exv10w6



 






Exhibit 10.6




LANDWIN REIT, INC.

2005 Equity Incentive Plan




I. GENERAL




     1. Purpose. The Landwin REIT, Inc. 2005 Equity Incentive Plan (the “Plan”) is
maintained by Landwin REIT, Inc., a Maryland Corporation (the “Company”) to:




     (a) attract and retain key executive and managerial employees;




     (b) motivate participating employees, by means of appropriate incentive, to achieve
long-range goals;




     (c) attract and retain well-qualified individuals to serve as members of the Company’s
Board of Directors, and as independent contractors and consultants;




     (d) provide incentive compensation opportunities which are competitive with those of
other corporations; and




     (e) further identify Participants’ interests with those of the Company’s other
stockholders through compensation alternatives based on the Company’s common stock;


and thereby promote the long term financial interest of the Company and its Subsidiaries, including
the growth in value of the Company’s equity and enhancement of long term returns.




     2. Effective Date. Subject to the approval of the holders of a majority of the voting
Stock of the Company, the Plan shall be effective as of December ___, 2005. The Plan shall
terminate on December ___, 2015, ten (10) years after the Plan’s effective date.



     3. Definitions. The following definitions are applicable to the Plan.




     (a) “Award Agreement” means the agreement between the Company and a Participant
described in Section I.11 hereof.




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




     (c) “Change in Control” has the meaning ascribed to it in Section I.13(d)
hereof.




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




     (e) “Committee” means the Compensation Committee of the Board.



 









 






     (f) “Disability” means the inability of a Participant, by reason of a physical or
mental impairment, to engage in any substantial gainful activity, of which the Board shall
be the sole judge.




     (g) “Effective Date” means December ___, 2005.




     (h) “Exchange Act” means the Securities Exchange Act of 1934, as amended




     (i) “Fair Market Value” of any shared Stock means (i) if the Stock is listed on a
national securities exchange, the closing price on the Stock on a given date; (ii) if the
Stock is traded on an exchange or market in which prices are reported on a bid and asked
price, the average of the mean between the bid and asked price for the Stock on a given
date; and (iii) if the Stock is not listed on a national securities exchange nor traded on
the over-the-counter market, such value as the Board, in good faith, shall determine.




     (j) “Non-employee Director” means each member of the Board who is not a full-time
employee of the Company.




     (k) “Option” means the right of a Participant to purchase Shares pursuant to an
Incentive Option under Part II or a Non-Qualified Option under Part III,
each awarded pursuant to the provisions of the Plan.




     (l) “Option Date” means, with respect to any Option, the date on which the Option is
awarded under the Plan.




     (m) “Participant” means (i) any employee of the Company or any Subsidiary who is
selected by the Board or Committee to participate in the Plan; (ii) any Non-employee
Director, to the extent provided in Section I.5; and (iii) any consultant or
independent contractor selected by the Board or Committee to participate in the Plan.




     (n) “Performance Unit” shall have the meaning ascribed to it in Part V.




     (o) “Permitted Transferees” means members of the immediate family of the Participant,
trusts for the benefit of such immediate family members, and partnerships in which
substantially all of the interests are held by the Participant and members of his or her
immediate family. An immediate family member shall mean any descendant (children,
grandchildren and more remote descendants), including step-children and relationships
arising from legal adoption, and any spouse of a Participant or a Participant’s descendant.




     (p) “Related Company” means any corporation during any period in which it is a
Subsidiary, or during any period in which it directly or indirectly owns fifty percent (50%)
or more of the total combined voting power of all classes of stock of the Company that are
entitled to vote.




     (q) “Restricted Period” has the meaning ascribed to it in Part IV.



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     (r) “Restricted Stock” has the meaning ascribed to it in Part IV.




     (s) “Retirement” means (i) termination of employment in accordance with the retirement
procedures set by the Company from time to time; (ii) an employee’s termination of
employment or a Non-employee Director’s ceasing to serve as a member of the Board because of
Disability; or (iii) an employee’s termination of employment, a Non-employee Director’s
ceasing to serve as a member of the Board, or a consultant’s or independent contractor’s
ceasing to provide services to the Company voluntarily with the consent of the Company (of
which the Board shall be the sole judge).




     (t) “Shares” means shares of the Company’s Stock.




     (u) “Stock” means the Company’s $0.01 par value common stock, and any class of shares
into which such Stock may be changed or exchanged (whether through merger, reorganization or
otherwise).




     (v) “Stock Appreciation Right” means the right of a holder of a Participant to receive
Stock or cash as described in Part VI.




     (w) “Subsidiary” means any entity during any period of which fifty percent (50%) or
more of the total combined voting power of all classes of equity entitled to vote is owned,
directly or indirectly, by the Company.



     4. Administration. The authority to manage and control the operation and
administration of the Plan shall be vested in the Board. Subject to the provisions of the Plan, the
Board will have authority to select employees, consultants, Non-employee Directors and independent
contractors to receive awards of Options, Restricted Stock, Performance Units and/or Stock
Appreciation Rights, to determine the time or times of receipt, to determine the types of awards
and the number of Shares covered by the awards, to establish the terms, conditions, performance
criteria, restrictions, and other provisions of such awards, to determine the number and value of
Performance Units awarded and earned and to cancel or suspend awards. In making such award
determinations, the Board may take into account the nature of services rendered by the employee,
consultant or independent contractor or Non-employee Director, his or her present and potential
contribution to the Company’s success and such other factors as the Board deems relevant. The Board
is authorized to interpret the Plan, to establish, amend and rescind any rules and regulations
relating to the Plan, to determine the terms and provisions of any agreements made pursuant to the
Plan, and to make all other determinations that may be necessary or advisable for the
administration of the Plan. The Board may, from time to time, delegate its authority to manage and
control the operation and administration of the Plan to the Committee. In such case, all references
herein to the “Board” shall be deemed to refer to the “Committee.”



     A majority of the Committee shall constitute a quorum, and the acts of a majority of the
members present at any meeting at which a quorum is present, or acts approved in writing by all
members of the Committee, shall be the acts of the Committee, unless provisions to the contrary are
embodied in the Company’s Bylaws or resolutions duly adopted by the Board. All actions taken and
decisions and determinations made by the Board or the Committee pursuant to the Plan



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shall be binding and conclusive on all persons interested in the Plan. No member of the Board or
the Committee shall be liable for any action or determination taken or made in good faith with
respect to the Plan.




     Notwithstanding the foregoing, during any period in which the Company shall have a class of
its Stock registered pursuant to Section 12 of the Exchange Act all authority to exercise
discretion with respect to the participation in the Plan of persons who are “10 percent
stockholders” or “officers” within the meaning of the applicable Securities and Exchange Commission
rules relating to Section 16 of the Exchange Act (“Insiders”), and/or directors of the Company, or
the timing, pricing and amounts of awards granted under the Plan to such officers and directors,
shall be vested in (i) the Board, or (ii) the Committee, if consisting of two or more directors
each of whom is a non-employee director within the meaning ascribed to such term in Rule 16b-3
promulgated under the Exchange Act, or within any successor definition or any successor rule.



     5. Participation.




     (a) Employees, Consultants and Independent Contractors. The Board shall
determine and designate, from time to time, the key executives and managerial employees,
consultants or independent contractors of the Company and/or its Subsidiaries who may
receive awards under the Plan. In the discretion of the Board, an eligible employee,
consultant or independent contractor may be awarded Options, Restricted Stock or Performance
Shares or any combination thereof, and more than one award may be granted to a Participant.
Except as otherwise agreed to by the Company and the Participant, any award under the Plan
shall not affect any previous award to the Participant under the Plan or any other plan
maintained by the Company or its Subsidiaries.




     (b) Non-employee Directors. Each Non-employee Director shall be granted without
further action by the Board 1,000 shares of Restricted Stock at the close of business of
each annual meeting of the stockholders of the Company. An individual who is first elected
and commences serving as a Non-employee Director shall also be granted without further
action by the Board 1,000 shares of Restricted Stock on the date of such election as a
Director.




     Each grant of shares of Restricted Stock to a Non-employee Director shall become vested
after the Director has completed [___(___) continuous months of service as a
member of the Board after the Grant Date (unless his service terminates during such period
by reason of Retirement, death or Disability, when the awards shall become 100% vested).



     6. Stock Subject to the Plan.




     (a) Awards to Employees, Consultants and Independent Contractors. Subject to
the provisions of paragraph I.10, the number of Shares available under the Plan for awards
to employees, consultants and independent contractors shall not exceed ___shares of
common stock, in the aggregate. If, for any reason, any award under the Plan otherwise



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distributable in Shares, or any portion of the award, shall expire, terminate or be
forfeited or canceled, or be settled in cash pursuant to the terms of the Plan and,
therefore, any such Shares are no longer distributable under the award, such Shares shall
again be available for award under the Plan.




     (b) Awards to Non-Employee Directors. Subject to the provisions of paragraph
I.10, the number of Shares available under the Plan for awards to Non-employee Directors
shall not exceed ___(___,000) Shares. If, for any reason, any Option award
to a Non-employee Director under the Plan or any portion of such award, shall expire,
terminate or be forfeited or canceled, or be settled in cash pursuant to the terms of the
Plan and, therefore, any such Shares are no longer distributable under the award, such
Shares shall again be available for award to Non-employee Directors under the Plan.




     (c) Annual Limit on Grants to Employees. Subject to the provisions of paragraph
I.10, the number of shares of Stock with respect to which Options under the Plan may be
granted in any calendar year to any employee shall not exceed ___shares.



     7. Compliance With Applicable Laws and Withholding of Taxes. Notwithstanding any other
provision of the Plan, the Company shall have no liability to issue any Shares under the Plan
unless such issuance would comply with all applicable laws and the applicable requirements of any
securities exchange or similar authority. Prior to the issuance of any Shares under the Plan, the
Company may require a written statement that the recipient is acquiring the Shares for investment
and not for the purpose or with the intention of distributing as amended, the Shares. All awards
and payments under the Plan to employees are subject to withholding of all applicable taxes, which
withholding obligations may be satisfied, with the consent of the Board, through the surrender of
Shares which the Participant already owns, or to which a Participant is otherwise entitled under
the Plan.



     Upon termination of the Restricted Period with respect to an award of Restricted Stock (or
such earlier time, if any, as an election is made by the Participant under Code Section 83(b), or
any successor provisions thereto, to include the value of such Stock in taxable income), the
Company shall have the right to require the Participant to pay to the Company the amount of taxes
that the Company is required to withhold with respect to such Stock or, in lieu thereof, to retain
or sell without notice a sufficient number of Shares held by it to cover the amount required to be
withheld. The Company shall have the right to deduct from all distributions paid with respect to a
Restricted Stock award the amount of taxes that the Company is required to withhold with respect to
such distribution payments, if any.



     8. Transferability. Incentive Stock Options, Performance Units, Stock Appreciation
Rights and, during the period of restriction, Restricted Stock awarded under the Plan are not
transferable except as designated by the Participant by will or by the laws of descent and
distribution. Incentive Stock Options may be exercised during the lifetime of the Participant only
by the Participant or his guardian or legal representative. If expressly permitted by the terms of
the Award Agreement, a Participant may transfer Non-Qualified Options to Permitted Transferees,
provided that there is not any consideration for the transfer.



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     9. Employment and Stockholder Status. The Plan does not constitute a contract of
employment, and selection as a Participant will not give any employee the right to be retained in
the employ of the Company or any Subsidiary. The Plan does not constitute or serve as evidence of
an agreement or understanding, express or implied, that the Company will retain a consultant,
independent contractor or Non-employee Director for any period of time. Subject to the provisions
of Section IV.3(a), no award under the Plan shall confer upon the holder thereof any right
as a stockholder prior to the date on which he fulfills all service requirements and other
conditions for receipt of Stock. If the redistribution of Shares is restricted pursuant to
Section I.8, certificates representing such Shares may bear a legend referring to such
restrictions.



     10. Adjustments to Number and Kind of Securities Subject to the Plan. In the event of
any change in the outstanding Stock of the Company by reason of any recapitalization, merger,
consolidation, combination, exchange of shares, or other similar change, the aggregate number of
Shares with respect to which awards may be made under the Plan, the terms and the number of Shares
under any outstanding Options, Performance Shares, Performance Units or Restricted Stock, and the
purchase price of a Share under Options, may be equitably adjusted by the Board in its sole
discretion. In addition, the Board may, in its sole discretion, make appropriate adjustment as to
the kind of shares or other securities deliverable with respect to outstanding awards under the
Plan.



     11. Agreement With Company. At the time of any awards under the Plan, the Board will
require a Participant to enter into an “Award Agreement” with the Company in a form specified by
the Board, agreeing to the terms and conditions of the Plan and to such additional terms and
conditions, not inconsistent with the Plan, as the Board may, in its sole discretion, prescribe. To
the extent that any award under this Plan is subject to Code Section 409A or any successor section,
the Award Agreement documenting such award shall contain terms and conditions which will permit the
award to satisfy the operational and documentary requirements of Code Section 409A or any such
successor section.



     12. Amendment and Termination of Plan. The Board may at any time and in any way amend,
suspend or terminate the Plan; provided, however, that no amendment of the Plan shall be made
without stockholder approval if stockholder approval is required by law, regulations or stock
exchange rule. No amendment, suspension or termination of the Plan shall alter or impair any
Options, Restricted Stock, Performance Units or Stock Appreciation Rights previously awarded under
the Plan without the consent of the holder thereof. Notwithstanding the preceding, no amendment
under this Section I.12 shall be effective if it would cause an Award to be subject to Code
Section 409A.



     13. Change in Control. In addition to the rights and obligations of the Committee to
modify, adjust or accelerate exercisability of outstanding Options, in the event that, while any
Options, Restricted Stock, Performance Units or Stock Appreciation Rights are outstanding under the
Plan, there shall occur a Change in Control, then, with respect to each award of Options,
Restricted Stock, Performance Units and/or Stock Appreciation Rights outstanding immediately prior
to the consummation of such transaction and, except as provided below, without the necessity of any
action by the Committee:



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     (a) If provision is made in writing in connection with such transaction for the
continuance and/or assumption of the Options, Restricted Stock, Performance Units and/or
Stock Appreciation Rights granted under the Plan, or the substitution for such Stock
Options, Performance Units, Stock Appreciation Rights, and Restricted Stock of new Options,
Performance Units, Restricted Stock, and/or Stock Appreciation Rights, with appropriate
adjustment as to the number and kind of shares or other securities deliverable with respect
thereto, the Options, Restricted Stock, Performance Units, and/or Stock Appreciation Rights
granted under the Plan, or the new Options, Restricted Stock, Performance Units, and/or
Stock Appreciation Rights substituted therefor, shall continue, subject to such adjustment,
in the manner and under the terms provided in the respective agreements.



     (b) In the event provision is not made in connection with such transaction for the
continuance and/or assumption of the Options, Restricted Stock, Performance Units, and/or
Stock Appreciation Rights granted under the Plan, or for the substitution of equivalent
options, rights, units and awards, then:




     (1) The holder of any Stock Appreciation Right shall be entitled, immediately
prior to the effective date of such transaction, to exercise such right (provided,
if applicable, that the exercise of a Stock Appreciation Right granted in tandem
with an Option shall be exercisable only to the extent the related Option is or
becomes exercisable at such time in accordance with its terms), provided that the
unexercised portion of any right shall be deemed cancelled and terminated as of the
effective date of such transaction;




     (2) All restrictions on any award of Restricted Stock shall lapse immediately
prior to the transaction;




     (3) Any performance requirements, restrictions or risks of forfeiture imposed
under the Plan on an award of Performance Units shall lapse immediately prior to the
effective date of such transaction and the Performance Units shall be settled at
that time.




     (4) The Committee, in its sole and absolute discretion, shall, with respect to
any or all outstanding Options, take any or all of the following actions to be
effective as of the date of the Change in Control (or as of any other date fixed by
the Committee occurring within the thirty (30) day period immediately preceding the
date of the Change in Control, but only if such action remains contingent upon the
effectuation of the Change in Control):




     (A) Unilaterally cancel such non-assumed Option in exchange for: (i)
whole and/or fractional Shares (or for whole Shares and cash in lieu of any
fractional Share) or whole and/or fractional shares of a successor (or for
whole shares of a successor and cash in lieu of any fractional share) that,
in the aggregate, are equal in value to the excess of



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the Fair Market Value of the Shares that could be purchased subject to
such non-assumed Option less the aggregate exercise price for the options
with respect to such Shares; or (ii) cash or other property equal in value
to the excess of the Fair Market Value of the Shares that could be purchased
subject to such non-assumed Option less the aggregate exercise price for the
Options with respect to such Shares; and/or




     (B) Unilaterally cancel such non-assumed Option after providing the
holder of such Option with (i) an opportunity to exercise the option within
a specified period prior to the date of the Change in Control, and (ii)
notice of such opportunity to exercise prior to the commencement of such
specified period. However, notwithstanding the foregoing, to the extent that
the recipient of a non-assumed Option is an Insider, payment of cash in lieu
of whole or fractional Shares or shares of a successor may only be made to
the extent that such payment (i) has met the requirements of an exemption
under Section 16(b) of the Exchange Act or the rules promulgated with
respect to such section, or (ii) is a subsequent transaction the terms of
which were provided for in a transaction initially meeting the requirements
of an exemption under Rule 16b-3 promulgated under the Exchange Act. Unless
an Award Agreement provides otherwise, the payment of cash in lieu of whole
or fractional Shares or in lieu of whole or fractional shares of a successor
shall be considered a subsequent transaction approved by the original grant
of an Option.




     (c) Notwithstanding the preceding, the Change in Control provisions contained in a
Participant’s Award Agreement shall govern in lieu of any provisions contained in this
Section I.13.




     (d) For purposes of this Plan a “Change in Control” shall be any of the following: (a)
a merger or consolidation of the Company with or into another corporation in which the
Company shall not be the surviving corporation (for purposes of this Section
I.13(d), the Company shall not be deemed the surviving corporation in any such
transaction if, as the result thereof, it becomes a wholly-owned subsidiary of another
corporation), (b) a dissolution of the Company, (c) a transfer of all or substantially all
of the assets or shares of stock of the Company in one transaction or a series of related
transactions to one or more other person or entities, or (d) if any “person” or “group” as
those terms are used in Sections 13(d) and 14(d) of the Exchange Act, other than Excluded
Persons, becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act),
directly or indirectly, of securities of the Company representing fifty percent (50%) or
more of the combined voting power of the Company’s then outstanding securities. The term
“Excluded Persons” means each of   
                                      
             
           
              
                                       
            
            
             
      , and any person, entity or group under the control of any
of them, or a trustee or other fiduciary holding securities under an employee benefit plan
of the Company. Notwithstanding the preceding, if any Awards are issued prior to the date
that the Company closes on its initial public offering of stock,



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     the issuance of shares in connection with that offering shall not constitute a “Change
in Control” under this Plan.



II. INCENTIVE STOCK OPTIONS




     1. Definition. The award of an Incentive Stock Option under the Plan entitles the
Participant to purchase Shares at a price fixed at the time the Option is awarded, subject to the
following terms of this Part II.



     2. Eligibility. The Committee shall designate the Participants to whom Incentive Stock
Options, as described in Code Section 422(b) or any successor section thereto, are to be awarded
under the Plan and shall determine the number of option shares to be offered to each of them.
Incentive Stock Options shall be awarded only to key employees of the Company, and no Non-employee
Director shall be eligible to receive an award of an Incentive Stock Option. In no event shall the
aggregate Fair Market Value (determined at the time the option is awarded) of Stock with respect to
which Incentive Stock Options are exercisable for the first time by an individual during any
calendar year (under all plans of the Company and all Subsidiaries) exceed $100,000 (subject to any
increases that may occur in future years as a result of changes in law).



     3. Price. The purchase price of a Share under each Incentive Stock Option shall be
determined by the Committee, provided, however, that in no event shall such price be less than the
greater of (i) one hundred percent (100%) of the Fair Market Value of a Share as of the Option Date
(or one hundred ten percent (110%) of such Fair Market Value if the holder of the Incentive Stock
Option owns stock possessing more than ten percent (10%) of the combined voting power of all
classes of stock of the Company or any Related Company) or (ii) the par value of a Share on such
date.



     4. Exercise.




     (a) A Participant may not exercise an Incentive Stock Option after the Expiration Date
(as defined in Section III.5 below) applicable to that Option. Each Incentive Stock
Option shall become and be exercisable at such time or times and during such period or
periods, in full or in such installments as may be determined by the Committee at the Option
Date.




     (b) A Participant shall exercise his or her Incentive Stock Options by delivering an
exercise notice to the Company and paying the full exercise price for such exercised
Incentive Stock Options. Participants may elect to pay the exercise price for Shares
purchased upon the exercise of Incentive Stock Options in cash or through tendering, either
through actual delivery or attestation, of shares of Stock (valued at Fair Market Value as
of the day of exercise) owned by the Participant, or any combination thereof, equivalent to
the purchase price of such Incentive Stock Options. As soon as practicable thereafter, a
certificate representing the shares so purchased shall be delivered to the person entitled
thereto. Any Shares that are tendered must have been held by the Participant for at least
six (6) months prior to their tender or have been purchased on the open market. If the
Company shall have a class of its Stock registered pursuant to Section



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12 of the Exchange Act, an Option holder may also make payment at the time of exercise
of an Incentive Stock Option by delivering to the Company a properly executed exercise
notice together with irrevocable instructions to a broker approved by the Company, that upon
such broker’s sale of Shares with respect to which such Option is exercised, it is to
deliver promptly to the Company the amount of sale proceeds necessary to satisfy the Option
exercise price and any required withholding taxes.



     5. Option Expiration Date. The “Expiration Date” with respect to an Incentive Stock
Option or any portion thereof awarded to a Participant under the Plan means the earliest of:




     (a) the date that is ten (10) years after the date on which the Incentive Stock Option
is awarded;




     (b) the date established by the Committee at the time of the award;




     (c) the date that is thirty (30) days after the date the Participant’s employment with
the Company and all Subsidiaries is terminated for reasons other than death or permanent and
total disability; or




     (d) the date that is one (1) year after the Participant’s employment with the Company
and all Subsidiaries is terminated because of death or permanent and total disability (as
defined in Code Section 22(e)(3)).



III. NON-QUALIFIED OPTIONS




     1. Definition. The award of a Non-Qualified Option under the Plan entitles the
Participant to purchase Shares at a price fixed at the time the Option is awarded, subject to the
following terms of this Part III.



     2. Eligibility. The Board shall designate the Participants to whom Non-Qualified
Options are to be awarded under the Plan and shall determine the number of Shares to be awarded to
each of them.



     3. Price. The purchase price of a Share under each Non-Qualified Option shall be
determined by the Board; provided, however, that in no event shall such price be less than the Fair
Market Value of a Share as of the Option Date.



     4. Exercise.




     (a) A Participant may not exercise a Non-Qualified Option after the Expiration Date
applicable to that Option. Unless otherwise specified herein, each Non-Qualified Option
shall become and be exercisable at such time or times and during such period or periods, in
full or in such installments as may be determined by the Board at the Option Date.



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     (b) A Participant shall exercise his or her Non-Qualified Options by delivering an
exercise notice to the Company and paying the full exercise price for such exercised
Options. Participants may elect to pay the purchase price of Shares purchased upon the
exercise of Non-Qualified Stock Options by tendering, either through actual delivery of
Shares or though attestation, Shares (valued at Fair Market Value as of the day of exercise)
owned by the Participant, or any combination thereof, equivalent to the purchase price of
such Non-Qualified Stock Options. Any Shares that are tendered must have been held by the
Participant for at least six (6) months prior to their tender or have been purchased on the
open market. Shares acquired pursuant to the exercise of a Non-Qualified Option shall be
subject to such conditions, restrictions and contingencies as the Board may establish in the
Award Agreement. If the Company shall have a class of its Stock registered pursuant to
Section 12 of the Exchange Act, an Option holder may also make payment at the time of
exercise of a Non-Qualified Stock Option by delivering to the Company a properly executed
exercise notice together with irrevocable instructions to a broker approved by the Company,
that upon such broker’s sale of Shares with respect to which such Option is exercised, it is
to deliver promptly to the Company the amount of sale proceeds necessary to satisfy the
Option exercise price and any required withholding taxes.



     5. Option Expiration Date. The “Expiration Date” with respect to a Non-Qualified
Option or any portion thereof awarded to a Participant under the Plan means the earliest of:




     (a) the date established by the Board at the time of the award or set forth in
Section III.5(b), as applicable;




     (b) the date that is thirty (30) days after the employee Participant’s employment with
the Company and all Subsidiaries or the consultant, independent contractor or Non-employee
Director Participant’s service is terminated for reasons other than Retirement or death; or




     (c) the date that is one (1) year after the date the employee Participant’s employment
with the Company and all Subsidiaries or the consultant, independent contractor or
Non-employee Director Participant’s service is terminated by reason of Retirement or death.



IV. RESTRICTED STOCK




     1. Definition. Restricted Stock awards are grants of Shares to Participants, the
vesting of which is subject to a required period of employment and any other conditions established
by the Board or by the terms of this Plan.



     2. Eligibility. The Board shall designate the Participants to whom Restricted Stock is
to be awarded and the number of Shares that are subject to the award.



     3. Terms and Conditions of Awards. All Restricted Stock awarded to Participants under
the Plan shall be subject to the following terms and conditions and to such other terms and



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conditions, not inconsistent with the Plan, as shall be prescribed by the Board in its sole
discretion and as shall be contained in the agreement referred to in Section I.11.





     (a) Restricted Stock awarded to Participants may not be sold, assigned, transferred,
pledged or otherwise encumbered, except as hereinafter provided, for a period of ten years
or such shorter period as the Board may determine, but no less than three years, after the
time of the award of such Stock (the “Restricted Period”). Such restrictions shall lapse as
to the Restricted Stock in accordance with the time(s) and number(s) of Shares as to which
the Restricted Period expires, as set forth in the Agreement with the Participant. Except
for such restrictions, the Participant as owner of such Stock shall have all the rights of a
stockholder, including but not limited to the right to receive all dividends on such Stock.




     (b) The Board may in its discretion, at any time after the date of the award of
Restricted Stock, adjust the length of the Restricted Period to account for individual
circumstances of a Participant or group of Participants, but in no case shall the length of
the Restricted Period be less than one (1) year.




     (c) Except as otherwise determined by the Board in its sole discretion, a Participant
whose employment or service with the Company and all Subsidiaries terminates prior to the
end of the Restricted Period for any reason shall forfeit all Restricted Stock remaining
subject to any outstanding Restricted Stock award which have not then vested in accordance
with the agreement entered into under Section I.11.




     (d) Each certificate issued in respect of Restricted Stock awarded under the Plan shall
be registered in the name of the Participant and, at the discretion of the Board, each such
certificate may be deposited with the Company or in a bank designated by the Board. Each
such certificate shall bear the following (or a similar) legend:




“The transferability of this certificate and the Shares represented hereby are
subject to the terms and conditions (including forfeiture) contained in the Landwin
REIT, Inc. 2005 Equity Incentive Plan and an agreement entered into between the
registered owner and Landwin REIT, Inc. A copy of such plan and agreement is on file
in the office of the Secretary of Landwin REIT, Inc., at its then current executive
offices, or if the Company changes its principal office, at the address of such new
principal office.”




     (e) As the Restricted Period for Restricted Stock expires and such restrictions lapse,
such Restricted Stock shall be held by a Participant (or his or her legal representative,
beneficiary or heir) free of all restrictions imposed by the Plan and the Award Agreement.
Such Shares shall nevertheless continue to be subject to any restriction imposed under
applicable securities laws.



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V. DEFERRED STOCK AND PERFORMANCE SHARES




     1. Definition. A “Deferred Stock” Award is the grant of a right to receive Stock in
the future. Performance Shares are awards to Participants who may receive value for the Shares at
the end of a Performance Period. The number of Shares earned, and value received for them, will be
contingent on the degree to which the performance measures established at the time of the initial
award are met. The term “Performance Shares” as used in Parts I through IV of the Plan shall be
deemed to include both Deferred Stock and Performance Shares.



     2. Eligibility. The Board shall designate the Participants to whom Deferred Stock or
Performance Shares are to be awarded, and the number of Shares to be the subject of such awards. No
Non-employee Director shall be eligible to receive an award of a Performance Share.



     3. Terms and Conditions of Awards. For each Participant, the Board will determine the
timing of awards; the number of Deferred Stock or Performance Shares awarded; the value of
Performance Shares; which may be stated either in cash or in Stock; the performance measures used
for determining whether the Performance Shares are earned; the performance period during which the
performance measures will apply; the relationship between the level of achievement of the
performance measures and the degree to which Performance Shares are earned; whether, during or
after the performance period, any revision to the performance measures or performance period should
be made to reflect significant events or changes that occur during the performance period; the
number of earned Performance Shares that will be paid in cash and/or Stock.; and whether any
dividends or dividend equivalents will be paid on Deferred Stock, either currently or on a deferred
basis.



     4. Payment. The Board will compare the actual performance to the performance measures
established for the performance period and determine the number of Performance Shares to be paid
and their value. Payment for Performance Shares earned shall be wholly in cash, wholly in Stock or
in a combination of the two, in a lump sum or installments, and subject to vesting requirements and
such other conditions as the Board shall determine. The Board will determine the number of earned
Shares to be paid in cash and the number to be paid in Stock. For Performance Shares awarded in
Stock, one Share will be paid for each Share earned, or cash will be paid for each Share earned
equal to either (a) the Fair Market Value of a Share at the end of the Performance Period or (b)
the Fair Market Value of a Share averaged for a number of days determined by the Board. For
Performance Shares awarded in cash, the value of each Share earned will be paid in its initial cash
value, or Shares will be distributed based on the cash value of the Shares earned divided by (a)
the Fair Market Value of a Share at the end of the Performance Period or (b) the Fair Market Value
of a Share averaged for a number of days determined by the Board.



     5. Retirement, Death or Termination. A Participant whose employment or service with
the Company and all Subsidiaries terminates during a performance period because of Retirement or
death shall be entitled to the prorated value of earned Performance Shares, issued with respect to
that performance period, at the conclusion of the performance period based on the ratio of the
months of employment or service during the period to the total months of the performance period. If
a Participant’s employment or service with the Company and all Subsidiaries terminates during a
performance period for any reason other than Retirement or death, the Performance Shares issued



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with respect to that performance period will be forfeited on the date such Participant’s employment
or service terminates. Notwithstanding the foregoing provisions of this Part IV, if a Participant’s
employment or service with the Company and all Subsidiaries terminates before the end of the
Performance Period with respect to any Performance Shares awarded to him, the Board may determine
that the Participant will be entitled to receive all or any portion of the Shares that he or she
would otherwise receive, and may accelerate the determination and payment of the value of such
Shares or make such other adjustments as the Board, in its sole discretion, deems desirable.




VI. STOCK APPRECIATION RIGHTS




     1. Definition. A Stock Appreciation Right is an award that entitles the Participant to
receive an amount equal to the difference between the Fair Market Value of Shares at the time of
exercise of the Stock Appreciation Right and the Fair Market Value of such Shares at the date of
award of the Stock Appreciation Right, subject to the applicable terms and conditions of the Stock
Appreciation Right and the following provisions of this Part VI.



     2. Eligibility. The Board may, in its discretion, award Stock Appreciation Rights
under this Part VI independently, concurrent with, or subsequent to, any other award under
the Plan.



     3. Exercise. A Stock Appreciation Right shall entitle the holder to receive, upon the
exercise of the Stock Appreciation Right, Shares (valued at their Fair Market Value at the time of
exercise), cash or a combination thereof, in an amount equal in value to the excess of the Fair
Market Value of the Shares subject to the Stock Appreciation Right as of the date of such exercise
over the Fair Market Value of the Shares subject to the Stock Appreciation Right at the date of
award, as shall be prescribed by the Board in its sole discretion and as shall be contained in the
Participant’s Award Agreement.



     4. Expiration Date. The “Expiration Date” with respect to a Stock Appreciation Right
shall be determined by the Board and documented in the Participant’s Award Agreement. If the right
is not exercised before the end of the day on which the right ceases to be exercisable, such right
shall be deemed exercised as of such date and payment shall be made to the holder in cash or
Shares, as designated on the Participant’s Award Agreement.




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