FORM
      OF
      THE EMPLOYEE
      AND DIRECTOR 

     

    INCENTIVE RESTRICTED SHARE PLAN 

     

    OF
      

     

    LIGHTSTONE
      VALUE PLUS REAL ESTATE INVESTMENT TRUST II, INC.

     

    SECTION
      1.  PURPOSES
      OF THE PLAN AND DEFINITIONS

     

    1.1  Purposes.
      The
      purposes of the Employee and Director Incentive Restricted Share Plan
      (this “Plan”)
      of
      Lightstone Value Plus Real Estate Investment Trust II, Inc. (the “Company”)
      are
      to:

     

    (1)  provide
      incentives to individuals chosen to receive share-based awards because of their
      ability to improve operations and increase profits;

     

    (2)  encourage
      selected persons to accept positions with or continue to provide services to
      the
      Company, the Advisor and Affiliates of the Company; and

     

    (3)  increase
      the interest of Directors in the Company’s welfare through their participation
      in the growth in value of the Company’s Shares.

     

    To
      accomplish these purposes, this Plan provides a means whereby employees of
      the
      Advisor and Affiliates of the Company, officers of the Company, the Advisor
      and
      Affiliates of the Company, Directors and other enumerated persons may receive
      Awards.

     

    1.2  Definitions.
      For
      purposes of this Plan, the following terms have the following
      meanings:

     

    “Advisor”
means
      the Person or Persons, if any, appointed, employed or contracted with by the
      Company to be responsible for directing or performing the day-to-day business
      affairs of the Company, including any Person to whom the Advisor subcontracts
      substantially all of such functions. The initial Advisor is Lightstone Value
      Plus REIT II LLC.

     

    “Affiliate”
means
      any Person (other than an Advisor), whose employees, directors or officers
      are
      eligible to receive Awards under this Plan. The determination of whether a
      Person is an Affiliate shall be made by the Board acting in its sole and
      absolute discretion.

     

    “Applicable
      Laws”
means
      the requirements relating to the administration of Awards under state
      corporation laws, U.S. federal and state securities laws, the Code, any stock
      exchange or quotation system on which the Shares are listed or quoted and the
      applicable laws of any foreign country or jurisdiction where Awards are, or
      will
      be, granted under this Plan.

     

    “Articles
      of Incorporation”
means
      the articles of incorporation of the Company as the same may be amended from
      time to time.

     

    “Award”
means
      any award of Restricted Shares under this Plan.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Award
      Agreement”
means,
      with respect to each Award, the written agreement executed by the Company and
      the Participant or other written document approved by the Board setting forth
      the terms and conditions of the Award.

     

    “Board”
means
      the Board of Directors of the Company.

     

    “Code”
means
      the Internal Revenue Code of 1986, as amended from time to time.

     

    “Shares”
means
      common shares of capital stock of the Company, $0.01 par value per
      share.

     

    “Company”
means
      Lightstone Value Plus Real Estate Investment Trust II, Inc. 

     

    “Director”
means
      a
      person elected or appointed and serving as a member of the Board in accordance
      with the Articles of Incorporation and the Maryland General Corporation
      Law.

     

    “Director
      Shares”
means
      Shares issued under Section
      6.

     

    “Effective
      Date”
has
      the
      meaning given it in Section
      15.

     

    “Employment
      Termination”
means
      that a Participant has ceased, for any reason and with or without cause, to
      be
      an employee or Director of, or a consultant to, the Company, the Advisor or
      any
      Affiliate of the Company. However, the term “Employment Termination” shall not
      include a Non-Employee Director’s ceasing to be a Director or a transfer of a
      Participant from the Company to the Advisor or an Affiliate or vice versa,
      or
      from one Affiliate to another, or a leave of absence duly authorized by the
      Company unless the Board has provided otherwise.

     

    “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended from time to time.

     

    “Fair
      Market Value”
means
      with respect to Shares:

     

    (i)  If
      the
      Shares are listed on any established stock exchange or a national market system,
      their Fair Market Value shall be the closing sales price for the Shares, or
      the
      mean between the high bid and low asked prices if no sales were reported, as
      quoted on such system or exchange (or, if the Shares are listed on more than
      one
      exchange, then on the largest such exchange) for the date the value is to be
      determined (or if there are no sales or bids for such date, then for the last
      preceding business day on which there were sales or bids), as reported in
The
      Wall Street Journal.

     

    (ii)  If
      the
      Shares are regularly quoted by a recognized securities dealer but selling prices
      are not reported, or if there is no secondary trading market for the Shares,
      their Fair Market Value shall be determined in good faith by the
      Board.

     

    “Grant
      Date”
has
      the
      meaning set forth in Section
      5.1(c).
      

     

    “Non-Employee
      Director”
means
      a
      person who is a Director of the Company, but who is not also an employee or
      officer of the Company.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Participant”
means
      an eligible person who is granted an Award.

     

    “Person”
means
      an individual, a corporation, partnership, trust, association, or any other
      entity.

     

    “Plan”
means
      this Employee and Director Incentive Restricted Share Plan.

     

    “Restricted
      Shares”
means
      an Award granted under Section
      5.2.
      

     

    “Retainer”
has
      the
      meaning given it in Section
      6.1.

     

    “Rule
      16b-3”
means
      Rule 16b-3 adopted under Section 16(b) or any successor rule, as it may be
      amended from time to time, and references to paragraphs or clauses of Rules
      16b-3 refer to the corresponding paragraphs or clauses of Rule 16b-3 as it
      exists at the Effective Date or the comparable paragraph or clause of Rule
      16b-3
      or successor rule, as that paragraph or clause may thereafter be
      amended.

     

    “Section
      16(b)”
means
      Section 16(b) of the Exchange Act.

     

    “Section
      409A
      of the Code” 

     

    means
      the
      nonqualified deferred compensation rules under Section 409A of the Code and
      any
      applicable Treasury regulation or other official guidance promulgated
      thereunder.

     

    “Securities
      Act”
means
      the Securities Act of 1933, as amended from time to time.

     

    SECTION
      2.  ELIGIBLE
      PERSONS 

     

    Every
      person who, at or as of the Grant Date, is 

     

    (a)  a
      full-time employee of the Advisor, the Company or any Affiliate of the
      Company;

     

    (b)  an
      officer of the Company, the Advisor or any Affiliate of the
      Company;

     

    (c)  a
      Director of the Company; 

     

    (d)  a
      director of the Advisor or any Affiliate of the Company; or

     

    (e)  someone
      whom the Board designates as eligible for an Award because the person:


     

    (i)  performs
      bona fide consulting or advisory services for the Company, the Advisor or any
      Affiliate of the Company pursuant to a written agreement (other than services
      in
      connection with the offer or sale of securities in a capital-raising
      transaction), and 

     

    (ii)  has
      a
      direct and significant effect on the financial development of the Company or
      any
      Affiliate of the Company, 

     

    shall
      be
      eligible to receive Awards hereunder. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Directors
      of the Company who are not full-time employees are only eligible to receive
      Director Shares under Section
      6.1.

     

    SECTION
      3.  SHARES
      SUBJECT TO THIS PLAN 

     

    The
      total
      number of Shares that may be issued under Awards is a number of Shares equal
      to
      0.5% of the Company’s outstanding Shares on a fully diluted basis, with such
      number of Shares not to exceed 255,000. The number of Shares reserved for
      issuance under this Plan is subject to adjustment in accordance with the
      provisions for adjustment in Section
      5.1.
      If any
      Shares awarded under this Plan are forfeited for any reason, the number of
      forfeited Shares shall again be available for purposes of granting Awards under
      this Plan.

     

    SECTION
      4.  ADMINISTRATION
      

     

    4.1  Administration.
      This
      Plan shall be administered by the Board.

     

    4.2  Board’s
      Powers.
      Subject
      to the express provisions of this Plan, the Board shall have the authority,
      in
      its sole discretion:

     

    (a)  to
      adopt,
      amend and rescind administrative and interpretive rules and regulations relating
      to this Plan;

     

    (b)  to
      determine the eligible persons to whom, and the time or times at which, Awards
      shall be granted;

     

    (c)  to
      determine the number of Shares that shall be the subject of each
      Award;

     

    (d)  to
      determine the terms and provisions of each Award (which need not be identical)
      and any amendments thereto, including provisions defining or otherwise relating
      to:

     

    (i)  the
      extent to which the transferability of Shares issued or transferred pursuant
      to
      any Award is restricted;

     

    (ii)  the
      effect of Employment Termination on an Award;

     

    (iii)  the
      effect of approved leaves of absence;

     

    (iv)  to
      construe the respective Award Agreements and this Plan;

     

    (v)  to
      make
      determinations of the Fair Market Value of Shares;

     

    (vi)  to
      waive
      any provision, condition or limitation set forth in an Award
      Agreement;

     

    (vii)  to
      delegate its duties under this Plan to such agents as it may appoint from time
      to time; and

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (viii)  to
      make
      all other determinations, perform all other acts and exercise all other powers
      and authority necessary or advisable for administering this Plan, including
      the
      delegation of those ministerial acts and responsibilities as the Board deems
      appropriate.

     

    The
      Board
      may correct any defect, supply any omission or reconcile any inconsistency
      in
      this Plan, in any Award or in any Award Agreement in the manner and to the
      extent it deems necessary or desirable to implement this Plan, and the Board
      shall be the sole and final judge of that necessity or desirability. The
      determinations of the Board on the matters referred to in this Section
      4.2
      shall be
      final and conclusive. Notwithstanding any provision in this Plan to the
      contrary, Awards will be made to Non-Employee Directors only under Section
      6.1
      of this
      Plan. In addition, notwithstanding any provision of this Plan to the contrary,
      the Board may not in any manner exercise discretion under this Plan with respect
      to any Awards made to Non-Employee Directors.

     

    4.3  Term
      of Plan.
      No
      Awards shall be granted under this Plan after 10 years from the Effective Date
      of this Plan.

     

    SECTION
      5.  CERTAIN
      TERMS AND CONDITIONS OF AWARDS

     

    5.1  All
      Awards.
      All
      Awards shall be subject to the following terms and conditions:

     

    (a)  Changes
      in Capital Structure.
      If the
      number of outstanding Shares is increased by means of a share dividend payable
      in Shares, a share split or other subdivision or by a reclassification of
      Shares, then, from and after the record date for such dividend, subdivision
      or
      reclassification, the number and class of Shares subject to this Plan shall
      be
      increased in proportion to such increase in outstanding Shares. If the number
      of
      outstanding Shares is decreased by means of a share split or other subdivision
      or by a reclassification of Shares, then, from and after the record date for
      such split, subdivision or reclassification, the number and class of Shares
      subject to this Plan shall be decreased in proportion to such decrease in
      outstanding Shares.

     

    (b)  Certain
      Corporate Transactions.
      In the
      event of any change in the capital structure or business of the Company by
      reason of any recapitalization, reorganization, merger, consolidation, split-up,
      combination, exchange of Shares or any similar change affecting the Company’s
      capital structure or business, then the aggregate number and kind of Shares
      which thereafter may be issued under this Plan shall be appropriately adjusted
      consistent with such change in such manner as the Board may deem equitable
      to
      prevent substantial dilution or enlargement of the rights granted to, or
      available for, Participants under this Plan, and any such adjustment determined
      by the Board in good faith shall be binding and conclusive on the Company and
      all Participants and employees and their respective heirs, executors,
      administrators, successors and assigns.

     

    (c)  Grant
      Date.
      Each
      Award Agreement shall specify the date as of which it shall be effective (the
      “Grant
      Date”).

     

    (d)  Vesting.
      Each
      Award shall vest, and any restrictions thereunder shall lapse, as the case
      may
      be, at such times and in such amounts as may be specified by the Board in the
      applicable Award Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (e)  Nonassignability
      of Rights.
      Awards
      shall not be transferable other than with the consent of the Board or by will
      or
      the laws of descent and distribution. 

     

    (f)  Termination
      of Employment from the Company, the Advisor or any Affiliate of the
      Company.
      The
      Board shall establish, in respect of each Award when granted, the effect of
      an
      Employment Termination on the rights and benefits thereunder and in so doing
      may, but need not, make distinctions based upon the cause of termination (such
      as retirement, death, disability or other factors) or which party effected
      the
      termination (the employer or the employee). 

     

    (g)  Minimum
      Purchase Price.
      Notwithstanding any provision of this Plan to the contrary, if authorized but
      previously unissued Shares are issued under this Plan, such Shares shall not
      be
      issued for a consideration which is less than as permitted under Applicable
      Law,
      and in no event, shall such consideration be less than the par value per Share
      multiplied by the number of Shares to be issued. 

     

    (h)  Other
      Provisions.
      Each
      Award Agreement may contain such other terms, provisions and conditions not
      inconsistent with this Plan, as may be determined by the Board.

     

    5.2  Restricted
      Shares.
      Restricted Shares shall be subject to the following terms and
      conditions:

     

    (a)  Grant.
      The
      Board may grant one or more Awards of Restricted Shares to any Participant
      other
      than Non-Employee Directors. Each Award of Restricted Shares shall specify
      the
      number of Shares to be issued to the Participant, the date of issuance and
      the
      restrictions imposed on the Shares including the conditions of release or lapse
      of such restrictions. Upon the issuance of Restricted Shares, the Participant
      may be required to furnish such additional documentation or other assurances
      as
      the Board may require to enforce restrictions applicable thereto. 

     

    (b)  Restrictions.
      Except
      as specifically provided elsewhere in this Plan or the Award Agreement regarding
      Restricted Shares, Restricted Shares may not be sold, assigned, transferred,
      pledged or otherwise disposed of or encumbered, either voluntarily or
      involuntarily, until the restrictions have lapsed and the rights to the Shares
      have vested. The Board may in its sole discretion provide for the lapse of
      such
      restrictions in installments and may accelerate or waive such restrictions,
      in
      whole or in part, based on service, performance or such other factors or
      criteria as the Board may determine.

     

    (c)  Dividends.
      Unless
      otherwise determined by the Board, cash dividends with respect to Restricted
      Shares shall be paid to the recipient of the Award of Restricted Shares on
      the
      normal dividend payment dates, and dividends payable in Shares shall be paid
      in
      the form of Restricted Shares having the same terms as the Restricted Shares
      upon which such dividend is paid. Each Award Agreement for Awards of Restricted
      Shares shall specify whether and, if so, the extent to which the Participant
      shall be obligated to return to the Company any cash dividends paid with respect
      to any Restricted Shares which are subsequently forfeited.

     

    (d)  Forfeiture
      of Restricted Shares.
      Except
      to the extent otherwise provided in the applicable Award Agreement, when a
      Participant’s Employment Termination occurs, the Participant shall automatically
      forfeit all Restricted Shares still subject to restriction.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SECTION
      6.  DIRECTOR
      SHARES

     

    6.1  Election.
      The
      Company shall pay to each individual who is a Non-Employee Director an annual
      fee in the amount set from time to time by the Board (the “Retainer”).
      Each
      Non-Employee Director shall be entitled to receive his or her Retainer
      exclusively in cash, exclusively in unrestricted Shares (“Director
      Shares”)
      or any
      portion in cash and Director Shares. Following the approval of this Plan by
      the
      stockholders of the Company, each Non-Employee Director shall be given the
      opportunity, during the month in which the Non-Employee Director first becomes
      a
      Non-Employee Director, and during each December thereafter, to elect among
      these
      choices for the balance of the calendar year (in the case of the election made
      during the month the Non-Employee Director first becomes a Non-Employee
      Director) and for the ensuing calendar year (in the case of a subsequent
      election made during any December). If the Non-Employee Director chooses to
      receive at least some of his or her Retainer in Director Shares, the election
      shall also indicate the percentage of the Retainer to be paid in Director
      Shares. If a Non-Employee Director makes no election during his or her first
      opportunity to make an election, the Non-Employee Director shall be assumed
      to
      have elected to receive his or her entire Retainer in cash.

     

    6.2  Issuance.
      The
      Company shall make the first issuance of Director Shares to electing Directors
      on the first business day following the last day of the full calendar quarter
      following the approval of this Plan by the Company’s stockholders. Subsequent
      issuances of Director Shares shall be made on the first business day of each
      subsequent calendar quarter and shall be made to all persons who are
      Non-Employee Directors on that day except any Non-Employee Director whose
      Retainer is to be paid entirely in cash. The number of Shares issuable to those
      Non-Employee Directors on the relevant date indicated above shall
      equal:

     

    (%
      x
      R/4)/P, where:

     

    %
      = the
      percentage of the Non-Employee Director’s Retainer that the Non-Employee
      Director elected or is deemed to have elected to receive in the form of Director
      Shares, expressed as a decimal;

     

    R
      = the
      Non-Employee Director’s Retainer for the year during which the issuance occurs;
      and 

     

    P
      = the
      Fair Market Value.

     

    Director
      Shares shall not include any fractional Shares. Fractions shall be rounded
      to
      the nearest whole Share (with one-half being rounded upward).

     

    SECTION
      7.  SECURITIES
      LAWS 

     

    Nothing
      in this Plan or in any Award or Award Agreement shall require the Company to
      issue any Shares with respect to any Award if, in the opinion of counsel for
      the
      Company, that issuance could constitute a violation of any Applicable Laws.
      As a
      condition to the grant of any Award, the Company may require the Participant
      (or, in the event of the Participant’s death, the Participant’s legal
      representatives, heirs, legatees or distributees) to provide written
      representations concerning the Participant’s (or such other person’s) intentions
      with regard to the retention or disposition of the Shares covered by the Award
      and written covenants as to the manner of disposal of such Shares as may be
      necessary or useful to ensure that the grant or disposition thereof will not
      violate the Securities Act, any other law or any rule of any applicable
      securities exchange or securities association then in effect. The Company shall
      not be required to register any Shares under the Securities Act or register
      or
      qualify any Shares under any state or other securities laws.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SECTION
      8.  EMPLOYMENT
      OR
      OTHER
      RELATIONSHIP 

     

    Nothing
      in this Plan or any Award shall in any way interfere with or limit the right
      of
      the Company, the Advisor or any Affiliate of the Company to terminate any
      Participant’s employment or status as a consultant or Director at any time, nor
      confer upon any Participant any right to continue in the employ of, or as a
      Director or consultant of, the Company, the Advisor or any Affiliate of the
      Company.

     

    SECTION
      9.  AMENDMENT,
      SUSPENSION AND TERMINATION OF THIS PLAN 

     

    The
      Board
      may at any time amend, suspend or discontinue this Plan provided that such
      amendment, suspension or discontinuance meets the requirements of Applicable
      Laws, including without limitation, the requirements for stockholder approval.
      Notwithstanding the above, an amendment, alteration, suspension or
      discontinuation shall not be made if it would impair the rights of any
      Participant under any Award previously granted, without the Participant’s
      consent, except to conform this Plan and Awards granted to the requirements
      of
      Applicable Laws. The provisions of this Plan relating to Awards for Non-Employee
      Directors may not be amended more than once each six months. Notwithstanding
      any provision of the Plan to the contrary, in the event that the Board
      determines that any Award may be subject to Section 409A of the Code, the
      Board may adopt such amendment to the Plan and the applicable Award Agreement
      or
      adopt other policies and procedures (including amendments, policies and
      procedures with retroactive effect), or take any other actions that the Board
      determines are necessary or appropriate, without the consent of the Participant,
      to (1) exempt the Award from Section 409A of the Code and/or preserve
      the intended tax treatment of the benefits provided with respect to the Award
      or
      (2) comply with the requirements of Section 409A of the Code.


     

    SECTION
      10.    LIABILITY
      AND INDEMNIFICATION OF THE BOARD 

     

    No
      person
      constituting, or member of the group constituting, the Board shall be liable
      for
      any act or omission on such person’s part, including but not limited to the
      exercise of any power or discretion given to such member under this Plan, except
      for those acts or omissions resulting from such member’s gross negligence or
      willful misconduct. The Company shall indemnify each present and future person
      constituting, or member of the group constituting, the Board against, and each
      person or member of the group constituting the Board shall be entitled without
      further act on his or her part to indemnity from the Company for, all expenses
      (including the amount of judgments and the amount of approved settlements made
      with a view to the curtailment of costs of litigation) reasonably incurred
      by
      such person in connection with or arising out of any action, suit or proceeding
      to the fullest extent permitted by law and by the Articles of Incorporation
      and
      Bylaws of the Company.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SECTION
      11.    SEVERABILITY
      

     

    If
      any
      provision of this Plan is held to be illegal or invalid for any reason, that
      illegality or invalidity shall not affect the remaining portions of this Plan,
      but such provision shall be fully severable and this Plan shall be construed
      and
      enforced as if the illegal or invalid provision had never been included in
      this
      Plan. Such an illegal or invalid provision shall be replaced by a revised
      provision that most nearly comports to the substance of the illegal or invalid
      provision. If any of the terms or provisions of this Plan or any Award Agreement
      conflict with the requirements of Applicable Laws, those conflicting terms
      or
      provisions shall be deemed inoperative to the extent they conflict with
      Applicable Law.

     

    SECTION
      12.  SECTION
      409A OF THE CODE

     

    Awards
      granted under the Plan are intended to be exempt from Section 409A of the Code.
      To the extent that the Plan is not exempt from the requirements of Section
      409A
      of the Code, the Plan is intended to comply with the requirements of Section
      409A of the Code and shall be limited, construed and interpreted in accordance
      with such intent. Notwithstanding the foregoing, in no event whatsoever shall
      the Company be liable for any additional tax, interest or penalty that may
      be
      imposed on a Participant by Section 409A of the Code or any damages for failing
      to comply with Section 409A of the Code.

     

    SECTION
      13.  WITHHOLDING

     

    The
      Company shall have the right to deduct from any payment to be made to a
      Participant, or to otherwise require, prior to the issuance or delivery of
      any
      Shares or the payment of any cash hereunder, payment by the Participant of,
      any
      federal, state or local taxes required by law to be withheld. Upon the vesting
      of Restricted Shares, or upon making an election under Section 83(b) of the
      Code, a Participant shall pay all required withholding to the Company. The
      Board
      may permit any such statutory withholding obligation with regard to any
      Participant to be satisfied by reducing the number of Shares otherwise
      deliverable or by delivering Shares already owned. 

     

    SECTION
      14.  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).

     

    SECTION
      15.   EFFECTIVE
      DATE AND PROCEDURAL HISTORY 

     

    This
      Plan
      was originally approved by the Company’s Board on 2008. It was approved in that
      form by the holders of the Company’s voting Shares on          ,
      2009 (the “Effective
      Date”).