exv10w2






Exhibit 10.2




CORESITE REALTY CORPORATION AND CORESITE, L.P.

2010 EQUITY INCENTIVE AWARD PLAN




ARTICLE 1



PURPOSE



     The purpose of the Coresite Realty Corporation and Coresite, L.P. 2010 Equity Incentive Award
Plan (the “Plan”) is to promote the success and enhance the value of Coresite Realty
Corporation, Inc., a Maryland corporation (the “Company”), and Coresite, L.P., a Delaware
limited partnership (the “Partnership”), by linking the personal interests of the members
of the Board, Employees, and Consultants to those of Company stockholders and by providing such
individuals with an incentive for outstanding performance to generate superior returns to Company
stockholders. The Plan is further intended to provide flexibility to the Company and the
Partnership in their ability to motivate, attract, and retain the services of members of the Board,
Employees, and Consultants upon whose judgment, interest, and special effort the successful conduct
of the Company’s and the Partnership’s operations is largely dependent.



ARTICLE 2




DEFINITIONS AND CONSTRUCTION



     Wherever the following terms are used in the Plan they shall have the meanings specified
below, unless the context clearly indicates otherwise. The singular pronoun shall include the
plural where the context so indicates.



     2.1 “Administrator” means the entity or person that conducts the general
administration of the Plan as provided herein. With reference to the administration of the Plan
with respect to Awards granted to Independent Directors, the term “Administrator” shall refer to
the Board. With reference to the administration of the Plan with respect to any other Award, the
term “Administrator” shall refer to the Committee unless the Board has assumed the authority for
administration of the Plan generally as provided in Section 11.1 hereof. With reference to the
duties of the Committee under the Plan which have been delegated to one or more persons pursuant to
Section 11.5 hereof, the term “Administrator” shall refer to such person(s) unless the Committee or
the Board has revoked such delegation.



     2.2 “Applicable Accounting Standards” shall mean Generally Accepted Accounting
Principles in the United States, International Financial Reporting Standards or such other
accounting principles or standards as may apply to the Company’s financial statements under United
States federal securities laws from time to time.



     2.3 “Award” means an Option, a Restricted Stock award, a Stock Appreciation Right
award, a Dividend Equivalents award, a Stock Payment award, a Restricted Stock Unit award, or an Other Incentive Award granted to a Participant pursuant to the
Plan.



 









 





     2.4 “Award Agreement” means any written agreement, contract, or other instrument or
document evidencing an Award, including through electronic medium.



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



     2.6 “Change in Control” means and includes each of the following:



          (a) A transaction or series of transactions (other than an offering of Stock to the general
public through a registration statement filed with the Securities and Exchange Commission) whereby
any “person” or related “group” of “persons” (as such terms are used in Sections 13(d) and 14(d)(2)
of the Exchange Act) (other than the Company, any of its subsidiaries, an employee benefit plan
maintained by the Company or any of its subsidiaries or a “person” that, prior to such transaction,
directly or indirectly controls, is controlled by, or is under common control with, the Company)
directly or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 under the
Exchange Act) of securities of the Company possessing more than 50% of the total combined voting
power of the Company’s securities outstanding immediately after such acquisition; or




          (b) During any period of two consecutive years, individuals who, at the beginning of such
period, constitute the Board together with any new director(s) (other than a director designated by
a person who shall have entered into an agreement with the Company to effect a transaction
described in Section 2.6(a) or Section 2.6(c)) whose election by the Board or nomination for
election by the Company’s stockholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of the two year period or
whose election or nomination for election was previously so approved, cease for any reason to
constitute a majority thereof; or




          (c) The consummation by the Company (whether directly involving the Company or indirectly
involving the Company through one or more intermediaries) of (x) a merger, consolidation,
reorganization, or business combination or (y) a sale or other disposition of all or substantially
all of the Company’s assets in any single transaction or series of related transactions or (z) the
acquisition of assets or stock of another entity, in each case other than a transaction:




               (i) Which results in the Company’s voting securities outstanding immediately before the
transaction continuing to represent (either by remaining outstanding or by being converted into
voting securities of the Company or the person that, as a result of the transaction, controls,
directly or indirectly, the Company, or owns, directly or indirectly, all or substantially all of
the Company’s assets or otherwise succeeds to the business of the Company (the Company or such
person, the “Successor Entity”)) directly or indirectly, at least a majority of the
combined voting power of the Successor Entity’s outstanding voting securities immediately after the
transaction, and



               (ii) After which no person or group beneficially owns voting securities representing 50% or
more of the combined voting power of the Successor Entity; provided, however, that no person or
group shall be treated for purposes of this Section 2.6(c)(ii) as



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beneficially owning 50% or more of combined voting power of the Successor Entity solely as a
result of the voting power held in the Company prior to the consummation of the transaction.




     In addition, if a Change in Control constitutes a payment event with respect to any Award
which provides for the deferral of compensation and is subject to Section 409A of the Code, the
transaction or event described in subsection (a), (b), (c) or (d) with respect to such Award must
also constitute a “change in control event,” as defined in Treasury Regulation §1.409A-3(i)(5) to
the extent required by Section 409A.



     The Administrator shall have full and final authority, which shall be exercised in its
discretion, to determine conclusively whether a Change in Control of the Company has occurred
pursuant to the above definition, and the date of the occurrence of such Change in Control and any
incidental matters relating thereto.



     2.7 “Code” means the Internal Revenue Code of 1986, as amended.



     2.8 “Committee” means the committee of the Board described in Article 11.



     2.9 “Company Consultant” means any consultant or adviser engaged to provide services
to the Company or any Company Subsidiary that qualifies as a consultant under the applicable rules
of the Securities and Exchange Commission for registration of shares on a Form S-8 Registration
Statement.



     2.10 “Company Employee” means any officer or other employee (as defined in accordance
with Section 3401(c) of the Code) of the Company or of any Company Subsidiary.



     2.11 “Company Subsidiary” means (i) any “subsidiary corporation” of the Company as
defined in Section 424(f) of the Code and any applicable regulations promulgated thereunder, (ii)
any other entity of which a majority of the outstanding voting stock or voting power is
beneficially owned directly or indirectly by the Company, or (iii) any partnership or limited
liability company of which 50% or more of the capital and profits interest is owned, directly or
indirectly, by the Company or by one or more Company Subsidiaries or by the Company and one or more
Company Subsidiaries; provided, however, that “Company Subsidiary” shall not include the
Partnership or any Partnership Subsidiary.



     2.12 “Consultant” means any Company Consultant or any Partnership Consultant.



     2.13 “Director” means a member of the Board, or as applicable a member of the board of
directors of a Subsidiary.



     2.14 “Disability” means “disability,” as such term is defined in Section 22(e)(3) of
the Code.



     2.15 “Dividend Equivalents” means a right granted to a Participant pursuant to Section
8.1 to receive the equivalent value (in cash or Stock) of dividends paid on Stock.



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     2.16 “DRO” shall mean a domestic relations order as defined by the Code or Title I of
the Employee Retirement Income Security Act of 1974, as amended from time to time, or the rules
thereunder.



     2.17 “Effective Date” has the meaning set forth in Section 12.1.



     2.18 “Eligible Individual” means any person who is an Employee, a Consultant or a
Director, as determined by the Administrator.



     2.19 “Employee” means any Company Employee or Partnership Employee.



     2.20 “Equity Restructuring” means a nonreciprocal transaction between the company and
its stockholders, such as a stock dividend, stock split, spin-off or recapitalization through a
large, nonrecurring cash dividend, that affects the shares of Stock (or other securities of the
Company) or the share price of Stock (or other securities) and causes a change in the per share
value of the Stock underlying outstanding Awards.



     2.21 “Exchange Act” means the Securities Exchange Act of 1934, as amended.



     2.22 “Expiration Date” has the meaning set forth in Section 12.2.



     2.23 “Fair Market Value” means, as of any given date, the fair market value of a share
of Stock on the date determined as follows:



          (a) If the Stock is listed on any (i) established securities exchange (such as the New York
Stock Exchange, the NASDAQ Global Market and the NASDAQ Global Select Market), (ii) national market
system or (iii) automated quotation system on which the Stock is listed, quoted or traded, its Fair
Market Value shall be the closing sales price for a share of Stock as quoted on such exchange or
system for such date or, if there is no closing sales price for a share of Stock on the date in
question, the closing sales price for a share of Stock on the last preceding date for which such
quotation exists, as reported in The Wall Street Journal or such other source as the Administrator
deems reliable;




          (b) If the Stock is not listed on an established securities exchange, national market system
or automated quotation system, but the Stock is regularly quoted by a recognized securities dealer,
its Fair Market Value shall be the mean of the high bid and low asked prices for such date or, if
there are no high bid and low asked prices for a share of Stock on such date, the high bid and low
asked prices for a share of Stock on the last preceding date for which such information exists, as
reported in The Wall Street Journal or such other source as the Administrator deems reliable; or




          (c) If the Stock is neither listed on an established securities exchange, national market
system or automated quotation system nor regularly quoted by a recognized securities dealer, its
Fair Market Value shall be established by the Administrator in good faith




     2.24 “Incentive Stock Option” means an Option that is intended to be an incentive
stock option and meets the requirements of Section 422 of the Code or any successor provision
thereto.



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     2.25 “Independent Director” means a Director of the Company who is not an Employee.



     2.26 “Misconduct” means the occurrence of any of, but not limited to, the following:
(i) conviction of the Participant of any felony or any crime involving fraud or dishonesty; (ii)
the Participant’s participation (whether by affirmative act or omission) in a fraud, act or
dishonesty or other act of misconduct against the Company, the Partnership or any Subsidiary; (iii)
conduct by the Participant which, based upon a good faith and reasonable factual investigation by
the Company (or, if the Participant is an executive officer, by the Board), demonstrates the
Participant’s unfitness to serve; (iv) the Participant’s violation of any statutory or fiduciary
duty, or duty of loyalty owed to the Company and/or the Partnership and/or any Subsidiary; (v) the
Participant’s violation of state or federal law in connection with the Participant’s performance of
his or her job which has an adverse effect on the Company and/or the Partnership and/or any
Subsidiary; and (vi) the Participant’s violation of Company or Partnership policy which has a
material adverse effect on the Company and/or the Partnership and/or any Subsidiary.
Notwithstanding the foregoing, the Participant’s Disability shall not constitute Misconduct as set
forth herein. The determination that a termination is for Misconduct shall be by the Administrator
it its sole and exclusive judgment and discretion. Notwithstanding the foregoing, if a Participant
is a party to an employment or severance agreement with the Company, the Partnership or any
Subsidiary in effect as of the date of grant of an Award which defines “Misconduct” or “Cause” or a
similar term, “Misconduct” for purposes of the Plan and such Award shall have the meaning given to
such term in such employment or severance agreement.



     2.27 “Non-Employee Director” means a Director of the Company who qualifies as a
“Non-Employee Director” as defined in Rule 16b-3(b)(3) of the Exchange Act, or any successor
definition.



     2.28 “Non-Qualified Stock Option” means an Option that is not intended to be or
otherwise does not qualify as an Incentive Stock Option.



     2.29 “Option” means a right granted to a Participant pursuant to Article 5 of the Plan
to purchase a specified number of shares of Stock at a specified price during specified time
periods. An Option may be either an Incentive Stock Option or a Non-Qualified Stock Option.



     2.30 “Other Incentive Award” means an Award granted or denominated in Stock or units
of Stock pursuant to Section 8.4 hereof or denominated in other equity interests, including,
without limitation, equity interests of the Partnership, such as partnership profits interests,
that are convertible or exchangeable into Stock.



     2.31 “Participant” means any Eligible Individual who, as a member of the Board,
Consultant or Employee, has been granted an Award pursuant to the Plan.



     2.32 “Partnership Agreement” means the Agreement of Limited Partnership of CoreSite,
L.P., as the same may be amended, modified or restated from time to time.



     2.33 “Partnership Consultant” means any consultant or adviser engaged to provide
services to the Partnership or any Partnership Subsidiary that qualifies as a consultant under the



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applicable rules of the Securities and Exchange Commission for registration of shares on a
Form S-8 Registration Statement.




     2.34 “Partnership Employee” means any officer or other employee (as defined in
accordance with Section 3401(c) of the Code) of the Partnership or of any Partnership Subsidiary



     2.35 “Partnership Subsidiary” means (i) any entity of which a majority of the
outstanding voting stock or voting power is beneficially owned directly or indirectly by the
Partnership, or (ii) any partnership or limited liability company of which 50% or more of the
capital and profits interest is owned, directly or indirectly, by the Partnership or by one or more
Partnership Subsidiaries or by the Partnership and one or more Partnership Subsidiaries.



     2.36 “Performance Criteria” means the criteria (and adjustments) that the
Administrator selects for an Award for purposes of establishing the Performance Goal or Performance
Goals for a Performance Period.



     2.37 “Performance Goals” means, for a Performance Period, the goals established in
writing by the Administrator for the Performance Period based upon the Performance Criteria.
Depending on the Performance Criteria used to establish such Performance Goals, the Performance
Goals may be expressed in terms of overall Company performance or the performance of a Subsidiary,
division or other operational unit, or an individual.



     2.38 “Performance Period” means the one or more periods of time, which may be of
varying and overlapping durations, as the Administrator may select, over which the attainment of
one or more Performance Goals will be measured for the purpose of determining a Participant’s right
to, and the payment of, a Performance-Based Award.



     2.39 “Permitted Transferee” shall mean, with respect to a Participant, any “family
member” of the Participant, as defined under the instructions to use of the Form S-8 Registration
Statement under the Securities Act, after taking into account any state, federal, local or foreign
tax and securities laws applicable to transferable Awards, or any other transferee approved by the
Administrator.



     2.40 “Plan” means this CoreSite Realty Corporation and CoreSite, L.P. 2010 Equity
Incentive Award Plan, as it may be amended from time to time.



     2.41 “Public Trading Date” means the first date upon which Stock is listed (or
approved for listing) upon notice of issuance on any securities exchange or designated (or approved
for designation) upon notice of issuance as a national market security on an interdealer quotation
system.




     2.42 “REIT” means a real estate investment trust within the meaning of Sections 856
through 860 of the Code.



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     2.43 “Restricted Stock” means Stock awarded to a Participant pursuant to Article 6
that is subject to certain restrictions and may be subject to risk of forfeiture or repurchase.



     2.44 “Restricted Stock Unit” means a right to receive a share of Stock during
specified time periods granted pursuant to Section 8.3.



     2.45 “Securities Act” means the Securities Act of 1933, as amended.



     2.46 “Stock” means the common stock of the Company and such other securities of the
Company that may be substituted for Stock pursuant to Article 10.



     2.47 “Stock Appreciation Right” means a right granted pursuant to Article 7 to receive
a payment equal to the excess of the Fair Market Value of a specified number of shares of Stock on
the date the Stock Appreciation Right is exercised over the Fair Market Value of such number of
shares of Stock on the date the Stock Appreciation Right was granted as set forth in the applicable
Award Agreement.



     2.48 “Stock Payment” means (a) a payment in the form of shares of Stock, or (b) an
option or other right to purchase shares of Stock, as part of any bonus, deferred compensation or
other arrangement, made in lieu of all or any portion of the compensation, granted pursuant to
Section 8.2.



     2.49 “Subsidiary” means any Company Subsidiary or Partnership Subsidiary.



     2.50 “Substitute Award” shall mean an Award granted under the Plan in connection with
a corporate transaction, such as a merger, combination, consolidation or acquisition of property or
stock, in any case, upon the assumption of, or in substitution for, outstanding equity awards
previously granted by a company or other entity that is a party to such transaction;
provided, however, that in no event shall the term “Substitute Award” be construed
to refer to an award made in connection with the cancellation and repricing of an Option or Stock
Appreciation Right.



     2.51 “Successor Entity” has the meaning set forth in Section 2.6.



     2.52 “Termination of Consultancy” means the time when the engagement of a Participant
as a Consultant is terminated for any reason, with or without cause, including, but not by way of
limitation, by resignation, discharge, death or retirement, but excluding: (a) terminations where
there is a simultaneous employment or continuing employment of the Participant by the Company, the
Partnership or any Subsidiary, and (b) terminations where there is a simultaneous reestablishment
of a consulting relationship or continuing consulting relationship between the Participant and the
Company, the Partnership or any Subsidiary. The Administrator, in its absolute discretion, shall
determine the effect of all matters and questions relating to Termination of Consultancy,
including, but not by way of limitation, the question of whether a particular leave of absence
constitutes a Termination of Consultancy. Notwithstanding any other provision of the Plan, the
Company, the Partnership or any Subsidiary has an absolute and unrestricted right to terminate a
Consultant’s service at any time for any reason whatsoever, with or without cause, except to the
extent expressly provided otherwise in writing.



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     2.53 “Termination of Directorship” means the time when a Participant, if he or she is
or becomes an Independent Director, ceases to be a Director for any reason, including, but not by
way of limitation, a termination by resignation, failure to be elected, death or retirement. The
Board, in its sole and absolute discretion, shall determine the effect of all matters and questions
relating to Termination of Directorship with respect to Independent Directors.



     2.54 “Termination of Employment” means the time when the employee-employer
relationship between a Participant and the Company, the Partnership or any Subsidiary is terminated
for any reason, with or without cause, including, but not by way of limitation, a termination by
resignation, discharge, death, Disability or retirement; but excluding: (a) terminations where
there is a simultaneous reemployment or continuing employment of the Participant by the Company,
the Partnership or any Subsidiary, and (b) terminations where there is a simultaneous establishment
of a consulting relationship or continuing consulting relationship between the Participant and the
Company, the Partnership or any Subsidiary. The Administrator, in its absolute discretion, shall
determine the effect of all matters and questions relating to Termination of Employment, including,
but not by way of limitation, the question of whether a particular leave of absence constitutes a
Termination of Employment.



     2.55 “Termination of Service” shall mean the last to occur of a Participant’s
Termination of Consultancy, Termination of Directorship or Termination of Employment, as
applicable. A Participant shall not be deemed to have a Termination of Service merely because of a
change in the capacity in which the Participant renders service to the Company, the Partnership or
any Subsidiary (i.e., a Participant who is an Employee becomes a Consultant) or a change in the
entity for which the Participant renders such service (i.e., an Employee of the Company becomes an
Employee of the Partnership), unless following such change in capacity or service the Participant
is no longer serving as an Employee, Independent Director or Consultant.



ARTICLE 3




SHARES SUBJECT TO THE PLAN



     3.1 Number of Shares.



          (a) Subject to Article 10 and Section 3.1(b), the aggregate number of shares of Stock which
may be issued or transferred pursuant to Awards under the Plan shall be 3,000,000 shares of Stock.
Other Incentive Awards which are denominated in Partnership units, shall count against the number
of shares of Stock available for issuance under the Plan only to the extent that such Partnership
unit is convertible into shares of Stock and on the same basis as the conversion ratio applicable
to the Partnership unit.




          (b) If any shares of Stock subject to an Award are forfeited or expire or such Award is
settled for cash (in whole or in part), the shares of Stock subject to such Award shall, to the
extent of such forfeiture, expiration or cash settlement, again be available for future grants of
Awards under the Plan and shall be added back to the share limit set forth in this Section 3.1(b)
in the same number of shares as were debited from the share limit in respect of the grant of such
Award (as may be adjusted in accordance with Section 10.1 hereof). Notwithstanding anything to the
contrary contained herein, the following shares shall not be added back to the share limit






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set forth in this Section 3.1(b) and will not be available for future grants of Awards: (i)
shares of Stock tendered by a Participant or withheld by the Company in payment of the exercise
price of an Option; (ii) shares of Stock tendered by the Participant or withheld by the Company to
satisfy any tax withholding obligation with respect to an Award; (iii) shares of Stock subject to a
Stock Appreciation Right that are not issued in connection with the stock settlement of the Stock
Appreciation Right on exercise thereof; and (iv) shares of Stock purchased on the open market with
the cash proceeds from the exercise of Options. If any shares of Restricted Stock are forfeited by
a Participant or repurchased by the Company pursuant to Article 6 hereof, such shares shall again
be available for the grant of an Award pursuant to the Plan. Notwithstanding the foregoing, Other
Incentive Awards covering units in the Partnership shall, to the extent such Partnership units are
convertible into Stock, reduce the maximum aggregate number of shares of Stock that may be issued
under this Plan, on the same basis as such Partnership unit is convertible into Stock (i.e., each
such unit shall be treated as an equivalent award of Stock). The payment of Dividend Equivalents
in cash in conjunction with any outstanding Awards shall not be counted against the shares of Stock
available for issuance under the Plan.




          (c) Substitute Awards shall not reduce the shares of Stock authorized for grant under the
Plan. Additionally, in the event that a company acquired by the Company, the Partnership or any
Subsidiary or with which the Company, the Partnership or any Subsidiary combines has shares
available under a pre-existing plan approved by stockholders and not adopted in contemplation of
such acquisition or combination, the shares available for grant pursuant to the terms of such
pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other
adjustment or valuation ratio or formula used in such acquisition or combination to determine the
consideration payable to the holders of common stock of the entities party to such acquisition or
combination) may be used for Awards under the Plan and shall not reduce the shares of Stock
authorized for grant under the Plan; provided, that Awards using such available shares shall not be
made after the date awards or grants could have been made under the terms of the pre-existing plan,
absent the acquisition or combination, and shall only be made to individuals who were not employed
by or providing services to the Company, the Partnership or any Subsidiary immediately prior to
such acquisition or combination.




          (d) Notwithstanding the provisions of this Section 3.1, no shares of Stock may again be
optioned, granted or awarded if such action would cause an Incentive Stock Option to fail to
qualify as an incentive stock option under Section 422 of the Code.




     3.2 Stock Distributed. Any shares of Stock distributed pursuant to an Award may
consist, in whole or in part, of authorized and unissued Stock, treasury Stock or Stock purchased
on the open market.



ARTICLE 4




ELIGIBILITY AND PARTICIPATION



     4.1 Eligibility. Each Eligible Individual shall be eligible to be granted one or more
Awards pursuant to the Plan.



     4.2 Participation. Subject to the provisions of the Plan, the Administrator may, from



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time to time, select from among all Eligible Individuals, those to whom Awards shall be
granted and shall determine the nature and amount of each Award. No Eligible Individual shall have
any right to be granted an Award pursuant to this Plan.




     4.3 Stand-Alone and Tandem Awards. Awards granted pursuant to the Plan may, in the
discretion of the Administrator, be granted either alone, in addition to, or in tandem with, any
other Award granted pursuant to the Plan. Awards granted in addition to or in tandem with other
Awards may be granted either at the same time as or at a different time from the grant of such
other Awards.



     4.4 Award Agreement. Awards under the Plan shall be evidenced by Award Agreements
that set forth the terms, conditions and limitations for each Award which may include the term of
an Award, the provisions applicable in the event the Participant’s employment or service
terminates, and the Company’s authority to unilaterally or bilaterally amend, modify, suspend,
cancel or rescind an Award.



     4.5 Foreign Participants. Notwithstanding any provision of the Plan to the contrary,
in order to comply with the laws in other countries in which the Company and its Subsidiaries
operate or have Eligible Individuals, or in order to comply with the requirements of any foreign
securities exchange, the Administrator, in its sole discretion, shall have the power and authority
to: (a) determine which Subsidiaries shall be covered by the Plan; (b) determine which Eligible
Individuals outside the United States are eligible to participate in the Plan; (c) modify the terms
and conditions of any Award granted to Eligible Individuals outside the United States to comply
with applicable foreign laws or listing requirements of any such foreign securities exchange; (d)
establish subplans and modify exercise procedures and other terms and procedures, to the extent
such actions may be necessary or advisable (any such subplans and/or modifications shall be
attached to the Plan as appendices); provided, however, that no such subplans and/or modifications
shall increase the share limitations contained in Section 3.1; and (e) take any action, before or
after an Award is made, that it deems advisable to obtain approval or comply with any necessary
local governmental regulatory exemptions or approvals or listing requirements of any such foreign
securities exchange. Notwithstanding the foregoing, the Administrator may not take any actions
hereunder, and no Awards shall be granted, that would violate the Code, the Exchange Act, the
Securities Act, any other securities law or governing statute, the rules of the securities exchange
or automated quotation system on which the Stock is listed, quoted or traded or any other
applicable law.



ARTICLE 5




STOCK OPTIONS



     5.1 General. The Administrator is authorized to grant Options to Eligible Individuals
on the following terms and conditions:



          (a) Exercise Price. The exercise price per share of Stock subject to an Option shall
be determined by the Administrator and set forth in the Award Agreement; provided that, subject to
Section 5.2(b), the exercise price for any Option shall not be less than 100% of the Fair Market
Value of a share of Stock on the date the Option is granted (or, as to Incentive Stock






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Options, on the date the Option is modified, extended or renewed for purposes of Section
424(h) of the Code).




          (b) Time of Exercise. The Administrator shall determine the time or times at which an
Option may be exercised in whole or in part. The Administrator shall also determine the
performance or other conditions, if any, that must be satisfied before all or part of an Option may
be exercised.




          (c) Manner of Exercise. The Administrator shall also determine the performance or
other conditions, if any, that must be satisfied before all or part of an Option may be exercised.
All or a portion of an exercisable Option shall be deemed exercised upon delivery of all of the
following to the Secretary of the Company, or such other person or entity designated by the
Administrator, or his, her or its office, as applicable:




               (i) A written or electronic notice complying with the applicable rules established by the
Administrator stating that the Option, or a portion thereof, is exercised. The notice shall be
signed by the Participant or other person then entitled to exercise the Option or such portion of
the Option;



               (ii) Such representations and documents as the Administrator, in its sole discretion, deems
necessary or advisable to effect compliance with all applicable provisions of the Securities Act
and any other federal, state or foreign securities laws or regulations, the rules of any securities
exchange or automated quotation system on which the shares of Stock are listed, quoted or traded or
any other applicable law. The Administrator may, in its sole discretion, also take whatever
additional actions it deems appropriate to effect such compliance including, without limitation,
placing legends on share certificates and issuing stop-transfer notices to agents and registrars;



               (iii) In the event that the Option shall be exercised pursuant to Section 9.3 by any person or
persons other than the Participant, appropriate proof of the right of such person or persons to
exercise the Option, as determined in the sole discretion of the Administrator; and



               (iv) Full payment of the exercise price and applicable withholding taxes to the stock
administrator of the Company for the shares with respect to which the Option, or portion thereof,
is exercised, in a manner permitted by Sections 9.1 and 9.2.



     5.2 Incentive Stock Options. The terms of any Incentive Stock Options granted
pursuant to the Plan must comply with the conditions and limitations contained in this Section 5.2.



          (a) Eligibility. Incentive Stock Options may be granted only to employees (as defined
in accordance with Section 3401(c) of the Code) of the Company or a Company Subsidiary which
constitutes a “subsidiary corporation” of the Company within the meaning of Section 424(f) of the
Code or a Parent which constitutes a “parent corporation” of the Company within the meaning of
Section 424(e) of the Code.




          (b) Exercise Price. The exercise price per share of Stock shall be set by the






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Administrator; provided that subject to Section 5.2(e) the exercise price for any Incentive
Stock Option shall not be less than 100% of the Fair Market Value on the date of grant.




          (c) Expiration. Subject to Section 5.2(e), an Incentive Stock Option may not be
exercised to any extent by anyone after the tenth anniversary of the date it is granted, unless an
earlier time is set in the Award Agreement.




          (d) Individual Dollar Limitation. The aggregate Fair Market Value (determined as of
the time the Option is granted) of all shares of Stock with respect to which Incentive Stock
Options are first exercisable by a Participant in any calendar year may not exceed $100,000 or such
other limitation as imposed by Section 422(d) of the Code, or any successor provision. To the
extent that Incentive Stock Options are first exercisable by a Participant in excess of such
limitation, the excess shall be considered Non-Qualified Stock Options.




          (e) Ten Percent Owners. An Incentive Stock Option shall be granted to any individual
who, at the date of grant, owns stock possessing more than ten percent of the total combined voting
power of all classes of Stock of the Company or any “subsidiary corporation” of the Company or
“parent corporation” of the Company (each within the meaning of Section 424 of the Code) only if
such Option is granted at an exercise price per share that is not less than 110% of the Fair Market
Value per share of the Stock on the date of grant and the Option is exercisable for no more than
five years from the date of grant.




          (f) Notice of Disposition. The Participant shall give the Company prompt notice of
any disposition of shares of Stock acquired by exercise of an Incentive Stock Option within (i) two
years from the date of grant of such Incentive Stock Option or (ii) one year after the transfer of
such shares of Stock to the Participant.




          (g) Transferability; Right to Exercise. An Incentive Stock Option shall not be
transferable by the Participant other than by will or by the laws of descent or distribution, or
pursuant to a DRO. During a Participant’s lifetime, unless such Incentive Stock Option is
transferred pursuant to a DRO, an Incentive Stock Option may be exercised only by the Participant.




          (h) Failure to Meet Requirements. Any Option (or portion thereof) purported to be an
Incentive Stock Option, which, for any reason, fails to meet the requirements of Section 422 of the
Code shall be considered a Non-Qualified Stock Option.




     5.3 Substitute Awards. Notwithstanding the foregoing provisions of this Article 5 to
the contrary, in the case of an Option that is a Substitute Award, the price per share of the
shares subject to such Option may be less than the Fair Market Value per share on the date of
grant, provided, however, that the excess of: (a) the aggregate Fair Market Value (as of the date
such Substitute Award is granted) of the shares subject to the Substitute Award, over (b) the
aggregate exercise price thereof does not exceed the excess of (x) the aggregate fair market value
(as of the time immediately preceding the transaction giving rise to the Substitute Award, such
fair market value to be determined by the Administrator) of the shares of the predecessor entity
that were



12









 




subject to the grant assumed or substituted for by the Company, over (y) the aggregate
exercise price of such shares.




     5.4 Substitution of Stock Appreciation Rights. The Administrator may provide in the
Award Agreement evidencing the grant of an Option that the Administrator, in its sole discretion,
shall have to right to substitute a Stock Appreciation Right for such Option at any time prior to
or upon exercise of such Option, subject to the provisions of Section 7.2 hereof; provided that
such Stock Appreciation Right shall be exercisable with respect to the same number of shares of
Stock for which such substituted Option would have been exercisable.



ARTICLE 6




RESTRICTED STOCK AWARDS



     6.1 Grant of Restricted Stock. The Administrator is authorized to make Awards of
Restricted Stock to any Eligible Individual selected by the Administrator in such amounts and
subject to such terms and conditions as determined by the Administrator. The Administrator shall
determine the mechanism for the transfer of the Restricted Stock and payment therefore in the case
of Awards to Partnership Employees or Partnership Consultants, and any forfeiture or repurchase of
such Restricted Stock pursuant to Section 6.3.



     6.2 Issuance and Restrictions. Restricted Stock shall be subject to such repurchase
restrictions, forfeiture restrictions, restrictions on transferability and other restrictions as
the Administrator may impose (including, without limitation, limitations on the right to vote
Restricted Stock or the right to receive dividends on the Restricted Stock). These restrictions
may lapse separately or in combination at such times, pursuant to such circumstances, in such
installments, or otherwise, as the Administrator determines at the time of the grant of the Award
or thereafter.



     6.3 Repurchase or Forfeiture. Except as otherwise determined by the Administrator at
the time of the grant of the Award or thereafter, upon Termination of Service during the applicable
restriction period, Restricted Stock that is at that time subject to restrictions shall be
forfeited or subject to repurchase by the Company (or its assignee) under such terms as the
Administrator shall determine; provided, however, that the Administrator may (a) provide in any
Award Agreement that restrictions or forfeiture conditions relating to Restricted Stock will be
waived in whole or in part in the event of a Participant’s Termination of Service under certain
circumstances, and (b) in other cases waive in whole or in part restrictions or forfeiture
conditions relating to Restricted Stock.



     6.4 Certificates for Restricted Stock. Restricted Stock granted pursuant to the Plan
may be evidenced in such manner as the Administrator shall determine. If certificates representing
shares of Restricted Stock are registered in the name of the Participant, certificates must bear an
appropriate legend referring to the terms, conditions, and restrictions applicable to such
Restricted Stock, and the Company may, at its discretion, retain physical possession of the
certificate until such time as all applicable restrictions lapse or the Award Agreement may provide
that the shares shall be held in escrow by an escrow agent designated by the Company.



13









 





ARTICLE 7




STOCK APPRECIATION RIGHTS



     7.1 Grant of Stock Appreciation Rights. A Stock Appreciation Right may be granted to
any Eligible Individual selected by the Administrator. A Stock Appreciation Right shall be subject
to such terms and conditions not inconsistent with the Plan as the Administrator shall impose and
shall be evidenced by an Award Agreement (including, without limitation, in the case of Awards to
Partnership Employees or Partnership Consultants, the mechanism for the transfer of rights under
such Awards).



     7.2 Stock Appreciation Rights.



          (a) A Stock Appreciation Right shall have a term set by the Administrator. A Stock
Appreciation Right shall be exercisable in such installments as the Administrator may determine. A
Stock Appreciation Right shall cover such number of shares of Stock as the Administrator may
determine. The exercise price per share of Stock subject to each Stock Appreciation Right shall be
set by the Administrator; provided, however, that the Administrator in its sole and absolute
discretion may provide that the Stock Appreciation Right may be exercised subsequent to a
Termination of Service or following a Change in Control of the Company, or because of the
Participant’s retirement, death or Disability, or otherwise.




          (b) A Stock Appreciation Right shall entitle the Participant (or other person entitled to
exercise the Stock Appreciation Right pursuant to the Plan) to exercise all or a specified portion
of the Stock Appreciation Right (to the extent then exercisable pursuant to its terms) and to
receive from the Company an amount determined by multiplying (i) the amount (if any) by which the
Fair Market Value of a share of Stock on the date of exercise of the Stock Appreciation Right
exceeds the exercise price per share of the Stock Appreciation Right, by (ii) the number of shares
of Stock with respect to which the Stock Appreciation Right shall have been exercised, subject to
any limitations the Administrator may impose.




     7.3 Payment and Limitations on Exercise.



          (a) Payment of the amounts determined under Section 7.2(b) above shall be in cash, in Stock
(based on its Fair Market Value as of the date the Stock Appreciation Right is exercised) or a
combination of both, as determined by the Administrator.




          (b) To the extent any payment under Section 7.2(b) is effected in Stock it shall be made
subject to satisfaction of all provisions of Article 5 above pertaining to Options.




ARTICLE 8




OTHER TYPES OF AWARDS



     8.1 Dividend Equivalents.



          (a) Any Eligible Individual selected by the Administrator may be granted Dividend Equivalents
based on the dividends on the shares of Stock that are subject to any






14









 







Award, to be credited as of dividend payment dates, during the period between the date the
Award is granted and the date the Award is exercised, vests or expires, as determined by the
Administrator. Such Dividend Equivalents shall be converted to cash or additional shares of Stock
by such formula and at such time and subject to such limitations as may be determined by the
Administrator. The Administrator shall specify the mechanism for the transfer of Stock pursuant to
a Dividend Equivalent Award in the case of Awards to Partnership Employees or Partnership
Consultants.




          (b) Unless otherwise determined by the Administrator, Dividend Equivalents with respect to an
Award with performance-based vesting that are based on dividends paid prior to the vesting of such
Award shall only be paid out to the Participant to the extent that the performance-based vesting
conditions are subsequently satisfied and the Award vests.




          (c) Notwithstanding the foregoing, no Dividend Equivalents shall be payable with respect to
Options or Stock Appreciation Rights.




     8.2 Stock Payments. Any Eligible Individual selected by the Administrator may receive
Stock Payments in the manner determined from time to time by the Administrator. The number of
shares of Stock or the number of options or other rights to purchase shares of Stock subject to a
Stock Payment shall be determined by the Administrator and may be based upon the attainment of
Performance Goals that are established by the Administrator and relate to one or more of the
Performance Criteria or other specific performance goals determined appropriate by the
Administrator. The Administrator shall specify the mechanism for the transfer of the Stock
pursuant to a Stock Payment Award and payment therefore, if applicable, in the case of Awards to
Partnership Employees or Partnership Consultants.



     8.3 Restricted Stock Units. The Administrator is authorized to make Awards of
Restricted Stock Units to any Eligible Individual selected by the Administrator in such amounts and
subject to such terms and conditions as determined by the Administrator. At the time of grant, the
Administrator shall specify the date or dates on which the Restricted Stock Units shall become
fully vested and nonforfeitable, and may specify such conditions to vesting as it deems
appropriate. At the time of grant, the Administrator shall specify the maturity date applicable to
each grant of Restricted Stock Units which shall be no earlier than the vesting date or dates of
the Award and may be determined at the election of the Eligible Individual to whom the Award is
granted. On the maturity date, the Company shall, subject to Section 9.4(b), transfer to the
Participant one unrestricted, fully transferable share of Stock for each Restricted Stock Unit that
is vested and scheduled to be distributed on such date and not previously forfeited. The
Administrator shall specify the purchase price, if any, to be paid by the Participant to the
Company for such shares of Stock.




15









 






     8.4 Other Incentive Awards. Any Eligible Individual selected by the Administrator may
be granted one or more Awards that provide Participants with shares of Stock or the right to
purchase shares of Stock or that have a value derived from the value of, or an exercise or
conversion privilege at a price related to, or that are otherwise payable in shares of Stock and
which may be linked to the attainment of Performance Goals that are established by the
Administrator and relate to one or more of the any one or more of the Performance Criteria or other
specific performance goals determined appropriate by the Administrator, in each case on a specified
date or dates or over any period or periods determined by the Administrator. In making such
determinations, the Administrator shall consider (among such other factors as it deems relevant in
light of the specific type of Award) the contributions, responsibilities and other compensation of
the particular Participant. The Administrator shall specify the mechanism for the transfer of the
Stock or other equity interests pursuant to Other Incentive Awards and payment therefore, if
applicable, in the case of Awards to Partnership Employees or Partnership Consultants.



     8.5 Term. Except as otherwise provided herein, the term of any Award of Dividend
Equivalents, Stock Payments, Restricted Stock Units or Other Incentive Award shall be set by the
Administrator in its discretion.



     8.6 Exercise or Purchase Price. The Administrator may establish the exercise or
purchase price, if any, of any Award of any Stock Payments, Restricted Stock Units or Other
Incentive Awards; provided, however, that such price shall not be less than the par value of a
share of Stock on the date of grant, unless otherwise permitted by applicable state law.



ARTICLE 9




PROVISIONS APPLICABLE TO AWARDS



     9.1 Payment. The Administrator shall determine the methods by which payments by any
Participant with respect to any Awards granted under the Plan shall be made, including, without
limitation: (a) cash or check, (b) shares of Stock (including, in the case of payment of the
exercise price of an Award, shares of Stock issuable pursuant to the exercise of the Award) or
shares of Stock held for such period of time as may be required by the Administrator in order to
avoid adverse accounting consequences, in each case, having a Fair Market Value on the date of
delivery equal to the aggregate payments required, (c) delivery of a written or electronic notice
that the Participant has placed a market sell order with a broker with respect to shares of Stock
then issuable upon exercise or vesting of an Award, and that the broker has been directed to pay a
sufficient portion of the net proceeds of the sale to the Company in satisfaction of the aggregate



16









 




payments required; provided, that payment of such proceeds is then made to the Company upon
settlement of such sale, or (d) other form of legal consideration acceptable to the Administrator.
The Administrator shall also determine the methods by which shares of Stock shall be delivered or
deemed to be delivered to Participants. Notwithstanding any other provision of the Plan to the
contrary, no Participant who is a Director or an “executive officer” of the Company within the
meaning of Section 13(k) of the Exchange Act shall be permitted to make payment with respect to any
Awards granted under the Plan, or continue any extension of credit with respect to such payment
with a loan from the Company or a loan arranged by the Company in violation of Section 13(k) of the
Exchange Act.




     9.2 Tax Withholding. The Company, the Partnership or any Subsidiary shall have the
authority and the right to deduct or withhold, or require a Participant to remit to the Company,
the Partnership or such Subsidiary an amount sufficient to satisfy federal, state, local and
foreign taxes (including the Participant’s employment tax obligations) required by law to be
withheld with respect to any taxable event concerning a Participant arising as a result of this
Plan. The Administrator may in its discretion and in satisfaction of the foregoing requirement
elect to have the Company, the Partnership or any Subsidiary, as applicable, withhold shares of
Stock otherwise issuable under an Award (or allow the return of shares of Stock) having a Fair
Market Value equal to the sums required to be withheld (or allow the Participant to make such an
election). Notwithstanding any other provision of the Plan, the number of shares of Stock which
may be withheld with respect to the issuance, vesting, exercise or payment of any Award (or which
may be repurchased from the Participant of such Award within six months (or such other period as
may be determined by the Administrator) after such shares of Stock were acquired by the
Participant) in order to satisfy the Participant’s federal, state, local and foreign income and
payroll tax liabilities with respect to the issuance, vesting, exercise or payment of the Award
shall be limited to the number of shares of Stock which have a Fair Market Value on the date of
withholding or repurchase equal to the aggregate amount of such liabilities based on the minimum
statutory withholding rates for federal, state, local and foreign income tax and payroll tax
purposes that are applicable to such supplemental taxable income. The Administrator shall
determine the fair market value of the Stock, consistent with applicable provisions of the Code,
for tax withholding obligations due in connection with a broker-assisted cashless Option or Stock
Appreciation Right exercise involving the sale of shares of Stock to pay the exercise price or any
tax withholding obligation.



     9.3 Transferability of Awards.



          (a) Except as otherwise provided in Section 9.3(b):




               (i) No Award under the Plan may be sold, pledged, assigned or transferred in any manner other
than by will or the laws of descent and distribution or, subject to the consent of the
Administrator, pursuant to a DRO, unless and until such Award has been exercised, or the shares
underlying such Award have been issued, and all restrictions applicable to such shares have lapsed;



               (ii) No Award or interest or right therein shall be liable for the debts, contracts or
engagements of the Participant or his successors in interest or shall be subject to disposition by
transfer, alienation, anticipation, pledge, hypothecation, encumbrance, assignment



17









 




or any other means whether such disposition be voluntary or involuntary or by operation of law
by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including
bankruptcy), and any attempted disposition thereof shall be null and void and of no effect, except
to the extent that such disposition is permitted by the preceding sentence; and




               (iii) During the lifetime of the Participant, only the Participant may exercise an Award (or
any portion thereof) granted to him under the Plan, unless it has been disposed of pursuant to a
DRO; after the death of the Participant, any exercisable portion of an Award may, prior to the time
when such portion becomes unexercisable under the Plan or the applicable Award Agreement, be
exercised by his personal representative or by any person empowered to do so under the deceased
Participant’s will or under the then applicable laws of descent and distribution.



          (b) Notwithstanding Section 9.3(a), the Administrator, in its sole discretion, may determine
to permit a Participant to transfer an Award other than an Incentive Stock Option to any one or
more Permitted Transferees, subject to the following terms and conditions: (i) an Award
transferred to a Permitted Transferee shall not be assignable or transferable by the Permitted
Transferee other than by will or the laws of descent and distribution; (ii) an Award transferred to
a Permitted Transferee shall continue to be subject to all the terms and conditions of the Award as
applicable to the original Participant (other than the ability to further transfer the Award); and
(iii) the Participant and the Permitted Transferee shall execute any and all documents requested by
the Administrator, including, without limitation documents to (A) confirm the status of the
transferee as a Permitted Transferee, (B) satisfy any requirements for an exemption for the
transfer under applicable federal, state and foreign securities laws and (C) evidence the transfer.




     9.4 Stock Certificates; Book Entry Procedures.



          (a) Notwithstanding anything herein to the contrary, the Company shall not be required to
issue or deliver any certificates evidencing shares of Stock pursuant to the exercise of any Award,
unless and until the Board has determined, with advice of counsel, that the issuance and delivery
of such certificates is in compliance with all applicable laws, regulations of governmental
authorities and, if applicable, the requirements of any exchange on which the shares of Stock are
listed or traded. All Stock certificates delivered pursuant to the Plan are subject to any
stop-transfer orders and other restrictions as the Administrator deems necessary or advisable to
comply with federal, state, or foreign jurisdiction, securities or other laws, rules and
regulations and the rules of any national securities exchange or automated quotation system on
which the Stock is listed, quoted, or traded. The Administrator may place legends on any Stock
certificate to reference restrictions applicable to the Stock. In addition to the terms and
conditions provided herein, the Board may require that a Participant make such reasonable
covenants, agreements, and representations as the Board, in its discretion, deems advisable in
order to comply with any such laws, regulations, or requirements. The Administrator shall have the
right to require any Participant to comply with any timing or other restrictions with respect to
the settlement or exercise of any Award, including a window-period limitation, as may be imposed in
the discretion of the Administrator.







18









 








          (b) Notwithstanding any other provision of the Plan, unless otherwise determined by the
Administrator or required by any applicable law, rule or regulation, the Company shall not deliver
to any Participant certificates evidencing shares of Stock issued in connection with any Award and
instead such shares of Stock shall be recorded in the books of the Company (or, as applicable, its
transfer agent or stock plan administrator).




     9.5 Paperless Administration. In the event that the Company establishes for itself or
using the services of a third part, an automated system for the documentation, granting or exercise
of Awards, such as a system using an internet website or interactive voice response, then the
paperless documentation, granting or exercise of Awards by a Participant may be permitted through
the use of such an automated system.



     9.6 Beneficiaries. Notwithstanding Section 9.3(a), a Participant may, in the manner
determined by the Administrator, designate a beneficiary to exercise the rights of the Participant
and to receive any distribution with respect to any Award upon the Participant’s death. A
beneficiary, legal guardian, legal representative, or other person claiming any rights pursuant to
the Plan is subject to all terms and conditions of the Plan and any Award Agreement applicable to
the Participant, except to the extent the Plan and the Award Agreement otherwise provide, and to
any additional restrictions deemed necessary or appropriate by the Administrator. If the
Participant is married and resides in a community property state, a designation of a person other
than the Participant’s spouse as his or her beneficiary with respect to more than 50% of the
Participant’s interest in the Award shall not be effective without the prior written or electronic
consent of the Participant’s spouse. If no beneficiary has been designated or survives the
Participant, payment shall be made to the person entitled thereto pursuant to the Participant’s
will or the laws of descent and distribution. Subject to the foregoing, a beneficiary designation
may be changed or revoked by a Participant at any time provided the change or revocation is filed
with the Administrator prior to the Participant’s death.



     9.7 Transfer of Shares to a Partnership Employee or Partnership Consultant. As soon
as practicable after the Company issues shares of Stock with respect to which an Award (which was
issued to and is held by a Partnership Employee or Partnership Consultant in such capacity), then,
with respect to each such Award:



          (a) The Company shall sell to the Partnership the number of shares equal to the number of
shares deliverable with respect to such Award. The price to be paid by the Partnership to the
Company for such shares shall be an amount equal to the product of (x) the number of shares
multiplied by (y) the Fair Market Value of a share of Stock at the time of exercise or delivery
less the amount paid by the Participant for such shares, if anything, pursuant to Section 9.1; and




          (b) The Company shall contribute to the Partnership an amount of cash equal to the sum of the
amount paid by the Participant, if any, for such shares of Stock, and the amount paid by the
Partnership under Section 9.7(a) and the Partnership shall issue an additional interest in the
Partnership on the terms set forth in the Partnership Agreement.




     9.8 Allocation of Payment. Notwithstanding the foregoing, to the extent that a
Participant provides services to more than one of the Company, the Partnership, or any



19









 




Subsidiary, the Company may, in its discretion, allocate the payment or issuance of shares of
Stock with respect to any Awards exercised by or otherwise delivered to such Participant or (and
the services performed by the Participant) among such entities for purposes of the provisions of
Section 9.7 in order to ensure that the relationship between the Company and the Partnership or
such Subsidiary remains at arms-length.




     9.9 Forfeiture Provisions. Pursuant to its general authority to determine the terms
and conditions applicable to Awards under the Plan, the Administrator shall have the right to
provide, in the terms of Awards made under the Plan, or to require a Participant to agree by
separate written or electronic instrument, that: (a)(i) any proceeds, gains or other economic
benefit actually or constructively received by the Participant upon any receipt or exercise of the
Award, or upon the receipt or resale of any shares of Stock underlying the Award, must be paid to
the Company, and (ii) the Award shall terminate and any unexercised portion of the Award (whether
or not vested) shall be forfeited, if (b)(i) a Termination of Service occurs prior to a specified
date, or within a specified time period following receipt or exercise of the Award, or (ii) the
Participant at any time, or during a specified time period, engages in any activity in competition
with the Company, or which is inimical, contrary or harmful to the interests of the Company, as
further defined by the Administrator or (iii) the Participant incurs a Termination of Service for
Misconduct.



ARTICLE 10




CHANGES IN CAPITAL STRUCTURE



     10.1 Adjustments.



          (a) In the event of any stock dividend, stock split, combination or exchange of shares,
merger, consolidation, distribution of Company assets to stockholders (other than normal cash
dividends), or any other corporate event affecting the Stock or the share price of the Stock other
than an Equity Restructuring, the Administrator may make such proportionate adjustments, if any, as
the Administrator in its discretion may deem appropriate to reflect such changes with respect
to (i) the aggregate number and type of shares that may be issued under the Plan
(including, but not limited to, adjustments of the limitations in Section 3.1); (ii) the number and
kind of shares of Stock (or other securities or property) subject to outstanding Awards; (iii) the
terms and conditions of any outstanding Awards (including, without limitation, any applicable
performance targets or criteria with respect thereto); and (iv) the grant or exercise price per
share for any outstanding Awards under the Plan.




          (b) In the event of any transaction or event described in Section 10.1(a) or any unusual or
nonrecurring transactions or events affecting the Company, any affiliate of the Company, or the
financial statements of the Company or any affiliate (including without limitation any Change in
Control), or of changes in applicable laws, regulations or accounting principles, the
Administrator, in its sole discretion and on such terms and conditions as it deems appropriate,
either by amendment of the terms of any outstanding Awards or by action taken prior to the
occurrence of such transaction or event, is hereby authorized to take any one or more of the
following actions whenever the Administrator determines that action is appropriate in order to
prevent the dilution or enlargement of the benefits or potential benefits intended to be






20









 







made available under the Plan or with respect to any Award under the Plan, to facilitate such
transactions or events or to give effect to such changes in laws, regulations or principles:




               (i) To provide for either (A) termination of any such Award in exchange for an amount of cash
and/or other property, if any, equal to the amount that would have been received upon the exercise
of such Award or realization of the Participant’s rights (and, for the avoidance of doubt, if as of
the date of the occurrence of the transaction or event described in this Section 10.1(b) the
Administrator determines in good faith that no amount would have been attained upon the exercise of
such Award or realization of the Participant’s rights, then such Award may be terminated by the
Company without payment) or (B) the replacement of such Award with other rights or property
selected by the Administrator in its sole discretion;



               (ii) To provide that such Award be assumed by the successor or survivor corporation, or a
parent or subsidiary thereof, or shall be substituted for by similar options, rights or awards
covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof,
with appropriate adjustments as to the number and kind of shares and prices;



               (iii) To make adjustments in the number and type of shares of Stock (or other securities or
property) subject to outstanding Awards, and in the number and kind of outstanding Restricted Stock
or Restricted Stock Unit Awards and/or in the terms and conditions of (including the grant or
exercise price), and the criteria included in, outstanding options, rights and awards and options,
rights and awards which may be granted in the future;



               (iv) To provide that such Award shall be exercisable or payable or fully vested with respect
to all shares covered thereby, notwithstanding anything to the contrary in the Plan or the
applicable Award Agreement; and



               (v) To provide that the Award cannot vest, be exercised or become payable after such event.



          (c) In connection with the occurrence of any Equity Restructuring, and notwithstanding
anything to the contrary in Sections 10.1(a) and 10.1(b):




               (i) The number and type of securities subject to each outstanding Award and the exercise price
or grant price thereof, if applicable, will be proportionately adjusted. The adjustments provided
under this Section 10.1(c)(i) shall be nondiscretionary and shall be final and binding on the
affected Participant and the Company.



               (ii) The Administrator shall make such proportionate adjustments, if any, as the Administrator
in its discretion may deem appropriate to reflect such Equity Restructuring with respect to the
aggregate number and kind of shares that may be issued under the Plan (including, but not limited
to, adjustments of the limitations in Section 3.1).



     10.2 Acceleration Upon a Change in Control. Notwithstanding Section 10.1, and except
as may otherwise be provided in any applicable Award Agreement or other written agreement entered
into between the Company, a Parent, a Subsidiary, or other Company affiliate



21









 




and a Participant, if a Change in Control occurs and a Participant’s Awards are not continued,
converted, assumed, or replaced by (i) the Company or a Parent or Subsidiary of the Company, or
(ii) a Successor Entity, then immediately prior to the Change in Control such Awards shall become
fully exercisable and/or payable, as applicable, and all forfeiture, repurchase and other
restrictions on such Awards shall lapse. Upon, or in anticipation of, a Change in Control, the
Administrator may cause any and all Awards outstanding hereunder to terminate at a specific time in
the future, including but not limited to the date of such Change in Control, and shall give each
Participant the right to exercise such Awards during a period of time as the Administrator, in its
sole and absolute discretion, shall determine.




     10.3 No Other Rights. Except as expressly provided in the Plan, no Participant shall
have any rights by reason of any subdivision or consolidation of shares of stock of any class, the
payment of any dividend, any increase or decrease in the number of shares of stock of any class or
any dissolution, liquidation, merger, or consolidation of the Company or any other corporation.
Except as expressly provided in the Plan or pursuant to action of the Administrator under the Plan,
no issuance by the Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect
to, the number of shares of Stock subject to an Award or the grant or exercise price of any Award.



     10.4 Restrictions on Exercise. In the event of any pending stock dividend, stock
split, combination or exchange of shares, merger, consolidation or other distribution (other than
normal cash dividends) of Company assets to stockholders, or any other change affecting the shares
of Stock or the share price of the Stock including any Equity Restructuring, for reasons of
administrative convenience, the Company in its sole discretion may refuse to permit the exercise of
any Award during a period of 30 days prior to the consummation of any such transaction.



ARTICLE 11




ADMINISTRATION



     11.1 Administrator. Unless and until the Board delegates administration of the Plan
to a Committee as set forth below, the Plan shall be administered by the full Board. The term
“Administrator” as used in this Plan shall apply to any person or persons who at the time have the
authority to administer the Plan. If administration is delegated to a Committee, the Committee
shall have, in connection with the administration of the Plan, the powers theretofore possessed by
the Board, including the power to delegate to a subcommittee any of the administrative powers the
Committee is authorized to exercise, subject, however, to such resolutions, not inconsistent with
the provisions of the Plan, as may be adopted from time to time by the Board. Notwithstanding the
foregoing, however, from and after the Public Trading Date, a Committee of the Board shall
administer the Plan and such committee shall consist solely of two or more members of the Board
each of whom is a Non-Employee Director; provided that any action taken by the Committee shall be
valid and effective, whether or not members of the Committee at the time of such action are later
determined not to have satisfied the requirements for membership set forth in this Section 11.1 or
otherwise provided in any charter of the Committee. Notwithstanding the foregoing: (a) the full
Board, acting by a majority of its members in office, shall conduct the general administration of
the Plan with respect to all



22









 




Awards granted to Independent Directors and for purposes of such Awards the term
“Administrator” as used in this Plan shall be deemed to refer to the Board and (b) the Board or the
Committee may delegate its authority hereunder to the extent permitted by Section 11.5. In
addition, in its sole discretion, the Board may at any time and from time to time exercise any and
all rights and duties of the Committee under the Plan except with respect to matters which,
following the Public Trading Date, are required to be determined in the sole discretion of the
Committee under Rule 16b-3 of the Exchange Act, or any regulations or rules issued thereunder.
Except as may otherwise be provided in any charter of the Committee, appointment of Committee
members shall be effective upon acceptance of appointment; Committee members may resign at any time
by delivering written notice to the Board; and vacancies in the Committee may only be filled by the
Board.




     11.2 Action by the Administrator. Unless otherwise established by the Board or in any
charter of the Company or the Committee, a majority of the Administrator shall constitute a quorum
and the acts of a majority of the members present at any meeting at which a quorum is present, and
acts approved in writing by a majority of the Administrator in lieu of a meeting, shall be deemed
the acts of the Administrator. Each member of the Administrator is entitled to, in good faith,
rely or act upon any report or other information furnished to that member by any officer or other
employee of the Company or of any Parent or Subsidiary, the Company’s independent certified public
accountants, or any executive compensation consultant or other professional retained by the Company
or any Parent or Subsidiary to assist in the administration of the Plan.



     11.3 Authority of Administrator. Subject to any specific designation in the Plan, the
Administrator has the exclusive power, authority and discretion to:



          (a) Designate Participants to receive Awards;




          (b) Determine the type or types of Awards to be granted to each Participant;




          (c) Determine the number of Awards to be granted and the number of shares of Stock to which an
Award will relate;




          (d) Determine the terms and conditions of any Award granted pursuant to the Plan, including,
but not limited to, the exercise price, grant price, or purchase price, any reload provision, any
restrictions or limitations on the Award, any schedule for lapse of forfeiture restrictions or
restrictions on the exercisability of an Award, and accelerations or waivers thereof, any
provisions related to non-competition and recapture of gain on an Award, based in each case on such
considerations as the Committee in its sole discretion determines;




          (e) Determine whether, to what extent, and pursuant to what circumstances an Award may be
settled in, or the exercise price of an Award may be paid in, cash, Stock, other Awards, or other
property, or an Award may be canceled, forfeited, or surrendered;




          (f) Prescribe the form of each Award Agreement, which need not be identical for each
Participant;




          (g) Decide all other matters that must be determined in connection with an






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Award;




          (h) Establish, adopt, or revise any rules and regulations as it may deem necessary or
advisable to administer the Plan;




          (i) Interpret the terms of, and any matter arising pursuant to, the Plan or any Award
Agreement; and




          (j) Make all other decisions and determinations that may be required pursuant to the Plan or
as the Administrator deems necessary or advisable to administer the Plan.




     11.4 Decisions Binding. The Administrator’s interpretation of the Plan, any Awards
granted pursuant to the Plan, any Award Agreement, and all decisions and determinations by the
Administrator with respect to the Plan are final, binding, and conclusive on all parties.



     11.5 Delegation of Authority. To the extent permitted by applicable law, the Board or
the Committee may from time to time delegate to a committee of one or more members of the Board or
one or more officers of the Company the authority to grant or amend Awards to Participants other
than (a) Employees who are subject to Section 16 of the Exchange Act, or (b) officers of the
Company (or Directors) to whom authority to grant or amend Awards has been delegated hereunder.
Any delegation hereunder shall be subject to the restrictions and limits that the Board or the
Committee specifies at the time of such delegation, and the Board or the Committee may at any time
rescind the authority so delegated or appoint a new delegatee. At all times, the delegatee
appointed under this Section 11.5 shall serve in such capacity at the pleasure of the Board or the
Committee.



ARTICLE 12




EFFECTIVE AND EXPIRATION DATE



     12.1 Effective Date. The Plan is effective as of the day prior to the Public Trading
Date (the “Effective Date”).



     12.2 Expiration Date. The Plan will expire on, and no Award may be granted pursuant
to the Plan after, the tenth anniversary of the date of the Board’s initial adoption of the Plan
(the “Expiration Date”). Any Awards that are outstanding on the Expiration Date shall
remain in force according to the terms of the Plan and the applicable Award Agreement.



     12.3 Approval of Plan by Stockholders. The Plan will be submitted for the approval of
the Company’s stockholders within twelve (12) months after the date of the Board’s initial adoption
of the Plan. Awards may be granted or awarded prior to such stockholder approval; provided that
such Awards shall not be exercisable nor shall such Awards vest prior to the time when the Plan is
approved by the stockholders; and, provided, further, that if such approval has not been obtained
at the end of said twelve-month period, all Awards previously granted or awarded under the Plan
shall thereupon be canceled and become null and void.



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ARTICLE 13




AMENDMENT, MODIFICATION, AND TERMINATION



     13.1 Amendment, Modification, And Termination. With the approval of the Board, at any
time and from time to time, the Board may terminate, amend or modify the Plan; provided, however,
that (a) to the extent necessary and desirable to comply with any applicable law, regulation, or
stock exchange rule, the Company shall obtain stockholder approval of any Plan amendment in such a
manner and to such a degree as required, and (b) stockholder approval shall be required for any
amendment to the Plan that increases the number of shares of Stock available under the Plan.



     13.2 Awards Previously Granted. No termination, amendment, or modification of the
Plan shall adversely affect in any material way any Award previously granted pursuant to the Plan
without the prior written consent of the Participant.



     13.3 Prohibition on Repricing. Notwithstanding Section 13.1, and subject to Section
10.1 hereof, the Administrator shall not, without the approval of the stockholders of the Company,
(i) authorize the amendment of any outstanding Option or Stock Appreciation Right to reduce its
price per share, or (ii) cancel any Option or Stock Appreciation Right in exchange for cash or
another Award when the Option or Stock Appreciation Right price per share exceeds the Fair Market
Value of the underlying shares of Stock. Subject to Section 10.1 hereof, the Administrator shall
have the authority, without the approval of the stockholders of the Company, to amend any
outstanding award to increase the price per share or to cancel and replace an Award with the grant
of an Award having a price per share that is greater than or equal to the price per share of the
original Award.



ARTICLE 14




GENERAL PROVISIONS



     14.1 No Rights to Awards. No Eligible Individual or other person shall have any claim
to be granted any Award pursuant to the Plan, and neither the Company nor the Administrator is
obligated to treat Eligible Individuals, Participants or any other persons uniformly.



     14.2 No Stockholders Rights. Except as otherwise provided herein, a Participant shall
have none of the rights of a stockholder with respect to shares of Stock covered by any Award until
the Participant becomes the record owner of such shares of Stock.



     14.3 No Right to Employment or Services. Nothing in the Plan or any Award Agreement
shall interfere with or limit in any way the right of the Company, the Partnership or any
Subsidiary to terminate any Participant’s employment or services at any time, nor confer upon any
Participant any right to continue in the employ or service of the Company, the Partnership or any
Subsidiary.



     14.4 Unfunded Status of Awards. The Plan is intended to be an “unfunded” plan for
incentive compensation. With respect to any payments not yet made to a Participant pursuant to an
Award, nothing contained in the Plan or any Award Agreement shall give the Participant any



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rights that are greater than those of a general creditor of the Company, the Partnership or
any Subsidiary.




     14.5 Indemnification. To the extent allowable pursuant to applicable law, each member
of the Administrator or of the Board shall be indemnified and held harmless by the Company from any
loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such member in
connection with or resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action or failure to act pursuant to
the Plan and against and from any and all amounts paid by him or her in satisfaction of judgment in
such action, suit, or proceeding against him or her; provided he or she gives the Company an
opportunity, at its own expense, to handle and defend the same before he or she undertakes to
handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons may be entitled pursuant to
the Company’s Articles of Incorporation or Bylaws, as a matter of law, or otherwise, or any power
that the Company may have to indemnify them or hold them harmless.



     14.6 Relationship to other Benefits. No payment pursuant to the Plan shall be taken
into account in determining any benefits pursuant to any pension, retirement, savings, profit
sharing, group insurance, welfare or other benefit plan of the Company, the Partnership or any
Subsidiary except to the extent otherwise expressly provided in writing in such other plan or an
agreement thereunder.



     14.7 Expenses. The expenses of administering the Plan shall be borne by the Company,
the Partnership and their Subsidiaries.



     14.8 Titles and Headings. The titles and headings of the Sections in the Plan are for
convenience of reference only and, in the event of any conflict, the text of the Plan, rather than
such titles or headings, shall control.



     14.9 Fractional Shares. No fractional shares of Stock shall be issued and the
Administrator shall determine, in its discretion, whether cash shall be given in lieu of fractional
shares of Stock or whether such fractional shares of Stock shall be eliminated by rounding up or
down as appropriate.



     14.10 Limitations Applicable to Section 16 Persons. Notwithstanding any other
provision of the Plan, the Plan, and any Award granted or awarded to any Participant 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 of the Exchange Act) that are requirements for the application of such exemptive rule.
To the extent permitted by applicable law, the Plan and Awards granted or awarded hereunder shall
be deemed amended to the extent necessary to conform to such applicable exemptive rule.



     14.11 Government and Other Regulations. The obligation of the Company or the
Partnership to make payment of awards in Stock or otherwise shall be subject to all applicable
laws, rules, and regulations, and to such approvals by government agencies as may be required.



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Neither the Company nor the Partnership shall be under an obligation to register pursuant to
the Securities Act any of the shares of Stock or Partnership units paid pursuant to the Plan. If
the shares of Stock or Partnership units paid pursuant to the Plan may in certain circumstances be
exempt from registration pursuant to the Securities Act, the Company or the Partnership, as
appropriate, may restrict the transfer of such shares of Stock or units in such manner as it deems
advisable to ensure the availability of any such exemption.




     14.12 Section 409A. To the extent that the Administrator determines that any Award
granted under the Plan is subject to Section 409A of the Code, the Award Agreement evidencing such
Award shall incorporate the terms and conditions required by Section 409A of the Code. To the
extent applicable, the Plan and Award Agreements shall be interpreted in accordance with Section
409A of the Code and Department of Treasury regulations and other interpretive guidance issued
thereunder, including without limitation any such regulations or other guidance that may be issued
after the adoption of the Plan. Notwithstanding any provision of the Plan to the contrary, in the
event that following the adoption of the Plan the Administrator determines that any Award may be
subject to Section 409A of the Code and related Department of Treasury guidance (including such
Department of Treasury guidance as may be issued after the adoption of the Plan), the Administrator
may adopt such amendments to the Plan and the applicable Award Agreement or adopt other policies
and procedures (including amendments, policies and procedures with retroactive effect), or take any
other actions, that the Administrator determines are necessary or appropriate to (a) exempt the
Award from Section 409A of the Code and/or preserve the intended tax treatment of the benefits
provided with respect to the Award, or (b) comply with the requirements of Section 409A of the Code
and related Department of Treasury guidance. Notwithstanding any provision in the Plan to the
contrary, the time of payment with respect to any Award that is subject to Section 409A of the Code
shall not be accelerated, except as permitted under Treasury Regulation Section 1.409A-3(j)(4).



     14.13 Governing Law. The Plan and all Award Agreements shall be construed in
accordance with and governed by the laws of the State of Delaware, without regard to the conflicts
of law principles thereof.



     14.14 Restrictions on Awards. This Plan shall be interpreted and construed in a
manner consistent with the Company’s status as a REIT. No Award shall be granted or awarded, and
with respect to an Award already granted under the Plan, such Award shall not become vested or
exercisable:



          (a) to the extent such Award or exercise could cause the Participant to be in violation of the
Ownership Limit (as defined in the Company’s Articles of Incorporation, as amended from time to
time); or




          (b) if, in the discretion of the Administrator, such Award or exercise could impair the
Company’s status as a REIT.




     14.15 Conflicts with Company’s Articles of Incorporation. Notwithstanding any other
provision of the Plan, no Participant shall acquire or have any right to acquire any Stock, and
shall not have any other rights under the Plan, which are prohibited under the Company’s Articles
of Incorporation, as amended from time to time.



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     14.16 Grant of Awards to Certain Employees or Consultants. The Company and the
Partnership or any Subsidiary may provide through the establishment of a formal written policy or
otherwise for the method by which shares of Stock and/or payment therefore may be exchanged or
contributed between the Company and such other party, or may be returned to the Company upon any
forfeiture or repurchase of Stock by the Participant, for the purpose of ensuring that the
relationship between the Company and the Partnership or such Subsidiary remains at arm’s length.



     14.17 Section 83(b) Election. No Participant may make an election under Section 83(b)
of the Code with respect to any Award under the Plan without the consent of the Company, which the
Company may grant or withhold in its sole discretion. If, with the consent of the Company, a
Participant makes an election under Section 83(b) of the Code to be taxed with respect to the
Restricted Stock as of the date of transfer of the Restricted Stock rather than as of the date or
dates upon which the Participant would otherwise be taxable under Section 83(a) of the Code, the
Participant shall be required to deliver a copy of such election to the Company promptly after
filing such election with the Internal Revenue Service.



     14.18 Clawback. To the extent required by applicable law or any applicable securities
exchange listing standards, Awards and amounts paid or payable pursuant to or with respect to
Awards shall be subject to clawback as determined by the Plan Administrator, which clawback may
include forfeiture, repurchase and/or recoupment of Awards and amounts paid or payable pursuant to
or with respect to Awards.




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