Document:

exv4w17

Exhibit
4.17

     SEVENTH SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of January 29,
2010, among RMD NETWORKS, INC. ( the “New Guarantor”), Subsidiary of Inverness Medical Innovations,
Inc. (or its successor) (the “Issuer”), INVERNESS MEDICAL INNOVATIONS, INC., a Delaware
corporation, each of the Guarantors (the “Existing Guarantors”) under the Indenture referred to
below, and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee under the Indenture referred
to below (the “Trustee”).

WITNESSETH:

     WHEREAS the Issuer has heretofore executed and delivered to the Trustee an Indenture dated as
of August 11, 2009, as amended, supplemented and modified by a Third Supplemental Indenture dated
as of September 28, 2009, and a Fifth Supplemental Indenture dated as of November 25, 2009 (as so
amended, supplemented or modified, and as further amended, supplemented or modified to date, the
“Indenture”), by and among the Issuer, the Existing Guarantors and the Trustee, providing for the
issuance of 7.875% Senior Notes due 2016 (the “Notes”);

     WHEREAS Section 4.13 of the Indenture provides that under certain circumstances the Issuer is
required to cause the New Guarantor to execute and deliver to the Trustee a supplemental indenture
pursuant to which the New Guarantor shall unconditionally and irrevocably guarantee all of the
Issuer’s obligations under the Notes pursuant to a guarantee on the terms and conditions set forth
herein; and

     WHEREAS pursuant to Section 9.01 of the Indenture, the Trustee, the Issuer and the Existing
Guarantors are authorized to execute and deliver this Supplemental Indenture;

     NOW THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the New Guarantor, the Trustee, the
Issuer and the Existing Guarantors mutually covenant and agree for the equal and ratable benefit of
the Holders as follows:

     SECTION 1. Definitions. For all purposes of this Supplemental Indenture, except as
otherwise herein expressly provided or unless the context otherwise requires: (i) the terms and
expressions used herein shall have the same meanings as corresponding terms and expressions used in
the Indenture; and (ii) the words “herein,” “hereof” and “hereby” and other words of similar import
used in this Supplemental Indenture refer to this Supplemental Indenture as a whole and not to any
particular section hereof.

     SECTION 2. Agreement to Guarantee. The New Guarantor hereby unconditionally and
irrevocably agrees, jointly and severally with all other Guarantors, to guarantee the Issuer’s
obligations under the Notes and the Indenture on the terms and subject to the conditions set forth
in Article Ten of the Indenture and to be bound by all other applicable provisions of the
Indenture.

     SECTION 3. Ratification of Indenture; Supplemental Indenture Part of Indenture.
Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all
the terms, conditions and provisions thereof shall remain in full force and effect. This

 

 

Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder
heretofore or hereafter authenticated and delivered shall be bound hereby.

     SECTION 4. Governing Law. This Supplemental Indenture shall be governed by, and
construed in accordance with, the laws of the State of New York, but without giving effect to
applicable principles of conflicts of laws to the extent that the application of the laws of
another jurisdiction would be required thereby.

     SECTION 5. Trustee Makes No Representation. The Trustee makes no representation as to
the validity or sufficiency of this Supplemental Indenture or for the recitals contained herein.

     SECTION 6. Counterparts. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them together represent
the same agreement.

     SECTION 7. Effect of Headings. The Section headings herein are for convenience only
and shall not effect the construction thereof.

[Signature Page Follows]

- 2 -

 

     IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly
executed as of the date first above written.

	 	 	 	 	 
	 	NEW GUARANTOR:

RMD NETWORKS, Inc.

   as a New Guarantor

 	 
	 	By:  	/s/ David A. Teitel
 	 
	 	 	Name:  	David A. Teitel 	 
	 	 	Title:  	Vice President, Finance and Treasurer 	 
	 
	 	ISSUER:

INVERNESS MEDICAL INNOVATIONS, INC.

 	 
	 	By:  	/s/ David A. Teitel
 	 
	 	 	Name:  	David A. Teitel 	 
	 	 	Title:  	Chief Financial Officer and Treasurer 	 
	 

Signature Page to Seventh Supplemental Indenture (7.875% Notes — 144A)

 

 

	 	 
	 

	EXISTING GUARANTORS:
	 
	 
	 

	ALERE HEALTH LLC
	 

	ALERE HEALTHCARE OF ILLINOIS, INC.
	 

	ALERE HEALTH IMPROVEMENT COMPANY
	 

	ALERE HEALTH SYSTEMS, INC.
	 

	ALERE MEDICAL, INC.
	 

	ALERE WELLOLOGY, INC.
	 

	ALERE WOMEN’S AND CHILDREN’S HEALTH, LLC
	 

	AMEDITECH INC.
	 

	APPLIED BIOTECH, INC.
	 

	BINAX, INC.
	 

	BIOSITE INCORPORATED
	 

	CHOLESTECH CORPORATION
	 

	FIRST CHECK DIAGNOSTICS CORP.
	 

	FIRST CHECK ECOM, INC.
	 

	FREE & CLEAR, INC.
	 

	GENECARE MEDICAL GENETICS CENTER, INC.
	 

	HEMOSENSE, INC.
	 

	IM US HOLDINGS, LLC

	 	 	 	 	 
	 	By:  	                      /s/ David A. Teitel
 	 
	 	 	Name:  	David A. Teitel 	 
	 	 	Title (respectively):  Vice President and
     Treasurer; Vice President, Finance; 
     Vice
President, Finance; Vice 
     President and
Treasurer; Vice 
     President and Treasurer;
Vice 
     President, Finance; Vice President,
     Finance; General Manager; Vice 
     President;
Vice President, Finance; 
     Vice President,
Finance; Vice 
     President, Finance and Chief
     Financial Officer; Vice President,
     Finance; Vice President; Vice 
     President,
Finance and Treasurer; 
     Vice President and
Treasurer; 
     Treasurer; President 	 
	 

Signature Page to Seventh Supplemental Indenture (7.875% Notes — 144A)

 

 

	 	 
	 

	As Guarantors (continued):
	 
	 
	 

	INNOVACON, INC.
	 

	INNOVATIVE MOBILITY, LLC
	 

	INSTANT TECHNOLOGIES, INC.
	 

	INVERNESS MEDICAL, LLC
	 

	INVERNESS MEDICAL — BIOSTAR INC.
	 

	INVERNESS MEDICAL INNOVATIONS NORTH AMERICA, INC.
	 

	INVERNESS MEDICAL INTERNATIONAL HOLDING CORP.
	 

	ISCHEMIA TECHNOLOGIES, INC.
	 

	IVC INDUSTRIES, INC.
	 

	MATRITECH, INC.
	 

	OSTEX INTERNATIONAL, INC.
	 

	QUALITY ASSURED SERVICES, INC.
	 

	REDWOOD TOXICOLOGY LABORATORY, INC.
	 

	RTL HOLDINGS, INC.
	 

	SELFCARE TECHNOLOGY, INC.
	 

	TAPESTRY MEDICAL, INC.
	 

	WAMPOLE LABORATORIES, LLC
	 

	ZYCARE, INC.

	 	 	 	 	 
	 	By:  	                     /s/ David A. Teitel
 	 
	 	 	Name:  	David A. Teitel 	 
	 	 	Title (respectively):  Vice President, Finance;
     Chief Financial Officer; Vice 
     President,
Finance; Vice President, 
     Finance; Vice
President, Finance; 
     Vice President,
Finance; President; 
     Vice President,
Finance; Vice 
     President; Vice President,
Finance; 
     Vice President, Finance; Chief
     Financial Officer; Vice President,
     Finance; Vice President, Finance; 
     Vice
President, Finance; Vice 
     President,
Finance; Vice President; 
     Chief Financial
Officer and Treasurer 	 
	 

Signature Page to Seventh Supplemental Indenture (7.875% Notes — 144A)

 

 

	 	 	 	 	 
	 	EXISTING GUARANTORS (continued):

MATRIA OF NEW YORK, INC.

 	 
	 	By:  	/s/ Tom Underwood
 	 
	 	 	Name:  	Tom Underwood 	 
	 	 	Title:  	President 	 
	 

Signature Page to Seventh Supplemental Indenture (7.875% Notes — 144A)

 

 

	 	 	 	 	 
	 	TRUSTEE:

THE BANK OF NEW YORK MELLON TRUST 
   COMPANY, N.A.,

   as Trustee

 	 
	 	By:  	/s/ Peter M. Murphy
 	 
	 	 	Name:  	Peter M. Murphy 	 
	 	 	Its: Vice President 	 
	 

Signature Page to Seventh Supplemental Indenture (7.875% Notes — 144A)exv10w1

Exhibit 10.1

CHATHAM LODGING TRUST

EQUITY INCENTIVE PLAN

 

 

 TABLE OF CONTENTS 

	 	 	 	 	 	 	 	 	 
	Section	 	 	 	 	 	Page	 
	 	 	 	 	 
	 	 	 	 
	Article I DEFINITIONS	 	 	1	 
	 	 	 	 	 
	 	 	 	 
	 	1.01.	 	 	Affiliate
	 	 	1	 
	 	1.02.	 	 	Agreement
	 	 	1	 
	 	1.03.	 	 	Board
	 	 	1	 
	 	1.04.	 	 	Change in Control
	 	 	1	 
	 	1.05.	 	 	Code
	 	 	2	 
	 	1.06.	 	 	Committee
	 	 	2	 
	 	1.07.	 	 	Common Share
	 	 	3	 
	 	1.08.	 	 	Company
	 	 	3	 
	 	1.09.	 	 	Completion Date
	 	 	3	 
	 	1.10.	 	 	Control Change Date
	 	 	3	 
	 	1.11.	 	 	Corresponding SAR
	 	 	3	 
	 	1.12.	 	 	Dividend Equivalent Right
	 	 	3	 
	 	1.13.	 	 	Exchange Act
	 	 	4	 
	 	1.14.	 	 	Fair Market Value
	 	 	4	 
	 	1.15.	 	 	Initial Value
	 	 	4	 
	 	1.16.	 	 	LTIP Unit
	 	 	4	 
	 	1.17.	 	 	Operating Partnership
	 	 	4	 
	 	1.18.	 	 	Option
	 	 	5	 
	 	1.19.	 	 	Other Equity-Based Award
	 	 	5	 
	 	1.20.	 	 	Participant
	 	 	5	 
	 	1.21.	 	 	Performance Units
	 	 	5	 
	 	1.22.	 	 	Plan
	 	 	5	 
	 	1.23.	 	 	REIT
	 	 	5	 
	 	1.24.	 	 	SAR
	 	 	5	 
	 	1.25.	 	 	Share Award
	 	 	6	 
	 	1.26.	 	 	Ten Percent Shareholder
	 	 	6	 
	 	 	 	 	 
	 	 	 	 
	Article II PURPOSES	 	 	6	 
	 	 	 	 	 
	 	 	 	 
	Article III ADMINISTRATION	 	 	6	 
	 	 	 	 	 
	 	 	 	 
	Article IV ELIGIBILITY	 	 	7	 
	 	 	 	 	 
	 	 	 	 
	Article V COMMON SHARES SUBJECT TO PLAN	 	 	7	 
	 	 	 	 	 
	 	 	 	 
	 	5.01.	 	 	Common Shares Issued
	 	 	7	 
	 	5.02.	 	 	Aggregate Limit
	 	 	8	 
	 	5.03.	 	 	Reallocation of Shares
	 	 	8	 
	 	 	 	 	 
	 	 	 	 
	Article VI OPTIONS	 	 	9	 
	 	 	 	 	 
	 	 	 	 
	 	6.01.	 	 	Award
	 	 	9	 
	 	6.02.	 	 	Option Price
	 	 	9	 
	 	6.03.	 	 	Maximum Option Period
	 	 	9	 

-i-

 

	 	 	 	 	 	 	 	 	 
	Section	 	 	 	 	 	Page
	 	6.04.	 	 	Nontransferability
	 	 	9	 
	 	6.05.	 	 	Transferable Options
	 	 	10	 
	 	6.06.	 	 	Employee Status
	 	 	10	 
	 	6.07.	 	 	Exercise
	 	 	10	 
	 	6.08.	 	 	Payment
	 	 	10	 
	 	6.09.	 	 	Shareholder Rights
	 	 	11	 
	 	6.10.	 	 	Disposition of Shares
	 	 	11	 
	 	 	 	 	 
	 	 	 	 
	Article VII SARS	 	 	11	 
	 	 	 	 	 
	 	 	 	 
	 	7.01.	 	 	Award
	 	 	11	 
	 	7.02.	 	 	Maximum SAR Period
	 	 	11	 
	 	7.03.	 	 	Nontransferability
	 	 	11	 
	 	7.04.	 	 	Transferable SARs
	 	 	12	 
	 	7.05.	 	 	Exercise
	 	 	12	 
	 	7.06.	 	 	Employee Status
	 	 	12	 
	 	7.07.	 	 	Settlement
	 	 	13	 
	 	7.08.	 	 	Shareholder Rights
	 	 	13	 
	 	 	 	 	 
	 	 	 	 
	Article VIII SHARE AWARDS	 	 	13	 
	 	 	 	 	 
	 	 	 	 
	 	8.01.	 	 	Award
	 	 	13	 
	 	8.02.	 	 	Vesting
	 	 	13	 
	 	8.03.	 	 	Employee Status
	 	 	13	 
	 	8.04.	 	 	Shareholder Rights
	 	 	14	 
	 	 	 	 	 
	 	 	 	 
	Article IX PERFORMANCE UNIT AWARDS	 	 	14	 
	 	 	 	 	 
	 	 	 	 
	 	9.01.	 	 	Award
	 	 	14	 
	 	9.02.	 	 	Earning the Award
	 	 	14	 
	 	9.03.	 	 	Payment
	 	 	14	 
	 	9.04.	 	 	Shareholder Rights
	 	 	14	 
	 	9.05.	 	 	Nontransferability
	 	 	15	 
	 	9.06.	 	 	Transferable Performance Units
	 	 	15	 
	 	9.07.	 	 	Employee Status
	 	 	15	 
	 	 	 	 	 
	 	 	 	 
	Article X OTHER EQUITY—BASED AWARDS	 	 	16	 
	 	 	 	 	 
	 	 	 	 
	 	10.01.	 	 	Award
	 	 	16	 
	 	10.02.	 	 	Terms and Conditions
	 	 	16	 
	 	10.03.	 	 	Payment or Settlement
	 	 	16	 
	 	10.04.	 	 	Employee Status
	 	 	16	 
	 	10.05.	 	 	Shareholder Rights
	 	 	17	 
	 	 	 	 	 
	 	 	 	 
	Article XI ADJUSTMENT UPON CHANGE IN COMMON STOCK	 	 	17	 
	 	 	 	 	 
	 	 	 	 
	Article XII COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES	 	 	18	 
	 	 	 	 	 
	 	 	 	 
	Article XIII GENERAL PROVISIONS	 	 	18	 
	 	 	 	 	 
	 	 	 	 
	 	13.01.	 	 	Effect on Employment and Service
	 	 	18	 

-ii-

 

	 	 	 	 	 	 	 	 	 
	Section	 	 	 	 	 	Page
	 	13.02.	 	 	Unfunded Plan
	 	 	18	 
	 	13.03.	 	 	Rules of Construction
	 	 	18	 
	 	13.04.	 	 	Withholding Taxes
	 	 	19	 
	 	13.05.	 	 	REIT Status
	 	 	19	 
	 	 	 	 	 
	 	 	 	 
	Article XIV change in control	 	 	19	 
	 	 	 	 	 
	 	 	 	 
	 	14.01.	 	 	Impact of Change in Control
	 	 	19	 
	 	14.02.	 	 	Assumption Upon Change in Control
	 	 	20	 
	 	14.03.	 	 	Cash-Out Upon Change in Control
	 	 	20	 
	 	14.04.	 	 	Limitation of Benefits
	 	 	20	 
	 	 	 	 	 
	 	 	 	 
	Article XV AMENDMENT	 	 	22	 
	 	 	 	 	 
	 	 	 	 
	Article XVI DURATION OF PLAN	 	 	22	 
	 	 	 	 	 
	 	 	 	 
	Article XVII EFFECTIVE DATE OF PLAN	 	 	22	 

-iii-

 

ARTICLE I

 DEFINITIONS 

	1.01.	 	 Affiliate 

          Affiliate means any entity, whether now or hereafter existing, which controls, is controlled
by, or is under common control with, the Company (including, but not limited to, joint ventures,
limited liability companies and partnerships). For this purpose, the term “control” shall mean
ownership of 50% or more of the total combined voting power or value of all classes of shares or
interests in the entity, or the power to direct the management and policies of the entity, by
contract or otherwise.

	1.02.	 	 Agreement

          Agreement means a written agreement (including any amendment or supplement thereto) between
the Company and a Participant specifying the terms and conditions of a Share Award, an award of
Performance Units, an Option, SAR or Other Equity-Based Award (including an LTIP) granted to such
Participant.

	1.03.	 	 Board
	 
	 	 	Board means the Board of Trustees of the Company.
	 
	1.04.	 	Change in Control

          “Change in Control” shall mean a change in control of the Company which will be deemed to have
occurred after the date hereof if:

	(1)	 	any “person” as such term is used in Section 3(a)(9) of the Exchange
Act, as modified and used in Sections 13(d) and 14(d) thereof except that
such term shall not include (A) the Company or any of its subsidiaries, (B)
any trustee or other fiduciary holding securities under an employee benefit
plan of the Company or any of its affiliates, (C) an underwriter temporarily
holding securities pursuant to an offering of such securities, (D) any
corporation owned, directly or indirectly, by the shareholders of the Company
in substantially the same proportions as their ownership of the Company’s
common shares, or (E) any person or group as used in Rule 13d-1(b) under the
Exchange Act, is or becomes the Beneficial Owner, as such term is defined in
Rule 13d-3 under the Exchange Act, directly or indirectly, of securities of
the Company representing at least 50% of the combined voting power or
common shares of the Company;
	 
	(2)	 	during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board, and any new trustee (other than
(A) a trustee designated by a person who has entered into an agreement with
the Company to effect a transaction described in clause (1), (3), or (4) of
this Section 1.05 or (B) a trustee whose initial assumption of office

-1-

 

	 	 	is in
connection with an actual or threatened election contest, including but not
limited to a consent solicitation, relating to the election of trustees of the
Company) whose election by the Board or nomination for election by the
Company’s shareholders was approved by a vote of at least two-thirds (2/3) of
the trustees then still in office who either were trustees at the beginning of
the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute at least a majority thereof;
	 
	(3)	 	there is consummated a merger or consolidation of the Company or any
direct or indirect subsidiary of the Company with any other corporation, other
than a merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities
of the surviving entity or any parent thereof) in combination with the
ownership of any trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any subsidiary of the Company, more
than 50% of the combined voting power and common shares of the Company or such
surviving entity or any parent thereof outstanding immediately after such
merger or consolidation; or
	 
	(4)	 	there is consummated an agreement for the sale or disposition by the
Company of all or substantially all of the Company’s assets (or any transaction
having a similar effect, including a liquidation) other than a sale or
disposition by the Company of all or substantially all of the Company’s assets
to an entity, more than fifty percent (50%) of the combined voting power and
common shares of which is owned by shareholders of the Company in substantially
the same proportions as their ownership of the common shares of the Company
immediately prior to such sale.

If a change in control constitutes a payment event with respect to any Option, SAR, Share Award,
Performance Unit or Other Equity-Based Award that provides for the deferral of compensation and is
subject to Section 409A of the Code, no payment will be made under that award on account of a
Change in Control unless the event described in (1), (2), (3) or (4) above, as applicable,
constitutes a “change in control event” under Treasury Regulation Section 1.409A-3(i)(5).

	1.05.	 	Code
	 
	 	 	Code means the Internal Revenue Code of 1986, and any amendments thereto.
	 
	1.06.	 	Committee

          Committee means the Compensation Committee of the Board. Unless otherwise determined by the
Board, the Committee shall consist solely of two or more non-employee members of the Board, each of
whom is intended to qualify as a “non-employee director” as defined by Rule 16b-3 of the Exchange
Act or any successor rule, an “outside director” for purposes of Section 162(m) of the Code (if
awards under the Plan are subject to the deduction

-2-

 

limitation of Section 162(m) of the Code) and an “independent director” under the rules of any
exchange or automated quotation system on which the Common Shares are listed, traded or quoted;
provided , that any action taken by the Committee shall be valid and effective, whether or not the
members of the Committee at the time of such action are later determined not to have satisfied the
foregoing requirements or otherwise provided in any charter of the Committee. If there is no
Compensation Committee, then “Committee” means the Board; and provided, further that with respect
to awards made to a member of the Board who is not an employee of the Company or an Affiliate,
“Committee” means the Board.

	1.07.	 	 Common Share 

          Common Share means common shares of beneficial interest, par value $0.01 per share, of the
Company.

	1.08.	 	Company
	 
	 	 	Company means Chatham Lodging Trust, a Maryland real estate investment trust.
	 
	1.09.	 	 Completion Date 

          Completion Date means the initial closing date of the initial public offering of the Common
Shares.

	1.10.	 	 Control Change Date 

          Control Change Date means the date on which a Change in Control occurs. If a Change in
Control occurs on account of a series of transactions, the “Control Change Date” is the date of the
last of such transactions.

	1.11.	 	 Corresponding SAR 

          Corresponding SAR means an SAR that is granted in relation to a particular Option and that can
be exercised only upon the surrender to the Company, unexercised, of that portion of the Option to
which the SAR relates.

	1.12.	 	 Dividend Equivalent Right 

          Dividend Equivalent Right means the right, subject to the terms and conditions prescribed by
the Committee, of a Participant to receive (or have credited) cash, shares or other property in
amounts equivalent to the cash, shares or other property dividends declared on Common Shares with
respect to specified Performance Units or Common Shares subject to an Other Equity-Based Award, as
determined by the Committee, in its sole discretion. The Committee may provide that such Dividend
Equivalents (if any) shall be distributed only when, and to the extent that, the underlying award
is vested or earned and also may provide that

-3-

 

Dividend Equivalents (if any) shall be deemed to have been reinvested in additional Common
Shares or otherwise reinvested.

	1.13.	 	 Exchange Act 
	 
	 	 	Exchange Act means the Securities Exchange Act of 1934, as amended.
	 
	1.14.	 	 Fair Market Value 

          Fair Market Value means, on any given date, the reported “closing” price of a Common Share on
the New York Stock Exchange for such date or, if there is no closing price for a Common Share on
the date in question, the closing price for a Common Share on the last preceding date for which a
quotation exists. If, on any given date, the Common Shares are not listed for trading on the New
York Stock Exchange, then Fair Market Value shall be the “closing” price of a Common Share on such
other exchange on which the Common Shares are listed for trading for such date (or, if there is no
closing price for a Common Share on the date in question, the closing price for a Common Share on
the last preceding date for which such quotation exists) or, if the Common Shares are not listed on
any exchange, the amount determined by the Committee using any reasonable method in good faith and
in accordance with the regulations under Section 409A of the Code.

	1.15.	 	 Initial Value 

          Initial Value means, with respect to a Corresponding SAR, the option price per share of the
related Option and, with respect to an SAR granted independently of an Option, the price per
Common Share as determined by the Committee on the date of grant; provided, however, that the price
shall not be less than the Fair Market Value on the date of grant. Except as provided in Article
XI, the Initial Value of an outstanding SAR may not be reduced (by amendment, cancellation and new
grant or otherwise) without the approval of shareholders.

	1.16.	 	 LTIP Unit 

          LTIP Unit means an “LTIP Unit” as defined in the Operating Partnership’s partnership
agreement. An LTIP Unit granted under this Plan represents the right to receive the benefits,
payments or other rights in respect of an LTIP Unit set forth in that partnership agreement,
subject to the terms and conditions of the applicable Agreement and that partnership agreement.

	1.17.	 	 Operating Partnership 
	 
	 	 	Operating Partnership means Chatham Lodging, L. P.

-4-

 

	1.18.	 	 Option 

          Option means a share option that entitles the holder to purchase from the Company a stated
number of Common Shares at the price set forth in an Agreement.

	1.19.	 	 Other Equity-Based Award 

          Other Equity-Based Award means any award other than an Option, SAR, a Performance Unit award
or a Share Award which, subject to such terms and conditions as may be prescribed by the Committee,
entitles a Participant to receive Common Shares or rights or units valued in whole or in part by
reference to, or otherwise based on, Common Shares (including securities convertible into Common
Shares) or other equity interests including LTIP Units.

	1.20.	 	 Participant 

          Participant means an employee or officer of the Company or an Affiliate, a member of the
Board, or an individual who provides bona fide services to the Company or an Affiliate (including
an individual who provides services to the Company or an Affiliate by virtue of employment with, or
providing services to, the Operating Partnership), and who satisfies the requirements of Article IV
and is selected by the Committee to receive an award of Performance Units or a Share Award, Option,
SAR, Other Equity-Based Award or a combination thereof.

	1.21.	 	 Performance Units 

          Performance Units means an award, in the amount determined by the Committee, stated with
reference to a specified number of Common Shares or other securities or property, that in
accordance with the terms of an Agreement entitles the holder to receive a payment for each
specified unit equal to the value of the Performance Unit on the date of payment.

	1.22.	 	 Plan 
	 
	 	 	Plan means this Chatham Lodging Trust Equity Incentive Plan.
	 
	1.23.	 	 REIT 

          REIT means a real estate investment trust within the meaning of Sections 856 through 860 of
the Code.

	1.24.	 	 SAR 

          SAR means a share appreciation right that in accordance with the terms of an Agreement
entitles the holder to receive, with respect to each Common Share encompassed by the exercise of
the SAR, the excess, if any, of the Fair Market Value at the time of exercise over the Initial

-5-

 

Value. References to “SARs” include both Corresponding SARs and SARs granted independently of
Options, unless the context requires otherwise.

	1.25.	 	 Share Award 
	 
	 	 	Share Award means Common Shares awarded to a Participant under Article VIII.
	 
	1.26.	 	 Ten Percent Shareholder 

          Ten Percent Shareholder means any individual owning more than ten percent (10%) of the total
combined voting power of all classes of shares of the Company or of a “parent corporation” or
“subsidiary corporation” (as such terms are defined in Section 424 of the Code) of the Company. An
individual shall be considered to own any voting shares owned (directly or indirectly) by or for
his or her brothers, sisters, spouse, ancestors or lineal descendants and shall be considered to
own proportionately any voting shares owned (directly or indirectly) by or for a corporation,
partnership, estate or trust of which such individual is a shareholder, partner or beneficiary.

ARTICLE II

 PURPOSES 

          The Plan is intended to assist the Company and its Affiliates in recruiting and retaining
individuals and other service providers with ability and initiative by enabling such persons or
entities to participate in the future success of the Company and its Affiliates and to associate
their interests with those of the Company and its shareholders. The Plan is intended to permit the
grant of both Options qualifying under Section 422 of the Code (“incentive stock options”) and
Options not so qualifying, and the grant of SARs, Share Awards, Performance Units, and Other
Equity-Based Awards in accordance with the Plan and any procedures that may be established by the
Committee. No Option that is intended to be an incentive stock option shall be invalid for failure
to qualify as an incentive stock option. The proceeds received by the Company from the sale of
Common Shares pursuant to this Plan shall be used for general corporate purposes.

ARTICLE III

 ADMINISTRATION 

          The Plan shall be administered by the Committee. The Committee shall have authority to grant
SARs, Share Awards, Performance Units, Options and Other Equity-Based Awards upon such terms (not
inconsistent with the provisions of this Plan), as the Committee may consider appropriate. Such
terms may include conditions (in addition to those contained in this Plan), on the exercisability
of all or any part of an Option or SAR or on the transferability or forfeitability of a Share
Award, an award of Performance Units or an Other Equity-Based Award. Notwithstanding any such
conditions, the Committee may, in its discretion, accelerate the time at which any Option or SAR
may be exercised, or the time at which a Share Award or Other Equity-Based Award may become
transferable or nonforfeitable or the time at which an Other

-6-

 

Equity-Based Award or an award of Performance Units may be settled. In addition, the Committee
shall have complete authority to interpret all provisions of this Plan; to prescribe the form of
Agreements; to adopt, amend, and rescind rules and regulations pertaining to the administration of
the Plan (including rules and regulations that require or allow Participants to defer the payment
of benefits under the Plan); and to make all other determinations necessary or advisable for the
administration of this Plan. The Committee’s determinations under the Plan (including without
limitation, determinations of the individuals to receive awards under the Plan, the form, amount
and timing of such awards, the terms and provisions of such awards and the Agreements) need not be
uniform and may be made by the Committee selectively among individuals who receive, or are eligible
to receive, awards under the Plan, whether or not such persons are similarly situated. The express
grant in the Plan of any specific power to the Committee shall not be construed as limiting any
power or authority of the Committee. Any decision made, or action taken, by the Committee in
connection with the administration of this Plan shall be final and conclusive. The members of the
Committee shall not be liable for any act done in good faith with respect to this Plan or any
Agreement, Option, SAR, Share Award, Other Equity-Based Award or award of Performance Units. All
expenses of administering this Plan shall be borne by the Company.

ARTICLE IV

 ELIGIBILITY 

          Any employee of the Company or an Affiliate (including a trade or business that becomes an
Affiliate after the adoption of this Plan) and any member of the Board is eligible to participate
in this Plan. In addition, any other individual who provides significant services to the Company
or an Affiliate (including an individual who provides services to the Company or an Affiliate by
virtue of employment with, or providing services to, the Operating Partnership) is eligible to
participate in this Plan if the Committee, in its sole discretion, determines that the
participation of such individual is in the best interest of the Company.

ARTICLE V

 COMMON SHARES SUBJECT TO PLAN 

	5.01.	 	 Common Shares Issued 

          Upon the award of Common Shares pursuant to a Share Award, an Other Equity-Based Award or in
settlement of an award of Performance Units, the Company may deliver to the Participant Common
Shares from its treasury shares or authorized but unissued Common Shares. Upon the exercise of any
Option, SAR or Other Equity-Based Award denominated in Common Shares, the Company may deliver to
the Participant (or the Participant’s broker if the Participant so directs), Common Shares from its
treasury shares or authorized but unissued Common Shares.

-7-

 

	5.02.	 	 Aggregate Limit 

          (a) The maximum aggregate number of Common Shares that may be issued under this Plan pursuant
to the exercise of Options and SARs, the grant of Share Awards or Other Equity-Based Awards and the
settlement of Performance Units is equal to _____ percent (___%) of the number of fully diluted
Common Shares (taking into account interests in the Operating Partnership that may become
convertible into Common Shares) outstanding on the Completion Date, but excluding any shares issued
pursuant to the exercise of the underwriters’ over-allotment option. Other Equity-Based Awards
that are LTIP Units shall reduce the maximum aggregate number of Common Shares that may be issued
under this Plan on a one-for-one basis, i.e., each such unit shall be treated as an award of Common
Shares.

          (b) The maximum number of Common Shares that may be issued under this Plan in accordance with
Section 5.02(a) shall be subject to adjustment as provided in Article XI.

          (c) The maximum number of Common Shares that may be issued upon the exercise of Options that
are incentive stock options or Corresponding SARs that are related to incentive stock options shall
be determined in accordance with Sections 5.02(a) and 5.02(b).

	5.03.	 	 Reallocation of Shares 

          If any award or grant under the Plan (including LTIP Units) expires, is forfeited or is
terminated without having been exercised or is paid in cash without delivery of Common Shares, then
any Common Shares covered by such lapsed, cancelled, expired, unexercised or cash-settled portion
of such award or grant and any forfeited, lapsed, cancelled or expired LTIP Units shall be
available for the grant of other Options, SARs, Share Awards, Other Equity-Based Awards and
settlement of Performance Units under this Plan. Any Common Shares tendered or withheld to satisfy
the grant or exercise price or tax withholding obligation pursuant to any award shall reduce the
number of Common Shares available under the Plan and shall not be available for future grants or
awards. If Common Shares are issued in settlement of an SAR, the number of Common Shares available
under the Plan shall be reduced by the number of Common Shares for which the SAR was exercised
rather than the number of Common Shares issued in settlement of the SAR. To the extent permitted
by applicable law or the rules of any exchange on which the Common Shares are listed for trading,
Common Shares issued in assumption of, or in substitution for, any outstanding awards of any entity
acquired in any form of combination by the Company or any Affiliate shall not reduce the number of
Common Shares available for issuance under the Plan. Notwithstanding the provisions of this
Section 5.03, no Common Shares may be subject to an Option or granted or awarded if such action
would cause an Option intended to be an incentive stock option to fail to qualify as such.

-8-

 

ARTICLE VI

 OPTIONS 

	6.01.	 	 Award 

          In accordance with the provisions of Article IV, the Committee will designate each individual
to whom an Option is to be granted and will specify the number of Common Shares covered by such
awards.

	6.02.	 	 Option Price 

          The price per Common Share purchased on the exercise of an Option shall be determined by the
Committee on the date of grant, but shall not be less than the Fair Market Value on the date the
Option is granted. Notwithstanding the preceding sentence, the price per Common Share purchased on
the exercise of any Option that is an incentive stock option granted to an individual who is a Ten
Percent Shareholder on the date such option is granted, shall not be less than one hundred ten
percent (110%) of the Fair Market Value on the date the Option is granted. Except as provided in
Article XI, the price per share of an outstanding Option may not be reduced (by amendment,
cancellation and new grant or otherwise) without the approval of shareholders.

	6.03.	 	 Maximum Option Period 

          The maximum period in which an Option may be exercised shall be determined by the Committee on
the date of grant except that no Option shall be exercisable after the expiration of ten years from
the date such Option was granted. In the case of an incentive stock option granted to a
Participant who is a Ten Percent Shareholder on the date of grant, such Option shall not be
exercisable after the expiration of five years from the date of grant. The terms of any
Option may provide that it is exercisable for a period less than such maximum period.

	6.04.	 	 Nontransferability 

          Except as provided in Section 6.05, each Option granted under this Plan shall be
nontransferable except by will or by the laws of descent and distribution. In the event of any
transfer of an Option (by the Participant or his transferee), the Option and any Corresponding SAR
that relates to such Option must be transferred to the same person or persons or entity or
entities. Except as provided in Section 6.05, during the lifetime of the Participant to whom the
Option is granted, the Option may be exercised only by the Participant. No right or interest of a
Participant in any Option shall be liable for, or subject to, any lien, obligation, or liability of
such Participant.

-9-

 

	6.05.	 	 Transferable Options 

          Section 6.04 to the contrary notwithstanding, if the Agreement provides, an Option that is not
an incentive stock option may be transferred by a Participant to the Participant’s children,
grandchildren, spouse, one or more trusts for the benefit of such family members or a partnership
in which such family members are the only partners, on such terms and conditions as may be
permitted under Rule 16b-3 under the Exchange Act as in effect from time to time. The holder of an
Option transferred pursuant to this Section shall be bound by the same terms and conditions that
governed the Option during the period that it was held by the Participant; provided, however, that
such transferee may not transfer the Option except by will or the laws of descent and distribution.
In the event of any transfer of an Option (by the Participant or his transferee), the Option and
any Corresponding SAR that relates to such Option must be transferred to the same person or persons
or entity or entities. Notwithstanding the foregoing, an Option may not be transferred for
consideration absent shareholder approval.

	6.06.	 	 Employee Status 

          For purposes of determining the applicability of Section 422 of the Code (relating to
incentive stock options), or in the event that the terms of any Option provide that it may be
exercised only during employment or continued service or within a specified period of time after
termination of employment or continued service, the Committee may decide to what extent leaves of
absence for governmental or military service, illness, temporary disability, or other reasons shall
not be deemed interruptions of continuous employment or service.

	6.07.	 	 Exercise 

          Subject to the provisions of this Plan and the applicable Agreement, an Option may be
exercised in whole at any time or in part from time to time at such times and in compliance with
such requirements as the Committee shall determine; provided, however, that incentive stock options
(granted under the Plan and all plans of the Company and its Affiliates) may not be first
exercisable in a calendar year for Common Shares having a Fair Market Value (determined as of the
date an Option is granted) exceeding $100,000. An Option granted under this Plan may be exercised
with respect to any number of whole shares less than the full number for which the Option could be
exercised. A partial exercise of an Option shall not affect the right to exercise the Option from
time to time in accordance with this Plan and the applicable Agreement with respect to the
remaining shares subject to the Option. The exercise of an Option shall result in the termination
of any Corresponding SAR to the extent of the number of shares with respect to which the Option is
exercised.

	6.08.	 	 Payment 

          Subject to rules established by the Committee and unless otherwise provided in an Agreement,
payment of all or part of the Option price may be made in cash, certified check, by tendering
Common Shares, by attestation of ownership of Common Shares, by a broker-assisted

-10-

 

cashless exercise or in such other form or manner acceptable to the Committee. If Common
Shares are used to pay all or part of the Option price, the sum of the cash and cash equivalent and
the Fair Market Value (determined as of the day preceding the date of exercise) of the shares
surrendered or other consideration paid must not be less than the Option price of the shares for
which the Option is being exercised.

	6.09.	 	 Shareholder Rights 

          No Participant shall have any rights as a shareholder with respect to Common Shares subject to
an Option until the date of exercise of such Option.

	6.10.	 	 Disposition of Shares 

          A Participant shall notify the Company of any sale or other disposition of Common Shares
acquired pursuant to an Option that was an incentive stock option if such sale or disposition
occurs (i) within two years of the grant of an Option or (ii) within one year of the issuance of
the Common Shares to the Participant. Such notice shall be in writing and directed to the
Secretary of the Company.

ARTICLE VII

 SARS 

	7.01.	 	 Award 

          In accordance with the provisions of Article IV, the Committee will designate each individual
to whom SARs are to be granted and will specify the number of Common Shares covered by such awards.
No Participant may be granted Corresponding SARs (under the Plan and all plans of the Company and
its Affiliates) that are related to incentive stock options which are first exercisable in any
calendar year for Common Shares having an aggregate Fair Market Value (determined as of the date
the related Option is granted) that exceeds $100,000.

	7.02.	 	 Maximum SAR Period 

          The term of each SAR shall be determined by the Committee on the date of grant, except that no
SAR shall have a term of more than ten years from the date of grant. In the case of a
Corresponding SAR that is related to an incentive stock option granted to a Participant who is a
Ten Percent Shareholder on the date of grant, such Corresponding SAR shall not be exercisable after
the expiration of five years from the date of grant. The terms of any SAR may provide that it has a
term that is less than such maximum period.

	7.03.	 	 Nontransferability 

          Except as provided in Section 7.04, each SAR granted under this Plan shall be nontransferable
except by will or by the laws of descent and distribution. In the event of any

-11-

 

such transfer, a Corresponding SAR and the related Option must be transferred to the same
person or persons or entity or entities. Except as provided in Section 7.04, during the lifetime
of the Participant to whom the SAR is granted, the SAR may be exercised only by the Participant.
No right or interest of a Participant in any SAR shall be liable for, or subject to, any lien,
obligation, or liability of such Participant.

	7.04.	 	 Transferable SARs 

          Section 7.03 to the contrary notwithstanding, if the Agreement provides, an SAR, other than a
Corresponding SAR that is related to an incentive stock option, may be transferred by a Participant
to the Participant’s children, grandchildren, spouse, one or more trusts for the benefit of such
family members or a partnership in which such family members are the only partners, on such terms
and conditions as may be permitted under Rule 16b-3 under the Exchange Act as in effect from time
to time. The holder of an SAR transferred pursuant to this Section shall be bound by the same
terms and conditions that governed the SAR during the period that it was held by the Participant;
provided, however, that such transferee may not transfer the SAR except by will or the laws of
descent and distribution. In the event of any transfer of a Corresponding SAR (by the Participant
or his transferee), the Corresponding SAR and the related Option must be transferred to the same
person or person or entity or entities. Notwithstanding the foregoing, in no event may an SAR be
transferred for consideration absent shareholder approval.

	7.05.	 	 Exercise 

          Subject to the provisions of this Plan and the applicable Agreement, an SAR may be exercised
in whole at any time or in part from time to time at such times and in compliance with such
requirements as the Committee shall determine; provided, however, that a Corresponding SAR that is
related to an incentive stock option may be exercised only to the extent that the related Option is
exercisable and only when the Fair Market Value exceeds the option price of the related Option. An
SAR granted under this Plan may be exercised with respect to any number of whole shares less than
the full number for which the SAR could be exercised. A partial exercise of an SAR shall not
affect the right to exercise the SAR from time to time in accordance with this Plan and the
applicable Agreement with respect to the remaining shares subject to the SAR. The exercise of a
Corresponding SAR shall result in the termination of the related Option to the extent of the number
of shares with respect to which the SAR is exercised.

	7.06.	 	 Employee Status 

          If the terms of any SAR provide that it may be exercised only during employment or continued
service or within a specified period of time after termination of employment or continued service,
the Committee may decide to what extent leaves of absence for governmental or military service,
illness, temporary disability or other reasons shall not be deemed interruptions of continuous
employment or service.

-12-

 

	7.07.	 	 Settlement 

          At the Committee’s discretion, the amount payable as a result of the exercise of an SAR may be
settled in cash, Common Shares, or a combination of cash and Common Shares. No fractional share
will be deliverable upon the exercise of an SAR but a cash payment will be made in lieu thereof.

	7.08.	 	 Shareholder Rights 

          No Participant shall, as a result of receiving an SAR, have any rights as a shareholder of the
Company or any Affiliate until the date that the SAR is exercised and then only to the extent that
the SAR is settled by the issuance of Common Shares. Notwithstanding the foregoing, the Committee
may provide in an Agreement that the holder of an SAR is entitled to Dividend Equivalents during
the period beginning on the date of the award and ending on the date the SAR is exercised.

ARTICLE VIII

 SHARE AWARDS 

	8.01.	 	 Award 

          In accordance with the provisions of Article IV, the Committee will designate each individual
to whom a Share Award is to be made and will specify the number of Common Shares covered by such
awards.

	8.02.	 	 Vesting 

          The Committee, on the date of the award, may prescribe that a Participant’s rights in a Share
Award shall be forfeitable or otherwise restricted for a period of time or subject to such
conditions as may be set forth in the Agreement. By way of example and not of limitation, the
Committee may prescribe that a Participant’s rights in a Share Award shall be forfeitable or
otherwise restricted subject to the attainment of objectives stated with reference to the
Company’s, an Affiliate’s or a business unit’s attainment of objectives stated with respect to
performance criteria established by the Committee.

	8.03.	 	 Employee Status 

          In the event that the terms of any Share Award provide that shares may become transferable and
nonforfeitable thereunder only after completion of a specified period of employment or continuous
service, the Committee may decide in each case to what extent leaves of absence for governmental or
military service, illness, temporary disability, or other reasons shall not be deemed interruptions
of continuous employment or service.

-13-

 

	8.04.	 	 Shareholder Rights 

          Unless otherwise specified in accordance with the applicable Agreement, while the Common
Shares granted pursuant to the Share Award may be forfeited or are nontransferable, a Participant
will have all rights of a stockholder with respect to a Share Award, including the right to receive
dividends and vote the shares; provided, however, that during such period (i) a Participant may not
sell, transfer, pledge, exchange, hypothecate, or otherwise dispose of shares granted pursuant to a
Share Award, (ii) the Company shall retain custody of the certificates evidencing shares granted
pursuant to a Share Award, and (iii) the Participant will deliver to the Company a stock power,
endorsed in blank, with respect to each Share Award. The limitations set forth in the preceding
sentence shall not apply after the shares granted under the Share Award are transferable and are no
longer forfeitable.

ARTICLE IX

 PERFORMANCE UNIT AWARDS 

	9.01.	 	 Award 

          In accordance with the provisions of Article IV, the Committee will designate each individual
to whom an award of Performance Units is to be made and will specify the number of Common Shares or
other securities or property covered by such awards. The Committee also will specify whether
Dividend Equivalent Rights are granted in conjunction with the Performance Units.

	9.02.	 	 Earning the Award 

          The Committee, on the date of the grant of an award, shall prescribe that the Performance
Units will be earned, and the Participant will be entitled to receive payment pursuant to the award
of Performance Units, only upon the satisfaction of performance objectives and such other criteria
as may be prescribed by the Committee.

	9.03.	 	 Payment 

          In the discretion of the Committee, the amount payable when an award of Performance Units is
earned may be settled in cash, by the issuance of Common Shares, by the delivery of other
securities or property or a combination thereof. A fractional Common Share shall not be
deliverable when an award of Performance Units is earned, but a cash payment will be made in lieu
thereof. The amount payable when an award of Performance Units is earned shall be paid in a lump
sum.

	9.04.	 	 Shareholder Rights 

          A Participant, as a result of receiving an award of Performance Units, shall not have any
rights as a shareholder until, and then only to the extent that, the award of Performance Units is

-14-

 

earned and settled in Common Shares. After an award of Performance Units is earned and
settled in Common Shares, a Participant will have all the rights of a shareholder as described in
Section 8.05.

	9.05.	 	 Nontransferability 

          Except as provided in Section 9.06, Performance Units granted under this Plan shall be
nontransferable except by will or by the laws of descent and distribution. No right or interest of
a Participant in any Performance Units shall be liable for, or subject to, any lien, obligation, or
liability of such Participant.

	9.06.	 	 Transferable Performance Units 

          Section 9.05 to the contrary notwithstanding, if the Agreement provides, an award of
Performance Units may be transferred by a Participant to the Participant’s children, grandchildren,
spouse, one or more trusts for the benefit of such family members or a partnership in which such
family members are the only partners, on such terms and conditions as may be permitted under Rule
16b-3 under the Exchange Act as in effect from time to time. The holder of Performance Units
transferred pursuant to this Section shall be bound by the same terms and conditions that governed
the Performance Units during the period that they were held by the Participant; provided, however
that such transferee may not transfer Performance Units except by will or the laws of descent and
distribution. Notwithstanding the foregoing, in no event may a Performance Unit be transferred for
consideration absent shareholder approval.

	9.07.	 	 Employee Status 

          In the event that the terms of any Performance Unit award provide that no payment will be made
unless the Participant completes a stated period of employment or continued service, the Committee
may decide to what extent leaves of absence for government or military service, illness, temporary
disability, or other reasons shall not be deemed interruptions of continuous employment or service.

-15-

 

ARTICLE X

 OTHER EQUITY—BASED AWARDS 

	10.01.	 	 Award 

          In accordance with the provisions of Article IV, the Committee will designate each individual
to whom an Other Equity-Based Award is to be made and will specify the number of Common Shares or
other equity interests (including LTIP Units) covered by such awards; provided, however, that the
grant of LTIP Units must satisfy the requirements of the partnership agreement of the Operating
Partnership as in effect on the date of grant. The Committee also will specify whether Dividend
Equivalent Rights are granted in conjunction with the Other Equity-Based Award.

	10.02.	 	 Terms and Conditions 

          The Committee, at the time an Other Equity-Based Award is made, shall specify the terms and
conditions which govern the award. The terms and conditions of an Other Equity-Based Award may
prescribe that a Participant’s rights in the Other Equity-Based Award shall be forfeitable,
nontransferable or otherwise restricted for a period of time or subject to such other conditions as
may be determined by the Committee, in its discretion and set forth in the Agreement. Other
Equity-Based Awards may be granted to Participants, either alone or in addition to other awards
granted under the Plan, and Other Equity-Based Awards may be granted in the settlement of other
Awards granted under the Plan.

	10.03.	 	 Payment or Settlement 

          Other Equity-Based Awards valued in whole or in part by reference to, or otherwise based on,
Common Shares, shall be payable or settled in Common Shares, cash or a combination of Common Shares
and cash, as determined by the Committee in its discretion; provided, however, that any Common
Shares that are issued on account of the conversion of LTIP Units into Common Stock shall not be
issued under the Plan. Other Equity-Based Awards denominated as equity interests other than Common
Shares may be paid or settled in shares or units of such equity interests or cash or a combination
of both as determined by the Committee in its discretion.

	10.04.	 	 Employee Status 

          If the terms of any Other Equity-Based Award provides that it may be earned or exercised only
during employment or continued service or within a specified period of time after termination of
employment or continued service, the Committee may decide to what extent leaves of absence for
governmental or military service, illness, temporary disability or other reasons shall not be
deemed interruptions of continuous employment or service.

-16-

 

	10.05.	 	 Shareholder Rights 

          A Participant, as a result of receiving an Other Equity-Based Award, shall not have any rights
as a shareholder until, and then only to the extent that, the Other Equity-Based Award is earned
and settled in Common Shares.

ARTICLE XI

 ADJUSTMENT UPON CHANGE IN COMMON STOCK 

          The maximum number of Common Shares as to which Options, SARs, Performance Units, Share Awards
and Other Equity-Based Awards may be granted and the terms of outstanding Share Awards, Options,
SARs, Performance Units and Other Equity-Based Awards shall be adjusted as the Board determines is
equitably required in the event that (i) the Company (a) effects one or more nonreciprocal
transactions between the Company and its shareholders such as a share dividend, extra-ordinary cash
dividend, share split-up, subdivision or consolidation of shares that affects the number or kind of
Common Shares (or other securities of the Company) or the Fair Market Value (or the value of other
Company securities) and causes a change in the Fair Market Value of the Common Shares subject to
outstanding awards or (b) engages in a transaction to which Section 424 of the Code applies or (ii)
there occurs any other event which, in the judgment of the Board necessitates such action. Any
determination made under this Article XI by the Board shall be nondiscretionary, final and
conclusive.

          The issuance by the Company of shares of any class, or securities convertible into shares of
any class, for cash or property, or for labor or services, either upon direct sale or upon the
exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations
of the Company convertible into such shares or other securities, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the maximum number of shares as to
which Options, SARs, Performance Units, Share Awards and Other Equity-Based Awards may be granted
or the terms of outstanding Share Awards, Options, SARs, Performance Shares or Other Equity-Based
Awards.

          The Committee may make Share Awards and may grant Options, SARs, Performance Units or Other
Equity-Based Awards in substitution for performance shares, phantom shares, stock awards, stock
options, stock appreciation rights, or similar awards held by an individual who becomes an employee
of the Company or an Affiliate in connection with a transaction described in the first paragraph of
this Article XI. Notwithstanding any provision of the Plan, the terms of such substituted Share
Awards, SARs, Other Equity-Based Awards, Options or Performance Units shall be as the Committee, in
its discretion, determines is appropriate.

-17-

 

ARTICLE XII

 COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES 

          No Option or SAR shall be exercisable, no Common Shares shall be issued, no certificates for
Common Shares shall be delivered, and no payment shall be made under this Plan except in compliance
with all applicable federal and state laws and regulations (including, without limitation,
withholding tax requirements), any listing agreement to which the Company is a party, and the rules
of all domestic stock exchanges on which the Company’s shares may be listed. The Company shall
have the right to rely on an opinion of its counsel as to such compliance. Any certificate issued
to evidence Common Shares when a Share Award is granted, a Performance Unit or Other Equity-Based
Award is settled or for which an Option or SAR is exercised may bear such legends and statements as
the Committee may deem advisable to assure compliance with federal and state laws and regulations.
No Option or SAR shall be exercisable, no Share Award or Performance Unit shall be granted, no
Common Shares shall be issued, no certificate for Common Shares shall be delivered, and no payment
shall be made under this Plan until the Company has obtained such consent or approval as the
Committee may deem advisable from regulatory bodies having jurisdiction over such matters.

ARTICLE XIII

 GENERAL PROVISIONS 

	13.01.	 	 Effect on Employment and Service 

          Neither the adoption of this Plan, its operation, nor any documents describing or referring to
this Plan (or any part thereof), shall confer upon any individual or entity any right to continue
in the employ or service of the Company or an Affiliate or in any way affect any right and power of
the Company or an Affiliate to terminate the employment or service of any individual or entity at
any time with or without assigning a reason therefor.

	13.02.	 	 Unfunded Plan 

          This Plan, insofar as it provides for grants, shall be unfunded, and the Company shall not be
required to segregate any assets that may at any time be represented by grants under this Plan.
Any liability of the Company to any person with respect to any grant under this Plan shall be based
solely upon any contractual obligations that may be created pursuant to this Plan. No such
obligation of the Company shall be deemed to be secured by any pledge of, or other encumbrance on,
any property of the Company.

	13.03.	 	 Rules of Construction 

          Headings are given to the articles and sections of this Plan solely as a convenience to
facilitate reference. The reference to any statute, regulation, or other provision of law shall be
construed to refer to any amendment to or successor of such provision of law.

-18-

 

	13.04.	 	 Withholding Taxes 

          Each Participant shall be responsible for satisfying any income and employment tax withholding
obligations attributable to participation in the Plan. Unless otherwise provided by the Agreement,
any such withholding tax obligations may be satisfied in cash (including from any cash payable in
settlement of an award of Performance Units, SARs or Other Equity-Based Award) or a cash equivalent
acceptable to the Committee. Except to the extent prohibited by Treasury Regulation Section
1.409A-3(j), any minimum statutory federal, state, district or city withholding tax obligations
also may be satisfied (a) by surrendering to the Company Common Shares previously acquired by the
Participant; (b) by authorizing the Company to withhold or reduce the number of Common Shares
otherwise issuable to the Participant upon the exercise of an Option or SAR, the settlement of a
Performance Unit award or an Other Equity-Based Award (if applicable) or the grant or vesting of a
Share Award; or (c) by any other method as may be approved by the Committee. If Common Shares are
used to pay all or part of such withholding tax obligation, the Fair Market Value of the shares
surrendered, withheld or reduced shall be determined as of the day the tax liability arises and the
number of Common Shares which may be withheld or surrendered shall be limited to the number of
shares which have a Fair Market Value on the day preceding the date of withholding equal to the
aggregate amount of such liabilities based on the minimum statutory withholding rates for federal,
state, local and foreign income tax and payroll tax purposes that are applicable to such
supplemental taxable income.

	13.05.	 	 REIT Status 

          The Plan shall be interpreted and construed in a manner consistent with the Company’s status
as a REIT. No award shall be granted or awarded, and with respect to any award granted under the
Plan, such award shall not vest, be exercisable or be settled (i) to the extent that the grant,
vesting, exercise or settlement could cause the Participant or any other person to be in violation
of the common stock ownership limit or aggregate stock ownership limit prescribed by the Company’s
Articles of Incorporation or Charter, as amended from time to time) or (ii) if, in the discretion
of the Committee, the grant, vesting, exercise or settlement of the award could impair the
Company’s status as a REIT.

ARTICLE XIV

 CHANGE IN CONTROL 

	14.01.	 	 Impact of Change in Control. 

          Upon a Change in Control, the Committee is authorized to cause (i) outstanding Options and
SARs to become fully exercisable, (ii) outstanding Share Awards to become transferable and
nonforfeitable and (iii) outstanding Performance Units and Other Equity-Based Awards to become
earned and nonforfeitable in their entirety.

-19-

 

	14.02.	 	 Assumption Upon Change in Control. 

          In the event of a Change in Control, the Committee, in its discretion and without the need for
a Participant’s consent, may provide that an outstanding Option, SAR, Share Award, Performance Unit
or Other Equity-Based Award shall be assumed by, or a substitute award granted by, the surviving
entity in the Change in Control. Such assumed or substituted award shall be of the same type of
award as the original Option, SAR, Share Award, Performance Unit or Other Equity-Based Award being
assumed or substituted. The assumed or substituted award shall have a value, as of the Control
Change Date, that is substantially equal to the value of the original award (or the difference
between the Fair Market Value and the option price or Initial Value in the case of Options and
SARs) as the Committee determines is equitably required and such other terms and conditions as may
be prescribed by the Committee.

	14.03.	 	 Cash-Out Upon Change in Control. 

          In the event of a Change in Control, the Committee, in its discretion and without the need of
a Participant’s consent, may provide that each Option, SAR, Share Award and Performance Unit and
Other Equity-Based Award shall be cancelled in exchange for a payment. The payment may be in
cash, Common Shares or other securities or consideration received by shareholders in the Change in
Control transaction. The amount of the payment shall be an amount that is substantially equal to
(i) the amount by which the price per share received by shareholders in the Change in Control
exceeds the option price or Initial Value in the case of an Option and SAR, or (ii) the price per
share received by shareholders for each Common Share subject to a Share Award, Performance Unit or
Other Equity-Based Award or (iii) the value of the other securities or property in which the
Performance Unit or Other Equity-Based award is denominated. If the option price or Initial Value
exceeds the price per share received by shareholders in the Change in Control transaction, the
Option or SAR may be cancelled under this Section 14.03 without any payment to the Participant.

	14.04.	 	 Limitation of Benefits 

          The benefits that a Participant may be entitled to receive under this Plan and other benefits
that a Participant is entitled to receive under other plans, agreements and arrangements (which,
together with the benefits provided under this Plan, are referred to as “Payments”), may constitute
Parachute Payments that are subject to Code Sections 280G and 4999. As provided in this Section
14.04, the Parachute Payments will be reduced pursuant to this Section 14.04 if, and only to the
extent that, a reduction will allow a Participant to receive a greater Net After Tax Amount than a
Participant would receive absent a reduction.

          The Accounting Firm will first determine the amount of any Parachute Payments that are payable
to a Participant. The Accounting Firm also will determine the Net After Tax Amount attributable to
the Participant’s total Parachute Payments.

-20-

 

          The Accounting Firm will next determine the largest amount of Payments that may be made to the
Participant without subjecting the Participant to tax under Code Section 4999 (the “Capped
Payments”). Thereafter, the Accounting Firm will determine the Net After Tax Amount attributable
to the Capped Payments.

          The Participant will receive the total Parachute Payments or the Capped Payments, whichever
provides the Participant with the higher Net After Tax Amount. If the Participant will receive the
Capped Payments, the total Parachute Payments will be adjusted by first reducing the amount of any
benefits under this Plan or any other plan, agreement or arrangement that are not subject to
Section 409A of the Code (with the source of the reduction to be directed by the Participant) and
then by reducing the amount of any benefits under this Plan or any other plan, agreement or
arrangement that are subject to Section 409A of the Code (with the source of the reduction to be
directed by the Participant) in a manner that results in the best economic benefit to the
Participant (or, to the extent economically equivalent, in a pro rata manner). The Accounting Firm
will notify the Participant and the Company if it determines that the Parachute Payments must be
reduced to the Capped Payments and will send the Participant and the Company a copy of its detailed
calculations supporting that determination.

          As a result of the uncertainty in the application of Code Sections 280G and 4999 at the time
that the Accounting Firm makes its determinations under this Article XIV, it is possible that
amounts will have been paid or distributed to the Participant that should not have been paid or
distributed under this Section 14.04 (“Overpayments”), or that additional amounts should be paid or
distributed to the Participant under this Section 14.04 (“Underpayments”). If the Accounting Firm
determines, based on either the assertion of a deficiency by the Internal Revenue Service against
the Company or the Participant, which assertion the Accounting Firm believes has a high probability
of success or controlling precedent or substantial authority, that an Overpayment has been made,
the Participant must repay to the Company, without interest; provided, however, that no loan will
be deemed to have been made and no amount will be payable by the Participant to the Company unless,
and then only to the extent that, the deemed loan and payment would either reduce the amount on
which the Participant is subject to tax under Code Section 4999 or generate a refund of tax imposed
under Code Section 4999. If the Accounting Firm determines, based upon controlling precedent or
substantial authority, that an Underpayment has occurred, the Accounting Firm will notify the
Participant and the Company of that determination and the amount of that Underpayment will be paid
to the Participant promptly by the Company.

          For purposes of this Section 14.04, the term “Accounting Firm” means the independent
accounting firm engaged by the Company immediately before the Control Change Date. For purposes of
this Article XIV, the term “Net After Tax Amount” means the amount of any Parachute Payments or
Capped Payments, as applicable, net of taxes imposed under Code Sections 1, 3101(b) and 4999 and
any State or local income taxes applicable to the Participant on the date of payment. The
determination of the Net After Tax Amount shall be made using the highest combined effective rate
imposed by the foregoing taxes on income of the same character as the Parachute Payments or Capped
Payments, as applicable, in effect on the date of payment.

-21-

 

For purposes of this Section 14.04, the term “Parachute Payment” means a payment that is
described in Code Section 280G(b)(2), determined in accordance with Code Section 280G and the
regulations promulgated or proposed thereunder.

          Notwithstanding any other provision of this Section 14.04, the limitations and provisions of
this Section 14.04 shall not apply to any Participant who, pursuant to an agreement with the
Company or the terms of another plan maintained by the Company, is entitled to indemnification for
any liability that the Participant may incur under Code Section 4999. In addition, nothing in this
Section 14.04 shall limit or otherwise supersede the provisions of any other agreement or plan
which provides that a Participant cannot receive Payments in excess of the Capped Payments.

ARTICLE XV

 AMENDMENT 

          The Board may amend or terminate this Plan at any time; provided, however, that no amendment
may adversely impair the rights of Participants with respect to outstanding awards. In addition,
an amendment will be contingent on approval of the Company’s shareholders if such approval is
required by law or the rules of any exchange on which the Common Shares are listed or if the
amendment would materially increase the benefits accruing to Participants under the Plan,
materially increase the aggregate number of Common Shares that may be issued under the Plan or
materially modify the requirements as to eligibility for participation in the Plan.

ARTICLE XVI

 DURATION OF PLAN 

          No Share Award, Performance Unit Award, Option, SAR or Other Equity-Based Award may be granted
under this Plan after the day before the tenth anniversary of the date that the Plan is adopted by
the Board. Share Awards, Performance Unit awards, Options, SARs and Other Equity-Based Awards
granted before such date shall remain valid in accordance with their terms.

ARTICLE XVII

 EFFECTIVE DATE OF PLAN 

          Options, Share Awards, Performance Units and Other Equity-Based Awards may be granted under
this Plan on and after the later of (i) the Completion Date and (ii) the date that the Plan is
adopted by the Board, provided that, this Plan shall not be effective unless, within twelve months
after the Board’s adoption of the Plan, the Plan is approved by holders of a majority of the
outstanding Common Shares entitled to vote and present or represented by properly executed and
delivered proxies at a duly held shareholders’ meeting at which a quorum is present or by unanimous
consent of the shareholders, within twelve months before or after the date that the Plan is adopted
by the Board and provided further that no award shall be exercisable, vested or settled until such
shareholder approval is obtained.

-22-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00168-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00168-of-00352.parquet"}]]