Document:

EX-10.1

Exhibit 10.1

2008 DEVELOPERS DIVERSIFIED REALTY CORPORATION

EQUITY-BASED AWARD PLAN

SECTION 1. Purpose; Definitions.

     The purpose of the 2008 Developers Diversified Realty Corporation Equity-Based Award Plan (the
“Plan”) is to enable Developers Diversified Realty Corporation (the “Company”) and its Subsidiaries
(as defined below) to attract, retain and reward employees and directors of the Company, its
Subsidiaries and Affiliates designated by the Company’s Board of Directors or the Executive
Compensation Committee of the Board and strengthen the mutuality of interests between those
employees and directors and the Company’s shareholders by offering the employees and directors
equity or equity-based incentives thereby increasing their proprietary interest in the Company’s
business and enhancing their personal interest in the Company’s success.

     For purposes of the Plan, the following terms are defined as follows:

(a) “409A Award” means an Award that provides for a deferral of compensation
from the date of grant, as determined under Code Section 409A and the
regulations promulgated thereunder.

(b) “409A Change in Control” has the meaning set forth in Section 12(b)(2).

(c) “Affiliate” means any entity (other than the Company and any Subsidiary)
that is designated by the Board as a participating employer under the Plan.

(d) “Award” means any award of Stock Options, Share Appreciation Rights,
Restricted Shares, Deferred Shares, Share Purchase Rights or Other
Share-Based Awards under the Plan.

(e) “Award Agreement” means an agreement between the Company and a
participant evidencing an Award.

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

(g) “Cause” means, unless otherwise provided by the Committee, (i) “Cause” as
defined in any Individual Agreement to which the participant is a party, or
(ii) if there is no such Individual Agreement or if it does not define Cause:
(A) conviction of the participant for committing a felony under federal law
or in the law of the state in which such action occurred, (B) dishonesty in
the course of fulfilling the participant’s employment duties, (C) willful and
deliberate failure on the part of the participant to perform the
participant’s employment duties in any material respect, or (D) prior to a
Change in Control, such other events as shall be determined by the Committee.
The Committee shall, unless otherwise provided in an Individual Agreement
with the participant, have the sole discretion to determine whether “Cause”
exists, and its determination shall be final.

(h) “Change in Control” has the meaning set forth in Section 12(b)(1).

(i) “Change in Control Price” has the meaning set forth in Section 12(d).

 

 

(j) “Code” means the Internal Revenue Code of 1986, as amended from time to
time, and any successor thereto.

(k) “Committee” means the Executive Compensation Committee of the Board of
the Company or any other committee or subcommittee authorized by the Board to
administer the Plan.

(l) “Company” means Developers Diversified Realty Corporation, an Ohio
corporation, or any successor corporation.

(m) “Deferral Period” has the meaning set forth in Section 8(a).

(n) “Deferred Shares” means an Award of the right to receive Shares at the
end of a specified deferral period granted pursuant to Section 8.

(o) “Disability” means a permanent and total disability as defined in Section
22(e)(3) of the Code.

(p) “Dividend Equivalent” means a right, granted to a participant under
Section 10 hereof, to receive cash, Shares, other Awards or other property
equal in value to dividends paid with respect to a specified number of
Shares, or other periodic payments.

(q) “Elective Deferral Period” has the meaning set forth in Section 8(b)(9).

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

(s) “Fair Market Value” means, as of a given date (in order of
applicability): (i) the closing price of a Common Share on the principal
exchange on which the Common Shares are then trading, if any, on such date,
or if Common Shares were not traded on such date, then on the next preceding
trading day during which a sale occurred; (ii) if Common Shares are not then
traded on an exchange, the mean between the closing representative bid and
asked prices for Common Shares on such date as reported by a national
quotation system; or (iii) if Common Shares are not traded on an exchange and
not quoted on a national quotation system, the mean between the closing bid
and asked prices for Common Shares, on such date, as determined in good faith
by the Committee; or (iv) if Common Shares are not publicly traded, the fair
market value established by the Committee acting in good faith and in
accordance with the applicable requirements of Code Section 409A and the
regulations promulgated thereunder.

(t) “Incentive Stock Option” means any Stock Option intended to be and
designated as, and that otherwise qualifies as, an “Incentive Stock Option”
within the meaning of Section 422 of the Code or any successor section
thereto.

(u) “Individual Agreement” means an employment or similar agreement between a
participant and the Company or one of its Subsidiaries or Affiliates.

(v) “Minimum Deferral Period” has the meaning set forth in Section 8(b)(1).

(w) “Minimum Holding Period” has the meaning set forth in Section 10(b)(1).

 

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(x) “Minimum Restriction Period” has the meaning set forth in Section
7(b)(5).

(y) “Non-Employee Director” has the meaning set forth under Rule 16b-3 under
the Exchange Act.

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

(aa) “Option Agreement” has the meaning set forth in Section 5(b).

(bb) “Other Share-Based Awards” means an Award granted pursuant to Section 10
that is valued, in whole or in part, by reference to, or is otherwise based
on, Shares.

(cc) “Outside Director” has the meaning set forth in Section 162(m) of the
Code and the regulations promulgated thereunder.

(dd) “Plan” means the 2008 Developers Diversified Realty Corporation
Equity-Based Award Plan, as amended from time to time.

(ee) “Potential Change in Control” has the meaning set forth in Section
12(c).

(ff) “Restricted Shares” means an Award of Shares that is granted pursuant to
Section 7 and is subject to restrictions.

(gg) “Restriction Period” has the meaning set forth in Section 7(b)(5).

(hh) “Section 16 Participant” means a participant under the Plan who is
subject to Section 16 of the Exchange Act.

(ii) “Separation from Service” has the meaning set forth in Section
11(b)(1)(C).

(jj) “Share Appreciation Right” means an Award of a right to receive an
amount from the Company that is granted pursuant to Section 6.

(kk) “Shares” means the Common Shares of the Company.

(ll) “Specified Employee” has the meaning set forth in Section 11(b)(1)(D).

(mm) “Stock Option” or “Option” means any option to purchase Shares
(including Restricted Shares and Deferred Shares, if the Committee so
determines) that is granted pursuant to Section 5.

(nn) “Share Purchase Right” means an Award of the right to purchase Shares
that is granted pursuant to Section 9.

(oo) “Subsidiary” means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of the
corporations (other than the last corporation in the unbroken chain) owns
stock possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in that chain.

 

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SECTION 2. Administration.

     The Plan shall be administered by the Committee. The Committee shall consist of not less than
three directors of the Company. It is intended that all members of the Committee shall be
independent directors, Outside Directors and Non-Employee Directors; provided, however, that the
formation and establishment of the Committee and all actions taken by the Committee (or by any
subcommittee or any Committee member) shall be valid and effective even if it is determined that
one or more members of the Committee or any subcommittee does not or may not qualify as an
independent director, Outside Director or a Non-Employee Director. Those directors shall be
appointed by the Board and shall serve as the Committee at the pleasure of the Board. The
functions of the Committee specified in the Plan shall be exercised by the Board if and to the
extent that no Committee exists that has the authority to so administer the Plan.

     The Committee shall have full power to interpret and administer the Plan and full authority to
select the individuals to whom Awards will be granted and to determine the type and amount of any
Award to be granted to each participant, the consideration, if any, to be paid for any Award, the
timing of each Award, the terms and conditions of any Award granted under the Plan, and the terms
and conditions of the related agreements that will be entered into with the participant. As to the
selection of and grant of Awards to participants who are not executive officers or non-employee
directors of the Company, or Section 16 Participants, the Committee may delegate its
responsibilities to members of the Company’s management in any manner consistent with applicable
law.

     The Committee shall have the authority to adopt, alter and repeal such rules, guidelines and
practices governing the Plan as it shall, from time to time, deem advisable; to interpret the terms
and provisions of the Plan and any Award issued under the Plan (and any agreement relating
thereto); to direct employees of the Company or other advisors to prepare such materials or perform
such analyses as the Committee deems necessary or appropriate; and otherwise to supervise the
administration of the Plan.

     Any interpretation or administration of the Plan by the Committee, and all actions and
determinations of the Committee, shall be final, binding and conclusive on the Company, its
shareholders, Subsidiaries, Affiliates, all participants in the Plan, their respective legal
representatives, successors and assigns, and all persons claiming under or through any of them. No
member of the Board or of the Committee shall incur any liability for any action taken or omitted,
or any determination made, in good faith in connection with the Plan.

SECTION 3. Shares Subject to the Plan.

(a) Aggregate Shares Subject to the Plan. Subject to adjustment as provided in
Section 3(c), the total number of Shares reserved and available for Awards under the
Plan is 2,900,000. Any Shares issued hereunder may consist, in whole or in part, of
authorized and unissued shares or treasury shares.

(b) Forfeiture or Termination of Awards of Shares. If any Shares subject to any
Award granted hereunder are forfeited or an Award otherwise terminates or expires
without the issuance of Shares, the Shares subject to that Award shall again be
available for future Awards under the Plan as set forth in Section 3(a), unless the
participant who had been awarded those forfeited Shares or the expired or terminated
Award has theretofore received dividends or other benefits of ownership with respect
to those Shares. For purposes hereof, a participant shall not be deemed to have
received a benefit of ownership with respect to those Shares by the exercise of
voting rights, or by the accumulation of dividends that are not

 

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realized because of the forfeiture of those Shares or the expiration or termination
of the related Award without issuance of those Shares.

(c) Adjustment. In the event of any merger, reorganization, consolidation,
recapitalization, share dividend, share split, combination of shares or other change
in corporate structure of the Company affecting the Shares, a substitution or
adjustment shall be made in the aggregate number of Shares reserved for issuance
under the Plan, in the number and option price of Shares subject to outstanding
options granted under the Plan, in the number and purchase price of Shares subject to
outstanding Share Purchase Rights granted under the Plan, in the number of Share
Appreciation Rights granted under the Plan, in the number of Shares underlying any
Dividend Equivalent Rights granted under the Plan, and in the number of Shares
subject to Restricted Share Awards, Deferred Share Awards and any other outstanding
Awards granted under the Plan, but the number of Shares subject to any Award shall
always be a whole number. The Committee, in its sole discretion, shall determine the
kind of securities or other property substituted and the amount of any substitution
or adjustment made, and the Committee’s determination shall be final, binding and
conclusive. Any fractional Shares otherwise issuable in connection with such
substitution or adjustment shall be eliminated. Notwithstanding the foregoing, no
substitution or adjustment shall be made which will result in an Award becoming
subject to the terms and conditions of Code Section 409A, unless agreed upon by the
Committee and the participant.

(d) Annual Award Limit. No participant may be granted Stock Options or other Awards
under the Plan with respect to an aggregate of more than 500,000 Shares (subject to
adjustment as provided in Section 3(c) hereof) during any calendar year.

SECTION 4. Eligibility.

     Grants may be made from time to time to those officers, employees and directors of the
Company, a Subsidiary or an Affiliate who are designated by the Committee in its sole and exclusive
discretion. Eligible persons may include, but shall not necessarily be limited to, officers and
directors of the Company and any Subsidiary or Affiliate; however, Stock Options intended to
qualify as Incentive Stock Options shall be granted only to eligible persons while actually
employed by the Company, a Subsidiary or an Affiliate. The Committee may grant more than one Award
to the same eligible person. No Award shall be granted to any eligible person during any period of
time when such eligible person is on a leave of absence. Awards to be granted to directors, which
may include members of the Committee, must be approved and granted by the Board.

SECTION 5. Stock Options.

(a) Grant. Stock Options may be granted alone, in addition to or in tandem with
other Awards granted under the Plan or cash or other awards made outside the Plan.
The Committee shall determine the individuals to whom, and the time or times at
which, grants of Stock Options will be made, the number of Shares purchasable under
each Stock Option, and the other terms and conditions of the Stock Options in
addition to those set forth in Sections 5(b) and 5(c).

Stock Options granted under the Plan may be of two types, which shall be indicated on
their face: (i) Incentive Stock Options or (ii) Non-Qualified Stock Options. Subject
to Section

 

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5(c), the Committee shall have the authority to grant to any participant Incentive
Stock Options, Non-Qualified Stock Options or both types of Stock Options.

(b) Terms and Conditions. A Stock Option under the Plan shall be evidenced by an
agreement (an “Option Agreement”), 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 Committee shall determine:

     (1) Option Price. The option price per share of Shares purchasable under a
Non-Qualified Stock Option or an Incentive Stock Option shall be determined by the
Committee at the time of grant and shall be not less than 100% of the Fair Market
Value of the Shares at the date of grant (or, with respect to an Incentive Stock
Option, 110% of the Fair Market Value of the Shares at the date of grant in the case
of a participant who at the date of grant owns Shares possessing more than 10% of the
total combined voting power of all classes of stock of the Company or its parent or
Subsidiary corporations (as determined under Sections 424(d), (e) and (f) of the
Code)).

     (2) Option Term. The term of each Stock Option shall be determined by the
Committee, but may not exceed ten years from the date the Option is granted (or, with
respect to an Incentive Stock Option, five years in the case of a participant who at
the date of grant owns Shares possessing more than 10% of the total combined voting
power of all classes of stock of the Company or its parent or Subsidiary corporations
(as determined under Sections 424(d), (e) and (f) of the Code)).

     (3) Exercise. Stock Options shall be exercisable at such time or times and
shall be subject to such terms and conditions as shall be determined by the Committee
at or after grant and permitted by Code Section 409A or agreed upon in writing by the
Committee and the participant; but, except as provided in Section 5(b)(6) and Section
12, unless otherwise determined by the Committee at or after grant, no Stock Option
shall be exercisable prior to six months and one day following the date of grant. If
any Stock Option is exercisable only in installments or only after specified exercise
dates, subject to Section 15(a), the Committee may waive, in whole or in part, such
installment exercise provisions, and may accelerate any exercise date or dates, at
any time at or after grant, based on such factors as the Committee shall determine in
its sole discretion; provided, however, the Committee may not waive, without the
participant’s consent, such installment exercise provisions or accelerate any
exercise dates with respect to a 409A Award if doing so would result in any adverse
tax consequences for the optionee under Code Section 409A and the regulations
promulgated thereunder.

     (4) Method of Exercise. Subject to any installment exercise provisions that
apply with respect to any Stock Option, Code Section 409A and the regulations
promulgated thereunder, and Section 5(b)(3), a Stock Option may be exercised in whole
or in part, at any time during the Option period, by the holder thereof giving to the
Company written notice of exercise specifying the number of Shares to be purchased.

     That notice shall be accompanied by payment in full of the Option price of the
Shares for which a Stock Option is exercised, and the Committee shall determine the
acceptable form of consideration for exercising a Stock Option, including the method
of payment, either through the terms of the Option Agreement or at the time of
exercise of a Stock Option. Acceptable forms of consideration may include:

 

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(A) cash;

(B) check or wire transfer (denominated in U.S. Dollars);

(C) subject to any conditions or limitations established by the
Committee, other Shares which (A) in the case of Shares acquired from
the Company (whether upon the exercise of a Stock Option or
otherwise), have been owned by the participant for more than six
months on the date of surrender (unless this condition is waived by
the Committee), and (B) have a Fair Market Value on the date of
surrender equal to or greater than the aggregate exercise price of the
Shares as to which said Stock Option is being exercised (it being
agreed that the excess of the Fair Market Value over the aggregate
exercise price shall be refunded to the participant in cash);

(D) subject to any conditions or limitations established by the
Committee, the Company withholding shares otherwise issuable upon
exercise of a Stock Option;

(E) consideration received by the Company under a broker-assisted sale
and remittance program acceptable to the Committee;

(F) such other consideration and method of payment for the issuance of
Shares to the extent permitted by applicable law; or

(G) any combination of the foregoing methods of payment.

     No Shares shall be issued upon exercise of an Option until full payment has been
made. Except in connection with the tandem award of Dividend Equivalent Rights, a
participant shall not have rights to dividends or any other rights of a shareholder
with respect to any Shares subject to an Option unless and until the participant has
given written notice of exercise, has paid in full for those Shares, has given, if
requested, the representation described in Section 15(b), and those Shares have been
issued to the participant.

     (5) Non-Transferability of Options. No Stock Option shall be transferable by
any participant other than by will or by the laws of descent and distribution or
pursuant to a qualified domestic relations order (as defined in the Code or the
Employee Retirement Income Security Act of 1974, as amended) except that, if so
provided in the Option Agreement, the participant may transfer the Option, other than
an Incentive Stock Option, during the participant’s lifetime to one or more members
of the participant’s family, to one or more trusts for the benefit of one or more of
the participant’s family, or to a partnership or partnerships of members of the
participant’s family, or to a charitable organization as defined in Section 501(c)(3)
of the Code, provided that the transfer would not result in the loss of any exemption
under Rule 16b-3 of the Exchange Act with respect to any Option. The transferee of
an Option will be subject to all restrictions, terms and conditions applicable to the
Option prior to its transfer, except that the Option will not be further transferable
by the transferee other than by will or by the laws of descent and distribution.

     (6) Termination of Employment

	 	(i)	 	Termination by Death. Subject to Sections
5(b)(3) and 5(c), if any participant’s employment with the Company or
any Subsidiary or Affiliate

 

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terminates by reason of death, any Stock Option held by that
participant shall become immediately and automatically vested and
exercisable. If termination of a participant’s employment is due to
death, then any Stock Option held by that participant may thereafter
be exercised for a period of two years (or with respect to an
Incentive Stock Option, for a period of one year) (or such other
period as the Committee may specify at or after grant) from the date
of death. Notwithstanding the foregoing, in no event will any Stock
Option be exercisable after the expiration of the option period of
such Option. The balance of the Stock Option shall be forfeited if
not exercised within two years (or one year with respect to Incentive
Stock Options).

	 	(ii)	 	Termination by Reason of Disability. Subject to
Sections 5(b)(3) and 5(c), if a participant’s employment with the
Company or any Subsidiary or Affiliate terminates by reason of
Disability, any Stock Option held by that participant shall become
immediately and automatically vested and exercisable. If termination of
a participant’s employment is due to Disability, then any Stock Option
held by that participant may thereafter be exercised by the participant
or by the participant’s duly authorized legal representative if the
participant is unable to exercise the Option as a result of the
participant’s Disability, for a period of two years (or with respect to
an Incentive Stock Option, for a period of one year) (or such other
period as the Committee may specify at or after grant) from the date of
such termination of employment; and if the participant dies within that
two year period (or such other period as the Committee may specify at or
after grant), any unexercised Stock Option held by that participant
shall thereafter be exercisable by the estate of the participant (acting
through its fiduciary) for the duration of the two-year period from the
date of that termination of employment. Notwithstanding the foregoing,
in no event will any Stock Option be exercisable after the expiration of
the option period of such Option. The balance of the Stock Option shall
be forfeited if not exercised within two years (or one year with respect
to Incentive Stock Options).
	 
	 	(iii)	 	Termination for Cause. Unless otherwise
determined by the Committee (subject to Section 15(a)) at or after the
time of granting any Stock Option, if a participant’s employment with
the Company or any Subsidiary or Affiliate terminates for Cause, any
unvested Stock Options will be forfeited and terminated immediately upon
termination and any vested Stock Options held by that participant shall
terminate 30 days after the date employment terminates. Notwithstanding
the foregoing, in no event will any Stock Option be exercisable after
the expiration of the option period of such Option. The balance of the
Stock Option shall be forfeited if not exercised within 30 days.
	 
	 	(iv)	 	Other Termination. Unless otherwise determined
by the Committee (subject to Section 15(a)) at or after the time of
granting any Stock Option, if a participant’s employment with the
Company or any Subsidiary or Affiliate terminates for any reason other
than death, Disability, or for Cause all Stock Options held by that
participant shall terminate 90 days after the date employment
terminates. Notwithstanding the foregoing, in no event will any Stock
Option be exercisable after the expiration of the option period of such

 

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Option. The balance of the Stock Option shall be forfeited if not
exercised within 90 days.

	 	(v)	 	Leave of Absence. In the event a participant is
granted a leave of absence by the Company or any Subsidiary or Affiliate
to enter military service or because of sickness, the participant’s
employment with the Company or such Subsidiary or Affiliate will not be
considered terminated, and the participant shall be deemed an employee
of the Company or such Subsidiary or Affiliate during such leave of
absence or any extension thereof granted by the Company or such
Subsidiary or Affiliate. Notwithstanding the foregoing, in the case of
an Incentive Stock Option, a leave of absence of more than 90 days will
be viewed as a termination of employment unless continued employment is
guaranteed by contract or statute.

(c) Incentive Stock Options. Notwithstanding Sections 5(b)(5) and (6), an Incentive
Stock Option shall be exercisable by (i) a participant’s authorized legal
representative (if the participant is unable to exercise the Incentive Stock Option
as a result of the participant’s Disability) only if, and to the extent, permitted by
Section 422 of the Code and (ii) by the participant’s estate, in the case of death,
or authorized legal representative, in the case of Disability, no later than 10 years
from the date the Incentive Stock Option was granted (in addition to any other
restrictions or limitations that may apply). Anything in the Plan to the contrary
notwithstanding, no term or provision of the Plan relating to Incentive Stock Options
shall be interpreted, amended or altered, nor shall any discretion or authority
granted under the Plan be exercised, so as to disqualify the Plan under Section 422
of the Code, or, without the consent of the participants affected, to disqualify any
Incentive Stock Option under that Section 422 or any successor Section thereto.

(d) Buyout Provisions. The Committee may at any time buy out for a payment in cash,
Shares, Deferred Shares or Restricted Shares, an Option previously granted, based on
such terms and conditions as the Committee shall establish and agree upon with the
participant, but (i) no such transaction involving a Section 16 Participant shall be
structured or effected in a manner that would result in any liability on the part of
the participant under Section 16(b) of the Exchange Act or the rules and regulations
promulgated thereunder, and (ii) no such transaction may buy out or cancel
outstanding Options or Share Appreciation Rights in exchange for cash, Options, Share
Appreciation Rights or other Awards with an exercise price that is less than the
exercise price of the original Options or Share Appreciation Rights without
shareholder approval. Further, any such buy out shall comply with the requirements
of Code Section 409A and the regulations promulgated thereunder, unless otherwise
agreed upon in writing by the Committee and the participant.

SECTION 6. Share Appreciation Rights.

(a) Grant. Share Appreciation Rights may be granted in connection with all or any
part of an Option, either concurrently with the grant of the Option or, if the Option
is a Non-Qualified Stock Option, by an amendment to the Option at any time thereafter
during the term of the Option. Share Appreciation Rights may be exercised in whole
or in part at such times and under such conditions as may be specified by the
Committee in the participant’s Option Agreement; provided, that no Share Appreciation
Right granted in connection with all or any part of an Option shall be exercisable
for less than the Fair Market Value of the underlying Common Shares as of the date of
the original grant of the Option unless such

 

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Share Appreciation Right or Option is a 409A Award, as provided for in the applicable
Award Agreement.

(b) Terms and Conditions. The following terms and conditions will apply to all Share
Appreciation Rights that are granted in connection with Options:

     (1) Rights. Share Appreciation Rights shall entitle the participant, upon
exercise of all or any part of the Share Appreciation Rights, to surrender to the
Company, unexercised, that portion of the underlying Option relating to the same
number of Shares as is covered by the Share Appreciation Rights (or the portion of
the Share Appreciation Rights so exercised) and to receive in exchange from the
Company an amount equal to the excess of (x) the Fair Market Value, on the date of
exercise, of the Shares covered by the surrendered portion of the underlying Option
over (y) the exercise price of the Shares covered by the surrendered portion of the
underlying Option. The Committee may limit the amount that the participant will be
entitled to receive upon exercise of the Share Appreciation Right, as provided for in
the applicable Award Agreement.

     (2) Surrender of Option. Upon the exercise of the Share Appreciation Right and
surrender of the related portion of the underlying Option, the Option, to the extent
surrendered, will not thereafter be exercisable. The underlying Option may provide
that such Share Appreciation Rights will be payable solely in cash.

     (3) Exercise. In addition to any further conditions upon exercise that may be
imposed by the Committee, the Share Appreciation Rights shall be exercisable only to
the extent that the related Option is exercisable, except that, unless otherwise
determined by the Committee at or after grant, in no event will a Share Appreciation
Right held by a Section 16 Participant be exercisable within the first six months
after it is awarded even though the related Option is or becomes exercisable, and
each Share Appreciation Right will expire no later than the date on which the related
Option expires. A Share Appreciation Right may be exercised only at a time when the
Fair Market Value of the Shares covered by the Share Appreciation Right exceeds the
exercise price of the Shares covered by the underlying Option.

     (4) Method of Exercise. Share Appreciation Rights may be exercised by the
participant giving written notice of the exercise to the Company, stating the number
of Share Appreciation Rights the participant has elected to exercise and surrendering
the portion of the underlying Option relating to the same number of Shares as the
number of Share Appreciation Rights elected to be exercised.

     (5) Payment. The manner in which the Company’s obligation arising upon the
exercise of the Share Appreciation Right will be paid will be determined by the
Committee and shall be set forth in the participant’s Option Agreement. The
Committee may provide for payment in Shares or cash, or a fixed combination of Shares
or cash, or the Committee may reserve the right to determine the manner of payment at
the time the Share Appreciation Right is exercised. Shares issued upon the exercise
of a Share Appreciation Right will be valued at their Fair Market Value on the date
of exercise.

 

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SECTION 7. Restricted Shares.

(a) Grant. Restricted Shares may be issued alone, in addition to or in tandem with
other Awards under the Plan or cash or other awards made outside the Plan. The
Committee shall determine the individuals to whom, and the time or times at which,
grants of Restricted Shares will be made, the number of Restricted Shares to be
awarded to each participant, the price (if any) to be paid by the participant
(subject to Section 7(b)), the date or dates upon which Restricted Share Awards will
vest, the period or periods within which those Restricted Share Awards may be subject
to forfeiture, and the other terms and conditions of those Awards in addition to
those set forth in Section 7(b).

     The Committee may condition the grant of Restricted Shares upon the attainment
of specified performance goals or such other factors as the Committee may determine
in its sole discretion.

(b) Terms and Conditions. Restricted Shares awarded under the Plan shall be subject
to the following terms and conditions and such additional terms and conditions, not
inconsistent with the provisions of the Plan, as the Committee shall deem desirable.
A participant who receives a Restricted Share Award shall not have any rights with
respect to that Award, unless and until the participant has executed an agreement
evidencing the Award in the form approved from time to time by the Committee, has
delivered a fully executed copy thereof to the Company, and has otherwise complied
with the applicable terms and conditions of that Award.

     (1) The purchase price (if any) for Restricted Shares shall be determined by the
Committee at the time of grant.

     (2) Awards of Restricted Shares must be accepted by executing a Restricted Share
Award Agreement and paying the price (if any) that is required under Section 7(b)(1).

     (3) Each participant receiving a Restricted Share Award shall be issued a stock
certificate in respect of those Restricted Shares. The certificate shall be
registered in the name of the participant and shall bear an appropriate legend
referring to the terms, conditions and restrictions applicable to the Award.

     (4) The Committee shall require that the stock certificates evidencing the
Restricted Shares be held in custody by the Company until the restrictions thereon
shall have lapsed, and that, as a condition of any Restricted Shares Award, the
participant shall have delivered to the Company a stock power, endorsed in blank,
relating to the Shares covered by that Award.

     (5) Subject to the provisions of this Plan and the Restricted Share Award
Agreement, during a period set by the Committee commencing with the date of any Award
(the “Restriction Period”), the participant shall not be permitted to sell, transfer,
pledge, assign or otherwise encumber the Restricted Shares covered by that Award.
Subject to Section 15(a), the Restriction Period shall not be less than three years
in duration with respect to a non-performance-based Restricted Share Award or less
than a one year performance period with respect to a performance-based Restricted
Share Award (“Minimum Restriction Period”). For clarification, if a Restricted Share
Award vests in installments, the duration of the Restriction Period shall be measured
from the date of grant of the Restricted Share Award until the date of vesting of the
last installment. Subject to Section 15(a), a non-performance-

 

Page 11

 

 

based Restricted Share Award can vest no more favorably than one-third of the
Restricted Share Award each year, and a performance-based Restricted Share Award can
vest no earlier than expiration of the one year performance period. Subject to these
limitations and the Minimum Restriction Period requirement, the Committee, in its
sole discretion, may provide for the lapse of restrictions in installments and,
subject to Section 15(a), may accelerate or waive restrictions, in whole or in part,
based on service, performance or such other factors and criteria as the Committee may
determine in its sole discretion.

     (6) Except as provided in this Section 7(b)(6) and Sections 7(b)(5) and 7(b)(7),
the participant shall have, with respect to the Restricted Shares awarded, all of the
rights of a shareholder of the Company, including the right to vote the Shares and
the right to receive any dividends. The Committee, in its sole discretion, as
determined at the time of Award, may permit or require the payment of cash dividends
to be deferred and subject to forfeiture and, if the Committee so determines,
reinvested, subject to Section 15(g), in additional Restricted Shares to the extent
Shares are available under Section 3, or otherwise reinvested. Unless the Committee
or Board determines otherwise, Share dividends issued with respect to Restricted
Shares shall be treated as additional Restricted Shares that are subject to the same
restrictions and other terms and conditions that apply to the Shares with respect to
which such dividends are issued.

     (7) No Restricted Shares shall be transferable by a participant other than by
will or by the laws of descent and distribution or pursuant to a qualified domestic
relations order (as defined in the Code or the Employee Retirement Income Security
Act of 1974, as amended) except that, if so provided in the Restricted Shares
Agreement, the participant may transfer the Restricted Shares, during the
participant’s lifetime to one or more members of the participant’s family, to one or
more trusts for the benefit of one or more of the participant’s family, to a
partnership or partnerships of members of the participant’s family, or to a
charitable organization as defined in Section 501(c)(3) of the Code, provided that
the transfer would not result in the loss of any exemption under Rule 16b-3 of the
Exchange Act with respect to any Restricted Shares. The transferee of Restricted
Shares will be subject to all restrictions, terms and conditions applicable to the
Restricted Shares prior to its transfer, except that the Restricted Shares will not
be further transferable by the transferee other than by will or by the laws of
descent and distribution.

     (8) Unless otherwise determined by the Committee at or after the time of
granting any Restricted Shares, if a participant’s employment with the Company or any
Subsidiary or Affiliate terminates by reason of death, any Restricted Shares held by
that participant shall thereafter vest and any restriction shall lapse.

     (9) Unless otherwise determined by the Committee at or after the time of
granting any Restricted Shares, if a participant’s employment with the Company or any
Subsidiary or Affiliate terminates by reason of Disability, any Restricted Shares
held by that participant shall thereafter vest and any restriction shall lapse.

     (10) Subject to Section 15(a), unless otherwise determined by the Committee at
or after the time of granting any Restricted Shares, if a participant’s employment
with the Company or any Subsidiary or Affiliate terminates for any reason other than
death or Disability, the Restricted Shares held by that participant that are unvested
or subject to restriction at the time of termination shall thereupon be forfeited.

 

Page 12

 

 

(c) Minimum Value. In order to better ensure that Award payments actually reflect
the performance of the Company and service of the participant, the Committee may
provide, in its sole discretion, for a tandem performance-based or other award
designed to guarantee a minimum value, payable in cash or Shares, to the recipient of
a Restricted Share Award, subject to such performance, future service, deferral and
other terms and conditions as may be specified by the Committee.

SECTION 8. Deferred Shares.

(a) Grant. Deferred Shares may be awarded alone, in addition to or in tandem with
other Awards granted under the Plan or cash or other awards made outside the Plan.
The Committee shall determine the individuals to whom, and the time or times at
which, Deferred Shares shall be awarded, the number of Deferred Shares to be awarded
to any participant, the duration of the period (the “Deferral Period”) during which,
and the conditions under which, receipt of the Shares will be deferred, and the other
terms and conditions of the Award in addition to those set forth in Section 8(b).

     The Committee may condition the grant of Deferred Shares upon the attainment of
specified performance goals or such other factors as the Committee shall determine in
its sole discretion.

(b) Terms and Conditions. Deferred Share Awards 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 Committee shall deem desirable:

     (1) The purchase price for Deferred Shares shall be determined at the time of
grant by the Committee. Subject to the provisions of the Plan and the Award Agreement
referred to in Section 8(b)(10), Deferred Share Awards may not be sold, assigned,
transferred, pledged or otherwise encumbered during the Deferral Period. At the
expiration of the Deferral Period (or the Elective Deferral Period referred to in
Section 8(b)(9), where applicable), share certificates shall be delivered to the
participant, or the participant’s legal representative, for the Shares covered by the
Deferred Share Award. Subject to Section 15(a), the Deferral Period applicable to
any Deferred Share Award shall not be less than three years in duration with respect
to a non-performance-based Deferred Share Award or less than a one year performance
period with respect to a performance-based Deferred Share Award (“Minimum Deferral
Period”). For clarification, if a Deferred Share Award vests in installments, the
duration of the Deferral Period shall be measured from the date of grant of the
Deferred Share Award until the date of vesting of the last installment. Subject to
Section 15(a), a non-performance-based Deferred Share Award can vest no more
favorably than one-third of the Deferred Share Award each year, and a
performance-based Deferred Share Award can vest no earlier than expiration of the one
year performance period.

     (2) To the extent a Deferred Share Award is a 409A Award, the Committee will
grant the Award in a manner as to comply with the requirements of Code Section 409A
and the regulations promulgated thereunder and in accordance with Section 11(b).

     (3) Amounts equal to any dividends declared during the Deferral Period with
respect to the number of Shares covered by a Deferred Share Award will be paid to the
participant in cash, deferred or deemed to be reinvested in additional Deferred
Shares that are subject to the same restrictions and other terms and conditions that
apply to the Deferred

 

Page 13

 

 

Shares with respect to which such dividends are issued, all as determined by the
Committee, in its sole discretion, at the time of the Award.

     (4) No Deferred Shares shall be transferable by a participant other than by will
or by the laws of descent and distribution or pursuant to a qualified domestic
relations order (as defined in the Code or the Employee Retirement Income Security
Act of 1974, as amended) except that, if so provided in the Deferred Shares
Agreement, the participant may transfer the Deferred Shares during the participant’s
lifetime to one or more members of the participant’s family, to one or more trusts
for the benefit of one or more of the participant’s family, to a partnership or
partnerships of members of the participant’s family, or to a charitable organization
as defined in Section 501(c)(3) of the Code, provided that the transfer would not
result in the loss of any exemption under Rule 16b-3 of the Exchange Act with respect
to any Deferred Shares. The transferee of Deferred Shares will be subject to all
restrictions, terms and conditions applicable to the Deferred Shares prior to their
transfer, except that the Deferred Shares will not be further transferable by the
transferee other than by will or by the laws of descent and distribution.

     (5) Unless otherwise determined by the Committee at the time of granting any
Deferred Shares, if a participant’s employment by the Company or any Subsidiary or
Affiliate terminates by reason of death, any Deferred Shares held by such participant
shall thereafter vest or any restriction shall lapse, and the participant’s
representative shall receive the Deferred Shares in one lump sum within 10 business
days following such death; provided, however, that the participant’s representative
must first provide satisfactory proof of death to the Committee.

     (6) Unless otherwise determined by the Committee at the time of granting any
Deferred Shares, if a participant’s employment by the Company or any Subsidiary or
Affiliate terminates by reason of Disability, any Deferred Shares held by such
participant shall thereafter vest or any restriction lapse, and the participant or
the participant’s representative shall be issued the Deferred Shares in one lump sum
within 10 business days following such Disability. A determination of Disability
shall be made by the Committee.

     (7) Subject to Section 15(a), unless otherwise determined by the Committee at or
after the time of granting any Deferred Share Award, if a participant’s employment by
the Company or any Subsidiary or Affiliate terminates for any reason other than death
or Disability, all Deferred Shares held by such participant which are unvested or
subject to restriction shall thereupon be forfeited.

     (8) Based on service, performance or such other factors or criteria as the
Committee may determine and subject to Section 15(a), the Committee may, at or after
grant, accelerate the vesting of all or any part of any Deferred Share Award, subject
in all cases to the Minimum Deferral Period requirement.

     (9) A participant may elect to further defer receipt of a Deferred Share Award
(or an installment of an Award) for a specified period or until a specified event
(the “Elective Deferral Period”), subject in each case to the Committee’s approval,
the terms of this Section 8, such other terms as are determined by the Committee, all
in its sole discretion, and in compliance with the terms and conditions of Code
Section 409A and the regulations promulgated thereunder. Subject to any exceptions
approved by the Committee, such election must be made at least 12 months prior to the
date the Deferral Period is set to expire and the Elective Deferral Period must be
for a period of at least five years from the date the

 

Page 14

 

 

Deferral Period is set to expire, except to the extent the holder of a Deferred
Share becomes entitled to receive the underlying Shares due to death or Disability.

     (10) Each such Award shall be confirmed by, and subject to the terms of, a
Deferred Share Award Agreement evidencing the Award in the form approved from time to
time by the Committee.

(c) Minimum Value Provisions. In order to better ensure that Award payments actually
reflect the performance of the Company and service of the participant, the Committee
may provide, in its sole discretion, for a tandem performance-based or other Award
designed to guarantee a minimum value, payable in cash or Shares to the recipient of
a Deferred Share Award, subject to such performance, future service, deferral and
other terms and conditions as may be specified by the Committee.

SECTION 9. Share Purchase Rights.

(a) Grant. Share Purchase Rights may be granted alone, in addition to or in tandem
with other Awards granted under the Plan or cash or other awards made outside the
Plan. The Committee shall determine the individuals to whom, and the time or times
at which, grants of Share Purchase Rights will be made, the number of Shares which
may be purchased pursuant to the Share Purchase Rights, and the other terms and
conditions of the Share Purchase Rights in addition to those set forth in Section
9(b). The Shares subject to the Share Purchase Rights may be purchased, as
determined by the Committee at the time of grant:

     (1) at the Fair Market Value of such Shares on the date of grant; or

     (2) at 85% of the Fair Market Value of such Shares on the date of grant if the
grant of Share Purchase Rights is made in lieu of cash compensation.

Subject to Section 9(b) hereof, the Committee may also impose such deferral,
forfeiture or other terms and conditions as it shall determine, in its sole
discretion, on such Share Purchase Rights or the exercise thereof.

Each Share Purchase Right Award shall be confirmed by, and be subject to the terms
of, a Share Purchase Rights Agreement, which shall be in form approved by the
Committee.

(b) Terms and Conditions. Share Purchase Rights may contain such additional terms
and conditions not inconsistent with the terms of the Plan as the Committee shall
deem desirable, and shall generally be exercisable for such period as shall be
determined by the Committee. However, unless otherwise determined by the Committee
at or after grant, Share Purchase Rights granted to Section 16 Participants shall not
become exercisable earlier than six months and one day after the grant date. Share
Purchase Rights shall not be transferable by a participant other than by will or by
the laws of descent and distribution.

SECTION 10. Other Share-Based Awards.

(a) Grant. Other Awards of Shares and other Awards that are valued, in whole or in
part, by reference to, or are otherwise based on, Shares, including, without
limitation, performance shares, convertible preferred shares, convertible debentures,
exchangeable

 

Page 15

 

 

securities, dividend equivalent rights and Share Awards or options valued by
reference to book value or Subsidiary performance, may be granted alone, in addition
to or in tandem with other Awards granted under the Plan or cash or other awards made
outside the Plan.

At the time the Shares or Other Share-Based Awards are granted, the Committee shall
determine the individuals to whom and the time or times at which such Shares or Other
Share-Based Awards shall be awarded, the number of Shares to be used in computing an
Award or which are to be awarded pursuant to such Awards, the consideration, if any,
to be paid for such Shares or Other Share-Based Awards, and all other terms and
conditions of the Awards in addition to those set forth in Section 10(b). The
Committee will also have the right, at its sole discretion, to settle such Awards in
Shares, Restricted Shares or cash in an amount equal to the Fair Market Value of the
Shares or Other Share-Based Awards at the time of settlement.

The provisions of Other Share-Based Awards need not be the same with respect to each
participant.

(b) Terms and Conditions. Other Share-Based Awards 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 Committee shall deem desirable:

     (1) Subject to the provisions of this Plan and the Award Agreement referred to
in Section 10(b)(5) below, Shares awarded or subject to Awards made under this
Section 10 may not be sold, assigned, transferred, pledged or otherwise encumbered
prior to the date on which the Shares are issued, or, if later, the date on which any
applicable restriction, performance, holding or deferral period or requirement is
satisfied or lapses. Subject to Section 15(a), unless otherwise determined by the
Committee at or after grant, all Shares or Other Share-Based Awards granted under
this Section 10 shall be subject to a minimum holding period (including any
applicable restriction, performance and/or deferral periods) of three years in
duration with respect to a non-performance-based Other Share-Based Award or a minimum
one year performance period with respect to a performance-based Other Share-Based
Award (the “Minimum Holding Period”). For clarification, if an Other Share-Based
Award vests in installments, the duration of the Minimum Holding Period shall be
measured from the date of grant of the Other Share-Based Award until the date of
vesting of the last installment. Subject to Section 15(a), a non-performance-based
Other Share-Based Award can vest no more favorably than one-third of the Other
Share-Based Award each year, and a performance-based Other Share-Based Award can vest
no earlier than expiration of the one year performance period.

     (2) Subject to the provisions of this Plan and the Award Agreement and unless
otherwise determined by the Committee at the time of grant, the recipient of an Other
Share-Based Award shall be entitled to receive, currently or on a deferred basis,
interest or dividends or interest or dividend equivalents with respect to the number
of Shares covered by the Award, as determined at the time of the Award by the
Committee, in its sole discretion, subject, if applicable, to the provisions of Code
Section 409A and the regulations promulgated thereunder, and the Committee may
provide that such amounts (if any) shall be deemed to have been reinvested in
additional Shares or otherwise reinvested.

     (3) Subject to the Minimum Holding Period, any Other Share-Based Award and any
Shares covered by any such Award shall vest or be forfeited to the extent, at the
times

 

Page 16

 

 

and subject to the conditions, if any, provided in the Award Agreement, as
determined by the Committee in its sole discretion.

     (4) In the event of the participant’s Disability or death, or, subject to
Section 15(a), in cases of special circumstances, the Committee may, in its sole
discretion, waive, in whole or in part, any or all of the remaining limitations
imposed hereunder or under any related Award Agreement (if any) with respect to any
part or all of any Award under this Section 10. Notwithstanding the foregoing, the
Committee may not waive, in whole or in part, any remaining limitations imposed with
respect to any Award if such waiver results in an Award’s failure to comply with the
requirements of Code Section 409A and the regulations promulgated thereunder, unless
agreed upon in writing by the Committee and Participant.

     (5) Each Award shall be confirmed by, and subject to the terms of, an agreement
or other instrument evidencing the Award in the form approved from time to time by
the Committee, the Company and the participant.

     (6) Shares (including securities convertible into Shares) issued under this
Section 10 on a bonus basis may be issued for no cash consideration. Shares
(including securities convertible into Shares) purchased pursuant to a purchase right
awarded under this Section 10 shall bear a price of at least 85% of the Fair Market
Value of the Shares on the date of grant. The purchase price of such Shares, and of
any Other Share-Based Award granted hereunder, or the formula by which such price is
to be determined, shall be fixed by the Committee at the time of grant.

     (7) In the event that any “derivative security,” as defined in Rule 16a-1(c) (or
any successor thereto) promulgated by the Securities and Exchange Commission under
Section 16 of the Exchange Act, is awarded pursuant to this Section 10 to any Section
16 Participant, such derivative security shall not be transferable other than by will
or by the laws of descent and distribution.

(c) Dividend Equivalent Rights. A Dividend Equivalent Right is an Award entitling
the participant to receive credits based on cash distributions that would have been
paid on the Shares specified in the Dividend Equivalent Right (or other Award to
which it relates) if such Shares had been issued to and held by the participant. A
Dividend Equivalent Right may be granted hereunder to any participant as a component
of another Award or as a freestanding award.

     (1) Terms and Conditions. In addition to the terms and conditions set forth in
Section 10(b), Dividend Equivalent Rights shall be subject to the following
additional terms and conditions. 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, which may thereafter accrue additional Dividend Equivalent Rights.
Any such reinvestment shall be at Fair Market Value on the date of reinvestment.
Dividend Equivalent Rights may be settled in cash or Shares or a combination thereof,
in a single installment or installments, all determined in the sole discretion of the
Committee. A Dividend Equivalent Right granted as a component of another Award may
provide that such Dividend Equivalent Right shall be settled upon exercise,
settlement, or payment of, or lapse of restrictions on, such other Award, and that
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 another Award may also contain terms and conditions different from such
other Award.

 

Page 17

 

 

     (2) 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 Award Agreement 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.

     (3) Termination of Employment. Except as may otherwise be provided by the
Committee either in the Award Agreement or in writing after the Award Agreement is
issued, a participant’s rights in all Dividend Equivalent Rights or interest
equivalents (other than any accrued but unpaid Dividend Equivalent Rights or interest
equivalents) shall automatically terminate upon the date that a participant’s
employment with the Company or any Subsidiary or Affiliate terminates for any reason
other than death or Disability. Any accrued but unpaid Dividend Equivalent Rights or
interest equivalents shall be paid in one lump sum amount by the Company within 90
days after the termination of the participant’s employment with the Company or any
Subsidiary or Affiliate.

SECTION 11. Form and Timing of Payment under Awards; Deferrals.

(a) Form and Timing of Payment. Subject to the terms of the Plan and any applicable
Award Agreement (as may be amended pursuant to Section 13 hereof), payments to be
made by the Company, a Subsidiary or Affiliate upon the exercise of an Option or
other Award or settlement of an Award may be made in such forms as the Committee
shall determine, including, without limitation, cash, Shares, other Awards or other
property, and may be made in a single payment or transfer, in installments, or on a
deferred basis; provided, however that settlement in other than Shares or payment on
a deferred basis must be authorized by the applicable Award Agreement. The
settlement of any Award may be accelerated and cash paid in lieu of Shares in
connection with such settlement; provided, however that settlement in cash must be
authorized by the applicable Award Agreement. The acceleration of any Award that
does not result in a cash settlement must also be authorized by the applicable Award
Agreement. Installment or deferred payments may be required by the Committee or
permitted at the election of the participant on terms and conditions approved by the
Committee, including without limitation the ability to defer awards pursuant to any
deferred compensation plan maintained by the Company, a Subsidiary or Affiliate.
Payments may include, without limitation, provisions for the payment or crediting of
a reasonable interest rate on installment or deferred payments or the grant or
crediting of Dividend Equivalents or other amounts in respect of installment or
deferred payments denominated in Shares.

(b) Certain Limitations on Awards to Ensure Compliance with Code Section 409A.

     (1) 409A Awards and Deferrals. Other provisions of the Plan notwithstanding,
the terms of any 409A Award, including any authority of the Company or the Committee
and rights of the participant with respect to the 409A Award, shall be limited to
those terms permitted under Code Section 409A and the regulations promulgated
thereunder. The following rules will apply to 409A Awards:

     (A) If a participant is permitted to elect to defer an Award or any
payment under an Award, such election shall be permitted only at times in
compliance with Code Section 409A and the regulations promulgated thereunder;

 

Page 18

 

 

     (B) The Company shall have no authority to accelerate or delay
distributions relating to 409A Awards in excess of the authority permitted
under Code Section 409A and the regulations promulgated thereunder;

     (C) Any distribution of a 409A Award triggered by a Participant’s
termination of employment shall be made only at the time that the Participant
has had a “Separation from Service” within the meaning of Code Section 409A
(or at such earlier time preceding a termination of employment that there
occurs another event triggering a distribution under the Plan or the
applicable Award Agreement in compliance with Code Section 409A and the
regulations promulgated thereunder);

     (D) Any distribution of a 409A Award to a “Specified Employee,” as
determined under Code Section 409A, after Separation from Service, shall
occur at the expiration of the six-month period following said Specified
Employee’s Separation from Service. In the case of installment payments,
this six-month delay shall not affect the timing of any installment otherwise
payable after the six-month delay period; and

     (E) In the case of any distribution of a 409A Award, the time and form
of payment for such distribution will be specified in the Award Agreement;
provided that, if the time and form of payment for such distribution is not
otherwise specified in the Plan or an Award Agreement or other governing
document, the distribution shall be made in one lump sum amount on or about
March 10 (and not later than March 15) in the calendar year following the
calendar year at which the settlement of the Award is specified to occur, any
applicable restriction lapses, or there is no longer a substantial risk of
forfeiture applicable to such amounts.

     (2) Distribution upon Vesting. In the case of any Award providing for a
distribution upon the lapse of a substantial risk of forfeiture, the time and form of
payment for such distribution will be specified in the Award Agreement; provided
that, if the timing and form of payment of such distribution is not otherwise
specified in the Plan or an Award Agreement or other governing document, the
distribution shall be made in one lump sum amount on March 15 of the calendar year
following the calendar year in which the substantial risk of forfeiture lapses.

     (3) Scope and Application of this Provision. For purposes of the Plan,
references to a term or event (including any authority or right of the Company, the
Committee or a participant) being “permitted” under Code Section 409A means that the
term or event will not cause the participant to be deemed to be in constructive
receipt of compensation relating to the 409A Award prior to the distribution of cash, shares or other property or to be liable for payment of interest or a tax penalty
under Code Section 409A.

     (4) Interpretation. If and to the extent that any provision of an Award is
required or intended to comply with Code Section 409A, such provision shall be
administered and interpreted in a manner consistent with the requirements of Code
Section 409A. If and solely to the extent that any such provision of an Award as
currently written would conflict with or result in adverse consequences to a
participant under Code Section 409A, the Committee shall have the authority, without
the consent of the participant, to administer such provision and to amend the Award
with respect to such provision to the extent the Committee deems necessary for the
purposes of avoiding any portion of the Shares or amounts to be

 

Page 19

 

 

delivered to the participant being subject to additional income or other taxes
under Code Section 409A.

SECTION 12. Change in Control Provision.

(a) Impact of Event. Notwithstanding any other provisions hereof or in any agreement
to the contrary, in the event of: (1) a “Change in Control” as defined in Section
12(b)(1), (2) a “409A Change in Control” as defined in Section 12(b)(2) or (3) a
“Potential Change in Control” as defined in Section 12(c), the following provisions
shall apply:

     (1) Any Stock Options awarded under the Plan not previously exercisable and
vested shall become fully exercisable and vested;

     (2) Any Share Appreciation Rights shall become immediately exercisable;

     (3) The restrictions applicable to any Restricted Share Awards, Deferred Shares,
Share Purchase Rights and Other Share-Based Awards shall lapse and such Shares and
Awards shall be deemed fully vested; and

     (4) Subject to Section 3(c), (A) unless otherwise determined by the Committee in
its sole discretion at or after grant but prior to any Change in Control or Potential
Change in Control, each outstanding Award (other than a 409A Award), in each case to
the extent vested, shall be cashed out (and such Award terminated) by paying the
participant an amount equal to the excess, if any, of the “Change in Control Price”
as defined in Section 12(d) as of the date such Change in Control or such Potential
Change in Control is determined to have occurred over the exercise price or other
purchase price, if any, payable by the participant with respect to such Award or (B)
upon any 409A Change in Control, each outstanding 409A Award, in each case to the
extent vested, shall be cashed out (and such 409A Award terminated) by paying the
participant an amount equal to the excess, if any, of the Change in Control Price as
of the date such 409A Change in Control is determined to have occurred over the
exercise price or other purchase price, if any, payable by the participant with
respect to such 409A Award. A 409A Award may be cashed out upon a Potential Change
in Control or a Change in Control that does not constitute a 409A Change in Control
only with the written consent of the Company and the participant.

(b) Definition of Change in Control.

     (1) A “Change in Control” means the occurrence of any of the following: (i) the
Board or shareholders of the Company approve a consolidation or merger in which the
Company is not the surviving corporation, the sale of substantially all of the assets
of the Company, or the liquidation or dissolution of the Company; (ii) any person or
other entity (other than the Company or a Subsidiary or any Company employee benefit
plan (including any trustee of any such plan acting in its capacity as trustee))
purchases any Shares (or securities convertible into Shares) pursuant to a tender or
exchange offer without the prior consent of the Board of Directors, or becomes the
beneficial owner of securities of the Company representing 20% or more of the voting
power of the Company’s outstanding securities; or (iii) during any two-year period,
individuals who at the beginning of such period constitute the entire Board of
Directors cease to constitute a majority of the Board of Directors, unless the
election or the nomination for election of each new director is approved

 

Page 20

 

 

by at least two-thirds of the directors then still in office who were directors
at the beginning of that period.

     (2) A “409A Change in Control” means the date on which any one of the following
occurs: (i) any one person, or more than one person acting as a group (as determined
under Code Section 409A and the regulations promulgated thereunder), acquires (or has
acquired during the twelve (12) month period ending on the date of the most recent
acquisition by such person or persons) ownership of stock of the Company possessing
30% or more of the total voting power of the stock of the Company; or (ii) a majority
of members of the Board of Directors is replaced during any 12-month period by
directors whose appointment or election is not endorsed by a majority of the members
of the Board of Directors before the date of such appointment or election; or (iii)
any one person, or more than one person acting as a group (as determined under Code
Section 409A and the regulations promulgated thereunder), acquires ownership of stock
of the Company that, together with stock held by such person or group, constitutes
more than 50% of the total fair market value or total voting power of the stock of
the Company; or (iv) any one person, or more than one person acting as a group (as
determined under Code Section 409A and the regulations thereunder), acquires (or has
acquired during the twelve (12) month period ending on the date of the most recent
acquisition by such person or persons) assets from the Company that have a total
gross fair market value equal to or more than 40% of the total gross fair market
value of all of the assets of the Company before such acquisition or acquisitions.
For this purpose, “gross fair market value” means the value of the assets of the
Company, or the value of the assets being disposed of, determined without regard to
any liabilities associated with such assets.

(c) Definition of Potential Change in Control. For purposes of Section 12(a), a
“Potential Change in Control” means the happening of any one of the following:

     (1) The approval by the shareholders of the Company of an agreement by the
Company, the consummation of which would result in a Change in Control of the Company
as defined in Section 12(b)(1); or

     (2) The acquisition of beneficial ownership, directly or indirectly, by any
entity, person or group (other than the Company or a Subsidiary or any Company
employee benefit plan (including any trustee of any such plan acting in its capacity
as trustee)) of securities of the Company representing 5% or more of the combined
voting power of the Company’s outstanding securities and the adoption by the Board of
a resolution to the effect that a Potential Change in Control of the Company has
occurred for purposes of this Plan.

(d) Change in Control Price. For purposes of this Section 12, “Change in Control
Price” means the highest price per share paid in any transaction reported on the New
York Stock Exchange Composite Index (or, if the Shares are not then traded on the New
York Stock Exchange, the highest price paid as reported for any national exchange on
which the Shares are then traded) or paid or offered in any bona fide transaction
related to a Change in Control, 409A Change in Control or Potential Change in Control
of the Company, at any time during the 30-day period immediately preceding the
occurrence of the Change in Control or 409A Change in Control (or, when applicable,
the occurrence of the Potential Change in Control event), in each case as determined
by the Committee.

 

Page 21

 

 

SECTION 13. Amendments and Termination.

     The Board may at any time, amend, alter or discontinue the Plan, but no such amendment,
alteration or discontinuation shall be made that would (i) impair the rights of a participant under
an Award theretofore granted, without the participant’s consent or (ii) require shareholder
approval under any applicable law or regulation (including any applicable regulation of an exchange
on which the Shares are traded), unless such shareholder approval is received. The Company shall
submit to the shareholders of the Company, for their approval, any amendments to the Plan required
pursuant to Section 162(m) of the Code or any material revisions to the Plan so long as such
approval is required by law or regulation (including any applicable regulation of an exchange on
which the Shares are traded).

     The Committee may at any time, in its sole discretion, amend the terms of any Award, but (i)
no such amendment shall be made that would impair the rights of a participant under an Award
theretofore granted, without the participant’s consent; (ii) no such amendment shall be made that
would make the applicable exemptions provided by Rule 16b-3 under the Exchange Act unavailable to
any Section 16 Participant holding the Award without the participant’s consent and (iii) no such
amendment shall be made if it would reduce the exercise price of a Stock Option or reduce the
purchase price, if any, of the Shares that are subject to the Award.

     Subject to the above provisions, the Board shall have all necessary authority to amend the
Plan, clarify any provision or to take into account changes in applicable securities and tax laws
and accounting rules, as well as other developments.

SECTION 14. Unfunded Status of Plan.

     The Plan is intended to constitute an “unfunded” plan for incentive and deferred compensation.
With respect to any payment not yet made to a participant by the Company, nothing contained herein
shall give that participant any rights that are greater than those of a general creditor of the
Company.

SECTION 15. General Provisions.

(a) Except in connection with the death, Disability or retirement of participants or
in connection with a Change in Control, a 409A Change in Control or a Potential
Change in Control, the Committee may not accelerate the exercise date or vesting of,
or waive any installment provision, limitation or restriction with respect to, Awards
that represent in the aggregate a number of Shares greater than (i) 145,000 Shares
(subject to adjustment as provided in Section 3(c)) less (ii) the number of Shares
applied against the Restriction Limit (as hereinafter defined) based upon their
restriction period, deferral period or holding period (the “Acceleration Limit”).
The Committee may accelerate the exercise date or vesting of, or waive any
installment provision, limitation or restriction with respect to, an Award upon a
participant’s death, Disability or retirement or in connection with a Change in
Control, a 409A Change in Control or a Potential Change in Control, and the Shares
covered by such acceleration or waiver shall not count against the Acceleration
Limit. The Committee may not establish a restriction period, deferral period or
holding period less than the Minimum Restriction Period, Minimum Deferral Period or
Minimum Holding Period, respectively, with respect to Awards that represent in the
aggregate a number of Shares greater than (i) 145,000 Shares (subject to adjustment
as provided in Section 3(c)) less (ii) the number of Shares subject to Awards applied
against the Acceleration Limit as a result of acceleration or waiver (the
“Restriction Limit”). In addition, without regard to the Acceleration Limit or the

 

Page 22

 

 

Restriction Limit, the Committee may (i) accelerate the exercise date or vesting of,
or waive any installment provision, limitation or restriction with respect to, an
Award or (ii) grant Shares with less than the Minimum Restriction Period or Minimum
Holding Period, to the extent the Company is obligated to do so under an agreement or
plan entered into prior to the date of adoption of this Plan by the Company’s
shareholders.

(b) The Committee may require each participant acquiring Shares pursuant to an Award
under the Plan to represent to and agree with the Company in writing that the
participant is acquiring the Shares without a view to distribution thereof. The
certificates for any such Shares may include any legend which the Committee deems
appropriate to reflect any restrictions on transfer.

All Shares or other securities delivered under the Plan shall be subject to such
stop-transfer orders and other restrictions as the Committee may deem advisable under
the rules, regulations and other requirements of the Securities and Exchange
Commission, any stock exchange upon which the Shares are then listed, and any
applicable federal or state securities laws, and the Committee may cause a legend or
legends to be put on any certificate for any such Shares to make appropriate
reference to those restrictions.

(c) Nothing contained in this Plan shall prevent the Board from adopting other or
additional compensation arrangements, subject to shareholder approval if such
approval is required, and such arrangements may be either generally applicable or
applicable only in specific cases.

(d) Neither the adoption of the Plan, nor its operation, nor any document describing,
implementing or referring to the Plan, or any part thereof, shall confer upon any
participant under the Plan any right to continue in the employ, or as a director, of
the Company or any Subsidiary or Affiliate, or shall in any way affect the right and
power of the Company or any Subsidiary or Affiliate to terminate the employment, or
service as a director, of any participant under the Plan at any time with or without
assigning a reason therefor, to the same extent as the Company or any Subsidiary or
Affiliate might have done if the Plan had not been adopted.

(e) For purposes of this Plan, a transfer of a participant between the Company and
any Subsidiary or Affiliate shall not be deemed a termination of employment.

(f) No later than the date as of which an amount first becomes includable in the
gross income of the participant for federal income tax purposes with respect to any
Award under the Plan, the participant shall pay to the Company, or make arrangements
satisfactory to the Committee regarding the payment of, any federal, state or local
taxes or other items of any kind required by law to be withheld with respect to that
amount. Subject to the following sentence, unless otherwise determined by the
Committee, withholding obligations may be settled with Shares, including unrestricted
Shares previously owned by the participant or Shares that are part of the Award that
gives rise to the withholding requirement. Notwithstanding the foregoing, any right
by a Section 16 Participant to elect to settle any tax withholding obligation with
Shares that are part of an Award must be set forth in the agreement evidencing that
Award or be approved by the Committee in its sole discretion. The obligations of the
Company under the Plan shall be conditional on those payments or arrangements and the
Company and its Subsidiaries and Affiliates shall, to the extent permitted by law,
have the right to deduct any such taxes from any payment of any kind otherwise
payable to the participant.

 

Page 23

 

 

(g) The actual or deemed reinvestment of dividends or dividend equivalents in
additional Restricted Shares (or in Deferred Shares or other types of Awards) at the
time of any dividend payment shall be permissible only if sufficient Shares are
available under Section 3 for reinvestment (taking into account then outstanding
Stock Options).

(h) The Plan, all Awards made and actions taken thereunder and any agreements
relating thereto shall be governed by and construed in accordance with the laws of
the State of Ohio.

(i) All agreements entered into with participants pursuant to the Plan shall be
subject to the Plan.

(j) The provisions of Awards need not be the same with respect to each participant.

SECTION 16. Shareholder Approval; Effective Date of Plan.

     The Plan was adopted by the Board on November 1, 2007 and is subject to approval by the
holders of the Company’s outstanding Shares, in accordance with applicable law. If the Plan is not
so approved within twelve (12) months after the date the Plan is adopted by the Board of Directors,
the Plan and any Grants made hereunder shall be null and void. However, if the Plan is so
approved, no further shareholder approval shall be required with respect to the granting of Awards
pursuant to the Plan.

SECTION 17. Term of Plan.

     No Award shall be granted pursuant to the Plan on or after November 1, 2017, but Awards
granted prior to that date may extend beyond that date.

 

 

 

 

 

 

 

Page 24EX-10.15

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THE REDACTED PORTIONS OF THIS

EXHIBIT, AND SUCH CONFIDENTIAL PORTIONS IDENTIFIED BY [*] HAVE BEEN OMITTED
AND 
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

EXHIBIT 10.15

LOAN PROCESSING AGREEMENT

THIS LOAN PROCESSING AGREEMENT is made and entered into this 28th day in the month of April for the
year 2008, by and between OHIO LEGACY BANK, a U.S. company hereinafter referred to as “OLB” and
Midwest Mortgage Processing, LLC hereinafter referred to as “MMP”.

WITNESS:

WHEREAS, OLB is licensed and approved to originate and close mortgage loans;

WHEREAS MMP has substantial experience processing mortgage loan applications and is interested in
processing mortgage loan applications originated by OLB in accordance with the terms set forth
below.

NOW, THEREFORE, the parties hereto agree as follows:

	 	1.	 	Loan Processing: OLB may submit loan applications it has originated to MMP loan
processing. MMP agrees to promptly and diligently process such loan applications in
compliance with all applicable laws and regulations. MMP will make every reasonable effort
to ensure that all loan applications are fully processed to the extent that OLB’s chosen
lender’s requirements are satisfied.
	 
	 	2.	 	Loan Processing Fees: The OLB understands, and agrees to, the fact that the
most mutually desirable method of payment of all fees due MMP, accrued pursuant to the
terms of this agreement, is by direct payment by the designated closing agent involved in
each transaction. By signing this agreement, OLB pledges its complete support for this
stated method of payment of fees due MMP, and further pledges to include MMP’s fee on the
“Fee Sheet”, in all cases possible. OLB, MMP further pledges that in cases payment of
third party processing fees are restricted it will make said fees readily available to MMP.
By signing this agreement, OLB and MMP acknowledge and agree that the processing fee owed
MMP hereunder shall be $[ * ] per loan.
	 
	 	3.	 	MMP shall operate on an exclusive basis and under the supervision of OLB, a service to
potential borrowers which offers to provide the ability to qualify for various mortgage
products including, but not limited to, first mortgage loans, refinance loans, home equity
loans, lines of credit, or other secured loans which may be provided from time to time by
or its participating loan Investors. All loans are subject to the quality control
standards established by OLB and applicable State and Federal laws. All loans shall be
registered with OLB through Internet based software.
	 
	 	4.	 	Quality Control: OLB maintains a quality control program for Originators,
including maintaining at a central location a Loan Quality “Library” of all loans. MMP
will assist in the quality control policy and procedures of all loans for OLB and such
amendments thereto that are made from time to time.
	 
	 	5.	 	Compensation: All compensation, fees, rebates, or the like, shall be in
accordance with the terms and conditions of the “Compensation Schedule” attached hereto.
	 
	 	6.	 	Due Diligence: MMP agrees to devote all necessary time, attention, and due
diligence for the purpose of enhancing production of Real Estate loans, in order to process
quality loans. Associate will assist Clients, Loan Officers, Underwriters, Funders, and
others at OLB’s correspondents, in whatever ways needed, in order to insure that the loans
processed by MMP become processed, closed and funded in a timely manner. MMP agrees to use
due diligence and all best efforts to insure that all information and documents presented
to OLB and clients of OLB complete, accurate and true to the best of Associate’s knowledge.
	 
	 	7.	 	Compliance with Law: MMP agrees not to engage in any acts for which the OLB’s
regulating agencies are authorized to revoke or suspend a licensee. MMP has full knowledge
and will strictly abide by the 

23

 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THE REDACTED PORTIONS OF THIS

EXHIBIT, AND SUCH CONFIDENTIAL PORTIONS IDENTIFIED BY [*] HAVE BEEN OMITTED
AND 
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

	 	 	 	current policies, rules, and regulations of H.U.D, F.H.A.,
V.A., Fannie Mae, Freddie Mac, Ginnie Mae, and other local, State, or Federal Regulatory
agencies which may have jurisdiction over OLB, or the duties preformed by MMP.

	 	8.	 	MMP is responsible for the supervision and control of its employees, and will report to
OLB any illegal acts and/or unethical conduct by the employees. MMP will follow the OLB
requirements of all Agencies that supervise all transactions submitted on OLB’s behalf.
All of MMP’s employees must be aware of the rules and regulations of all governing
agencies.
	 
	 	9.	 	OLB’s OBLIGATION\’S:

	 	(a)	 	If applicable, facilitate and support the
generation of accurate, real-time rate information, as well as specific
information about all costs (e.g., closing costs, processing Fees) that
Borrower may be asked to pay in connection with a particular loan
product.
	 
	 	(b)	 	Support the download of loan data, product, and
Borrowers information from OLB’s and any correspondents from time to
time.
	 
	 	(c)	 	Cooperate with MMP in establishing procedures to
allow effective communication between the Borrower, the sites and MMP.
OLB shall provide and maintain Email accounts and Internet access for
each of its employees, agents, contractors, and/or any other person who
works with qualification forms and/or Borrowers on behalf of OLB
correspondents.
	 
	 	(d)	 	Promptly review for accuracy and completeness, all
information, site screens, processing and analytical mechanisms submitted
to it for review OLB as they relate to loan products and services a
report any necessary modifications to OLB.
	 
	 	(e)	 	Comply with all legal and regulatory requirements
applicable to Associates offering of the loan products on the sites and
dealing with Borrowers, including, without limitation, federal laws and
regulations, such as Truth-in-Lending Act, the Fair Credit Reporting Act,
the privacy provisions of the Gramm-Leach-Bliley Act and all applicable
state laws and regulations.

	 	10.	 	Administrative Services Agreement. This Agreement is delivered in connection
with the delivery of a certain Administrative Certain Agreement of even date herewith by
and between Bank and JMC MARKETING LLC, an Ohio limited liability company, which entity has
common ownership with MMP. The parties hereto acknowledge and agree that this Agreement
shall terminate contemporaneously with the termination of the Administrative Services
Agreement regardless of cause. In the event there is a conflict between this Agreement and
the Administrative Services Agreement, the terms of the Administrative Services Agreement
shall control.

24

 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THE REDACTED PORTIONS OF THIS

EXHIBIT, AND SUCH CONFIDENTIAL PORTIONS IDENTIFIED BY [ * ] HAVE BEEN OMITTED AND

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

	 	 	 	 	 
	 	OHIO LEGACY BANK, N.A.

 	 
	 	By:  	/s/ D. Michael Kramer
 	 
	 	 	D. Michael Kramer, President and 	 
	 	 	Chief Executive Officer 	 
	 
	 	Midwest Mortgage Processing, LLC

 	 
	 	By:  	/s/ James A. Hinkle
 	 
	 	 	James A. Hinkle, President and 	 
	 	 	Chief Executive Officer 	 
	 

25

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