Document:

Exhibit 10.2

 

FORM OF ESCROW AGREEMENT

 

THIS ESCROW AGREEMENT (the “Agreement”) is
made and entered into as of the      day of        ,
2010 (“Effective Date”), by and among Clarion Property Trust Inc. (the “Company”), ING Investments Distributor, LLC (the “Dealer
Manager”), and BNY Mellon
Investment Servicing (US) Inc., as escrow agent (the “Escrow Agent”
or “BNY”).

 

RECITALS

 

WHEREAS, the Company proposes to offer for sale (the
“Offering”), on a continuing basis, up to $2,250,000,000 in shares of
the Company’s common stock, par value $0.01 per share, some of which will be
designated as Class A and some of which will be designated as Class W
(collectively the “Shares”), pursuant to the terms of the prospectus
(the “Prospectus”) contained in the Company’s Registration Statement on Form S-11,
filed with the Securities and Exchange Commission under the Securities Act of
1933, as amended, and dated February 8, 2010, as it may be amended from
time to time;

 

WHEREAS, the Dealer Manager, a registered
broker-dealer and member of the Financial Industry Regulatory Authority (“FINRA”),
has agreed to serve as the dealer manager for the Offering and will offer the
Shares through other registered broker-dealers that are members of FINRA (the “Dealers”);

 

WHEREAS, it is anticipated that investors submitting
orders for the purchase of Shares (“Investors”) will provide the Dealer
Manager with payments for such Shares (“Share Payments”), which purchase
orders will be contingent upon (i) their respective acceptances by the
Company; (ii) the Company’s acceptance of purchases aggregating at least
$50,000,000 from investors (the “Minimum Offering Amount”) before the
date on which the minimum offering period expires (the “Minimum Offering
Termination Date”), which is 180 days following the first date on which the
Shares are offered for sale to the public (the “Initial Offering Date”);
and (iii) a determination by the Company’s board of directors that it is
in the best interest of the stockholders of the Company to cause the proceeds to
be released to the Company so that it may commence operations before the
Minimum Offering Termination Date;

 

WHEREAS, the Company and the Dealer Manager desire
to deposit Share Payments with the Escrow Agent, to be held for the benefit of
Purchasers (as defined herein) and the Company until such time as purchases for
the Minimum Offering Amount have been deposited into escrow or otherwise in
accordance with the terms of this Agreement;

 

WHEREAS, the Escrow Agent has agreed to receive
and hold in escrow all Share Payments in accordance with this Agreement; and

 

WHEREAS, the Escrow Agent is willing to accept
appointment as the escrow agent for only the expressed duties, terms and
conditions outlined herein.

 

NOW, THEREFORE, in consideration of the
foregoing and the agreements set forth herein, the parties hereto, intending to
be legally bound, hereby agree as follows:

 

1.                                      Appointment of Escrow Agent.  The Company and the Dealer
Manager hereby appoint the Escrow Agent to serve as escrow agent, and the
Escrow Agent hereby accepts such appointment, each in accordance with the terms
of this Agreement. The Company and the Dealer Manager hereby acknowledge that
the status of the Escrow Agent is that of agent only for the limited purposes
set forth herein, and hereby agree that they will not represent (i) that
the Escrow Agent has investigated the desirability or advisability of
investment in the Shares or has approved, endorsed or passed upon the merits of
the investment therein, or (ii) that the Escrow Agent serves in any other
capacity, except as 

 

 

transfer
agent in the event the Company and BNY enter into an agreement providing for
BNY to perform transfer agency and related shareholder services to the Company.
The Company and the Dealer Manager further agree that the name of the Escrow
Agent shall not be used in any manner in connection with the offer or sale of
the Shares other than to state that the Escrow Agent has agreed to serve as
escrow agent for the limited purposes set forth herein.  The Escrow Agreement acknowledges and agrees
that the Escrow Account (defined below) shall at all times be an account in a
commercial banking institution as described in Section 7 below.

 

2.                                      Proceeds.

 

(a)                                  Until such time
as the Escrow Agent receives the Disbursement Instruction (as defined below):

 

(i)                                     Escrow Agent shall accept
for deposit into the Consolidated DDA Account (as defined in Schedule F), on
behalf of a particular Investor, “Conforming Instruments”, which are
hereby defined to be personal checks of that Investor (i) payable to the
order of “BNY Mellon Investment Servicing (US) Inc., as escrow agent for
Clarion Properties Trust Inc.,” or a recognizable contraction or abbreviation
thereof reasonably acceptable to the Escrow Agent, (ii) which have been
delivered to Escrow Agent by the Company’s transfer agent (the “Transfer
Agent”) (iii) with instructions of the Transfer Agent to deposit such
personal check into the Consolidated DDA Account; and

 

(ii)                              Escrow Agent shall accept
for deposit into the Consolidated DDA Account “Conforming Wire Payments”,
which are hereby defined to be funds sent by wire transfer (i) with
respect to which the Escrow Agent has been notified in advance by the Transfer
Agent to accept, and (ii) that have been transmitted pursuant to the wire
instructions set forth on Exhibit C.

 

(b)                                 Escrow Agent
shall not be obligated to accept for deposit into the Consolidated DDA Account
any Share Payment which is not a Conforming Instrument or a Conforming Wire
Payment.  In the event Escrow Agent
receives in connection with the Offering personal checks other than a
Conforming Instrument or other negotiable instruments or wire transfers other
than a Conforming Wire Payment, Escrow Agent may take any appropriate
commercially reasonable action, including (i) delivering any instrument
which is not a Conforming Instrument to the Transfer Agent, and (ii) refusing
acceptance of or returning to the sending institution any wire transfer which
is not a Conforming Wire Payment.

 

(c)                                  Following its
receipt of the Disbursement Instruction and on and after the Minimum Offering
Termination Date, and notwithstanding any other provision of this Agreement:
Escrow Agent will have no obligation to accept any Share Payment for deposit
into the Consolidated DDA Account or for any other reason and the Escrow Agent’s
only obligation with respect to any Share Payment received after he
Disbursement Instruction has been received will be to notify the Transfer Agent
of such and (i) deliver it to the Transfer Agent in the case of personal
checks or other negotiable instruments, and (ii) refuse acceptance or
return it to the sending institution in the case of wire transfers.

 

(d)                             By 5:00 PM
(Eastern Time) of the business day following the business day the Escrow Agent
receives a Conforming Instrument or Conforming Wire Payment (collectively, “Conforming
Payments”) the Escrow Agent shall deposit the Conforming Payment into the
Consolidated DDA Account.  Investors with
respect to whom the Escrow Agent has deposited one or more Conforming Payments
into the Consolidated DDA Account are referred to herein as “Purchasers”.

 

(e)                                  By 5:00 PM
(Eastern Time) of the business day following the business day the Escrow Agent
has deposited a particular Conforming Payment into the Consolidated DDA Account
on behalf of a person who is eligible under Federal banking law and Regulation
D (“Regulation D”) of the Board of Governors 

 

2

 

of
the Federal Reserve System to hold a NOW account, the Escrow Agent shall
transfer amounts corresponding to such Conforming Payment into the Escrow
(Eligible) Account.  By 5:00 PM (Eastern
Time) of the business day following the business day the Escrow Agent has
deposited a particular Conforming Payment into the Consolidated DDA Account on
behalf of a person who is not eligible under Federal banking laws and
Regulation D to hold a NOW account, the Escrow Agent shall transfer amounts
corresponding to such Conforming Payment into the Escrow (Non-Eligible)
Account.

 

(f)                                    All Conforming
Payments deposited into the Consolidated DDA Account and transferred to the
Escrow (Non-Eligible) Account or the Escrow (Eligible) Account (all three
accounts being collectively the “Escrow Account”) shall be considered
the property of the respective Purchasers and shall be held for the benefit of
such Purchasers and shall not be (i) commingled with the monies or become
an asset of the Company, or (ii) subject to any liens or charges by the
Company or the Escrow Agent, or judgments or creditors’ claims against the
Company, until released to the Company pursuant to the Disbursement
Instructions.

 

(g)                                 In the event
that any Payment Instrument or Wire Transfer deposited in the Escrow Account is
returned or reversed as uncollectible (“Uncollectible Amounts”) after
the funds represented thereby have been released by the Escrow Agent pursuant
to this Agreement, the Dealer Manager or the Company shall, upon the request of
the Escrow Agent, promptly reimburse the Escrow Agent the full amount of the
Payment Instrument or Wire Transfer and any and all costs incurred in
connection with the uncollectability of funds, and the Escrow Agent shall
deliver any such uncollectible Payment Instrument to the party from whom the
Escrow Agent has requested reimbursement pursuant to this provision. Company
and Dealer Manager shall be jointly and severally liable to Escrow Agent for
the foregoing payment obligation.

 

(h)                                 If the Escrow
Agent receives a request for a full or partial refund from any Purchaser which
the Escrow Agent determines to be in good order in accordance with applicable
industry standards and legal requirements (respectively, a “Full Refund
Request” and a “Partial Refund Request”, and collectively, “Refund
Requests”) prior to receiving the Disbursement Instruction, the Escrow
Agent shall notify the Dealer Manager of the Refund Request and return to the
Purchaser:

 

(i)                                     if a Partial Refund Request,
the amount of the requested refund, without deduction for escrow expenses, or

 

(ii)                                  if a Full Refund Request: (A) the
aggregate amount of all Conforming Payments made by the Purchaser, together
with all Allocable Interest (as defined in Section 4(c) below), or (B) at
the option of the Escrow Agent, if all Conforming Payments were made with
Payment Instruments and the relevant Payment Instruments have not been tendered
for deposit into the Escrow Account, the relevant Payment Instruments.

 

The
Escrow Agent shall have no liability with respect to a Refund Request it
receives after it receives the Disbursement Instruction and its sole duty with
respect to such a Refund Request shall be to deliver it to the Transfer Agent.

 

3                                         [Reserved]

 

4.                                      Disbursement of Proceeds.

 

(a)                                  On or about
5:00 PM (Eastern Time) of the Minimum Offering Termination Date (or, if not a
business day, the next business day), and prior thereto on a weekly basis or as
otherwise reasonably requested by Company, the Escrow Agent shall notify the
Company of the aggregate amount of 

 

3

 

Conforming
Payments the Escrow Agent has received, adjusted for any Refund Requests,
Uncollected Amounts and Rejection Notifications (as defined in Section 4(e) below)
(the “Collected Funds”) as of such time and date or as of the time of
the request, as applicable. The notification given by the Escrow Agent pursuant
to the foregoing sentence with respect the Minimum Offering Termination Date is
referred to herein as the “Termination Date Collected Funds Notice”.  If as of 5:00 PM (Eastern Time) on any
business day prior to the Minimum Offering Termination Date the Collected Funds
are equal to or greater than the Minimum Offering Amount, the Escrow Agent
shall promptly deliver notice to the Company and the Dealer Manager stating the
amount of the Collected Funds (the “Minimum Offering Amount Notice”).

 

(b)                                 If after
delivering a Minimum Offering Amount Notice or if after delivering a
Termination Date Collected Funds Notice indicating Collected Funds equal to or
exceeding the Minimum Offering Amount, the Escrow Agent receives a Written
Instruction from the Company citing this Section 4(b) and instructing
the Escrow Agent to disburse the entire balance in the Escrow Account to the
Company or its designee (the “Disbursement Instruction”), the Escrow
Agent shall, after it has sufficient opportunity to deposit all Conforming
Payments into the Escrow Account in accordance with Sections 2(d) and 2(e) and
after the removal of any funds availability restrictions imposed by the
Depository Bank (as defined in Schedule F) and set forth on Exhibit E,
deliver as soon as practicable and in no event later than two (2) business
days following receipt of the Disbursement Instruction the entire balance in
the Escrow Account to the Company or to its designee in the manner set forth in
the Disbursement Instruction along with a list that includes the name of each
Purchaser, the number and Class of Shares purchased by such Purchaser, the
aggregate Share Payments remitted by such Purchaser, and such Purchaser’s
Allocable Interest (defined below).

 

(c)                                  Purchasers
shall be entitled to a pro rata share of the aggregate interest earned by
balances in the Escrow Account (“Interest”), with such pro rata share
determined by reference to the amount of Conforming Payments made by each
Purchaser and deposited in the Escrow Account and the period of time each such
amount was held in, as appropriate, the Escrow (Eligible) Account or Escrow
(Non-Eligible) Account (“Allocable Interest”).  In the absence of commercially reasonable
Written Instructions from the Company directing the Escrow Agent with respect
to the methodology for calculating the Allocable Interest of each Purchaser,
the Escrow Agent may employ any commercially reasonable methodology for
calculating the pro rata share of Allocable Interest of each Purchaser.

 

(d)                                 If the
Termination Date Collected Funds Notice indicates an amount of Collected Funds
that does not equal or exceed the Minimum Offering Amount, the Escrow Agent
shall within a reasonable time following the Minimum Offering Termination Date,
but in no event more than fifteen (15) days after the Minimum Offering
Termination Date, send to each Purchaser by first-class mail a covering letter
furnished by the Company or Dealer Manager and (i) a check in an aggregate
amount equal to all Conforming Payments paid by such Purchaser (and not
refunded) together with any Allocable Interest, or (ii) at the option of
the Escrow Agent, if all Conforming Payments of a Purchaser were made by
Conforming Instruments and the relevant Conforming Instruments have not been
tendered for deposit into the Escrow Account, then the relevant Conforming
Instruments.  In addition, the Escrow
Agent shall deliver to the Company a list that includes the name of each
Purchaser, the number and Class of Shares purchased by such Purchaser, the
aggregate Share Payments remitted by such Purchaser, and such Purchaser’s
Allocable Interest.

 

(e)                                  In the event
the Escrow Agent receives written notification from the Company or Dealer
Manager that a Purchaser’s purchase order for Shares has been rejected (“Rejection
Notification”) prior to its receipt of the Disbursement Instruction, the
Escrow Agent shall no later than the fifth (5th) business day following receipt of the
Rejection Notification send to the Purchaser by first-class mail a covering
letter furnished by the Company or Dealer Manager and (i) a check in an
aggregate amount equal to all 

 

4

 

Conforming
Payments paid by such Purchaser (and not refunded) together with any Allocable
Interest, or (ii) at the option of the Escrow Agent, if all Conforming
Payments of the Purchaser were made by Conforming Instruments and the relevant
Conforming Instruments have not been deposited into the Escrow Account, then
the relevant Conforming Instruments. The Escrow Agent shall have no duty or
liability with respect to a Rejection Notification it receives after it
receives the Disbursement Instruction.

 

5.                                      Duties
and Liabilities of the Escrow Agent.

 

(a)                                  The duties,
responsibilities and obligations of the Escrow Agent are purely ministerial in
nature and shall be limited to those expressly set forth herein and no duties,
responsibilities, covenants or obligations, fiduciary or otherwise, shall be
inferred or implied, against the Escrow Agent by reason of this Agreement. The
Escrow Agent shall not be subject to, nor required to comply with, any other
agreement between or among the Company or to which the Company is a party, even
though reference thereto may be made herein, or to comply with any direction or
instruction (other than those expressly contained herein or Written
Instructions delivered pursuant to this Agreement and in accordance with
applicable requirements) from the Company or the Dealer Manager. The Escrow
Agent shall be under no duty to determine whether the Company or the Dealer
Manager is complying with requirements of this Agreement or the Prospectus in
tendering to the Escrow Agent the Share Payments or in connection with any
other matter or action or inaction of any nature.

 

(b)                                 The Escrow
Agent shall have the right to perform any of its duties hereunder through its
agents, attorneys, custodians or nominees; provided that the Escrow Agent shall
at all times have ultimate responsibility for performing its obligations under
this Agreement.

 

(c)                                  The Escrow
Agent may conclusively rely upon and shall be protected in acting upon any
statement, certificate, notice, request, consent, order or other document
reasonably believed by it to be genuine and to have been signed or presented by
the proper party or parties.

 

(d)                                 The Escrow
Agent shall not be under any duty or obligation to inquire into and shall not
be liable for the validity, authority, truthfulness, accuracy, sufficiency,
correctness, genuineness, or lack of any of the foregoing, of any asset
deposited with it or of any statement, certificate, notice, request,
instruction, direction, document, instrument, consent, order or information
which the Escrow Agent reasonably believes to be genuine.

 

(e)                                  The Escrow
Agent shall be under no obligation to institute or defend any action, suit or
proceeding in connection with this Agreement unless first indemnified to its
satisfaction. The Escrow Agent may consult and hire counsel in respect of any
question arising under this Agreement, and the Escrow Agent shall not be liable
for any action taken or omitted in good faith upon advice of such counsel. The
Escrow Agent shall have the right to seek an adjudication in a court of
competent jurisdiction as to the respective rights of the parties hereto and
shall not be held liable by any party hereto for any delay or the consequences
of any delay occasioned by such resort to court.  The expenses associated with such retention
of counsel shall be borne by the Company and Dealer Manager, jointly and
severally.

 

(f)                                    In the event
the Escrow Agent determines that it requires instructions from the Company or
Dealer Manager in order for it to perform a service or obligation hereunder in
circumstances where the manner of performing the service or obligation is not
expressly provided for herein or in the standard operating procedures of the
Escrow Agent, the Escrow Agent may require the Company or Dealer Manager, as
the case may be, to furnish commercially reasonable Written Instructions in a
form or format reasonably acceptable to the Escrow Agent in its sole discretion
(“Conforming Written Instructions”) and may refrain from acting (or omitting an
action) in connection with such a service or obligation until 

 

5

 

receiving
such Conforming Written Instruction. 
Escrow Agent’s obligation to act on Written Instructions is limited to
acting on Conforming Written Instructions. The Escrow Agent shall be entitled
to assume that any Written Instruction received hereunder is not in any way
inconsistent with the provisions of the Company’s charter or other governing
instruments or this Agreement or of any vote, resolution or proceeding of the
Company’s or Dealer Manager’s Board of Directors, unless and until the Escrow
Agent receives Written Instructions to the contrary.

 

(g)                                 Subject to the
terms of this Section 5, the Escrow Agent shall be liable to the Company
and Dealer Manager (or any person or entity claiming through either) only to
the extent the Loss (defined below) to the Company or Dealer Manager is finally
adjudicated to have directly resulted from or been caused by the Escrow Agent’s
own intentional misconduct, bad faith or gross negligence with respect to its
duties under this Agreement.

 

(h)                                 Except for
Losses related to the Escrow Agent’s fraud or willful misconduct, the Escrow
Agent’s aggregate cumulative liability to the Company and the Dealer Manager,
considered collectively, and any person or entity claiming through the Company
or Dealer Manager for any loss, claim, suit, controversy, breach or damage of any
nature whatsoever (including but not limited to those arising out of or related
to this Agreement) and regardless of the form of action or legal theory (“Loss”)
shall not exceed the lesser of (i) the fees received by the Escrow Agent for
services provided hereunder during the period preceding the date of the last
such Loss; or (ii) $250,000.

 

(i)                                     Notwithstanding
any other provision of the Agreement, neither party, nor its affiliates nor any
of its or their directors, officers, employees, agents or subcontractors shall
be liable under any theory of tort, contract, strict liability or other legal
or equitable theory for lost profits, for exemplary, punitive, special,
incidental, indirect or consequential damages, or for any other damages which
are not direct damages regardless of whether such damages were or could have
been foreseeable to any extent and regardless of whether any entity has been
advised of the possibility of such damages, all and each of which damages is
hereby excluded by agreement of the parties. 
For purposes of clarification: no other provision of this Agreement
shall be interpreted to condition, limit, modify, nullify or otherwise prevail
in whole or in part over this Section 5(i).  Notwithstanding the foregoing provisions of
this Section 5(i), this Section 5(i) shall not in any manner
restrict, limit or condition BNY’s ability to receive payment of fees, charges
and reimbursable expenses owed hereunder to BNY due to services rendered
hereunder by BNY or BNY’s ability to claim lost fees as damages in any claim
for wrongful termination.

 

(j)                                     Notwithstanding
any other provision, and for all purposes, of this Agreement: Neither party
shall be liable for any Loss (including Loss caused by delays, failure, errors,
interruption or loss of data) or breach hereunder occurring directly or
indirectly by reason of any event or circumstance, whether foreseeable or
unforeseeable, which despite the taking of commercially reasonable measures is
beyond its reasonable control (“Event Beyond Reasonable Control”).  Upon the occurrence of an Event Beyond
Reasonable Control, the affected party shall be excused from any
non-performance caused by the Event Beyond Reasonable Control for so long as (i) the
Event Beyond Reasonable Control or circumstances caused by it prevail and such
party continues to use commercially reasonable efforts to attempt to perform
the obligation so impacted and (ii) the affected party gives prompt notice
to the other parties of the occurrence of such Event Beyond Reasonable Control.

 

(k)                                  No party may
assert a cause of action against the Escrow Agent or any of its affiliates that
allegedly occurred more than eighteen (18) months immediately prior to the
filing of the suit (or, if applicable, commencement of arbitration proceedings)
alleging such cause of action.

 

(l)                                     The Company
will provide such information and documentation as the Escrow Agent may
reasonably request in connection with the services provided by the Escrow Agent
under this Agreement.

 

6

 

(m)                               Except as
expressly provided in this Agreement, the Escrow Agent hereby disclaims all
representations and warranties, express or implied, made to the Company and the
Dealer Manager or any other person, including, without limitation, any warranties
regarding quality, suitability, merchantability, fitness for a particular
purpose or otherwise (irrespective of any course of dealing, custom or usage of
trade), of any services or goods provided incidental to services provided under
this Agreement.  The Escrow Agent
disclaims any warranty of title or non-infringement except as otherwise set
forth in this Agreement.

 

(n)                                 Notwithstanding
any other provision in this Agreement, the Company and the Dealer Manager each
agrees not to amend or adopt any governing documents, amend or adopt any
policies or amend the terms of the Offering or Prospectus which would
materially affect the obligations or responsibilities of the Escrow Agent
hereunder without the prior written approval of the Escrow Agent, which approval
shall not be unreasonably withheld or delayed.

 

(o)                                 The parties
agree that the Escrow Agent has no role in the preparation of the documents
used in the Offering (the “Offering Documents”), has not reviewed any
such documents and makes no representations or warranties with respect to the
information contained therein or omitted therefrom. The Escrow Agent agrees
that it may be named in the Prospectus and other Offering Documents, to the
extent necessary to describe this Agreement and the duties of the Escrow Agent
herein, and for no other purpose. The Escrow Agent shall have no obligation,
duty or liability with respect to compliance with any federal or state
securities, disclosure or tax laws concerning the Offering Documents or the
issuance, offering or sale of the Shares. The Escrow Agent shall have no duty
or obligation to monitor the application and use of Collected Funds once
transferred to the Company, that being the sole obligation and responsibility
of the Company.

 

(p)                                 The quoted
terms below have the indicated meanings:

 

(i)                                     “Authorized Person”
means those officers of the Company or Dealer Manager, as the case may be, set
forth on Exhibit D and any other person set forth on a revised Exhibit D
signed by an Authorized Person and delivered to the Escrow Agent by the Company
or the Dealer Manager, as the case may be, and each such person is duly
authorized by, respectively, the Company or the Dealer Manager to give Written
Instructions on behalf of, respectively, the Company or the Dealer Manager.  An Authorized Person’s scope of authority may
be limited by setting forth such limitation in a written document signed by an
Authorized Person.

 

(ii)                                  “BNY Authorized Person”
means those employees of the Escrow Agent set forth on Exhibit D
and any other person set forth on a revised Exhibit D signed by a
BNY Authorized Person and delivered to the Company and Dealer Manager by the
Escrow Agent, and each such person is duly authorized by the Escrow Agent to
give Written Instructions on behalf of the Escrow Agent.  A BNY Authorized Person’s scope of authority
may be limited by setting forth such limitation in a written document signed by
a BNY Authorized Person.

 

(ii)                                  “Written Instructions”
means:

 

(A)                              written instructions signed
by an Authorized Person (or a person reasonably believed by the Escrow Agent to
be an Authorized Person), addressed to and received by the Escrow Agent, and
delivered by hand, private messenger with signed acknowledgment of receipt,
U.S. Postal Service with signed acknowledgment of receipt, or overnight
national courier service with signed acknowledgment of receipt; and

 

7

 

(B)                                email sent by an Authorized
Person (or a person reasonably believed by the Escrow Agent to be an Authorized
Person) to the email address of a BNY Authorized Person, with a return email
from the BNY Authorized Person acknowledging receipt.

 

6.                                      Escrow Agent Fee. The Escrow
Agent shall be entitled to compensation for its services, as stated in the fee
schedule attached hereto as Exhibit B, and reimbursement of the
reasonable out-of-pocket expenses incurred in connection with such services,
which compensation and reimbursement shall be paid by the Company. The
foregoing obligation of the Company shall become an obligation of the Dealer
Manager with respect to fees and reimbursable expenses that the Company does
not pay within 30 days of being invoiced by BNY. Subject to the provisions of
Section 10 hereof, the fee agreed upon for the services rendered hereunder
in Exhibit B is intended as full compensation for the Escrow Agent’s
services as contemplated by this Agreement. Any fee, reimbursement for costs
and expenses, indemnification for damages incurred by the Escrow Agent or other
monies of any sort may be paid out of or chargeable to the income of assets of
the Escrow Account if such is not paid by the Company or Dealer manager within
thirty (30) days of demand by the Escrow Agent, but any partial recovery
by the Escrow Agent pursuant to the foregoing sentence shall not be construed
as an accord and satisfaction of all amounts that may be owed.

 

7.                                      Investment of Share Payments.

 

(a)                                  The accounts
constituting the Escrow Account shall be titled in a manner as the parties
hereto may agree.

 

(b)                                 All interest
earned by funds in the Escrow Account shall be retained in the Escrow Account
until disbursed in accordance with Section 4 or Section 2(f).

 

(c)                                  The Escrow
Agent shall have no responsibility or liability for any loss which may result
from the deposit of Conforming Payments into and holding of the proceeds of the
Conforming Payments and interest in the Escrow Account unless such loss is the
result of willful misconduct or gross negligence of the Escrow Agent.

 

(d)                                 The parties
recognize and agree that the Escrow Agent will not provide supervision,
recommendations or advice relating to either the investment of moneys held in
the Escrow Account.

 

(e)                                  The Escrow
Agent shall send statements to the Company on a monthly basis reflecting
activity in the Escrow Account for the preceding month, provided that no such
statement need be rendered for the Escrow Account if no activity occurred for
such month.

 

8.                                      Tax Reporting.

 

(a)                                  As of the end
of each calendar year and to the extent required under the provisions of the
Internal Revenue Code of 1986, as amended, and the regulations promulgated
thereunder (the “Code”), whether or not such income was disbursed during
a such calendar year, the Escrow Agent shall report to the Internal Revenue
Service (the “IRS”) all income earned from the investment of any sum
held in the Escrow Account to the person or entity receiving the interest or
other taxable income.

 

(b)                                 The Company
shall, upon request of the Escrow Agent after the date hereof, provide the
Escrow Agent with certified tax identification numbers by furnishing
appropriate IRS forms W-9 or W-8 and other forms and documents that the Escrow
Agent may reasonably request. The parties hereto understand that if such tax
reporting documentation is not so certified to the Escrow Agent, the Escrow
Agent may be required by the Code to withhold a portion of any interest or
other income earned on the Collected Funds.

 

8

 

(c)                                  To the extent
that the Escrow Agent becomes liable for the payment of any taxes in respect of
income derived from the investment of funds held or payments made hereunder,
the Escrow Agent shall satisfy such liability to the extent possible from the
funds in the Escrow Account.

 

9.                                      Notices. 
All notices, requests, demands and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given
(i) on the date of service if served personally on the party to whom
notice is to be given, (ii) on the day of transmission if sent by
facsimile transmission to the facsimile number given below, and written
confirmation of receipt is obtained promptly after completion of transmission,
(iii) on the day after delivery to the United Parcel Service or similar
overnight courier or the Express Mail service maintained by the United States
Postal Service and sent via overnight delivery or (iv) on the fifth day
after mailing, if mailed to the party to whom notice is to be given, by first
class mail, registered or certified, postage prepaid, and properly addressed,
return receipt requested, to the party as follows:

 

If
to Company:

 

Clarion Property Trust Inc.

230 Park Avenue, New York, NY 10169

Attention:
Michael O’Connor and Amy Boyle

Fax: (212) 883-2700

 

With
a copy (which shall not constitute notice) to:

 

Alston &
Bird LLP

1201
West Peachtree Street

Atlanta,
Georgia 30309

Attention:  Rosemarie Thurston

Fax:  (404) 881-7777

 

If
to the Dealer Manager:

 

ING Investments Distributor, LLC

7337 E. Doubletree Ranch Road, Scottsdale, AR 85258

Attention: Senior Vice President of Operations

Fax:
[                                  ]

 

If
to the Escrow Agent:

 

BNY Mellon Investment Servicing (US) Inc.

[                                          ]

Attention:
[                         ]

Fax:
[                                  ]

 

Wires
to the Escrow Agent should be directed to the following:

 

BNY Mellon Investment Servicing (US) Inc.

[                                          ]

Attention: [                         ]

Fax: [                                  ]

 

9

 

Any
party hereto may change its address for purposes of this paragraph by giving
the other party written notice of the new address in the manner set forth
above.

 

10.          Indemnification
of the Escrow Agent. The Company and
the Dealer Manager each hereby agree to jointly and severally indemnify and
defend the Escrow Agent and its officers, directors, employees and agents, and
hold them harmless, from and against any and all claims, suits, actions,
proceedings, damages, losses, liabilities, obligations, costs and reasonable
expenses (including attorneys’ fees and court costs, travel costs, reasonable
settlement costs and other reasonable out-of-pocket costs related to dispute
resolution) which the Escrow Agent may suffer or incur directly or indirectly
from or which relate in any way to (i) this Agreement, (ii) any
transaction to which this Agreement relates, (iii) for avoidance of doubt:
any actions taken or not taken hereunder pursuant to Sections 11, 19 or 21
(except, with respect to Section 21, a removal attributable to a material
breach of the Agreement by the Escrow Agent) or the second to last sentence of Section 20
hereunder, (iv) any action taken or omitted to be taken by the Escrow
Agent in connection with the provision of services to the Company or pursuant
to Written Instructions, and, (v) for the avoidance of doubt: any
liability for taxes or any additions for late payment, interest, penalties or
other assessments or expenses that may be charged to or incurred by the Escrow
Agent under applicable tax laws or tax regulations attributable to the
investment of funds held in escrow by the Escrow Agent or disbursements made
hereunder; except to the extent any of the foregoing in clauses (i) through
(v) is finally adjudicated to have directly resulted from or been caused
by the Escrow Agent’s own intentional misconduct, bad faith or gross negligence
with respect to its duties under this Agreement. The provisions of this
Section 10 shall survive the termination of this Agreement and the
resignation or removal of the Escrow Agent.

 

11.          Attachment
of Escrow Property; Compliance with Legal Orders. In the event that any property held under escrow
hereunder (“Escrow Property”) shall be attached, garnished or levied
upon by any court order, or the delivery thereof shall be stayed or enjoined by
an order of a court, or any order, judgment or decree shall be made or entered
by any court order affecting the Escrow Property, the Escrow Agent is hereby
expressly authorized, in its sole discretion, to respond as it deems appropriate
or to comply with all writs, orders or decrees so entered or issued, or which
it is advised by legal counsel of its own choosing is binding upon it, whether
with or without jurisdiction. In the event that the Escrow Agent obeys or
complies with any such writ, order or decree, it shall not be liable to the
Company or the Dealer Manager or to any other person, firm or corporation,
should, by reason of such compliance notwithstanding, such writ, order or
decree be subsequently reversed, modified, annulled, set aside or vacated.

 

12.          Successors
and Assigns.

 

(a)           Except as otherwise provided
in this Agreement, no party hereto shall assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other parties
hereto and any such attempted assignment without such prior written consent
shall be null and void and of no force and effect. This Agreement shall inure
to the benefit of and shall be binding upon the heirs, executors,
administrators, successors and permitted assigns of the parties hereto,

 

(b)           Notwithstanding the above,
any corporation or association into which the Escrow Agent may be converted or
merged, or with which it may be consolidated, or to which it may sell or
transfer all or substantially all of its corporate trust business and assets as
a whole or substantially as a whole, or any corporation or association
resulting from any such conversion, sale, merger, consolidation or transfer to
which the Escrow Agent is a party, shall be and become the successor escrow
agent under this Agreement and shall have and succeed to the rights, powers,
duties, immunities and privileges as its predecessor, without the execution or
filing of any instrument or paper or the performance of any further act.

 

10

 

(c)           For purposes of
clarification: a change in control of Escrow Agent shall not constitute an
assignment under this Section 12.

 

13.          Term.  This Agreement shall
terminate thirty (30) days after the day BNY receives written notice of
termination from the Company and the Dealer Manager. In the event the Escrow
Agent disburses all funds in the Escrow Account in accordance with
Section 4 of this Agreement, this Agreement shall terminate upon the
conclusion of all actions and activities of the Escrow Agent in connection with
such disbursement and the Escrow Agent shall thereafter be relieved of all
responsibilities, including those relating to the Escrow Account, except claims
which are occasioned by its gross negligence or willful misconduct.

 

14.          Governing
Law. This Agreement shall be
construed, performed, and enforced in accordance with, and governed by, the
laws of the State of New York, without giving effect to the principles of
conflicts of laws thereof. 

 

15.          Severability. In the event that any part of this Agreement is
declared by any court or other judicial or administrative body to be null, void
or unenforceable, said provision shall survive to the extent it is not so
declared, and all of the other provisions of this Agreement shall remain in
full force and effect.

 

16.          Amendments;
Waivers. This Agreement may be
amended or modified, and any of the terms, covenants, representations,
warranties or conditions hereof may be waived, only by a written instrument
executed by the parties hereto or, in the case of a waiver, by the party
waiving compliance. Any waiver by any party of any condition, or of the breach
of any provision, term, covenant, representation or warranty contained in this
Agreement, in any one or more instances, shall not be deemed to be nor
construed as further or continuing waiver of any such condition, or of the
breach of any other provision, term, covenant, representation or warranty of
this Agreement.

 

17.          Entire
Agreement; Counterparts. This Agreement
contains the entire understanding among the parties hereto with respect to the
subject matter of this Agreement and supersedes and replaces all prior and
contemporaneous agreements and understandings, oral or written, with regard to
the subject matter of this Agreement. This Agreement, and any amendments
hereto, may be executed by the parties hereto in two or more counterparts, each
of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

 

18.          Section Headings. The section headings in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.

 

11

 

19.          Disputes.

 

(a)           In the event of a
disagreement among any of the parties to this Agreement, or among them or any
other person resulting in adverse claims and demands being made in connection
with or from any property in the Escrow Account, the Escrow Agent shall be
entitled to refuse to comply with any such claims or demands as long as such
disagreement may continue, and in so refusing, shall make no delivery or other
disposition of any property then held by it in the Escrow Account under this
Agreement, and in so doing, the Escrow Agent shall be entitled to continue to
refrain from acting until (i) the right of adverse claimants shall have
been finally settled by binding arbitration or finally adjudicated in a court
assuming and having jurisdiction of the property involved herein or affected
hereby or (ii) all differences shall have been adjusted by agreement and
the Escrow Agent shall have been notified in writing of such agreement signed
by the parties hereto.

 

(b)           In the event of such a
dispute, the Escrow Agent shall be entitled, in its discretion and judgment, to
tender into the registry or custody of any court of competent jurisdiction
subject to the limitations set forth in Section 14 of this Agreement, all
money or property in its hands under this Agreement, together with such legal
pleadings as the Escrow Agent deems appropriate, and thereupon be discharged
from all further duties and liabilities under this Agreement. In the event of
any uncertainty as to its duties hereunder, the Escrow Agent may refuse to act
under the provisions of this Agreement pending order of a court of competent
jurisdiction and the Escrow Agent shall have no liability to the Company, the
Dealer Manager, any Dealer or to any other person as a result of such action.
The filing of any such legal proceedings shall not deprive the Escrow Agent of
its compensation earned under this Agreement.

 

20.          Resignation. The Escrow Agent may resign upon thirty
(30) days advance written notice to the Company and the Dealer Manager (a “Resignation
Notice”). Such resignation shall become effective on the date specified in
a Resignation Notice, which shall be not earlier than thirty (30) days
after such Resignation Notice has been given. In the event of any such
resignation, a successor escrow agent, which shall be a bank or trust company
organized under the laws of the United States of America, shall be appointed by
the mutual agreement of the Company and the Dealer Manager. Any such successor
escrow agent shall deliver to the Company and the Dealer Manager a written
instrument accepting such appointment, and thereupon shall succeed to all the
rights and duties of the Escrow Agent hereunder and shall be entitled to
receive the Escrow Account from the Escrow Agent. The Escrow Agent shall
promptly pay all funds in the Escrow Account, including interest thereon, to
the successor escrow agent. If a successor escrow agent is not appointed by the
Company or the Dealer Manager within the thirty (30) day period following
delivery of a Resignation Notice by the Escrow Agent, the Escrow Agent may
petition any court of competent jurisdiction to name a successor escrow agent.
All costs, expenses and reasonable attorney’s fees the Escrow Agent incurs in
connection with such proceeding shall be paid by the Company.

 

21.          Removal. The Escrow Agent may be jointly removed by the
Company and the Dealer Manager at any time, by written notice executed by both
of them (a “Removal Notice”), which Removal Notice shall become
effective on the date specified in such Removal Notice. The removal of the
Escrow Agent shall not deprive the Escrow Agent of its compensation earned
prior to such removal. In the event of any such removal, a successor escrow
agent, which shall be a bank or trust company organized under the laws of the
United States of America, shall be appointed by the mutual agreement of the
Company and the Dealer Manager. Any such successor escrow agent shall deliver
to the Company and the Dealer Manager a written instrument accepting such
appointment, and thereupon shall succeed to all the rights and duties of the
Escrow Agent hereunder and shall be entitled to receive the Escrow Account from
the Escrow Agent. The Escrow Agent shall promptly pay all funds in the Escrow
Account, including interest thereon, to the successor escrow agent. If a
successor escrow agent is not appointed by the Company or the Dealer Manager
within the thirty (30) day period following delivery of a Removal Notice,
the Escrow

 

12

 

Agent
may petition any court of competent jurisdiction to name a successor escrow
agent. All costs, expenses and reasonable attorneys fees the Escrow Agent
incurs in connection with such proceeding shall be paid by the Company.

 

22.          Maintenance
of Records. The Escrow Agent shall
maintain accurate records of all transactions hereunder. Promptly after the
termination of this Agreement, and as may from time to time be reasonably
requested by the Company before such termination, the Escrow Agent shall, at
the Company’s sole cost and expense, provide the Company with a copy of such
records, certified by the Escrow Agent to be a complete and accurate account of
all transactions hereunder. The authorized representatives of the Company and
the Dealer Manager shall also have access to the Escrow Agent’s books and
records to the extent relating to its duties hereunder, during normal business
hours upon reasonable notice to the Escrow Agent, and at the requesting party’s
expense.

 

23.          Representatives. The applicable persons designated in Exhibit D
hereto have been duly appointed to act as the representatives of the Company or
Dealer Manager, as applicable, hereunder and have full power and authority to
execute and deliver any Written Instructions, to amend, modify or waive any
provision of this Agreement and to take any and all other actions on behalf of
the Company or Dealer Manager, as applicable, under this Agreement, all without
further consent or direction from, or notice to, the Company or Dealer Manager,
as applicable, or any other party.

 

24.          USA Patriot
Act. The Company and Dealer
Manager acknowledge that the Escrow Agent may request identifying information
in connection with the USA Patriot Act, Pub.L. 107-56 (the “Patriot Act”),
and the Company and Dealer Manager agree to provide any such information
requested by the Escrow Agent in connection with the Patriot Act or any similar
legislation or regulation to which the Escrow Agent is subject, in a timely
manner.

 

25.          Illegal
Activities. The Escrow Agent shall have
the right in its sole discretion to not accept appointment as escrow agent and
reject funds and collateral from any party in the event that the Escrow Agent
has reason to believe that such funds or collateral violate applicable banking
practices or applicable laws or regulations, including, but not limited to, the
Patriot Act. In the event of suspicious or illegal activity and pursuant to all
applicable laws, regulations and practices, the other parties to this Agreement
will assist the Escrow Agent and comply with any reviews, investigations and
examinations directed against the deposited funds.

 

IN WITNESS WHEREOF, the parties hereto have
caused this Escrow Agreement to be executed the day and year first set forth
above.

 

	
   

  	
  Clarion Property Trust Inc., the
  Company

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ING Investments Distributor, LLC, as
  Dealer Manager

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

13

 

	
   

  	
  BNY
  Mellon Investment Servicing (US) Inc., as Escrow Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

14Exhibit 10.3

 

 

CLARION PROPERTY TRUST INC.

LONG-TERM INCENTIVE PLAN

 

 

 

CLARION PROPERTY TRUST INC.

LONG-TERM INCENTIVE PLAN

 

	
  ARTICLE 1  PURPOSE

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  General

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2  DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3  EFFECTIVE
  TERM OF PLAN

  	
  7

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Effective Date

  	
  7

  
	
  3.2

  	
  Termination of Plan

  	
  7

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4  ADMINISTRATION

  	
  7

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Committee

  	
  7

  
	
  4.2

  	
  Actions and Interpretations by the Committee

  	
  8

  
	
  4.3

  	
  Authority of Committee

  	
  8

  
	
  4.4

  	
  Award Certificates

  	
  9

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5  SHARES
  SUBJECT TO THE PLAN

  	
  9

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Number of Shares

  	
  9

  
	
  5.2

  	
  Share Counting

  	
  9

  
	
  5.3

  	
  Stock Distributed

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6  ELIGIBILITY

  	
  10

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  General

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7  STOCK
  OPTIONS

  	
  10

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  General

  	
  10

  
	
  7.2

  	
  Incentive Stock Options

  	
  11

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8  STOCK
  APPRECIATION RIGHTS

  	
  11

  
	
   

  	
   

  	
   

  
	
  8.1

  	
  Grant of Stock Appreciation Rights

  	
  11

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9  RESTRICTED
  STOCK, RESTRICTED STOCK UNITS AND DEFERRED STOCK UNITS

  	
  12

  
	
   

  	
   

  	
   

  
	
  9.1

  	
  Grant of Restricted Stock, Restricted Stock Units and
  Deferred Stock Units

  	
  12

  
	
  9.2

  	
  Issuance and Restrictions

  	
  13

  
	
  9.3

  	
  Dividends on Restricted Stock

  	
  13

  
	
  9.4

  	
  Forfeiture

  	
  13

  
	
  9.5

  	
  Delivery of Restricted Stock

  	
  13

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10  PERFORMANCE AWARDS

  	
  14

  
	
   

  	
   

  	
   

  
	
  10.1

  	
  Grant of Performance Awards

  	
  14

  
	
  10.2

  	
  Performance Goals

  	
  14

  

 

i

 

	
  ARTICLE 11  DIVIDEND
  EQUIVALENTS

  	
  14

  
	
   

  	
   

  	
   

  
	
  11.1

  	
  Grant of Dividend Equivalents

  	
  14

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  12  STOCK OR OTHER STOCK-BASED AWARDS

  	
  15

  
	
   

  	
   

  	
   

  
	
  12.1

  	
  Grant of Stock or Other Stock-Based Awards

  	
  15

  
	
   

  	
   

  	
   

  
	
  ARTICLE 13  PROVISIONS
  APPLICABLE TO AWARDS

  	
  15

  
	
   

  	
   

  	
   

  
	
  13.1

  	
  Term of Awards

  	
  15

  
	
  13.2

  	
  Form of Payment for Awards

  	
  15

  
	
  13.3

  	
  Limits on Transfer

  	
  15

  
	
  13.4

  	
  Beneficiaries

  	
  16

  
	
  13.5

  	
  Stock Trading Restrictions

  	
  16

  
	
  13.6

  	
  Acceleration for Any Reason

  	
  16

  
	
  13.7

  	
  Forfeiture Events

  	
  16

  
	
  13.8

  	
  Substitute Awards

  	
  17

  
	
   

  	
   

  	
   

  
	
  ARTICLE 14  CHANGES IN
  CAPITAL STRUCTURE

  	
  17

  
	
   

  	
   

  	
   

  
	
  14.1

  	
  Mandatory Adjustments

  	
  17

  
	
  14.2

  	
  Discretionary Adjustments

  	
  17

  
	
  14.3

  	
  General

  	
  18

  
	
   

  	
   

  	
   

  
	
  ARTICLE 15  AMENDMENT,
  MODIFICATION AND TERMINATION

  	
  18

  
	
   

  	
   

  	
   

  
	
  15.1

  	
  Amendment, Modification and Termination

  	
  18

  
	
  15.2

  	
  Awards Previously Granted

  	
  18

  
	
  15.3

  	
  Compliance Amendments

  	
  19

  
	
   

  	
   

  	
   

  
	
  ARTICLE 16  GENERAL
  PROVISIONS

  	
  19

  
	
   

  	
   

  	
   

  
	
  16.1

  	
  Rights of Participants

  	
  19

  
	
  16.2

  	
  Withholding

  	
  20

  
	
  16.3

  	
  Special Provisions Related to Section 409A of the Code

  	
  20

  
	
  16.4

  	
  Unfunded Status of Awards

  	
  21

  
	
  16.5

  	
  Relationship to Other Benefits

  	
  21

  
	
  16.6

  	
  Expenses

  	
  22

  
	
  16.7

  	
  Titles and Headings

  	
  22

  
	
  16.8

  	
  Gender and Number

  	
  22

  
	
  16.9

  	
  Fractional Shares

  	
  22

  
	
  16.10

  	
  Government and Other Regulations

  	
  22

  
	
  16.11

  	
  Governing Law

  	
  22

  
	
  16.12

  	
  Additional Provisions

  	
  23

  
	
  16.13

  	
  No Limitations on Rights of Company

  	
  23

  
	
  16.14

  	
  Indemnification

  	
  23

  

 

ii

 

CLARION PROPERTY TRUST INC.

LONG TERM INCENTIVE PLAN

 

ARTICLE 1

PURPOSE

 

1.1.                              GENERAL.  The purpose of the Clarion Property Trust
Inc. Long Term Incentive Plan is to enable Clarion Property Trust Inc. and its
Affiliates (as defined below) to (1) provide an incentive to employees,
officers, directors, consultants and advisors to increase the value of the
Company’s common stock, (2) give such persons a stake in the Company’s
future that corresponds to the stake of each of the Company’s stockholders, and
(3) obtain or retain the services of these persons who are considered
essential to the Company’s long-term success, by offering such persons an
opportunity to participate in the Company’s growth through ownership of the
Company’s Class A or Class W common stock or through other equity-related
awards. Accordingly, the Plan permits the grant of incentive awards from time
to time to selected employees, officers, directors, consultants and advisors of
the Company and its Affiliates.

 

ARTICLE 2

DEFINITIONS

 

2.1.                              DEFINITIONS.  When a word or phrase appears in this Plan
with the initial letter capitalized, and the word or phrase does not commence a
sentence, the word or phrase shall generally be given the meaning ascribed to
it in this Section or in Section 1.1 unless a clearly different
meaning is required by the context.  The
following words and phrases shall have the following meanings:

 

(a)                                  “Affiliate”
means (i) any Subsidiary or Parent, or (ii) an entity that directly
or through one or more intermediaries controls, is controlled by or is under
common control with, the Company, as determined by the Committee.

 

(b)                                 “Award”
means any Option, Stock Appreciation Right, Restricted Stock, Restricted Stock
Unit, Deferred Stock Unit, Performance Award, Dividend Equivalent, Other
Stock-Based Award, or any other right or interest relating to Stock or cash,
granted to a Participant under the Plan.

 

(c)                                  “Award
Certificate” means a written document, in such form as the Committee
prescribes from time to time, setting forth the terms and conditions of an
Award.  Award Certificates may be in the
form of individual award agreements or certificates or a program document
describing the terms and provisions of an Award or series of Awards under the Plan.  The Committee may provide for the use of
electronic, internet or other non-paper Award Certificates, and the use of
electronic, internet or other non-paper means for the acceptance thereof and
actions thereunder by a Participant.

 

(d)                                 “Beneficial
Owner” shall have the meaning given such term in Rule 13d-3 

 

1

 

of the General Rules and
Regulations under the 1934 Act.

 

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

 

(f)                                    “Cause”
as a reason for a Participant’s termination of employment shall have the
meaning assigned such term in the employment, severance or similar agreement,
if any, between such Participant and the Company or an Affiliate, provided,
however that if there is no such employment, severance or similar agreement in
which such term is defined, and unless otherwise defined in the applicable
Award Certificate, “Cause” shall mean any of the following acts by the
Participant, as determined by the Committee: gross neglect of duty, prolonged
absence from duty without the consent of the Company, material breach by the
Participant of any published Company code of conduct or code of ethics; or
willful misconduct, misfeasance or malfeasance of duty which is reasonably
determined to be detrimental to the Company. With respect to a Participant’s
termination of directorship, “Cause” means an act or failure to act that
constitutes cause for removal of a director under applicable Maryland
law.  The determination of the Committee as to the existence of “Cause”
shall be conclusive on the Participant and the Company.

 

(g)                                 “Change in
Control” means and includes the occurrence of any one of the following
events but shall specifically exclude a Public Offering:

 

(i)                                     during any
consecutive 12 month period, individuals who, at the beginning of such period,
constitute the Board (the “Incumbent Directors”) cease for any reason to
constitute at least a majority of such Board, provided that any person becoming
a director after the beginning of such 12 month period and whose election or
nomination for election was approved by a vote of at least a majority of the
Incumbent Directors then on the Board shall be an Incumbent Director; provided,
however, that no individual initially elected or nominated as a director
of the Company as a result of an actual or threatened election contest with
respect to the election or removal of directors (“Election Contest”) or
other actual or threatened solicitation of proxies or consents by or on behalf
of any Person other than the Board (“Proxy Contest”), including by
reason of any agreement intended to avoid or settle any Election Contest or
Proxy Contest, shall be deemed an Incumbent Director; or

 

(ii)                                  any Person
becomes a Beneficial Owner, directly or indirectly, of either (A) 30% or
more of the then-outstanding shares of common stock of the Company (“Company
Common Stock”) or (B) securities of the Company representing 30% or
more of the combined voting power of the Company’s then outstanding securities
eligible to vote for the election of directors (the “Company Voting Securities”);
provided, however, that for purposes of this subsection (ii), the
following acquisitions of Company Common Stock or Company Voting Securities
shall not constitute a Change in Control: (w) an acquisition directly from
the Company, (x) an acquisition by the Company or a Subsidiary, (y) an
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any Subsidiary, or (z) an acquisition
pursuant to a 

 

2

 

Non-Qualifying Transaction (as defined in subsection
(iii) below); or

 

(iii)                               the
consummation of a reorganization, merger, consolidation, statutory share
exchange or similar form of corporate transaction involving the Company or a
Subsidiary (a “Reorganization”), or the sale or other disposition of all
or substantially all of the Company’s assets (a “Sale”) or the
acquisition of assets or stock of another corporation or other entity (an “Acquisition”),
unless immediately following such Reorganization, Sale or Acquisition: (A) all
or substantially all of the individuals and entities who were the Beneficial
Owners, respectively, of the outstanding Company Common Stock and outstanding
Company Voting Securities immediately prior to such Reorganization, Sale or
Acquisition beneficially own, directly or indirectly, more than 30% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the entity
resulting from such Reorganization, Sale or Acquisition (including, without
limitation, an entity which as a result of such transaction owns the Company or
all or substantially all of the Company’s assets or stock either directly or
through one or more subsidiaries, the “Surviving Entity”) in
substantially the same proportions as their ownership, immediately prior to
such Reorganization, Sale or Acquisition, of the outstanding Company Common
Stock and the outstanding Company Voting Securities, as the case may be, and (B) no
Person (other than (x) the Company or any Subsidiary, (y) the
Surviving Entity or its ultimate parent entity, or (z) any employee
benefit plan (or related trust) sponsored or maintained by any of the foregoing)
is the Beneficial Owner, directly or indirectly, of 30% or more of the total
common stock or 30% or more of the total voting power of the outstanding voting
securities eligible to elect directors of the Surviving Entity, and (C) at
least a majority of the members of the board of directors of the Surviving
Entity were Incumbent Directors at the time of the Board’s approval of the
execution of the initial agreement providing for such Reorganization, Sale or
Acquisition (any Reorganization, Sale or Acquisition which satisfies all of the
criteria specified in (A), (B) and (C) above shall be deemed to be a “Non-Qualifying
Transaction”); or

 

(iv)                              approval by the
stockholders of the Company of a complete liquidation or dissolution of the
Company.

 

(h)                                 “Charter”
means the articles of incorporation of the Company, as such articles of
incorporation may be amended from time to time.

 

(i)                                     “Code”
means the Internal Revenue Code of 1986, as amended from time to time.  For purposes of this Plan, references to
sections of the Code shall be deemed to include references to any applicable
regulations thereunder and any successor or similar provision.

 

(j)                                     “Committee”
means the committee of the Board described in Article 4.

 

3

 

(k)                                  “Company”
means Clarion Property Trust Inc., a Maryland corporation, or any successor
corporation.

 

(l)                                     “Continuous
Status as a Participant” means the absence of any interruption or
termination of service as an employee, officer, director, consultant or advisors
of the Company or any Affiliate, as applicable; provided, however, that for
purposes of an Incentive Stock Option “Continuous Status as a Participant”
means the absence of any interruption or termination of service as an employee
of the Company or any Parent or Subsidiary, as applicable, pursuant to
applicable tax regulations.  Continuous
Status as a Participant shall not be considered interrupted in the following
cases: (i) a Participant transfers employment between the Company and an
Affiliate or between Affiliates, or (ii) in the discretion of the
Committee as specified at or prior to such occurrence, in the case of a
spin-off, sale or disposition of the Participant’s employer from the Company or
any Affiliate, or (iii) any leave of absence authorized in writing by the
Company prior to its commencement; provided, however, that for purposes of
Incentive Stock Options, no such leave may exceed 90 days, unless reemployment
upon expiration of such leave is guaranteed by statute or contract.  If reemployment upon expiration of a leave of
absence approved by the Company is not so guaranteed, on the 91st day of such
leave any Incentive Stock Option held by the Participant shall cease to be
treated as an Incentive Stock Option and shall be treated for tax purposes as a
Nonstatutory Stock Option.  Whether
military, government or other service or other leave of absence shall
constitute a termination of Continuous Status as a Participant shall be
determined in each case by the Committee at its discretion, and any
determination by the Committee shall be final and conclusive.

 

(m)                               “Deferred
Stock Unit” means a right granted to a Participant under Article 9 to
receive Shares (or the equivalent value in cash or other property if the
Committee so provides) at a future time as determined by the Committee, or as
determined by the Participant within guidelines established by the Committee in
the case of voluntary deferral elections.

 

(n)                                 “Disability”
of a Participant means that the Participant (i) is unable to engage in any
substantial gainful activity by reason of any medically determinable physical
or mental impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than 12 months, or (ii) is,
by reason of any medically determinable physical or mental impairment which can
be expected to result in death or can be expected to last for a continuous
period of not less than 12 months, receiving income replacement benefits for a
period of not less than three months under an accident and health plan covering
employees of the Participant’s employer. 
If the determination of Disability relates to an Incentive Stock Option,
Disability means Permanent and Total Disability as defined in Section 22(e)(3) of
the Code.  In the event of a dispute, the
determination of whether a Participant is Disabled will be made by the
Committee and may be supported by the advice of a physician competent in the
area to which such Disability relates.

 

(o)                                 “Dividend
Equivalent” means a right granted to a Participant under Article 11.

 

4

 

(p)                                 “Effective
Date” has the meaning assigned such term in Section 3.1.

 

(q)                                 “Eligible
Participant” means an employee, officer, consultant or director of the
Company or any Affiliate.

 

(r)                                    “Exchange”
means any national securities exchange on which the Stock may from time to time
be listed or traded.

 

(s)                                  “Fair Market
Value,” on any date, means (i) if the Stock is listed on a securities
exchange, the closing sales price on such exchange or over such system on such
date or, in the absence of reported sales on such date, the closing sales price
on the immediately preceding date on which sales were reported, or (ii) if
the Stock is not listed on a securities exchange, the mean between the bid and
offered prices as quoted by the applicable interdealer quotation system for
such date, or (iii) if the Stock is not quoted on such interdealer quotation
system or it is determined that the fair market value is not properly reflected
by such quotations, Fair Market Value will equal the Company’s net asset value
for the relevant class of stock, as calculated by the Company’s advisor
pursuant to the valuation guidelines approved by the Board. 

 

(t)                                    “Grant Date”
of an Award means the first date on which all necessary corporate action has
been taken to approve the grant of the Award as provided in the Plan, or such
later date as is determined and specified as part of that authorization
process.  Notice of the grant shall be
provided to the grantee within a reasonable time after the Grant Date.

 

(u)                                 “Incentive
Stock Option” means an Option that is intended to be an incentive stock
option and meets the requirements of Section 422 of the Code or any
successor provision thereto.

 

(v)                                 “Independent
Director” means a director of the Company who is not a common law employee
of the Company and who meets the additional requirements set forth for an “independent
director” in the Charter.

 

(w)                               “Nonstatutory
Stock Option” means an Option that is not an Incentive Stock Option.

 

(x)                                   “Option”
means a right granted to a Participant under Article 7 of the Plan to
purchase Stock at a specified price during specified time periods.  An Option may be either an Incentive Stock
Option or a Nonstatutory Stock Option.

 

(y)                                 “Other
Stock-Based Award” means a right granted to a Participant under Article 12,
that relates to or is valued by reference to Stock or other Awards relating to
Stock.

 

5

 

(z)                                   “Parent”
means a corporation, limited liability company, partnership or other entity
which owns or beneficially owns a majority of the outstanding voting stock or
voting power of the Company. Notwithstanding the above, with respect to an
Incentive Stock Option, Parent shall have the meaning set forth in Section 424(e) of
the Code.

 

(aa)                            “Participant”
means a person who, as an employee, officer, director or consultant of the
Company or any Affiliate, has been granted an Award under the Plan; provided
that in the case of the death of a Participant, the term “Participant” refers
to a beneficiary designated pursuant to Section 13.4 or the legal guardian
or other legal representative acting in a fiduciary capacity on behalf of the
Participant under applicable state law and court supervision.

 

(bb)                          “Performance
Award” means any award granted under the Plan pursuant to Article 10.

 

(cc)                            “Person”
means any individual, entity or group, within the meaning of Section 3(a)(9) of
the 1934 Act and as used in Section 13(d)(3) or 14(d)(2) of the
1934 Act.

 

(dd)                          “Plan”
means the Clarion Property Trust Inc. Long Term Incentive Plan, as amended from
time to time.

 

(ee)                            “Public
Offering” shall occur on the closing date of a public offering of any class
or series of the Company’s equity securities pursuant to a registration
statement filed by the Company under the 1933 Act.

 

(ff)                                “Restricted
Stock” means Stock granted to a Participant under Article 9 that is
subject to certain restrictions and to risk of forfeiture.

 

(gg)                          “Restricted
Stock Unit” means a right granted to a Participant under Article 9 to
receive shares of Stock (or the equivalent value in cash or other property if
the Committee so provides) in the future, which right is subject to certain
restrictions and to risk of forfeiture.

 

(hh)                          “Shares”
means shares of the Company’s Stock.  If
there has been an adjustment or substitution pursuant to Section 14.1, the
term “Shares” shall also include any shares of stock or other securities that
are substituted for Shares or into which Shares are adjusted pursuant to Section 14.1.

 

(ii)                                  “Stock”
means (i) the $0.01 par value Class A common stock of the Company (ii) the
$0.01 par value Class W common stock of the Company, and (iii) such other
securities of the Company as may be substituted for either such Class of Stock
pursuant to Section 14.1.

 

(jj)                                  “Stock
Appreciation Right” or “SAR” means a right granted to a Participant
under Article 8 to receive a payment equal to the difference between the
Fair Market Value of a Share as of the date of exercise of the SAR over the
grant price of the 

 

6

 

SAR, all as determined
pursuant to Article 8.

 

(kk)                            “Subsidiary”
means any corporation, limited liability company, partnership or other entity
of which a majority of the outstanding voting stock or voting power is
beneficially owned directly or indirectly by the Company. Notwithstanding the
above, with respect to an Incentive Stock Option, Subsidiary shall have the
meaning set forth in Section 424(f) of the Code.

 

(ll)                                  “1933 Act”
means the Securities Act of 1933, as amended from time to time.

 

(mm)                      “1934 Act”
means the Securities Exchange Act of 1934, as amended from time to time.

 

ARTICLE 3

EFFECTIVE TERM OF PLAN

 

3.1.                              EFFECTIVE DATE.  The Plan shall be effective as of the date it
is approved by both the Board and the stockholders of the Company (the “Effective
Date”).

 

3.2.                              TERMINATION OF PLAN.  The Plan shall terminate on the tenth
anniversary of the Effective Date unless earlier terminated as provided
herein.  The termination of the Plan on
such date shall not affect the validity of any Award outstanding on the date of
termination, which shall continue to be governed by the applicable terms and
conditions of this Plan.  Notwithstanding
the foregoing, no Incentive Stock Options may be granted more than ten (10) years
after the earlier of (a) adoption of this Plan by the Board, or (b) the
Effective Date.

 

ARTICLE 4

ADMINISTRATION

 

4.1.                              COMMITTEE.  The Plan shall be administered by a Committee
appointed by the Board (which Committee shall consist of at least two
directors) or, at the discretion of the Board from time to time, the Plan may
be administered by the Board.  The
members of the Committee shall be appointed by, and may be changed at any time
and from time to time in the discretion of, the Board.  It is intended that at least two of the
directors appointed to serve on the Committee shall be “non-employee directors”
(within the meaning of Rule 16b-3 promulgated under the 1934 Act) and that
any such members of the Committee who do not so qualify shall abstain from
participating in any decision to make or administer Awards that are made to
Eligible Participants who at the time of consideration for such Award are
persons subject to the short-swing profit rules of Section 16 of the
1934 Act.  However, the mere fact that a
Committee member shall fail to qualify as a “non-employee director” or shall
fail to abstain from such action shall not invalidate any Award made by the
Committee which Award is otherwise validly made under the Plan.  The members of the Committee shall be
appointed by, and may be changed at any time and from time to time in the discretion
of, the Board.  The Board may reserve to
itself any or all of the authority and responsibility of the Committee under
the Plan or may act as administrator of the Plan for any and all purposes.  To the extent the Board has reserved any
authority and 

 

7

 

responsibility or during any time that the
Board is acting as administrator of the Plan, it shall have all the powers of
the Committee hereunder, and any reference herein to the Committee (other than
in this Section 4.1) shall include the Board.  To the extent any action of the Board under
the Plan conflicts with actions taken by the Committee, the actions of the
Board shall control.

 

4.2.                              ACTION AND INTERPRETATIONS
BY THE COMMITTEE.  For
purposes of administering the Plan, the Committee may from time to time adopt
rules, regulations, guidelines and procedures for carrying out the provisions
and purposes of the Plan and make such other determinations, not inconsistent
with the Plan, as the Committee may deem appropriate.  The Committee may correct any defect, supply
any omission or reconcile any inconsistency in the Plan or in any Award in the
manner and to the extent it deems necessary to carry out the intent of the
Plan.  The Committee’s interpretation of
the Plan, any Awards granted under the Plan, any Award Certificate and all
decisions and determinations by the Committee with respect to the Plan are
final, binding, and conclusive on all parties. 
Each member of the Committee is entitled to, in good faith, rely or act
upon any report or other information furnished to that member by any officer or
other employee of the Company or any Affiliate, the Company’s or an Affiliate’s
independent certified public accountants, Company counsel or any executive
compensation consultant or other professional retained by the Company to assist
in the administration of the Plan.  No
member of the Committee will be liable for any good faith determination, act or
omission in connection with the Plan or any Award.

 

4.3.                              AUTHORITY OF COMMITTEE.  The Committee has the exclusive power,
authority and discretion to:

 

(a)                                  Grant Awards;

 

(b)                                 Designate
Participants;

 

(c)                                  Determine the
type or types of Awards to be granted to each Participant;

 

(d)                                 Determine the
number of Awards to be granted and the number of Shares or dollar amount to
which an Award will relate;

 

(e)                                  Determine the
terms and conditions of any Award granted under the Plan;

 

(f)                                    Prescribe the
form of each Award Certificate, which need not be identical for each
Participant;

 

(g)                                 Decide all
other matters that must be determined in connection with an Award;

 

(h)                                 Establish,
adopt or revise any rules, regulations, guidelines or procedures as it may deem
necessary or advisable to administer the Plan;

 

(i)                                     Make all other
decisions and determinations that may be required under

 

8

 

the Plan or as the Committee deems necessary or
advisable to administer the Plan;

 

(j)                                     Amend the Plan
or any Award Certificate as provided herein; and

 

(k)                                  Adopt such
modifications, procedures, and subplans as may be necessary or desirable to
comply with provisions of the laws of non-U.S. jurisdictions in which the
Company or any Affiliate may operate, in order to assure the viability of the
benefits of Awards granted to participants located in such other jurisdictions
and to meet the objectives of the Plan.

 

4.4.                              AWARD CERTIFICATES.  Each Award shall be evidenced by an Award
Certificate.  Each Award Certificate
shall include such provisions, not inconsistent with the Plan, as may be
specified by the Committee.

 

ARTICLE 5

SHARES SUBJECT TO THE PLAN

 

5.1.                              NUMBER OF SHARES.  Subject to adjustment as provided in Sections
5.2 and Section 14.1, the aggregate number of Shares reserved and
available for issuance pursuant to Awards granted under the Plan shall be 4,000,000
(comprised of 2,800,000 Shares of Class A Stock and 1,200,000 Shares of Class W
stock); provided, however, that no Awards shall be granted under the Plan on
any date on which the aggregate number of Shares subject to Awards previously
issued under the Plan, together with the proposed Awards to be granted on such
date, shall exceed 2% of the Company’s total outstanding Shares on such date.  The maximum number of Shares that may be
issued upon exercise of Incentive Stock Options granted under the Plan shall be
4,000,000.

 

5.2.                              SHARE COUNTING.  Shares covered by an Award shall be subtracted
from the Plan share reserve as of the Grant Date, but shall be added back to
the Plan share reserve in accordance with this Section 5.2.

 

(a)                                  To the extent
that an Award is canceled, terminates, expires, is forfeited or lapses for any
reason, any unissued or forfeited Shares originally subject to the Award will
be added back to the Plan share reserve and again be available for issuance
pursuant to Awards granted under the Plan.

 

(b)                                 Shares subject
to Awards settled in cash will be added back to the Plan share reserve and
again be available for issuance pursuant to Awards granted under the Plan.

 

(c)                                  Shares withheld
or repurchased from an Award or delivered by a Participant to satisfy minimum
tax withholding requirements will be added back to the Plan share reserve and
again be available for issuance pursuant to Awards granted under the Plan.

 

(d)                                 If the exercise
price of an Option is satisfied in whole or in part by delivering Shares to the
Company (by either actual delivery or attestation), the number of Shares so
tendered (by delivery or attestation) shall be added to the Plan share reserve
and will be available for issuance pursuant to Awards granted under the Plan.

 

(e)                                  To the extent
that the full number of Shares subject to an Option or SAR is 

 

9

 

not
issued upon exercise of the Option or SAR for any reason, including by reason
of net-settlement of the Award, the unissued Shares originally subject to the
Award will be added back to the Plan share reserve and again be available for
issuance pursuant to other Awards granted under the Plan.

 

(f)                                    To the extent
that the full number of Shares subject to an Award other than an Option or SAR
is not issued for any reason, including by reason of failure to achieve maximum
performance goals, the unissued Shares originally subject to the Award will be
added back to the Plan share reserve and again be available for issuance
pursuant to Awards granted under the Plan.

 

(g)                                 Substitute
Awards granted pursuant to Section 13.8 of the Plan shall not count
against the Shares otherwise available for issuance under the Plan under Section 5.1.

 

5.3.                              STOCK DISTRIBUTED.  Any Stock distributed pursuant to an Award
may consist, in whole or in part, of authorized and unissued Stock, treasury
Stock or Stock purchased on the open market.

 

ARTICLE 6

ELIGIBILITY

 

6.1.                              GENERAL.  Awards may be granted only to Eligible
Participants.  Incentive Stock Options
may be granted only to Eligible Participants who are employees of the Company
or a Parent or Subsidiary as defined in Section 424(e) and (f) of
the Code.  Eligible Participants who are
service providers to an Affiliate may be granted Options or SARs under this
Plan only if the Affiliate qualifies as an “eligible issuer of service
recipient stock” within the meaning of §1.409A-1(b)(5)(iii)(E) of the
final regulations under Code Section 409A.

 

ARTICLE 7

STOCK OPTIONS

 

7.1.                              GENERAL.  The Committee is authorized to grant Options
to Participants on the following terms and conditions:

 

(a)                                  EXERCISE PRICE.  The exercise price per Share under an Option
shall be determined by the Committee, provided that the exercise price for any
Option (other than an Option issued as a substitute Award pursuant to Section 13.8)
shall not be less than the Fair Market Value as of the Grant Date.

 

(b)                                 PROHIBITION ON
REPRICING.  Except as
otherwise provided in Section 14.1, the exercise price of an Option may
not be reduced, directly or indirectly by cancellation and regrant or
otherwise, without the prior approval of the stockholders of the Company.

 

(c)                                  TIME AND
CONDITIONS OF EXERCISE.  The
Committee shall 

 

10

 

determine the time or times at which an Option may
be exercised in whole or in part, subject to Section 7.1(e), including a
provision that an Option that is otherwise exercisable and has an exercise
price that is less than the Fair Market Value of the Stock on the last day of
its term will be automatically exercised on such final date of the term by
means of a “net exercise,” thus entitling the optionee to Shares equal to the
intrinsic value of the Option on such exercise date, less the number of Shares
required for tax withholding.  The
Committee shall also determine the performance or other conditions, if any,
that must be satisfied before all or part of an Option may be exercised or
vested.

 

(d)                                 PAYMENT.  The Committee shall determine the methods by
which the exercise price of an Option may be paid, the form of payment, and the
methods by which Shares shall be delivered or deemed to be delivered to
Participants.  As determined by the
Committee at or after the Grant Date, payment of the exercise price of an
Option may be made in, in whole or in part, in the form of (i) cash or
cash equivalents, (ii) delivery (by either actual delivery or attestation)
of previously-acquired Shares based on the Fair Market Value of the Shares on
the date the Option is exercised, (iii) withholding of Shares from the
Option based on the Fair Market Value of the Shares on the date the Option is
exercised, (iv) broker-assisted market sales, or (iv) any other “cashless
exercise” arrangement.

 

(e)                                  EXERCISE TERM.  Except for Nonstatutory Options granted to
Participants outside the United States, no Option granted under the Plan shall
be exercisable for more than ten years from the Grant Date.

 

(f)                                    NO DEFERRAL
FEATURE.  No Option shall provide for any feature for the deferral of compensation
other than the deferral of recognition of income until the exercise or
disposition of the Option.

 

(g)                                 NO DIVIDEND
EQUIVALENTS.  No Option
shall provide for Dividend Equivalents.

 

7.2.                              INCENTIVE STOCK OPTIONS.  The terms of any Incentive Stock Options
granted under the Plan must comply with the requirements of Section 422 of
the Code.  Without limiting the foregoing,
any Incentive Stock Option granted to a Participant who at the Grant Date owns
more than 10% of the voting power of all classes of shares of the Company must
have an exercise price per Share of not less than 110% of the Fair Market Value
per Share on the Grant Date and an Option term of not more than five
years.  If all of the requirements of Section 422
of the Code (including the above) are not met, the Option shall automatically
become a Nonstatutory Stock Option.

 

ARTICLE 8

STOCK APPRECIATION RIGHTS

 

8.1.                              GRANT OF STOCK
APPRECIATION RIGHTS.  The
Committee is authorized to grant Stock Appreciation Rights to Participants on
the following terms and conditions:

 

11

 

(a)                                  RIGHT TO
PAYMENT.  Upon the exercise of a SAR,
the Participant has the right to receive, for each Share with respect to which
the SAR is being exercised, the excess, if any, of:

 

(1)                                        The Fair Market
Value of one Share on the date of exercise; over

 

(2)                                        The base price
of the SAR as determined by the Committee and set forth in the Award
Certificate, which shall not be less than the Fair Market Value of one Share on
the Grant Date.

 

(b)                                 PROHIBITION ON
REPRICING.  Except as
otherwise provided in Section 14.1, the base price of a SAR may not be
reduced, directly or indirectly by cancellation and regrant or otherwise,
without the prior approval of the stockholders of the Company.

 

(c)                                  TIME AND
CONDITIONS OF EXERCISE.  The
Committee shall determine the time or times at which a SAR may be exercised in
whole or in part, including a provision that a SAR that is otherwise
exercisable and has a base price that is less than the Fair Market Value of the
Stock on the last day of its term will be automatically exercised on such final
date of the term, thus entitling the holder to cash or Shares equal to the
intrinsic value of the SAR on such exercise date, less the cash or number of
Shares required for tax withholding. 
Except for SARs granted to Participants outside the United States, no
SAR shall be exercisable for more than ten years from the Grant Date.

 

(d)                                 NO DEFERRAL
FEATURE.  No SAR shall provide for any
feature for the deferral of compensation other than the deferral of recognition
of income until the exercise or disposition of the SAR.

 

(e)                                  NO DIVIDEND
EQUIVALENTS.  No SAR
shall provide for Dividend Equivalents.

 

(f)                                    OTHER TERMS.  All SARs shall be evidenced by an Award
Certificate.  Subject to the limitations
of this Article 8, the terms, methods of exercise, methods of settlement,
form of consideration payable in settlement (e.g., cash, Shares or other
property), and any other terms and conditions of the SAR shall be determined by
the Committee at the time of the grant and shall be reflected in the Award
Certificate.

 

ARTICLE 9

RESTRICTED STOCK, RESTRICTED STOCK UNITS

AND DEFERRED STOCK UNITS

 

9.1.                              GRANT OF
RESTRICTED STOCK, RESTRICTED STOCK UNITS AND DEFERRED STOCK UNITS.  The Committee is authorized to make Awards of
Restricted Stock, Restricted Stock Units or Deferred Stock Units to
Participants in such amounts and subject to such terms and conditions as may be
selected by the Committee.  An Award of 

 

12

 

Restricted Stock, Restricted Stock Units or
Deferred Stock Units shall be evidenced by an Award Certificate setting forth
the terms, conditions, and restrictions applicable to the Award.

 

9.2.                              ISSUANCE AND RESTRICTIONS.  Restricted Stock, Restricted Stock Units or
Deferred Stock Units shall be subject to such restrictions on transferability
and other restrictions as the Committee may impose (including, for example,
limitations on the right to vote Restricted Stock or the right to receive
dividends on the Restricted Stock). 
These restrictions may lapse separately or in combination at such times,
under such circumstances, in such installments, upon the satisfaction of
performance goals or otherwise, as the Committee determines at the time of the
grant of the Award or thereafter.  Except
as otherwise provided in an Award Certificate or any special Plan document
governing an Award, the Participant shall have all of the rights of a
stockholder with respect to the Restricted Stock, and the Participant shall
have none of the rights of a stockholder with respect to Restricted Stock Units
or Deferred Stock Units until such time as Shares of Stock are paid in
settlement of the Restricted Stock Units or Deferred Stock Units.  Unless otherwise provided in the applicable
Award Certificate, awards of Restricted Stock will be entitled to full dividend
rights and any dividends paid thereon will be paid or distributed to the holder
no later than the end of the calendar year in which the dividends are paid to
stockholders or, if later, the 15th  day of the third month following the date the
dividends are paid to stockholders.

 

9.3                                 DIVIDENDS ON RESTRICTED
STOCK.  In the case of Restricted
Stock, the Committee may provide that ordinary cash dividends declared on the
Shares before they are vested (i) will be forfeited, (ii) will be deemed
to have been reinvested in additional Shares or otherwise reinvested (subject
to Share availability under Section 5.1 hereof), or (iii) in the case
of Restricted Stock that is not subject to performance-based vesting, will be
paid or distributed to the Participant as accrued (in which case, such
dividends must be paid or distributed no later than the 15th day of the 3rd
month following the later of (A) the calendar year in which the
corresponding dividends were paid to shareholders, or (B) the first calendar
year in which the Participant’s right to such dividends is no longer subject to
a substantial risk of forfeiture). 
Unless otherwise provided by the Committee, dividends accrued on Shares
of Restricted Stock before they are vested shall, as provided in the Award
Certificate, either (i) be reinvested in the form of additional Shares,
which shall be subject to the same vesting provisions as provided for the host
Award, or (ii) be credited by the Company to an account for the
Participant and accumulated without interest until the date upon which the host
Award becomes vested, and any dividends accrued with respect to forfeited
Restricted Stock will be reconveyed to the Company without further
consideration or any act or action by the Participant.

 

9.4.                              FORFEITURE.  Subject to the terms of the Award Certificate
and except as otherwise determined by the Committee at the time of the grant of
the Award or thereafter, upon termination of Continuous Status as a Participant
during the applicable restriction period or upon failure to satisfy a
performance goal during the applicable restriction period, Restricted Stock or
Restricted Stock Units that are at that time subject to restrictions shall be
forfeited.

 

9.5.                              DELIVERY OF RESTRICTED STOCK.  Shares of Restricted Stock shall be delivered
to the Participant at the Grant Date either by book-entry registration or by
delivering to the Participant, or a custodian or escrow agent (including,
without limitation, the Company or

 

13

 

one
or more of its employees) designated by the Committee, a stock certificate or
certificates registered in the name of the Participant.  If physical certificates representing shares
of Restricted Stock are registered in the name of the Participant, such
certificates must bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such Restricted Stock.

 

ARTICLE 10

PERFORMANCE AWARDS

 

10.1.                        GRANT OF
PERFORMANCE AWARDS.  The
Committee is authorized to grant any Award under this Plan, including
cash-based Awards, with performance-based vesting criteria, on such terms and
conditions as may be selected by the Committee. 
Any such Awards with performance-based vesting criteria are referred to
herein as Performance Awards. The Committee shall have the complete discretion
to determine the number of Performance Awards granted to each Participant and
to designate the provisions of such Performance Awards as provided in Section 4.3.  All Performance Awards shall be evidenced by
an Award Certificate or a written program established by the Committee,
pursuant to which Performance Awards are awarded under the Plan under uniform
terms, conditions and restrictions set forth in such written program.

 

10.2.                        PERFORMANCE GOALS.  The Committee may establish performance goals
for Performance Awards which may be based on any criteria selected by the
Committee.  Such performance goals may be
described in terms of Company-wide objectives or in terms of objectives that
relate to the performance of the Participant, an Affiliate or a division,
region, department or function within the Company or an Affiliate. If the
Committee determines that a change in the business, operations, corporate
structure or capital structure of the Company or the manner in which the
Company or an Affiliate conducts its business, or other events or circumstances
render performance goals to be unsuitable, the Committee may modify such
performance goals in whole or in part, as the Committee deems appropriate.  If a Participant is promoted, demoted or
transferred to a different business unit or function during a performance
period, the Committee may determine that the performance goals or performance
period are no longer appropriate and may (i) adjust, change or eliminate the
performance goals or the applicable performance period as it deems appropriate
to make such goals and period comparable to the initial goals and period, or (ii) make
a cash payment to the participant in an amount determined by the Committee.

 

ARTICLE 11

DIVIDEND EQUIVALENTS

 

11.1.                        GRANT OF
DIVIDEND EQUIVALENTS.  Except as
provided in Sections 7.1(g) and 8.1(e), the Committee is authorized to
grant Dividend Equivalents with respect to Awards granted hereunder, subject to
such terms and conditions as may be selected by the Committee.  Dividend Equivalents shall entitle the
Participant to receive payments equal to dividends with respect to all or a
portion of the number of Shares subject to an Award, as determined by the
Committee.  The Committee may provide
that Dividend Equivalents (i) will be deemed to have been reinvested in
additional Shares or otherwise reinvested, or (ii) except in the case of
Performance Awards, will be paid or distributed to the Participant as accrued
(in 

 

14

 

which case, such Dividend Equivalents must be
paid or distributed no later than the 15th day of the 3rd month following the later of (A) the
calendar year in which the corresponding dividends were paid to shareholders,
or (B) the first calendar year in which the Participant’s right to such
Dividends Equivalents is no longer subject to a substantial risk of
forfeiture).  Unless otherwise provided
by the Committee, Dividend Equivalents accruing on unvested Full-Value Awards
shall, as provided in the Award Certificate, either (i) be reinvested in
the form of additional Shares, which shall be subject to the same vesting
provisions as provided for the host Award, or (ii) be credited by the
Company to an account for the Participant and accumulated without interest
until the date upon which the host Award becomes vested, and any Dividend
Equivalents accrued with respect to forfeited Awards will be reconveyed to the
Company without further consideration or any act or action by the Participant.

 

ARTICLE 12

STOCK OR OTHER STOCK-BASED
AWARDS

 

12.1.                        GRANT OF STOCK OR OTHER
STOCK-BASED AWARDS.  The
Committee is authorized, subject to limitations under applicable law, to grant
to Participants such other Awards that are payable in, valued in whole or in
part by reference to, or otherwise based on or related to Shares, as deemed by
the Committee to be consistent with the purposes of the Plan, including without
limitation, membership interests in a Subsidiary or operating partnership,
Shares awarded purely as a “bonus” and not subject to any restrictions or
conditions, convertible or exchangeable debt securities, other rights
convertible or exchangeable into Shares, and Awards valued by reference to book
value of Shares or the value of securities of or the performance of specified
Parents or Subsidiaries.  The Committee
shall determine the terms and conditions of such Awards.

 

ARTICLE 13

PROVISIONS APPLICABLE TO AWARDS

 

13.1.                        TERM OF AWARD.  The term of each Award shall be for the
period as determined by the Committee, provided that in no event shall the term
of any Option or a Stock Appreciation Right exceed a period of ten years from
its Grant Date.

 

13.2.                        FORM OF PAYMENT FOR
AWARDS.  At the discretion of the
Committee, payment of Awards may be made in cash, Stock, a combination of cash
and Stock, or any other form of property as the Committee shall determine.  In addition, payment of Awards may include
such terms, conditions, restrictions and/or limitations, if any, as the
Committee deems appropriate, including, in the case of Awards paid in the form
of Stock, restrictions on transfer and forfeiture provisions.  Further, payment of Awards may be made in the
form of a lump sum, or in installments, as determined by the Committee.

 

13.3.                        LIMITS ON TRANSFER.  No right or interest of a Participant in any
unexercised or restricted Award may be pledged, encumbered, or hypothecated to
or in favor of any party other than the Company or an Affiliate, or shall be
subject to any lien, obligation, or liability of such Participant to any other
party other than the Company or an Affiliate. 
No unexercised or restricted Award shall be assignable or transferable
by a Participant other than by will or the laws

 

15

 

of
descent and distribution; provided, however, that the Committee may (but need
not) permit other transfers (other than transfers for value) where the
Committee concludes that such transferability (i) does not result in
accelerated taxation, (ii) does not cause any Option intended to be an
Incentive Stock Option to fail to be described in Code Section 422(b), and
(iii) is otherwise appropriate and desirable, taking into account any
factors deemed relevant, including without limitation, state or federal tax or
securities laws applicable to transferable Awards.

 

13.4.                        BENEFICIARIES.  Notwithstanding Section 13.3, a
Participant may, in the manner determined by the Committee, designate a
beneficiary to exercise the rights of the Participant and to receive any
distribution with respect to any Award upon the Participant’s death.  A beneficiary, legal guardian, legal
representative, or other person claiming any rights under the Plan is subject
to all terms and conditions of the Plan and any Award Certificate applicable to
the Participant, except to the extent the Plan and Award Certificate otherwise
provide, and to any additional restrictions deemed necessary or appropriate by
the Committee.  If no beneficiary has
been designated or survives the Participant, payment shall be made to the
Participant’s estate.  Subject to the
foregoing, a beneficiary designation may be changed or revoked by a Participant
at any time provided the change or revocation is filed with the Committee.

 

13.5.                        STOCK TRADING RESTRICTIONS.  All Stock issuable under the Plan is subject
to any stop-transfer orders and other restrictions as the Committee deems
necessary or advisable to comply with federal or state securities laws, rules and
regulations and the rules of any national securities exchange or automated
quotation system on which the Stock is listed, quoted, or traded.  The Committee may place legends on any Stock
certificate or issue instructions to the transfer agent to reference
restrictions applicable to the Stock.

 

13.6.                    ACCELERATION FOR ANY REASON.  The Committee may in its sole discretion at
any time determine that all or a portion of a Participant’s Options, SARs, and
other Awards in the nature of rights that may be exercised shall become fully
or partially exercisable, that all or a part of the time-based vesting
restrictions on all or a portion of the outstanding Awards shall lapse, and/or
that any performance-based criteria with respect to any Awards shall be deemed
to be wholly or partially satisfied, in each case, as of such date as the Committee
may, in its sole discretion, declare. 
The Committee may discriminate among Participants and among Awards
granted to a Participant in exercising its discretion pursuant to this Section 13.6.  Notwithstanding anything in the Plan,
including this Section 13.6, the Committee may not accelerate the payment
of any Award if such acceleration would violate Section 409A(a)(3) of
the Code.

 

13.7.                        FORFEITURE EVENTS.  The Committee may specify in an Award
Certificate that the Participant’s rights, payments and benefits with respect
to an Award shall be subject to reduction, cancellation, forfeiture or
recoupment upon the occurrence of certain specified events, in addition to any
otherwise applicable vesting or performance conditions of an Award. Such events
shall include, but shall not be limited to, termination of employment for
Cause, violation of material Company or Affiliate policies, breach of
noncompetition, confidentiality or other restrictive agreements that may apply
to the Participant.

 

16

 

13.8.                        SUBSTITUTE AWARDS.  The Committee may grant Awards under the Plan
in substitution for stock and stock-based awards held by employees of another
entity who become employees of the Company or an Affiliate as a result of a
merger or consolidation of the former employing entity with the Company or an
Affiliate or the acquisition by the Company or an Affiliate of property or
stock of the former employing corporation. 
The Committee may direct that the substitute awards be granted on such
terms and conditions as the Committee considers appropriate in the
circumstances.

 

ARTICLE 14

CHANGES IN CAPITAL STRUCTURE

 

14.1.                        MANDATORY ADJUSTMENTS.  In the
event of a nonreciprocal transaction between the Company and its stockholders that
causes the per-share value of the Stock to change (including, without
limitation, any stock dividend, stock split, spin-off, rights offering, or
large nonrecurring cash dividend), the authorization limits under Section 5.1
shall be adjusted proportionately, and the
Committee shall make such adjustments to the Plan and Awards as it deems
necessary, in its sole discretion, to prevent dilution or enlargement of rights
immediately resulting from such transaction. 
Action by the Committee may include: (i) adjustment of the number
and kind of shares that may be delivered under the Plan; (ii) adjustment
of the number and kind of shares subject to outstanding Awards; (iii) adjustment
of the exercise price of outstanding Awards or the measure to be used to determine
the amount of the benefit payable on an Award; and (iv) any other
adjustments that the Committee determines to be equitable.  Notwithstanding
the foregoing, the Committee shall not make any adjustments to outstanding
Options or SARs that would constitute a modification or substitution of the
stock right under Treas. Reg. Sections 1.409A-1(b)(5)(v) that would be
treated as the grant of a new stock right or change in the form of payment for
purposes of Code Section 409A.  Without limiting the foregoing, in the
event of a subdivision of the outstanding Stock (stock-split), a declaration of
a dividend payable in Shares, or a combination or consolidation of the
outstanding Stock into a lesser number of Shares, the authorization limits
under Section 5.1 shall automatically be adjusted proportionately, and the
Shares then subject to each Award shall automatically, without the necessity
for any additional action by the Committee, be adjusted proportionately without
any change in the aggregate purchase price therefor.

 

14.2.                        DISCRETIONARY ADJUSTMENTS.  Upon the occurrence or in anticipation of any
corporate event or transaction involving the Company (including, without
limitation, any merger, reorganization, recapitalization, combination or
exchange of shares, or any transaction described in Section 14.1), the Committee
may, in its sole discretion, provide (i) that Awards will be settled in
cash rather than Stock, (ii) that Awards will become immediately vested
and exercisable and will expire after a designated period of time to the extent
not then exercised, (iii) that Awards will be assumed by another party to
a transaction or otherwise be equitably converted or substituted in connection
with such transaction, (iv) that outstanding Awards may be settled by
payment in cash or cash equivalents equal to the excess of the Fair Market
Value of the underlying Stock, as of a specified date associated with the
transaction, over the exercise price of the Award, (v) that performance
targets and performance periods for Performance Awards will be modified, or (vi) any
combination of the foregoing.

 

17

 

14.3.                        GENERAL.  Any discretionary adjustments made pursuant
to this Article 14 shall be subject to the provisions of Section 15.2.  To the extent that any adjustments made
pursuant to this Article 14 cause Incentive Stock Options to cease to
qualify as Incentive Stock Options, such Options shall be deemed to be
Nonstatutory Stock Options.

 

ARTICLE 15

AMENDMENT, MODIFICATION AND TERMINATION

 

15.1.                        AMENDMENT, MODIFICATION AND
TERMINATION.  The Board
or the Committee may, at any time and from time to time, amend, modify or
terminate the Plan without stockholder approval; provided, however, that if an
amendment to the Plan would, in the reasonable opinion of the Board or the
Committee, either (i) materially increase the number of Shares available
under the Plan, (ii) expand the types of awards under the Plan, (iii) materially
expand the class of participants eligible to participate in the Plan, (iv) materially
extend the term of the Plan, or (v) otherwise constitute a material change
requiring stockholder approval under applicable laws, policies or regulations
or the applicable listing or other requirements of an Exchange, then such
amendment shall be subject to stockholder approval; and provided, further, that
the Board or Committee may condition any other amendment or modification on the
approval of stockholders of the Company for any reason, including by reason of
such approval being necessary or deemed advisable (i) to comply with the
listing or other requirements of an Exchange, or (ii) to satisfy any other
tax, securities or other applicable laws, policies or regulations.

 

15.2.                        AWARDS PREVIOUSLY GRANTED.  At any time and from time to time, the
Committee may amend, modify or terminate any outstanding Award without approval
of the Participant; provided, however:

 

(a)                                  Subject to the
terms of the applicable Award Certificate, such amendment, modification or
termination shall not, without the Participant’s consent, reduce or diminish
the value of such Award determined as if the Award had been exercised, vested,
cashed in or otherwise settled on the date of such amendment or termination
(with the per-share value of an Option or SAR for this purpose being calculated
as the excess, if any, of the Fair Market Value as of the date of such
amendment or termination over the exercise or base price of such Award);

 

(b)                                 The original
term of an Option or SAR may not be extended without the prior approval of the
stockholders of the Company;

 

(c)                                  Except as
otherwise provided in Section 14.1, the exercise price of an Option or SAR
may not be reduced, directly or indirectly, without the prior approval of the
stockholders of the Company; and

 

(d)                                 No termination,
amendment, or modification of the Plan shall adversely 

 

18

 

affect any Award previously granted under the Plan,
without the written consent of the Participant affected thereby.  An outstanding Award shall not be deemed to
be “adversely affected” by a Plan amendment if such amendment would not reduce
or diminish the value of such Award determined as if the Award had been
exercised, vested, cashed in or otherwise settled on the date of such amendment
(with the per-share value of an Option or SAR for this purpose being calculated
as the excess, if any, of the Fair Market Value as of the date of such
amendment over the exercise or base price of such Award).

 

15.3.                        COMPLIANCE AMENDMENTS.  Notwithstanding anything in the Plan or in
any Award Certificate to the contrary, the Board may amend the Plan or an Award
Certificate, to take effect retroactively or otherwise, as deemed necessary or
advisable for the purpose of conforming the Plan or Award Certificate to any present
or future law relating to plans of this or similar nature (including, but not
limited to, Section 409A of the Code), and to the administrative
regulations and rulings promulgated thereunder. 
By accepting an Award under this Plan, a Participant agrees to any
amendment made pursuant to this Section 15.3 to any Award granted under
the Plan without further consideration or action.

 

ARTICLE 16

GENERAL PROVISIONS

 

16.1.                        RIGHTS OF PARTICIPANTS.

 

(a)                                  No Participant
or any Eligible Participant shall have any claim to be granted any Award under
the Plan.  Neither the Company, its
Affiliates nor the Committee is obligated to treat Participants or Eligible
Participants uniformly, and determinations made under the Plan may be made by
the Committee selectively among Eligible Participants who receive, or are
eligible to receive, Awards (whether or not such Eligible Participants are
similarly situated).

 

(b)                                 Nothing in the
Plan, any Award Certificate or any other document or statement made with
respect to the Plan, shall interfere with or limit in any way the right of the
Company or any Affiliate to terminate any Participant’s employment or status as
an officer, or any Participant’s service as a director, at any time, nor confer
upon any Participant any right to continue as an employee, officer, or director
of the Company or any Affiliate, whether for the duration of a Participant’s
Award or otherwise.

 

(c)                                  Neither an
Award nor any benefits arising under this Plan shall constitute an employment
contract with the Company or any Affiliate and, accordingly, subject to Article 15,
this Plan and the benefits hereunder may be terminated at any time in the sole
and exclusive discretion of the Committee without giving rise to any liability
on the part of the Company or any of its Affiliates.

 

(d)                                 No Award gives
a Participant any of the rights of a stockholder of the Company unless and
until Shares are in fact issued to such person in connection with such Award.

 

19

 

16.2.                        WITHHOLDING.  The Company or any Affiliate shall have the
authority and the right to deduct or withhold, or require a Participant to
remit to the Company, an amount sufficient to satisfy federal, state, and local
taxes (including the Participant’s FICA obligation) required by law to be
withheld with respect to any exercise, lapse of restriction or other taxable
event arising as a result of the Plan. 
With respect to withholding required upon any taxable event under the
Plan, the Committee may, at the time the Award is granted or thereafter,
require or permit that any such withholding requirement be satisfied, in whole
or in part, by withholding from the Award Shares having a Fair Market Value on
the date of withholding equal to the minimum amount (and not any greater
amount) required to be withheld for tax purposes, all in accordance with such
procedures as the Committee establishes. 
All such elections shall be subject to any restrictions or limitations
that the Committee, in its sole discretion, deems appropriate.

 

16.3.                        SPECIAL
PROVISIONS RELATED TO SECTION 409A OF THE CODE.

 

(a)                                  General.  It is intended that the payments and benefits
provided under the Plan and any Award shall either be exempt from the
application of, or comply with, the requirements of Section 409A of the
Code.  The Plan and all Award
Certificates shall be construed in a manner that effects such intent.  Nevertheless, the tax treatment of the
benefits provided under the Plan or any Award is not warranted or
guaranteed.  Neither the Company, its Affiliates
nor their respective directors, officers, employees or advisers shall be held
liable for any taxes, interest, penalties or other monetary amounts owed by any
Participant or other taxpayer as a result of the Plan or any Award.

 

(b)                                 Definitional
Restrictions. Notwithstanding anything in the Plan or in any
Award Certificate to the contrary, to the extent that any amount or benefit
that would constitute non-exempt “deferred compensation” for purposes of Section 409A
of the Code would otherwise be payable or distributable, or a different form of
payment (e.g., lump sum or installment) would be effected, under the Plan or
any Award Certificate by reason of the occurrence of a Change in Control, or
the Participant’s Disability or separation from service, such amount or benefit
will not be payable or distributable to the Participant, and/or such different
form of payment will not be effected, by reason of such circumstance unless the
circumstances giving rise to such Change in Control, Disability or separation
from service meet any description or definition of “change in control event,” “disability”
or “separation from service,” as the case may be, in Section 409A of the
Code and applicable regulations (without giving effect to any elective
provisions that may be available under such definition).  This provision does not prohibit the vesting
of any Award upon a Change in Control, Disability or separation from service,
however defined.  If this provision
prevents the payment or distribution of any amount or benefit, such payment or
distribution shall be made on the next earliest payment or distribution date or
event specified in the Award Certificate that is permissible under Section 409A
of the Code.  If this provision prevents
the application of a different form of payment of any amount or benefit, such
payment shall be made in the same form as would have applied absent such
designated event or circumstance.

 

20

 

(c)                                  Allocation
among Possible Exemptions.  If
any one or more Awards granted under the Plan to a Participant could qualify
for any separation pay exemption described in Treas. Reg. Section 1.409A-1(b)(9),
but such Awards in the aggregate exceed the dollar limit permitted for the
separation pay exemptions, the Company (acting through the Committee) shall
determine which Awards or portions thereof will be subject to such exemptions.

 

(d)                                 Six-Month Delay
in Certain Circumstances. 
Notwithstanding anything in the Plan or in any Award Certificate to the
contrary, if any amount or benefit that would constitute non-exempt “deferred
compensation” for purposes of Section 409A of the Code would otherwise be
payable or distributable under this Plan or any Award Certificate by reason of
a Participant’s separation from service during a period in which the
Participant is a Specified Employee (as defined below), then, subject to any
permissible acceleration of payment by the Committee under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic
relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment
of employment taxes):

 

(i)                                     the amount of such
non-exempt deferred compensation that would otherwise be payable during the
six-month period immediately following the Participant’s separation from
service will be accumulated through and paid or provided on the first day of
the seventh month following the Participant’s separation from service (or, if
the Participant dies during such period, within 30 days after the Participant’s
death) (in either case, the “Required Delay Period”), and

 

(ii)                                  the normal payment or
distribution schedule for any remaining payments or distributions will resume
at the end of the Required Delay Period.

 

For
purposes of this Plan, the term “Specified Employee” has the meaning
given such term in Section 409A of the Code and the final regulations
thereunder, provided, however, that, as permitted in such final regulations,
the Company’s Specified Employees and its application of the six-month delay rule of
409A(a)(2)(B)(i) of the Code shall be determined in accordance with rules adopted
by the Board or any committee of the Board, which shall be applied consistently
with respect to all nonqualified deferred compensation arrangements of the
Company, including this Plan.

 

16.4.                        UNFUNDED STATUS
OF AWARDS.  The Plan is
intended to be an “unfunded” plan for incentive and deferred compensation.  With respect to any payments not yet made to
a Participant pursuant to an Award, nothing contained in the Plan or any Award
Certificate shall give the Participant any rights that are greater than those
of a general creditor of the Company or any Affiliate.  This Plan is not intended to be subject to
ERISA.

 

16.5.                        RELATIONSHIP TO OTHER
BENEFITS.  No payment
under the Plan shall be taken into account in determining any benefits under
any pension, retirement, savings, profit sharing, group insurance, welfare or
benefit plan of the Company or any Affiliate unless provided otherwise in such
other plan.

 

21

 

16.6.                        EXPENSES.  The expenses of administering the Plan shall
be borne by the Company and its Affiliates.

 

16.7.                        TITLES AND HEADINGS.  The titles and headings of the Sections in
the Plan are for convenience of reference only, and in the event of any
conflict, the text of the Plan, rather than such titles or headings, shall
control.

 

16.8.                        GENDER AND NUMBER.  Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine; the
plural shall include the singular and the singular shall include the plural.

 

16.9.                        FRACTIONAL SHARES.  No fractional Shares shall be issued and the
Committee shall determine, in its discretion, whether cash shall be given in
lieu of fractional Shares or whether such fractional Shares shall be eliminated
by rounding up or down.

 

16.10.                  GOVERNMENT AND OTHER
REGULATIONS.

 

(a)                                  Notwithstanding
any other provision of the Plan, no Participant who acquires Shares pursuant to
the Plan may, during any period of time that such Participant is an affiliate
of the Company (within the meaning of the rules and regulations of the
Securities and Exchange Commission under the 1933 Act), sell such Shares,
unless such offer and sale is made (i) pursuant to an effective
registration statement under the 1933 Act, which is current and includes the
Shares to be sold, or (ii) pursuant to an appropriate exemption from the
registration requirement of the 1933 Act, such as that set forth in Rule 144
promulgated under the 1933 Act.

 

(b)                                 Notwithstanding
any other provision of the Plan, if at any time the Committee shall determine
that the registration, listing or qualification of the Shares covered by an
Award upon any Exchange or under any foreign, federal, state or local law or
practice, or the consent or approval of any governmental regulatory body, is
necessary or desirable as a condition of, or in connection with, the granting
of such Award or the purchase or receipt of Shares thereunder, no Shares may be
purchased, delivered or received pursuant to such Award unless and until such registration,
listing, qualification, consent or approval shall have been effected or
obtained free of any condition not acceptable to the Committee.  Any Participant receiving or purchasing
Shares pursuant to an Award shall make such representations and agreements and
furnish such information as the Committee may request to assure compliance with
the foregoing or any other applicable legal requirements.  The Company shall not be required to issue or
deliver any certificate or certificates for Shares under the Plan prior to the
Committee’s determination that all related requirements have been
fulfilled.  The Company shall in no event
be obligated to register any securities pursuant to the 1933 Act or applicable
state or foreign law or to take any other action in order to cause the issuance
and delivery of such certificates to comply with any such law, regulation or
requirement.

 

16.11.                  GOVERNING LAW.  To the extent not governed by federal law,
the Plan and all 

 

22

 

Award
Certificates shall be construed in accordance with and governed by the laws of
the State of Maryland.

 

16.12.                  ADDITIONAL PROVISIONS.  Each Award Certificate may contain such other
terms and conditions as the Committee may determine; provided that such other
terms and conditions are not inconsistent with the provisions of the Plan.

 

16.13.                  NO LIMITATIONS ON RIGHTS OF
COMPANY.  The grant of any Award shall
not in any way affect the right or power of the Company to make adjustments,
reclassification or changes in its capital or business structure or to merge,
consolidate, dissolve, liquidate, sell or transfer all or any part of its
business or assets.  The Plan shall not
restrict the authority of the Company, for proper corporate purposes, to draft
or assume awards, other than under the Plan, to or with respect to any
person.  If the Committee so directs, the
Company may issue or transfer Shares to an Affiliate, for such lawful
consideration as the Committee may specify, upon the condition or understanding
that the Affiliate will transfer such Shares to a Participant in accordance
with the terms of an Award granted to such Participant and specified by the
Committee pursuant to the provisions of the Plan.

 

16.14.                  INDEMNIFICATION.  Each person who is or shall have been a
member of the Committee or of the Board shall be indemnified and held harmless
by the Company against and from any loss, cost, liability, or expense that may
be imposed upon or reasonably incurred by him or her in connection with or
resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action taken or
failure to act under the Plan and against and from any and all amounts paid by
him or her in settlement thereof, with the Company’s approval, or paid by him
or her in satisfaction of any judgment in any such action, suit, or proceeding
against him or her, provided he or she shall give the Company an opportunity,
at its own expense, to handle and defend the same before he or she undertakes
to handle and defend it on his or her own behalf, unless such loss, cost,
liability, or expense is a result of his or her own willful misconduct or
except as expressly provided by statute. 
The foregoing right of indemnification shall not be exclusive of any
other rights of indemnification to which such persons may be entitled under the
Company’s charter or bylaws, as a matter of law, or otherwise, or any power
that the Company may have to indemnify them or hold them harmless.

 

**********

 

23

 

The foregoing is hereby acknowledged as being the
Clarion Property Trust Inc. Long-Term Incentive Plan as adopted by the Board on
September 22, 2010 and by the stockholder on September 22, 2010.

 

	
   

  	
  CLARION PROPERTY TRUST INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael O’Connor

  
	
   

  	
  Name:

  	
  Michael O’Connor

  
	
   

  	
  Title:

  	
  Secretary

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