exhibit105.htm - Generated by SEC Publisher for SEC Filing







Exhibit 10.5


 





ETRE REIT, LLC


2014 NON-MANAGEMENT DIRECTOR
COMPENSATION PLAN


 


1.       PURPOSE.
The Plan is intended to provide incentives to non-management directors of the
Company, to encourage a proprietary interest in the Company, to encourage the non-management
directors to remain in the service of the Company, to attract new directors with
outstanding qualifications, and to afford additional incentive to non-management
directors to increase their efforts in providing significant services to the
Company and the Series. In furtherance thereof, the Plan permits awards of
equity-based incentives to Directors of the Company. 


2.       DEFINITIONS.
As used in this Plan, the following definitions apply: 


"Act"
shall mean the Securities Act of 1933, as amended. 


"Administrative
Agent" shall mean ETRE Asset Management LLC, a Delaware limited
liability company, together with its successors and assigns.


"Award
Agreement" shall mean a written agreement evidencing a Grant pursuant
to the Plan. 


"Board"
shall mean the Board of Directors of the Company and each Series. 


"Cause"
shall mean, with respect to a Director, unless otherwise provided in an
applicable Award Agreement, a termination of service, based upon a finding by
the Company, acting in good faith, after the occurrence of any of the following:
(1) the Director is convicted or charged with a criminal offense; (2) the Director's
intentional violation of law in connection with any transaction involving the
purchase, sale, loan or other disposition of, or the rendering of investment
advice with respect to, any security, futures or forward contract, insurance
contract, debt instrument, financial instrument or currency; (3) the Director's
dishonesty, bad faith, gross negligence, willful misconduct, fraud or willful
or reckless disregard of duties in connection with the performance of any
services on behalf of the Company or any Series or the Director's engagement in
conduct which is injurious to the Company or any Series, monetarily or
otherwise; (4) the Director's intentional breach of any material provision of
an Award Agreement or any other agreements of the Company or any Series; (5)
the Director's material violation of any written policies adopted by the
Company  governing the conduct of persons performing services on behalf of the
Company or any Series or the Director's non-adherence to the Company's policies
and procedures or other applicable Company compliance manuals; (6) the taking
of or omission to take any action that has caused or substantially contributed
to a material deterioration in the business or reputation of the Company or any
Series, or that was otherwise materially disruptive of their business or
affairs; provided, however, that the term Cause shall not include
for this purpose any mistake of judgment made in good faith with respect to any
transaction respecting an investment made by any Series; (7) the failure by the
Director to devote a sufficient portion of time to performing services for the
Company or any Series without the prior written consent of the Company, other
than by reason of death or Disability; (8) the obtaining by the Director of any
material improper personal benefit as a result of a breach by the Director of
any covenant or agreement (including, without limitation, a breach by the Director
of the Company's code of ethics or a material breach by the Director of other
written policies furnished to the Director relating to personal investment
transactions or of any covenant, agreement, representation or warranty
contained in any limited liability company agreement); or (9) the Director's
suspension or other disciplinary action against the Director by an applicable
regulatory authority; provided, however, that if a failure,
breach, violation or action or omission described in any of clauses (4) to (6)
is capable of being cured, the Director has failed to do so after being given
notice and a reasonable opportunity to cure. As used in this definition, "material"
means more than de minimis. 






1


 







 





 





"Change in Control" means unless
otherwise provided in an Award Agreement the happening of any of the following:
 


(i)           any
"person," including a "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act, but excluding the Company, any
entity controlling, controlled by or under common control with the Company, any
trustee, fiduciary or other person or entity holding securities under any
employee benefit plan or trust of the Company or any such entity, and, with
respect to any particular Director, the Director and any "group" (as
such term is used in Section 13(d)(3) of the Exchange Act) of which the Director
is a member), is or becomes the "beneficial owner" (as defined in
Rule 13(d)(3) under the Exchange Act), directly or indirectly, of securities of
the Company representing 50% or more of either (A) the combined voting power of
the Company's then outstanding securities or (B) the then outstanding Shares of
all Series (in either such case other than as a result of an acquisition of
securities directly from the Company); or 


(ii)          any
consolidation or merger of the Company where the shareholders of the Company,
immediately prior to the consolidation or merger, would not, immediately after
the consolidation or merger, beneficially own (as such term is defined in Rule
13d-3 under the Exchange Act), directly or indirectly, shares representing in
the aggregate 50% or more of the combined voting power of the securities of the
corporation issuing cash or securities in the consolidation or merger (or of
its ultimate parent corporation, if any); or  


(iii)         there
shall occur (A) any sale, lease, exchange or other transfer (in one transaction
or a series of transactions contemplated or arranged by any party as a single
plan) of all or substantially all of the assets of the Company, other than a
sale or disposition by the Company of all or substantially all of the Company's
assets to an entity, at least 50% of the combined voting power of the voting
securities of which are owned by "persons" (as defined above) in
substantially the same proportion as their ownership of the Company immediately
prior to such sale or (B) the approval by shareholders of the Company of any
plan or proposal for the liquidation or dissolution of the Company. 


Notwithstanding the
foregoing, no event or condition shall constitute a Change in Control to the
extent that, if it were, a 20% tax would be imposed under Section 409A of the
Code; provided  that, in such a case, the event or condition shall
continue to constitute a Change in Control to the maximum extent possible (e.g.,
if applicable, in respect of vesting without an acceleration of distribution)
without causing the imposition of such 20% tax. 


"Code"
shall mean the Internal Revenue Code of 1986, as amended. 


"Committee"
shall mean the Compensation Committee of the Company or any subcommittee of the
Board as appointed by the Board in accordance with Section 4 of the Plan; provided,
however, that the Committee shall at all times consist of two or more
persons who, at the time of their appointment, each qualified as a "Non-Employee
Director" under Rule 16b-3(b)(3)(i) promulgated under the Exchange Act. 


"Common
Shares" shall mean any common shares of any Series of the Company,
either currently existing or designated hereafter pursuant to the Operating
Agreement.  


"Company"
shall mean ETRE REIT, LLC, a Delaware series limited liability company. 


"DER"
shall mean a right awarded under Section 10 of the Plan to receive (or have
credited) the equivalent value (in cash or Shares) of dividends paid on Common
Shares of a Series. 






2


 







 





 





"Director" shall mean a Non-Management
Director to whom Options, Restricted Shares, Phantom Shares, DERs, or other
equity-based awards are granted hereunder.


"Disability"
shall mean, unless otherwise provided by the Committee in the Director's Award
Agreement, the occurrence of an event which would entitle the Director to the
payment of disability income under an approved long-term disability income plan
or a long-term disability as determined by the Committee in its absolute
discretion pursuant to any other standard as may be adopted by the Committee.
Notwithstanding the foregoing, no circumstances or condition shall constitute a
Disability to the extent that, if it were, a 20% tax would be imposed under
Section 409A of the Code; provided  that, in such a case, the event or
condition shall continue to constitute a Disability to the maximum extent
possible (e.g., if applicable, in respect of vesting without an
acceleration of distribution) without causing the imposition of such 20% tax. 


"dividend"
shall mean a distribution on
or in respect of any Shares.


"Exchange
Act" shall mean the Securities Exchange Act of 1934, as amended. 


"Exercise
Price" shall mean the price per Common Share, determined by the Board
or the Committee, at which an Option may be exercised. 


"Fair
Market Value" shall mean the value of one Common Share of a Series,
determined as follows: 


(i)           If
the Shares of such Series are then listed on a national stock exchange, the
closing sales price per Share on the exchange on the date in question (or, if
no such price is available for such date, for the last preceding date on which
there was a sale of Shares on such exchange), as determined by the Committee. 


(ii)          If
the Shares of such Series are not then listed on a national stock exchange but
are then traded on an over-the-counter market, the average of the closing bid
and asked prices on the date in question for the Shares in such
over-the-counter market (or, if no such average is available for such date, for
the last preceding date on which there was a sale of Shares in such market), as
determined by the Committee. 


(iii)         If
neither (i) nor (ii) applies, such value as the Committee in its discretion may
in good faith determine. Notwithstanding the foregoing, where the Shares of
such Series are listed or traded, the Committee may make discretionary
determinations in good faith where the Shares have not been traded for 10
trading days. 


Notwithstanding the
foregoing, with respect to any "stock right" within the meaning of
Section 409A of the Code, Fair Market Value shall not be less than the "fair
market value" of the Common Shares of such Series determined in accordance
with the final regulations promulgated under Section 409A of the Code.


"Grant"
shall mean the issuance of a Non-qualified Share Option, Restricted Share,
Phantom Share, DER, or other equity-based grant as contemplated herein or any
combination thereof as applicable to a Director. The Committee will determine
the eligibility of Directors based on, among other factors, the position and
responsibilities of such individuals, the nature and value to the Company or a
Series of such individuals' accomplishments and potential contribution to the
success of the Company or a Series whether directly or through its
subsidiaries. 






3


 







 





 





"Non-Management Director" shall mean
(a) (i) a member of the Board and (ii) with respect to a Series, any person who
has been designated pursuant to the terms of the Operating Agreement as a
specific director to be associated with such Series, in each case, that is (b)
not an officer of (i) the Company or (ii) the Administrative Agent or its
affiliates.


"Non-qualified
Share Option" shall mean an Option not described in Section 422(b) of
the Code.


"Operating
Agreement" shall mean the First Amended and Restated Limited Liability
Company Agreement of the Company, as it may be amended, modified, supplemented
or restated from time to time. 


"Option"
shall mean a Non-qualified Share Option, to purchase, at a price and for the
term fixed by the Committee in accordance with the Plan, and subject to such
other limitations and restrictions in the Plan and the applicable Award
Agreement, a number of Shares of a Series determined by the Committee. 


"Optionee"
shall mean any Director to whom an Option is granted, or the Successors of the
Optionee, as the context so requires. 


 "Performance
Goals" has the meaning set forth in Section 12. 


"Phantom
Share" shall mean a right, pursuant to the Plan, of the Director to
payment of the Phantom Share Value. 


"Phantom
Share Value", per Phantom Share, shall mean the Fair Market Value of a
Share of the applicable Series or, if so provided by the Committee, such Fair
Market Value to the extent in excess of a base value established by the
Committee at the time of grant. 


"Plan"
shall mean the Company's 2014 Non-Management Director Compensation Plan, as set
forth herein, and as the same may from time to time be amended. 


 "Purchase
Price" shall mean the Exercise Price times the number of Shares with
respect to which an Option is exercised. 


"Restricted
Share" shall mean an award of Shares of a Series that are subject to
restrictions hereunder.


"Series"
shall mean a series of the Company, either currently existing or designated
hereafter pursuant to the Operating Agreement.


"Shares"
shall mean Common Shares of the Company, adjusted in accordance with Section 14
of the Plan (if applicable).


"Subsidiary"
shall mean any corporation, partnership, limited liability company or other
entity at least 50% of the economic interest in the equity of which is owned,
directly or indirectly, by the Company, any Series or by another subsidiary. 


"Successors
of the Optionee" shall mean the legal representative of the estate of
a deceased Optionee or the person or persons who shall acquire the right to
exercise an Option by bequest or inheritance or by reason of the death of the
Optionee. 


"Termination
of Service" shall mean the time when the directorship between the
Director and the Company and/or the Series is terminated for any reason, with
or without Cause, including, but not limited to, any
termination by resignation, discharge, death or retirement. The Committee, in
its absolute discretion, shall determine the effects of all matters and
questions relating to Termination of Service, including, but not limited to,
the question of whether any Termination of Service was for Cause and all
questions of whether particular leaves of absence constitute Terminations of
Service. For this purpose, the service relationship shall be treated as
continuing intact while the Director is on military leave, sick leave or other bona
fide leave of absence (to be determined in the discretion of the Committee). 




4


 







 





 







3.       EFFECTIVE DATE.
The effective date of the Plan is ____, 2014. The Plan shall not become
effective unless and until it is approved on or prior to the effective date by
the requisite percentage of the holders of the Common Shares of the Company
then outstanding. The Plan shall terminate on, and no award shall be granted
hereunder on or after, the one-year anniversary of the earlier of the approval
of the Plan by (i) the Board or (ii) the shareholders of the Company; provided,
however, that the Board may at any time prior to that date terminate the
Plan. 


4.       ADMINISTRATION.
 


(a)          Membership
on Committee. The Plan shall be administered by the Committee appointed by the
Board. If no Committee is designated by the Board to act for those purposes or
the Board otherwise so elects, the full Board shall have the rights and
responsibilities of the Committee hereunder and under the Award Agreements. 


(b)          Committee
Meetings. The acts of a majority of the members present at any meeting of the
Committee at which a quorum is present, or acts approved in writing by a
majority of the entire Committee, shall be the acts of the Committee for
purposes of the Plan. If and to the extent applicable, no member of the
Committee may act as to matters under the Plan specifically relating to such
member. 


(c)          Grant
of Awards. 


(i)           The
Committee shall from time to time at its discretion select the Directors who
are to be issued Grants and determine the number and type of Grants to be
issued under any Award Agreement to a Director. In particular, the Committee
shall (A) determine the terms and conditions, not inconsistent with the terms
of the Plan, of any Grants awarded hereunder (including, but not limited to the
performance goals and periods applicable to the award of Grants); (B) determine
the time or times when and the manner and condition in which each Option shall
be exercisable and the duration of the exercise period; and (C) determine or
impose other conditions to the Grant or exercise of Options under the Plan as
it may deem appropriate. The Committee may establish such rules, regulations
and procedures for the administration of the Plan as it deems appropriate,
determine the extent, if any, to which Options, Phantom Shares, Shares (whether
or not Restricted Shares), DERs or other equity-based awards shall be forfeited
(whether or not such forfeiture is expressly contemplated hereunder), and take
any other actions and make any other determinations or decisions that it deems
necessary or appropriate in connection with the Plan or the administration or
interpretation thereof. The Committee shall also cause each Option to be
designated a Non-qualified Share Option. The Director shall take whatever
additional actions and execute whatever additional documents the Committee may
in its reasonable judgment deem necessary or advisable in order to carry or
effect one or more of the obligations or restrictions imposed on the Director
pursuant to the express provisions of the Plan and the Award Agreement. DERs
will be exercisable separately or together with Options, and paid in cash or
other consideration at such times and in accordance with such rules, as the
Committee shall determine in its discretion. Unless expressly provided
hereunder, the Committee, with respect to any Grant, may exercise its
discretion hereunder at the time of the award or thereafter. The Committee
shall have the right and responsibility to interpret the Plan and the
interpretation and construction by the Committee of any provision of the Plan
or of any Grant thereunder, including, without limitation, in the event of a
dispute, shall be final and binding on all Directors and other
persons to the maximum extent permitted by law. Without limiting the generality
of Section 23, no member of the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any Grant
hereunder. 




5


 







 





 







(ii)          Notwithstanding
clause (i) of this Section 4(c), unless otherwise required by law or exchange
listing rules, any award under the Plan to a Director who is a member of the
Committee shall be made by the full Board, but for these purposes the directors
of the Company who are on the Committee shall be required to be recused in
respect of such awards and shall not be permitted to vote.  


(d)          Awards.



(i)           Agreements.
Grants to Directors shall be evidenced by written Award Agreements in such form
as the Committee shall from time to time determine (which Award Agreements need
not be in the same form as any other Award Agreement evidencing Grants under
the Plan and need not contain terms and conditions identical to those
applicable to any other Grant under the Plan or to those applicable to any
other Directors). Such Award Agreements shall comply with and be subject to the
terms and conditions set forth below. 


(ii)          Number
of Shares and Specification of Series. Each Grant issued to a Director shall
state the number of Shares to which it pertains or which otherwise underlie the
Grant and shall provide for the adjustment thereof in accordance with the
provisions of Section 14 hereof.  Each Grant issued to a Director shall state
the Series to which it pertains.


(iii)         Grants.
Subject to the terms and conditions of the Plan and consistent with the Company's
intention for the Committee to exercise the greatest permissible flexibility
under Rule 16b-3 under the Exchange Act in awarding Grants, the Committee shall
have the power: 


(1)       to determine from time to time the Grants to
be issued to Directors under the Plan and to prescribe the terms and provisions
(which need not be identical) of Grants issued under the Plan to such persons; 



(2)       to construe and interpret the Plan and the
Grants thereunder and to establish, amend and revoke the rules, regulations and
procedures established for the administration of the Plan. In this connection,
the Committee may correct any defect or supply any omission, or reconcile any
inconsistency in the Plan, in any Award Agreement, or in any related
agreements, in the manner and to the extent it shall deem necessary or
expedient to make the Plan fully effective. All decisions and determinations by
the Committee in the exercise of this power shall be final and binding upon the
Company, the Series and the Directors; 


(3)       to amend any outstanding Grant, subject to
Section 16, and to accelerate or extend the vesting or exercisability of any
Grant (in compliance with Section 409A of the Code, if applicable) and to waive
conditions or restrictions on any Grants, to the extent it shall deem
appropriate; 


(4)       to determine the circumstances, if any, upon
which an award made under the Plan shall be subject to forfeiture in whole or
in part as a result of a breach by the Director of a provision or covenant to
which the Director is subject; and 






6


 







 





 





(5)       generally to
exercise such powers and to perform such acts as are deemed necessary or
expedient to promote the best interests of the Company with respect to the
Plan. 


(iv)         Any
Grant awarded after the effective date of this Plan is subject to mandatory
repayment by the Director to the Company and/or the applicable Series to the
extent the Director is or in the future becomes subject to any Company and/or
Series "clawback" or recoupment policy or as otherwise required by
applicable law. 


5.       PARTICIPATION.
 


(a)          Eligibility.
Only Directors shall be eligible to receive Grants under the Plan. 


(b)          Limitation
of Ownership. No Grants shall be issued under the Plan to any person who after
such Grant would beneficially own more than 9.8% of the outstanding Common
Shares of a Series of the Company, unless the foregoing restriction is
expressly and specifically waived by action of the independent directors of the
Board. 


(c)          Share
Ownership. For purposes of Section 5(b) above, in determining share ownership a
Director shall be considered as owning the shares owned, directly or
indirectly, by or for his brothers, sisters, spouses, ancestors and lineal
descendants. Shares owned, directly or indirectly, by or for a corporation,
partnership, estate or trust shall be considered as being owned proportionately
by or for its shareholders, partners or beneficiaries. Shares with respect to
which any person holds an Option shall be considered to be owned by such
person. 


(d)          Outstanding
Shares. For purposes of Section 5(b) above, "outstanding Common Shares of
a Series" shall include all shares actually issued and outstanding
immediately after the issue of the Grant to the Director. With respect to the share
ownership of any Director, "outstanding Common Shares of a Series"
shall include shares authorized for issue under outstanding Options held by
such Director, but not options held by any other person. 


6.       SHARES.
Subject to adjustments pursuant to Section 14, no Grant may cause the total
number of Common Shares subject to all outstanding awards to exceed 0.25% of the issued and outstanding Common
Shares of all Series on a fully diluted basis (assuming, if applicable, the
exercise of all outstanding Options and the conversion of all warrants and
convertible securities into Common Shares). 
Notwithstanding the first sentence of this Section 6, (i) Shares that have been
granted as Restricted Shares or that have been reserved for distribution in
payment for Options or Phantom Shares but are later forfeited or for any other reason
are not payable under the Plan; and (ii) Shares as to which an Option is
granted under the Plan that remains unexercised at the expiration, forfeiture
or other termination of such Option, may be the subject of the issue of further
Grants. Common Shares issued hereunder may consist, at the applicable time, in
whole or in part, of authorized and unissued shares, treasury shares or
previously issued Shares under the Plan. The certificates for Shares issued
hereunder may include any legend which the Committee deems appropriate to
reflect any restrictions on transfer hereunder or under the Award Agreement, or
as the Committee may otherwise deem appropriate. Shares subject to DERs, other
than DERs based directly on the dividends payable with respect to Shares
subject to Options or the dividends payable on a number of Shares corresponding
to the number of Phantom Shares awarded, shall be subject to the limitation of
this Section 6. Notwithstanding the limitations above in this Section 6, there
shall be no limit on the number of Phantom Shares or DERs to the extent they
are paid out in cash that may be granted under the Plan. If any Phantom Shares
or DERs are paid out in cash, the underlying Shares may again be made the
subject of Grants under the Plan, notwithstanding the first sentence of this
Section 6. 






7


 







 





 





7.       TERMS
AND CONDITIONS OF OPTIONS.  


(a)          Each
Award Agreement with a Director shall state the Exercise Price. The Exercise
Price for any Option shall not be less than the Fair Market Value of a Share of
the applicable Series on the date of Grant.


(b)          Medium
and Time of Payment. Except as may otherwise be provided below, the Purchase
Price for each Option granted to a Director shall be payable in full in United
States dollars upon the exercise of the Option. In the event the Company
determines that it and/or the applicable Series is required to withhold taxes
as a result of the exercise of an Option, as a condition to the exercise
thereof, a Director may be required to make arrangements satisfactory to the
Company to enable it and/or the applicable Series to satisfy such withholding
requirements in accordance with Section 20.  If the applicable Award Agreement
so provides, or the Committee otherwise so permits, the Purchase Price may be
paid in one or a combination of the following, taking into account the desired
accounting treatment and compliance with applicable law: 


(i)           by
a certified or bank cashier's check; 


(ii)          by
the surrender of Common Shares in good form for transfer, owned by the person
exercising the Option and having a Fair Market Value on the date of exercise
equal to the Purchase Price, or in any combination of cash and Common Shares,
as long as the sum of the cash so paid and the Fair Market Value of the Common
Shares so surrendered equals the Purchase Price; 


(iii)         by
reduction of the Shares issuable upon exercise of the Option; 


(iv)         by
cancellation of indebtedness owed by the applicable Series to the Director; 


(v)          subject
to Section 16(e), by broker-assisted cashless exercise using a broker reasonably
acceptable to the Company, pursuant to which the Director delivers to the
Company, on or prior to the exercise date, the Director's instruction directing
and obligating the broker to (a) sell Shares (or a sufficient portion of the
Shares) acquired upon exercise of the Option and (b) remit to the Company a
sufficient portion of the sale proceeds to pay the aggregate purchase price, no
later than the third trading day after the exercise date; 


(vi)         subject
to Section 16(e), by a loan or extension of credit from the applicable Series
evidenced by a full recourse promissory note executed by the Director. The
interest rate and other terms and conditions of such note shall be determined
by the Committee (in which case the Committee may require that the Director
pledge his or her Shares to the applicable Series for the purpose of securing
the payment of such note, and in no event shall the share certificate(s)
representing such Shares be released to the Director until such note shall have
been paid in full); or 


(vii)        by
any combination of such methods of payment or any other method acceptable to
the Committee in its discretion. 


Except in the case of
Options exercised by certified or bank cashier's check, the Committee may
impose such limitations and prohibitions on the exercise of Options as it deems
appropriate, including, without limitation, any limitation or prohibition
designed to avoid accounting consequences which may result from the use of Common
Shares as payment upon exercise of an Option. Any fractional Common Shares
resulting from a Director's election that are accepted by the Company shall in
the discretion of the Committee be paid in cash. 






8


 







 





 





(c)          Term and Nontransferability of Grants and
Options. 


(i)           Each
Option under this Section 7 shall state the time or times which all or part
thereof becomes exercisable, subject to the restrictions set forth in clauses
(ii) through (v) below.


(ii)          No
Option shall be exercisable except by the Director or a transferee permitted
hereunder. 


(iii)         No
Option shall be assignable or transferable, except by will or the laws of
descent and distribution of the state wherein the Director is domiciled at the
time of his death; provided, however, that the Committee may (but
need not) permit other transfers, where the Committee concludes that such
transferability (i) does not result in accelerated taxation and (ii) is
otherwise appropriate and desirable. 


(iv)         No
Option shall be exercisable until such time as set forth in the applicable
Award Agreement (but in no event after the expiration of such Grant). 


(v)          No
modification of an Option shall, without the consent of the Optionee or as
required by applicable law or regulation or to meet the requirements of any
accounting standard or to correct an administrative error, materially impair
the rights of an Optionee under any Option previously granted. 


(d)          Termination
of Service, other than by Death, Disability, or for Cause. Unless otherwise
provided in the applicable Award Agreement, upon any Termination of Service for
any reason other than his or her death or Disability, an Optionee shall have
the right, subject to the restrictions of Section 4(c) above, to exercise his
or her Option at any time within 90 days after Termination of Service, but only
to the extent that, at the date of Termination of Service, the Optionee's right
to exercise such Option had accrued pursuant to the terms of the applicable
Award Agreement and had not previously been exercised or forfeited; provided,
however, that, unless otherwise provided in the applicable Award
Agreement, if there occurs a Termination of Service for Cause, any Option not
exercised in full prior to such termination shall be canceled. 


(e)          Death
of Optionee. Unless otherwise provided in the applicable Award Agreement, if
the Optionee of an Option dies while a Director or within 90 days after any
Termination of Service other than for Cause, and has not fully exercised the
Option, subject to the restrictions of Section 4(c) above, the Option may be
exercised at any time within 12 months after the Optionee's death (or 12 months
after the Optionee's Termination of Service, if sooner) by the Successor of the
Optionee, but only to the extent that, at the date of death, the Optionee's
right to exercise such Option had accrued pursuant to the terms of the
applicable Award Agreement and had not previously been exercised or forfeited. 


(f)           Disability
of Optionee. Unless otherwise provided in the Award Agreement, upon any
Termination of Service for reason of his or her Disability, an Optionee shall have
the right, subject to the restrictions of Section 4(c) above, to exercise the
Option at any time within 12 months after Termination of Service, but only to
the extent that, at the date of Termination of Service, the Optionee's right to
exercise such Option had accrued pursuant to the terms of the applicable Award
Agreement and had not previously been exercised or forfeited. 


(g)          Rights
as a Shareholder. An Optionee, a Successor of the Optionee, or the holder of a
DER shall have no rights as a shareholder with respect to any Shares covered by
his or her Grant until, in the case of an Optionee, the date of the issuance of
a share certificate for such Shares. No adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other property),
distributions or other rights for which the record date is prior to the date
such share certificate is issued, except as provided in Section 14. 






9


 







 





 





(h)          Modification, Extension and Renewal of Option.
Within the limitations of the Plan, the Committee may modify, extend or renew
outstanding Options or accept the cancellation of outstanding Options (to the
extent not previously exercised) for the granting of new Options in
substitution therefor (but not including repricings, in the absence of shareholder
approval). The Committee may modify, extend or renew any Option granted to any Director,
taking into consideration Rule 16b-3 under the Exchange Act and Section 409A of
the Code. The foregoing notwithstanding, no modification of an Option shall,
without the consent of the Optionee, alter or impair any rights or obligations
under any Option previously granted. 


(i)           Stock
Appreciation Rights. The Committee, in its discretion, may (taking into
account, without limitation, the application of Section 409A of the Code, as
the Committee may deem appropriate), also permit the Optionee to elect to
exercise an Option by receiving Shares, cash or a combination thereof, in the
discretion of the Committee and as may be set forth in the applicable Award
Agreement, with an aggregate Fair Market Value (or, to the extent of payment in
cash, in an amount) equal to the excess of the Fair Market Value of the Shares
with respect to which the Option is being exercised over the aggregate Purchase
Price, as determined as of the day the Option is exercised. 


(j)           Deferral.
The Committee may establish a program (taking into account, without limitation,
the application of Section 409A of the Code, as the Committee may deem
appropriate) under which Optionees will have Phantom Shares subject to Section 9
credited upon their exercise of Options, rather than receiving Shares at that
time. 


(k)          Other
Provisions. The Award Agreement authorized under the Plan may contain such
other provisions not inconsistent with the terms of the Plan (including,
without limitation, restrictions upon the exercise of the Option) as the
Committee shall deem advisable. 


8.       PROVISIONS
APPLICABLE TO RESTRICTED SHARES.  


(a)          Vesting
Periods. In connection with the grant of Restricted Shares, whether or not Performance
Goals apply thereto, the Committee shall establish one or more vesting periods
with respect to the Restricted Shares granted, the length of which shall be
determined in the discretion of the Committee and set forth in the applicable
Award Agreement. Subject to the provisions of this Section 8, the applicable
Award Agreement and the other provisions of the Plan, restrictions on Restricted
Shares shall lapse if the Director satisfies all applicable service
requirements through the end of the applicable vesting period.


(b)          Grant
of Restricted Shares. Subject to the other terms of the Plan, the Committee
may, in its discretion as reflected by the terms of the applicable Award
Agreement: (i) authorize the granting of Restricted Shares to Directors; (ii)
provide a specified purchase price for the Restricted Shares (whether or not
the payment of a purchase price is required by any state law applicable to the
Company); (iii) determine the restrictions applicable to Restricted Shares and
(iv) determine or impose other conditions to the grant of Restricted Shares
under the Plan as it may deem appropriate. 


(c)          Certificates.



(i)           Each
Director granted Restricted Shares may be issued a share certificate in respect
of Shares of Restricted Shares awarded under the Plan. Any such certificate
shall be registered in the name of the Director. Without limiting the
generality of Section 6, in addition to any legend that might otherwise be
required by the Board or the Company's Operating Agreement, bylaws or other
applicable documents, the certificates for Restricted Shares issued hereunder
may include any legend which the Committee deems appropriate to reflect any
restrictions on transfer hereunder or under the applicable Award
Agreement, or as the Committee may otherwise deem appropriate, and, without
limiting the generality of the foregoing, shall bear a legend referring to the
terms, conditions, and restrictions applicable to such Grant, substantially in
the following form: 




10


 







 





 







THE
TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY ARE
SUBJECT TO THE TERMS AND CONDITIONS (INCLUDING FORFEITURE) OF THE ETRE REIT,
LLC 2014 NON-MANAGEMENT DIRECTOR COMPENSATION PLAN, AND AN AWARD AGREEMENT
ENTERED INTO BETWEEN THE REGISTERED OWNER AND ETRE REIT, LLC. COPIES OF SUCH
PLAN AND AWARD AGREEMENT ARE ON FILE IN THE OFFICES OF ETRE REIT, LLC, 44 WALL
STREET, NEW YORK, NY 10005. 


(ii)          The
Committee may require that any share certificates evidencing such Shares be
held in custody by the Company until the restrictions hereunder shall have
lapsed and that, as a condition of any grant of Restricted Shares, the Director
shall have delivered a stock power, endorsed in blank, relating to the shares covered
by such Grant. If and when such restrictions so lapse, the share certificates
shall be delivered by the Company to the Director or his or her designee as
provided in Section 8(d). 


(iii)         For
purposes of clarity, nothing contained in the Plan shall preclude the use of
non-certficated evidence of ownership that the Committee determines to be
appropriate, including book entry. 


(d)          Restrictions
and Conditions. Unless otherwise provided by the Committee in an Award
Agreement, the Restricted Shares awarded pursuant to the Plan shall be subject
to the following restrictions and conditions: 


(i)           Subject
to the provisions of the Plan and the applicable Award Agreement, during a
period commencing with the date of such Grant and ending on the date the period
of forfeiture with respect to such Shares lapses, the Director shall not be
permitted voluntarily or involuntarily to sell, transfer, pledge, anticipate,
alienate, encumber or assign Restricted Shares awarded under the Plan (or have
such Shares attached or garnished). Subject to the provisions of the applicable
Award Agreement, the period of forfeiture with respect to Shares granted
hereunder shall lapse as provided in the applicable Award Agreement.
Notwithstanding the foregoing, unless otherwise expressly provided by the
Committee, the period of forfeiture with respect to such Shares shall only
lapse as to whole Shares. 


(ii)          Except
as provided in the foregoing clause (i), or in Section 14, the Director shall
have, in respect of the Restricted Shares, all of the rights of a shareholder of
such Shares of the Company, including the right to vote the Shares and receive
dividends. Certificates for Shares (not subject to restrictions hereunder)
shall be delivered to the Director or his or her designee (or where permitted,
transferee) promptly after, and only after, the period of forfeiture shall
lapse without forfeiture in respect of such Restricted Shares. 


(iii)         Termination
of service. Unless otherwise provided in the applicable Award Agreement, if the
Director has a Termination of Service for any reason, then (A) all Restricted Shares
still subject to restriction shall thereupon, and with no further action, be
forfeited by the Director, and (B) the applicable Series shall pay to the Director
as soon as practicable (and in no event more than 30 days) after such
termination an amount equal to the lesser of (x) the amount paid by the Director,
if any, for such forfeited Restricted Shares as contemplated by Section 8(b),
and (y) the Fair Market Value on the date of termination of the forfeited Restricted
Shares. 


9.       PROVISIONS
APPLICABLE TO PHANTOM SHARES.  






11


 







 





 





(a)          Grant of Phantom Shares. Subject to the
other terms of the Plan, the Committee shall, in its discretion as reflected by
the terms of the applicable Award Agreement: (i) authorize the Granting of
Phantom Shares to Directors and (ii) determine or impose other conditions to
the grant of Phantom Shares under the Plan as it may deem appropriate. 


(b)          Term.
The Committee may provide in an Award Agreement that any particular Phantom
Share shall expire at the end of a specified term. 


(c)          Vesting.



(i)           Subject
to the provisions of the applicable Award Agreement and Section 9(c)(ii),
Phantom Shares shall vest as provided in the applicable Award Agreement. 


(ii)          Unless
otherwise determined by the Committee in an applicable Award Agreement, in the
event that a Director has a Termination of Service, any and all of the Director's
Phantom Shares which have not vested prior to or as of such termination shall
thereupon, and with no further action, be forfeited and cease to be
outstanding, and the Director's vested Phantom Shares shall be settled as set
forth in Section 9(d). 


(d)          Settlement
of Phantom Shares. 


(i)           Except
as otherwise provided by the Committee, each vested and outstanding Phantom
Share shall be settled by the transfer to the Director of one Share of the
applicable Series; provided, however, that, the Committee at the
time of grant (or, in the appropriate case, as determined by the Committee,
thereafter) may provide that a Phantom Share may be settled (A) in cash at the
applicable Phantom Share Value, (B) in cash or by transfer of Shares as elected
by the Director in accordance with procedures established by the Committee (if
any) or (C) in cash or by transfer of Shares as elected by the Company and the
applicable Series. 


(ii)          Each
Phantom Share shall be settled with a single-sum payment by the applicable
Series; provided, however, that, with respect to Phantom Shares
of a Director which have a common Settlement Date (as defined below), the
Committee may permit the Director to elect in accordance with procedures
established by the Committee (taking into account, without limitation, Section
409A of the Code, as the Committee may deem appropriate) to receive installment
payments over a period not to exceed 10 years. 


(iii)         (1)        Except
as otherwise provided by the Committee, the settlement date with respect to a Director
is the first day of the month to follow the Director's Termination of Service ("Settlement
Date").  


(2)       Notwithstanding Section 9(d)(iii)(1), the
Committee may provide that distributions of Phantom Shares can be elected at
any time in those cases in which the Phantom Share Value is determined by
reference to Fair Market Value of the applicable Shares to the extent in excess
of a base value, rather than by reference to unreduced Fair Market Value. 


(3)       Notwithstanding the foregoing, the
Settlement Date, if not earlier pursuant to this Section 9(d)(iii), is the date
of the Director's death. 


(iv)         Notwithstanding
any other provision of the Plan (taking into account, without limitation, Section
409A of the Code, as the Committee may deem appropriate), a Director may
receive any amounts to be paid in installments as provided in Section 9(d)(ii)
or deferred by the Director as provided in Section 9(d)(iii)
in the event of an Unforeseeable Emergency. For these purposes, an "Unforeseeable
Emergency" shall have the meaning provided in Section 409A of the Code
and the regulations thereunder, as determined by the Committee in its sole
discretion, provided  that such Unforeseeable Emergency must cause a
severe financial hardship to the Director resulting from (x) a sudden and
unexpected illness or accident of the Director or "dependent," as
defined in Section 152(a) of the Code, of the Director, (y) loss of the Director's
property due to casualty, or (z) other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the Director.
The circumstances that will constitute an Unforeseeable Emergency will depend
upon the facts of each case, but, in any case, payment may not be made to the
extent that such hardship is or may be relieved: 




12


 







 





 







(1)       through reimbursement or compensation by
insurance or otherwise; 


(2)       by liquidation of the Director's assets, to
the extent the liquidation of such assets would not itself cause severe
financial hardship; or 


(3)       by future cessation of the making of
additional deferrals with respect to Phantom Shares. 


Without limitation, the
need to send a Director's child to college or the desire to purchase a home
shall not constitute an Unforeseeable Emergency. Distributions of amounts
because of an Unforeseeable Emergency shall be permitted to the extent
reasonably needed to satisfy the emergency need.


(e)          Other
Phantom Share Provisions. 


(i)           Except
as permitted by the Committee, rights to payments with respect to Phantom
Shares granted under the Plan shall not be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment, garnishment, levy, execution, or other legal or equitable process,
either voluntary or involuntary; and any attempt to anticipate, alienate, sell,
transfer, assign, pledge, encumber, attach or garnish, or levy or execute on
any right to payments or other benefits payable hereunder, shall be void. 


(ii)          A
Director may designate in writing, on forms to be prescribed by the Committee,
a beneficiary or beneficiaries to receive any payments payable after his or her
death and may amend or revoke such designation at any time. If no beneficiary
designation is in effect at the time of a Director's death, payments hereunder
shall be made to the Director's estate. If a Director with a vested Phantom
Share dies, such Phantom Share shall be settled and the Phantom Share Value in
respect of such Phantom Shares paid, and any payments deferred pursuant to an
election under Section 9(d)(iii) shall be accelerated and paid, as soon as
practicable (but no later than 60 days) after the date of death to such Director's
beneficiary or estate, as applicable.


(iii)         The
Committee may (taking into account, without limitation, Section 409A of the
Code, as the Committee may deem appropriate) establish a program under which
distributions with respect to Phantom Shares may be deferred for periods in
addition to those otherwise contemplated by the foregoing provisions of this
Section 9. Such program may include, without limitation, provisions for the
crediting of earnings and losses on unpaid amounts and, if permitted by the
Committee, provisions under which Directors may select from among hypothetical
investment alternatives for such deferred amounts in accordance with procedures
established by the Committee. 


(iv)         Notwithstanding
any other provision of this Section 9, any fractional Phantom Share will be
paid out in cash at the Phantom Share Value as of the Settlement Date. 






13


 







 





 





(v)          No Phantom Share shall give any Director
any rights with respect to Shares or any ownership interest in the Company
associated with any Series. Except as may be provided in accordance with
Section 10, no provision of the Plan shall be interpreted to confer upon any Director
of a Phantom Share any voting, dividend or derivative or other similar rights
with respect to any Phantom Share. 


(f)           Claims
Procedures. 


(i)           The
Director, or his beneficiary hereunder or authorized representative, may file a
claim for payments with respect to Phantom Shares under the Plan by written
communication to the Committee or its designee. A claim is not considered filed
until such communication is actually received. Within 90 days (or, if special
circumstances require an extension of time for processing, 180 days, in which
case notice of such special circumstances should be provided within the initial
90-day period) after the filing of the claim, the Committee will either: 


(1)       approve the claim and take appropriate steps
for satisfaction of the claim; or 


(2)       if the claim is wholly or partially denied,
advise the claimant of such denial by furnishing to him or her a written notice
of such denial setting forth (A) the specific reason or reasons for the denial;
(B) specific reference to pertinent provisions of the Plan on which the denial
is based and, if the denial is based in whole or in part on any rule of
construction or interpretation adopted by the Committee, a reference to such
rule, a copy of which shall be provided to the claimant; (C) a description of
any additional material or information necessary for the claimant to perfect
the claim and an explanation of the reasons why such material or information is
necessary; and (D) a reference to this Section 9(f) as the provision setting
forth the claims procedure under the Plan.


(ii)          The
claimant may request a review of any denial of his or her claim by written
application to the Committee within 60 days after receipt of the notice of
denial of such claim. Within 60 days (or, if special circumstances require an
extension of time for processing, 120 days, in which case notice of such
special circumstances should be provided within the initial 60-day period)
after receipt of written application for review, the Committee will provide the
claimant with its decision in writing, including, if the claimant's claim is
not approved, specific reasons for the decision and specific references to the
Plan provisions on which the decision is based. 


10.     PROVISIONS
APPLICABLE TO DIVIDEND EQUIVALENT RIGHTS.  


(a)          Grant
of DERs. Subject to the other terms of the Plan, the Committee shall, in its
discretion as reflected by the terms of the Award Agreements, authorize the
granting of DERs to Directors based on the dividends declared on Common Shares
of a Series, to be credited as of the dividend payment dates, during a
specified period determined by the Committee, which may be, for example,
between the date a Grant is issued or vests, and the date such Grant is
exercised, vests or expires. Such DERs shall be converted to cash or additional
Shares by such formula and at such time and subject to such limitation as may
be determined by the Committee.  If a DER is granted in respect of another
Grant hereunder, then, unless otherwise stated in the Award Agreement, or, in
the appropriate case, as determined by the Committee, in no event shall the DER
be in effect for a period beyond the time during which the applicable related
portion of the underlying Grant has been exercised or otherwise settled, or has
expired, been forfeited or otherwise lapsed, as applicable.


(b)          Certain
Terms. 






14


 







 





 





(i)           The term of a DER shall be set by the
Committee in its discretion. 


(ii)          Payment
of the amount determined in accordance with Section 10(a) shall be in cash, in Common
Shares or a combination of the both, as determined by the Committee at the time
of grant. 


(c)          Other
Types of DERs. The Committee may establish a program under which DERs of a type
whether or not described in the foregoing provisions of this Section 10 may be
granted to Directors. For example, without limitation, the Committee may grant
a DER in respect of each Share subject to an Option or with respect to a
Phantom Share, which right would consist of the right (subject to Section 10(d))
to receive a cash payment in an amount equal to the dividend distributions paid
on a Share from time to time.


(d)          Deferral.



(i)           The
Committee may (taking into account, without limitation, Section 409A of the
Code, as the Committee may deem appropriate) establish a program under which Directors
(i) will have Phantom Shares credited, subject to the terms of Sections 9(d)
and 9(e) as though directly applicable with respect thereto, upon the granting
of DERs, or (ii) will have payments with respect to DERs deferred. 


(ii)          The
Committee may establish a program under which distributions with respect to
DERs may be deferred. Such program may include, without limitation, provisions
for the crediting of earnings and losses on unpaid amounts, and, if permitted
by the Committee, provisions under which Directors may select from among
hypothetical investment alternatives for such deferred amounts in accordance
with procedures established by the Committee. 


11.     OTHER
EQUITY-BASED AWARDS. The Board shall have the right to grant other awards
based upon the Common Shares of a Series having such terms and conditions as
the Board may determine, including, without limitation, the grant of Shares of
a Series based upon certain conditions, the grant of securities convertible
into Common Shares of a Series, and the grant of restricted stock units.


12.       PERFORMANCE
GOALS. The Committee, in its discretion, may grant performance-based grants
("Performance-Based Grants") and (i) establish one or more
performance goals ("Performance Goals") as a precondition to
the issuance or vesting of Grants, and (ii) provide, in connection with the
establishment of the Performance Goals, for predetermined Grants to those Directors
(who continue to meet all applicable eligibility requirements) with respect to whom
the applicable Performance Goals are satisfied. The Performance Goals may be
based upon the criteria set forth in Exhibit A hereto which is hereby
incorporated herein by reference as though set forth in full. 


13.       TERM OF PLAN.
Grants may be granted pursuant to the Plan until the expiration of one year
from the effective date of the Plan. 


14.       RECAPITALIZATION
AND CHANGES OF CONTROL.  


(a)          Subject
to any required action by shareholders and to the specific provisions of
Section 15, if (i) the Company shall at any time be involved in a merger,
consolidation, dissolution, liquidation, reorganization, exchange of shares,
sale of all or substantially all of the assets or shares of the Company or a
transaction similar thereto, (ii) any share dividend, share split, reverse share
split, share combination, reclassification, recapitalization or other similar
change in the capital structure of the Company, or any distribution to holders
of Common Shares of a Series other than cash dividends, shall occur or (iii)
any other event shall occur which in the judgment of the Committee necessitates
action by way of adjusting the terms of the outstanding Grants, then: 






15


 







 





 





(i)           the maximum aggregate number of Shares
which may be made subject to Options and DERs under the Plan, the maximum
aggregate number and kind of Restricted Shares that may be granted under the
Plan, the maximum aggregate number of Phantom Shares and other Grants which may
be granted under the Plan shall be appropriately adjusted by the Committee in
its discretion; and 


(ii)          the
Committee shall take any such action as in its discretion shall be necessary to
maintain each Directors' rights hereunder (including under their applicable
Award Agreements) so that they are, in their respective Options, Phantom Shares
and DERs (and, as appropriate, other Grants under Section 11), substantially
proportionate to the rights existing in such Options, Phantom Shares and DERs
(and other Grants under Section 11) prior to such event, including, without
limitation, adjustments in (A) the number of Options, Phantom Shares and DERs
(and other Grants under Section 11) granted, (B) the number and kind of shares
or other property to be distributed in respect of Options, Phantom Shares and
DERs (and other Grants under Section 11, as applicable, (C) the Exercise Price,
Purchase Price and Phantom Share Value, and (D) performance-based criteria
established in connection with Grants; provided  that, in the discretion
of the Committee, the foregoing clause (D) may also be applied in the case of
any event relating to a Subsidiary if the event would have been covered under
this Section 14(a) had the event related to the Company. 


To the extent that such
action shall include an increase or decrease in the number of Shares (or units
of other property then available) subject to all outstanding Grants, the number
of Shares (or units) available under Section 6 above shall be increased or
decreased, as the case may be, proportionately. 


(b)          Any
Shares or other securities distributed to a Director with respect to Restricted
Shares or otherwise issued in substitution of Restricted Shares pursuant to
this Section 14 shall be subject to the applicable restrictions and
requirements imposed by Section 8, including depositing the certificates
therefor with the Company together with a stock power and bearing a legend as
provided in Section 8(c)(i).


(c)          If
the Company shall be consolidated or merged with a corporation or other entity,
each Director who has received Restricted Shares that is then subject to
restrictions imposed by Section 8(d) may be required to deposit with the
successor corporation the certificates for the stock or securities or the other
property that the Director is entitled to receive by reason of ownership of Restricted
Shares in a manner consistent with Section 8(c)(ii), and such stock, securities
or other property shall become subject to the restrictions and requirements
imposed by Section 8(d), and the certificates therefor or other evidence
thereof shall bear a legend similar in form and substance to the legend set
forth in Section 8(c)(i).


(d)          The
judgment of the Committee with respect to any matter referred to in this
Section 14 shall be conclusive and binding upon each Director without the need
for any amendment to the Plan. 


(e)          Subject
to any required action by shareholders, if the Company is the surviving company
in any merger or consolidation, the rights under any outstanding Grant shall
pertain and apply to the securities to which a holder of the number of Shares
subject to the Grant would have been entitled. Subject to the terms of any
applicable Award Agreement, in the event of a merger or consolidation in which
the Company is not the surviving company, the date of exercisability of each
outstanding Option and settling of each Phantom Share or, as applicable, other
Grant under Section 11 (in each case whether or not vested), shall be
accelerated to a date prior to such merger or consolidation, unless the
agreement of merger or consolidation provides for the assumption of the Grant
by the successor to the Company. 






16


 







 





 





(f)           To the extent that the foregoing
adjustment related to securities of the Company, such adjustments shall be made
by the Committee, whose determination shall be conclusive and binding on all
persons. 


(g)          Except
as expressly provided in this Section 14, a Director shall have no rights by
reason of subdivision or consolidation of shares of stock of any class, the
payment of any stock dividend or any other increase or decrease in the number
of shares of stock of any class or by reason of any dissolution, liquidation,
merger or consolidation or spin-off of assets or stock of another corporation,
and any issue by the Company of shares of any class, or securities convertible
into shares of any class, shall not affect, and no adjustment by reason thereof
shall be made with respect to, the number of Shares subject to a Grant or the
Exercise Price of Shares subject to an Option. 


(h)          Grants
made pursuant to the Plan shall not affect in any way the right or power of the
Company to make adjustments, reclassifications, reorganizations or changes of
its capital or business structure, to merge or consolidate or to dissolve,
liquidate, sell or transfer all or any part of its business assets. 


(i)           Upon
the occurrence of a Change in Control: 


(i)           The
Committee as constituted immediately before the Change in Control may make such
adjustments as it, in its discretion, determines are necessary or appropriate
in light of the Change in Control (including, without limitation, the
substitution of stock other than shares of the Company as the stock optioned
hereunder, and the acceleration of the exercisability or vesting of awards
granted under the Plan, cancellation of any Options or stock appreciation
rights in return for payment equal to the Fair Market Value of Shares subject
to an Option or stock appreciation right as of the date of the Change in
Control less the Exercise Price applicable thereto (which amount may be zero)
and settling of each vested Phantom Share or, as applicable, other Grant under
Section 11 (in each case whether or not vested)), if any, provided  that
the Committee determines that such adjustments do not have a substantial
adverse economic impact on the Director as determined at the time of the
adjustments. 


(ii)          Notwithstanding
the provisions of Section 9, the Settlement Date for Phantom Shares shall be
the date of such Change in Control and all amounts due with respect to Phantom
Shares to a Director hereunder shall be paid as soon as practicable (but in no
event more than 30 days) after such Change in Control, unless such Director
elects otherwise in accordance with procedures established by the Committee. 


15.       EFFECT OF
CERTAIN TRANSACTIONS. In the case of (i) the dissolution or liquidation of
the Company, (ii) a merger, consolidation, reorganization or other business
combination in which the Company is acquired by another entity or in which the
Company is not the surviving entity, or (iii) any sale, lease, exchange or
other transfer (in one transaction or a series of transactions contemplated or
arranged by any party as a single plan) of all or substantially all of the
assets of the Company, the Plan and the Grants issued hereunder shall terminate
upon the effectiveness of any such transaction or event, unless provision is
made in connection with such transaction for the assumption of Grants
theretofore granted, or the substitution for such Grants of new Grants, by the
successor entity or parent thereof, with appropriate adjustment as to the
number and kind of shares and the per share exercise prices, as provided in
Section 14. In the event of such termination, all outstanding Options and
Grants shall be exercisable to the extent then vested (taking into account any
accelerated vesting provided by the Committee) for at least ten days prior to
the date of such termination. 


16.       SECURITIES LAW
REQUIREMENTS.  






17


 







 





 





(a)          Legality of Issuance. The issuance of any
Shares pursuant to Grants under the Plan and the issuance of any Grant shall be
contingent upon the following: 


(i)           the
obligation of the Company to sell Shares with respect to Grants issued under
the Plan shall be subject to all applicable laws, rules and regulations,
including all applicable federal and state securities laws, and the obtaining
of all such approvals by governmental agencies as may be deemed necessary or
appropriate by the Committee; 


(ii)          the
Committee may make such changes to the Plan as may be necessary or appropriate
to comply with the rules and regulations of any government authority or to
obtain tax benefits applicable to stock options; and 


(iii)         each
grant of Options, Restricted Shares, Phantom Shares (or issuance of Shares in
respect thereof), DERs (or issuance of Shares in respect thereof), or other
Grant under Section 11 (or issuance of Shares in respect thereof), is subject
to the requirement that, if at any time the Committee determines, in its
discretion, that the listing, registration or qualification of Shares issuable
pursuant to the Plan is required by any securities exchange or under any state
or federal law, or the consent or approval of any governmental regulatory body
is necessary or desirable as a condition of, or in connection with, the
issuance of Options, Restricted Shares, Phantom Shares, DERs, other Grants or
other Shares, no payment shall be made, or Phantom Shares or Shares issued or
grant of Restricted Shares or other Grant made, in whole or in part, unless
listing, registration, qualification, consent or approval has been effected or
obtained free of any conditions in a manner acceptable to the Committee. 


(b)          Restrictions
on Transfer. Regardless of whether the offering and sale of Shares under the
Plan has been registered under the Act or has been registered or qualified
under the securities laws of any state, the Company may impose restrictions on
the sale, pledge or other transfer of such Shares (including the placement of
appropriate legends on share certificates) if, in the judgment of the Company
and its counsel, such restrictions are necessary or desirable in order to
achieve compliance with the provisions of the Act, the securities laws of any
state or any other law. In the event that the sale of Shares under the Plan is
not registered under the Act but an exemption is available which requires an
investment representation or other representation, each Director shall be
required to represent that such Shares are being acquired for investment, and
not with a view to the sale or distribution thereof, and to make such other
representations as are deemed necessary or appropriate by the Company and its
counsel. Any determination by the Company and its counsel in connection with
any of the matters set forth in this Section 16 shall be conclusive and binding
on all persons. Without limiting the generality of Section 6, share certificates
evidencing Shares acquired under the Plan pursuant to an unregistered
transaction shall bear a restrictive legend, substantially in the following
form, and such other restrictive legends as are required or deemed advisable
under the provisions of any applicable law: 


"THE
SALE OF THE SECURITIES REPRESENTED HEREBY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT"). ANY TRANSFER OF SUCH SECURITIES
WILL BE INVALID UNLESS A REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT AS
TO SUCH TRANSFER OR IN THE OPINION OF COUNSEL FOR THE ISSUER SUCH REGISTRATION
IS UNNECESSARY IN ORDER FOR SUCH TRANSFER TO COMPLY WITH THE ACT." 


(c)          Registration
or Qualification of Securities. The Company may, but shall not be obligated to,
register or qualify the issuance of Grants and/or the sale of Shares under the
Act or any other applicable law. The Company shall not be obligated to take any
affirmative action in order to cause the issuance of Grants or the sale of
Shares under the Plan to comply with any law. 






18


 







 





 





(d)          Exchange of Certificates. If, in the
opinion of the Company and its counsel, any legend placed on a share certificate
representing Shares sold under the Plan is no longer required, the holder of
such certificate shall, with the permission of the Committee, be entitled to
exchange such certificate for a certificate representing the same number of Shares
but lacking such legend.


(e)          Certain
Loans. Notwithstanding any other provision of the Plan, the Company and the
Series shall not be required to take or permit any action under the Plan or any
Award Agreement which, in the good-faith determination of the Company, would
result in a material risk of a violation by the Company of Section 13(k) of the
Exchange Act. 


17.       COMPLIANCE
WITH SECTION 409A OF THE CODE.  


(a)          Any
Award Agreement issued under the Plan that is subject to Section 409A of the
Code shall include such additional terms and conditions as may be required to
satisfy the requirements of Section 409A of the Code. 


(b)          Notwithstanding
any other provision of the Plan, the Board and the Committee shall administer
the Plan, and exercise authority and discretion under the Plan, to satisfy the
requirements of Section 409A of the Code or any exemption thereto. Nothing
contained herein is intended to provide assurances or an indemnity to any Director
regarding his personal tax treatment. 


(c)          Notwithstanding
anything in the Plan or in any Award Agreement to the contrary, to the extent
that any amount or benefit that would constitute non-exempt "deferred
compensation" for purposes of Section 409A of the Code would otherwise be
payable or distributable, or a different form of payment (e.g., lump sum
or installment) would be effected, under the Plan or any Award Agreement by
reason of the occurrence of a Termination of Service, such amount or benefit
will not be payable or distributable to the Director, and/or such different
form of payment will not be effected, by reason of such circumstance unless the
circumstances giving rise to such Termination of Service meets the description
or definition of "separation from service" in Section 409A of the
Code.  This provision does not prohibit the vesting of any Award upon a
Termination of Service, however defined. If this provision prevents the payment
or distribution of any amount or benefit, or the application of a different
form of payment of any amount or benefit, such payment or distribution shall be
made at the time and in the form that would have applied absent the Termination
of Service. 


   (d)        Notwithstanding
anything in the Plan or in any Award Agreement to the contrary, if any amount
or benefit that would constitute non-exempt "deferred compensation"
for purposes of Section 409A would otherwise be payable or distributable under
this Plan or any Award Agreement by reason of a Termination of Service during a
period in which the Director is a "specified employee" (as defined in
Section 409A of the Code), then, subject to any permissible acceleration of
payment by the Committee under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic
relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment
of employment taxes):  (i) the amount of such non-exempt deferred compensation
that would otherwise be payable during the six-month period immediately
following the Termination of Service will be accumulated through and paid or
provided on the first day of the seventh month following the Termination of
Service (or, if the Director dies during such period, within 30 days after the
Director's death); and (ii) the normal payment or distribution schedule for any
remaining payments or distributions will resume at the end of such delay
period. 


   (e)        If,
pursuant to an Award, a Director is entitled to a series of installment
payments, such Director's right to the "series of installment payments"
(as described in Treas. Reg. Section 1.409A-2(b)(2)(iii)) shall be treated as a
right to a series of separate payments and not to a single payment. 






19


 







 





 





 


18.       AMENDMENT OF
THE PLAN.  The Board may from time to time, with respect to any Shares at
the time not subject to Grants, suspend or discontinue the Plan or revise or
amend it in any respect whatsoever, taking into account applicable laws,
regulations, exchange and accounting rules. The Board may otherwise amend the
Plan as it shall deem advisable, except that no amendment may materially impair
the rights of a Director under an award previously granted without the Director's
consent, unless effected to comply with applicable law or regulation or to meet
the requirements of any accounting standard or to correct an administrative
error. 


19.       APPLICATION OF
FUNDS. The proceeds received by the Company from the sale of Common Shares pursuant
to the exercise of an Option, the sale of Restricted Shares or in connection
with other Grants under the Plan will be used for general corporate purposes. 


20.       TAX WITHHOLDING.
Each Director shall, no later than the date as of which the value of any Grant
first becomes includable in the gross income of the Director for federal income
tax purposes, pay to the Company and/or the applicable Series, or make
arrangements satisfactory to the Company regarding payment of any federal,
state or local taxes of any kind that are required by law to be withheld with
respect to such income. To the extent permitted by the Committee from time to
time, a Director may elect to have such tax withholding satisfied, in whole or
in part, by (i) authorizing the Company and/or the applicable Series to
withhold a number of Shares to be issued pursuant to a Grant equal to the Fair
Market Value thereof as of the date withholding is effected that would satisfy
the withholding amount due or (ii) transferring to the Company and/or the
applicable Series Shares owned by the Director with a Fair Market Value equal
to the amount of the required withholding tax. Notwithstanding anything
contained in the Plan to the contrary, the Director's satisfaction of any
tax-withholding requirements imposed by the Committee shall be a condition
precedent to the Company's and/or the applicable Series' obligation as may otherwise
by provided hereunder to provide Shares to the Director, and the failure of the
Director to satisfy such requirements with respect to a Grant shall cause such
Grant to be forfeited. 


21.       NOTICES.
All notices under the Plan shall be in writing, and if to the Company, shall be
delivered to the Board or mailed to its principal office, addressed to the
attention of the Board; and if to the Director, shall be delivered personally
or mailed to the Director at the address appearing in the records of the Company.
Such addresses may be changed at any time by written notice to the other party
given in accordance with this Section 21.


22.       RIGHTS TO
EMPLOYMENT OR OTHER SERVICE. Nothing in the Plan or in any Grant issued
pursuant to the Plan shall confer on any individual any right to continue in
the service of the Company or a Series or interfere in any way with the right
of the Company, the Series and the members of the Company to terminate the
individual's service at any time. 


23.       EXCULPATION
AND INDEMNIFICATION. To the maximum extent permitted by law, the Company
and the Series shall indemnify and hold harmless the members of the Board and
the members of the Committee, in each case as constituted from time to time,
from and against any and all liabilities, costs and expenses incurred by such
persons as a result of any act or omission to act in connection with the
performance of such person's duties, responsibilities and obligations under the
Plan, other than such liabilities, costs and expenses as may result from the
gross negligence, bad faith, willful misconduct or criminal acts of such
persons. 


24.       NO FUND
CREATED. Any and all payments hereunder to any Director under the Plan
shall be made from the general funds of the applicable Series, no special or
separate fund shall be established or other segregation of assets made to
assure such payments, and the Phantom Shares (including for purposes
of this Section 24 any accounts established to facilitate the implementation of
Section 9(d)(iii)) and any other similar devices issued hereunder to account
for Plan obligations do not constitute Common Shares and shall not be treated
as (or as giving rise to) property or as a trust fund of any kind; provided,
however, that the Company may establish a mere bookkeeping reserve to
meet its or the Series' obligations hereunder or a trust or other funding
vehicle that would not cause the Plan to be deemed to be funded for tax
purposes or for purposes of Title I of the Employee Retirement Income Security
Act of 1974, as amended. The obligations of the Company and the Series under
the Plan are unsecured and constitute a mere promise by the Company and the
Series to make benefit payments in the future and, to the extent that any
person acquires a right to receive payments under the Plan from the Company or
a Series, such right shall be no greater than the right of a general unsecured
creditor of the Company or such Series. Without limiting the foregoing, Phantom
Shares and any other similar devices issued hereunder to account for Plan
obligations are solely a device for the measurement and determination of the
amounts to be paid to a Director under the Plan, and each Director's right in
the Phantom Shares and any such other devices is limited to the right to
receive payment, if any, as may herein be provided. 




20


 







 





 







25.       NO FIDUCIARY
RELATIONSHIP. Nothing contained in the Plan (including without limitation
Section 9(e)(iii)), and no action taken pursuant to the provisions of the Plan,
shall create or shall be construed to create a trust of any kind, or a
fiduciary relationship between the Company, the Series, or the officers of the
Company and/or associated with a Series or the Committee, on the one hand, and
the Director, the Company, the Series or any other person or entity, on the
other. 


26.       CAPTIONS.
The use of captions in the Plan is for convenience. The captions are not
intended to provide substantive rights. 


27.       GOVERNING LAW.
THE PLAN SHALL BE GOVERNED BY THE LAWS OF DELAWARE, WITHOUT REFERENCE TO
PRINCIPLES OF CONFLICT OF LAWS. 


28.     REGIONAL
VARIATION. The Committee reserves the right to authorize the establishment
of, and to grant Awards pursuant to, annexes, sub-plans or other supplementary
documentation as the Committee deems appropriate in light of local law, rules
and customs.


29.     INVALIDITY OF
PROVISIONS. If any provision of the Plan is or becomes invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby. 









21


 







 





 





EXHIBIT A


PERFORMANCE CRITERIA


Performance
Based Grants may be payable upon the attainment of objective performance goals
that are established by the Committee and relate to one or more Performance
Criteria, in each case on specified date or over any period, up to 10 years, as
determined by the Committee. Performance Criteria may be based on the
achievement of the specified levels of performance under one or more of the
measures set out below relative to the performance of one or more other
corporations or indices. 


"Performance
Criteria" means the following business criteria (or any combination
thereof) with respect to one or more of the Company, any Series or any division
or operating unit thereof: 


 i)          
pre-tax income, 


ii)          
after-tax income, 


iii)          net income (meaning net income as
reflected in the Company's or the Series' financial reports for the applicable
period, on an aggregate, diluted and/or per share basis, or economic net
income), 


iv)
         operating income or profit, 


v)           cash flow, free cash flow, cash flow
return on investment (discounted or otherwise), net cash provided by
operations, or cash flow in excess of cost of capital, 


vi)
         earnings per share (basic or diluted), 


vii)
        return on equity, 


viii)
       returns on sales or revenues, 


ix)
         return on invested capital or assets (gross or net), 


x)           cash,
funds or earnings available for distribution, 


xi)
         appreciation in the fair market value of the Common Shares of a Series,



xii)
        operating expenses, 


xiii)
       implementation or completion of critical projects or processes, 


xiv)
       return on investment,


xv)         total return to shareholders associated
with a Series (meaning the aggregate Common Share price appreciation and
dividends paid (assuming full reinvestment of dividends) during the applicable
period), 


xvi)        net earnings growth, 


xvii)       stock appreciation (meaning an increase in
the price or value of the Common Shares of a Series after the date of grant of
an award and during the applicable period), 






22


 







 





 





xviii)      related return
ratios, 


xix)        increase in revenues, 


xx)                     the Company's or a Series' published
ranking against its peer group of real estate investment trusts based on total shareholder
return, 


xxi)        net earnings, 


xxii)       changes (or the absence of changes) in the
per share or aggregate market price of the Common Shares of a Series, 


xxiii)      number of securities sold, 


xxiv)      earnings before or after any one or more of
the following items: interest, taxes, depreciation or amortization, as
reflected in the Company's or a Series' financial reports for the applicable period,



xxv)       total revenue growth (meaning the increase
in total revenues after the date of grant of an award and during the applicable
period, as reflected in the Company's or a Series' financial reports for the
applicable period), 


xxvi)       economic value created,


xxvii)     operating margin or profit margin, 


xxviii)    cost targets, reductions and savings,
productivity and efficiencies, 


xxix)      strategic business criteria, consisting of
one or more objectives based on meeting objectively determinable specified
market penetration, geographic business expansion, investor satisfaction,
employee satisfaction, human resources management, supervision of litigation,
information technology, and goals relating to acquisitions, divestitures, joint
ventures and similar transactions, and budget comparisons, 


xxx)                   objectively determinable
personal professional objectives, including any of the foregoing performance
goals, the implementation of policies and plans, the negotiation of
transactions, the development of long term business goals, formation of joint
ventures, research or development collaborations, and the completion of other
corporate transactions, and 


xxxi)      any combination of, or a specified increase
or improvement in, any of the foregoing. 


 Where
applicable, the Performance Goals may be expressed in terms of attaining a
specified level of the particular criteria or the attainment of a percentage
increase or decrease in the particular criteria, and may be applied to one or
more of the Company, a Series, or a division or operating unit thereof, or may
be applied to the performance of the Company or a Series relative to a market
index, a group of other companies or a combination thereof, all as determined
by the Committee. 


The
Performance Goals may include a threshold level of performance below which no
payment shall be made (or no vesting shall occur), levels of performance at
which specified payments shall be made (or specified
vesting shall occur), and a maximum level of performance above which no
additional payment shall be made (or at which full vesting shall occur). 




23


 







 





 







Except
as otherwise expressly provided, all financial terms are used as defined under U.S.
Generally Accepted Accounting Principles ("GAAP") and all
determinations shall be made in accordance with GAAP, as applied by the Company
in the preparation of its periodic reports to shareholders. 


Unless
the Committee provides otherwise at the time of establishing the performance
goals, for each fiscal year of the Company or a Series, the Committee shall have
the authority to make equitable adjustments to the Performance Goals in
recognition of unusual or non-recurring events affecting the Company or a
Series or the financial statements of the Company or such Series and may
provide for objectively determinable adjustments, as determined in accordance
with GAAP, to any of the Performance Criteria described above for one or more
of the items of gain, loss, profit or expense: (A) determined to be
extraordinary or unusual in nature or infrequent in occurrence, (B) related to
the disposal of a segment of a business, (C) related to a change in accounting
principle under GAAP or a change in applicable laws or regulations, (D) related
to discontinued operations that do not qualify as a segment of a business under
GAAP, and (E) attributable to the business operations of any entity acquired by
the Company or a Series during the fiscal year. 


  









24