Document:

Exhibit 10.1

 

TRAFFIC.COM

851
Duportail Road

Wayne, PA
19087

 

February 16, 2006

 

Mr. Brian Sisko

230 Oakwood Lane

Phoenixville, PA 19460

 

Dear Brian:

 

We are pleased to offer you employment with
Traffic.com ® (the Company) as Chief Legal Officer, Senior Vice President and
General Counsel reporting directly to me, Robert N. Verratti, Chief Executive
Officer, at our Wayne office. The purpose of this letter is to confirm the
terms of our offer to you.

 

Your official start date will be February 20,
2006. Your semi-monthly base compensation will be $8,333.33 (a rate equivalent
to $200,000.00 on an annualized basis), payable in accordance with normal
Company policy. In addition, you will be eligible to receive an annual
discretionary bonus, 50 percent of which will be based on your individual
performance and 50 percent of which will be based upon the Company’s overall
performance. Any increases in base compensation will be determined by the
Compensation Committee of the Board of Directors.

 

Subject to Board approval, you will also
receive an initial stock option grant of incentive stock options to purchase
Fifty Eight Thousand Three Hundred and Thirty Three (58,333) shares of the
Company’s common stock, exercisable at a price equal to the fair market value
of the Company’s common stock as of the date of grant. Such grant shall be made
at the next meeting of the Company’s Board of Directors. This option grant will
be subject to a four-year vesting period, with 25% vesting at the end of the
first year and 6.25% vesting per quarter thereafter until fully vested, and to
other terms and conditions set forth in the Company’s 2005 Long-term Incentive
Plan, as amended through the date hereof. Option grants are generally submitted
for approval at the first Board meeting held after the employee’s start date.

 

You will be eligible to participate in
Company fringe benefit programs. These benefits currently include medical,
vision, prescription, dental, disability, and group term life insurance and are
subject to change at the Company’s discretion. The Company also sponsors a
401(k) plan. All reasonable business expenses will be reimbursed subject to the
submission of an approved expense report.

 

With respect to vacation leave, you will be
eligible to receive vacation leave in the amount of twenty-five (25) days
during each year of your employment with the Company, which is accrued in
accordance with Company policy. Vacation leave usage is restricted to a maximum
of two consecutive weeks at a time. Any unused vacation leave is forfeit at the
end of each year of employment with the Company.

 

Additionally, the Company will provide you
with equipment as deemed necessary for your business use. Such equipment shall
be installed and maintained by the Company and subject to normal business practices.
Please note these items and all other business materials, including but not
limited to files, e-mails, disks, correspondence, and information thereon,
shall be returned to the Company upon the termination of your employment.

 

Your employment is contingent upon your
execution and return of the Confidential Information and Invention Assignment
Agreement. By signing this letter, you acknowledge that you are not a party to
any instrument or agreement with any other person or entity (other than the Company)
requiring or restricting the use or disclosure of any confidential information
or the provision by you of any employment services contemplated by this offer

 

Your employment is also subject to your
adherence to the Company’s Employee Handbook Revised March 2005 together
with any future revisions or amendments.

 

As a legal matter, please note that this
offer letter supersedes all previous discussions about the terms of your
employment with the Company. In addition, please be advised that you will be employed
as an “at will” employee, which means that either you or the Company can
terminate your employment at any time, for any reason, with or without notice.

 

We are pleased at the interest you have shown
in our Company and we took forward to having you as a colleague. If you have
any questions regarding the terms of our offer or any other matters regarding
your potential employment with us, please do not hesitate to contact me. If you
find the above terms acceptable, sign and return this letter to my attention
(please retain a copy for your records).

 

 

	
  Sincerely

  
	
   

  
	
  /s/ Robert N. Verratti

  	
   

  
	
  Robert N. Verratti

  
	
  Chief Executive Officer

  
	
   

  
	
   

  
	
  Accepted:

  
	
   

  
	
  BRIAN J. SISKO

  
	
   

  
	
  /s/ Brian J. Sisko

  	
   

  
	
   

  
	
  Date: 2/16/2006Exhibit 10.10

 

THE 2003 INCENTIVE AWARD PLAN

 

OF

 

REALTY INCOME CORPORATION

 

(As amended and restated February 21, 2006)

 

Realty
Income Corporation, a Maryland corporation, has adopted the 2003 Incentive
Award Plan of Realty Income Corporation, (the “Plan”), effective May 6,
2003, for the benefit of its eligible employees, consultants and directors.

 

The
purposes of the Plan are as follows:

 

(1)           To provide an additional incentive for directors, Employees and
Consultants (as such terms are defined below) to further the growth,
development and financial success of the Company by personally benefiting
through the ownership of Company stock and/or rights which recognize such
growth, development and financial success.

 

(2)           To enable the Company and it subsidiaries to obtain and retain the
services of directors, Employees and Consultants considered essential to the
long range success of the Company by offering them an opportunity to own stock
in the Company and/or rights which will reflect the growth, development and
financial success of the Company.

 

ARTICLE I.

DEFINITIONS

 

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

 

1.1           “Administrator”
shall mean the entity that conducts the general administration of the Plan as
provided herein. With reference to the administration of the Plan with respect
to Options and Restricted Stock granted to Independent Directors, the term “Administrator”
shall refer to the Board. With reference to the administration of the Plan with
respect to any other Award, the term “Administrator” shall refer to the
Committee unless the Board has assumed the authority for administration of the
Plan generally as provided in Section 10.1.

 

1.2           “Award”
shall mean an Option, a Restricted Stock award, a Performance Award, a Dividend
Equivalents award, a Deferred Stock award, a Stock Payment award or a Stock
Appreciation Right which may be awarded or granted under the Plan
(collectively, “Awards”).

 

1.3           “Award Agreement”
shall mean a written agreement executed by an authorized officer of the Company
and the Holder which shall contain such terms and conditions with respect to an
Award as the Administrator shall determine, consistent with the Plan.

 

1.4           “Award Limit”
shall mean One Million Six Hundred Thousand (1,600,000) shares of Common Stock,
as adjusted pursuant to Section 11.3; provided,  however,
that solely with respect to Performance Awards granted pursuant to Section 8.2(b),
Award Limit shall mean Five Million Dollars ($5,000,000).

 

1.5           “Board”
shall mean the Board of Directors of the Company.

 

1.6           “Code” shall
mean the Internal Revenue Code of 1986, as amended. “Committee” shall mean
the Compensation Committee of the Board, or another committee or subcommittee
of the Board, appointed as provided in Section 10.1.

 

1.7           “Common Stock”
shall mean the common stock of the Company, par value $1.00 per share.

 

1.8           “Company”
shall mean Realty Income Corporation, a Maryland corporation.

 

1.9           “Consultant”
shall mean any consultant or adviser if:

 

(a)           The consultant or adviser renders bona fide services
to the Company or any Subsidiary;

 

(b)           The services rendered by the consultant or adviser are
not in connection with the offer or sale of securities in a capital-raising
transaction and do not directly or indirectly promote or maintain a market for
the Company’s securities; and

 

(c)           The consultant or adviser is a natural person who has
contracted directly with the Company to render such services.

 

1

 

1.10         “Deferred Stock” shall mean
Common Stock awarded under Article VIII of the Plan.

 

1.11         “Director” shall mean a member
of the Board.

 

1.12         “Dividend Equivalent” shall
mean a right to receive the equivalent value (in cash or Common Stock) of
dividends paid on Common Stock, awarded under Article VIII of the Plan.

 

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

 

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

 

1.15         “Exchange Act” shall mean the
Securities Exchange Act of 1934, as amended.

 

1.16         “Fair Market Value” of a share
of Common Stock as of a given date shall be (a) the closing price of a
share of Common Stock on the principal exchange on which shares of Common Stock
are then trading, if any (or as reported on any composite index which includes
such principal exchange), on the trading day previous to such date, or if
shares were not traded on the trading day previous to such date, then on the
next preceding date on which a trade occurred, or (b) if Common Stock is
not traded on an exchange but is quoted on Nasdaq or a successor quotation
system, the mean between the closing representative bid and asked prices for
the Common Stock on the trading day previous to such date as reported by Nasdaq
or such successor quotation system, or (c) if Common Stock is not publicly
traded on an exchange and not quoted on Nasdaq or a successor quotation system,
the Fair Market Value of a share of Common Stock as established by the
Administrator acting in good faith.

 

1.17         “Holder” shall mean a person
who has been granted or awarded an Award.

 

1.18         “Incentive Stock Option” shall
mean an option which conforms to the applicable provisions of Section 422
of the Code and which is designated as an Incentive Stock Option by the
Administrator.

 

1.19         “Independent Director” shall
mean a member of the Board who is not an Employee of the Company.

 

1.20         “Non-Qualified Stock Option”
shall mean an Option which is not designated as an Incentive Stock Option by
the Administrator or which does not conform to the applicable provisions
of Section 422 of the Code.

 

1.21         “Option” shall mean a stock
option granted under Article IV of the Plan. An Option granted under the
Plan shall, as determined by the Administrator, be either a Non-Qualified Stock
Option or an Incentive Stock Option; provided,  however, that
Options granted to Independent Directors and Consultants shall be Non-Qualified
Stock Options.

 

1.22         “Ownership Limit” shall mean
the ownership of not more than 9.8% of the outstanding shares of common stock
(as defined in the Company’s Amended and Restated Certificate of Incorporation)
of the Company.

 

1.23         “Performance Award” shall mean
a cash bonus, stock bonus or other performance or incentive award that is paid
in cash, Common Stock or a combination of both, awarded under Article VIII
of the Plan.

 

1.24         “Performance Criteria” shall
mean the following business criteria with respect to the Company, any
Subsidiary or any division or operating unit: (a) net income, (b) pre-tax
income, (c) operating income, (d) cash flow, (e) earnings per
share, (f) return on equity, (g) return on invested capital or
assets, (h) cost reductions or savings, (i) funds from operations,
(j) appreciation in the fair market value of Common Stock, and (k) earnings
before any one or more of the following items: interest, taxes, depreciation or
amortization; each as determined in accordance with generally accepted
accounting principles or subject to such adjustments as may be specified
by the Committee with respect to a Performance Award.

 

1.25         “Plan” shall mean the 2003
Incentive Award Plan of Realty Income Corporation.

 

1.26         “Restricted Stock” shall mean
Common Stock awarded under Article VII of the Plan.

 

1.27         “Rule 16b-3” shall mean Rule 16b-3
promulgated under the Exchange Act, as such Rule may be amended from
time to time.

 

1.28         “Section 162(m) Participant”
shall mean any Employee designated by the Administrator as an Employee whose
compensation for the fiscal year in which the Employee is so designated or a
future fiscal year may be subject to the limit on deductible compensation
imposed by Section 162(m) of the Code.

 

1.29         “Securities Act” shall mean
the Securities Act of 1933, as amended.

 

2

 

1.30         “Stock Appreciation Right”
shall mean a stock appreciation right granted under Article IX of the
Plan.

 

1.31         “Stock Payment” shall mean (a) a
payment in the form of shares of Common Stock, or (b) an option or
other right to purchase shares of Common Stock, as part of a deferred
compensation arrangement, made in lieu of all or any portion of the
compensation, including without limitation, salary, bonuses and commissions,
that would otherwise become payable to an Employee or Consultant in cash, awarded
under Article VIII of the Plan.

 

1.32         “Subsidiary” shall mean any
corporation in an unbroken chain of corporations beginning with the Company if
each of the corporations other than the last corporation in the unbroken chain
then owns stock possessing fifty percent (5 0%) or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain. “Subsidiary” shall also mean any partnership in which the Company, or
any Subsidiary, owns more than 50 percent of the capital or profits interests.

 

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

 

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

 

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

 

1.36         “Termination of Employment” shall
mean the time when the employee-employer relationship between a Holder and the
Company or any Subsidiary is terminated for any reason, with or without cause,
including, but not by way of limitation, a termination by resignation,
discharge, death, disability or retirement; but excluding (a) terminations
where there is a simultaneous reemployment or continuing employment of a Holder
by the Company or any Subsidiary, (b) at the discretion of the
Administrator, terminations which result in a temporary severance of the
employee-employer relationship, and (c) at the discretion of the
Administrator, terminations which are followed by the simultaneous
establishment of a consulting relationship by the Company or a Subsidiary with
the former employee. The Administrator, in its absolute discretion, shall
determine the effect of all matters and questions relating to Termination of
Employment, including, but not by way of limitation, the question of whether a
Termination of Employment resulted from a discharge for good cause, and all
questions of whether a particular leave of absence constitutes a Termination of
Employment; provided,  however, that, with respect to Incentive
Stock Options, unless otherwise determined by the Administrator in its
discretion, a leave of absence, change in status from an employee to an
independent contractor or other change in the employee-employer relationship
shall constitute a Termination of Employment if, and to the extent that, such
leave of absence, change in status or other change interrupts employment for
the purposes of Section 422(a)(2) of the Code and the then applicable
regulations and revenue rulings under said Section.

 

ARTICLE II.

SHARES SUBJECT TO PLAN

 

2.1           Shares Subject to
Plan.

 

(a)           The shares of stock subject to Awards shall be Common
Stock, initially shares of the Company’s Common Stock. Subject to adjustment as
provided in Section 11.3, the aggregate number of such shares which may be
issued upon exercise of such Options or rights or upon any such Awards under the
Plan shall not exceed Three Million Four Hundred and Twenty Eight Thousand
(3,428,000). The shares of Common Stock issuable upon exercise of such Options
or rights or upon any such awards may be either previously authorized but
unissued shares or treasury shares.

 

3

 

(b)           The maximum number of shares which may be subject
to Awards granted under the Plan to any individual in any calendar year shall
not exceed the Award Limit. To the extent required by Section 162(m) of
the Code, shares subject to Options which are canceled continue to be counted
against the Award Limit.

 

2.2           Add-back of Options
and Other Rights. If any Option, or other right to
acquire shares of Common Stock under any other Award under the Plan, expires or
is canceled without having been fully exercised, or is exercised in whole or in
part for cash as permitted by the Plan, the number of shares subject to
such Option or other right but as to which such Option or other right was not
exercised prior to its expiration, cancellation or exercise may again be
optioned, granted or awarded hereunder, subject to the limitations of Section 2.1.
Furthermore, any shares subject to Awards which are adjusted pursuant to Section 11.3
and become exercisable with respect to shares of stock of another corporation
shall be considered cancelled and may again be optioned, granted or
awarded hereunder, subject to the limitations of Section 2.1. Shares of
Common Stock which are delivered by the Holder or withheld by the Company upon
the exercise of any Award under the Plan, in payment of the exercise price
thereof or tax withholding thereon, may again be optioned, granted or
awarded hereunder, subject to the limitations of Section 2.1. If any
shares of Restricted Stock are surrendered by the Holder or repurchased by the
Company pursuant to Section 7.5 or 7.6 hereof, such shares may again
be optioned, granted or awarded hereunder, subject to the limitations of Section 2.1.
Notwithstanding the provisions of this Section 2.2, no shares of Common
Stock may again be optioned, granted or awarded if such action would cause
an Incentive Stock Option to fail to qualify as an incentive stock option under
Section 422 of the Code.

 

ARTICLE III.

GRANTING OF AWARDS

 

3.1           Award Agreement. Each Award
shall be evidenced by an Award Agreement. Award Agreements evidencing Awards
intended to qualify as performance-based compensation as described in Section 162(m)(4)(C) of
the Code shall contain such terms and conditions as may be necessary to
meet the applicable provisions of Section 162(m) of the Code. Award
Agreements evidencing Incentive Stock Options shall contain such terms and
conditions as may be necessary to meet the applicable provisions of Section 422
of the Code.

 

3.2           Provisions
Applicable to Section 162(m) Participants.

 

(a)           The Committee, in its discretion, may determine
whether an Award is to qualify as performance-based compensation as described
in Section 162(m)(4)(C) of the Code.

 

(b)           Notwithstanding anything in the Plan to the contrary, the
Committee may grant any Award to a Section 162(m) Participant,
including Restricted Stock the restrictions with respect to which lapse upon
the attainment of performance goals which are related to one or more of the
Performance Criteria and any performance or incentive award described in Article VIII
that vests or becomes exercisable or payable upon the attainment of performance
goals which are related to one or more of the Performance Criteria.

 

(c)           To the extent necessary to comply with the performance-based
compensation requirements of Section 162(m)(4)(C) of the Code, with
respect to any Award granted under Articles VII and VIII which may be
granted to one or more Section 162(m) Participants, no later than ninety
(90) days following the commencement of any fiscal year in question or any
other designated fiscal period or period of service (or such other time as may be
required or permitted by Section 162(m) of the Code), the Committee shall,
in writing, (i) designate one or more Section 162(m) Participants, (ii) select
the Performance Criteria applicable to the fiscal year or other designated
fiscal period or period of service, (iii) establish the various
performance targets, in terms of an objective formula or standard, and amounts
of such Awards, as applicable, which may be earned for such fiscal year or
other designated fiscal period or period of service, and (iv) specify the
relationship between Performance Criteria and the performance targets and the
amounts of such Awards, as applicable, to be earned by each Section 162(m)
Participant for such fiscal year or other designated fiscal period or period of
service. Following the completion of each fiscal year or other designated
fiscal period or period of service, the Committee shall certify in writing whether
the applicable performance targets have been achieved for such fiscal year or
other designated fiscal period or period of service. In determining the amount
earned by a Section 162(m) Participant, the Committee shall have the right
to reduce (but not to increase) the amount payable at a given level of
performance to take into account additional factors that the Committee may deem
relevant to the assessment of individual or corporate performance for the
fiscal year or other designated fiscal period or period of service.

 

(d)           Furthermore, notwithstanding any other provision of
the Plan or any Award which is granted to a Section 162(m) Participant and
is intended to qualify as performance-based compensation as described in Section 162(m)(4)(C) of
the Code shall be subject to any additional limitations set forth in Section 162(m)
of the Code (including any amendment to Section

 

4

 

162(m) of the Code) or any
regulations or rulings issued thereunder that are requirements for
qualification as performance-based compensation as described in Section 162(m)(4)(C) of
the Code, and the Plan shall be deemed amended to the extent necessary to conform to
such requirements.

 

3.3           Limitations
Applicable to Section 16 Persons. Notwithstanding
any other provision of the Plan, the Plan, and any Award granted or awarded to
any individual who is then subject to Section 16 of the Exchange Act,
shall be subject to any additional limitations set forth in any applicable
exemptive rule under Section 16 of the Exchange Act (including any
amendment to Rule 16b-3 of the Exchange Act) that are requirements for the
application of such exemptive rule. To the extent permitted by applicable law,
the Plan and Awards granted or awarded hereunder shall be deemed amended to the
extent necessary to conform to such applicable exemptive rule.

 

3.4           Consideration. In
consideration of the granting of an Award under the Plan, the Holder shall
agree, in the Award Agreement, to remain in the employ of (or to consult for or
to serve as an Independent Director of, as applicable) the Company or any
Subsidiary for a period of at least one year (or such shorter period as may be
fixed in the Award Agreement or by action of the Administrator following grant
of the Award) after the Award is granted (or, in the case of an Independent
Director, until the next annual meeting of stockholders of the Company).

 

3.5           At-Will Employment. Nothing in
the Plan or in any Award Agreement hereunder shall confer upon any Holder any right
to continue in the employ of, or as a Consultant for, the Company or any
Subsidiary, or as a director of the Company, or shall interfere with or
restrict in any way the rights of the Company and any Subsidiary, which are
hereby expressly reserved, to discharge any Holder at any time for any reason
whatsoever, with or without cause, except to the extent expressly provided
otherwise in a written employment agreement between the Holder and the Company
and any Subsidiary.

 

ARTICLE IV.

GRANTING OF OPTIONS TO EMPLOYEES

CONSULTANTS AND INDEPENDENT DIRECTORS

 

4.1           Eligibility. Any
Employee, Consultant or Independent Director selected by the Administrator
pursuant to Section 4.4(a)(i) shall be eligible to be granted an
Option.

 

4.2           Disqualification
for Stock Ownership. No person may be granted an
Incentive Stock A – 6 Option under the Plan if such person, at the time the
Incentive Stock Option is granted, owns stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company or any then
existing Subsidiary or parent corporation (within the meaning of Section 422
of the Code) unless such Incentive Stock Option conforms to the applicable
provisions of Section 422 of the Code.

 

4.3           Qualification of
Incentive Stock Options. No Incentive Stock Option shall be
granted to any person who is not an Employee.

 

4.4           Granting of Options
to Employees and Consultants.

 

(a)           The Committee shall from time to time, in its absolute
discretion, and subject to applicable limitations of the Plan:

 

(i)            Determine which
Employees or Consultants (including Employees or Consultants who have
previously received Awards under the Plan) in its opinion should be granted
Options;

 

(ii)           Subject to the
Award Limit, determine the number of shares to be subject to such Options
granted to the selected Employees or Consultants;

 

(iii)          Subject to Section 4.3,
determine whether such Options are to be Incentive Stock Options or
Non-Qualified Stock Options and whether such Options are to qualify as
performance-based compensation as described in Section 162(m)(4)(C) of
the Code; and

 

(iv)          Determine the terms
and conditions of such Options, consistent with the Plan; provided, however, that the
terms and conditions of Options intended to qualify as performance-based
compensation as described in Section 162(m)(4)(C) of the Code shall
include, but not be limited to, such terms and conditions as may be
necessary to meet the applicable provisions of Section 162(m) of the Code.

 

(b)           Upon the selection of an Employee or Consultant to be
granted an Option, the Committee shall instruct the Secretary of the Company to
issue the Option and may impose such conditions on the grant of the Option
as it deems appropriate.

 

5

 

(c)           Any Incentive Stock Option granted under the Plan may be
modified by the Committee, with the consent of the Holder, to disqualify such
Option from treatment as an “incentive stock option” under Section 422 of
the Code.

 

4.5           Granting of Options
to Independent Directors. The Board shall from time to time,
in its absolute discretion, and subject to applicable limitations of the Plan:

 

(a)           Select from among the Independent Directors (including
Independent Directors who have previously received Options under the Plan) such
of them as in its opinion should be granted Options;

 

(b)           Subject to the Award Limit, determine the number of
shares to be subject to such Options granted to the selected Independent
Directors;

 

(c)           Subject to the provisions of Article 5, determine
the terms and conditions of such Options, consistent with the Plan.

 

All
the foregoing Option grants authorized by this Section 4.5 are subject to
stockholder approval of the Plan.

 

4.6           Options in Lieu of
Cash Compensation. Options may be granted under
the Plan to Employees and Consultants in lieu of cash bonuses which would
otherwise be payable to such Employees and Consultants, pursuant to such
policies which may be adopted by the Administrator from time to time.

 

ARTICLE V.

TERMS OF OPTIONS

 

5.1           Option Price. The price
per share of the shares subject to each Option granted to Employees and
Consultants shall be set by the Committee; provided,  however,
that such price shall be no less than the Fair Market Value of a share of
Common Stock on the date the Option is granted. In the case of Incentive Stock
Options granted to an individual then owning (within the meaning of Section 424(d) of
the Code) more than 10% of the total combined voting power of all classes of
stock of the Company or any Subsidiary or parent corporation thereof (within
the meaning of Section 422 of the Code), such price shall not be less than
110% of the Fair Market Value of a share of Common Stock on the date the Option
is granted (or the date the Option is modified, extended or renewed for
purposes of Section 424(h) of the Code)..

 

5.2           Option Term. The term of
an Option granted to an Employee or Consultant shall be set by the Committee in
its discretion; provided,  however, that, in the case of Incentive
Stock Options, the term shall not be more than 10 years from the date the
Incentive Stock Option is granted, or five years from the date the Incentive
Stock Option is granted if the Incentive Stock Option is granted to an
individual then owning (within the meaning of Section 424(d) of the
Code) more than 10% of the total combined voting power of all classes of stock
of the Company or any Subsidiary or parent corporation thereof (within the
meaning of Section 422 of the Code). Except as limited by Section 5.4
and the requirements of Section 422 of the Code and regulations and
rulings thereunder applicable to Incentive Stock Options, the Committee may extend
the term of any outstanding Option in connection with any Termination of
Employment or Termination of Consultancy of the Holder, or amend any other term
or condition of such Option relating to such a termination.

 

5.3           Option Vesting.

 

(a)           The period during which the right to exercise, in
whole or in part, an Option granted to an Employee or a Consultant vests in the
Holder shall be set by the Committee and the Committee may determine that
an Option may not be exercised in whole or in part for a specified
period after it is granted. At any time after grant of an Option, the Committee
may, in its sole and absolute discretion and subject to whatever terms and
conditions it selects, accelerate the period during which an Option granted to
an Employee or Consultant vests.

 

(b)           No portion of an Option granted to an Employee or
Consultant which is unexercisable at Termination of Employment or Termination
of Consultancy, as applicable, shall thereafter become exercisable, except as may be
otherwise provided by the Committee either in the Award Agreement or by action
of the Committee following the grant of the Option.

 

(c)           To the extent that the aggregate Fair Market Value of
stock with respect to which “incentive stock options” (within the meaning of Section 422
of the Code, but without regard to Section 422(d) of the Code) are
exercisable for the first time by a Holder during any calendar year (under the
Plan and all other incentive stock option plans of the Company and any parent
or subsidiary corporation, within the meaning of Section 422 of the Code)
of the Company, exceeds $100,000, such Options shall be treated as
Non-Qualified Stock Options to the extent required by Section 422 of the
Code. The rule set forth in the preceding sentence shall be applied by
taking Options into account in the order in which they were granted. For
purposes of

 

6

 

this Section 5.3(c), the Fair
Market Value of stock shall be determined as of the time the Option with
respect to such stock is granted.

 

5.4           Exercise of Options
Granted to Employees and Consultants. An Option granted
to an Employee or Consultant may only be exercised by the Optionee while
such Optionee is an Employee or Consultant, as applicable; provided,  however,
that subject to Section 5.3(b), the Administrator may, in its sole
discretion, provide in the terms of an individual Award Agreement that an
Option may be exercised subsequent to an Optionee’s Termination of
Employment, or Termination of Consultancy, as applicable, within the periods
prescribed below:

 

(a)           The expiration of 12 months from the date of the
Holder’s death;

 

(b)           The expiration of 12 months from the date of the
Holder’s Termination of Employment, or Termination of Consultancy, as
applicable, by reason of his or her permanent and total disability (within the
meaning of Section 22(e)(3) of the Code); or

 

(c)           the expiration of 3 months from the date of the Holder’s
Termination of Employment, or Termination of Consultancy , as applicable, for
any reason other than such Holder’s death or his or her permanent and total
disability, unless the Holder dies within said three-month period.

 

5.5           Terms of Options
Granted to Independent Directors. The price per share of the shares
subject to each Option granted to an Independent Director shall equal 100% of
the Fair Market Value of a share of Common Stock on the date the Option is
granted. Options granted to Independent Directors shall become 100% vested and
fully exercisable on the first anniversary of the date of Option grant. Each
Option granted to an Independent Director shall expire on the earlier of 10
years from the date the Option is granted or 12 months after an Independent
Director’s Termination of Directorship. No portion of an Option which is
unexercisable at Termination of Directorship shall thereafter become
exercisable.

 

5.6           Substitute Awards.
Notwithstanding the foregoing provisions of this Article V to the contrary,
in the case of an Option that is a Substitute Award, the price per share of the
shares subject to such Option may be less than the Fair Market Value per
share on the date of grant, provided, that the excess of:

 

(a)           The aggregate Fair Market Value (as of the date such
Substitute Award is granted) of the shares subject to the Substitute Award;
over

 

(b)           The aggregate exercise price thereof; does not exceed
the excess of:

 

(c)           The aggregate fair market value (as of the time
immediately preceding the transaction giving rise to the Substitute Award, such
fair market value to be determined by the Committee) of the shares of the
predecessor entity that were subject to the grant assumed or substituted for by
the Company; over

 

(d)           The aggregate exercise price of such shares.

 

ARTICLE VI.

EXERCISE OF OPTIONS

 

6.1           Partial Exercise. An
exercisable Option may be exercised in whole or in part. However, an
Option shall not be exercisable with respect to fractional shares and the
Administrator may require that, by the terms of the Option, a partial
exercise be with respect to a minimum number of shares.

 

6.2           Manner of Exercise. All or a
portion of an exercisable Option shall be deemed exercised upon delivery of all
of the following to the Secretary of the Company or his or her office:

 

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

 

(b)           Such representations and documents as the
Administrator, in its absolute discretion, deems necessary or advisable to
effect compliance with all applicable provisions of the Securities Act and any
other federal or state securities laws or regulations. The Administrator may,
in its absolute discretion, also take whatever additional actions it deems
appropriate to effect such compliance including, without limitation, placing
legends on share certificates and issuing stop-transfer notices to agents and
registrars;

 

(c)           In the event that the Option shall be exercised
pursuant to Section 11.1 by any person or persons other than the Holder,
appropriate proof of the right of such person or persons to exercise the Option;
and

 

7

 

(d)           Full cash payment to the Secretary of the Company for
the shares with respect to which the Option, or portion thereof, is exercised.
However, the Administrator may, in its discretion, (i) allow a delay in
payment up to 30 days from the date the Option, or portion thereof, is
exercised; (ii) allow payment, in whole or in part, through the delivery
of shares of Common Stock which have been owned by the Holder for at least six
months, duly endorsed for transfer to the Company with a Fair Market Value on
the date of delivery equal to the aggregate exercise price of the Option or
exercised portion thereof; (iii) allow payment, in whole or in part,
through the surrender of shares of Common Stock then issuable upon exercise of
the Option having a Fair Market Value on the date of Option exercise equal to
the aggregate exercise price of the Option or exercised portion thereof; (iv) allow
payment, in whole or in part, through the delivery of property of any kind
which constitutes good and valuable consideration; (v) allow payment, in
whole or in part, through the delivery of a full recourse promissory note
bearing interest (at no less than such rate as shall then preclude the
imputation of interest under the Code) and payable upon such terms as may be
prescribed by the Administrator; (vi) allow payment, in whole or in part,
through the delivery of a notice that the Holder has placed a market sell order
with a broker with respect to shares of Common Stock then issuable upon
exercise of the Option, and that the broker has been directed to pay a
sufficient portion of the net proceeds of the sale to the Company in
satisfaction of the Option exercise price, provided that payment of such
proceeds is then made to the Company upon settlement of such sale; or (vii) allow
payment through any combination of the consideration provided in the foregoing
subparagraphs (ii), (iii), (iv), (v) and (vi). In the case of a promissory
note, the Administrator may also prescribe the form of such note and
the security to be given for such note. The Option may not be exercised,
however, by delivery of a promissory note or by a loan from the Company when or
where such loan or other extension of credit is prohibited by law.

 

6.3           Transfer of Shares
to a Subsidiary Employee or Consultant.

 

(a)           As soon as practicable after receipt by the
Subsidiary, pursuant to Section 6.2(d), of payment for the shares with
respect to which an Option, or portion thereof, is exercised by an Optionee who
is an Employee or Consultant of a Subsidiary, then with respect to each such
exercise the Company shall transfer to the Subsidiary the number of shares of
Common Stock equal to:

 

(i)           the amount of the
payment made by the Optionee to the Company pursuant to Section 6.2(d), divided
by

 

(ii)           the price per share
of the shares subject to the exercised portion of the Option, as determined
pursuant to Section 5.1.

 

(b)           As soon as practicable after receipt of the shares of
Common Stock by the Subsidiary pursuant to this Section 6.3, the
Subsidiary shall transfer such shares to the Optionee for no additional
consideration.

 

6.4           Conditions to
Issuance of Stock Certificates. The Company shall not be required to
issue or deliver any certificate or certificates for shares of stock purchased
upon the exercise of any Option or portion thereof prior to fulfillment of all
of the following conditions:

 

(a)           The admission of such shares to listing on all stock
exchanges on which such class of stock is then listed;

 

(b)           The completion of any registration or other
qualification of such shares under any state or federal law, or under the
rulings or regulations of the Securities and Exchange Commission or any other
governmental regulatory body which the Administrator shall, in its absolute discretion,
deem necessary or advisable;

 

(c)           The obtaining of any approval or other clearance from
any state or federal governmental agency which the Administrator shall, in its
absolute discretion, determine to be necessary or advisable;

 

(d)           The lapse of such reasonable period of time following
the exercise of the Option as the Administrator may establish from time to
time for reasons of administrative convenience; and

 

(e)           The receipt by the Company of full payment for such
shares, including payment of any applicable withholding tax, which in the
discretion of the Administrator may be in the form of consideration
used by the Holder to pay for such shares under Section 6.2(d).

 

6.5           Rights as
Stockholders. Holders shall not be, nor have any of the rights or
privileges of, stockholders of the Company in respect of any shares purchasable
upon the exercise of any part of an Option unless and until certificates
representing such shares have been issued by the Company to such Holders.

 

6.6           Ownership and
Transfer Restrictions. The Administrator, in its absolute
discretion, may impose such restrictions on the ownership and
transferability of the shares purchasable upon the exercise of an Option as it
deems appropriate. Any such restriction shall be set forth in the respective
Award Agreement and may be referred to on the certificates evidencing such
shares. The Holder shall give the Company prompt notice of any disposition of
shares of Common Stock acquired by exercise

 

8

 

of an Incentive Stock Option within (a) two
years from the date of granting (including the date the Option is modified,
extended or renewed for purposes of Section 424(h) of the Code) such
Option to such Holder, or (b) one year after the transfer of such shares
to such Holder.

 

6.7           Additional
Limitations on Exercise of Options. Holders may be required to
comply with any timing or other restrictions with respect to the settlement or
exercise of an Option, including a window-period limitation, as may be imposed
in the discretion of the Administrator.

 

ARTICLE VII.

AWARD OF RESTRICTED STOCK

 

7.1           Eligibility. Subject to
the Award Limit, Restricted Stock may be awarded to any Employee or any
Consultant whom the Committee determines should receive such an Award. Each
Independent Director shall be eligible to be granted shares of Restricted Stock
at the times and in the manner set forth in Section 7.3.

 

7.2           Award of Restricted
Stock to Employees and Consultants.

 

(a)           The Committee may from time to time, in its absolute
discretion:

 

(i)            Determine which
Employees or Consultants (including Employees or Consultants who have
previously received other awards under the Plan) in its opinion should be
awarded Restricted Stock; and

 

(ii)           Determine the
purchase price, if any, and other terms and conditions applicable to such
Restricted Stock, consistent with the Plan.

 

(b)           The Committee shall establish the purchase price, if
any, and form of payment for Restricted Stock; provided,  however,
that such purchase price shall be no less than the par value of the Common
Stock to be purchased, unless otherwise permitted by applicable state law. In
all cases, legal consideration shall be required for each issuance of
Restricted Stock.

 

(c)           Upon the selection of an Employee or Consultant to be
awarded Restricted Stock, the Committee shall instruct the Secretary of the
Company to issue such Restricted Stock and may impose such conditions on
the issuance of such Restricted Stock as it deems appropriate.

 

7.3           Award of Restricted
Stock to Independent Directors.

 

(a)           Restricted Stock shall be awarded to Independent
Directors in accordance with the following formula:

 

(i)            Each person who is
an Independent Director as of the date the Plan is adopted by the Board
automatically shall be granted 2,000 shares of Restricted Stock (subject to
adjustment as provided in Section 11.3) on the date of each annual meeting
of the stockholders occurring after the date the Plan is adopted by the Board; provided,
such person is an Independent Director as of such date and has continuously
served an Independent Director during such period.

 

(ii)           Each person who is
elected, re-elected or appointed by the Board as an Independent Director after
the date the Plan is adopted by the Board, automatically shall be granted: (A) 4,000
shares of Restricted Stock (subject to adjustment as provided in Section 11.3)
on the date such Independent Director is first elected or appointed, and (B) 4,000
shares of Restricted Stock (subject to adjustment as provided in Section 11.3)
on the date of each annual meeting of the stockholders occurring after such
initial election or appointment; provided, such person is an Independent
Director as of such date and has continuously served as an Independent Director
during such period.

 

(iii)          All of the
foregoing grants of Restricted Stock authorized by this Section 7.3 are
subject to stockholder approval of the Plan.

 

(b)           Independent Directors shall not be required to pay any
purchase price for the shares of Common Stock to be acquired pursuant to an
award of Restricted Stock under Section 7.3(a), unless otherwise required
under applicable law, in which case the purchase price shall be the minimum
purchase price required by such law, as determined by the Board in its sole
discretion. To the extent a purchase price is so required, such purchase price
shall be paid in cash or by check at the time such award of Restricted Stock is
granted.

 

(c)           The restrictions imposed under Sections 7.5 and 7.6 on
Restricted Stock awarded to Independent Directors shall lapse and be removed
(and the shares of Common Stock acquired by a Participant pursuant to a
Restricted Stock award shall vest) in 20% increments on each of the first five
anniversaries of the date the shares of Restricted Stock are granted; provided,

 

9

 

however, that shares of Restricted Stock
granted after February 21, 2006 pursuant to clause B of Section 7.3(a)(ii) above
shall vest based on Independent Directors’ Years of Service in accordance with
the following schedule:

 

	
  Years
  of Service at the Date of Grant

  	
   

  	
  Percentage Vested

  
	
  Less than six

  	
   

  	
  20% increments on each of
  the first five anniversaries of the date the shares of Restricted Stock are
  granted

  
	
  Six

  	
   

  	
  25% increments on each of
  the first four anniversaries of the date the shares of Restricted Stock are
  granted

  
	
  Seven

  	
   

  	
  33-1/3% increments on each
  of the first three anniversaries of the date the shares of Restricted Stock
  are granted (rounded up to the nearest whole share)

  
	
  Eight

  	
   

  	
  50% increments on each of
  the first two anniversaries of the date the shares of Restricted Stock are
  granted

  
	
  Nine

  	
   

  	
  100% vested on the first
  anniversary of the date the shares of Restricted Stock are granted

  
	
  Ten or more

  	
   

  	
  100% vested as of the date
  the shares of Restricted Stock are granted

  

 

For purposes of this Plan, “Years of Service” for a
Director shall mean each 365-day period of his or her continuous service to the
Company as an Employee, Director or Consultant. The Committee shall have sole,
final and binding authority to determine any questions regarding a Director’s
Years of Service for purposes of the Plan.

 

7.4           Rights as
Stockholders. Subject to Section 7.5, upon delivery of the
shares of Restricted Stock to the escrow holder pursuant to Section 7.7,
the Holder shall have, unless otherwise provided by the Administrator, all the
rights of a stockholder with respect to said shares, subject to the
restrictions in his or her Award Agreement, including the right to receive all
dividends and other distributions paid or made with respect to the shares; provided,
however, that in the discretion of the Administrator, any extraordinary
distributions with respect to the Common Stock shall be subject to the
restrictions set forth in Section 7.5.

 

7.5           Restriction. Except as
otherwise provided in Section 7.3, all shares of Restricted Stock issued
under the Plan (including any shares received by holders thereof with respect
to shares of Restricted Stock as a result of stock dividends, stock splits or
any other form of recapitalization) shall, in the terms of each individual
Award Agreement, be subject to such restrictions as the Administrator shall
provide, which restrictions may include, without limitation, restrictions
concerning voting rights and transferability and restrictions based on duration
of employment or service with the Company, Company performance and individual
performance; provided,  however, that, except with respect to
shares of Restricted Stock granted to Section 162(m) Participants, by
action taken after the Restricted Stock is issued, the Administrator may, on
such terms and conditions as it may determine to be appropriate, remove
any or all of the restrictions imposed by the terms of the Award Agreement.
Restricted Stock may not be sold or encumbered until all restrictions are
terminated or expire. If no consideration was paid by the Holder upon issuance,
a Holder’s rights in unvested Restricted Stock shall lapse, and such Restricted
Stock shall be surrendered to the Company without consideration, upon
Termination of Employment or, if applicable, upon Termination of Consultancy or
Termination of Directorship with the Company. Notwithstanding the foregoing,
the Administrator in its sole and absolute discretion may provide that
such rights shall not lapse in the event of a Termination of Employment
following a “change of ownership or control” (within the meaning of Treasury
Regulation Section 1.162-27(e)(2)(v) or any successor regulation
thereto) of the Company or because of the Holder’s death or disability; provided,
further, except with respect to shares of Restricted Stock granted to Section 162(m)
Participants, the Administrator in its sole and absolute discretion may provide
that no such lapse or surrender shall occur in the event of a Termination of
Employment, Termination of Consultancy, or Termination of Directorship, without
cause or following any change in control of the Company or because of the
Holder’s retirement, or otherwise.

 

10

 

7.6           Repurchase of
Restricted Stock. The Administrator shall provide in
the terms of each individual Award Agreement that the Company shall have the
right to repurchase from the Holder the Restricted Stock then subject to
restrictions under the Award Agreement immediately upon a Termination of
Employment or, if applicable, upon a Termination of Consultancy or Termination
of Directorship, between the Holder and the Company, at a cash price per share
equal to the price paid, if any, by the Holder for such Restricted Stock; provided,
however, that the Administrator in its sole and absolute discretion may provide
that no such right of repurchase shall exist in the event of a Termination of
Employment following a “change of ownership or control” (within the meaning of
Treasury Regulation Section 1 .162-27(e)(2)(v) or any successor
regulation thereto) of the Company or because of the Holder’s death or
disability; provided, further, that, except with respect to shares of
Restricted Stock granted to Section 162(m) Participants, the Administrator
in its sole and absolute discretion may provide that no such right of
repurchase shall exist in the event of a Termination of Employment, Termination
of Consultancy or Termination of Directorship, without cause or following any
change in control of the Company or because of the Holder’s retirement, or
otherwise.

 

7.7           Escrow. The
Secretary of the Company or such other escrow holder as the Administrator may appoint
shall retain physical custody of each certificate representing Restricted Stock
until all of the restrictions imposed under the Award Agreement with respect to
the shares evidenced by such certificate expire or shall have been removed.
With respect to shares of Restricted Stock granted or awarded to the Company’s
Employees, Consultants and Independent Directors, upon the expiration or
removal of such restrictions, the Secretary of the Company, or other escrow
holder, shall transfer the shares to the Holder. With respect to shares of
Restricted Stock granted to a Subsidiary’s Employees, upon the expiration or
removal of such restrictions, the Secretary of the Company, or other escrow
holder, shall transfer the shares to the Subsidiary. As soon as practicable
after the receipt of such shares by the Subsidiary, the Subsidiary shall
transfer such shares to the Holder for no additional consideration.

 

7.8           Legend. In order to
enforce the restrictions imposed upon shares of Restricted Stock hereunder, the
Administrator shall cause a legend or legends to be placed on certificates
representing all shares of Restricted Stock that are still subject to
restrictions under Award Agreements, which legend or legends shall make
appropriate reference to the conditions imposed thereby.

 

7.9           Section 83(b). A Holder may not
make an election under Section 83(b) of the Code with respect to any
share of Restricted Stock granted or awarded hereunder without the consent of
the Company, which the Company may grant or withhold in its sole
discretion.

 

ARTICLE VIII.

PERFORMANCE AWARDS, DIVIDEND EQUIVALENTS, DEFERRED STOCK, STOCK PAYMENTS

 

8.1           Eligibility. Subject to
the Award Limit, one or more Performance Awards, Dividend Equivalents, awards
of Deferred Stock and/or Stock Payments may be granted to any Employee or
any Consultant whom the Committee determines should receive such an Award.

 

8.2           Performance Awards.

 

(a)           Any Employee or Consultant selected by the Committee may be
granted one or more Performance Awards. The value of such Performance Awards may be
linked to any one or more of the Performance Criteria or other specific performance
criteria determined appropriate by the Committee, in each case on a specified
date or dates or over any period or periods determined by the Committee. In
making such determinations, the Committee shall consider (among such other
factors as it deems relevant in light of the specific type of award) the
contributions, responsibilities and other compensation of the particular
Employee or Consultant.

 

(b)           Without limiting Section 8.2(a), the Committee may grant
Performance Awards to any 162(m) Participant in the form of a cash bonus
payable upon the attainment of objective performance goals which are
established by the Committee and relate to one or more of the Performance
Criteria, in each case on a specified date or dates or over any period or
periods determined by the Committee. Any such bonuses paid to 162(m)
Participants shall be based upon objectively determinable bonus formulas
established in accordance with the provisions of Section 3.2. The maximum
amount of any Performance Award payable to a 162(m) Participant under this Section 8.2(b) shall
not exceed the Award Limit with respect to any calendar year of the Company.
Unless otherwise specified by the Committee at the time of grant, the
Performance Criteria with respect to a Performance Award payable to a 162(m)
Participant shall be determined on the basis of generally accepted accounting
principles.

 

11

 

8.3           Dividend
Equivalents.

 

(a)           Any Employee or Consultant selected by the Committee may be
granted Dividend Equivalents based on the dividends declared on Common Stock,
to be credited as of dividend payment dates, during the period between the date
a Stock Appreciation Right, Deferred Stock or Performance Award is granted, and
the date such Stock Appreciation Right, Deferred Stock or Performance Award is
exercised, vests or expires, as determined by the Committee. Such Dividend
Equivalents shall be converted to cash or additional shares of Common Stock by
such formula and at such time and subject to such limitations as may be
determined by the Committee.

 

(b)           Any Holder of an Option who is an Employee or
Consultant selected by the Committee may be granted Dividend Equivalents
based on the dividends declared on Common Stock, to be credited as of dividend
payment dates, during the period between the date an Option is granted, and the
date such Option is exercised, vests or expires, as determined by the
Committee. Such Dividend Equivalents shall be converted to cash or additional
shares of Common Stock by such formula and at such time and subject to such
limitations as may be determined by the Committee.

 

(c)           Any Holder of an Option who is an Independent Director
selected by the Board may be granted Dividend Equivalents based on the
dividends declared on Common Stock, to be credited as of dividend payment
dates, during the period between the date an Option is granted and the date
such Option is exercised, vests or expires, as determined by the Board. Such
Dividend Equivalents shall be converted to cash or additional shares of Common
Stock by such formula and at such time and subject to such limitations as may be
determined by the Board.

 

(d)           Dividend Equivalents granted with respect to Options
intended to be qualified performance-based compensation for purposes of Section 162(m)
of the Code shall be payable, with respect to pre-exercise periods, regardless
of whether such Option is subsequently exercised.

 

8.4           Stock Payments. Any
Employee or Consultant selected by the Committee may receive Stock
Payments in the manner determined from time to time by the Committee. The
number of shares shall be determined by the Committee and may be based
upon the Performance Criteria or other specific performance criteria determined
appropriate by the Committee, determined on the date such Stock Payment is made
or on any date thereafter.

 

8.5           Deferred Stock. Any
Employee or Consultant selected by the Committee may be granted an award
of Deferred Stock in the manner determined from time to time by the Committee.
The number of shares of Deferred Stock shall be determined by the Committee and
may be linked to the Performance Criteria or other specific performance
criteria determined to be appropriate by the Committee, in each case on a
specified date or dates or over any period or periods determined by the
Committee. Common Stock underlying a Deferred Stock award will not be issued
until the Deferred Stock award has vested, pursuant to a vesting schedule or
performance criteria set by the Committee. Unless otherwise provided by the
Committee, a Holder of Deferred Stock shall have no rights as a Company
stockholder with respect to such Deferred Stock until such time as the Award
has vested and the Common Stock underlying the Award has been issued.

 

8.6           Term. The term
of a Performance Award, Dividend Equivalent, award of Deferred Stock and/or
Stock Payment shall be set by the Committee in its discretion.

 

8.7           Exercise or
Purchase Price. The Committee may establish the
exercise or purchase price of a Performance Award, shares of Deferred Stock or
shares received as a Stock Payment; provided,  however, that such
price shall not be less than the par value of a share of Common Stock, unless
otherwise permitted by applicable state law.

 

8.8           Exercise Upon
Termination of Employment, Termination of Consultancy or Termination of
Directorship. A Performance Award, Dividend Equivalent, award of
Deferred Stock and/or Stock Payment is exercisable or payable only while the
Holder is an Employee, or Consultant, as applicable; provided,  however,
that the Administrator in its sole and absolute discretion may provide
that the Performance Award, Dividend Equivalent, award of Deferred Stock and/or
Stock Payment may be exercised or paid subsequent to a Termination of
Employment following a “change of control or ownership” (within the meaning of Section 1.162-27(e)(2)(v) or
any successor regulation thereto) of the Company; provided,  further,
that except with respect to Performance Awards granted to Section 162(m)
Participants, the Administrator in its sole and absolute discretion may provide
that Performance Awards may be exercised or paid following a Termination
of Employment or a Termination of Consultancy without cause, or following a
change in control of the Company, or because of the Holder’s retirement, death
or disability, or otherwise.

 

8.9           Form of
Payment. Payment of the amount determined under Section 8.2 or
8.3 above shall be in cash, in Common Stock or a combination of both, as
determined by the Committee. To the extent any payment under this Article VIII
is effected in Common Stock, it shall be made subject to satisfaction of all
provisions of Section 6.5.

 

12

 

8.10         Independent
Director Retirement Awards. Notwithstanding anything in this
Plan to the contrary, upon the Termination of Directorship for any reason by an
Independent Director who has rendered continuous service to the Company or any
Subsidiary (either as an Employee or an Independent Director) for a period of
at least ten years, such Independent Director may be granted a Performance
Award of shares of Common Stock, with the number of shares of Common Stock
subject to each such Performance Award to be determined by the Board in its
sole discretion.

 

ARTICLE IX.

STOCK APPRECIATION RIGHTS

 

9.1           Grant of Stock
Appreciation Rights. A Stock Appreciation Right may be
granted to any Employee or Consultant selected by the Committee. A Stock
Appreciation Right may be granted (a) in connection and
simultaneously with the grant of an Option, (b) with respect to a previously
granted Option, or (c) independent of an Option. A Stock Appreciation
Right shall be subject to such terms and conditions not inconsistent with the
Plan as the Committee shall impose and shall be evidenced by an Award
Agreement.

 

9.2           Coupled Stock
Appreciation Rights.

 

(a)           A Coupled Stock Appreciation Right (“CSAR”) shall be
related to a particular Option and shall be exercisable only when and to the
extent the related Option is exercisable.

 

(b)           A CSAR may be granted to the Holder for no more
than the number of shares subject to the simultaneously or previously granted
Option to which it is coupled.

 

(c)           A CSAR shall entitle the Holder (or other person
entitled to exercise the Option pursuant to the Plan) to surrender to the
Company unexercised a portion of the Option to which the CSAR relates (to the
extent then exercisable pursuant to its terms) and to receive from the Company
in exchange therefore an amount determined by multiplying the difference
obtained by subtracting the Option exercise price from the Fair Market Value of
a share of Common Stock on the date of exercise of the CSAR by the number of
shares of Common Stock with respect to which the CSAR shall have been
exercised, subject to any limitations the Committee may impose.

 

9.3           Independent Stock
Appreciation Rights.

 

(a)           An Independent Stock Appreciation Right (“ISAR”) shall
be unrelated to any Option and shall have a term set by the Committee. An ISAR
shall be exercisable in such installments as the Committee may determine.
An ISAR shall cover such number of shares of Common Stock as the Committee may determine.
The exercise price per share of Common Stock subject to each ISAR shall be set
by the Committee. An ISAR is exercisable only while the Holder is an Employee
or Consultant; provided, that the Committee may determine that the
ISAR may be exercised subsequent to Termination of Employment or
Termination of Consultancy without cause, or following a change in control of
the Company, or because of the Holder’s retirement, death or disability, or
otherwise.

 

(b)           An ISAR shall entitle the Holder (or other person
entitled to exercise the ISAR pursuant to the Plan) to exercise all or a
specified portion of the ISAR (to the extent then exercisable pursuant to its
terms) and to receive from the Company an amount determined by multiplying the
difference obtained by subtracting the exercise price per share of the ISAR
from the Fair Market Value of a share of Common Stock on the date of exercise
of the ISAR by the number of shares of Common Stock with respect to which the
ISAR shall have been exercised, subject to any limitations the Committee may impose.

 

9.4           Payment and
Limitations on Exercise.

 

(a)           Payment of the amounts determined under Section 9.2(c) and
9.3(b) above shall be in cash, in Common Stock (based on its Fair Market
Value as of the date the Stock Appreciation Right is exercised) or a
combination of both, as determined by the Committee. To the extent such payment
is effected in Common Stock it shall be made subject to satisfaction of all
provisions of Section 6.5 above pertaining to Options.

 

(b)           Holders of Stock Appreciation Rights may be
required to comply with any timing or other restrictions with respect to the
settlement or exercise of a Stock Appreciation Right, including a window-period
limitation, as may be imposed in the discretion of the Committee.

 

ARTICLE X.

ADMINISTRATION

 

10.1         Compensation
Committee. The Compensation Committee (or another committee or a
subcommittee of the Board assuming the functions of the Committee under the
Plan) shall consist solely of two or more Independent Directors appointed

 

13

 

by and holding office at the pleasure
of the Board, each of whom is both a “non-employee director” as defined by Rule 16b-3
and an “outside director” for purposes of Section 162(m) of the Code.
Appointment of Committee members shall be effective upon acceptance of
appointment. Committee members may resign at any time by delivering
written notice to the Board. Vacancies in the Committee may be filled by
the Board.

 

10.2         Duties and Powers
of Committee. It shall be the duty of the Committee to conduct the
general administration of the Plan in accordance with its provisions. The
Committee shall have the power to interpret the Plan and the Award Agreements,
and to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith, to interpret, amend or
revoke any such rules and to amend any Award Agreement provided that the
rights or obligations of the Holder of the Award that is the subject of any
such Award Agreement are not affected adversely. Any such grant or award under
the Plan need not be the same with respect to each Holder. Any such
interpretations and rules with respect to Incentive Stock Options shall be
consistent with the provisions of Section 422 of the Code. In its absolute
discretion, the Board may at any time and from time to time exercise any
and all rights and duties of the Committee under the Plan except with respect
to matters which under Rule 16b-3 or Section 162(m) of the Code, or
any regulations or rules issued thereunder, are required to be determined
in the sole discretion of the Committee. Notwithstanding the foregoing, the
full Board, acting by a majority of its members in office, shall conduct the
general administration of the Plan with respect to Options, Dividend
Equivalents and Restricted Stock granted to Independent Directors.

 

10.3         Majority Rule;
Unanimous Written Consent. The Committee shall act by a
majority of its members in attendance at a meeting at which a quorum is present
or by a memorandum or other written instrument signed by all members of the
Committee.

 

10.4         Compensation;
Professional Assistance; Good Faith Actions. Members of the
Committee shall receive such compensation, if any, for their services as
members as may be determined by the Board. All expenses and liabilities
which members of the Committee incur in connection with the administration of
the Plan shall be borne by the Company. The Committee may, with the approval of
the Board, employ attorneys, consultants, accountants, appraisers, brokers or
other persons. The Committee, the Company and the Company’s officers and
Directors shall be entitled to rely upon the advice, opinions or valuations of
any such persons. All actions taken and all interpretations and determinations
made by the Committee or the Board in good faith shall be final and binding
upon all Holders, the Company and all other interested persons. No members of
the Committee or Board shall be personally liable for any action, determination
or interpretation made in good faith with respect to the Plan or Awards, and
all members of the Committee and the Board shall be fully protected by the
Company in respect of any such action, determination or interpretation.

 

10.5         Delegation of
Authority to Grant Awards. The Committee may, but need not,
delegate from time to time some or all of its authority to grant Awards under
the Plan to a committee consisting of one or more members of the Committee or
of one or more officers of the Company; provided,  however, that
the Committee may not delegate its authority to grant Awards to
individuals (a) who are subject on the date of the grant to the reporting rules under
Section 16(a) of the Exchange Act, (b) who are Section 162(m)
Participants, or (c) who are officers of the Company who are delegated
authority by the Committee hereunder. Any delegation hereunder shall be subject
to the restrictions and limits that the Committee specifies at the time of such
delegation of authority and may be rescinded at any time by the Committee.
At all times, any committee appointed under this Section 10.5 shall serve
in such capacity at the pleasure of the Committee.

 

ARTICLE XI.

MISCELLANEOUS PROVISIONS

 

11.1         Not Transferable.

 

(a)           Except as otherwise provided in Section 11.1(b):

 

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

 

(ii)           No Award or
interest or right therein shall be liable for the debts, contracts or
engagements of the Holder or his or her successors in interest or shall be
subject to disposition by transfer, alienation, anticipation, pledge,
encumbrance, assignment or any other means whether such disposition be
voluntary or involuntary or by operation of law by judgment, levy, attachment,
garnishment or any other legal or equitable proceedings (including bankruptcy),
and any attempted disposition thereof shall be null and void and of no effect,
except to the extent that such disposition is permitted by the preceding
sentence.

 

14

 

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

 

(b)           Notwithstanding Section 11.1(a), in the case of
Options granted to Independent Directors, an Optionee who is an Independent
Director may transfer an Option to a Permitted Transferee (as defined
below) subject to the following terms and conditions: (i) an Option
transferred to a Permitted Transferee shall not be assignable or transferable
by the Permitted Transferee other than by will or the laws of descent and
distribution or, subject to the consent of the Administrator, pursuant to a
DRO; (ii) any Option which is transferred to a Permitted Transferee shall
continue to be subject to all the terms and conditions of the Option as
applicable to the original Holder (other than the ability to further transfer
the Option); and (iii) the Holder and the Permitted Transferee shall
execute any and all documents requested by the Administrator, including,
without limitation documents to (A) confirm the status of the transferee
as a Permitted Transferee, (B) satisfy any requirements for an exemption
for the transfer under applicable federal and state securities laws and (C) evidence
the transfer. Shares of Common Stock acquired by a Permitted Transferee through
the exercise of an Option have not been registered under the Securities Act or
any state securities act and may not be transferred, nor will any assignee
or transferee thereof be recognized as an owner of such shares of Common Stock for
any purpose, unless a registration statement under the Securities Act and any
applicable state securities act with respect to such shares shall then be in
effect or unless the availability of an exemption from registration with
respect to any proposed transfer or disposition of such shares shall be
established to the satisfaction of counsel for the Company. For purposes of
this Section 11.1(b), “Permitted Transferee” shall mean, with respect to a
Holder, any child, stepchild, grandchild, parent, stepparent, grandparent,
spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including
adoptive relationships, any person sharing the Holder’s household (other than a
tenant or employee), a trust in which these persons (or the Holder) control the
management of assets, and any other entity in which these persons (or the
Holder) own more than fifty percent of the voting interests, or any other
transferee specifically approved by the Administrator after taking into account
any state or federal tax or securities laws applicable to transferable Options.

 

11.2         Amendment,
Suspension or Termination of the Plan. Except as
otherwise provided in this Section 11.2, the Plan may be wholly or
partially amended or otherwise modified, suspended or terminated at any time or
from time to time by the Administrator (including, but not limited to, an
amendment to the number of shares that may be subject to future awards of
Restricted Stock pursuant to Section 7.3). However, without approval of
the Company’s stockholders given within 12 months before or after the action by
the Administrator, no action of the Administrator may, except as provided in Section 11.3,
increase the limits imposed in Section 2.1 on the maximum number of shares
which may be issued under the Plan. No amendment, suspension or
termination of the Plan shall, without the consent of the Holder, alter or
impair any rights or obligations under any Award theretofore granted or
awarded, unless the Award itself otherwise expressly so provides. No Awards may be
granted or awarded during any period of suspension or after termination of the
Plan, and in no event may any Award be granted under the Plan after the
first to occur of the following events:

 

(a)           The expiration of 10 years from the date the Plan is
adopted by the Board; or

 

(b)           The expiration of 10 years from the date the Plan is
approved by the Company’s stockholders under Section 11.4.

 

11.3         Changes in Common
Stock or Assets of the Company, Acquisition or Liquidation of the Company and
Other Corporate Events.

 

(a)           Subject to Section 11.3(e), in the event that the
Administrator determines that any dividend or other distribution (whether in
the form of cash, Common Stock, other securities or other property),
recapitalization, reclassification, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, liquidation, dissolution, or sale, transfer, exchange or other
disposition of all or substantially all of the assets of the Company, or
exchange of Common Stock or other securities of the Company, issuance of
warrants or other rights to purchase Common Stock or other securities of the
Company, or other similar corporate transaction or event, in the Administrator’s
sole discretion, affects the Common Stock such that an adjustment is determined
by the Administrator to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan or with respect to an Award, then the Administrator shall, in
such manner as it may deem equitable, adjust any or all of:

 

15

 

(i)            The number and kind
of shares of Common Stock (or other securities or property) with respect to
which Awards may be granted or awarded (including, but not limited to,
adjustments of the limitations in Section 2.1 on the maximum number and
kind of shares which may be issued and adjustments of the Award Limit);

 

(ii)           The number and kind
of shares of Common Stock (or other securities or property) subject to
outstanding Awards; and

 

(iii)          The grant or
exercise price with respect to any Award.

 

(b)           Subject to Sections 11.3(c) and 11.3(e), in the
event of any transaction or event described in Section 11.3(a) or any
unusual or nonrecurring transactions or events affecting the Company, any
affiliate of the Company, or the financial statements of the Company or any
affiliate, or of changes in applicable laws, regulations or accounting
principles, the Administrator, in its sole and absolute discretion, and on such
terms and conditions as it deems appropriate, either by the terms of the Award
or by action taken prior to the occurrence of such transaction or event and
either automatically or upon the Holder’s request, is hereby authorized to take
any one or more of the following actions whenever the Administrator determines
that such action is appropriate in order to prevent dilution or enlargement of
the benefits or potential benefits intended to be made available under the Plan
or with respect to any Award under the Plan, to facilitate such transactions or
events or to give effect to such changes in laws, regulations or principles:

 

(i)            To provide for
either the purchase of any such Award for an amount of cash equal to the amount
that could have been attained upon the exercise of such Award or realization of
the Holder’s rights had such Award been currently exercisable or payable or
fully vested or the replacement of such Award with other rights or property
selected by the Administrator in its sole discretion;

 

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

 

(iii)          To provide that
such Award shall be exercisable as to all shares covered thereby, notwithstanding
anything to the contrary in Section 5.3 or the provisions of such Award;

 

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

 

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

 

(vi)          To provide that,
for a specified period of time prior to such event, the restrictions imposed
under an Award Agreement upon some or all shares of Restricted Stock or
Deferred Stock may be terminated, and, in the case of Restricted Stock,
some or all shares of such Restricted Stock may cease to be subject to
repurchase under Section 7.6 or forfeiture under Section 7.5 after
such event.

 

(c)           Subject to Sections 11.3(e), 3.2 and 3.3, the
Administrator may, in its discretion, include such further provisions and
limitations in any Award, agreement or certificate, as it may deem
equitable and in the best interests of the Company.

 

(d)           With respect to Awards which are granted to Section 162(m)
Participants and are intended to qualify as performance-based compensation
under Section 162(m)(4)(C), no adjustment or action described in this Section 11.3
or in any other provision of the Plan shall be authorized to the extent that
such adjustment or action would cause such Award to fail to so qualify under Section 162(m)(4)(C),
or any successor provisions thereto. No adjustment or action described in this Section 11.3
or in any other provision of the Plan shall be authorized to the extent that
such adjustment or action would cause the Plan to violate Section 422(b)(1) of
the Code. Furthermore, no such adjustment or action shall be authorized to the
extent such adjustment or action would result in short-swing profits liability
under Section 16 or violate the exemptive conditions of Rule 16b-3
unless the Administrator determines that the Award is not to comply with such exemptive
conditions. The number of shares of Common Stock subject to any Award shall
always be rounded to the next whole number.

 

(e)           The existence of the Plan, the Award Agreement and the
Awards granted hereunder shall not affect or restrict in any way the right or
power of the Company or the stockholders of the Company to make or authorize
any adjustment, recapitalization, reorganization or other change in the Company’s
capital structure or its business, any merger or consolidation of the Company,
any issue of stock or of options, warrants or rights to purchase stock or of
bonds, debentures, preferred or prior preference stocks whose rights are
superior to or affect the Common Stock or the rights thereof or which are
convertible

 

16

 

into or exchangeable for Common
Stock, or the dissolution or liquidation of the company, or any sale or
transfer of all or any part of its assets or business, or any other
corporate act or proceeding, whether of a similar character or otherwise.

 

11.4         Approval of Plan by
Stockholders. The Plan will be submitted for the approval of the
Company’s stockholders within 12 months after the date of the Board’s initial
adoption of the Plan. Awards may be granted or awarded prior to such stockholder
approval, provided that such Awards shall not be exercisable nor shall such
Awards vest prior to the time when the Plan is approved by the stockholders,
and provided further that if such approval has not been obtained at the end of
said twelve-month period, all Awards previously granted or awarded under the
Plan shall thereupon be canceled and become null and void. In addition, if the
Board determines that Awards other than Options or Stock Appreciation Rights
which may be granted to Section 162(m) Participants should continue
to be eligible to qualify as performance-based compensation under Section 162(m)(4)(C) of
the Code, the Performance Criteria must be disclosed to and approved by the
Company’s stockholders no later than the first stockholder meeting that occurs
in the fifth year following the year in which the Company’s stockholders
previously approved the Performance Criteria.

 

11.5         Tax Withholding. The Company
shall be entitled to require payment in cash or deduction from other
compensation payable to each Holder of any sums required by federal, state or
local tax law to be withheld with respect to the issuance, vesting, exercise or
payment of any Award. The Administrator may in its discretion and in
satisfaction of the foregoing requirement allow such Holder to elect to have
the Company withhold shares of Common Stock otherwise issuable under such Award
(or allow the return of shares of Common Stock) having a Fair Market Value
equal to the sums required to be withheld. Notwithstanding any other provision
of the Plan, the number of shares of Common Stock which may be withheld
with respect to the issuance, vesting, exercise or payment of any Award (or
which may be repurchased from the Holder of such Award within six months
after such shares of Common Stock were acquired by the Holder from the Company)
in order to satisfy the Holder’s federal and state income and payroll tax
liabilities with respect to the issuance, vesting, exercise or payment of the
Award shall be limited to the number of shares which have a Fair Market Value
on the date of withholding or repurchase equal to the aggregate amount of such
liabilities based on the minimum statutory withholding rates for federal and
state tax income and payroll tax purposes that are applicable to such
supplemental taxable income.

 

11.6         Restrictions on
Awards. This Plan shall be interpreted and construed in a manner
consistent with the Company’s status as a real estate investment trust (“REIT”),
within the meaning of Sections 856 through 860 of the Code. No Award shall be
granted or awarded, and with respect to an Option already granted under the
Plan, an Option shall not be exercisable:

 

(a)           to the extent such Option or other Award could cause
the Holder to be in violation of the Ownership Limit; or

 

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

 

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

 

11.8         Loans. To the
extent permitted under applicable law, the Committee may, in its discretion,
extend one or more loans to Employees in connection with the exercise or
receipt of an Award granted or awarded under the Plan, or the issuance of
Restricted Stock or Deferred Stock awarded under the Plan. The terms and
conditions of any such loan shall be set by the Committee.

 

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

 

11.10       Effect of Plan Upon
Options and Compensation Plans. The adoption of the Plan shall not
affect any other compensation or incentive plans in effect for the Company or
any Subsidiary. Nothing in the Plan shall be construed to limit

 

17

 

the right of the Company (a) to
establish any other forms of incentives or compensation for Employees,
Directors or Consultants of the Company or any Subsidiary, or (b) to grant
or assume options or other rights or awards otherwise than under the Plan in
connection with any proper corporate purpose including but not by way of
limitation, the grant or assumption of options in connection with the
acquisition by purchase, lease, merger, consolidation or otherwise, of the
business, stock or assets of any corporation, partnership, limited liability
company, firm or association.

 

11.11       Compliance with
Laws. The Plan, the granting and vesting of Awards under the Plan
and the issuance and delivery of shares of Common Stock and the payment of
money under the Plan or under Awards granted or awarded hereunder are subject
to compliance with all applicable federal and state laws, rules and
regulations (including but not limited to state and federal securities law and
federal margin requirements) and to such approvals by any listing, regulatory
or governmental authority as may, in the opinion of counsel for the Company, be
necessary or advisable in connection therewith. Any securities delivered under
the Plan shall be subject to such restrictions, and the person acquiring such
securities shall, if requested by the Company, provide such assurances and
representations to the Company as the Company may deem necessary or
desirable to assure compliance with all applicable legal requirements. To the
extent permitted by applicable law, the Plan and Awards granted or awarded
hereunder shall be deemed amended to the extent necessary to conform to
such laws, rules and regulations.

 

11.12       Titles. Titles are
provided herein for convenience only and are not to serve as a basis for
interpretation or construction of the Plan.

 

11.13       Governing Law. The Plan
and any agreements hereunder shall be administered, interpreted and enforced
under the internal laws of the State of Maryland without regard to conflicts of
laws thereof.

 

* * *

 

I
hereby certify that the foregoing amended and restated version of the Plan was
duly adopted by the Board of Directors of Realty Income Corporation on February 21,
2006.

 

* * *

 

I
hereby certify that the foregoing Plan was approved by the stockholders of Realty
Income Corporation on May 6, 2003.

 

Executed
on this 21st day of February, 2006.

 

	
   

  	
  /s/ Michael R. Pfeiffer

  	
   

  
	
   

  	
  Secretary

  

 

18

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