption of, or in substitution for,
outstanding awards previously granted by a company or other entity acquired by the Company or any
Affiliate or with which the Company or any Affiliate combines.



     2.43 “Ten Percent Shareholder” means an individual who owns more than ten percent (10%) of the
total combined voting power of all classes of outstanding Shares of the Company, its parent or any
of its Subsidiaries. In determining share ownership, the attribution rules of Section 424(d) of the
Code shall be applied.



     2.44“Unit Option” means an option to purchase one or more Units pursuant to the Plan.



     2.45 “Units” means units of partnership interest of the Operating Partnership (but does not
include preferred interests in the Operating Partnership).



     2.44 “Unrestricted Shares” means an Award pursuant to Section 12 hereof.



3. ADMINISTRATION OF THE PLAN




     3.1. Board



          The Board shall have such powers and authorities related to the administration of the Plan as
are consistent with the Company’s declaration of trust and by-laws and applicable law. The Board
shall have full power and authority to take all actions and to make all determinations required or
provided for under the Plan, any Award or any Award Agreement, and shall have full power and
authority to take all such other actions and make all such other determinations not inconsistent
with the specific terms and provisions of the Plan that the Board deems to be necessary or
appropriate to the administration of the Plan, any Award or any Award Agreement. All such actions
and determinations shall be by the affirmative vote of a majority of the members of the Board
present at a meeting or by unanimous consent of the Board executed in writing in
accordance with the Company’s declaration of trust and by-laws and applicable law. The
interpretation and construction by the Board of any provision of the Plan, any Award or any Award
Agreement shall be final, binding and conclusive.




     3.2. Committee.



          The Board from time to time may delegate to the Committee such powers and authorities related
to the administration and implementation of the Plan, as set forth in Section 3.1 above and other
applicable provisions, as the Board shall determine, consistent with the declaration of trust and
by-laws of the Company and applicable law.




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     (i) Except as provided in Subsection (ii) and except as the Board may otherwise
determine, the Committee, if any, appointed by the Board to administer the Plan shall
consist of two or more Outside Trustees of the Company who: (a) qualify as “outside
directors” within the meaning of Section 162(m) of the Code and who (b) meet such other
requirements as may be established from time to time by the Securities and Exchange
Commission for plans intended to qualify for exemption under Rule 16b-3 (or its successor)
under the Exchange Act and who (c) comply with the independence requirements of the stock
exchange on which the Shares are listed. Discretionary Awards to Outside Trustees may only
be administered by the Committee.




     (ii) The Board may also appoint one or more separate committees of the Board, each
composed of one or more trustees of the Company who need not be Outside Trustees, who may
administer the Plan with respect to employees or other Service Providers who are not
officers or trustees of the Company, may grant Awards under the Plan to such employees or
other Service Providers, and may determine all terms of such Awards.


In the event that the Plan, any Award or any Award Agreement entered into hereunder provides for
any action to be taken by or determination to be made by the Board, such action may be taken or
such determination may be made by the Committee if the power and authority to do so has been
delegated to the Committee by the Board as provided for in this Section. Unless otherwise expressly
determined by the Board, any such action or determination by the Committee shall be final, binding
and conclusive. To the extent permitted by law, the Committee may delegate its authority under the
Plan to a member of the Board.




     3.3. Terms of Awards.



          Subject to the other terms and conditions of the Plan, the Board shall have full and final
authority to:




          (i) designate Grantees,




          (ii) determine the type or types of Awards to be made to a
Grantee,




          (iii) determine the number of Shares to be subject to an Award,




          (iv) establish the terms and conditions of each Award (including, but not limited to, the
exercise price of any Option, the nature and duration of any restriction or condition (or provision
for lapse thereof) relating to the vesting, exercise, transfer, or forfeiture of an Award or the
Shares subject thereto, the treatment of an Award in the event of a change of control, and any
terms or conditions that may be necessary to qualify Options as Incentive Share Options),




          (v) prescribe the form of each Award Agreement evidencing an Award, and




          (vi) amend, modify, or supplement the terms of any outstanding Award. Such authority
specifically includes the authority, in order to effectuate the purposes of the Plan but without
amending the Plan, to make or modify Awards to eligible individuals who are foreign nationals or
are individuals who are employed outside the United States to recognize differences in local law,
tax policy, or custom. Notwithstanding the foregoing, no amendment, modification or supplement of
any Award shall, without the consent of the Grantee, impair the Grantee’s rights under such Award.




          The Company may retain the right in an Award Agreement to cause a forfeiture of the gain
realized by a Grantee on account of actions taken by the Grantee in violation or breach of or in
conflict with any employment agreement, non-competition agreement, any agreement prohibiting
solicitation of employees or clients of the Company or any Affiliate thereof or any confidentiality
obligation with respect to the Company or any Affiliate thereof or otherwise in competition with
the Company or any Affiliate thereof, to the extent specified in such Award Agreement applicable to
the Grantee. In addition, the Company may annul an Award if the Grantee is an employee of the
Company or an



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Affiliate thereof and is terminated for Cause as defined in the applicable Award Agreement or the
Plan, as applicable.




          Furthermore, if the Company is required to prepare an accounting restatement due to the
material noncompliance of the Company, as a result of misconduct, with any financial reporting
requirement under the securities laws, the individuals subject to automatic forfeiture under
Section 304 of the Sarbanes-Oxley Act of 2002 and any Grantee who knowingly engaged in the
misconduct, was grossly negligent in engaging in the misconduct, knowingly failed to prevent the
misconduct or was grossly negligent in failing to prevent the misconduct, shall reimburse the
Company the amount of any payment in settlement of an Award earned or accrued during the
twelve-(12)month period following the first public issuance or filing with the United States
Securities and Exchange Commission (whichever first occurred) of the financial document that
contained such material noncompliance.




     3.4. No Repricing



          Notwithstanding anything in this Plan to the contrary, no amendment or modification may be
made to an outstanding Option or SAR, including, without limitation, by replacement of Options or
SARs with cash or other award type, that would be treated as a repricing under the rules of the
stock exchange on which the Shares are listed, in each case, without the approval of the
shareholders of the Company, provided, that, appropriate adjustments may be made to outstanding
Options and SARs pursuant to Section 17 or Section 5.3 and may be made to make changes to achieve
compliance with applicable law, including Internal Revenue Code Section 409A.




     3.5. Deferral Arrangement.



          The Board may permit or require the deferral of any award payment into a deferred compensation
arrangement, subject to such rules and procedures as it may establish, which may include provisions
for the payment or crediting of interest or dividend equivalents, including converting such credits
into deferred Share equivalents. Any such deferrals shall be made in a manner that complies with
Code Section 409A.




     3.6. No Liability.



          No member of the Board or the Committee shall be liable for any action or determination made
in good faith with respect to the Plan or any Award or Award Agreement.




     3.7. Share Issuance/Book-Entry



          Notwithstanding any provision of this Plan to the contrary, the issuance of the Shares under
the Plan may be evidenced in such a manner as the Board, in its discretion, deems appropriate,
including, without limitation, book-entry registration or issuance of one or more Share
certificates.




4. SHARES SUBJECT TO THE PLAN




     4.1. Number of Shares Available for Awards



          Subject to adjustment as provided in Section 17 hereof, the number of Shares available for
issuance under the Plan shall be five million (5,000,000), all of which may be granted as Incentive
Share Options, increased by Shares covered by awards granted under a Prior Plan that are not
purchased or are forfeited or expire, or otherwise terminate without delivery of any Shares subject
thereto, to the extent such Shares would again be available for issuance under such Prior Plan.
Shares issued or to be issued under the Plan shall be authorized but unissued Shares; or, to the
extent permitted by applicable law, issued Shares that have been reacquired by the Company.




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     4.2. Adjustments in Authorized Shares



          The Board shall have the right to substitute or assume Awards in connection with mergers,
reorganizations, separations, or other transactions to which Section 424(a) of the Code applies.
The number of Shares reserved pursuant to Section 4 shall be increased by the corresponding number
of Awards assumed and, in the case of a substitution, by the net increase in the number of Shares
subject to Awards before and after the substitution.




     4.3. Share Usage



          Shares covered by an Award shall be counted as used as of the Grant Date. Any Shares that are
subject to Awards of Options shall be counted against the limit set forth in Section 4.1 as one (1)
Share for every one (1) Share subject to an Award of Options. With respect to SARs, the number of
Shares subject to an award of SARs will be counted against the aggregate number of Shares available
for issuance under the Plan regardless of the number of Shares actually issued to settle the SAR
upon exercise. Any Shares that are subject to Awards other than Options or Share Appreciation
Rights shall be counted against the limit set forth in Section 4.1 as 3.60 Shares for every one (1)
Share granted. If any Shares covered by an Award granted under the Plan or a Prior Plan are not
purchased or are forfeited or expire, or if an Award otherwise terminates without delivery of any
Shares subject thereto or is settled in cash in lieu of Shares, then the number of Shares counted
against the aggregate number of Shares available under the Plan with respect to such Award shall,
to the extent of any such forfeiture, termination or expiration, again be available for making
Awards under the Plan in the same amount as such Shares were counted against the limit set forth in
Section 4.1, provided that any Shares covered by an Award granted under a Prior Plan will again be
available for making Awards under the Plan in the same amount as such Shares were counted against
the limits set forth in the applicable Prior Plan. The number of Shares available for issuance
under the Plan shall not be increased by (i) any Shares tendered or withheld or Award surrendered
in connection with the purchase of Shares upon exercise of an Option as described in Section 13.2,
or (ii) any Shares deducted or delivered from an Award payment in connection with the Company’s tax
withholding obligations as described in Section 18.3.




5. EFFECTIVE DATE, DURATION AND AMENDMENTS




     5.1. Effective Date.



          The Plan shall be effective as of the Effective Date, subject to approval of the Plan by the
Company’s shareholders within one year of the Effective Date. Upon approval of the Plan by the
shareholders of the Company as set forth above, all Awards made under the Plan on or after the
Effective Date shall be fully effective as if the shareholders of the Company had approved the Plan
on the Effective Date. If the shareholders fail to approve the Plan within one year of the
Effective Date, any Awards made hereunder shall be null and void and of no effect. Following the
Effective Date no awards will be made under the Prior Plans.




     5.2. Term.



          The Plan shall terminate automatically ten (10) years after the Effective Date and may be
terminated on any earlier date as provided in Section 5.3.




     5.3. Amendment and Termination of the Plan



          The Board may, at any time and from time to time, amend, suspend, or terminate the Plan as to
any Shares as to which Awards have not been made. An amendment shall be contingent on approval of
the Company’s shareholders to the extent stated by the Board, required by applicable law or
required by applicable stock exchange listing requirements. In addition, an amendment will be
contingent on approval of the Company’s shareholders if the amendment would: (i) materially
increase the benefits accruing to participants under the Plan, (ii) materially increase the
aggregate number of Shares that may be issued under the Plan, or (iii) materially modify the
requirements as to eligibility for participation in the



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Plan. No Awards shall be made after termination of the Plan. No amendment, suspension, or
termination of the Plan shall, without the consent of the Grantee, impair rights or obligations
under any Award theretofore awarded under the Plan.




6. AWARD ELIGIBILITY AND LIMITATIONS




     6.1. Service Providers and Other Persons



          Subject to this Section 6, Awards may be made under the Plan to: (i) any Service Provider to
the Company or of any Affiliate, including any Service Provider who is an officer or trustee of the
Company, or of any Affiliate, as the Board shall determine and designate from time to time and (ii)
any other individual whose participation in the Plan is determined to be in the best interests of
the Company by the Board.




     6.2. Successive Awards and Substitute Awards.



          An eligible person may receive more than one Award, subject to such restrictions as are
provided herein. Notwithstanding Sections 8.1 and 10.1, the Option Price of an Option or the grant
price of a SAR that is a Substitute Award (as defined in Section 2.42) may be less than 100% of the
Fair Market Value of a Share on the original date of grant; provided, that, the Option Price or
grant price is determined in accordance with the principles of Code Section 424 and the regulations
thereunder.




7. AWARD AGREEMENT




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




8. TERMS AND CONDITIONS OF OPTIONS




     8.1. Option Price



          The Option Price of each Option shall be fixed by the Board and stated in the Award Agreement
evidencing such Option. Except in the case of Substitute Awards, the Option Price of each Option
shall be at least the Fair Market Value on the Grant Date of a Share; provided, however,
that in the event that a Grantee is a Ten Percent Shareholder, the Option Price of an Option
granted to such Grantee that is intended to be an Incentive Share Option shall be not less than 110
percent of the Fair Market Value of a Share on the Grant Date. In no case shall the Option Price of
any Option be less than the par value of a Share.




     8.2. Vesting.



               Subject to Sections 8.3 and 17.3 hereof, each Option granted under the Plan shall become
exercisable at such times and under such conditions as shall be determined by the Board and stated
in the Award Agreement. For purposes of this
Section 8.2, fractional numbers of Shares subject to an Option shall be rounded down to the
next nearest whole number.



     8.3. Term.



          Each Option granted under the Plan shall terminate, and all rights to purchase Shares
thereunder shall cease, upon the expiration of ten years from the date such Option is granted, or
under such circumstances and on such date prior thereto as is set forth in the Plan or as may be
fixed by the Board and stated in the Award Agreement relating to such Option; provided,
however, that in the event that the



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Grantee is a Ten Percent Shareholder, an Option granted to such Grantee that is intended to be an
Incentive Share Option shall not be exercisable after the expiration of five years from its Grant
Date.




     8.4. Termination of Service.



          Each Award Agreement shall set forth the extent to which the Grantee shall have the right to
exercise the Option following termination of the Grantee’s Service. Such provisions shall be
determined in the sole discretion of the Board, need not be uniform among all Options issued
pursuant to the Plan, and may reflect distinctions based on the reasons for termination of Service.




     8.5. Limitations on Exercise of Option.



          Notwithstanding any other provision of the Plan, in no event may any Option be exercised, in
whole or in part, prior to the date the Plan is approved by the shareholders of the Company as
provided herein or after the occurrence of an event referred to in Section 17 hereof which results
in termination of the Option.




     8.6. Method of Exercise.



          Subject to the terms of Article 13 and Section 18.3, an Option that is exercisable may be
exercised by the Grantee’s delivery to the Company of notice of exercise on any business day, at
the Company’s principal office, on the form specified by the Company. Such notice shall specify the
number of Shares with respect to which the Option is being exercised and shall be accompanied by
payment in full of the Option Price of the Shares for which the Option is being exercised plus the
amount (if any) of federal and/or other taxes which the Company may, in its judgment, be required
to withhold with respect to an Award.




     8.7. Rights of Holders of Options



          Unless otherwise stated in the applicable Award Agreement, an individual holding or exercising
an Option shall have none of the rights of a shareholder (for example, the right to receive cash or
dividend payments or distributions attributable to the subject Shares or to direct the voting of
the subject Shares) until the Shares covered thereby are fully paid and issued to him. Except as
provided in Section 17 hereof, no adjustment shall be made for dividends, distributions or other
rights for which the record date is prior to the date of such issuance.




     8.8. Delivery of Share Certificates.



          Promptly after the exercise of an Option by a Grantee and the payment in full of the Option
Price, such Grantee shall be entitled to the issuance of a shares certificate or certificates
evidencing his or her ownership of the Shares subject to the Option.




     8.9. Transferability of Options



          Except as provided in Section 8.10, during the lifetime of a Grantee, only the Grantee (or, in
the event of legal incapacity or incompetency, the Grantee’s guardian or legal representative) may
exercise an Option. Except as provided in Section 8.10, no
Option shall be assignable or transferable by the Grantee to whom it is granted, other than by will
or the laws of descent and distribution.




     8.10. Family Transfers.



          If authorized in the applicable Award Agreement, a Grantee may transfer, not for value, all or
part of an Option which is not an Incentive Share Option to any Family Member. For the purpose of
this Section 8.10, a “not for value” transfer is a transfer which is (i) a gift, (ii) a transfer
under a domestic relations order in settlement of marital property rights; or (iii) a transfer to
an entity in which more than fifty percent of the voting interests are owned by Family Members (or
the Grantee) in exchange for an interest in that entity. Following a transfer under this Section
8.10, any such Option shall continue to be subject to the same terms and conditions as were
applicable immediately prior to transfer. Subsequent transfers of transferred Options are
prohibited except to Family Members of the original Grantee in




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accordance with this Section 8.10 or by will or the laws of descent and distribution. The events
of termination of Service of Section 8.4 hereof shall continue to be applied with respect to the
original Grantee, following which the Option shall be exercisable by the transferee only to the
extent, and for the periods specified, in Section 8.4.




     8.11. Limitations on Incentive Share Options.



          An Option shall constitute an Incentive Share Option only (i) if the Grantee of such Option is
an employee of the Company or any Subsidiary of the Company; (ii) to the extent specifically
provided in the related Award Agreement; and (iii) to the extent that the aggregate Fair Market
Value (determined at the time the Option is granted) of the Shares with respect to which all
Incentive Share Options held by such Grantee become exercisable for the first time during any
calendar year (under the Plan and all other plans of the Grantee’s employer and its Affiliates)
does not exceed $100,000. This limitation shall be applied by taking Options into account in the
order in which they were granted.




     8.12. Notice of Disqualifying Disposition



          If any Grantee shall make any disposition of Shares issued pursuant to the exercise of an
Incentive Share Option under the circumstances described in Code Section 421(b) (relating to
certain disqualifying dispositions), such Grantee shall notify the Company of such disposition
within ten (10) days thereof.




9. GRANT AND EXERCISE OF UNIT OPTIONS




     9.1 Issuance of Unit Options



          Upon the issuance of an Option, and in accordance with Section 4.2(B) of the Partnership
Agreement, the General Partner shall be deemed automatically to have caused the Operating
Partnership to issue to the General Partner a corresponding Unit Option on terms identical to those
of such Option.




     9.2 Exercise of Unit Options



          A Unit Option shall be deemed exercised automatically, upon the exercise by an Optionee of the
corresponding Option, as to the number of Units equal to the number of Shares for which such Option
is exercised. The General Partner shall then cause the Operating Partnership to issue such Units
to the General Partner, and the Company shall remit payment for such Units to the General Partner,
which shall then remit payment to the Operating Partnership, all in accordance with Section 4.2(B)
of the Partnership Agreement.




     9.2 Termination of Unit Options



          Upon the termination of an Option, the corresponding Unit Option also shall terminate.




10. TERMS AND CONDITIONS OF SHARE APPRECIATION RIGHTS




     10.1. Right to Payment and Grant Price.



          A SAR shall confer on the Grantee to whom it is granted a right to receive, upon exercise
thereof, the excess of (A) the Fair Market Value of one Share on the date of exercise over (B) the
grant price of the SAR as determined by the Board. The Award Agreement for a SAR shall specify the
grant price of the SAR, which shall be at least the Fair Market Value of a Share on the date of
grant. SARs may be granted in conjunction with all or part of an Option granted under the Plan or
at any subsequent time during the term of such Option, in conjunction with all or part of any other
Award or without regard to any Option or other Award; provided that a SAR that is granted
subsequent to the Grant Date of a related Option must have a SAR Price that is no less than the
Fair Market Value of one Share on the SAR Grant Date.




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     10.2. Other Terms.



          The Board shall determine at the date of grant or thereafter, the time or times at which and
the circumstances under which a SAR may be exercised in whole or in part (including based on
achievement of performance goals and/or future service requirements), the time or times at which
SARs shall cease to be or become exercisable following termination of Service or upon other
conditions, the method of exercise, method of settlement, form of consideration payable in
settlement, method by or forms in which Shares will be delivered or deemed to be delivered to
Grantees, whether or not a SAR shall be in tandem or in combination with any other Award, and any
other terms and conditions of any SAR.




     10.3. Term.



          Each SAR granted under the Plan shall terminate, and all rights thereunder shall cease, upon
the expiration of ten years from the date such SAR is granted, or under such circumstances and on
such date prior thereto as is set forth in the Plan or as may be fixed by the Board and stated in
the Award Agreement relating to such SAR.




     10.4. Transferability of SARS



          Except as provided in Section 10.5, during the lifetime of a Grantee, only the Grantee (or, in
the event of legal incapacity or incompetency, the Grantee’s guardian or legal representative) may
exercise a SAR. Except as provided in Section 10.5, no SAR shall be assignable or transferable by
the Grantee to whom it is granted, other than by will or the laws of descent and distribution.




     10.5. Family Transfers.



          If authorized in the applicable Award Agreement, a Grantee may transfer, not for value, all or
part of a SAR to any Family Member. For the purpose of this Section 10.5, a “not for value”
transfer is a transfer which is (i) a gift, (ii) a transfer under a domestic relations order in
settlement of marital property rights; or (iii) a transfer to an entity in which more than fifty
percent of the voting interests are owned by Family Members (or the Grantee) in exchange for an
interest in that entity. Following a transfer under this Section 10.5, any such SAR shall continue
to be subject to the same terms and conditions as were applicable immediately prior to transfer.
Subsequent transfers of transferred SARs are prohibited except to Family Members of the original
Grantee in accordance with this Section 10.5 or by will or the laws of descent and distribution.




11. TERMS AND CONDITIONS OF RESTRICTED SHARES AND SHARE UNITS




     11.1. Grant of Restricted Shares or Share Units.



          Awards of Restricted Shares or Share Units may be made for no consideration (other than par
value of the Shares which is deemed paid by Services already rendered).




     11.2. Restrictions.



          At the time a grant of Restricted Shares or Share Units is made, the Board may, in its sole
discretion, establish a period of time (a “restricted period”) applicable to such Restricted Shares
or Share Units. Each Award of Restricted Shares or Share Units may be
subject to a different restricted period. The Board may in its sole discretion, at the time a grant
of Restricted Shares or Share Units is made, prescribe restrictions in addition to or other than
the expiration of the restricted period, including the satisfaction of corporate or individual
performance objectives, which may be applicable to all or any portion of the Restricted Shares



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or Share Units as described in Article 14. Notwithstanding the foregoing terms of this Section
11.2, and subject to Section 11.9 below, (i) Restricted Shares and Share Units that vest solely by
the passage of time shall not vest in full in less than three (3) years from the Grant Date, and
(ii) Restricted Shares and Share Units that vest, or for which vesting may be accelerated, by
achieving performance targets shall not vest in full in less than one (1) year from the Grant Date.
The foregoing restriction shall not apply to Restricted Shares or Share Units assumed in connection
with mergers, reorganizations, separations, or other transactions to which Section 424(a) of the
Code applies. Neither Restricted Shares nor Share Units may be sold, transferred, assigned,
pledged or otherwise encumbered or disposed of during the restricted period or prior to the
satisfaction of any other restrictions prescribed by the Board with respect to such Restricted
Shares or Share Units.




     11.3. Restricted Share Certificates.



          The Company shall issue, in the name of each Grantee to whom Restricted Shares have been
granted, share certificates representing the total number of Restricted Shares granted to the
Grantee, as soon as reasonably practicable after the Grant Date. The Board may provide in an Award
Agreement that either (i) the Secretary of the Company shall hold such certificates for the
Grantee’s benefit until such time as the Restricted Shares are forfeited to the Company or the
restrictions lapse, or (ii) such certificates shall be delivered to the Grantee, provided,
however, that such certificates shall bear a legend or legends that comply with the applicable
securities laws and regulations and makes appropriate reference to the restrictions imposed under
the Plan and the Award Agreement.




     11.4. Rights of Holders of Restricted Shares.



          Unless the Board otherwise provides in an Award Agreement, holders of Restricted Shares shall
have the right to vote such Shares and the right to receive any dividends declared or paid with
respect to such Shares. The Board may provide that any dividends paid on Restricted Shares must be
reinvested in Shares, which may or may not be subject to the same vesting conditions and
restrictions applicable to such Restricted Shares. All distributions, if any, received by a Grantee
with respect to Restricted Shares as a result of any share split, share dividend, combination of
shares, or other similar transaction shall be subject to the restrictions applicable to the
original Grant.




     11.5. Rights of Holders of Share Units.



               11.5.1. Voting and Dividend Rights.



          Holders of Share Units shall have no rights as shareholders of the Company. The Board may
provide in an Award Agreement evidencing a grant of Share Units that the holder of such Share Units
shall be entitled to receive, upon the Company’s payment of a cash dividend on its outstanding
Shares, a cash payment for each Share Unit held equal to the per-share dividend paid on the Shares.
Such Award Agreement may also provide that such cash payment will be deemed reinvested in
additional Share Units at a price per unit equal to the Fair Market Value of a Share on the date
that such dividend is paid.




               11.5.2. Creditor’s Rights.



          A holder of Share Units shall have no rights other than those of a general creditor of the
Company. Share Units represent an unfunded and unsecured obligation of the Company, subject to the
terms and conditions of the applicable Award Agreement.




     11.6. Termination of Service.



               (a) Unless the Board otherwise provides in an Award Agreement or in writing after the Award
Agreement is issued, upon the termination of a Grantee’s Service, any Restricted Shares or Share
Units held by such Grantee that have not vested, or with respect to which all applicable
restrictions and conditions have not lapsed, shall immediately be deemed forfeited. Upon forfeiture
of Restricted Shares or Share Units, the Grantee shall have no further rights with respect to such
Award, including but not limited to



A-13









 







any right to vote Restricted Shares or any right to receive dividends with respect to Restricted
Shares or Share Units.



               (b) Notwithstanding the terms of Section 11.6(a), and subject to Section 11.9 below, the Board
may not (i) grant Restricted Shares or Share Units that provide for acceleration of vesting, except
in the case of a Grantee’s death, disability or retirement, or upon or in connection with a
Corporate Transaction, or upon the satisfaction of performance-based vesting conditions as provided
in Section 11.2; or (ii) waive vesting restrictions or conditions applicable to Restricted Shares
or Share Units, except in the case of a Grantee’s death, disability or retirement or upon or in
connection with a Corporation Transaction. The foregoing restriction shall not apply to Restricted
Shares or Share Unit Awards assumed in connection with mergers, reorganizations, separations, or
other transactions to which Section 424(a) of the Code applies.



     11.7. Purchase of Restricted Shares and Shares Subject to Share Units.



          The Grantee shall be required, to the extent required by applicable law, to purchase the
Restricted Shares or Shares subject to vested Share Units from the Company at a Purchase Price
equal to the greater of (i) the aggregate par value of the Shares represented by such Restricted
Shares or Share Units (ii) the Purchase Price, if any, specified in the Award Agreement relating to
such Restricted Shares or Share Units. The Purchase Price shall be payable in a form described in
Section 13 or, in the discretion of the Board, in consideration for past or future Services
rendered to the Company or an Affiliate.




     11.8. Delivery of Shares.



          Upon the expiration or termination of any restricted period and the satisfaction of any other
conditions prescribed by the Board, the restrictions applicable to Restricted Shares or Share Units
settled in Shares shall lapse, and, unless otherwise provided in the Award Agreement, a share
certificate for such Shares shall be delivered, free of all such restrictions, to the Grantee or
the Grantee’s beneficiary or estate, as the case may be. Neither the Grantee, nor the Grantee’s
beneficiary or estate, shall have any further rights with regard to a Share Unit once the Shares
represented by the Share Unit has been delivered.




     11.9. Unrestricted Pool.



          Notwithstanding anything to the contrary in this Plan, Restricted Shares and Share Unit Awards
may be (i) granted with vesting terms that do not comply with the requirements of Section 11.2;
(ii) granted with terms providing for the acceleration of vesting that do not comply with Section
11.6(b), and/or (iii) subsequent to the date of grant, modified to provide acceleration of vesting
terms that do not comply with Section 11.6(b), provided that, in no event, shall the aggregate
number of shares underlying Restricted Shares and Share Unit Awards granted or modified as
contemplated in this Section 11.9 exceed five percent of the shares authorized for issuance in
Section 4.1 hereof.




12. TERMS AND CONDITIONS OF UNRESTRICTED SHARE AWARDS




          The Board may, in its sole discretion, grant (or sell at par value or such other higher
purchase price determined by the Board) an Unrestricted Share Award to any Grantee
pursuant to which such Grantee may receive Shares free of any restrictions (“Unrestricted Shares”)
under the Plan; provided, however, that, in the aggregate, no more than five percent of the
shares reserved for issuance under this Plan may be granted pursuant to this Section 12 and the
exceptions set forth in Section 11.9. Unrestricted Share Awards may be granted or sold as described
in the preceding sentence in respect of past services and other valid consideration, or in lieu of,
or in addition to, any cash compensation due to such Grantee.




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13. FORM OF PAYMENT FOR OPTIONS AND RESTRICTED SHARES




     13.1. General Rule.



          Payment of the Option Price for the Shares purchased pursuant to the exercise of an Option or
the Purchase Price for Restricted Shares shall be made in cash or in cash equivalents acceptable to
the Company.




     13.2. Surrender of Shares.



          To the extent the Award Agreement so provides, payment of the Option Price for Shares
purchased pursuant to the exercise of an Option or the Purchase Price for Restricted Shares may be
made all or in part through the tender or attestation to the Company of Shares, which shall be
valued, for purposes of determining the extent to which the Option Price or Purchase Price has been
paid thereby, at their Fair Market Value on the date of exercise or surrender.




     13.3. Cashless Exercise.



          With respect to an Option only (and not with respect to Restricted Shares), to the extent
permitted by law and to the extent the Award Agreement so provides, payment of the Option Price for
Shares purchased pursuant to the exercise of an Option may be made all or in part by delivery (on a
form acceptable to the Board) of an irrevocable direction to a licensed securities broker
acceptable to the Company to sell Shares and to deliver all or part of the sales proceeds to the
Company in payment of the Option Price and any withholding taxes described in Section 18.3.




     13.4. Other Forms of Payment.



          To the extent the Award Agreement so provides, payment of the Option Price for Shares
purchased pursuant to exercise of an Option or the Purchase Price for Restricted Shares may be made
in any other form that is consistent with applicable laws, regulations and rules, including,
without limitation, Service.




14. TERMS AND CONDITIONS OF PERFORMANCE SHARES AND PERFORMANCE UNITS




     14.1. Grant of Performance Units/Performance Shares.



          Subject to the terms and provisions of this Plan, the Board, at any time and from time to
time, may grant Performance Units and/or Performance Shares to Participants in such amounts and
upon such terms as the Committee shall determine.




     14.2. Value of Performance Units/Performance Shares.



          Each Performance Unit shall have an initial value that is established by the Board at the time
of grant. The Board shall set performance goals in its discretion which, depending on the extent to
which they are met, will determine the value and/or number of Performance Units/Performance Shares
that will be paid out to the Participant.




     14.3. Earning of Performance Units/Performance Shares.



          Subject to the terms of this Plan, after the applicable Performance Period has ended, the
holder of Performance Units/Performance Shares shall be entitled to receive payout on the value and
number of Performance Units/Performance Shares earned by the Participant over the Performance
Period, to be determined as a function of the extent to which the corresponding performance goals
have been achieved. The Board shall have the ability, which it may exercise in its sole
discretion, to alter the



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performance goals to take into account unusual or nonrecurring events or items or other factors the
Board considers relevant.




     14.4. Form and Timing of Payment of Performance Units/Performance Shares.



          Payment of earned Performance Units/Performance Shares shall be as determined by the Board and
as evidenced in the Award Agreement. Subject to the terms of this Plan, the Board, in its sole
discretion, may pay earned Performance Units/Performance Shares in the form of cash or in Shares
(or in a combination thereof) equal to the value of the earned Performance Units/Performance Shares
at the close of the applicable Performance Period, or as soon as practicable after the end of the
Performance Period. Any Shares may be granted subject to any restrictions deemed appropriate by the
Committee. The determination of the Committee with respect to the form of payout of such Awards
shall be set forth in the Award Agreement pertaining to the grant of the Award.




     14.5. Settlement of Awards; Other Terms.



          Settlement of such Awards shall be in cash, Shares, other Awards or other property, in the
discretion of the Board. The Board shall specify the circumstances in which such Performance Shares
or Performance Units shall be paid or forfeited in the event of termination of Service by the
Grantee prior to the end of a performance period or settlement of Awards.




15. PARACHUTE LIMITATIONS




          Notwithstanding any other provision of this Plan or of any other agreement, contract, or
understanding heretofore or hereafter entered into by a Grantee with the Company or any Affiliate,
except an agreement, contract, or understanding that expressly addresses Section 280G or Section
4999 of the Code (an “Other Agreement”), and notwithstanding any formal or informal plan or other
arrangement for the direct or indirect provision of compensation to the Grantee (including groups
or classes of Grantees or beneficiaries of which the Grantee is a member), whether or not such
compensation is deferred, is in cash, or is in the form of a benefit to or for the Grantee (a
“Benefit Arrangement”), if the Grantee is a “disqualified individual,” as defined in Section
280G(c) of the Code, any Option, Restricted Share, Share Unit, Performance Share or Performance
Unit held by that Grantee and any right to receive any payment or other benefit under this Plan
shall not become exercisable or vested (i) to the extent that such right to exercise, vesting,
payment, or benefit, taking into account all other rights, payments, or benefits to or for the
Grantee under this Plan, all Other Agreements, and all Benefit Arrangements, would cause any
payment or benefit to the Grantee under this Plan to be considered a “parachute payment” within the
meaning of Section 280G(b)(2) of the Code as then in effect (a “Parachute Payment”) and (ii) if, as
a result of receiving a Parachute Payment, the aggregate after-tax amounts received by the Grantee
from the Company under this Plan, all Other Agreements, and all Benefit Arrangements would be less
than the maximum after-tax amount that could be received by the Grantee without causing any such
payment or benefit to be considered a Parachute Payment. In the event that the receipt of any such
right to exercise, vesting, payment, or benefit under this Plan, in conjunction with all other
rights, payments, or benefits to or for the Grantee under any Other Agreement or any Benefit
Arrangement would cause the Grantee to be considered to have received a Parachute Payment under
this Plan that would have the effect of decreasing the after-tax amount received by the Grantee as
described in clause (ii) of the preceding sentence, then the Grantee shall have the right, in the
Grantee’s sole discretion, to designate those rights, payments, or benefits under this Plan, any
Other Agreements, and any Benefit Arrangements that should be reduced or eliminated so as to avoid
having the payment or benefit to the Grantee under this Plan be deemed to be a Parachute Payment;
provided, however, that in order to comply with Section 409A of the Code, the reduction or
elimination will be performed in the order in which each dollar of value subject to an Award
reduces the Parachute Payment to the greatest extent.




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16. REQUIREMENTS OF LAW




     16.1. General.



          The Company shall not be required to sell or issue any Shares under any Award if the sale or
issuance of such Shares would constitute a violation by the Grantee, any other individual
exercising an Option, or the Company of any provision of any law or regulation of any governmental
authority, including without limitation any federal or state securities laws or regulations. If at
any time the Company shall determine, in its discretion, that the listing, registration or
qualification of any shares subject to an Award upon any securities exchange or under any
governmental regulatory body is necessary or desirable as a condition of, or in connection with,
the issuance or purchase of Shares, no Shares may be issued or sold to the Grantee or any other
individual exercising an Option pursuant to such Award unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free of any conditions not
acceptable to the Company, and any delay caused thereby shall in no way affect the date of
termination of the Award. Without limiting the generality of the foregoing, in connection with the
Securities Act, upon the exercise of any Option or any SAR that may be settled in Shares or the
delivery of any Shares underlying an Award, unless a registration statement under such Act is in
effect with respect to the Shares covered by such Award, the Company shall not be required to sell
or issue such Shares unless the Board has received evidence satisfactory to it that the Grantee or
any other individual exercising an Option may acquire such Shares pursuant to an exemption from
registration under the Securities Act. Any determination in this connection by the Board shall be
final, binding, and conclusive. The Company may, but shall in no event be obligated to, register
any securities covered hereby pursuant to the Securities Act. The Company shall not be obligated to
take any affirmative action in order to cause the exercise of an Option or a SAR or the issuance of
Shares pursuant to the Plan to comply with any law or regulation of any governmental authority. As
to any jurisdiction that expressly imposes the requirement that an Option (or SAR that may be
settled in Shares) shall not be exercisable until the Shares covered by such Option (or SAR) are
registered or are exempt from registration, the exercise of such Option (or SAR) under
circumstances in which the laws of such jurisdiction apply shall be deemed conditioned upon the
effectiveness of such registration or the availability of such an exemption.




     16.2. Rule 16b-3.



          During any time when the Company has a class of equity security registered under Section 12 of
the Exchange Act, it is the intent of the Company that Awards pursuant to the Plan and the exercise
of Options and SARs granted hereunder will qualify for the exemption provided by Rule 16b-3 under
the Exchange Act. To the extent that any provision of the Plan or action by the Board does not
comply with the requirements of Rule 16b-3, it shall be deemed inoperative to the extent permitted
by law and deemed advisable by the Board, and shall not affect the validity of the Plan. In the
event that Rule 16b-3 is revised or replaced, the Board may exercise its discretion to modify this
Plan in any respect necessary to satisfy the requirements of, or to take advantage of any features
of, the revised exemption or its replacement.




17. EFFECT OF CHANGES IN CAPITALIZATION




     17.1. Changes in Shares.



          If the number of outstanding Shares is increased or decreased or the Shares are changed into
or exchanged for a different number or kind of shares or other securities of the Company on account
of any recapitalization, reclassification, share split, reverse split, combination of shares,
exchange of shares, share dividend or other distribution payable in capital shares, or other
increase or decrease in such shares effected without receipt of consideration by the Company
occurring after the Effective Date, the number and kinds of shares for which grants of Options and
other Awards may be made under the Plan shall be adjusted proportionately and accordingly by the
Company. In addition, the number and kind of shares for which Awards are outstanding shall be
adjusted proportionately and accordingly so that the proportionate interest of the Grantee
immediately following such event shall, to the extent practicable, be the same as immediately
before such event. Any such adjustment in outstanding Options or SARs shall not change the



A-17









 






aggregate Option Price or SAR Exercise Price payable with respect to Shares that are subject to the
unexercised portion of an outstanding Option or SAR, as applicable, but shall include a
corresponding proportionate adjustment in the Option Price or SAR Exercise Price per share. The
conversion of any convertible securities of the Company shall not be treated as an increase in
shares effected without receipt of consideration. Notwithstanding the foregoing, in the event of
any distribution to the Company’s shareholders of securities of any other entity or other assets
(including an extraordinary dividend but excluding a non-extraordinary dividend of the Company)
without receipt of consideration by the Company, the Company shall, in such manner as the Company
deems appropriate, adjust (i) the number and kind of Shares subject to outstanding Awards and/or
(ii) the exercise price of outstanding Options and Share Appreciation Rights to reflect such
distribution.





	 	17.2.	 	Reorganization in Which the Company Is the Surviving Entity Which does not Constitute a
Corporate Transaction.





          Subject to Section 17.3 hereof, if the Company shall be the surviving entity in any
reorganization, merger, or consolidation of the Company with one or more other entities which does
not constitute a Corporate Transaction, any Option or SAR theretofore granted pursuant to the Plan
shall pertain to and apply to the securities to which a holder of the number of Shares subject to
such Option or SAR would have been entitled immediately following such reorganization, merger, or
consolidation, with a corresponding proportionate adjustment of the Option Price or SAR Exercise
Price per share so that the aggregate Option Price or SAR Exercise Price thereafter shall be the
same as the aggregate Option Price or SAR Exercise Price of the shares remaining subject to the
Option or SAR immediately prior to such reorganization, merger, or consolidation. Subject to any
contrary language in an Award Agreement evidencing an Award, any restrictions applicable to such
Award shall apply as well to any replacement shares received by the Grantee as a result of the
reorganization, merger or consolidation. In the event of a transaction described in this Section
17.2, Share Units shall be adjusted so as to apply to the securities that a holder of the number of
Shares subject to the Share Units would have been entitled to receive immediately following such
transaction.





	 	17.3.	 	Corporate Transaction in which Awards are not Assumed.





               Upon the occurrence of a Corporate Transaction in which outstanding Options, SARs, Share Units
and Restricted Shares are not being assumed or continued:



               (i) all outstanding Restricted Shares shall be deemed to have vested, and all Share Units
shall be deemed to have vested and the Shares subject thereto shall be delivered, immediately prior
to the occurrence of such Corporate Transaction, and



               (ii) either of the following two actions shall be taken:



                    (A) fifteen days prior to the scheduled consummation of a Corporate Transaction, all Options
and SARs outstanding hereunder shall become immediately exercisable and shall remain exercisable
for a period of fifteen days, or



                    (B) the Board may elect, in its sole discretion, to cancel any outstanding Awards of Options,
Restricted Shares, Share Units, and/or SARs and pay or deliver, or cause to be paid or delivered,
to the holder thereof an amount in cash or
securities having a value (as determined by the Board acting in good faith), in the case of
Restricted Shares or Share Units, equal to the formula or fixed price per share paid to holders of
Shares and, in the case of Options or SARs, equal to the product of the number of Shares subject to
the Option or SAR (the “Award Shares”) multiplied by the amount, if any, by which (I) the formula
or fixed price per share paid to holders of Shares pursuant to such transaction exceeds (II) the
Option Price or SAR Exercise Price applicable to such Award Shares.



               With respect to the Company’s establishment of an exercise window, (i) any exercise of an
Option or SAR during such fifteen-day period shall be conditioned upon the consummation of the
event and shall be effective only immediately before the consummation of the event, and (ii) upon



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consummation of any Corporate Transaction, the Plan and all outstanding but unexercised Options and
SARs shall terminate. The Board shall send notice of an event that will result in such a
termination to all individuals who hold Options and SARs not later than the time at which the
Company gives notice thereof to its shareholders.




     17.4. Corporation Transaction in which Awards are Assumed.



          The Plan, Options, SARs, Share Units and Restricted Shares theretofore granted shall continue
in the manner and under the terms so provided in the event of any Corporate Transaction to the
extent that provision is made in writing in connection with such Corporate Transaction for the
assumption or continuation of the Options, SARs, Share Units and Restricted Shares theretofore
granted, or for the substitution for such Options, SARs, Share Units and Restricted Shares for new
common share options and share appreciation rights and new common share units and restricted shares
relating to the shares of a successor entity, or a parent or subsidiary thereof, with appropriate
adjustments as to the number of shares (disregarding any consideration that is not common stock)
and option and share appreciation right exercise prices. In the event a Grantee’s Award is
assumed, continued or substituted upon the consummation of any Corporate Transaction and his
employment is terminated without Cause within one year following the consummation of such Corporate
Transaction, the Grantee’s Award will be fully vested and may be exercised in full, to the extent
applicable, beginning on the date of such termination and for the one-year period immediately
following such termination or for such longer period as the Committee shall determine.




     17.5. Adjustments



          Adjustments under this Section 17 related to Shares or securities of the Company shall be made
by the Board, whose determination in that respect shall be final, binding and conclusive. No
fractional shares or other securities shall be issued pursuant to any such adjustment, and any
fractions resulting from any such adjustment shall be eliminated in each case by rounding downward
to the nearest whole share. The Board shall determine the effect of a Corporate Transaction upon
Awards other than Options, SARs, Share Units and Restricted Shares, and such effect shall be set
forth in the appropriate Award Agreement. The Board may provide in the Award Agreements at the time
of grant, or any time thereafter with the consent of the Grantee, for different provisions to apply
to an Award in place of those described in Sections 17.1, 17.2, 17.3 and 17.4. This Section 17 does
not limit the Company’s ability to provide for alternative treatment of Awards outstanding under
the Plan in the event of change of control events that are not Corporate Transactions.




     17.6. No Limitations on Company



          The making of Awards pursuant to the Plan shall not affect or limit in any way the right or
power of the Company to make adjustments, reclassifications, reorganizations, or changes of its
capital or business structure or to merge, consolidate, dissolve, or liquidate, or to sell or
transfer all or any part of its business or assets.




18. GENERAL PROVISIONS




     18.1. Disclaimer of Rights



          No provision in the Plan or in any Award or Award Agreement shall be construed to confer upon
any individual the right to remain in the employ or service of the Company or any Affiliate, or to
interfere in any way with any contractual or other right or authority of the Company either to
increase or decrease the compensation or other payments to any individual at any time, or to
terminate any employment or other relationship between any individual and the Company. In addition,
notwithstanding anything contained in the Plan to the contrary, unless otherwise stated in the
applicable Award Agreement, no Award granted under the Plan shall be affected by any change of
duties or position of the Grantee, so long as such Grantee continues to be a trustee, officer,
consultant or employee of the Company or an Affiliate. The obligation of the Company to pay any
benefits pursuant to this Plan shall be interpreted as a contractual obligation to pay only those
amounts described herein, in the manner and under the conditions prescribed



A-19









 






herein. The Plan shall in no way be interpreted to require the Company to transfer any amounts to a
third party trustee or otherwise hold any amounts in trust or escrow for payment to any Grantee or
beneficiary under the terms of the Plan.




     18.2. Nonexclusivity of the Plan



          Neither the adoption of the Plan nor the submission of the Plan to the shareholders of the
Company for approval shall be construed as creating any limitations upon the right and authority of
the Board to adopt such other incentive compensation arrangements (which arrangements may be
applicable either generally to a class or classes of individuals or specifically to a particular
individual or particular individuals) as the Board in its discretion determines desirable,
including, without limitation, the granting of share options otherwise than under the Plan.




     18.3. Withholding Taxes



          The Company or an Affiliate, as the case may be, shall have the right to deduct from payments
of any kind otherwise due to a Grantee any federal, state, or local taxes of any kind required by
law to be withheld with respect to the vesting of or other lapse of restrictions applicable to an
Award or upon the issuance of any Shares upon the exercise of an Option or pursuant to an Award.
At the time of such vesting, lapse, or exercise, the Grantee shall pay to the Company or the
Affiliate, as the case may be, any amount that the Company or the Affiliate may reasonably
determine to be necessary to satisfy such withholding obligation. Subject to the prior approval of
the Company or the Affiliate, which may be withheld by the Company or the Affiliate, as the case
may be, in its sole discretion, the Grantee may elect to satisfy such obligations, in whole or in
part, (i) by causing the Company or the Affiliate to withhold Shares otherwise issuable to the
Grantee or (ii) by delivering to the Company or the Affiliate Shares already owned by the Grantee.
The Shares so delivered or withheld shall have an aggregate Fair Market Value equal to such
withholding obligations. The Fair Market Value of the Shares used to satisfy such withholding
obligation shall be determined by the Company or the Affiliate as of the date that the amount of
tax to be withheld is to be determined. A Grantee who has made an election pursuant to this Section
18.3 may satisfy his or her withholding obligation only with Shares that are not subject to any
repurchase, forfeiture, unfulfilled vesting, or other similar requirements. The maximum number of
Shares that may be withheld from any Award to satisfy any federal, state or local tax withholding
requirements upon the exercise, vesting, lapse of restrictions applicable to such Award or payment
of Shares pursuant to such Award, as applicable, cannot exceed such number of shares having a Fair
Market Value equal to the minimum statutory amount required by the Company to be withheld and paid
to any such federal, state or local taxing authority with respect to such exercise, vesting, lapse
of restrictions or payment of Shares.




     18.4. Captions



          The use of captions in this Plan or any Award Agreement is for the convenience of reference
only and shall not affect the meaning of any provision of the Plan or such Award Agreement.




     18.5. Other Provisions



          Each Award granted under the Plan may contain such other terms and conditions not inconsistent
with the Plan as may be determined by the Board, in its sole discretion.




     18.6. Number and Gender



          With respect to words used in this Plan, the singular form shall include the plural form, the
masculine gender shall include the feminine gender, etc., as the context requires.




     18.7. Severability



          If any provision of the Plan or any Award Agreement shall be determined to be illegal or
unenforceable by any court of law in any jurisdiction, the remaining provisions hereof and thereof
shall be




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severable and enforceable in accordance with their terms, and all provisions shall remain
enforceable in any other jurisdiction.




     18.8. Governing Law



          The validity and construction of this Plan and the instruments evidencing the Awards hereunder
shall be governed by the laws of the State of Maryland, other than any conflicts or choice of law
rule or principle that might otherwise refer construction or interpretation of this Plan and the
instruments evidencing the Awards granted hereunder to the substantive laws of any other
jurisdiction.




     18.9. Section 409A of the Code



          The Board intends to comply with Section 409A of the Code (“Section 409A”), or an exemption to
Section 409A, with regard to Awards hereunder that constitute nonqualified deferred compensation
within the meaning of Section 409A. To the extent that the Board determines that a Grantee would be
subject to the additional 20% tax imposed on certain nonqualified deferred compensation plans
pursuant to Section 409A as a result of any provision of any Award granted under this Plan, such
provision shall be deemed amended to the minimum extent necessary to avoid application of such
additional tax. The nature of any such amendment shall be determined by the Board.




*      *      *





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