IN ATTACHMENT A HERETO, PROVIDED THAT SUCH
ACTIVITIES DO NOT IMPAIR EMPLOYEE'S ABILITY TO PERFORM SERVICES TO THE COMPANY
AS SET FORTH HEREIN.
4.
PLACE OF PERFORMANCE.
THE PRINCIPAL PLACE OF EMPLOYMENT OF
EMPLOYEE SHALL BE AT THE SMITH DIVISION'S OFFICES IN ARLINGTON, VIRGINIA.
5.
COMPENSATION AND RELATED MATTERS.
(A)
BASE SALARY AND BONUS.
DURING THE EMPLOYMENT PERIOD THE COMPANY SHALL PAY
EMPLOYEE A BASE SALARY AT THE RATE OF NOT LESS THAN $500,000 PER YEAR ("BASE
SALARY").
EMPLOYEE'S BASE SALARY SHALL BE PAID IN APPROXIMATELY EQUAL
INSTALLMENTS IN ACCORDANCE WITH THE COMPANY'S CUSTOMARY PAYROLL PRACTICES.
IF
EMPLOYEE'S BASE SALARY IS INCREASED BY THE COMPANY, SUCH INCREASED BASE SALARY
SHALL THEN CONSTITUTE THE BASE SALARY FOR ALL PURPOSES UNDER THIS AGREEMENT.
IN
ADDITION TO BASE SALARY, THE EMPLOYEE (I) MAY BE ENTITLED TO AN ANNUAL INCENTIVE
BONUS ("BONUS") EACH FISCAL YEAR (AT A TARGET OF 50% OF BASE SALARY) AT THE SOLE
DISCRETION OF THE COMPANY, TO BE PAYABLE AT THE SAME TIME AS BONUSES ARE PAID TO
THE SENIOR EXECUTIVE OFFICERS OF THE COMPANY LISTED ON SCHEDULE 1 HERETO (THE
"SENIOR EXECUTIVE OFFICERS"); AND (II) SHALL BE ENTITLED TO PARTICIPATE IN
EXTRAORDINARY BONUS PLANS AND PROGRAMS OF THE COMPANY ALONG WITH OTHER SENIOR
EXECUTIVE OFFICERS ELIGIBLE TO PARTICIPATE IN SUCH PROGRAMS.
NOTWITHSTANDING
THE FOREGOING, EMPLOYEE SHALL RECEIVE A BONUS OF NOT LESS THAN $200,000 FOR THE
COMPANY'S FISCAL YEAR IN WHICH THE COMMENCEMENT DATE OCCURS.
(B)
SHARE OPTIONS. EMPLOYEE SHALL BE GRANTED SHARE OPTIONS TO PURCHASE 125,000
COMMON SHARES OF BENEFICIAL INTEREST ("STOCK") OF THE COMPANY PURSUANT TO THE
TERMS OF THE COMPANY'S 2002 OMNIBUS SHARE PLAN (THE "2002 PLAN") AT A PURCHASE
PRICE PER SHARE EQUAL TO THE FAIR MARKET VALUE OF THE STOCK ON THE DATE THE
OPTIONS ARE GRANTED (THE "OPTIONS").
SUCH OPTIONS SHALL BE GRANTED ON THE
COMMENCEMENT DATE, AND SHALL BE SUBJECT TO THE GENERAL TERMS OF THE 2002 PLAN
AND THE SHARE OPTION AGREEMENT THEREUNDER IN THE FORM ATTACHED HERETO AS EXHIBIT
A.
THE OPTIONS SHALL BECOME EXERCISABLE AT A RATE OF ONE-THIRD (33 1/2 %) AFTER
THE FIRST ANNIVERSARY OF THE DATE OF GRANT, AND AN ADDITIONAL ONE-THIRD (33 1/2
%) ON EACH OF THE SECOND AND THIRD ANNIVERSARIES OF SUCH DATE, PROVIDED EMPLOYEE
REMAINS AN EMPLOYEE OF THE COMPANY ON SUCH RESPECTIVE DATES.
NOTWITHSTANDING
THE FOREGOING, THE OPTIONS WILL ACCELERATE AND BECOME FULLY EXERCISABLE IF (I)
EMPLOYEE IS TERMINATED PURSUANT TO SECTIONS 6(E) OR 6(F), OR (II) UPON THE SALE
OR CHANGE IN CONTROL OF THE COMPANY (COLLECTIVELY, A "SALE").
ANY FUTURE SHARE
OPTION GRANTS SHALL BE MADE TO EMPLOYEE ON COMPARABLE TERMS AS SUCH GRANTS ARE
MADE TO OTHER SENIOR EXECUTIVE OFFICERS.
2
(C)
BENEFIT PLANS.
EMPLOYEE SHALL BE ENTITLED TO PARTICIPATE IN SUCH
RETIREMENT, PENSION, INSURANCE, HEALTH, OR OTHER BENEFIT PLAN OR PROGRAM, FRINGE
BENEFIT OR OTHER PERQUISITE THAT GENERALLY IS PROVIDED BY THE COMPANY FOR OTHER
SENIOR EXECUTIVE OFFICERS OF THE COMPANY, OR WHICH IT MAY ADOPT FROM TIME TO
TIME FOR ITS SENIOR EXECUTIVE OFFICERS, IN