Exhibit
10.2


FORM OF


EMPLOYEE AND DIRECTOR LONG-TERM INCENTIVE PLAN


OF


CORNERSTONE
GROWTH & INCOME REIT, INC.


















TABLE OF
CONTENTS


 


	
  

  	
  Page

  
	
   

  	
   

  
	
  1.

  	
  Purposes of the Plan and Definitions

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.1

  	
  Purposes

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.2

  	
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Eligible Persons

  	
  4

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Shares of Stock Subject to this Plan

  	
  4

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Administration

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.1

  	
  Committee

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.2

  	
  Duration, Removal, Etc

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.3

  	
  Meetings and Actions of Committee

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.4

  	
  Committee’s Powers

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.5

  	
  Term of Plan

  	
  7

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Grant of Options

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.1

  	
  Written Agreement

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.2

  	
  Annual $100,000 Limitation on ISOs

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  Certain Terms and Conditions of Options and Other
  Awards

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.1

  	
  All Awards

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.2

  	
  Terms and Conditions to Which Only NQOs Are Subject

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.3

  	
  Terms and Conditions to Which Only ISOs Are Subject

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.4

  	
  Surrender of Options

  	
  12

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Stock Appreciation Rights

  	
  12

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Dividend Equivalent Rights

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.1

  	
  General

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.2

  	
  Rights and Options

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.3

  	
  Payments

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.4

  	
  Termination of Employment

  	
  13

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Other Equity-Based
  Awards

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.1

  	
  Grant.

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.2

  	
  Terms and Conditions

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.3

  	
  Payment or Settlement

  	
  13

  
	
   

  	
   

  	
   

  
	
  10.

  	
  Compliance with Laws

  	
  14

  
	
   

  	
   

  	
   

  
	
  11.

  	
  Employment or Other Relationship

  	
  14

  
					



 



 i
 









                                                                                                                                                                                                             


                                                                                                                                                


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  12.

  	
  Amendment, Suspension and Termination of this Plan

  	
  14

  
	
   

  	
   

  	
   

  
	
  13.

  	
  Liability and Indemnification of the Committee

  	
  15

  
	
   

  	
   

  	
   

  
	
  14.

  	
  Securities Law Legends

  	
  15

  
	
   

  	
   

  	
   

  
	
  15.

  	
  Severability

  	
  15

  
	
   

  	
   

  	
   

  
	
  16.

  	
  Effective Date and Stockholder Approval

  	
  16

  
	
   

  	
   

  	
   

  
	
  17.

  	
  Miscellaneous

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  17.1

  	
  Loans

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  17.2

  	
  Forfeiture Provisions

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  17.3

  	
  Limitations Applicable to Section 16

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  17.4

  	
  Effect of Plan Upon Other Incentive and Compensation
  Plans

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  17.5

  	
  Section 83(b) Election Prohibited

  	
  16

  



 



 ii















FORM OF


EMPLOYEE
AND DIRECTOR LONG-TERM INCENTIVE PLAN

OF

CORNERSTONE GROWTH & INCOME
REIT, INC.


1.  Purposes of the Plan
and Definitions


1.1  Purposes.  The purposes of the Employee and Director
Long-Term Incentive Plan (the “Plan”) of Cornerstone Growth & Income REIT,
Inc. (the “Company”) are to:


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


(b)  encourage
selected persons to accept or continue employment with the Company or any
Advisor or Affiliate of the Company; and


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


To accomplish these purposes, this Plan provides a means
whereby Employees of the Company or any Advisor or Affiliate 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 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 Cornerstone Leveraged
Realty  Advisors, LLC.


“Affiliate” means any Person (other than an Advisor),
whose employees (as such term is defined in the Form S-8 registration statement
under the Securities Act) are eligible to receive Awards under the Plan.  The determination of whether a Person is an
Affiliate shall be made by the Committee acting in its sole and absolute
discretion.


“Applicable Laws” means the requirements relating to
the administration of Awards under U.S. state corporate laws, U.S. Federal and
state securities laws, the Code, any stock exchange or quotation system on
which the shares of Stock are listed or quoted and the applicable laws of any
foreign country or jurisdiction where Awards are, or will be, granted under the
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 under this Plan, including any
grant of Options, Stock Appreciation Rights, Dividend Equivalent Rights or
Other Equity-Based Award.



 1
 









“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 Committee setting forth the terms and
conditions of the Award.


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


“Cause,” unless otherwise defined in an Employee’s
employment agreement, means (i) gross negligence or willful misconduct, (ii) an
uncured breach of any of the Employee’s material duties under his or her
employment agreement, (iii) fraud or other conduct against the material best
interests of his or her employer or the Company, or (iv) a conviction of a
felony, if such conviction has a material adverse effect on his or her
employer.  If “Cause” is otherwise
defined in an Employee’s employment agreement, the definition in the employment
agreement shall be effective for purposes of the Plan with respect to the
Employee in question.


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


“Committee” has the meaning given it in Section 4.1.


“Common Stock” or “Stock” means common shares of
capital stock of the Company, $0.001 par value per share.


“Company” has the meaning given it in Section 1.1.


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


“Dividend Equivalent Right” means an Award of rights
pursuant to Section 9.


“Effective Date” has the meaning given it in Section
18.


“Employee” has the meaning ascribed to it for purposes
of Section 3401(c) of the Code and the Treasury Regulations adopted under that
Section.  An employee includes an officer
or a Director who is an employee of the Company.


“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 Committee has provided
otherwise.


“ERISA” means the Employee Retirement Income Security
Act of 1974, as amended from time to time.


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



 2
 









“Exercise Notice” has the meaning given it in Section
6.1(f).


“Fair Market Value” means with respect to Stock:


(i)  If
the Stock is listed on any established stock exchange or a national market
system, including, without limitation, the NASDAQ National Market System, the
Fair Market Value of shares of Stock shall be the closing sales price for the
Stock, 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 Stock is 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 or similar publication.


(ii)  If
the Stock is regularly quoted by a recognized securities dealer but selling
prices are not reported, or if there is no market for the Stock, the Fair
Market Value of the shares of Stock shall be determined in good faith by the
Committee, with reference to the Company’s net worth, prospective earning
power, dividend-paying capacity and other relevant factors, including the
goodwill of the Company, the economic outlook in the Company’s industry, the
Company’s position in the industry and its management, and the values of stock
of other enterprises in the same or similar lines of business.


“Grant Date” has the meaning given it in Section
6.1(d).


“Incentive Stock Option” or “ISO” means any Option
intended to be and designated as an “incentive stock option” within the meaning
of Section 422 of the Code, and any successor provision.


“Non-Employee Director” means a person who is a
non-employee director as defined in Rule 16b-3 or a person who is an outside
director as defined in Treasury Regulation 1.162-27(e)(3).


“Non-Qualified Share Option” or “NQO” means any Option
that is not an Incentive Stock Option.


“Operating Partnership” means Cornerstone Growth &
Income Operating Partnership, L.P.


“Option” means an option granted under Section 5.


“Other Equity-Based Award” means any award other than
an Option, Stock Appreciation Right or Dividend Equivalent Right Award which,
subject to such terms and conditions as may be prescribed by the Committee,
entitles a Participant to receive shares of Common Stock or rights or units
valued in whole or in part by reference to, or otherwise based on, shares of
Common Stock or dividends on shares of Common Stock.


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


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



 3
 









“Plan” means this Employee and Director Incentive
Stock Plan.


“Related Corporation” means a parent or subsidiary
corporation of the Company, as those terms are defined in Sections 424(e) and
(f) of the Code.


 “Rule 16b-3”
means Rule 16b-3 adopted under Section 16(b) of the Exchange Act 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) under the Exchange
Act.


“Securities Act” means the Securities Act of 1933, as
amended from time to time, and any successor statute.


“Stock Appreciation Right” means an Award granted
under Section 8.


“Ten Percent Stockholder” means any person who, at the
time this definition is being applied, owns, directly or indirectly (or is
treated as owning by reason of attribution rules currently set forth in Code
Section 424 or any successor statute), shares of the Company constituting more
than 10% of the total combined voting power of all classes of outstanding
capital stock of the Company or any Related Corporation.


2.  Eligible Persons


Every person who, at or as of the Grant Date, is (a) a
full-time Employee of the Company, the Advisor or any Affiliate of the Company,
(b) a Director of the Company or a director of any Affiliate of the Company, or
(c) someone whom the Committee designates as eligible for an Award (other than
for Incentive Stock Options) 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.


3.  Shares of Stock
Subject to this Plan


The total number of shares of Stock that may be issued
under Awards is a number of shares equal to ten percent (10%) of the Company’s
outstanding Stock.  The maximum number of
shares of Stock with respect to which ISOs may be granted under the Plan is
5,000,000.  Such shares of Stock may
consist, in whole or in part, of authorized and unissued Stock or shares of
Stock reacquired in private transactions or open market purchases, but all
shares of Stock issued under the Plan, regardless of their source, shall be
counted against the Stock limitation. 
Any shares of Stock that are retained by the Company upon exercise or
settlement of an Award in order to satisfy the exercise price in whole or in
part, or to pay withholding taxes due with respect to such exercise or
settlement, shall be treated as issued to the Participant and will thereafter
not be available under the Plan.  Any shares
of Stock subject to unexercised portions



 4
 









of Options granted under
the Plan which shall have been terminated, cancelled or that have expired may
again be subject to Options hereunder. Other Equity-Based Awards covering
Operating Partnership units that are convertible (directly or indirectly) into
Common Stock shall reduce the maximum aggregate number of shares of Common
Stock that may be issued under this Plan on a one-for-one basis, i.e. , each
such unit shall be treated as an award of Common Stock.  Awards settled in cash will not reduce the
maximum aggregate number of shares of Common Stock that may be issued under the
Plan.  The number of shares of Stock
reserved for issuance under this Plan is subject to adjustment in accordance
with the provisions for adjustment in Section 6.1.


4.  Administration


4.1  Committee.


(a)  In
General.  This Plan shall be administered
by a committee (the “Committee”) appointed by the Board.  The number of persons who shall constitute
the Committee shall be determined from time to time by a majority of all the
members of the Board; provided, however, that the Committee shall not consist
of fewer than two persons.


(b)  Section
162(m).  To the extent the Board desires
to qualify Awards granted under this Plan as “performance based compensation”
within the meaning of section 162(m) of the Code, the Plan shall be
administered by a Committee of two or more “outside directors” as defined in
Treasury Regulation 1.162-27(e)(3).


(c)  Rule
16b-3.  To the extent desirable to
qualify transactions under this Plan as exempt under Rule 16b-3, a Committee
consisting solely of two or more “non-employee directors” as defined in Rule
16b-3, must approve such transactions.


4.2  Duration,
Removal, Etc.  The members of the
Committee shall serve at the pleasure of the Board, which shall have the power,
at any time and from time to time, to remove members from or add members to the
Committee.  Removal from the Committee
may be with or without cause.  Any
individual serving as a member of the Committee shall have the right to resign
from the Committee by giving at least three days’ prior written notice to the
Board.  The Board, and not the remaining
members of the Committee, shall have the power and authority to fill vacancies
on the Committee, however caused.  The
Board shall promptly fill any vacancy that causes the number of members of the
Committee to be fewer than two or any other minimum number required to comply
with Rule 16b-3 or section 162(m) of the Code, (unless the Board expressly
determines not to have Awards under the Plan comply with Rule 16b-3 or section
162(m) of the Code, respectively).


4.3  Meetings
and Actions of Committee.  The Board
shall designate which of the Committee members shall be the chairperson of the
Committee.  If the Board fails to
designate a chairperson for the Committee, the members of the Committee shall
elect one of the Committee members as chairperson, who shall act as chairperson
until he or she ceases to be a member of the Committee or until the Board (or
the Committee) elects a new chairperson. 
The Committee may make any rules and regulations for the conduct of its
business that are not inconsistent with this Plan, the Articles of
Incorporation, the Bylaws of the Company or Applicable Laws.



 5
 









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


(a)  to grant Awards upon such terms
and conditions (not inconsistent with the provisions of this Plan), as the
Committee may consider appropriate;


(b)  to adopt, amend and rescind
administrative and interpretive rules and regulations relating to the Plan;


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


(d)  to determine the number of shares
of Stock that shall be the subject of each Award;


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


(i)  the
period or periods and extent of exercisability of any Option or Stock
Appreciation Right;


(ii)  the
methods by which the exercise price of an Option may be paid, the form of
payment, including, without limitation, cash, Stock, or other property
(including “cashless exercise” arrangements), and the methods by which Stock
shall be delivered or deemed to be delivered to Participants; provided,
however, that if Stock is used to pay the exercise price of an Option, such
Stock must have been held by the Participant for at least six months;


(iii)  the
extent to which the transferability of shares of Stock issued or transferred
pursuant to any Award is restricted;


(iv)  the
effect of Employment Termination on an Award; and


(v)  the
effect of approved leaves of absence;


(f)  to accelerate the time of
exercisability of any Option, Dividend Equivalent Right, Stock Appreciation
Right or Other Equity-Based Award;


(g)  to construe the respective
Award Agreements and the Plan;


(h)  to make determinations of the
Fair Market Value of shares of Stock;


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


(j)  to delegate its duties under
the Plan to such agents as it may appoint from time to time; provided, however,
that the Committee may not delegate its duties with respect to making or
exercising discretion with respect to Awards to eligible persons if such
delegation



 6
 









would cause Awards not to qualify for the exemptions provided by Rule
16b-3 or section 162(m) of the Code (unless the Board expressly determines not
to have Awards under the Plan comply with Rule 16b-3 or section 162(m) of the
Code, respectively); and


(k)  to make all other determinations, perform all
other acts and exercise all other powers and authority necessary or advisable
for administering the Plan.


The Committee
may discriminate among Eligible Participants and Participants and among Awards
granted to a Participant in exercising its discretion pursuant to this
Plan.  The Committee may correct any
defect, supply any omission or reconcile any inconsistency in the Plan, in any
Award or in any Award Agreement in the manner and to the extent it deems
necessary or desirable to implement the Plan, and the Committee shall be the
sole and final judge of that necessity or desirability.  The determinations of the Committee on the
matters referred to in this Section 4.4 shall be final and conclusive.


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


5.  Grant of Options


5.1  Written
Agreement.  Each Option shall be
evidenced by an Award Agreement.  The
Award Agreement shall specify whether each Option it evidences is an NQO or an
ISO.


5.2  Annual
$100,000 Limitation on ISOs.  To the
extent that the aggregate Fair Market Value of shares of Stock with respect to
which ISOs first become exercisable by a Participant in any calendar year
exceeds $100,000, taking into account ISOs granted under this Plan and any
other plan of the Company or any Related Corporation, the Options covering such
additional shares of Stock becoming exercisable in that year shall cease to be
ISOs and thereafter be NQOs.  For this
purpose, the Fair Market Value of shares of Stock subject to Options shall be
determined as of the date the Options were granted.  In reducing the number of Options treated as
ISOs to meet this $100,000 limit, the most recently granted Options shall be
reduced first.


6.  Certain Terms and
Conditions of Options and Other Awards


Each Option shall be designated as an ISO or an NQO
and shall be subject to the terms and conditions set forth in Section 6.1.  Notwithstanding the foregoing, the Committee
may provide for different terms and conditions in any Award Agreement or
amendment thereto as provided in Section 4.4.


6.1  All
Awards.  All Options and other Awards
shall be subject to the following terms and conditions:


(a)  Changes
in Capital Structure.  If the number of
outstanding shares of Stock is increased by means of a share dividend payable
in shares of Stock, a share split or other subdivision or by a reclassification
of Stock, then, from and after the record date for such dividend, subdivision
or reclassification, the number of shares of Stock and class of Stock subject
to this Plan and each outstanding Award shall be increased in proportion to
such increase in outstanding Stock and the then-applicable exercise price of each
outstanding Award shall be



 7
 









correspondingly decreased.  If
the number shares of outstanding Stock is decreased by means of a share split
or other subdivision or by a reclassification of Stock, then, from and after
the record date for such split, subdivision or reclassification, the number of
shares of Stock and class of Stock subject to this Plan and each outstanding
Award shall be decreased in proportion to such decrease in outstanding Stock
and the then-applicable exercise price of each outstanding Award shall be
correspondingly increased.


(b)  Certain
Corporate Transactions.  In the case of
any reclassification or change of outstanding Stock issuable upon exercise of
an outstanding Award or in the case of any consolidation or merger of the
Company with or into another entity (other than a merger in which the Company
is the surviving entity and which does not result in any reclassification or
change in the then-outstanding Stock) or in the case of any sale or conveyance
to another entity of the property of the Company as an entirety or
substantially as an entirety, then, as a condition of such reclassification,
change, consolidation, merger, sale or conveyance, the Company or such
successor or purchasing entity, as the case may be, shall make lawful and
adequate provision whereby the holder of each outstanding Award shall
thereafter have the right, on exercise of such Award, to receive the kind and
amount of securities, property and/or cash receivable upon such
reclassification, change, consolidation, merger, sale or conveyance by a holder
of the number of securities issuable upon exercise of such Award immediately
before such reclassification, change, consolidation, merger, sale or
conveyance.  Such provision shall include
adjustments that shall be as nearly equivalent as may be practicable to the
adjustments provided for in Section 6.1(a). 
Notwithstanding the foregoing, if such a transaction occurs, in lieu of
causing such rights to be substituted for outstanding Awards, the Committee
may, upon 20 days’ prior written notice to Participants in its sole discretion:
(i) shorten the period during which Awards are exercisable, provided they
remain exercisable, to the extent otherwise exercisable, for at least 20 days
after the date the notice is given, or (ii) cancel an Award upon payment to the
Participant in cash, with respect to each Award to the extent then exercisable,
of an amount which, in the sole discretion of the Committee, is determined to
be equivalent to the amount, if any, by which the Fair Market Value (at the
effective time of the transaction) of the consideration that the Participant
would have received if the Award had been exercised before the effective time
exceeds the exercise price of the Award. 
The actions described in this Section 6.1(b) may be taken without regard
to any resulting tax consequences to the Participant.


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


(d)  Time
of Exercise; Vesting.  Awards may, in the
sole discretion of the Committee, be exercisable or may vest, and restrictions
may lapse, as the case may be, at such times and in such amounts as may be
specified by the Committee in the grant of the Award.


(e)  Nonassignability
of Rights.  Awards shall not be
transferable other than with the consent of the Committee (which consent will
not be granted in the case of ISOs unless the conditions for transfer of ISOs
specified in the Code have been satisfied) or by will or the laws of the
descent and distribution.  Awards
requiring exercise shall be exercisable only by the Participant, assignees that
were approved by the Committee, executors, administrators or beneficiaries of
the Participant (who are the permitted transferees hereunder), guardians or
members of a committee for an incompetent Participant, or similar persons duly
authorized by law to administer the estate or assets of a Participant.



 8
 









(f)  Notice
and Payment.  To the extent it is
exercisable, an Award shall be exercisable only by written or recorded
electronic notice of exercise, in the manner specified by the Committee from
time to time, delivered to the Company or its designated agent during the term
of the Award (the “Exercise Notice”). 
The Exercise Notice shall: (i) state the number of shares of Stock with
respect to which the Award is being exercised; (ii) be signed by the holder of
the Award or by the person authorized to exercise the Award pursuant to Section
6.1(e); and (iii) include such other information, instruments and documents as
may be required to satisfy any other condition to exercise set forth in the
Award Agreement.  Except as provided
below, payment in full, in cash or check, shall be made for all shares of Stock
purchased at the time notice of exercise of an Award is given to the
Company.  The proceeds of any payment
shall constitute general funds of the Company. 
At the time an Award is granted or before it is exercised, the
Committee, in the exercise of its sole discretion, may authorize any one or
more of the following additional methods of payment:


(i)  for
all Participants other than officers and Directors, acceptance of each such
Participant’s full recourse promissory note for some or all (to the extent
permitted by law) of the exercise price of the Stock being acquired, payable on
such terms and rate of interest as determined by the Committee, and secured in
such manner, if at all, as the Committee shall approve, including, without
limitation, by a security interest in the Stock which are the subject of the
Award or other securities;


(ii)  for
all Participants, delivery by each such Participant of Stock already owned by
such Participant for all or part of the exercise price of the Award being
exercised, provided that the Fair Market Value of such Stock is equal on the
date of exercise to the exercise price of the Award being exercised, or such
portion thereof as the Participant is authorized to pay and elects to pay by
delivery of such shares of Stock;


(iii)  for
all Participants, surrender by each such Participant, or withholding by the
Company from the Stock issuable upon exercise of the Award, of a number of
shares of Stock subject to the Award being exercised with a Fair Market Value
equal to some or all of the exercise price of the Stock being acquired,
together with such documentation as the Committee and the broker, if
applicable, shall require; or


(iv)  for
all Participants, payment may be made pursuant to a cashless exercise
arrangement approved by the Committee.


If the exercise price is satisfied in whole or in part
by the delivery of Stock pursuant to paragraph (ii) above, and provided that
all such Stock have been held by the Participant for at least six months, the
Committee may issue the Participant an additional Option, with terms identical
to those set forth in the option agreement governing the exercised Option,
except for the exercise price which shall be the fair market value used for
such delivery and the number of shares of Stock subject to such additional
Option shall be the number of shares of Stock so delivered.



 9
 









(g)  Termination
of Employment from the Company, the Advisor or any Affiliate of the Company;
Removal of a Director for Cause.  Any
Award or portion thereof which has not vested on or before the date of a
Participant’s Employment Termination shall expire on the date of such
Employment Termination.  As to an Award
or portion thereof that has vested by the time of Employment Termination, the
Committee 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). 
All Awards granted to a Director whether or not an Employee will lapse
on the date the Director ceases to be a Director of the Company as a result of
his removal for Cause.  Notwithstanding
any other provision in this Plan or the Award Agreement, the Committee may
decide in its discretion at the time of any Employment Termination (or within a
reasonable time thereafter) to extend the exercise period of an Award (but not
beyond the period specified in Section 6.2(b) or 6.3(b), as applicable) and not
decrease the number of shares of Stock covered by the Award with respect to
which the Award is exercisable or vested. 
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, shall not be deemed an Employment
Termination or a break in continuous employment unless the Committee has
provided otherwise.


(h)  Death,
Disability or Retirement.  Any Award or
portion thereof which has not vested on or before the date of the Participant’s
death, disability or retirement shall expire on the date of such Participant’s
death, disability or retirement.  As to
an Award or portion thereof that has vested by the date of death, disability or
retirement of the Participant, such Awards or portions thereof must be
exercised within two years of the date of the Participant’s death, disability
or retirement by the Participant or a person authorized under this Plan to
exercise such Award.


(i)  Other
Provisions.  Each Award Agreement may
contain such other terms, provisions and conditions not inconsistent with this
Plan, as may be determined by the Committee, and each ISO granted under this
Plan shall include such provisions and conditions as are necessary to qualify
such Option as an “incentive stock option” within the meaning of Section 422 of
the Code.


(j)  Withholding
and Employment Taxes.  At the time of
exercise of an Award, the lapse of restrictions on an Award or a disqualifying
disposition of shares of Stock issued under an ISO (within the meaning of
Section 6.3(c)), the Participant shall remit to the Company in cash all
applicable Federal and state withholding and employment taxes.  If and to the extent authorized and approved
by the Committee in its sole discretion, a Participant may elect, by means of a
form of election to be prescribed by the Committee, to have shares of Stock
which are acquired upon exercise of an Award withheld by the Company or tender
other shares of Stock owned by the Participant to the Company at the time that
the amount of such taxes is determined, in order to pay the amount of such tax
obligations, subject to any limitations as the Committee determines are
necessary or appropriate.  Any shares of
Stock so withheld or tendered shall be valued by the Company as of the date
they are withheld or tendered.  If shares
of Stock are tendered to satisfy such withholding tax obligation, the Committee
may issue the Participant an additional Option, with terms identical to those
set forth in the option agreement



 10
 









governing the Option exercised, except that the exercise price shall be
the Fair Market Value used by the Company in accepting the tender of shares of
Stock for such purpose and the number of shares of Stock subject to the
additional Option shall be the number of shares of Stock tendered by the
Participant.


(k)  Employee
Status.  If the terms of any Award
provides that it may be earned or exercised only during employment or continued
service or within a specified period of time after termination of employment or
continued service, the Committee may decide to what extent leaves of absence
for governmental or military service, illness, temporary disability or other
reasons shall not be deemed interruptions of continuous employment or service.


(l)  Stockholder
Rights.  A Participant, as a result of
receiving an Award, shall not have any rights as a stockholder until, and then
only to the extent that, the Award is earned and settled in shares of Common
Stock.


6.2  Terms
and Conditions to Which Only NQOs Are Subject. 
Options granted under this Plan which are designated as NQOs shall be
subject to the following terms and conditions:


(a)  Exercise
Price.  The exercise price of an NQO
shall be determined by the Committee; provided, however, that the exercise
price of an NQO shall not be less than the Fair Market Value of the Stock
subject to the Option on the Grant Date.


(b)  Option
Term.  Unless the Committee specifies an
earlier expiration date at the Grant Date, each NQO shall expire 10 years after
the Grant Date.


6.3  Terms
and Conditions to Which Only ISOs Are Subject. 
Options granted under this Plan which are designated as ISOs shall be
subject to the following terms and conditions:


(a)  Exercise
Price.  The exercise price of an ISO
shall be determined in accordance with the applicable provisions of the Code
and shall in no event be less than the Fair Market Value of the Stock covered
by the ISO at the Grant Date; provided, however, that the exercise price of an
ISO granted to a Ten Percent Stockholder shall not be less than 110% of such
fair market value.


(b)  Option
Term.  Unless an earlier expiration date
is specified by the Committee at the Grant Date, each ISO shall expire 10 years
after the Grant Date; provided, however, that an ISO granted to a Ten Percent
Stockholder shall expire no later than five years after the Grant Date.


(c)  Disqualifying
Dispositions.  If shares of Stock
acquired by exercise of an ISO are disposed of within two years after the Grant
Date or within one year after the transfer of the Stock to the optionee, the
holder of the Stock immediately before the disposition shall promptly notify
the Company in writing of the date and terms of the disposition, shall provide
such other information regarding the disposition as the Company may reasonably
require and shall pay the Company any withholding and employment taxes which
the Company in its sole discretion deems applicable to the disposition.



 11
 









(d)  Termination
of Employment.  Notwithstanding Section
6.1(i), all vested ISOs must be exercised within three months of the Employment
Termination of the optionee, or at any time otherwise permissible in the case
of a Participant who dies within three months of Employment Termination, unless
such Employment Termination is due to the employee’s being disabled (within the
meaning of Section 22(e)(3) of the Code), in which case the ISO shall be
exercised within one year of the Employment Termination, notwithstanding
Section 6.1(i).


6.4  Surrender
of Options.  The Committee, acting in its
sole discretion, may include a provision in an Award Agreement allowing the
optionee to surrender the Option covered by the agreement, in whole or in part
in lieu of exercise in whole or in part, on any date that the Fair Market Value
of the Stock subject to the Option exceeds the exercise price and the Option is
exercisable (to the extent being surrendered). 
The surrender shall be effected by the delivery of the Award Agreement,
together with a signed statement which specifies the number of shares of Stock
as to which the optionee is surrendering the Option, together with a request
for such type of payment.  Upon such
surrender, the optionee shall receive (subject to any limitations imposed by
Rule 16b-3), at the election of the Committee, payment in cash or shares of
Stock, or a combination of the two, equal to (or equal in Fair Market Value to)
the excess of the Fair Market Value of the shares of Stock covered by the
portion of the Option being surrendered on the date of surrender over the
exercise price for such shares of Stock. 
The Committee, acting in its sole discretion, shall determine the form
of payment, taking into account such factors as it deems appropriate.  To the extent necessary to satisfy Applicable
Laws, the Committee may terminate an optionee’s rights to receive payments in
cash for fractional shares of Stock.  Any
Award Agreement providing for such surrender privilege shall also incorporate
such additional restrictions on the exercise or surrender of Options as may be
necessary to satisfy Applicable Law.


7.  Stock Appreciation
Rights


The Committee may grant Stock Appreciation Rights
to eligible persons.  A Stock
Appreciation Right shall entitle its holder to receive from the Company, at the
time of exercise of the right, an amount in cash equal to (or, at the Committee’s
discretion, shares of Stock equal in Fair Market Value to) the excess of the
Fair Market Value (at the date of exercise) of a share of Stock over a
specified price fixed by the Committee in the governing Award Agreement
multiplied by the number of shares of Stock as to which the holder is
exercising the Stock Appreciation Right. 
The specified price fixed by the Committee shall not be less than the
Fair Market Value of the shares of Stock on the Grant Date of the Stock
Appreciation Right.  Stock Appreciation
Rights may be granted in tandem with any previously or contemporaneously
granted Option or independent of any Option. 
The specified price of a tandem Stock Appreciation Right shall be the
exercise price of the related Option. 
Any Stock Appreciation Rights granted in connection with an ISO shall
contain such terms as may be required to comply with Section 422 of the Code.


8.  Dividend Equivalent
Rights


8.1  General.  The Committee shall have the authority to
grant Dividend Equivalent Rights to Participants upon such terms and conditions
as it shall establish, subject in all events to the following limitations and
provisions of general application set forth in this Plan.  Each



 12
 









Dividend Equivalent Right shall entitle a holder to receive, for a
period of time to be determined by the Committee, a payment equal to the
periodic dividends declared and paid by the Company on one share of Stock.  If the Dividend Equivalent Right relates to a
specific Option, the period shall not extend beyond the earliest of the date
the Option is exercised, the date any Stock Appreciation Right related to the
Option is exercised, or the expiration date set forth in the Option.


8.2  Rights
and Options.  Each Dividend Equivalent
Right may relate to a specific Option granted under this Plan and may be
granted to the optionee either concurrently with the grant of such Option or at
such later time as determined by the Committee, or each Dividend Equivalent
Right may be granted independent of any Option.


8.3  Payments.  The Committee shall determine at the time of
grant whether payment pursuant to a Dividend Equivalent Right shall be
immediate or deferred and if immediate, the Company shall make payments
pursuant to each Dividend Equivalent Right concurrently with the payment of the
periodic dividends to holders of Common Shares. 
If deferred, the payments shall not be made until a date or the
occurrence of an event specified by the Committee and then shall be made within
30 days after the occurrence of the specified date or event, unless the
Dividend Equivalent Right is forfeited under the terms of the Plan or
applicable Award Agreement.  The
Committee shall also determine in its sole discretion whether any portion of
any payment shall be made in shares of Stock.


8.4  Termination
of Employment.  In the event of
Employment Termination, any Dividend Equivalent Right held by such Participant
on the date of Employment Termination shall automatically be forfeited, unless
otherwise expressly provided by the Committee.


9.  Other Equity-Based Awards


9.1  Grant.  The Committee may grant one or more Other
Equity-Based Awards to any Participant. 
Each Award specify the number of shares of Common Stock or other equity
interests covered by such awards.


9.2  Terms
and Conditions.  The Committee, at the
time an Other Equity-Based Award is made, shall specify the terms and
conditions which govern the award. The terms and conditions of an Other
Equity-Based Award may prescribe that a Participant’s rights in the Other
Equity-Based Award shall be forfeitable, nontransferable or otherwise
restricted for a period of time or subject to such other conditions as may be
determined by the Committee, in its discretion and set forth in the Agreement.
Other Equity-Based Awards may be granted to Participants, either alone or in
addition to other awards granted under the Plan, and Other Stock-Based Awards
may be granted in the settlement of other Awards granted under the Plan.


9.3  Payment
or Settlement.  Other Equity-Based Awards
valued in whole or in part by reference to, or otherwise based on, shares of
Common Stock, shall be payable or settled in shares of Common Stock, cash or a
combination of Common Stock and cash, as determined by the Committee in its
discretion. Other Equity-Based Awards denominated as equity interests other
than shares of Common Stock may be paid or settled in shares or units of such
equity interests or cash or a combination of both as determined by the Committee
in its discretion.



 13
 









10.  Compliance with Laws


This Plan, the granting and vesting of Awards under
this Plan, the issuance and delivery of Stock, and the payment of money or
other consideration allowable under this Plan or under Awards awarded hereunder
are subject to compliance with all applicable federal and state laws, rules and
regulations (including, but not limited to, state and federal securities laws
and federal margin requirements) and to such approvals by any listing,
regulatory or governmental authority as may, in the opinion of counsel for the
Committee, the Board or the Company, be necessary or advisable in connection
therewith.  Any securities delivered
under this Plan shall be subject to such restrictions, and the person acquiring
such securities shall, if requested by the Company, provide such assurances and
representations to the Company as the Committee, the Board or the Company may
deem necessary or desirable to assure compliance with all applicable legal
requirements.  To the extent permitted by
applicable law, the Plan shall be deemed amended to the extent necessary to
conform to such laws, rules and regulations. 
Nothing in this Plan or in any Award or Award Agreement shall require
the Company to issue any Stock 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 or exercise 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 Stock covered by the Award and written
covenants as to the manner of disposal of such Stock as may be necessary or
useful to ensure that the grant, exercise 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 Stock under the Securities Act or register or qualify any Stock under any
state or other securities laws.


11.  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.


12.  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.



 14
 









13.  Liability and
Indemnification of the Committee


No person constituting, or member of the group
constituting, the Committee 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 Committee against, and each person or member of the group
constituting the Committee 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.


14.  Securities Law
Legends


Certificates of shares of Stock, if issued, may
have the following legend and statements of other applicable restrictions
endorsed thereon:


THE SHARES OF STOCK
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY STATE LAWS. 
THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, TRANSFERRED OR
OTHERWISE DISPOSED OF UNTIL THE HOLDER HEREOF PROVIDES EVIDENCE SATISFACTORY TO
THE ISSUER (WHICH, IN THE SOLE DISCRETION THE ISSUER, MAY INCLUDE AN OPINION OF
COUNSEL SATISFACTORY TO THE ISSUER) THAT SUCH OFFER, SALE, PLEDGE, TRANSFER OR
OTHER DISPOSITION WILL NOT VIOLATE ANY APPLICABLE FEDERAL OR STATE SECURITIES
LAWS.


This legend shall not be required for any shares of
Stock issued pursuant to an effective registration statement under the
Securities Act.


15.  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 the Plan, but such provision shall be fully severable and
the 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.



 15
 









16.  Effective Date and
Stockholder Approval


This Plan was originally approved by the Company’s
Board on                   .  It was approved in that form by the holder of
the Company’s voting Stock on                   
(the “Effective Date”).


17.  Miscellaneous


17.1  Loans.  An employer may, in its discretion, extend
one or more loans to Employees in connection with the exercise or receipt of an
Award granted under this Plan.  The terms
and conditions of any such loan shall be set by the board of directors of the
employer.


17.2  Forfeiture
Provisions.  Pursuant to its general
authority to determine the terms and conditions applicable to Awards granted
under the Plan, the Committee shall have the right (to the extent consistent
with the applicable exemptive conditions of Rule 16b-3) to provide, in the
terms of an Award Agreement, or by separate written instrument, that (i) any
proceeds, gains or other economic benefit actually or constructively received
by a Participant upon the receipt or exercise of the Award, or upon the receipt
or resale of any Stock underlying such Award, must be paid to the Company, and
(ii) the Award shall terminate and any unexercised portion of such Award
(whether or not vested) shall be forfeited, if (a) Employment Termination
occurs prior to a specified date, or within a specified time period following
receipt or exercise of the Award, or (b) the Participant, at any time, or
during a specified time period, engages in any activity in competition with his
employer or the Company, or which is inimical, contrary or harmful to the
interests of his employer or the Company, as may be further defined from time
to time by the Committee.


17.3  Limitations
Applicable to Section 16. 
Notwithstanding any other provision of this Plan, this Plan, and any
Award granted to any individual who is then subject to Section 16 of the
Exchange Act, shall be subject to any additional limitations set forth in any
applicable exemptive rule under Section 16 of the Exchange Act (including any
amendment to Rule 16b-3) that are requirements for the application of such
exemptive rule.  To the extent permitted
by applicable law, the Plan shall be deemed amended to the extent necessary to
conform to such applicable exemptive rule.


17.4  Effect
of Plan Upon Other Incentive and Compensation Plans.  The adoption of this Plan shall not affect
any other options or compensation or incentive plans in effect for the
Company.  Nothing in this Plan shall be
construed to limit the right of the Company (i) to establish any other forms of
incentives or compensation for employees of the Company, the Advisor or its
Affiliates, or (ii) to grant or assume options or other rights or awards
otherwise than under this Plan in connection with any proper corporate purpose
including, but not by way of limitation, the grant or assumption of options in
connection with the acquisition by purchase, lease, merger, consolidation or
otherwise of the business, stock or assets of any corporation, partnership, limited
liability company, firm or association.


17.5  Section
83(b) Election Prohibited.  No
Participant may make an election under Section 83(b) of the Code with respect
to any Award granted under this Plan without the Company’s consent.



 16