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Exhibit 10.4
 COMPOSITE VERSION
(Through Amendment # 2)
 
 CAPITALSOURCE INC.
 THIRD AMENDED AND RESTATED EQUITY INCENTIVE PLAN




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TABLE OF CONTENTS
 Page1.
    
    
    PURPOSE
    
    
    12.
    
    
    DEFINITIONS
    
    
    13.
    
    
    ADMINISTRATION OF THE PLAN
    
    
    53.1. Board
    
    
    53.2. Committee
    
    
    53.3. Terms of Awards
    
    
    53.4. Deferral Arrangement
    
    
    63.5. No Liability
    
    
    64.
    
    
    STOCK SUBJECT TO THE PLAN
    
    
    65.
    
    
    EFFECTIVE DATE, DURATION AND AMENDMENTS
    
    
    75.1. Effective Date
    
    
    75.2. Term
    
    
    75.3. Amendment and Termination of the Plan
    
    
    76.
    
    
    AWARD ELIGIBILITY AND LIMITATIONS
    
    
    76.1. Service Providers; Outside Directors; Other Persons
    
    
    76.2. Successive Awards
    
    
    76.3. Limitation on Shares of Stock Subject to Awards and Cash Awards
    
    
    86.4. Limitations on Incentive Stock Options
    
    
    86.5. Stand-Alone, Additional, Tandem, and Substitute Awards
    
    
    87.
    
    
    AWARD AGREEMENT
    
    
    88.
    
    
    TERMS AND CONDITIONS OF OPTIONS
    
    
    98.1. Option Price
    
    
    98.2. Vesting
    
    
    98.3. Term
    
    
    98.4. Termination of Service
    
    
    98.5. Limitations on Exercise of Option
    
    
    98.6. Method of Exercise
    
    
    98.7. Rights of Holders of Options
    
    
    108.8. Delivery of Stock Certificates
    
    
    108.9. No Option Repricing
    
    
    109.
    
    
    TRANSFERABILITY OF OPTIONS
    
    
    109.1. Transferability of Options
    
    
    109.2. Family Transfers
    
    
    1010.
    
    
    STOCK APPRECIATION RIGHTS
    
    
    1110.1. Right to Payment
    
    
    1110.2. Other Terms
    
    
    1110.3. No SAR Repricing
    
    
    1111.
    
    
    RESTRICTED STOCK AND STOCK UNITS
    
    
    1111.1. Grant of Restricted Stock or Stock Units
    
    
    1111.2. Restrictions
    
    
    1111.3. Restricted Stock Certificates
    
    
    12
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Page11.4. Rights of Holders of Restricted Stock
    
    
    1211.5. Rights of Holders of Stock Units
    
    
    1211.5.1.No Voting and Dividend Rights
    
    
    1211.5.2.Creditors Rights
    
    
    1211.6. Termination of Service
    
    
    1311.7. Purchase of Restricted Stock
    
    
    1311.8. Delivery of Stock
    
    
    1312.
    
    
    UNRESTRICTED STOCK AWARDS
    
    
    1313.
    
    
    FORM OF PAYMENT FOR OPTIONS AND RESTRICTED STOCK
    
    
    1313.1. General Rule
    
    
    1313.2. Surrender of Stock
    
    
    1313.3. Cashless Exercise
    
    
    1413.4. Other Forms of Payment
    
    
    1414.
    
    
    DIVIDEND EQUIVALENT RIGHTS
    
    
    1414.1. Dividend Equivalent Rights
    
    
    1414.2. Termination of Service
    
    
    1415.
    
    
    PERFORMANCE AND ANNUAL INCENTIVE AWARDS
    
    
    1515.1. Performance Conditions
    
    
    1515.2. Performance or Annual Incentive Awards Granted to Designated Covered Employees
    
    
    1515.2.1. Performance Goals Generally
    
    
    1515.2.2. Business Criteria
    
    
    1515.2.3. Timing For Establishing Performance Goals
    
    
    1615.2.4. Performance or Annual Incentive Award Pool
    
    
    1615.2.5. Settlement of Performance or Annual Incentive Awards;
Other Terms
    
    
    1615.3. Written Determinations
    
    
    1615.4. Status of Section 15.2 Awards Under Code Section 162(m)
    
    
    1616.
    
    
    PARACHUTE LIMITATIONS
    
    
    1717.
    
    
    REQUIREMENTS OF LAW
    
    
    1717.1. General
    
    
    1717.2. Rule 16b-3
    
    
    1818.
    
    
    EFFECT OF CHANGES IN CAPITALIZATION
    
    
    1818.1. Changes in Stock
    
    
    1818.2. Changes in Capitalization; Merger; Liquidation
    
    
    1918.3. Adjustments
    
    
    1918.4. No Limitations on Company
    
    
    1919.
    
    
    GENERAL PROVISIONS
    
    
    1919.1. Disclaimer of Rights
    
    
    1919.2. Nonexclusivity of the Plan
    
    
    2019.3. Withholding Taxes
    
    
    2019.4. Captions
    
    
    2019.5. Other Provisions
    
    
    2019.6. Number And Gender
    
    
    20
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Page19.7. Severability
    
    
    2119.8. Governing Law
    
    
    2119.9. Code Section 409A
    
    
    22




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CAPITALSOURCE INC.
 THIRD AMENDED AND RESTATED EQUITY INCENTIVE PLAN
  1. PURPOSE
  2. DEFINITIONS
  Affiliate
 Annual Incentive Award Section 15
 Award
 Award Agreement
 Benefit Arrangement Section 16
 Board
 Cause




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Code
 Committee
 Company
 Corporate Transaction
 Covered Employee
 Disability
 Dividend Equivalent Section 14
 Effective Date
 Exchange Act
 Fair Market Value
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Family Member
 Grant Date Section 6
 Grantee
 Incentive Stock Option
 Non-qualified Stock Option
 Option
 Option Price
 Other Agreement Section 16
 Outside Director
 Performance Award Section 15
 Plan
 Purchase Price
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Reporting Person
 Restricted Stock Section 11
 SAR Exercise Price Section 10
 Securities Act
 Service
 Service Provider
 Stock
 Stock Appreciation Right SAR Section 10
 Stock Unit Section 11
 Subsidiary
 Termination Date Section 8.3
 Ten Percent Stockholder
 Unrestricted Stock Section 12
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3. ADMINISTRATION OF THE PLAN
 3.1. Board
  3.2. Committee
 Section 3.1
 3.3. Terms of Awards
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Section 8.9
  3.4. Deferral Arrangement
  3.5. No Liability
  4. STOCK SUBJECT TO THE PLAN
 Section 18 1 2
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1 2
 5. EFFECTIVE DATE, DURATION AND AMENDMENTS
 5.1. Effective Date
  5.2. Term
 Section 5.3
 5.3. Amendment and Termination of the Plan
  6. AWARD ELIGIBILITY AND LIMITATIONS
 6.1. Service Providers; Outside Directors; Other Persons
 Section 6
 6.2. Successive Awards
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6.3. Limitation on Shares of Stock Subject to Awards and Cash Awards
 Section 6
 Section 6
  Section 6.3 Section
18
 6.4. Limitations on Incentive Stock Options
  6.5. Stand-Alone, Additional, Tandem, and Substitute Awards
 Sections 8.1 and 10.1
 7. AWARD AGREEMENT
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8. TERMS AND CONDITIONS OF OPTIONS
 8.1. Option Price
 provided however
 8.2. Vesting
 Sections 8.3 and 18 Section 8.2
 8.3. Term
 provided however
 8.4. Termination of Service
  8.5. Limitations on Exercise of Option
 Section 18
 8.6. Method of Exercise
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8.7. Rights of Holders of Options
 Section 18
 8.8. Delivery of Stock Certificates
  8.9. No Option Repricing
  9. TRANSFERABILITY OF OPTIONS
 9.1. Transferability of Options
 Section 9.2 Section 9.2
 9.2. Family Transfers
 Section 9.2 Section
9.2 Section 9.2 Section
8.4
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Section 8.4
 10. STOCK APPRECIATION RIGHTS
  10.1. Right to Payment
  10.2. Other Terms
 provided however
 10.3. No SAR Repricing
  11. RESTRICTED STOCK AND STOCK UNITS
 11.1. Grant of Restricted Stock or Stock Units
 Section 6
 11.2. Restrictions
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Section 15.1 15.2
 11.3. Restricted Stock Certificates
 provided however
 11.4. Rights of Holders of Restricted Stock
  11.5. Rights of Holders of Stock Units
 11.5.1. No Voting and Dividend Rights
  11.5.2. Creditors Rights
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11.6. Termination of Service
  11.7. Purchase of Restricted Stock
 Section 13
 11.8. Delivery of Stock
  12. UNRESTRICTED STOCK AWARDS
  13. FORM OF PAYMENT FOR OPTIONS AND RESTRICTED STOCK
 13.1. General Rule
  13.2. Surrender of Stock
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13.3. Cashless Exercise
 Section 19.3
 13.4. Other Forms of Payment
  14. DIVIDEND EQUIVALENT RIGHTS
 14.1. Dividend Equivalent Rights
  14.2. Termination of Service
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15. PERFORMANCE AND ANNUAL INCENTIVE AWARDS
 15.1. Performance Conditions
 Sections 15.2
 15.2. Performance or Annual Incentive Awards Granted to Designated Covered Employees
 Section 15.2
 15.2.1. Performance Goals Generally
 Section 15.2
 15.2.2. Business Criteria
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15.2.3. Timing For Establishing Performance Goals
  15.2.4. Performance or Annual Incentive Award Pool
  15.2.5. Settlement of Performance or Annual Incentive Awards; Other Terms
  15.3. Written Determinations
  15.4. Status of Section 15.2 Awards Under Code Section 162(m)
 Section 15.2 Section 15.2
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16. PARACHUTE LIMITATIONS
 and
 17. REQUIREMENTS OF LAW
 17.1. General
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17.2. Rule 16b-3
  18. EFFECT OF CHANGES IN CAPITALIZATION
 18.1. Changes in Stock
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18.2. Changes in Capitalization; Merger; Liquidation
  18.1
 18.3. Adjustments
 Section 18 Section 18
 18.4. No Limitations on Company
  19. GENERAL PROVISIONS
 19.1. Disclaimer of Rights
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19.2. Nonexclusivity of the Plan
  19.3. Withholding Taxes
 Section 19.3
 19.4. Captions
  19.5. Other Provisions
  19.6. Number And Gender
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19.7. Severability
  19.8. Governing Law
  19.9. Code Section 409A
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