EXHIBIT
      10.4

    
 

    


    


    


    


    


    
      
        

      

    

     

    AMERICAN
      REALTY CAPITAL TRUST, INC.

    


    FORM
      OF 2007 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN

    


    Adopted
      by Board of Directors:
      [                    ],
      2007

    


    [Approved
      by Stockholders:
      [                    ],
      2007]

    


    
      
 


    


    


    


    


    


    


    


    


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    AMERICAN
      REALTY CAPITAL TRUST, INC.

    


    FORM
      OF 2007 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN

    


    Adopted
      by Board of Directors:
      [                    ],
      2007

    


    [Approved
      by Stockholders:
      [                    ],
      2007]

    


    1.
      Purpose
      of the Plan. 

     

    The
      purpose of this American Realty Capital Trust, Inc. 2007 Non-Employee Director
      Stock Option Plan is to enhance the Company’s profitability and value for the
      benefit of stockholders to enable the Company to attract, retain and motivate
      Non-Employee Directors and who are important to the success of the Company
      and
      to create and strengthen a mutuality of interest between the Non-Employee
      Directors and the stockholders of the Company by granting such directors options
      to purchase Common Stock of the Company. 

     

    2.
      Definitions. 

     

    (a)
      “Acquisition
      Event”
      means a
      merger or consolidation in which the Company is not the surviving entity, or
      any
      transaction that results in the acquisition of all or substantially all of
      the
      Company’s outstanding Common Stock by a single person or entity or by a group of
      persons and/or entities in concert, or the sale or transfer of all or
      substantially all of the Company’s assets. 

     

    (b)
      “Act”
      means
      the Securities Exchange Act of 1934, as amended and the rules and regulations
      promulgated thereunder. 

     

    (c)
      “Annual
      Date of Grant”
      has the
      meaning set forth in Section 6(a). 

     

    (d)
      “Board”
      means
      the Board of Directors of the Company. 

     

    (e)
      “Cause”
      has the
      meaning set forth in Section 7(b). 

     

    (f)
      “Change
      of Control”
      has the
      meaning set for in Section 6(d). 

     

    (g)
      “Code”
      means
      the Internal Revenue Code of 1986, as amended. 

     

    (h)
      “Committee”
      means
      the Board or a duly appointed committee of the Board to which the Board has
      delegated its powers and functions hereunder. 

     

    (i)
      “Common
      Stock”
      means
      the voting common stock of the Company, par value $.01, any common stock into
      which the common stock may be converted and any common stock resulting from
      any
      reclassification of the common stock. 

     

    (j)
      “Company”
      means
      American Realty Capital Trust, Inc., a Maryland corporation. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (k)
      “Company
      Voting Securities”
      has the
      meaning set forth in Section 6(d)(i). 

     

    (l)
      “Corporate
      Transaction”
      has the
      meaning set forth in Section 6(d)(i). 

     

    (m)
      “Disability”
      means a
      permanent and total disability, as determined by the Committee in its sole
      discretion, provided that in no event shall any disability that is not permanent
      and total disability within the meaning of Section 22(e)(3) of the Code be
      treated as a Disability. A Disability shall be deemed to occur at the time
      of
      the determination by the Committee of the Disability. 

     

    (n)
      “Effective
      Date”
      has the
      meaning set forth in Section 3. 

     

    (o)
      “Fair
      Market Value”
      means,
      for purposes of this Plan, unless otherwise required by any applicable provision
      of the Code or any regulations issued thereunder, as of any date and except
      as
      provided below, the last sales price reported for the Common Stock on the
      applicable date: (i) as reported on the principal national securities exchange
      in the United States on which it is then traded or The Nasdaq Stock Market;
      or
      (ii) if not traded on any such national securities exchange or The Nasdaq Stock
      Market, as quoted on an automated quotation system sponsored by the National
      Association of Securities Dealers, Inc. or if the Common Stock shall not have
      been reported or quoted on such date, on the first day prior thereto on which
      the Common Stock was reported or quoted; provided, that the Committee may modify
      the definition of Fair Market Value to reflect any changes in the trading
      practices of any exchange on which the Common Stock is listed or traded. If
      the
      Common Stock is not readily tradable on a national securities exchange, The
      Nasdaq Stock Market or any automated quotation system sponsored by the National
      Association of Securities Dealers, Inc., its Fair Market Value shall be set
      in
      good faith by the Committee and in a manner that complies with Section 409A
      of
      the Code. For purposes of the grant of any Option, the applicable date shall
      be
      the date on which the Stock Option is granted. 

     

    (p)
      “Incumbent
      Board”
      has the
      meaning set forth in Section 6(d)(ii). 

     

    (q)
      “Non-Employee
      Directors”
      means
      directors of the Company who are not employees of the Company or its
      subsidiaries. 

     

    (r)
      “Option”
      means
      the right to purchase the number of Shares granted in the Option agreement
      at a
      prescribed purchase price on the terms specified in the Plan and the Option
      agreement. No Option awarded under this Plan is intended to be an “incentive
      stock option” within the meaning of Section 422 of the Code. 

     

    (s)
      “Participant”
      means a
      Non-Employee Director who is granted an Option under the Plan, which Option
      has
      not expired or been cancelled. 

     

    (t)
      “Person”
      means an
      individual, entity or group within the meaning of Section l3d-3 or 14d-1 of
      the
      Act. 

     

    (u)
      “Plan”
      means
      the American Realty Capital Trust, Inc. 2007 Non-Employee Director Stock Option
      Plan, as amended from time to time. 

    
       

      
        
          
          

        

        
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    (v)
      “Purchase
      Price” means
      the
      purchase price per Share. 

     

    (w)
      “Securities
      Act”
      means
      the Securities Act of 1933, as amended. 

     

    (x)
      “Share”
      means a
      share of Common Stock. 

     

    (y)
      “Termination
      of Service”
      means
      termination of the relationship with the Company so that an individual is no
      longer a director of the Company. 

     

    3.
      Effective
      Date/Expiration of Plan. 

     

    The
      Plan
      became effective
      [                    ]
      2007 (the “Effective Date”). No Option shall be granted under the Plan on or
      after the tenth anniversary of the Effective Date, but Options previously
      granted may extend beyond that date. 

     

    4.
      Administration. 

     

    (a)
      Duties
      of the Committee.
      The Plan
      shall be administered by the Committee. The Committee shall have full authority
      to interpret the Plan and to decide any questions and settle all controversies
      and disputes that may arise in connection with the Plan; to establish, amend,
      and rescind rules for carrying out the Plan, to administer the Plan, subject
      to
      its provisions; to prescribe the form or forms of instruments evidencing Options
      and any other instruments required under the Plan (which need not be uniform)
      and to change such forms from time to time; and to make all other determinations
      and to take all such steps in connection with the Plan and the Options as the
      Committee, in its sole discretion, deems necessary or desirable; provided,
      that
      all such determinations shall be in accordance with the express provisions,
      if
      any, contained in the Plan or Option agreement. The Committee shall not be
      bound
      to any standards of uniformity or similarity of action, interpretation or
      conduct in the discharge of its duties hereunder, regardless of the apparent
      similarity of the matters coming before it. The determination, action or
      conclusion of the Committee in connection with the foregoing shall be final,
      conclusive and binding on all parties. 

     

    (b)
      Advisors.
      The
      Committee may designate the Secretary of the Company, other employees of the
      Company or competent professional advisors to assist the Committee in the
      administration of the Plan, and may grant authority to such persons (other
      than
      professional advisors) to grant an Option or to execute Option agreements or
      other documents on behalf of the Committee, provided that no Participant may
      grant an Option or execute any Option agreement granting Options to such
      Participant. The Committee may employ such legal counsel, consultants and agents
      as it may deem desirable for the administration of the Plan, and may rely upon
      any opinion received from any such counsel or consultant and any computation
      received from any such consultant or agent. Expenses incurred by the Committee
      in the engagement of such counsel, consultant or agent shall be paid by the
      Company. 

     

    (c)
      Indemnification.
      To the
      maximum extent permitted by law, no officer, member or former officer or member
      of the Committee or the Board shall be liable for any action or determination
      made in good faith with respect to the Plan or any Option granted under it.
      To
      the maximum extent permitted by applicable law or the Certificate of
      Incorporation or By-Laws of the Company and to the extent not covered by
      insurance, each officer, member or former officer or member of the Committee
      or
      of the Board shall be indemnified and held harmless by the Company against
      any
      cost or expense (including reasonable fees of counsel reasonably acceptable
      to
      the Company) or liability (including any sum paid in settlement of a claim
      with
      the approval of the Company), and advanced amounts necessary to pay the
      foregoing at the earliest time and to the fullest extent permitted, arising
      out
      of any act or omission to act in connection with the Plan, except to the extent
      arising out of such officer’s, member’s or former officer’s or member’s own
      fraud or bad faith. Such indemnification shall be in addition to any rights
      of
      indemnification the officers, members or former officers or members may have
      as
      directors under applicable law or under the Certificate of Incorporation or
      By-Laws of the Company or otherwise. 

    
       

      
        
          
          

        

        
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    (d)
      Meetings
      of the Committee.
      The
      Committee shall select one of its members as a Chairman and shall adopt such
      rules and regulations, as it shall deem appropriate, concerning the holding
      of
      its meetings and the transaction of its business. Any member of the Committee
      may be removed at any time either with or without cause by resolution adopted
      by
      the Board, and any vacancy on the Committee may at any time be filled by
      resolution adopted by the Board. All determinations by the Committee shall
      be
      made by the affirmative vote of a majority of its members. Any such
      determination may be made at a meeting duly called and held at which a majority
      of the members of the Committee were in attendance in person or through
      telephonic communication. Any determination set forth in writing and signed
      by
      all of the members of the Committee shall be as fully effective as if it had
      been made by a vote of such members at a meeting duly called and held.


     

    5.
      Shares;
      Adjustment Upon Certain Events. 

     

    (a)
      Shares
      to be Delivered; Fractional Shares.
      Shares
      to be issued under the Plan shall be made available, at the discretion of the
      Board, either from authorized but unissued Shares or from issued Shares
      reacquired by the Company and held in treasury. No fractional Shares will be
      issued or transferred upon the exercise of any Option. In lieu thereof, the
      Company shall pay a cash adjustment equal to the same fraction of the Fair
      Market Value of one Share on the date of exercise. 

     

    (b)
      Number
      of Shares.
      Subject
      to adjustment as provided in this Section 5, the maximum aggregate number of
      Shares authorized for issuance under the Plan shall be 1,000,000 Shares. If
      an
      Option is for any reason canceled, or expires or terminates unexercised, the
      Shares covered by such Option shall again be available for the grant of Options,
      within the limits provided by the preceding sentence. In addition, if Common
      Stock has been exchanged by a Participant as full or partial payment to the
      Company of the Purchase Price or if the number of shares of Common Stock
      otherwise deliverable has been reduced for full or partial payment to the
      Company of the Purchase Price, the number of shares of Common Stock exchanged
      or
      reduced shall again be available under the Plan. 

     

    (c)
      Adjustments;
      Recapitalization, etc.
      The
      existence of the Plan and the Options granted hereunder shall not affect in
      any
      way the right or power of the Board or the stockholders of the Company to make
      or authorize any adjustment, recapitalization, reorganization or other change
      in
      the Company’s capital structure or its business, any merger or consolidation of
      the Company, any issue of bonds, debentures, preferred or prior preference
      stocks ahead of or affecting Common Stock, the dissolution or liquidation of
      the
      Company or any sale or transfer of all or part of its assets or business or
      any
      other corporate act or proceeding. If and whenever the Company takes any such
      action, however, the following provisions, to the extent applicable, shall
      govern: 

    
       

      
        
          
          

        

        
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    (i)
      If
      and
      whenever the Company shall effect a stock split, stock dividend, subdivision,
      recapitalization or combination of Shares or other changes in the Company’s
      Common Stock, (x) the Purchase Price (as defined herein) per Share and the
      number and class of Shares and/or other securities with respect to which
      outstanding Options thereafter may be exercised, and (y) the total number and
      class of Shares and/or other securities that may be issued under this Plan,
      shall be proportionately adjusted by the Committee. The Committee may also
      make
      such other adjustments as it deems necessary to take into consideration any
      other event (including, without limitation, accounting changes) if the Committee
      determines that such adjustment is appropriate to avoid distortion in the
      operation of the Plan. 

     

    (ii)
      Subject
      to Section 5(c)(iii), if the Company merges or consolidates with one or more
      corporations, then from and after the effective date of such merger or
      consolidation, upon exercise of an Option theretofore granted, the Participant
      shall be entitled to purchase under such Option, in lieu of the number of Shares
      as to which such Option shall then be exercisable but on the same terms and
      conditions of exercise set forth in such Option, the number and class of Shares
      and/or other securities or property (including cash) to which the Participant
      would have been entitled pursuant to the terms of the agreement of merger or
      consolidation if, immediately prior to such merger or consolidation, the
      Participant had been the holder of record of the total number of Shares
      receivable upon exercise of such Option (whether or not then exercisable).
      In
      connection with any event described in this paragraph, the Committee may
      provide, in its sole discretion, for the cancellation of any outstanding Options
      and payment in cash or other property in exchange therefor. 

     

    (iii)
      In
      the
      event of an Acquisition Event, the Committee may, in its discretion, and without
      any liability to any Participant, terminate all outstanding Options as of the
      consummation of the Acquisition Event by delivering notice of termination to
      each Participant at least 20 days prior to the date of consummation of the
      Acquisition Event; provided that, during the period from the date on which
      such
      notice of termination is delivered to the consummation of the Acquisition Event,
      each Participant shall have the right to exercise in full all of the Options
      that are then outstanding (without regard to limitations on exercise otherwise
      contained in the Options) but any such exercise shall be contingent upon and
      subject to the occurrence of the Acquisition Event, provided that if the
      Acquisition Event does not take place within a specified period after giving
      such notice for any reason whatsoever, the notice and exercise pursuant thereto
      shall be null and void. If the Acquisition Event does take place after giving
      such notice, any Option not exercised prior to the date of the consummation
      of
      such Acquisition Event shall be forfeited simultaneous with the consummation
      of
      the Acquisition Event. If an Acquisition Event occurs and the Committee does
      not
      terminate the outstanding Options pursuant to the foregoing provisions, then
      the
      provisions of Section 5(c)(ii) shall apply. 

     

    (iv)
      If,
      as a
      result of any adjustment made pursuant to the preceding paragraphs of this
      Section 5, any Participant shall become entitled upon exercise of an Option
      to
      receive any securities other than Common Stock, then the number and class of
      securities so receivable thereafter shall be subject to adjustment from time
      to
      time in a manner and on terms as nearly equivalent as practicable to the
      provisions with respect to the Common Stock set forth in this Section 5, as
      determined by the Committee in its discretion. 

    
       

      
        
          
          

        

        
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    (v)
      Except
      as
      hereinbefore expressly provided, the issuance by the Company of shares of stock
      of any class, or securities convertible into shares of stock of any class,
      for
      cash, property, labor or services, upon direct sale, upon the exercise of rights
      or warrants to subscribe therefor, or upon conversion of shares or other
      securities, and in any case whether or not for fair value, shall not affect,
      and
      no adjustment by reason thereof shall be made with respect to the number and
      class of Shares and/or other securities or property subject to Options
      theretofore granted of the Purchase Price per Share. 

     

    6.
      Awards
      and Terms of Options. 

     

    (a)
      Grant.

     

    (i)
      Without
      further action by the Board or the stockholders (except as provided in Section
      11) of the Company, each Non-Employee Director shall be automatically granted
      an
      Option to purchase 3,000 Shares (subject to any increase or decrease pursuant
      to
      Section 5(c)), subject to the terms of the Plan, upon the date of his or her
      initial election or appointment to be a Non-Employee Director.

     

    (ii)
      Without
      further action by the Board or the stockholders (except as provided in Section
      11) of the Company, each year, as of the date of the annual meeting of the
      stockholders of the Company (each such date, an “Annual Date of Grant”), each
      Non-Employee Director shall be automatically granted an Option to purchase
      3,000
      Shares (subject to any increase or decrease pursuant to Section 5(c)), subject
      to the terms of the Plan, provided that no such Option shall be granted if
      on
      the date of grant the Company has liquidated, dissolved or merged or
      consolidated with another entity in such a manner that it is not the surviving
      entity (unless the Plan has been assumed by such surviving entity with regard
      to
      future grants). 

     

    (b)
      Purchase
      Price.
      The
      Purchase Price deliverable upon the exercise of an Option shall equal 100%
      of
      the Fair Market Value on the last business day preceding the Annual Date of
      Grant. Notwithstanding the foregoing, the Purchase Price for all Options granted
      under the Plan before the termination of the Company’s initial public offering
      will be $10 per Share 

     

    (c)
      Exercisability.
      Except
      as otherwise provided herein, any Option granted to a Participant shall vest
      and
      become exercisable on the second anniversary of the date of grant, subject
      to
      the Participant’s continued service as a Non-Employee Director through such
      date. No Option shall be exercisable after the expiration of ten (10) years
      from
      the date of grant. 

     

    (d)
      Acceleration
      of Exercisability on Change of Control.
      All
      Options granted and not previously exercisable shall become exercisable
      immediately upon a Change of Control (as defined herein). For this purpose,
      a
“Change of Control” shall be deemed to have occurred upon: 

    
       

      
        
          
          

        

        
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    (i)
      an
      acquisition by any Person of beneficial ownership (within the meaning of Rule
      l3d-3 promulgated under the Act) of 33% or more of either (A) the then
      outstanding Shares or (B) the combined voting power of the then outstanding
      voting securities of the Company entitled to vote generally in the election
      of
      directors (the “Company Voting Securities”); excluding, however, the following:
      (w) any acquisition  directly from the Company, other than an acquisition
      by virtue of the exercise of a conversion privilege unless the security being
      so
      converted was itself acquired directly from the Company, (x) any acquisition
      by
      the Company, (y) any acquisition by an employee benefit plan (or related trust)
      sponsored or maintained by the Company or (z) any acquisition by any entity
      pursuant to a reorganization, merger, consolidation or similar corporate
      transaction (in each case, a “Corporate Transaction”), if, pursuant to such
      Corporate Transaction, the conditions described in clauses (A), (B) and (C)
      of
      paragraph (iii) of this Section are satisfied; or 

     

    (ii)
      a
      change
      in the composition of the Board such that the individuals who, as of the
      Effective Date hereof, constitute the Board (the Board as of the date hereof
      shall be hereinafter referred to as the “Incumbent Board”) cease for any reason
      to constitute at least a majority of the Board; provided that for purposes
      of
      this subsection any individual who becomes a member of the Board subsequent
      to
      the date hereof whose election, or nomination for election by the Company’s
      stockholders, was approved by a vote of at least a majority of those individuals
      who are members of the Board and who are also members of the Incumbent Board
      (or
      deemed to be such pursuant to this proviso) shall be considered as though such
      individual were a member of the Incumbent Board; but, provided further, that
      any
      such individual whose initial assumption of office occurs as a result of either
      an actual or threatened election contest (as such terms are used in Rule 14a-11
      of Regulation 14A promulgated under the Act) or other actual or threatened
      solicitation of proxies or consents by or on behalf of a Person other than
      the
      Board shall not be so considered as a member of the Incumbent Board; or


     

    (iii)
      the
      approval by the stockholders of the Company of a Corporate Transaction or,
      if
      consummation of such Corporate Transaction is subject, at the time of such
      approval by stockholders, to the consent of any government or governmental
      agency, the obtaining of such consent (either explicitly or implicitly by
      consummation); excluding, however, such a Corporate Transaction pursuant to
      which (A) all or substantially all of the individuals and entities who are
      the
      beneficial owners, respectively, of the outstanding Shares and Company Voting
      Securities immediately prior to such Corporate Transaction will beneficially
      own, directly or indirectly, more than 60% of, respectively, the outstanding
      shares of common stock of the entity resulting from such Corporate Transaction
      and the combined voting power of the outstanding voting securities of such
      entity entitled to vote generally in the election of directors, in substantially
      the same proportions as their ownership, immediately prior to such Corporate
      Transaction, of the outstanding Shares and Company Voting Securities, as the
      case may be, (B) no Person (other than the Company, any employee benefit plan
      (or related trust) of the Company or the entity resulting from such Corporate
      Transaction and any Person beneficially owning, immediately prior to such
      Corporate Transaction, directly or indirectly, 33% or more of the outstanding
      Shares or Company Voting Securities, as the case may be) will beneficially
      own,
      directly or indirectly, 33% or more of, respectively, the outstanding shares
      of
      common stock of the entity resulting from such Corporate Transaction or the
      combined voting power of the then outstanding securities of such entity entitled
      to vote generally in the election of directors and (C) individuals who were
      members of the Incumbent Board will constitute at least a majority of the
      members of the board of directors of the corporation resulting from such
      Corporate Transaction; notwithstanding the foregoing, no Change of Control
      will
      occur if two-thirds (2/3) of the Incumbent Board approves the Corporate
      Transaction; or 

    
       

      
        
          
          

        

        
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    (iv)
      the
      approval of the stockholders of the Company of (A) a complete liquidation or
      dissolution of the Company or (B) the sale or other disposition of all or
      substantially all of the assets of the Company; excluding, however, such a
      sale
      or other disposition to a entity with respect to which, following such sale
      or
      other disposition, (x) more than 60% of, respectively, the then outstanding
      shares of common stock of such entity and the combined voting power of the
      then
      outstanding voting securities of such entity entitled to vote generally in
      the
      election of directors will be then beneficially owned, directly or indirectly,
      by all or substantially all of the individuals and entities who were the
      beneficial owners respectively, of the outstanding Shares and Company Voting
      Securities immediately prior to such sale or other disposition in substantially
      the same proportion as their ownership, immediately prior to such sale or other
      disposition, of the outstanding Shares and Company Voting Securities, as the
      case may be, (y) no Person (other than the Company and any employee benefit
      plan
      (or related trust) of the Company or such entity and any Person beneficially
      owning, immediately prior to such sale or other disposition, directly or
      indirectly, 33% or more of the outstanding Shares or Company Voting Securities,
      as the case may be) will beneficially own, directly or indirectly, 33% or more
      of, respectively, the then outstanding shares of common stock of such entity
      and
      the combined voting power of the then outstanding voting securities of such
      entity entitled to vote generally in the election of directors and (z)
      individuals who were members of the Incumbent Board will constitute at least
      a
      majority of the members of the board of directors of such entity. 

     

    (e)
      Exercise
      of Options. 

     

    (i)
      A
      Participant may elect to exercise an Option by giving written notice to the
      Committee of such election and of the number of Shares such Participant has
      elected to purchase pursuant to the Option, accompanied by payment in full
      of
      the aggregate Purchase Price for the number of Shares for which the Option
      is
      being exercised. 

     

    (ii)
      Shares
      purchased pursuant to the exercise of an Option shall be paid for at the time
      of
      exercise as follows: 

     

    (A)
      in
      cash
      or by check, bank draft or money order payable to the order of the Company;
      

     

    (B)
      if
      so
      permitted by the Committee: (x) through the delivery of unencumbered Shares
      (including Shares being acquired pursuant to the Option then being exercised),
      provided such Shares (or such Option) have been owned by the Participant for
      such period as may be required by applicable accounting standards to avoid
      a
      charge to earnings or (y) through a combination of Shares and cash as provided
      above, provided, that, if the Shares delivered upon exercise of the Option
      is an
      original issue of authorized Shares, at least so much of the Purchase Price
      as
      represents the par value of such Shares shall be paid in cash or by a
      combination of cash and Shares; 

    
       

      
        
          
          

        

        
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    (C)
      to
      the
      extent permitted by applicable law, if the Common Stock is traded on a national
      securities exchange, the Nasdaq Stock Market, Inc. or quoted on a national
      quotation system sponsored by the National Association of Securities Dealers,
      through the delivery of irrevocable instructions to a broker to deliver promptly
      to the Company an amount equal to the aggregate Purchase Price; or 

     

    (D)
      on
      such
      other terms and conditions as may be acceptable to the Committee and in
      accordance with applicable law. The
      Company will not issue shares in certificated form. The Company's transfer
      agent
      maintains a stock ledger that contains the name and address of each stockholder
      and the number of shares that the stockholder holds. The Company shall provide
      the Participant, pursuant to the Company's Articles of Amendment and
      Restatement, with a notice containing information about the Shares purchased,
      in
      lieu of issuance of a share certificate.

     

    (iii)
      REIT
      Status. Notwithstanding anything herein to the contrary, no Option granted
      under
      this Plan may be exercised if such exercise would jeopardize the Company’s
      status as a “real estate investment trust” as defined under the Code.


     

    7.
      Effect
      of Termination of Service. 

     

    (a)
      Death,
      Disability, or Retirement.
      Except
      as otherwise provided in the Participant’s Option agreement or in this Plan,
      upon a Termination of Service, all outstanding Options then exercisable and
      not
      exercised by the Participant prior to such Termination of Service shall remain
      exercisable by the Participant to the extent not theretofore exercised for
      the
      following time periods (subject to Section 6(c)): 

     

    (i)
      in
      the
      event of the Participant’s death, such Options shall remain exercisable (by the
      Participant’s estate or by the person given authority to exercise such Options
      by the Participant’s will or by operation of law) for a period of one (1) year
      from the date of the Participant’s death; and 

     

    (ii)
      in
      the
      event the Participant retires at or after age 65 (or, with the consent of the
      Committee, before age 65), or, if the Participant’s services terminate due to
      Disability, such Options shall remain exercisable for one (1) year from the
      date
      of the Participant’s Termination of Service. 

     

    (b)
      Cause.
      Upon the
      Termination of Service of a Participant for Cause (as defined herein) or if
      it
      is discovered after a Termination of Service that such Participant had engaged
      in conduct that would have justified a Termination of Service for Cause, all
      outstanding Options (whether vested or unvested) shall immediately be canceled,
      provided that upon any such termination the Committee may, in its discretion,
      require the Participant to promptly pay to the Company (and the Company shall
      have the right to recover) any gain the Participant realized as a result of
      the
      exercise of any Option that occurred within one (1) year prior to such
      Termination of Service or the discovery of conduct that would have justified
      a
      Termination of Service for Cause. Termination of Service shall be deemed to
      be
      for “Cause” for purposes of this Section 7(b) if the Participant shall have
      committed fraud or any felony in connection with the Participant’s duties as a
      director of the Company or willful misconduct or any act of disloyalty,
      dishonesty, fraud or breach of trust, confidentiality or fiduciary duties as
      to
      the Company or the commission of any other act which causes or may reasonably
      be
      expected to cause economic or reputational injury to the Company or any other
      act or failure to act that constitutes “cause” for removal of a director under
      applicable Maryland law. 

    
       

      
        
          
          

        

        
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    (c)
      Other
      Termination.
      In the
      event of a Termination of Service for any reason other than as provided in
      Sections 7(a) and 7(b), all outstanding Options then exercisable and not
      exercised by the Participant prior to such Termination of Service shall remain
      exercisable (to the extent exercisable by such Participant immediately before
      such termination) for a period of three (3) months after such termination,
      but
      not beyond the original stated term of the Option. 

     

    8.
      Nontransferability
      of Options. 

     

    No
      Option
      shall be transferable by the Participant otherwise than by will or under
      applicable laws of descent and distribution, and during the lifetime of the
      holder may be exercised only by the holder or his or her guardian or legal
      representative. In addition, no Option shall be assigned, negotiated, pledged
      or
      hypothecated in any way (whether by operation of law or otherwise), and no
      Option shall be subject to execution, attachment or similar process. Upon any
      attempt to transfer, assign, negotiate, pledge or hypothecate any Option, or
      in
      the event of any levy upon any Option by reason of any execution, attachment
      or
      similar process contrary to the provisions hereof, such Option shall immediately
      be cancelled. Notwithstanding the foregoing, the Committee may determine at
      the
      time of grant or thereafter, that an Option that is otherwise non transferable
      is transferable in whole or in part and in such circumstances, and under such
      conditions, as specified by the Committee. 

     

    9.
      Rights
      as a Stockholder. 

     

    A
      holder
      of an Option shall have no rights as a stockholder with respect to any Shares
      covered by such holder’s Option until such holder shall have become the holder
      of record of such Shares, and no adjustments shall be made for dividends in
      cash
      or other property or distributions or other rights in respect to any such
      Shares, except as otherwise specifically provided for in this Plan.


     

    10.
      Determinations. 

     

    Each
      determination, interpretation or other action made or taken pursuant to the
      provisions of this Plan by the Committee shall be final, conclusive and binding
      for all purposes and upon all persons, including, without limitation, the
      holders of any Options and Non-Employee Directors and their respective heirs,
      executors, administrators, personal representatives and other successors in
      interest. 

     

    11.
      Termination,
      Amendment and Modification. 

     

    Notwithstanding
      any other provision of this Plan, the Board or the Committee may at any time,
      and from time to time, amend, in whole or in part, any or all of the provisions
      of this Plan, or suspend or terminate it entirely, retroactively or otherwise;
      provided, however, that, unless otherwise required by law or specifically
      provided herein, the rights of a Participant with respect to Options granted
      prior to such amendment, suspension or termination, may not be impaired without
      the consent of such Participant; provided further, that no amendment may be
      made,  without stockholder approval if stockholder approval is required
      under applicable law. The Committee may amend the terms of any Option
      theretofore granted, prospectively or retroactively, but, subject to Section
      5
      above or as otherwise specifically provided herein, no such amendment or other
      action by the Committee shall impair the rights of any holder without the
      holder’s consent. 

    
       

      
        
          
          

        

        
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    12.
      Non-Exclusivity. 

     

    Neither
      the adoption of the Plan by the Board shall be construed as creating any
      limitations on the power of the Board to adopt such other incentive arrangements
      as it may deem desirable, including, without limitation, the granting or
      issuance of Options, Shares and/or other incentives otherwise than under the
      Plan, and such arrangements may be either generally applicable or limited in
      application. 

     

    13.
      Use
      of Proceeds. 

     

    The
      proceeds of the sale of Shares subject to Options under the Plan are to be
      added
      to the general funds of the Company and used for its general corporate purposes
      as the Board shall determine. 

     

    14.
      General
      Provisions. 

     

    (a)
      Right
      to Terminate Services.
      Neither
      the adoption of the Plan nor the grant of Options shall impose any obligations
      on the Company to retain any Participant as a director nor shall it impose
      any
      obligation on the part of any Participant to remain a director. 

     

    (b)
      Purchase
      for Investment.
      If the
      Board determines that the law so requires, the holder of an Option granted
      hereunder shall, upon any exercise or conversion thereof, execute and deliver
      to
      the Company a written statement, in form satisfactory to the Company,
      representing and warranting that such Participant is purchasing or accepting
      the
      Shares then acquired for such Participant’s own account and not with a view to
      the resale or distribution thereof, that any subsequent offer for sale or sale
      of any such Shares shall be made either pursuant to (i) a registration statement
      on in appropriate form under the Securities Act, which registration statement
      shall have become effective and shall be current with respect to the Shares
      being offered and sold, or (ii) a specific exemption from the registration
      requirements of the Securities Act, and that in claiming such exemption the
      holder will, prior to any offer for sale or sale of such Shares, obtain a
      favorable written opinion, satisfactory in form and substance to the Company,
      from counsel approved by the Company as to the availability of such exception.
      

     

    (c)
      Trusts,
      etc.
      Nothing
      contained in the Plan and no action taken pursuant to the Plan (including,
      without limitation, the grant of any Option thereunder) shall create or be
      construed to create a trust of any kind, or a fiduciary relationship, between
      the Company and any Participant or the executor, administrator or other personal
      representative or designated beneficiary of such Participant, or any other
      persons. Any reserves that may be established by the Company in connection
      with
      the Plan shall continue to be part of the general funds of the Company, and
      no
      individual or entity other than the Company shall have any interest in such
      funds until paid to a Participant. If and to the extent that any Participant
      or
      such Participant’s executor, administrator, or other personal representative, as
      the case may be, acquires a right to receive any payment from the Company
      pursuant to the Plan, such right shall be no greater than the right of an
      unsecured general creditor of the Company. 

    
       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

    

    (d)
      Notices.
      Each
      Participant shall be responsible for furnishing the Committee with the current
      and proper address for the mailing to such Participant of notices and the
      delivery to such Participant of agreements, Shares and payments. Any notices
      required or permitted to be given shall be deemed given if directed to the
      person to whom addressed at such address and mailed by regular United States
      mail, first class and prepaid. If any item mailed to such address is returned
      as
      undeliverable to the addressee, mailing will be suspended until the Participant
      furnishes the proper address. 

     

    (e)
      Severability
      of Provisions.
      If any
      provisions of the Plan shall be held invalid or unenforceable, such invalidity
      or unenforceability shall not affect any other provisions of the Plan, and
      the
      Plan shall be construed and enforced as if such provisions had not been
      included. 

     

    (f)
      Payment
      to Minors, Etc.
      Any
      benefit payable to or for the benefit of a minor, an incompetent person or
      other
      person incapable of receipting therefor shall be deemed paid when paid to such
      person’s guardian or to the party providing or reasonably appearing to provide
      for the care of such person, and such payment shall fully discharge the
      Committee, the Company and their employees, agents and representatives with
      respect thereto. 

     

    (g)
      Readings
      and Captions.
      The
      headings and captions herein are provided for reference and convenience only.
      They shall not be considered part of the Plan and shall not be employed in
      the
      construction of the Plan. 

     

    (h)
      Other
      Benefits.
      No award
      under this Plan shall be deemed compensation for purposes of computing benefits
      under any retirement plan of the Company or its subsidiaries nor affect any
      benefits under any other benefit plan now or subsequently in effect under which
      the availability or amount of benefits is related to the level of compensation.
      

     

    (i)
      409A.
      To the
      extent applicable, the Plan is intended to comply with the applicable
      requirements of Section 409A of the Code and shall be limited, construed and
      interpreted in a manner so as to comply therewith. To the extent that any Option
      is subject to Section 409A of the Code, it shall be paid in a manner that will
      comply with Section 409A of the Code, including proposed, temporary or final
      regulations or any other guidance issued by the Secretary of the Treasury and
      the Internal Revenue Service with respect thereto.

     

    15.
      Issuance
      of Stock Certificates; Legends and Payment of Expenses. 

     

    (a)
      Uncertificate Shares. Upon any exercise of an Option and payment of the
      exercise price as provided in such Option, Shares as to which such Option has
      been exercised shall be issued by the Company in the name of the person or
      persons exercising such Option along with a notice to the Participant containing
      information about the Shares purchased, in lieu of issuance of a share
      certificate, and the Company's transfer agent maintains a stock ledger that
      contains the name and address of each stockholder and the number of shares
      that
      the stockholder holds. The Company will not issue shares in certificated
      form.

    
       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

    

    (b)
      Payment
      of Expenses.
      The
      Company shall pay all issue or transfer taxes with respect to the issuance
      or
      transfer of Shares, as well as all fees and expenses necessarily incurred by
      the
      Company in connection with such issuance or transfer and with the administration
      of the Plan. 

     

    (c)
      Section
      16(b) of the Act.
      All
      elections and transactions under the Plan by persons subject to Section 16
      of
      the Act involving Shares are intended to comply with any applicable condition
      under Rule 16b-3, provided, however, noncompliance with the requirements of
      Rule
      16b-3 shall not affect the validity of an Option granted under this Plan. To
      the
      extent any provision of the Plan or action by the Committee fails to so comply,
      it shall be deemed null and void. The Committee may establish and adopt written
      administrative guidelines, designed to facilitate compliance with Section 16(b)
      of the Act, as it may deem necessary or proper for the administration and
      operation of the Plan and the transaction of business thereunder. 

     

    16.
      Listing
      of Shares and Related Matters. 

     

    If
      at any
      time the Board shall determine in its sole discretion that the listing,
      registration or qualification of the Shares covered by the, Plan upon any
      national securities exchange or under any state or federal law, or the consent
      or approval of any governmental regulatory body, is necessary or desirable
      as a
      condition of, or in connection with, the award or sale of Shares under the
      Plan,
      no Shares will be delivered unless and until such listing, registration,
      qualification, consent or approval shall have been effected or obtained, or
      otherwise provided for, free of any conditions not acceptable to the Board.
      

     

    17.
      Governing
      Law. 

     

    This
      Plan
      shall be governed and construed in accordance with the laws of the State of
      Maryland (regardless of the law that might otherwise govern under applicable
      principles of conflict of laws). 

    
       

      
        
          
          

        

        
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    TABLE
      OF CONTENTS

    


    Page

    

      
        	
                1.
                  Purpose
                  of the Plan.

              	
                1

              
	 	 
	
                2.
                  Definitions.

              	
                1

              
	 	 
	
                3.
                  Effective
                  Date/Expiration of Plan.

              	
                3

              
	 	 
	
                4.
                  Administration.

              	
                3

              
	 	 
	
                5.
                  Shares;
                  Adjustment Upon Certain Events.

              	
                4

              
	 	 
	
                6.
                  Awards
                  and Terms of Options.

              	
                6

              
	 	 
	
                7.
                  Effect
                  of Termination of Service.

              	
                9

              
	 	 
	
                8.
                  Nontransferability
                  of Options.

              	
                10

              
	 	 
	
                9.
                  Rights
                  as a Stockholder.

              	
                10

              
	 	 
	
                10.
                  Determinations.

              	
                10

              
	 	 
	
                11.
                  Termination,
                  Amendment and Modification.

              	
                10

              
	 	 
	
                12.
                  Non-Exclusivity.

              	
                11

              
	 	 
	
                13.
                  Use
                  of Proceeds.

              	
                11

              
	 	 
	
                14.
                  General
                  Provisions.

              	
                11

              
	 	 
	
                15.
                  Issuance
                  of Stock Certificates; Legends and Payment of Expenses.

              	
                12

              
	 	 
	
                16.
                  Listing
                  of Shares and Related Matters.

              	
                13

              
	 	 
	
                17.
                  Governing
                  Law.

              	
                13

              


      

    

     

    
      
        
        

      

      
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