Exhibit 10.1


 


AVALONBAY
COMMUNITIES, INC.


 


2009
STOCK OPTION AND INCENTIVE PLAN


 


	
  SECTION 1.

  	
  GENERAL PURPOSE OF THE PLAN; DEFINITIONS

  



 


The name of the plan is the AvalonBay Communities, Inc. 2009 Stock
Option and Incentive Plan (the “Plan”). 
The purpose of the Plan is to encourage and enable the officers,
employees, Non-Employee Directors and other key persons (including consultants
and prospective employees) of AvalonBay Communities, Inc. (the “Company”)
and its Subsidiaries upon whose judgment, initiative and efforts the Company
largely depends for the successful conduct of its business to acquire a
proprietary interest in the Company.  It
is anticipated that providing such persons with a direct stake in the Company’s
welfare will assure a closer identification of their interests with those of
the Company and its stockholders, thereby stimulating their efforts on the
Company’s behalf and strengthening their desire to remain with the Company.


 


The following terms shall be defined as set forth below:


 


“Act” means the Securities Act of 1933, as amended, and the
rules and regulations thereunder.


 


“Administrator” means either the Board or the compensation committee
of the Board or a similar committee performing the functions of the
compensation committee and which is comprised of not less than two Non-Employee
Directors who are independent.


 


“Award” or “Awards,”
except where referring to a particular category of grant under the Plan, shall
include Incentive Stock Options, Non-Qualified Stock Options, Stock Appreciation
Rights, Restricted Stock Units, Restricted Stock Awards, Unrestricted Stock
Awards, Cash-Based Awards, Performance Share Awards and Dividend Equivalent
Rights.


 


“Award Certificate” means a written or electronic document setting forth
the terms and provisions applicable to an Award granted under the Plan.  Each Award Certificate is subject to the
terms and conditions of the Plan.


 


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


 


“Cash-Based Award” means an Award entitling the recipient to receive a
cash-denominated payment.


 


“Code” means the Internal Revenue Code of 1986,
as amended, and any successor Code, and related rules, regulations and
interpretations.


 


“Covered Employee” means an employee who is a “Covered
Employee” within the meaning of Section 162(m) of the Code.


 

















 


“Dividend Equivalent Right” means an Award entitling the grantee to
receive credits based on cash dividends that would have been paid on the shares
of Stock specified in the Dividend Equivalent Right (or other award to which it
relates) if such shares had been issued to and held by the grantee.


 


“Effective Date” means the date on which the Plan is
approved by stockholders as set forth in Section 21.


 


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


 


“Fair Market Value” of the Stock on any given date means the
last reported sale price at which Stock is traded on such date or, if no Stock
is traded on such date, the most recent date on which Stock was traded, as
reflected on the New York Stock Exchange or, if applicable, any other national
exchange on which the Stock is traded.


 


“Incentive Stock Option” means any Stock Option designated and
qualified as an “incentive stock option” as defined in Section 422 of the
Code.


 


“Non-Employee Director” means a member of the Board who is not
also an employee of the Company or any Subsidiary.


 


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


 


“Option” or “Stock
Option” means any option to purchase shares of Stock granted
pursuant to Section 5.


 


“Performance-Based Award” means any Restricted Stock Award,
Restricted Stock Units, Performance Share Award or Cash-Based Award granted to
a Covered Employee that is intended to qualify as “performance-based
compensation” under Section 162(m) of the Code and the regulations
promulgated thereunder.


 


“Performance Criteria” means the criteria that the
Administrator selects for purposes of establishing the Performance Goal or
Performance Goals for an individual for a Performance Cycle.  The Performance Criteria (which shall be
applicable to the organizational level specified by the Administrator,
including, but not limited to, the Company or a unit, division, group, or
Subsidiary of the Company) that will be used to establish Performance Goals are
limited to the following:  (i) earnings
before interest, taxes, depreciation and amortization; (ii) net income
(loss) (either before or after interest, taxes, depreciation and/or
amortization); (iii) changes in the market price of the Stock; (iv) cash
flow; (v) funds from operations or similar measure; (vi) sales or
revenue; (vii) acquisitions or strategic transactions; (viii) operating
income (loss); (ix) return on capital, assets, equity, or investment; (x) total
stockholder returns or total returns to stockholders; (xi) gross or net profit
levels; (xii) productivity; (xiii) expense; (xiv) margins; (xv) operating
efficiency; (xvi) customer satisfaction; (xvii) working capital; (xviii)
earnings per share of Stock; or (xix) lease up performance, net operating
income performance or yield on development or redevelopment communities, any of
which under the preceding clauses (i) 


 


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through (xix) may be measured either in absolute terms
or as compared to any incremental increase or as compared to results of a peer
group.


 


“Performance Cycle” means 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 Criteria will be measured
for the purpose of determining a grantee’s right to and the payment of a
Restricted Stock Award, Restricted Stock Units, Performance Share Award or
Cash-Based Award.  Each such period shall
not be less than 12 months.


 


“Performance Goals” means, for a Performance Cycle, the
specific goals established in writing by the Administrator for a Performance
Cycle based upon the Performance Criteria.


 


“Performance Share Award” means an
Award entitling the recipient to acquire shares of Stock upon the attainment of
specified Performance Goals.


 


“Restricted Stock Award” means an Award entitling the recipient
to acquire, at such purchase price (which may be zero) as determined by the
Administrator, shares of Stock subject to such restrictions and conditions as
the Administrator may determine at the time of grant.


 


“Restricted Stock Units” means an Award of phantom stock units to
a grantee.


 


“Sale Event” shall mean (i) the sale of all or substantially
all of the assets of the Company on a consolidated basis to one or more
unrelated persons or entities, or (ii) the sale or other transfer of all
or substantially all of the Stock of the Company to one or more unrelated
persons or entities (including by way of a merger, reorganization or
consolidation in which the outstanding shares of Stock are converted into or
exchanged for securities of the successor entity).


 


“Sale Price” means the value as
determined by the Administrator of the consideration payable, or otherwise to
be received by stockholders, per share of Stock pursuant to a Sale Event.


 


“Section 409A” means Section 409A of the Code and the
regulations and other guidance promulgated thereunder.


 


“Stock” means the Common Stock, par value $.01
per share, of the Company, subject to adjustments pursuant to Section 3.


 


“Stock Appreciation Right” means an Award entitling the recipient
to receive shares of Stock having a value equal to the excess of the Fair
Market Value of the Stock on the date of exercise over the exercise price of
the Stock Appreciation Right multiplied by the number of shares of Stock with
respect to which the Stock Appreciation Right shall have been exercised.


 


“Subsidiary” means any corporation or other entity
(other than the Company) in which the Company has at least a 50 percent
interest, either directly or indirectly.


 


“Ten Percent Owner” means an employee who owns or is deemed to own (by
reason of the attribution rules of Section 424(d) of the Code)
more than 10 percent of the combined voting power of all classes of stock of
the Company or any parent or subsidiary corporation.


 


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“Unrestricted Stock Award” means an Award of shares of Stock free
of any restrictions.


 


	
  SECTION 2.

  	
  ADMINISTRATION OF PLAN; ADMINISTRATOR AUTHORITY TO
  SELECT GRANTEES AND DETERMINE AWARDS

  



 


(a)           Administration of Plan. 
The Plan shall be administered by the Administrator, provided that the
amount, timing and terms of the grants of Awards to Non-Employee Directors
shall be determined by the compensation committee or similar committee
comprised solely of Non-Employee Directors.


 


(b)           Powers of Administrator. 
The Administrator shall have the power and authority to grant Awards
consistent with the terms of the Plan, including the power and authority:


 


(i)            to select the individuals to whom Awards
may from time to time be granted;


 


(ii)           to determine the time or times of grant,
and the extent, if any, of Incentive Stock Options, Non-Qualified Stock
Options, Stock Appreciation Rights, Restricted Stock Awards, Restricted Stock
Units, Unrestricted Stock Awards, Cash-Based Awards, Performance Share Awards
and Dividend Equivalent Rights, or any combination of the foregoing, granted to
any one or more grantees;


 


(iii)          to
determine the number of shares of Stock to be covered by any Award;


 


(iv)          to determine and modify from time to time
the terms and conditions, including restrictions, not inconsistent with the
terms of the Plan, of any Award, which terms and conditions may differ among individual
Awards and grantees, and to approve the forms of Award Certificates;


 


(v)           to accelerate at any time the
exercisability or vesting of all or any portion of any Award provided that the
Administrator generally shall not exercise such discretion to accelerate Awards
subject to Sections 7 and 8 except in the event of the grantee’s death,
disability, retirement or termination of employment without cause, or a Sale
Event;


 


(vi)          subject to the provisions of Section 5(c),
to extend at any time the period in which Stock Options may be exercised; and


 


(vii)         at
any time to adopt, alter and repeal such rules, guidelines and practices for
administration of the Plan and for its own acts and proceedings as it shall
deem advisable; to interpret the terms and provisions of the Plan and any Award
(including related written instruments); to make all determinations it deems
advisable for the administration of the Plan; to decide all disputes arising in
connection with the Plan; and to otherwise supervise the administration of the
Plan.


 


All decisions and interpretations of the Administrator shall be binding
on all persons, including the Company and Plan grantees.


 


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(c)           Delegation of Authority to Grant Awards. 
Subject to applicable law, the Administrator, in its discretion, may
delegate to the Chief Executive Officer of the Company (or other executive
officers of the Company to the extent permitted under applicable law) all or
part of the Administrator’s authority and duties with respect to the granting
of Awards to individuals who are (i) not subject to the reporting and
other provisions of Section 16 of the Exchange Act and (ii) not
Covered Employees.  Any such delegation
by the Administrator shall include a limitation as to the amount of Awards that
may be granted during the period of the delegation and shall contain guidelines
as to the determination of the exercise price and the vesting criteria.  The Administrator may revoke or amend the
terms of a delegation at any time but such action shall not invalidate any
prior actions of the Administrator’s delegate or delegates that were consistent
with the terms of the Plan.


 


(d)           Award Certificate. 
Awards under the Plan shall be evidenced by Award Certificates that set
forth the terms, conditions and limitations for each Award which may include,
without limitation, the term of an Award and the provisions applicable in the
event employment or service terminates.


 


(e)           Indemnification. 
Neither the Board nor the Administrator, nor any member of either or any
delegate thereof, shall be liable for any act, omission, interpretation,
construction or determination made in good faith in connection with the Plan,
and the members of the Board and the Administrator (and any delegate thereof)
shall be entitled in all cases to indemnification and reimbursement by the
Company in respect of any claim, loss, damage or expense (including, without
limitation, reasonable attorneys’ fees) arising or resulting therefrom to the
fullest extent permitted by law and/or under the Company’s articles or bylaws
or any directors’ and officers’ liability insurance coverage which may be in
effect from time to time and/or any indemnification agreement between such
individual and the Company.


 


	
  SECTION 3.

  	
  STOCK ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION

  



 


(a)           Stock Issuable. 
The maximum number of shares of Stock reserved and available for
issuance under the Plan shall be the sum of (i) 2,930,000 shares, plus (ii) a
number of shares equal to the number of shares available under the Company’s
1994 Stock Incentive Plan as of the Effective Date, subject to adjustment as
provided in Section 3.  For purposes
of this limitation, the shares of Stock underlying any Awards under this Plan
or awards under the Company’s 1994 Stock Incentive Plan that are forfeited,
canceled or otherwise terminated (other than by exercise) shall be added back
to the shares of Stock available for issuance under the Plan.  Notwithstanding the foregoing, the following
shares of Stock shall not be added to the shares authorized for grant under the
Plan:  (1) shares tendered or held
back upon exercise of an Option or settlement of an Award to cover the exercise
price or tax withholding, and (2) shares subject to a Stock Appreciation
Right that are not issued in connection with the stock settlement of the Stock
Appreciation Right upon exercise thereof. 
Subject to such overall limitations, shares of Stock may be issued up to
such maximum number pursuant to any type or types of Award; provided, however,
that Stock Options or Stock Appreciation Rights with respect to no more than
600,000 shares of Stock may be granted to any one individual grantee during any
one calendar year period, and no more than 2,930,000  shares of the Stock may be issued in the form
of Incentive Stock Options.  The shares
available for issuance under the Plan may be authorized but unissued shares of
Stock or shares of Stock reacquired by the Company.


 


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(b)           Effect of Awards. 
The grant of any full value Award (i.e., an Award other than an Option
or a Stock Appreciation Right) shall be deemed, for purposes of determining the
number of shares of Stock available for issuance under Section 3(a), as an
Award of 2.17 shares of Stock for each such share of Stock actually subject to
the Award.  The grant of an Option or a
Stock Appreciation Right shall be deemed, for purposes of determining the
number of shares of Stock available for issuance under Section 3(a), as an
Award for one share of Stock for each such share of Stock actually subject to
the Award.  Any forfeitures, cancellation
or other termination of such Awards shall be returned to the reserved pool of
shares of Stock under the Plan in the same manner.


 


(c)           Changes in Stock. 
Subject to Section 3(d) hereof, if, as a result of any
reorganization, recapitalization, reclassification, stock dividend, stock
split, reverse stock split or other similar change in the Company’s capital
stock, the outstanding shares of Stock are increased or decreased or are
exchanged for a different number or kind of shares or other securities of the
Company, or additional shares or new or different shares or other securities of
the Company or other non-cash assets are distributed with respect to such
shares of Stock or other securities, or, if, as a result of any merger or
consolidation, sale of all or substantially all of the assets of the Company,
the outstanding shares of Stock are converted into or exchanged for securities
of the Company or any successor entity (or a parent or subsidiary thereof), the
Administrator shall make an appropriate or proportionate adjustment in (i) the
maximum number of shares reserved for issuance under the Plan, including the
maximum number of shares that may be issued in the form of Incentive Stock
Options, (ii) the number of Stock Options or Stock Appreciation Rights
that can be granted to any one individual grantee and the maximum number of
shares that may be granted under a Performance-Based Award, (iii) the
number and kind of shares or other securities subject to any then outstanding
Awards under the Plan, (iv) the repurchase price, if any, per share
subject to each outstanding Restricted Stock Award, and (v) the price for
each share subject to any then outstanding Stock Options and Stock Appreciation
Rights under the Plan, without changing the aggregate exercise price (i.e., the
exercise price multiplied by the number of Stock Options and Stock Appreciation
Rights) as to which such Stock Options and Stock Appreciation Rights remain
exercisable.  The Administrator shall
also make equitable or proportionate adjustments in the number of shares
subject to outstanding Awards and the exercise price and/or the terms of
outstanding Awards to take into consideration cash dividends declared and paid
other than in the ordinary course or any other extraordinary corporate event,
other than those contemplated by Section 3(d) hereof, to the extent
determined to be necessary by the Administrator to avoid distortion in the
value of the Awards.  The adjustment by
the Administrator shall be final, binding and conclusive.  No fractional shares of Stock shall be issued
under the Plan resulting from any such adjustment, but the Administrator in its
discretion may make a cash payment in lieu of fractional shares.


 


(d)           Mergers and Other Transactions. 
Except as the Administrator may otherwise specify with respect to
particular Awards in the relevant Award Certificate, in the case of and subject
to the consummation of a Sale Event, the Plan and all outstanding Awards
granted hereunder shall terminate, unless provision is made in connection with
the Sale Event in the sole discretion of the parties thereto for the assumption
or continuation of Awards theretofore granted by the successor entity, or the
substitution of such Awards with new Awards of the successor entity or parent
thereof, with appropriate adjustment as to the number and kind of shares and,
if appropriate, the per share exercise prices, as such parties shall agree
(after taking into account 


 


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any
acceleration hereunder).  In the event of
such termination, (i) the Company shall have the option (in its sole
discretion) to make or provide for a cash payment to the grantees holding
Options and Stock Appreciation Rights, in exchange for the cancellation
thereof, in an amount equal to the difference between (A) the Sale Price
multiplied by the number of shares of Stock subject to outstanding Options and
Stock Appreciation Rights (to the extent then exercisable (after taking into
account any acceleration hereunder) at prices not in excess of the Sale Price)
and (B) the aggregate exercise price of all such outstanding Options and
Stock Appreciation Rights; or (ii) each grantee shall be permitted, within
a specified period of time prior to the consummation of the Sale Event as
determined by the Administrator, to exercise all outstanding Options and Stock
Appreciation Rights held by such grantee.


 


(e)           Substitute Awards. 
The Administrator may grant Awards under the Plan in substitution for
stock and stock based awards held by employees, directors or other key persons
of another corporation in connection with the merger or consolidation of the
employing corporation with the Company or a Subsidiary or the acquisition by
the Company or a Subsidiary of property or stock of the employing
corporation.  The Administrator may
direct that the substitute awards be granted on such terms and conditions as
the Administrator considers appropriate in the circumstances.  Any substitute Awards granted under the Plan
shall not count against the share limitation set forth in Section 3(a).


 


	
  SECTION 4.

  	
  ELIGIBILITY

  



 


Grantees under the Plan will be such full or part-time officers and
other employees, Non-Employee Directors and key persons (including consultants
and prospective employees) of the Company and its Subsidiaries as are selected
from time to time by the Administrator in its sole discretion.


 


	
  SECTION 5.

  	
  STOCK OPTIONS

  



 


(a)           Grants of Stock Options.  Any Stock
Option granted under the Plan shall be in such form as the Administrator may
from time to time approve.


 


Stock Options granted under the Plan may be either Incentive Stock
Options or Non-Qualified Stock Options. 
Incentive Stock Options may be granted only to employees of the Company
or any Subsidiary that is a “subsidiary corporation” within the meaning of Section 424(f) of
the Code.  To the extent that any Option
does not qualify as an Incentive Stock Option, it shall be deemed a
Non-Qualified Stock Option.


 


The Administrator in its discretion may grant Stock Options to eligible
employees and key persons of the Company or any Subsidiary.  Stock Options granted pursuant to this Section 5(a) shall
be subject to the following terms and conditions and shall contain such additional
terms and conditions, not inconsistent with the terms of the Plan, as the
Administrator shall deem desirable.  If
the Administrator so determines, Stock Options may be granted in lieu of cash
compensation at the optionee’s election, subject to such terms and conditions
as the Administrator may establish.


 


(b)           Exercise Price.  The exercise
price per share for the Stock covered by a Stock Option granted pursuant to
this Section 5(b) shall be determined by the Administrator at the
time 


 


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of grant but shall
not be less than 100 percent of the Fair Market Value on the date of
grant.  In the case of an Incentive Stock
Option that is granted to a Ten Percent Owner, the option price of such
Incentive Stock Option shall be not less than 110 percent of the Fair Market
Value on the grant date.


 


(c)           Option Term.  The term of
each Stock Option shall be fixed by the Administrator, but no Stock Option
shall be exercisable more than ten years after the date the Stock Option is
granted.  In the case of an Incentive
Stock Option that is granted to a Ten Percent Owner, the term of such Stock
Option shall be no more than five years from the date of grant.


 


(d)           Exercisability; Rights of a Stockholder. 
Stock Options shall become exercisable at such time or times, whether or
not in installments, as shall be determined by the Administrator at or after
the grant date.  The Administrator may at
any time accelerate the exercisability of all or any portion of any Stock
Option.  An optionee shall have the
rights of a stockholder only as to shares acquired upon the exercise of a Stock
Option and not as to unexercised Stock Options.


 


(e)           Method of Exercise.  Stock Options
may be exercised in whole or in part, by giving written or electronic notice of
exercise to the Company, specifying the number of shares to be purchased.  Payment of the purchase price may be made by
one or more of the following methods to the extent provided in the Option Award
Certificate:


 


(i)            In cash, by certified or bank check or
other instrument acceptable to the Administrator;


 


(ii)           Through the delivery (or attestation to
the ownership) of shares of Stock beneficially owned by the optionee and that
are not then subject to restrictions under any Company plan.  Such surrendered shares shall be valued at
Fair Market Value on the exercise date;


 


(iii)          By the optionee delivering to the Company
a properly executed exercise notice together with irrevocable instructions to a
broker to promptly deliver to the Company cash or a check payable and
acceptable to the Company for the purchase price; provided that in the event
the optionee chooses to pay the purchase price as so provided, the optionee and
the broker shall comply with such procedures and enter into such agreements of
indemnity and other agreements as the Administrator shall prescribe as a
condition of such payment procedure; or


 


(iv)          With respect to Stock Options that are
not Incentive Stock Options, by a “net exercise” arrangement pursuant to which
the Company will reduce the number of shares of Stock issuable upon exercise by
the largest whole number of shares with a Fair Market Value that does not
exceed the aggregate exercise price.


 


Payment
instruments will be received subject to collection.  The transfer to the optionee on the records
of the Company or of the transfer agent of the shares of Stock to be purchased
pursuant to the exercise of a Stock Option will be contingent upon receipt from
the optionee (or a purchaser acting in his stead in accordance with the provisions
of the Stock Option) by the Company of the full purchase price for such shares
and the fulfillment of any other requirements contained in the Option Award
Certificate or applicable provisions of laws (including the satisfaction of any
withholding taxes that the Company is obligated to withhold with respect to 


 


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the
optionee).  In the event an optionee
chooses to pay the purchase price by previously-owned shares of Stock through
the attestation method, the number of shares of Stock transferred to the
optionee upon the exercise of the Stock Option shall be net of the number of
attested shares.  In the event that the
Company establishes, for itself or using the services of a third party, an
automated system for the exercise of Stock Options, such as a system using an
internet website or interactive voice response, then the paperless exercise of
Stock Options may be permitted through the use of such an automated system.


 


(f)            Annual Limit on Incentive Stock Options. 
To the extent required for “incentive stock option” treatment under Section 422
of the Code, the aggregate Fair Market Value (determined as of the time of
grant) of the shares of Stock with respect to which Incentive Stock Options
granted under this Plan and any other plan of the Company or its parent and
subsidiary corporations become exercisable for the first time by an optionee
during any calendar year shall not exceed $100,000.  To the extent that any Stock Option exceeds
this limit, it shall constitute a Non-Qualified Stock Option.


 


	
  SECTION 6.

  	
  STOCK APPRECIATION RIGHTS

  



 


(a)           Exercise Price of Stock Appreciation
Rights.  The exercise price of a Stock Appreciation
Right shall not be less than 100 percent of the Fair Market Value of the Stock on
the date of grant.


 


(b)           Grant and Exercise of Stock Appreciation
Rights.  Stock Appreciation Rights may be granted by
the Administrator independently of any Stock Option granted pursuant to Section 5
of the Plan.


 


(c)           Terms and Conditions of Stock Appreciation
Rights.  Stock Appreciation Rights shall be subject to
such terms and conditions as shall be determined from time to time by the
Administrator.  The term of a Stock
Appreciation Right may not exceed ten years.


 


	
  SECTION 7.

  	
  RESTRICTED STOCK AWARDS

  



 


(a)           Nature of Restricted Stock Awards. 
The Administrator shall determine the restrictions and conditions
applicable to each Restricted Stock Award at the time of grant.  Conditions may be based on continuing employment
(or other service relationship) and/or achievement of pre-established
performance goals and objectives.  The
terms and conditions of each such Award Certificate shall be determined by the
Administrator, and such terms and conditions may differ among individual Awards
and grantees.


 


(b)           Rights as a Stockholder. 
Upon the grant of the Restricted Stock Award and payment of any
applicable purchase price, a grantee shall have the rights of a stockholder
with respect to the voting and dividends of the Restricted Stock, subject to
such conditions contained in the Restricted Stock Award Certificate.  Unless the Administrator shall otherwise
determine, (i) uncertificated Restricted Stock shall be accompanied by a
notation on the records of the Company or the transfer agent to the effect that
they are subject to forfeiture until such Restricted Stock are vested as
provided in Section 7(d) below, and (ii) certificated Restricted
Stock shall remain in the possession of the Company until such Restricted Stock
is vested as provided in 


 


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Section 7(d) below,
and the grantee shall be required, as a condition of the grant, to deliver to
the Company such instruments of transfer as the Administrator may prescribe.


 


(c)           Restrictions. 
Restricted Stock may not be sold, assigned, transferred, pledged or
otherwise encumbered or disposed of except as specifically provided herein or
in the Restricted Stock Award Certificate. 
Except as may otherwise be provided by the Administrator either in the
Award Certificate or, subject to Section 18 below, in writing after the
Award is issued, if a grantee’s employment (or other service relationship) with
the Company and its Subsidiaries terminates for any reason, any Restricted
Stock that has not vested at the time of termination shall automatically and
without any requirement of notice to such grantee from or other action by or on
behalf of, the Company be deemed to have been reacquired by the Company at its
original purchase price (if any) from such grantee or such grantee’s legal representative
simultaneously with such termination of employment (or other service
relationship), and thereafter shall cease to represent any ownership of the
Company by the grantee or rights of the grantee as a stockholder.  Following such deemed reacquisition of
unvested Restricted Stock that are represented by physical certificates, a
grantee shall surrender such certificates to the Company upon request without
consideration.


 


(d)           Vesting of Restricted Stock. 
The Administrator at the time of grant shall specify the date or dates
and/or the attainment of pre-established performance goals, objectives and
other conditions on which the non-transferability of the Restricted Stock and
the Company’s right of repurchase or forfeiture shall lapse.  Notwithstanding the foregoing, in the event
that any such Restricted Stock granted to employees shall have a
performance-based goal, the restriction period with respect to such shares
shall not be less than one year, and in the event any such Restricted Stock
granted to employees shall have a time-based restriction only (without any
prior performance condition to the grant or vesting thereof), the total
restriction period with respect to such shares shall not be less than three
years; provided, however, that Restricted Stock with a time-based restriction
may become vested incrementally over such three-year period.  Subsequent to such date or dates and/or the
attainment of such pre-established performance goals, objectives and other
conditions, the shares on which all restrictions have lapsed shall no longer be
Restricted Stock and shall be deemed “vested.” 
Except as may otherwise be provided by the Administrator either in the
Award Certificate or, subject to Section 18 below, in writing after the
Award is issued, a grantee’s rights in any shares of Restricted Stock that have
not vested shall automatically terminate upon the grantee’s termination of
employment (or other service relationship) with the Company and its
Subsidiaries and such shares shall be subject to the provisions of Section 7(c) above.


 


	
  SECTION 8.

  	
  RESTRICTED STOCK UNITS

  



 


(a)           Nature of Restricted Stock Units. 
The Administrator shall determine the restrictions and conditions
applicable to each Restricted Stock Unit at the time of grant.  Conditions may be based on continuing
employment (or other service relationship) and/or achievement of
pre-established performance goals and objectives.  The terms and conditions of each such Award
Certificate shall be determined by the Administrator, and such terms and conditions
may differ among individual Awards and grantees.  Notwithstanding the foregoing, in the event
that any such Restricted Stock Units granted to employees shall have a
performance-based goal, the restriction period with respect to such Award shall
not be less than one year, and


 


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in
the event any such Restricted Stock Units granted to employees shall have a
time-based restriction only (without any prior performance condition to the
grant or vesting thereof), the total restriction period with respect to such
Award shall not be less than three years; provided, however, that any
Restricted Stock Units with a time-based restriction may become vested
incrementally over such three-year period. 
At the end of the deferral period, the Restricted Stock Units, to the
extent vested, shall be settled in the form of shares of Stock.  To the extent that an award of Restricted
Stock Units is subject to Section 409A, it may contain such additional
terms and conditions as the Administrator shall determine in its sole
discretion in order for such Award to comply with the requirements of Section 409A.


 


(b)                                 Election to Receive Restricted Stock
Units in Lieu of Compensation.  The
Administrator may, in its sole discretion, permit a grantee to elect to receive
a portion of future cash compensation otherwise due to such grantee in the form
of an award of Restricted Stock Units. 
Any such election shall be made in writing and shall be delivered to the
Company no later than the date specified by the Administrator and in accordance
with Section 409A and such other rules and procedures established by
the Administrator.  Any such future cash
compensation that the grantee elects to defer shall be converted to a fixed
number of Restricted Stock Units based on the Fair Market Value of Stock on the
date the compensation would otherwise have been paid to the grantee if such
payment had not been deferred as provided herein.  The Administrator shall have the sole right
to determine whether and under what circumstances to permit such elections and
to impose such limitations and other terms and conditions thereon as the
Administrator deems appropriate.  Any
Restricted Stock Units that are elected to be received in lieu of cash
compensation shall be fully vested, unless otherwise provided in the Award
Certificate.


 


(c)                                  Rights as a Stockholder. 
A grantee shall have the rights as a stockholder only as to shares of
Stock acquired by the grantee upon settlement of Restricted Stock Units;
provided, however, that the grantee may be credited with Dividend Equivalent
Rights with respect to the phantom stock units underlying his Restricted Stock
Units, subject to such terms and conditions as the Administrator may determine.


 


(d)                                 Termination. 
Except as may otherwise be provided by the Administrator either in the
Award Certificate or, subject to Section 18 below, in writing after the
Award is issued, a grantee’s right in all Restricted Stock Units that have not
vested shall automatically terminate upon the grantee’s termination of
employment (or cessation of service relationship) with the Company and its
Subsidiaries for any reason.


 


SECTION 9.  UNRESTRICTED
STOCK AWARDS


 


Grant or Sale of Unrestricted Stock. 
The Administrator may, in its sole discretion, grant (or sell at par
value or such higher purchase price determined by the Administrator) an
Unrestricted Stock Award under the Plan. 
Unrestricted Stock Awards may be granted in respect of past services or
other valid consideration, or in lieu of cash compensation due to such grantee.


 


SECTION 10.  CASH-BASED
AWARDS


 


Grant of Cash-Based Awards. 
The Administrator may, in its sole discretion, grant Cash-Based Awards
to any grantee in such number or amount and upon such terms, and subject to 


 


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such conditions, as the Administrator shall determine
at the time of grant.  The Administrator
shall determine the maximum duration of the Cash-Based Award, the amount of
cash to which the Cash-Based Award pertains, the conditions upon which the
Cash-Based Award shall become vested or payable, and such other provisions as
the Administrator shall determine.  Each
Cash-Based Award shall specify a cash-denominated payment amount, formula or
payment ranges as determined by the Administrator.  Payment, if any, with respect to a Cash-Based
Award shall be made in accordance with the terms of the Award and may be made
in cash or in shares of Stock, as the Administrator determines.


 


SECTION 11.  PERFORMANCE
SHARE AWARDS


 


(a)                                  Nature of Performance Share Awards. 
The Administrator may, in its sole discretion, grant Performance Share
Awards independent of, or in connection with, the granting of any other Award
under the Plan.  The Administrator shall
determine whether and to whom Performance Share Awards shall be granted, the
Performance Goals, the periods during which performance is to be measured,
which may not be less than one year, and such other limitations and conditions
as the Administrator shall determine.


 


(b)                                 Rights as a Stockholder. 
A grantee receiving a Performance Share Award shall have the rights of a
stockholder only as to shares actually received by the grantee under the Plan
and not with respect to shares subject to the Award but not actually received
by the grantee.  A grantee shall be
entitled to receive shares of Stock under a Performance Share Award only upon
satisfaction of all conditions specified in the Performance Share Award
Certificate (or in a performance plan adopted by the Administrator).


 


(c)                                  Termination. 
Except as may otherwise be provided by the Administrator either in the
Award agreement or, subject to Section 18 below, in writing after the
Award is issued, a grantee’s rights in all Performance Share Awards shall
automatically terminate upon the grantee’s termination of employment (or
cessation of service relationship) with the Company and its Subsidiaries for
any reason.


 


SECTION 12.  PERFORMANCE-BASED
AWARDS TO COVERED EMPLOYEES


 


(a)                                  Performance-Based Awards. 
Any employee or other key person providing services to the Company and
who is selected by the Administrator may be granted one or more
Performance-Based Awards in the form of a Restricted Stock Award, Restricted
Stock Units, Performance Share Awards or Cash-Based Award payable upon the
attainment of Performance Goals that are established by the Administrator and
related to one or more of the Performance Criteria, in each case on a specified
date or dates or over any period or periods determined by the
Administrator.  The Administrator shall
define in an objective fashion the manner of calculating the Performance
Criteria it selects to use for any Performance Cycle.  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 division, business
unit, or an individual.  The
Administrator, in its discretion, may adjust or modify the calculation of
Performance Goals for such Performance Cycle in order to prevent the dilution
or enlargement of the rights of an individual (i) in the event of, or in
anticipation of, any unusual or extraordinary corporate item, transaction,
event or development, (ii) in recognition of, or in 


 


12

















 


anticipation of,
any other unusual or nonrecurring events affecting the Company, or the financial
statements of the Company, or (iii) in response to, or in anticipation of,
changes in applicable laws, regulations, accounting principles, or business
conditions provided however, that the Administrator may not exercise such
discretion in a manner that would increase the Performance-Based Award granted
to a Covered Employee.  Each
Performance-Based Award shall comply with the provisions set forth below.


 


(b)                                 Grant of Performance-Based Awards. 
With respect to each Performance-Based Award granted to a Covered
Employee, the Administrator shall select, within the first 90 days of a
Performance Cycle (or, if shorter, within the maximum period allowed under Section 162(m) of
the Code) the Performance Criteria for such grant, and the Performance Goals with
respect to each Performance Criterion (including a threshold level of
performance below which no amount will become payable with respect to such
Award).  Each Performance-Based Award
will specify the amount payable, or the formula for determining the amount
payable, upon achievement of the various applicable performance targets.  The Performance Criteria established by the
Administrator may be (but need not be) different for each Performance Cycle and
different Performance Goals may be applicable to Performance-Based Awards to
different Covered Employees.


 


(c)                                  Payment of Performance-Based Awards. 
Following the completion of a Performance Cycle, the Administrator shall
meet to review and certify in writing whether, and to what extent, the
Performance Goals for the Performance Cycle have been achieved and, if so, to
also calculate and certify in writing the amount of the Performance-Based
Awards earned for the Performance Cycle. 
The Administrator shall then determine the actual size of each Covered
Employee’s Performance-Based Award, and, in doing so, may reduce or eliminate
the amount of the Performance-Based Award for a Covered Employee if, in its
sole judgment, such reduction or elimination is appropriate.


 


(d)                                 Maximum Award Payable. 
The maximum Performance-Based Award payable to any one Covered Employee
under the Plan for a Performance Cycle is 300,000 shares of Stock (subject to
adjustment as provided in Section 3(c) hereof) or $4 million in the
case of a Performance-Based Award that is a Cash-Based Award.


 


SECTION 13.  DIVIDEND
EQUIVALENT RIGHTS


 


(a)                                  Dividend Equivalent Rights. 
A Dividend Equivalent Right may be granted hereunder to any grantee as a
component of an award of Restricted Stock Units, Restricted Stock Award or as a
freestanding award.  The terms and
conditions of Dividend Equivalent Rights shall be specified in the Award
Certificate.  Dividend equivalents
credited to the holder of a Dividend Equivalent Right may be paid currently or
may be deemed to be reinvested in additional shares of Stock, which may
thereafter accrue additional equivalents. 
Any such reinvestment shall be at Fair Market Value on the date of
reinvestment or such other price as may then apply under a dividend
reinvestment plan sponsored by the Company, if any.  Dividend Equivalent Rights may be settled in
cash or shares of Stock or a combination thereof, in a single installment or
installments.  A Dividend Equivalent
Right granted as a component of an award of Restricted Stock Units or
Restricted Stock Award may provide that such Dividend Equivalent Right shall be
settled upon settlement or payment of, or lapse of restrictions on, such other
Award, and that 


 


13

















 


such
Dividend Equivalent Right shall expire or be forfeited or annulled under the
same conditions as such other Award.  A
Dividend Equivalent Right granted as a component of a Restricted Stock Units or
Restricted Stock Award may also contain terms and conditions different from such
other Award.


 


(b)                                 Interest Equivalents. 
Any Award under this Plan that is settled in whole or in part in cash on
a deferred basis may provide in the grant for interest equivalents to be
credited with respect to such cash payment. 
Interest equivalents may be compounded and shall be paid upon such terms
and conditions as may be specified by the grant.


 


(c)                                  Termination. 
Except as may otherwise be provided by the Administrator either in the
Award Certificate or, subject to Section 18 below, in writing after the
Award is issued, a grantee’s rights in all Dividend Equivalent Rights or
interest equivalents granted as a component of an award of Restricted Stock
Units or Restricted Stock Award that has not vested shall automatically
terminate upon the grantee’s termination of employment (or cessation of service
relationship) with the Company and its Subsidiaries for any reason.


 


SECTION 14.  TRANSFERABILITY
OF AWARDS


 


(a)                                  Transferability. 
Except as provided in Section 14(b) below, during a grantee’s
lifetime, his or her Awards shall be exercisable only by the grantee, or by the
grantee’s legal representative or guardian in the event of the grantee’s
incapacity.  No Awards shall be sold,
assigned, transferred or otherwise encumbered or disposed of by a grantee other
than by will or by the laws of descent and distribution or pursuant to a
domestic relations order.  No Awards
shall be subject, in whole or in part, to attachment, execution, or levy of any
kind, and any purported transfer in violation hereof shall be null and void.


 


(b)                                 Administrator Action. 
Notwithstanding Section 14(a), the Administrator, in its
discretion, may provide either in the Award Certificate regarding a given Award
or by subsequent written approval that the grantee (who is an employee or
director) may transfer his or her Awards (other than any Incentive Stock
Options or Restricted Stock Units) to his or her immediate family members, to
trusts for the benefit of such family members, or to partnerships in which such
family members are the only partners, provided that the transferee agrees in
writing with the Company to be bound by all of the terms and conditions of this
Plan and the applicable Award.


 


(c)                                  Family Member. 
For purposes of Section 14(b), “family member” shall mean a grantee’s
child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former
spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, including adoptive
relationships, any person sharing the grantee’s household (other than a tenant
of the grantee), a trust in which these persons (or the grantee) have more than
50 percent of the beneficial interest, a foundation in which these persons (or
the grantee) control the management of assets, and any other entity in which
these persons (or the grantee) own more than 50 percent of the voting
interests.


 


(d)                                 Designation of Beneficiary. 
Each grantee to whom an Award has been made under the Plan may designate
a beneficiary or beneficiaries to exercise any Award or receive any 


 


14

















 


payment under any
Award payable on or after the grantee’s death. 
Any such designation shall be on a form provided for that purpose by the
Administrator and shall not be effective until received by the
Administrator.  If no beneficiary has
been designated by a deceased grantee, or if the designated beneficiaries have
predeceased the grantee, the beneficiary shall be the grantee’s estate.


 


SECTION 15.  TAX
WITHHOLDING


 


(a)                                  Payment by Grantee. 
Each grantee shall, no later than the date as of which the value of an
Award or of any Stock or other amounts received thereunder first becomes
includable in the gross income of the grantee for Federal income tax purposes,
pay to the Company, or make arrangements satisfactory to the Administrator
regarding payment of, any Federal, state, or local taxes of any kind required
by law to be withheld by the Company with respect to such income.  The Company and its Subsidiaries shall, to
the extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to the grantee.  The Company’s obligation to deliver evidence
of book entry (or stock certificates) to any grantee is subject to and
conditioned on tax withholding obligations being satisfied by the grantee.


 


(b)                                 Payment in Stock. 
Subject to approval by the Administrator, a grantee may elect to have
the Company’s minimum required tax withholding obligation satisfied, in whole
or in part, by authorizing the Company to withhold from shares of Stock to be
issued pursuant to any Award a number of shares with an aggregate Fair Market
Value (as of the date the withholding is effected) that would satisfy the
withholding amount due.


 


SECTION 16.  SECTION 409A
AWARDS


 


To the extent that any Award is determined to constitute “nonqualified
deferred compensation” within the meaning of Section 409A (a “409A Award”),
the Award shall be subject to such additional rules and requirements as
specified by the Administrator from time to time in order to comply with Section 409A.  In this regard, if any amount under a 409A
Award is payable upon a “separation from service” (within the meaning of Section 409A)
to a grantee who is then considered a “specified employee” (within the meaning
of Section 409A), then no such payment shall be made prior to the date
that is the earlier of (i) six months and one day after the grantee’s
separation from service, or (ii) the grantee’s death, but only to the
extent such delay is necessary to prevent such payment from being subject to
interest, penalties and/or additional tax imposed pursuant to Section 409A.  Further, the settlement of any such Award may
not be accelerated or postponed except to the extent permitted by Section 409A.


 


SECTION 17.  TRANSFER,
LEAVE OF ABSENCE, ETC.


 


For purposes of the Plan, the following events shall not be deemed a
termination of employment:


 


(a)                                  a transfer to the employment of the
Company from a Subsidiary or from the Company to a Subsidiary, or from one
Subsidiary to another; or


 


15

















 


(b)                                 an approved leave of absence for military
service or sickness, or for any other purpose approved by the Company, if the
employee’s right to re-employment is guaranteed either by a statute or by
contract or under the policy pursuant to which the leave of absence was granted
or if the Administrator otherwise so provides in writing.


 


SECTION 18.  AMENDMENTS
AND TERMINATION


 


The Board may, at any time, amend or discontinue the Plan and the
Administrator may, at any time, amend or cancel any outstanding Award for the
purpose of satisfying changes in law or for any other lawful purpose, but no
such action shall adversely affect rights under any outstanding Award without
the holder’s consent.  Except as provided
in Section 3(c) or 3(d), without prior stockholder approval, in no
event may the Administrator exercise its discretion to reduce the exercise
price of outstanding Stock Options or Stock Appreciation Rights or effect
repricing through cancellation and re-grants. 
To the extent required under the rules of any securities exchange
or market system on which the Stock is listed, to the extent determined by the
Administrator to be required by the Code to ensure that Incentive Stock Options
granted under the Plan are qualified under Section 422 of the Code, or to
ensure that compensation earned under Awards qualifies as performance-based
compensation under Section 162(m) of the Code, Plan amendments shall
be subject to approval by the Company stockholders entitled to vote at a
meeting of stockholders.  Nothing in this
Section 18 shall limit the Administrator’s authority to take any action
permitted pursuant to Section 3(c) or 3(d).


 


SECTION 19.  STATUS OF
PLAN


 


With respect to the portion of any Award that has not been exercised
and any payments in cash, Stock or other consideration not received by a
grantee, a grantee shall have no rights greater than those of a general
creditor of the Company unless the Administrator shall otherwise expressly
determine in connection with any Award or Awards.  In its sole discretion, the Administrator may
authorize the creation of trusts or other arrangements to meet the Company’s
obligations to deliver Stock or make payments with respect to Awards hereunder,
provided that the existence of such trusts or other arrangements is consistent
with the foregoing sentence.


 


SECTION 20.  GENERAL
PROVISIONS


 


(a)                                  No Distribution. 
The Administrator may require each person acquiring Stock pursuant to an
Award to represent to and agree with the Company in writing that such person is
acquiring the shares without a view to distribution thereof.


 


(b)                                 Delivery of Stock Certificates. 
Stock certificates to grantees under this Plan shall be deemed delivered
for all purposes when the Company or a stock transfer agent of the Company
shall have mailed such certificates in the United States mail, addressed to the
grantee, at the grantee’s last known address on file with the Company.  Uncertificated Stock shall be deemed
delivered for all purposes when the Company or a Stock transfer agent of the
Company shall have given to the grantee by electronic mail (with proof of
receipt) or by United States mail, addressed to the grantee, at the grantee’s
last known address on file with the Company, notice of issuance and recorded
the issuance in its records (which may include electronic “book entry”
records).  Notwithstanding anything
herein to the contrary, the Company shall not be 


 


16

















 


required
to issue or deliver any certificates evidencing shares of Stock pursuant to the
exercise of any Award, unless and until the Administrator has determined, with
advice of counsel (to the extent the Administrator deems such advice necessary
or advisable), 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, quoted or traded.  All
Stock certificates delivered pursuant to the Plan shall be 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 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 Administrator may
require that an individual make such reasonable covenants, agreements, and
representations as the Administrator, in its discretion, deems necessary or
advisable in order to comply with any such laws, regulations, or
requirements.  The Administrator shall
have the right to require any individual 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.


 


(c)                                  Stockholder Rights. 
Until Stock is deemed delivered in accordance with Section 20(b),
no right to vote or receive dividends or any other rights of a stockholder will
exist with respect to shares of Stock to be issued in connection with an Award,
notwithstanding the exercise of a Stock Option or any other action by the grantee
with respect to an Award.


 


(d)                                 Other Compensation Arrangements; No
Employment Rights.  Nothing contained in this Plan shall prevent
the Board from adopting other or additional compensation arrangements,
including trusts, and such arrangements may be either generally applicable or
applicable only in specific cases.  The
adoption of this Plan and the grant of Awards do not confer upon any employee
any right to continued employment with the Company or any Subsidiary.


 


(e)                                  Trading Policy Restrictions.  Option
exercises and other Awards under the Plan shall be subject to the Company’s
insider trading policies and procedures, as in effect from time to time.


 


(f)                                    Forfeiture of Awards under Sarbanes-Oxley
Act.  If the Company is required to prepare an
accounting restatement due to the material noncompliance of the Company, as a
result of misconduct, with any financial reporting requirement under the
securities laws, then, to the extent required by law, any grantee who is one of
the individuals subject to automatic forfeiture under Section 304 of the
Sarbanes-Oxley Act of 2002 shall reimburse the Company for the amount of any
Award received by such individual under the Plan during the 12-month period
following the first public issuance or filing with the United States Securities
and Exchange Commission, as the case may be, of the financial document
embodying such financial reporting requirement.


 


17

















 


SECTION 21.  EFFECTIVE
DATE OF PLAN


 


This Plan shall become effective upon approval by the stockholders in
accordance with applicable state law, the Company’s bylaws and articles of
incorporation and the applicable rules of the New York Stock
Exchange.  No grants of Stock Options and
other Awards may be made hereunder after the tenth anniversary of the Effective
Date and no grants of Incentive Stock Options may be made hereunder after the
tenth anniversary of the date the Plan is approved by the Board.


 


SECTION 22.  GOVERNING
LAW


 


This Plan and all Awards and actions taken thereunder
shall be governed by, and construed in accordance with, the laws of the State
of Maryland, applied without regard to conflict of law principles.


 


DATE APPROVED BY BOARD OF DIRECTORS:  APRIL 1, 2009


 


DATE
APPROVED BY STOCKHOLDERS:  MAY 21,
2009


 


18