Document:

First Amended and Restated Sub-Advisory Agreement

 Exhibit 10.4 

First Amended and Restated 

Sub-advisory Agreement 

between 

American Realty Capital II Advisors, LLC 

and 
 Phillips
Edison NTR LLC 
 July 1, 2010 

 Table of Contents 

 

			
	 	  	Page
	 Article 1 – Definitions
	  	1
	 Article 2 – Appointment
	  	3
	 Article 3 – Duties of the Sub-advisor
	  	3
	 Article 4 – Authority and Certain Activities of Sub-advisor
	  	3
	 Article 5 – Assignment of Payments
	  	4
	 5.1 Acquisition Fees
	  	4
	 5.2 Asset Management Fee
	  	4
	 5.3 Disposition Fees
	  	4
	 5.4 Financing Fee
	  	4
	 5.5 Subordinated Share of Cash Flows
	  	5
	 5.6 Subordinated Incentive Fee
	  	5
	 5.7 Subordinated Performance Fee Due Upon Termination
	  	5
	 5.8 Expense Reimbursements
	  	5
	 Article 6 – Allocation of Expense Reimbursements
	  	5
	 6.1 Organization and Offering Expense Reimbursements
	  	5
	 6.2 All Other Expense Reimbursements
	  	6
	 Article 7 – Voting Agreements
	  	6
	 7.1 Election of Directors
	  	6
	 7.2 Other Voting of Shares
	  	7
	 7.3 Major Decisions
	  	7
	 Article 8 – Relationship Of Advisor And Company; Other Activities Of The Advisor
	  	8
	 8.1 Relationship
	  	8
	 8.2 Time Commitment
	  	9
	 8.3 Advisor and Sub-advisor Meetings
	  	9
	 8.4 Investment Opportunities and Allocation
	  	9
	 8.5 Prospectus Guidance
	  	11
	 Article 9 – Dealer Manager
	  	11
	 Article 10 – The Phillips Edison and ARC Names
	  	11
	 Article 11 – Other Agreements
	  	11
	 11.1 Approval and Funding of Company Organization and Offering Costs
	  	11
	 11.2 Property Level Agreements
	  	13
	 11.3 Advisor, Advisory Agreement and Dealings with Company
	  	13
	 Article 12 – Certain Transfers
	  	13
	 12.1 Transfers
	  	13
	 12.2 Prohibited Transfers
	  	14
	 Article 13 – Representations, Warranties, and Agreements
	  	14
	 Article 14 – Term And Termination of the Agreement
	  	17
	 14.1 Term
	  	17
	 14.2 Termination
	  	18
	 14.3 Survival upon Termination
	  	18
	 14.4 Payments on Termination and Survival of Certain Rights and Obligations
	  	19

   

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	 Article 15 – Assignment
	  	19
	 Article 16 – Indemnification And Limitation Of Liability
	  	19
	 Article 17 – Miscellaneous
	  	19
	 17.1 Notices
	  	19
	 17.2 Modification
	  	20
	 17.3 Severability
	  	20
	 17.4 Construction
	  	20
	 17.5 Entire Agreement
	  	21
	 17.6 Waiver
	  	21
	 17.7 Gender
	  	21
	 17.8 Titles Not to Affect Interpretation
	  	21
	 17.9 Counterparts
	  	21

   

 ii 

 First Amended and Restated Sub-advisory Agreement 

This First Amended and Restated Sub-advisory Agreement, dated as of July 1, 2010 (this
“Agreement”), is between, American Realty Capital II Advisors, LLC, a Delaware limited liability company (the “Advisor”) and Phillips Edison NTR LLC (formerly known as Phillips
Edison & Company SubAdvisor LLC), a Delaware limited liability company (the “Sub-advisor”). 

W I T N E S S E T H 

WHEREAS, the parties entered into the Sub-advisory Agreement on January 11, 2010 (the “Original Agreement”);

 WHEREAS, the parties have agreed to make certain amendments and desire to amend and restate the Original Agreement;

 WHEREAS, Phillips Edison – ARC Shopping Center REIT Inc., a Maryland corporation (the “Company”) has
appointed Advisor as its advisor pursuant to the Third Amended and Restated Advisory Agreement between the Company and the Advisor, dated as of even date herewith (as the same may be amended, restated or otherwise modified from time to time in
accordance with its terms, the “Advisory Agreement”); 
 WHEREAS, the Advisor desires to avail itself of the
knowledge, experience, sources of information, advice, assistance and certain facilities available to the Sub-advisor and to have the Sub-advisor undertake the duties and responsibilities hereinafter set forth, on behalf of the Advisor, and subject
to the supervision of, the Board of Directors of the Company, all as provided herein; and 
 WHEREAS, the Sub-advisor is willing
to undertake such duties and responsibilities, subject to the supervision of the Board of Directors of the Company, on the terms and subject to the conditions hereinafter set forth. 

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements contained herein, the Parties hereto agree
that the Original Agreement hereby is amended and restated to read in its entirety as follows: 
 Article 1 

Definitions 

Capitalized and other terms that are defined in the Advisory Agreement but not otherwise defined in this Agreement have the respective
meanings ascribed to such terms in the Advisory Agreement, a copy of which is attached hereto as Appendix A. 
 The
following defined terms used in this Agreement shall have the meanings specified below: 
  

 1 

 “Advisor” has the meaning set forth at the head of this Agreement.

 “Advisory Agreement” has the meaning set forth in the recitals. 

“Affiliate” has the meaning set forth in the Advisory Agreement. For the avoidance of doubt, none of the Company, the
Sub-advisor, any subsidiary of the Company, any subsidiary of the Sub-advisor and any other Person controlled by, controlling or under common control with Phillips Edison Limited Partnership shall be an Affiliate of the Advisor. 

“Agreement” has the meaning set forth in the preamble. 

“Company” has the meaning set forth in the recitals hereto. 

“Dealer Manager” means Realty Capital Services, LLC, a Delaware limited liability company, in its capacity as dealer
manager pursuant to the Dealer Manager Agreement. 
 “Dealer Manager Agreement” means that dealer manager
agreement, dated as of even date herewith, between the Company and the Dealer Manager, providing for the distribution of the Shares. 

“Effective Date” means the initial Effective Date (as defined in the Dealer Manager Agreement). 

“Fund IV” means Phillips Edison Shopping Center Fund IV, L.P. 

“Immediate Family Member” means, with respect to a Key Person: (i) any of such Key Person’s parents and
siblings, spouse and descendants and any of the spouses of such descendants (collectively, the “Individual Group”); (ii) any trust, the beneficiaries of which consist exclusively of one or more members of the Individual Group
(collectively, the “Family Trusts”); and (iii) any entity which is controlled by, directly or indirectly, one or more members of the Individual Group and/or one or more of the Family Trusts. 

“Key Person” means (i) with respect to the Advisor, each of William Kahane and Nicholas Schorsch and his heirs,
legal representatives and executors, and (ii) with respect to the Sub-advisor, each of Michael C. Phillips and Jeffrey S. Edison and his heirs, legal representatives and executors. 

“Offering Period” has the meaning set forth in the Dealer Manager Agreement. 

“Party” or “Parties” refer to the Advisor or the Sub-advisor or both, as the case may be. 

“Prospectus” has the meaning set forth in the Dealer Manager Agreement. 

 

 2 

 “Reference Date” means the first date the Company breaks escrow on
stockholder subscriptions in the Initial Public Offering. 
 “Sub-advisor” has the meaning set forth at the
head of this Agreement. 
 “Transfer Restriction Period” means, with respect to the Sub-advisor, the Offering
Period plus 12 months, and with respect to the Advisor, the Offering Period plus six months. 
 Article 2 

Appointment 

The Advisor, pursuant to its authority to delegate all of its rights and powers to manage and control the business and affairs of the
Company to the Sub-advisor pursuant to Section 4.1 of the Advisory Agreement, hereby appoints the Sub-advisor to serve as the Sub-advisor for the Company. The Sub-advisor hereby accepts such appointment. The Advisor delegates, and the
Sub-advisor agrees to perform, all the duties of the Advisor set forth in the Advisory Agreement, all on the terms and subject to the conditions set forth in this Agreement. 

Article 3 

Duties of the Sub-advisor 

Under the Advisory Agreement, the Advisor is responsible for managing, operating, directing and supervising the operations and
administration of the Company and its assets. Consistent with Article 2 hereof, the Sub-advisor undertakes to use commercially reasonable efforts to present to the Company potential investment opportunities and to provide the Company with a
continuing and suitable investment program consistent with the investment objectives and policies of the Company as determined and adopted from time to time by the Board. Subject to the limitations set forth in this Agreement and the Advisory
Agreement, including Article 4 of the Advisory Agreement, consistent with the provisions of the Articles of Incorporation and Bylaws and the continuing and exclusive authority of the Board over the supervision of the Company, the Sub-advisor shall,
either directly or by engaging an Affiliate or third party, perform the duties set forth in Article 3 of the Advisory Agreement (a copy of which is attached hereto as Appendix A), which duties are incorporated herein by reference as if fully
set forth herein. 
 Article 4 

Authority and Certain Activities of Sub-advisor 

The Sub-advisor shall have the authority set forth in Article 4 of the Advisory Agreement, shall have the authority to establish and
maintain bank accounts as set forth 
  

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in Article 5 of the Advisory Agreement, shall maintain books and records for the Company as set forth in Article 6 of the Advisory Agreement, and shall abide by the limitations of Article 7 of
the Advisory Agreement, all of which (i.e., Articles 4 through 7 of the Advisory Agreement) are incorporated herein by reference as if fully set forth herein. 

Article 5 

Assignment of Payments 

As compensation for the services provided pursuant to this Agreement, Advisor hereby assigns payments as follows: 

 

	5.1	Acquisition Fees. The Advisor hereby assigns its right to receive direct payment from the Company of 85% of all Acquisition Fees payable pursuant to
Section 8.1 of the Advisory Agreement. The Advisor will submit an invoice to the Company, which the Sub-advisor shall prepare, following the closing or closings of each acquisition or origination, accompanied by a computation of the Acquisition
Fee. The portion of the Acquisition Fee payable to each of the Advisor and Sub-advisor then will be paid by the Company at the closing of the applicable transaction upon receipt of the invoice by the Company as provided in the Advisory Agreement.

  

	5.2	Asset Management Fee. The Advisor hereby assigns its right to receive direct payment from the Company of 85% of all Asset Management Fees payable pursuant to the
Advisory Agreement. The Advisor will submit a quarterly invoice to the Company, which the Sub-advisor shall prepare and which shall include a computation of the Asset Management Fee for the applicable period. The Asset Management Fee shall be
payable by the Company as provided in the Advisory Agreement. 

  

	5.3	Disposition Fees. The Advisor hereby assigns its right to receive direct payment from the Company of 85% of all Disposition Fees payable pursuant to the Advisory
Agreement; provided, however, that if the receipt by the Advisor of all or any part of a Disposition Fee for any particular transaction would violate applicable law, and if applicable law would permit payment thereof to the
Sub-advisor, then the assignment shall be deemed to be for the Disposition Fee (or part thereof) associated with that particular transaction that would violate applicable law if received by the Advisor. The portion of the Disposition Fee payable to
each of the Advisor and the Sub-advisor shall be paid by the Company as provided in the Advisory Agreement. 

  

	5.4	 Financing Fee. The Advisor hereby assigns its right to receive direct payment from the Company of 85% of all Financing Fees payable to the
Advisor pursuant to the Advisory Agreement; provided, however, that if the receipt by the Advisor of a Financing Fee for any particular transaction would violate applicable law, and if applicable law would permit payment thereof to the
Sub-advisor, then the 

  

 4 

	 	 
assignment shall be deemed to be for the Financing Fee (or part thereof) associated with that particular transaction that would violate applicable law if received by the Advisor.

  

	5.5	Subordinated Share of Cash Flows. The Advisor hereby assigns its right to receive direct payment from the Company of 85% of all Subordinated Share of Cash Flows
payable pursuant to the Advisory Agreement. 

  

	5.6	Subordinated Incentive Fee. The Advisor hereby assigns its right to receive direct payment from the Company of 85% of all Subordinated Incentive Fees payable
pursuant to the Advisory Agreement, in whatever form payable by the Company (i.e., cash, Shares or a promissory note). 

  

	5.7	Subordinated Performance Fee Due Upon Termination. The Advisor hereby assigns its right to receive direct payment from the Company of 85% of the Subordinated
Performance Fee Due Upon Termination payable pursuant to the Advisory Agreement, in whatever form payable by the Company (i.e., cash, Shares or a promissory note). 

 

	5.8	Expense Reimbursements. Subject to Article 6 of this Agreement and Article 9 of the Advisory Agreement, the Advisor hereby assigns its right to receive
direct payment from the Company of expense reimbursements the Sub-advisor incurs on behalf of the Company or in connection with the services the Sub-advisor provides to the Company pursuant to this Agreement. 

Article 6 

Allocation of Expense Reimbursements 
  

	6.1	Organization and Offering Expense Reimbursements. All Organization and Offering Expense reimbursements will be apportioned between the Advisor and Sub-advisor
pro rata based on the amount of such Organization and Offering Expenses reimbursements due each as of the date of the reimbursement. 

  

	 	(A)	It is understood and agreed that the Company shall be under no obligation to reimburse the Advisor or Sub-advisor to the extent such reimbursement would cause the total
amount spent by the Company on Organization and Offering Expenses (excluding underwriting and brokerage discounts and commissions, but including third-party due diligence fees as set forth in detailed and itemized invoices) to exceed 1.5% of Gross
Proceeds raised in a Public Offering as of the termination of such Public Offering; and 

  

	 	(B)	 Within 60 days after the end of the month in which a Public Offering terminates, the Sub-advisor shall reimburse the Advisor, to the extent the Advisor
was not reimbursed or had an obligation to reimburse the Company (and did so reimburse the Company), for Organization and Offering Expenses (excluding underwriting and brokerage discounts and

  

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commissions, but including third-party due diligence fees as set forth in detailed and itemized invoices) exceeding 1.5% of Gross Proceeds raised in a Public Offering.

  

	 	(C)	The Company shall not reimburse the Advisor or Sub-advisor for any Organization and Offering Expenses that the Conflicts Committee determines are not fair and
commercially reasonable to the Company. 

  

	 	(D)	The Company shall not make any reimbursement for any of the following Organization and Offering Expenses incurred by the Dealer Manager that are to be paid out of the
Dealer Manager’s fee: 

  

	 	(1)	participating broker-dealer expense reimbursements (including meals with financial advisors and participating broker-dealer client seminars); 

 

	 	(2)	sales seminars sponsored by participating broker-dealers; 

  

	 	(3)	promotional items; 

  

	 	(4)	marketing support; 

  

	 	(5)	expenses in connection with bona fide training and educational meetings; 

  

	 	(6)	wholesaling commissions, wholesaling salaries and wholesaling expense reimbursements (including travel, meals and lodging in connection with the Offering);

  

	 	(7)	occasional meals and entertainment expenses of participating broker-dealers; and 

 

	 	(8)	legal fees and expenses of the Dealer Manager associated with FINRA-related filings or the drafting and review of any dealer manager agreements, participating
broker-dealer agreements and due diligence agreements. 

  

	6.2	All Other Expense Reimbursements. All other expense reimbursements will be apportioned between the Advisor and Sub-advisor pro rata based on the amount of
such expense reimbursements due each as of the date of the reimbursement. 

 Article 7 

Voting Agreements 
  

	7.1	 Election of Directors. The Advisor and Sub-advisor each agrees, with respect to any Shares now or hereinafter owned by it, to vote such Shares
in favor of the Advisor’s nominee for the Board and the Sub-advisor’s nominees for the Board. 

  

 6 

	 	 
As of the date hereof, the Advisor’s nominee for the Board is William M. Kahane, and the Sub-advisor’s nominees are Jeffrey S. Edison and Michael C. Phillips.

  

	7.2	Other Voting of Shares. The Advisor and Sub-advisor each agrees that, with respect to any Shares now or hereinafter owned by it, neither will vote or consent on
matters submitted to the stockholders of the Company regarding (i) the removal of the Advisor or any Affiliate of the Advisor; (ii) the removal of the Sub-advisor or any Affiliate of the Sub-advisor; (iii) any transaction between the
Company and the Advisor or any of its Affiliates; or (iv) any transaction between the Company and the Sub-advisor or any of its Affiliates. This voting restriction shall survive until such time that the Advisor is no longer serving as such.

  

	7.3	Major Decisions. 

  

	 	(A)	Subject to Sections 7.3(C) and 7.3(D) with respect to the Company, all major decisions of the Company set forth below in clauses (A)(1) through
(A)(6) (“Major Decisions”) shall be subject to the Company’s Articles of Incorporation and joint approval by the Advisor and Sub-advisor. For the avoidance of doubt, Major Decisions specifically exclude any decisions
regarding the day-to-day operations of the Company, the decision-making authority for which has been delegated to the Sub-advisor pursuant to this Agreement. Major Decisions shall consist of the following: 

 

	 	(1)	Decisions to recommend to the Board of Directors that the Company acquire or sell Properties, Loans and other Permitted Investments; 

 

	 	(2)	Retention of investment banks for the Company; 

  

	 	(3)	Marketing methods for the Company’s sale of Shares; 

  

	 	(4)	Extending, initiating or terminating the Initial Public Offering or any subsequent Offering of the Shares; 

 

	 	(5)	Issuing press releases involving the major decisions of the Company or the Advisor or Sub-advisor or their Affiliates with respect to the business or operations of the
Company; provided, that the Sub-advisor need not obtain consent to any press releases regarding acquisitions or dispositions of Properties, Loans or other Permitted Investments; and provided further, however, that
notwithstanding the immediately preceding proviso, any mention of the Advisor or its Affiliates in such press releases regarding acquisitions or dispositions shall be pre-approved by the Advisor; and 

 

	 	(6)	Merging or otherwise engaging in any change of control transaction for the Company. 

 

 7 

	 	(B)	Notwithstanding anything in this Agreement to the contrary, if the Parties do not agree to any action constituting a Major Decision that is described in any of
clauses (A)(2) through (A)(6) above and that has been proposed by either Party, the Parties shall meet (in person or by phone) to discuss the issue in dispute in good faith over the five-business day period beginning with the delivery
of notice of the proposed action to the other Party. 

  

	 	(C)	Notwithstanding anything in this Agreement to the contrary, with respect to Major Decisions described in clause (A)(1) above (but subject to
Section 7.3(D)), (1) joint approval shall not be required, (2) the Sub-advisor and the Advisor shall discuss the proposed transaction (either in person or by phone) prior to either Party making any recommendation of the
proposed transaction to the Board of Directors, and (3) the Sub-Advisor and the Advisor shall each give due consideration to the opinions of the other Party. Ordinarily, such discussions shall begin at least five business days before a
recommendation is made to the Board of Directors; however, if in the sole discretion of the Sub-advisor it is in the best interest of the Company to make a recommendation to the Board of Directors more promptly, then the Sub-advisor may do so. In
the event the Parties do not agree as to whether to recommend the proposed transaction to the Board of Directors, the Sub-advisor’s decision shall govern. 

 

	 	(D)	Notwithstanding the provisions of this Section 7.3 or any other provision in this Agreement to the contrary, in all events, including Major Decisions, the
Company will be managed under the direction of the Board of Directors. 

  

	 	(E)	Notwithstanding anything in this Agreement to the contrary (but subject to Section 7.3(D)), the Sub-advisor shall have sole authority to act on behalf of
the Company regarding amending the Advisory Agreement. 

 Article 8 

Relationship of Sub-advisor and Advisor and their Affiliates; 

Other Activities of the Advisor and Sub-advisor 
  

	8.1	 Relationship. The Advisor and the Sub-advisor are not partners or joint venturers with each other, and nothing in this Agreement shall be
construed to make them such partners or joint venturers. Except as set forth in Section 8.4, nothing herein contained shall prevent the Advisor or Sub-advisor from engaging in or earning fees from other activities, including, without
limitation, the rendering of advice to other Persons (including other REITs) and the management of other programs advised, sponsored or organized by the Advisor or Sub-advisor, respectively, or any of their Affiliates. Nor shall this Agreement limit
or restrict the right of any manager, director, officer, member, partner, employee or 

  

 8 

	 	 
equityholder of the Advisor or Sub-advisor or their Affiliates to engage in or earn fees from any other business or to render services of any kind to any other Person. The Sub-advisor may, with
respect to any investment in which the Company is a participant, also render advice and service to each and every other participant therein, and earn fees for rendering such advice and service. Specifically, it is contemplated that the Company may
enter into Joint Ventures or other similar co-investment arrangements with certain Persons, and pursuant to the agreements governing such Joint Ventures or other similar co-investment arrangements, the Advisor or the Sub-advisor may be engaged to
provide advice and service to such Persons, in which case, the Advisor or the Sub-advisor, as applicable, will earn fees for rendering such advice and service. Each of the Advisor and the Sub-advisor shall promptly disclose to the Board the
existence of any condition or circumstance, existing or anticipated, of which it has knowledge, that creates or which would reasonably result in a conflict of interest between its obligations to the Company and its obligations to or its interest in
any other Persons (it being understood and agreed that the conditions and circumstances referred to in the second paragraph of Section 8.4(A) are deemed to have been disclosed to the Board for purposes of this Section 8.1).

  

	8.2	Time Commitment. The Sub-advisor shall, and shall cause its Affiliates and their respective employees, officers and agents to, devote to the Company such time as
shall be reasonably necessary to conduct the business and affairs of the Company in an appropriate manner consistent with the terms of this Agreement. Each Party acknowledges that the other Party and its Affiliates and their respective employees,
officers and agents may also engage in activities unrelated to the Company and may provide services to Persons other than the Company or any of its Affiliates. 

 

	8.3	Advisor and Sub-advisor Meetings. The Parties shall meet on a regular basis (frequency to be determined) to discuss and consult with one another regarding the
Company and its assets and opportunities. Advisor and Sub-advisor shall cause their respective principals to meet (in person or by phone) with representatives of each other upon the request of either Party. The Parties will provide each other
information regarding the operations and acquisitions of the Company as reasonably requested by the other. Each of Advisor and Sub-advisor shall have direct access to the books and records of the Company and of each attorney, accountant, servicer
and other contracting party of the Company (except to the extent such attorney represents either Party with respect to this Agreement). 

  

	8.4	Investment Opportunities and Allocation. 

  

	 	(A)	 The Sub-advisor shall be required to use commercially reasonable efforts to present a continuing and suitable investment program to the Company that is
consistent with the investment policies and objectives of the Company. So long as the Advisor is acting in its capacity as advisor under the Advisory Agreement, each of the Advisor and the Sub-advisor will not (and will cause its Affiliates to not)
(i) pursue any opportunity to acquire 

  

 9 

	 	 
any Property, Loan or other Permitted Investment that fits within the Company’s strategy, or (ii) offer such Property, Loan or other Permitted Investment to a third party, in each case
unless and until such opportunity is first presented to the Company. The Company shall have 30 days from the date of its receipt of a complete written offering package relating to such opportunity, customary in scope and content, to notify the
Advisor or the Sub-advisor, as the case may be, of the Company’s decision as to whether or not to pursue such opportunity. If the Company fails so to notify the Advisor or the Sub-advisor, as the case may be, within such 30-day period, the
Company shall be deemed to have passed on such opportunity. If the Company passes on such opportunity, then the Advisor, Sub-advisor or such Affiliate, as the case may be, may acquire the subject investment or offer the subject investment to a third
party for a period of 180 days, in each case on terms and conditions (including price) that are not materially different from the terms and conditions set forth in the offering package to the Company. If at the expiration of such 180-day period,
such opportunity remains available, then the provisions of this Section 8.4(A) shall once again apply to such opportunity. 

Notwithstanding the preceding, however, the Advisor or any Affiliate of the Advisor shall be permitted to pursue any opportunity or to
offer any opportunity to a third party in respect of (1) any net leased retail, office and industrial properties or other property consistent with the investment policies of American Reality Capital Trust, Inc., (2) any commercial real
estate or other real estate investments that relate to office, retail, multi-family residential, industrial and hotel property types, located primarily in the New York metropolitan area or other property consistent with the investment policies of
American Realty Capital New York Recovery REIT, Inc., or (3) any investments to be made by a contemplated non-traded REIT (the “Identified REIT”) that the Advisor or any of its Affiliates has described as (a) intending to
invest primarily in “power center” real estate developments, (b) being sponsored or co-sponsored by ARC (or one of its Affiliates), the acquisition services for which will be provided by an international commercial and residential
real estate developer and manager (or one of its Affiliates), and (c) being the subject of an executed letter of intent or term sheet between the Advisor (or one of its Affiliates) and such international commercial and residential real estate
developer and manager (or one of its Affiliates), and which has or will have as its publicly disclosed (and not subsequently revised or required to be revised under applicable securities laws) investment objectives to have less than 20% of its
assets (measured by purchase price) in anchored shopping centers with purchase prices of less than $20,000,000 per property (determined once the proceeds of the offering have been fully invested). 

 

	 	(B)	 If Fund IV, Phillips Edison Shopping Center Fund III, L.P., Phillips Edison Strategic Investment Fund or Phillips Edison Limited Partnership

  

 10 

	 	 
presents an investment opportunity to the Company and discloses in writing that such entity is attempting to seek properties to qualify for tax deferred treatment under Section 1031 of the
Code, then if the Company does not respond within 21 days, the Company shall be deemed to have passed on such investment opportunity. For clarification, developing single tenant retail or commercial properties shall not be considered to fit within
the Company’s strategy. 

  

	 	(C)	Notwithstanding the preceding, the restrictions in clauses (A) and (B) will cease to be effective upon termination of the Offering Period or, if
later, the time when all equity raised during the Offering Period has been substantially invested or committed to investment. 

  

	 	(D)	Except as provided in this Section 8.4, none of the Advisor and the Sub-advisor nor any of their respective Affiliates shall be obligated generally to
present any particular investment opportunity to the Company. 

  

	8.5	Prospectus Guidance. Sub-advisor has read and will abide by the Prospectus with respect to the Company’s investment objectives, targeted assets and
investment restrictions, targeted markets, leverage, distribution policy, and investor profile except to the extent directed by the Board. 

Article 9 

Dealer Manager 

The Parties agree to use their best efforts to cause the Company, subject to approval by the Company’s Board of Directors, to enter
into the Dealer Manager Agreement with the Dealer Manager on terms consistent with the “Plan of Distribution” section of the Prospectus. 

Article 10 

The Phillips Edison and ARC Names 

The Parties acknowledge and reaffirm the rights and obligations set forth with respect to their proprietary interests in their respective
names as set forth in Article 12 of the Advisory Agreement. 
 Article 11 

Other Agreements 
  

	11.1	Approval and Funding of Certain Organization and Offering Costs. 

  

	 	(A)	 On or prior to the date hereof, the Advisor has prepared an initial Organization and Offering Expense budget for the Advisor and its Affiliates
(including Realty Capital Services, LLC in its capacity as Dealer 

  

 11 

	 	 
Manager) for the period ending on the Effective Date, a copy of which is attached as Schedule I hereto (the “Initial O&O Budget”) and the Sub-advisor has reviewed and
approved the Initial O&O Budget. On or before the Effective Date, the Advisor or its Affiliates will prepare and present to the Sub-advisor for its review and approval the proposed Organization and Offering Expense budget for the one-year period
following the Effective Date for the Advisor and its Affiliates (including Realty Capital Services, LLC in its capacity as Dealer Manager). Thereafter, on or before the 30th day preceding the annual anniversary of the Effective Date, the Advisor or
its Affiliates will prepare and present to the Sub-advisor for its review and approval the proposed Organization and Offering Expense budget for the following one-year period for the Advisor and its Affiliates (including Realty Capital Services, LLC
in its capacity as Dealer Manager). Each of (1) the Initial O&O Budget, and (2) each such other Organization and Offering Expense budget for the time period specified therein once approved by the Sub-advisor, shall be referred to
herein as an “Approved O&O Budget”. It is understood and agreed that neither the Initial O&O Budget nor any other Approved O&O Budget shall cover or refer to selling commissions or the Dealer Manager Fee payable
pursuant to the Dealer Manager Agreement. 

  

	 	(B)	Each Approved O&O Budget may contain contingencies for expenditure items anticipated in good faith by the Advisor and its Affiliates, but the precise amounts of
which are unknown at the time of preparation and submission thereof to the Sub-advisor for approval. Within 30 days after each proposed Organization and Offering Expense budget is submitted to it, the Sub-advisor shall notify the Advisor in writing
(1) that it approves the proposed budget or (2) of the revisions it reasonably believes should be made to such proposed budget. If the Sub-advisor fails to respond within such 30-day period, the Sub-advisor shall be deemed to have approved
the proposed budget and such proposed budget shall become the Approved O&O Budget for the time periods specified therein. If the Sub-advisor withholds its approval of any proposed budget, then the Parties shall negotiate a mutually acceptable
Organization and Offering Expense budget for the Advisor and its Affiliates (including Realty Capital Services, LLC in its capacity as Dealer Manager). For the avoidance of doubt, this Section 11.1(B) shall not apply to the Initial
O&O Budget. 

  

	 	(C)	 Notwithstanding anything to the contrary contained herein or in any other agreement, the Advisor shall ensure that it and its Affiliates shall not make
any expenditure of Company funds or of funds for which reimbursement is sought from the Company or Sub-advisor, or commit to make any such expenditure, except as provided for in an Approved O&O Budget; provided, however, with
respect to any line item in an Approved O&O Budget, the Advisor and its Affiliates may incur up to 115% of the amount budgeted therefor; provided further, however, with respect to any line item in an Approved O&O Budget,
the Advisor and its Affiliates may incur in 

  

 12 

	 	 
excess of 115% of the amount budgeted therefor with the approval of the Sub-advisor. 

  

	 	(D)	The Advisor and Sub-advisor have caused their Affiliates to fund $75,000 and $425,000, respectively, into their respective bank accounts, and Advisor and Sub-advisor
will bear the initial $500,000 of Organization and Offering Expenses (excluding underwriting and brokerage discounts and commissions) in the ratio of 15% to 85%, respectively. After such initial $500,000 of Organization and Offering Expenses have
been borne as aforesaid, Sub-advisor will fund 100% of all Organization and Offering Expenses (excluding underwriting and brokerage discounts and commissions, but including third-party due diligence fees set forth in detailed and itemized invoices).

  

	11.2	Property Level Agreements. The Parties agree to use their best efforts to cause the Company, subject to approval by the Company’s Board of Directors, to
enter into a Master Property Management, Leasing, and Construction Management Agreement with an Affiliate of the Sub-advisor consistent with the description of the same in the Prospectus. Advisor shall have the right to review and comment upon such
master agreement, and to approve such master agreement (such approval not to be unreasonably withheld), prior to submission to the Board. Advisor agrees that it shall have no right in the fees generated pursuant to such master agreement.

  

	11.3	Advisor, Advisory Agreement and Dealings with Company. 

  

	 	(A)	Advisor agrees to inform and make Sub-advisor a party to all negotiations between Advisor and the Company regarding any proposed amendment of the Advisory Agreement. No
amendment to the Advisory Agreement will be agreed upon or permitted if such amendment would impact the rights or obligations of the Sub-advisor without the Sub-advisor’s consent and signature. 

 

	 	(B)	Advisor agrees to allow Sub-advisor to present and recommend to the Company all investment opportunities recommended by Sub-advisor. 

Article 12 

Certain Transfers 
  

	12.1	 Transfers. The Parties have selected one another based on the experience and personnel of each other and their Affiliates. Accordingly, each
Party agrees that it is mutually desirable to restrict changes in ownership of each Party. Each Party agrees to amend, to the extent necessary, its governing documents to restrict transferability of any direct or indirect interest in such Party by
such Party’s Key Persons unless both Parties jointly agree as otherwise permitted by this Article 12; provided, however, that any transfer of an interest in either Party by any of such

  

 13 

	 	 
Party’s Key Persons, by any entity controlled by a Key Person of such Party or by any Immediate Family Member of a Key Person of such Party shall be permitted without any approval so long as
(i) the transferee of such interest is an Immediate Family Member of a Key Person of such Party, and (ii) one or more of the Key Persons of such Party retain management and voting control over such interest held by such transferee at all
times after the applicable transfer occurs. 

  

	12.2	Prohibited Transfers.  

  

	 	(A)	Except for Permitted Transfers and other transfers made in accordance with, and as permitted by, this Agreement, neither Party (1) will allow any direct or
indirect transfer of interests therein by its applicable Key Persons, and (2) will directly or indirectly transfer any part of its direct or indirect ownership interest in the Company (if any), whether in each such case voluntarily or by
foreclosure, assignment in lieu thereof or other enforcement of a pledge, hypothecation or collateral assignment without the prior approval of the other Party. 

 

	 	(B)	“Permitted Transfer” (for which no approval by the other Party shall be required) means either of the following: 

 

	 	(1)	any transfer of all or any portion of the direct or indirect interest in the Company held by a Party (if any) to any Affiliate of such Party; provided,
however, that in each such case the transferee executes an instrument agreeing to be bound by the provisions of this Agreement to the extent applicable to the transferor; and 

 

	 	(2)	any transfer of all or any portion of the direct or indirect interest in a Party held, directly or indirectly, by such Party’s Key Persons or Immediate Family
Members; provided, however, that either (a) either or both of such Party’s Key Persons remain involved with the material decision-making and actions of such Party for the applicable Transfer Restriction Period (for the sake
of clarity, after the applicable Transfer Restriction Period, each Party is permitted to allow the effecting of a transfer of all or any portion of the direct or indirect interest in such Party without regard to the continued involvement of
such Party’s Key Persons) or (b) in the case of the Advisor, the transfer occurs after the Offering Period and the applicable transferee agrees to cede any decision making and governance authority relating to the Company (including making
Major Decisions) to the Sub-advisor. 

 Article 13 

Representations, Warranties, and Agreements 

 

 14 

	13.1	The Advisor and the Sub-advisor each hereby represents and warrants to, and agrees with, the other as follows: 

 

	 	(A)	Such Party is duly formed and validly existing under the laws of the jurisdiction of its organization; 

 

	 	(B)	Such Party has full power and authority to enter into this Agreement and to conduct its business to the extent contemplated in this Agreement; 

 

	 	(C)	This Agreement has been duly authorized, executed and delivered by such Party and constitutes the valid and legally binding agreement of such Party, enforceable in
accordance with its terms against such Party, except as such enforceability may be limited by bankruptcy, insolvency, moratorium and other similar laws relating to creditors’ rights generally, and by general equitable principles.

  

	 	(D)	The execution and delivery of this Agreement by such Party and the performance of its duties and obligations hereunder do not result in a breach of any of the terms,
conditions or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, credit agreement, note or other evidence of indebtedness, or any lease or other agreement, or any license, permit, franchise or certificate to which
such Party is a party or by which it is bound or to which its properties are subject or require any authorization or approval under or pursuant to any of the foregoing, or violate any statute, regulation, law, order, writ, injunction, judgment or
decree to which such Party is subject; 

  

	 	(E)	Such Party is not aware of any facts pertaining to such Party or its Affiliates that would cause such Party, or any of such Party’s Affiliates, to be unable to
discharge timely the obligations of such Party or its Affiliates under this Agreement or the obligations of the Company under any agreement to which any of them is a party; 

 

	 	(F)	To the knowledge of such Party, no consent, approval or authorization of, or filing, registration or qualification with, any court or governmental authority on the part
of such Party is required for the execution and delivery of this Agreement by such Party and the performance of its obligations and duties hereunder and such execution, delivery and performance shall not violate any other agreement to which such
Party is bound; 

  

	 	(G)	 Such Party recognizes that DLA Piper LLP (US) is representing and in the future may represent the Sub-advisor, its Affiliates and the Company with
respect to matters in this Agreement and on other unrelated matters, and acknowledges that it has been notified of this representation and that it has been suggested that it retain independent counsel in reviewing this Agreement and the terms agreed
to herein. The Advisor hereby waives all 

  

 15 

	 	 
conflicts of interest regarding DLA Piper with respect thereto and hereby waives all rights to disqualify DLA Piper from representing the Sub-advisor, its Affiliates, and the Company in any
matter at any time; 

  

	 	(H)	Such Party recognizes that Proskauer Rose LLP is representing and in the future may represent the Advisor, the Dealer Manager, their Affiliates and the Company with
respect to matters in this Agreement and on other unrelated matters, and acknowledges that it has been notified of this representation and that it has been suggested that it retain independent counsel in reviewing this Agreement and the terms agreed
to herein. The Sub-Advisor hereby waives all conflicts of interest regarding Proskauer Rose LLP with respect thereto and hereby waives all rights to disqualify Proskauer Rose LLP from representing the Advisor, the Dealer Manager, their Affiliates
and the Company in any matter at any time; 

  

	 	(I)	Except as specifically provided in this Agreement, such Party is not relying upon the other Party, the Company or their respective Affiliates or advisors, in connection
with any of the matters referred to in this Agreement, including any projections, information, due diligence, representations or warranties (express or implied, oral or written), statements or other matters concerning the Company, the other Party,
or otherwise, and each Party hereby confirms that it has conducted an independent investigation of the facts regarding the same (or has chosen not to do so at such Party’s peril); 

 

	 	(J)	The Party is not acting as the representative or agent or in any other capacity, fiduciary or otherwise, on behalf of another Person in connection with the Company or
the other matters referred to in this Agreement; 

  

	 	(K)	Such Party is aware that the other Party and/or Affiliates of such other Party now and in the future shall be, and in the past have been, engaged in businesses which
are competitive with that of the Company. Each of the Parties hereby acknowledges and agrees that the Parties’ obligations with respect to all future activities which are in competition with the Company are as set forth in Article 8;

  

	 	(L)	Such Party is aware that compensation and reimbursements may be payable to Affiliates of the Parties by the Company, as addressed in this Agreement, the Advisory
Agreement and the Dealer Manager Agreement; 

  

	 	(M)	No Party is required to cause the controlling persons of such Party to devote any specific portion of their time to Company business other than as necessary to fulfill
such Parties’ obligations under this Agreement and the Advisory Agreement, as the case may be, and such controlling persons are expected to spend substantial amounts of their time on activities that are unrelated to the Company;

  

 16 

	 	(N)	Such Party understands that the other Party is relying on the accuracy of the representations set forth in this Article 13 in entering into this Agreement;

  

	 	(O)	Such Party has not granted to any third party rights that would be inconsistent with the rights granted to the other Party by this Agreement; 

 

	 	(P)	Such Party has all requisite licenses to do and perform all acts and receive all fees as contemplated by this Agreement and the Advisory Agreement; and

  

	 	(Q)	None of its principals has been convicted of any felony, or convicted of any misdemeanor involving moral turpitude (including fraud), or entered a plea of nolo
contendere in connection with any felony or any such misdemeanor. 

  

	13.2	The Sub-advisor hereby represents and warrants to, and agrees with, the Advisor as follows: 

 

	 	(A)	The staff and employees of the Sub-advisor and its Affiliates have the skills, knowledge of and expertise in property selection, acquisitions/development, financing,
asset and property management, and dispositions as to perform their respective duties and obligations hereunder; and 

  

	 	(B)	The Sub-advisor is sophisticated in real estate and securities transactions, has been granted access to such financial and other material information concerning the
Company, the other Party and the other Party’s Affiliates, and their respective current and anticipated operations and such due diligence materials as it deems necessary or advisable, as it has requested or may require in connection with its
investment (including an advance of expenses that may be reimbursed) in the Company, is able, either directly or through its agents and representatives, to evaluate such information and any due diligence materials provided or made available to it
from time to time hereunder, and is able to bear the financial risk of loss presented by an investment in the Company, particularly in light of the risks that would be disclosed by a detailed analysis thereof (its access to which, to the full extent
any Party has requested, hereby is confirmed by each Party); 

 Article 14 

Term And Termination of the Agreement 
  

	14.1	Term. This Agreement shall have an initial term of one year from the date hereof and shall be renewed for an unlimited number of successive one-year terms upon
renewal of the Advisory Agreement. This Agreement shall be co-terminus with the Advisory Agreement. 

  

 17 

	14.2	Termination. Subject to last sentence of Section 14.1: 

  

	 	(A)	This Agreement may only be terminated (1) by the Advisor upon 60 days’ prior written notice by the Advisor to the Sub-advisor with approval of a majority of
the Conflicts Committee, or (2) by the Sub-advisor upon 60 days’ prior written notice by the Sub-advisor to the Advisor; 

  

	 	(B)	This Agreement may be terminated by the Advisor, if the Sub-advisor materially breaches this Agreement; provided, however, that the Sub-advisor shall have
30 calendar days after the receipt of notice of such breach from the Advisor to cure such breach; 

  

	 	(C)	This Agreement may be terminated by the Advisor, as a result of any fraud, criminal conduct, gross negligence or willful misconduct by Sub-Advisor or any Affiliate
thereof in any action or failure to act undertaken by such Person pertaining to or having a detrimental effect upon the ability of the Advisor or the Sub-advisor to perform their respective duties hereunder; provided, however, that the
Sub-advisor does not cure any such act within 30 calendar days after the receipt of notice of such act (or at such later time as may be stated in the notice) from the Advisor; or 

 

	 	(D)	This Agreement may be terminated by either Party, if the other Party (1) commences a voluntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, (2) consents to the entry of an order for relief in an involuntary case under any such law, (3) consents to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) for the other Party or for any substantial part of its property, or (4) makes any general assignment for the benefit of creditors under applicable state law; 

 

	 	(E)	This Agreement may be terminated by either Party, if: (1) an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in
effect has been commenced against the other Party, and such case has not been dismissed within 60 days after the commencement thereof; or (2) a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) has been
appointed for the other Party or has taken possession of the other Party or any substantial part of its property, and such appointment has not been rescinded or such possession has not been relinquished within 60 days after the occurrence thereof;
or 

  

	 	(F)	This Agreement may be terminated at any time within five years after the date hereof by the Advisor if both Michael C. Phillips and Jeffrey S. Edison cease to be
actively involved in the management of the Sub-advisor. 

  

	14.3	 Survival upon Termination. Notwithstanding anything else that may be to the contrary herein, the expiration or earlier termination of this
Agreement shall not 

  

 18 

	 	 
relieve a party for liability for any breach occurring prior to such expiration or earlier termination. The provisions of Articles 1, 5, 6, 10, 13, 14,
16, and 17 shall survive termination of this Agreement. 

  

	14.4	Payments on Termination and Survival of Certain Rights and Obligations. After termination of this Agreement, the Sub-advisor shall have the rights to payment and
the responsibilities as set forth in Section 13.3 of the Advisory Agreement. 

 Article 15 

Assignment 

This Agreement may be assigned by the Sub-advisor (a) to an Affiliate with the consent of the Advisor, such consent not to be
unreasonably withheld or delayed, provided that such Affiliate remains at all times thereafter an Affiliate of Phillips Edison Limited Partnership or (b) in a manner meeting the conditions of Section 12.2(B)(2). This Agreement shall
not be assigned by the Advisor without the consent of the Sub-Advisor, except in the case of (i) an assignment by the Advisor to the Company whereby the Sub-advisor becomes the advisor to the Company or (ii) an assignment by the Advisor
meeting the conditions of Section 12.2(B)(2). 
 Article 16 

Indemnification And Limitation Of Liability 

The indemnification and limitation of liability provisions contained in the Advisory Agreement apply to both the Advisor and Sub-advisor.
Both Parties agree that neither will take any action inconsistent with such limitation of liability or indemnification provisions. 

Article 17 

Miscellaneous 
  

	17.1	Notices. Any notice, request, demand, approval, consent, waiver or other communication required or permitted to be given hereunder or to be served upon any of
the Parties hereto (each a “Notice”) shall be in writing and shall be (a) delivered in person, (b) sent by facsimile transmission (with the original thereof also contemporaneously given by another method specified in this
Section 17.1), (c) sent by a nationally-recognized overnight courier service, or (d) sent by certified or registered mail (postage prepaid, return receipt requested), to the address of such Party set forth herein.

 To the Advisor: 

American Realty Capital II Advisors, LLC 
  

 19 

 405 Park Avenue 

New York, New York 10022

Attention: Nicholas S. Schorsch 

    Jesse Galloway

with a copy to (which shall not constitute Notice):

Proskauer Rose LLP

1585 Broadway

New York, New York 10036

Attention: Peter M. Fass, Esq. 

    James P. Gerkis, Esq.

Telephone: (212) 969-3000

Facsimile: (212) 969-2900

To the Sub-advisor:

Phillips Edison NTR LLC

11501 Northlake Drive

Cincinnati, OH 45249 

with a copy to (which shall not constitute Notice): 

DLA Piper LLP (US)

4141 Parklake Drive , Suite 300

Raleigh, North Carolina 27612

Attention: Robert Bergdolt

Telephone: (919) 786-2002

Facsimile: (919) 786-2202

Either Party may at any time give Notice in writing to the other Party of a change in its address for the purposes of this
Section 17.1. Each Notice shall be deemed given and effective upon receipt (or refusal of receipt). 
  

	17.2	Modification. This Agreement shall not be amended, supplemented, changed, modified, terminated or discharged, in whole or in part, except by an instrument in
writing signed by both Parties hereto, or their respective successors or permitted assigns. 

  

	17.3	Severability. The provisions of this Agreement are independent of and severable from each other, and no provision shall be affected or rendered invalid or
unenforceable by virtue of the fact that for any reason any other or others of them may be invalid or unenforceable in whole or in part. 

  

	17.4	Construction. The provisions of this Agreement shall be construed and interpreted in accordance with the laws of the State of New York as at the time in effect,
without regard to the principles of conflicts of laws thereof. 

  

 20 

	17.5	Entire Agreement. This Agreement contains the entire agreement and understanding between the Parties hereto with respect to the subject matter hereof, and
supersedes all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof. The express terms hereof control and supersede
any course of performance and/or usage of the trade inconsistent with any of the terms hereof. In all events, nothing contained herein shall be read, construed, interpreted or applied in any manner that prevents or hinders the Company from
qualifying as a real estate investment trust under Section 856(c) of the Code. 

  

	17.6	Waiver. Neither the failure nor any delay on the part of a Party to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any other right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or
privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the Party asserted to have
granted such waiver. 

  

	17.7	Gender. Words used herein regardless of the number and gender specifically used, shall be deemed and construed to include any other number, singular or plural,
and any other gender, masculine, feminine or neuter, as the context requires. 

  

	17.8	Titles Not to Affect Interpretation. The titles of Articles and Sections contained in this Agreement are for convenience only, and they neither form a part of
this Agreement nor are they to be used in the construction or interpretation hereof. 

  

	17.9	Counterparts. This Agreement may be executed with counterpart signature pages or in any number of counterparts, each of which shall be deemed to be an original
as against any Party whose signature appears thereon, and all of which shall together constitute one and the same instrument. This Agreement shall become binding when one or more counterpart signature pages or counterparts hereof, individually or
taken together, shall bear the signatures of all of the Parties reflected hereon as the signatories. 

 [The
remainder of this page is intentionally left blank. 
 Signature page follows.] 

 

 21 

 IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date and year
first above written. 
  
  
			
	American Realty Capital II Advisors, LLC
		
	By:	 	 /s/ William Kahane

		 	William Kahane, President
	
	Phillips Edison NTR LLC
		
	By:	 	 /s/ John B. Bessey

		 	John B. Bessey, President

   

 [Signature Page to First Amended and Restated Sub-advisory Agreement between

 American Realty Capital II Advisors, LLC and Phillips Edison NTR LLC] 

 Schedule I 

Initial O&O Budget 

 Appendix A 

Form of Advisory AgreementForm of 2010 Long-Term Incentive Plan

 Exhibit 10.5 

PHILLIPS EDISON – ARC SHOPPING CENTER REIT INC. 

FORM OF 

2010 LONG-TERM INCENTIVE PLAN 

PHILLIPS EDISON – ARC SHOPPING CENTER REIT INC. 

FORM OF 2010 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	  	3
			
	 3.1
	 	 Effective Date
	  	3
			
	 3.2
	 	 Term of Plan
	  	3
		
	ARTICLE 4 ADMINISTRATION	  	3
			
	 4.1
	 	 Committee
	  	3
			
	 4.2
	 	 Actions and Interpretations by the Committee
	  	3
			
	 4.3
	 	 Authority of Committee
	  	3
			
	 4.4
	 	 Award Certificates
	  	4
		
	ARTICLE 5 SHARES SUBJECT TO THE PLAN	  	4
			
	 5.1
	 	 Number of Shares
	  	4
			
	 5.2
	 	 Share Counting
	  	4
			
	 5.3
	 	 Stock Distributed
	  	4
		
	ARTICLE 6 ELIGIBILITY	  	4
			
	 6.1
	 	 General
	  	4
		
	ARTICLE 7 STOCK OPTIONS	  	4
			
	 7.1
	 	 General
	  	4
			
	 7.2
	 	 Incentive Stock Options
	  	4
		
	ARTICLE 8 STOCK APPRECIATION RIGHTS	  	5
			
	 8.1
	 	 Grant of Stock Appreciation Rights
	  	5
		
	ARTICLE 9 PERFORMANCE AWARDS	  	5
			
	 9.1
	 	 Grant of Performance Awards
	  	5

					
			
	 9.2
	 	 Performance Goals
	  	5
			
	 9.3
	 	 Right to Payment
	  	5
			
	 9.4
	 	 Other Terms
	  	5
		
	 ARTICLE 10 RESTRICTED STOCK AND RESTRICTED STOCK UNIT AWARDS
	  	5
			
	 10.1
	 	 Grant of Restricted Stock and Restricted Stock Units
	  	5
			
	 10.2
	 	 Issuance and Restrictions
	  	6
			
	 10.3
	 	 Forfeiture
	  	6
			
	 10.4
	 	 Delivery of Restricted Stock
	  	6
		
	 ARTICLE 11 DEFERRED STOCK UNITS
	  	6
			
	 11.1
	 	 Grant of Deferred Stock Units
	  	6
		
	 ARTICLE 12 DIVIDEND EQUIVALENTS
	  	6
			
	 12.1
	 	 Grant of Dividend Equivalents
	  	6
		
	 ARTICLE 13 STOCK OR OTHER STOCK-BASED AWARDS
	  	6
			
	 13.1
	 	 Grant of Stock or Other Stock-Based Awards
	  	6
		
	 ARTICLE 14 PROVISIONS APPLICABLE TO AWARDS
	  	6
			
	 14.1
	 	 Stand-Alone and Tandem Awards
	  	6
			
	 14.2
	 	 Term of Awards
	  	6
			
	 14.3
	 	 Form of Payment of Awards
	  	6
			
	 14.4
	 	 Limits on Transfer
	  	7
			
	 14.5
	 	 Beneficiaries
	  	7
			
	 14.6
	 	 Stock Certificates
	  	7
			
	 14.7
	 	 Acceleration Upon Death or Disability
	  	7
			
	 14.8
	 	 Treatment upon a Change in Control
	  	7
			
	 14.9
	 	 Acceleration For Any Reason
	  	7
			
	 14.10
	 	 Termination of Employment
	  	7
			
	 14.11
	 	 Forfeiture Events
	  	8
			
	 14.12
	 	 Substitute Awards
	  	8
		
	 ARTICLE 15 CHANGES IN CAPITAL STRUCTURE
	  	8
			
	 15.1
	 	 Mandatory Adjustments
	  	8
			
	 15.2
	 	 Discretionary Adjustments
	  	8
			
	 15.3
	 	 General
	  	8
		
	 ARTICLE 16 AMENDMENT, MODIFICATION AND TERMINATION
	  	8
			
	 16.1
	 	 Amendment, Modification and Termination
	  	8

  

 ii 

					
			
	 16.2
	 	 Awards Previously Granted
	  	8
		
	ARTICLE 17 GENERAL PROVISIONS	  	9
			
	 17.1
	 	 No Rights to Awards; Non-Uniform Determinations
	  	9
			
	 17.2
	 	 No Shareholder Rights
	  	9
			
	 17.3
	 	 Withholding
	  	9
			
	 17.4
	 	 No Right to Continued Service
	  	9
			
	 17.5
	 	 Unfunded Status of Awards
	  	9
			
	 17.6
	 	 Relationship to Other Benefits
	  	9
			
	 17.7
	 	 Expenses
	  	9
			
	 17.8
	 	 Titles and Headings
	  	9
			
	 17.9
	 	 Gender and Number
	  	9
			
	 17.10
	 	 Fractional Shares
	  	9
			
	 17.11
	 	 Government and Other Regulations
	  	9
			
	 17.12
	 	 Governing Law
	  	9
			
	 17.13
	 	 Additional Provisions
	  	9
			
	 17.14
	 	 No Limitations on Rights of Company
	  	9
			
	 17.15
	 	 Indemnification
	  	10
			
	 17.16
	 	 Special Provisions Related to Section 409A of the Code
	  	10

  

 iii 

 Exhibit 10.5 

PHILLIPS EDISON – ARC SHOPPING CENTER REIT INC. 

FORM OF 2010 LONG-TERM INCENTIVE PLAN 

ARTICLE 1 

PURPOSE 

1.1. GENERAL. The purpose of the Phillips Edison – ARC Shopping Center REIT Inc. 2010 Long-Term Incentive Plan (the
“Plan”) is to promote the success, and enhance the value, of Phillips Edison – ARC Shopping Center REIT Inc. (the “Company”), by linking the personal interests of employees, officers and consultants of the
Company or any Affiliate (as defined below) to those of Company stockholders and by providing such persons with an incentive for outstanding performance. The Plan is further intended to provide flexibility to the Company in its ability to motivate,
attract, and retain the services of employees, officers and consultants upon whose judgment, interest, and special effort the successful conduct of the Company’s operation is largely dependent. Accordingly, the Plan permits the grant of
incentive awards from time to time to selected employees, officers and consultants 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 Award, Restricted Stock Unit Award, Deferred
Stock Unit Award, Performance Award, Dividend Equivalent Award, Other Stock-Based Award, Performance-Based Cash Awards, 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 Awards or series of Awards under the Plan. 

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

(e) “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 or the Board: (i) the willful and continued failure of the Participant to
perform his or her required duties as an officer or employee of the Company or any Affiliate, (ii) any action by the Participant that involves willful misfeasance or gross negligence, (iii) the requirement of or direction by a federal or
state regulatory agency that has jurisdiction over the Company or any Affiliate to terminate the employment of the Participant, (iv) the conviction of the Participant of the commission of any criminal offense that involves dishonesty or breach
of trust, or (v) any intentional breach by the Participant of a material term, condition or covenant of any agreement between the Participant and the Company or any Affiliate. 

(f) “Change in Control” means and includes the occurrence of any one of the following events but shall specifically
exclude a Public Offering: 
 (i) individuals who, on the Effective Date, 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 Effective Date 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” (as defined in Rule 13d-3 under the 1934 Act),
directly or indirectly, of either (A) 25% or more of the then-outstanding shares of common stock of the Company ( “Company Common Stock” ) or (B) securities of the Company representing 25% 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 of the Company, (y) an
acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary of the Company, or (z) an acquisition pursuant to a 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 (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 50% 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 corporation resulting from such Reorganization, Sale or Acquisition (including, without
limitation, a corporation 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 Corporation” ) 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 of the Company, (y) the Surviving Corporation or its ultimate parent corporation, 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 25% or more of the total common stock or 25% or more of the total voting power of the outstanding voting securities eligible to elect directors of the Surviving Corporation, and (C) at least a
majority of the members of the board of directors of the Surviving Corporation 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. 

(g) “Code” means the Internal Revenue Code of 1986, as amended from time to time, and includes a reference to the
underlying final regulations. 
 (h) “Committee” means the committee of the Board described in Article 4.

 (i) “Company” means Phillips Edison – ARC Shopping Center REIT Inc., a Maryland corporation, or any
successor corporation. 
 (j) “Continuous Status as a Participant” means the absence of any interruption or
termination of service as an employee, officer or consultant of the Company or any Affiliate, as applicable; provided, however, that for purposes of an Incentive Stock Option, or a Stock Appreciation Right issued in tandem with 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 continue to the extent provided in a written severance or employment agreement during any period for which severance compensation payments are made to an employee, officer or consultant and shall not be
considered interrupted in the case of any short-term disability or 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. 

(k) “Deferred Stock Unit” means a right granted to a Participant under Article 11. 

 

 ii 

 (l) “Disability” or “Disabled” has the same meaning as
provided in the long-term disability plan or policy maintained by the Company or if applicable, most recently maintained, by the Company or if applicable, an Affiliate, for the Participant, whether or not such Participant actually receives
disability benefits under such plan or policy. If no long-term disability plan or policy was ever maintained on behalf of Participant or if the determination of Disability relates to an Incentive Stock Option, or a Stock Appreciation Right issued in
tandem with 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 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. 
 (m)
“Dividend Equivalent” means a right granted to a Participant under Article 12. 
 (n) “Effective
Date” has the meaning assigned such term in Section 3.1. 
 (o) “Eligible Participant” means an
employee, officer or consultant of the Company or any Affiliate. 
 (p) “Fair Market Value”, on any date, means
(i) if the Stock is listed on a national securities exchange or is traded on a national market system, 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 national securities exchange or traded on a national market system, the mean between the bid and offered prices as quoted by
NASDAQ for such date, provided that if it is determined that the fair market value is not properly reflected by such NASDAQ quotations or bid and offered prices for the Shares are not quoted by NASDAQ, Fair Market Value will be determined by such
other method as the Committee determines in good faith to be reasonable. 
 (q) “Full Value Award” means an
Award other than in the form of an Option or SAR, and which is settled by the issuance of Stock. 
 (r) “Good
Reason” (or similar term) has the meaning assigned such term in the Award Certificate or agreement referred to in Section 14.8(b). 

(s) “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. 

(t) “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. 
 (u) “Independent Director” means a
director of the Company who is not a common law employee of the Company or an Affiliate. 
 (v) “Nonstatutory Stock
Option” means an Option that is not an Incentive Stock Option. 
 (w) “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. 

(x) “Other Stock-Based Award” means a right, granted to a Participant under Article 13, that relates to or is valued by
reference to Stock or other Awards relating to Stock. 
 (y) “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 mean a “parent
corporation” within the meaning set forth in Section 424(e) of the Code. 
 (z) “Participant” means a
person who, as an employee, officer 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 14.5 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. 

(aa) “Performance Award” means Performance Shares or Performance Units or Performance-Based Cash Awards granted pursuant
to Article 9. 
 (bb) “Performance-Based Cash Award” means a right granted to a Participant under Article 9 to
a cash award to be paid upon achievement of such performance goals as the Committee establishes with regard to such Award. 
  

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 (cc) “Performance Share” means any right granted to a Participant under
Article 9 to a unit to be valued by reference to a designated number of Shares to be paid upon achievement of such performance goals as the Committee establishes with regard to such Performance Share. 

(dd) “Performance Unit” means a right granted to a Participant under Article 9 to a unit valued by reference to a
designated amount of cash or property other than Shares to be paid to the Participant upon achievement of such performance goals as the Committee establishes with regard to such Performance Unit. 

(ee) “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. 
 (ff) “Plan” means the Phillips Edison – ARC
Shopping Center REIT Inc. 2010 Long-Term Incentive Plan, as amended from time to time. 
 (gg) “Public
Offering” shall occur on the closing date of a firm commitment underwritten 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.

 (hh) “Restricted Stock Award” means Stock granted to a Participant under Article 10 that is subject to
certain restrictions and to risk of forfeiture. 
 (ii) “Restricted Stock Unit Award” means the right granted
to a Participant under Article 10 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. 

(jj) “Shares” means shares of the Company’s Stock. If there has been an adjustment or substitution pursuant to
Section 15.1, 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 15.1. 

(kk) “Stock” means the $.01 par value common stock of the Company and such other securities of the Company as may be
substituted for Stock pursuant to Article 15. 
 (ll) “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 SAR, all as determined pursuant to Article
8. 
 (mm) “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 mean a “subsidiary corporation”
within the meaning set forth in Section 424(f) of the Code. 
 (nn) “1933 Act” means the Securities Act of
1933, as amended from time to time. 
 (oo) “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 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. 

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. 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 
  

 iv 

 
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 under the foregoing requirement 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 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’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. 
 4.3. AUTHORITY OF COMMITTEE. Except as provided below, 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, not inconsistent with the provisions of the Plan, granted under the Plan, including
but not limited to, the exercise price, grant price, or purchase price, any restrictions or limitations on the Award, any schedule for lapse of forfeiture restrictions or restrictions on the exercisability of an Award, and accelerations or waivers
thereof, based in each case on such considerations as the Committee in its sole discretion determines; 
 (f) Determine whether,
to what extent, and under what circumstances an Award may be settled in, or the exercise price of an Award may be paid in, cash, Stock, other Awards, or other property, or an Award may be canceled, forfeited, or surrendered; 

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

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

(i) Establish, adopt or revise any rules, regulations, guidelines or procedures as it may deem necessary or advisable to administer the
Plan; 
 (j) Make all other decisions and determinations that may be required under the Plan or as the Committee deems necessary
or advisable to administer the Plan; 
 (k) Amend the Plan or any Award Certificate as provided herein; and 

(l) 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. 

Notwithstanding the foregoing, grants of Awards hereunder shall not be made to Independent Directors in their capacity as such, it being
the intention that grants to Independent Directors shall be made only in accordance with the 
  

 v 

 
terms, conditions and parameters of a separate plan, program or policy for the compensation of Independent Directors as in effect from time to time. 

Notwithstanding the above, the Board or the Committee may, by resolution, expressly delegate to a special committee, consisting of one or
more directors who are also officers of the Company, the authority, within specified parameters, to (i) designate officers, employees and/or consultants of the Company or any of its Affiliates to be recipients of Awards under the Plan, and
(ii) to determine the number of such Awards to be granted to any such Participants; provided that a limit on the total number or dollar value of Awards to be granted to any such Participants shall be approved in advance by the Board or the
Committee and provided further that such delegation of duties and responsibilities to such special committee may not be made with respect to the grant of Awards to Eligible Participants who are subject to Section 16(a) of the 1934 Act at the
Grant Date. The acts of such delegates shall be treated hereunder as acts of the Board and such delegates shall report regularly to the Board and the Committee regarding the delegated duties and responsibilities and any Awards so granted.

 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 15.1, the aggregate number of Shares reserved and
available for issuance pursuant to Awards granted under the Plan shall be 9,000,000. The maximum number of Shares that may be issued upon exercise of Incentive Stock Options granted under the Plan shall be 9,000,000. The maximum number of Shares
that may be issued (i) upon the exercise or grant of an Award granted under the Plan and (ii) pursuant to the Company’s 2010 Independent Director Stock Plan, shall not exceed in the aggregate (including both plans) an amount equal to
5% of the outstanding Shares on the Grant Date. 
  5.2. SHARE COUNTING. 

(a) To the extent that an Award is canceled, terminates, expires, is forfeited or lapses for any reason, any unissued Shares from such
Award will again be available for issuance pursuant to Awards granted under the Plan. 
 (b) Shares subject to Awards settled in
cash will again be available for issuance pursuant to Awards granted under the Plan. 
 (c) Shares withheld from an Award
to satisfy minimum tax withholding requirements will again be available for issuance pursuant to Awards granted under the Plan, but Shares delivered by a Participant (by either actual delivery or attestation) to satisfy tax withholding
requirements shall not be added back to the number of Shares available for issuance under the Plan. 
 (d) If the exercise price
of an Option is satisfied by delivering Shares to the Company (by either actual delivery or attestation), only the net number of Shares actually issued by the Company shall be considered for purposes of determining the number of Shares remaining
available for issuance pursuant to Awards granted under the Plan. 
 (e) To the extent that the full number of Shares subject to
an Award is not issued for any reason, only the number of Shares issued and delivered shall be considered for purposes of determining the number of Shares remaining available for issuance pursuant to Awards granted under the Plan. Nothing in this
subsection shall imply that any particular type of cashless exercise of an Option is permitted under the Plan, that decision being reserved to the Committee or other provisions of the Plan. 

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 
  

 vi 

 6.1. GENERAL. Awards may be granted only to Eligible Participants; except that
Incentive Stock Options may be granted to only to Eligible Participants who are employees of the Company or a Parent or Subsidiary which constitute a “parent corporation” or a “subsidiary corporation” as defined in
Section 424(e) and (f) of the Code, respectively. 
 ARTICLE 7 

STOCK OPTIONS 

7.1. GENERAL. The Committee is authorized to grant Options to Participants subject to terms and conditions, not inconsistent with
the provisions of the Plan, as the Committee shall establish, including the following: 
 (a) EXERCISE PRICE. The
exercise price per Share under an Option shall be determined by the Committee; provided, however, that the exercise price of an Option shall not be less than the Fair Market Value as of the Grant Date. 

(b) TIME AND CONDITIONS OF EXERCISE. The Committee shall determine the time or times at which an Option may be exercised in whole
or in part, subject to Section 7.1(d). 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. Except under certain circumstances
contemplated by Section 14.8 or 14.9 or as may be set forth in an Award Certificate with respect to death or Disability of a Participant, Options will not be exercisable before the expiration of one year from the Grant Date. 

(c) PAYMENT. The Committee shall determine the methods by which the exercise price of an Option may be paid, the form of payment,
including, without limitation, cash, Shares, or other property (including “cashless exercise” arrangements), and the methods by which Shares shall be delivered or deemed to be delivered to Participants; provided, however, that if Shares
are used to pay the exercise price of an Option, such Shares must have been held by the Participant for at least such period of time, if any, as necessary to avoid the recognition of an expense under generally accepted accounting principles as a
result of the exercise of the Option. 
 (d) EXERCISE TERM. In no event may any Option be exercisable for more than ten
years from the Grant Date. 
 7.2. INCENTIVE STOCK OPTIONS. The terms of any Incentive Stock Options granted under the
Plan must comply with the following additional rules: 
 (a) EXERCISE PRICE. The exercise price of an Incentive Stock
Option shall not be less than the Fair Market Value as of the Grant Date. 
 (b) LAPSE OF OPTION. Subject to any earlier
termination provision contained in the Award Certificate, an Incentive Stock Option shall lapse upon the earliest of the following circumstances: 

(1) The expiration date set forth in the Award Certificate. 

(2) The tenth anniversary of the Grant Date. 

(3) Three months after termination of the Participant’s Continuous Status as a Participant for any reason other than the
Participant’s Disability or death. 
 (4) One year after the termination of the Participant’s Continuous Status as a
Participant by reason of the Participant’s Disability. 
 (5) Two years after the Participant’s death if the
Participant dies while employed or during the three-month period described in paragraph (3) or during the one-year period described in paragraph (4) and before the Option otherwise lapses. 

Unless the exercisability of the Incentive Stock Option is accelerated as provided in Article 14, if a Participant exercises an Option
after termination of employment, the Option may be exercised only with respect to the Shares that were otherwise vested on the Participant’s termination of employment. Upon the Participant’s death, any exercisable Incentive Stock Options
may be exercised by the Participant’s beneficiary, determined in accordance with Section 14.5. 
 (c) INDIVIDUAL
DOLLAR LIMITATION. The aggregate Fair Market Value (determined as of the Grant Date) of all Shares with respect to which Incentive Stock Options are first exercisable by a Participant in any calendar year may not exceed $100,000.00. 

(d) TEN PERCENT OWNERS. No Incentive Stock Option shall be granted to any individual who, at the Grant Date, owns stock possessing
more than ten percent of the total combined voting power of all classes of stock of the 
  

 vii 

 
Company or any Parent or Subsidiary unless the exercise price per share of such Option is at least 110% of the Fair Market Value per Share at the Grant Date and the Option expires no later than
five years after the Grant Date. 
 (e) EXPIRATION OF AUTHORITY TO GRANT INCENTIVE STOCK OPTIONS. No Incentive Stock
Option may be granted pursuant to the Plan after the day immediately prior to the tenth anniversary of the Effective Date of the Plan, or the termination of the Plan, if earlier. 

(f) RIGHT TO EXERCISE. During a Participant’s lifetime, an Incentive Stock Option may be exercised only by the Participant
or, in the case of the Participant’s Disability, by the Participant’s guardian or legal representative. 
 (g)
ELIGIBLE GRANTEES. The Committee may not grant an Incentive Stock Option to a person who is not at the Grant Date an employee of the Company or a Parent or Subsidiary which constitute a “parent corporation” or a “subsidiary
corporation” as defined in Section 424(e) and (f) of the Code, respectively. 
 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: 
 (a) RIGHT TO PAYMENT. Upon the exercise of a Stock Appreciation Right, the Participant
to whom it is granted has the right to receive 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 Stock Appreciation Right as determined by the Committee, which shall not be less
than the Fair Market Value of one Share on the Grant Date. 
 (b) OTHER TERMS. All awards of Stock Appreciation Rights
shall be evidenced by an Award Certificate. The terms, methods of exercise, methods of settlement, form of consideration payable in settlement, and any other terms and conditions of any Stock Appreciation Right shall be determined by the Committee
at the time of the grant of the Award and shall be reflected in the Award Certificate. 
 ARTICLE 9 

PERFORMANCE AWARDS 

9.1. GRANT OF PERFORMANCE AWARDS. The Committee is authorized to grant Performance Shares, Performance Units or Performance-Based
Cash Awards to Participants on such terms and conditions as may be selected by the Committee. 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. 
 9.2. PERFORMANCE GOALS. The Committee
may establish performance goals for Performance Awards which may be based on any performance criteria selected by the Committee. Such performance criteria 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. The length of a performance period shall be determined by the Committee; provided, however, that a performance period
shall not be shorter than 12 months. 
 9.3. RIGHT TO PAYMENT. The grant of a Performance Share to a Participant will
entitle the Participant to receive at a specified later time a specified number of Shares, or the equivalent cash value, if the performance goals established by the Committee are achieved and the other terms and conditions thereof are satisfied. The
grant of a Performance Unit to a Participant will entitle the Participant to receive at a specified later time a specified dollar value, which may be settled in cash or other property, including Shares, variable under conditions specified in the
Award, if the performance goals in the Award are achieved and the other terms and conditions thereof are satisfied. The grant of a Performance-Based Cash Award to a Participant will entitle the Participant to receive at a specified later time a
specified dollar value in cash variable under conditions specified in the Award, if the performance goals in the Award are achieved and the other terms and conditions thereof are satisfied. The Committee shall set performance goals and other terms
or conditions to payment 
  

 viii 

 
of the Performance Awards in its discretion which, depending on the extent to which they are met, will determine the value of the Performance Awards that will be paid to the Participant.

 9.4. OTHER TERMS. Performance Awards may be payable in cash, Stock or other property, and have such other terms and
conditions as determined by the Committee and reflected in the Award Certificate. For purposes of determining the number of Shares to be used in payment of a Performance Award denominated in cash but payable in whole or in part in Shares or
Restricted Stock, the number of Shares to be so paid will be determined by dividing the cash value of the Award to be so paid by the Fair Market Value of a Share on the date of determination by the Committee of the amount of the payment under the
Award, or, if the Committee so directs, the date immediately preceding the date the Award is paid. 
 ARTICLE 10

 RESTRICTED STOCK AND RESTRICTED STOCK UNIT AWARDS 

10.1. GRANT OF RESTRICTED STOCK AND RESTRICTED STOCK UNITS. The Committee is authorized to make Awards of Restricted Stock or
Restricted Stock Units to Participants in such amounts and subject to such terms and conditions as may be selected by the Committee. An Award of Restricted Stock or Restricted Stock Units shall be evidenced by an Award Certificate setting forth the
terms, conditions, and restrictions applicable to the Award. 
 10.2. ISSUANCE AND RESTRICTIONS. Restricted Stock or
Restricted Stock Units shall be subject to such restrictions on transferability and other restrictions as the Committee may impose (including, without limitation, limitations on the right to vote Restricted Stock or the right to receive dividends on
the Restricted Stock or dividend equivalents on the Restricted Stock Units) covering a period of time specified by the Committee (the “Restriction Period”). 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
until such time as Shares of Stock are paid in settlement of the Restricted Stock Units. 
 10.3. FORFEITURE. Except for
certain limited situations (including the death or Disability of the Participant or a Change in Control referred to in Section 14.8), Restricted Stock Awards and Restricted Stock Unit Awards subject solely to continued employment restrictions
shall have a Restriction Period of not less than three years from the Grant Date (but permitting pro-rata vesting over such time). Except as otherwise determined by the Committee at the time of the grant of the Award or thereafter, immediately after
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. 
 10.4. DELIVERY OF RESTRICTED STOCK. Shares of Restricted Stock shall be
delivered to the Participant at the time of grant either by book-entry registration or by delivering to the Participant, or a custodian or escrow agent (including, without limitation, the Company or 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 11 

DEFERRED STOCK UNITS 

11.1. GRANT OF DEFERRED STOCK UNITS. The Committee is authorized to grant Deferred Stock Units to Participants subject to such
terms and conditions as may be selected by the Committee. Deferred Stock Units shall entitle the Participant to receive Shares of Stock (or the equivalent value in cash or other property if so determined by the Committee) 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. An Award of Deferred Stock Units shall be evidenced by an Award Certificate setting forth
the terms and conditions applicable to the Award. 
  

 ix 

 ARTICLE 12 

DIVIDEND EQUIVALENTS 

12.1. GRANT OF DIVIDEND EQUIVALENTS. The Committee is authorized to grant Dividend Equivalents to Participants, in connection with
other Awards or on a freestanding basis, 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 any Award, as determined by the Committee. The Committee may provide that Dividend Equivalents be paid or distributed when accrued or be deemed to have been reinvested in additional Shares or units equivalent to Shares,
or otherwise reinvested. 
 ARTICLE 13 

STOCK OR OTHER STOCK-BASED AWARDS 

13.1. 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 or other property, as deemed by the Committee to be consistent with the purposes of the Plan,
including without limitation 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 Affiliates ( “Other Stock-Based Awards” ). Such Other Stock-Based Awards shall also be available as a form of payment in the
settlement of other Awards granted under the Plan. The Committee shall determine the terms and conditions of such Other Stock-Based Awards. Except for certain limited situations (including the death or Disability of the Participant or a Change in
Control referred to in Section 14.8), Other Stock-Based Awards subject solely to continued employment restrictions shall be subject to restrictions imposed by the Committee for a period of not less than three years from the Grant Date (but
permitting pro-rata vesting over such time); provided that such restrictions shall not be applicable to any substitute awards granted under Section 14.12, grants of Other Stock-Based Awards in payment of Performance Awards pursuant to Article
9, grants of Other Stock-Based Awards granted in lieu of cash or other compensation, or grants of Other Stock-Based Awards on a deferred basis. 

ARTICLE 14 

PROVISIONS APPLICABLE TO AWARDS 

14.1. STAND-ALONE AND TANDEM AWARDS. Awards granted under the Plan may, in the discretion of the Committee, be granted either
alone or in addition to, in tandem with, any other Award granted under the Plan. Subject to Section 16.2, awards granted in addition to or in tandem with other Awards may be granted either at the same time as or at a different time from the
grant of such other Awards. 
 14.2. 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 Incentive Stock Option or a Stock Appreciation Right granted in tandem with the Incentive Stock Option exceed a period of ten years from its Grant Date (or, if Section 7.2(d) applies,
five years from its Grant Date). 
 14.3. FORM OF PAYMENT FOR AWARDS. Subject to the terms of the Plan and any applicable
law or Award Certificate, payments or transfers to be made by the Company or an Affiliate on the grant or exercise of an Award may be made in such form as the Committee determines at or after the Grant Date, including without limitation, cash,
Stock, other Awards, or other property, or any combination, and may be made in a single payment or transfer or in installments, in each case determined in accordance with rules adopted by, and at the discretion of, the Committee. 

14.4. 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 of descent and distribution or, except in the case of an Incentive Stock Option, pursuant to a domestic relations order that would satisfy
Section 414(p)(1)(A) of the Code if such Section applied to an Award under the Plan; provided, however, that the Committee may (but need not) permit other transfers where the Committee concludes that such transferability

  

 x 

 
(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. 

14.5. BENEFICIARIES. Notwithstanding Section 14.4, 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 Company. 
 14.6. STOCK CERTIFICATES. 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. 

14.7. ACCELERATION UPON DEATH OR DISABILITY. Except as otherwise provided in the Award Certificate or any special Plan document
governing an Award, upon the Participant’s death or Disability during his or her Continuous Status as a Participant, (i) all of such Participant’s outstanding Options, SARs, and other Awards in the nature of rights that may be
exercised shall become fully exercisable, (ii) all time-based vesting restrictions on the Participant’s outstanding Awards shall lapse, and (iii) the target payout opportunities attainable under all of such Participant’s
outstanding performance-based Awards shall be deemed to have been fully earned as of the date of termination based upon (A) an assumed achievement of all relevant performance goals at the “target” level if the date of termination
occurs during the first half of the applicable performance period, or (B) the actual level of achievement of all relevant performance goals against target, if the date of termination occurs during the second half of the applicable performance
period, and, in either such case, there shall be a prorata payout to the Participant or his or her estate within thirty (30) days following the date of termination (unless a later date is required by Section 17.16 hereof) based upon the
length of time within the performance period that has elapsed prior to the date of termination. Any Awards shall thereafter continue or lapse in accordance with the other provisions of the Plan and the Award Certificate. To the extent that this
provision causes Incentive Stock Options to exceed the dollar limitation set forth in Section 7.2(c), the excess Options shall be deemed to be Nonstatutory Stock Options. 

14.8. TREATMENT UPON A CHANGE IN CONTROL. The provisions of this Section 14.8 shall apply in the case of a Change in Control,
unless otherwise provided in the Award Certificate or any special Plan document or separate agreement with a Participant governing an Award. 

(a) Awards not Assumed or Substituted by Surviving Corporation. Upon the occurrence of a Change in Control, and except with
respect to any Awards assumed by the Surviving Corporation or otherwise equitably converted or substituted in connection with the Change in Control in a manner approved by the Committee or the Board: (i) outstanding Options, SARs, and other
Awards in the nature of rights that may be exercised shall become fully exercisable, (ii) time-based vesting restrictions on outstanding Awards shall lapse, and (iii) the target payout opportunities attainable under outstanding
performance-based Awards shall be deemed to have been fully earned as of the effective date of the Change in Control based upon (A) an assumed achievement of all relevant performance goals at the “target” level if the Change in
Control occurs during the first half of the applicable performance period, or (B) the actual level of achievement of all relevant performance goals against target, if the Change in Control occurs during the second half of the applicable
performance period, and, in either such case, there shall be prorata payout to Participants within thirty (30) days following the Change in Control (unless a later date is required by Section 17.16 hereof) based upon the length of time
within the performance period that has elapsed prior to the Change in Control. Any Awards shall thereafter continue or lapse in accordance with the other provisions of the Plan and the Award Certificate. To the extent that this provision causes
Incentive Stock Options to exceed the dollar limitation set forth in Section 7.2(c), the excess Options shall be deemed to be Nonstatutory Stock Options. 
  

 xi 

 (b) Awards Assumed or Substituted by Surviving Corporation. With respect to Awards
assumed by the Surviving Corporation or otherwise equitably converted or substituted in connection with a Change in Control: if within two years after the effective date of the Change in Control, a Participant’s employment is terminated without
Cause or the Participant resigns for Good Reason, then (i) all of that Participant’s outstanding Options, SARs and other Awards in the nature of rights that may be exercised shall become fully exercisable, (ii) all time-based vesting
restrictions on the his or her outstanding Awards shall lapse, and (iii) the target payout opportunities attainable under all outstanding of that Participant’s performance-based Awards shall be deemed to have been fully earned as of the
date of termination based upon (A) an assumed achievement of all relevant performance goals at the “target” level if the date of termination occurs during the first half of the applicable performance period, or (B) the actual
level of achievement of all relevant performance goals against target, if the date of termination occurs during the second half of the applicable performance period, and, in either such case, there shall be prorata payout to such Participant within
thirty (30) days following the date of termination of employment (unless a later date is required by Section 17.16 hereof) based upon the length of time within the performance period that has elapsed prior to the date of termination of
employment. With regard to each Award, a Participant shall not be considered to have resigned for Good Reason unless either (i) the Award Certificate includes such provision or (ii) the Participant is party to an employment, severance or
similar agreement with the Company or an Affiliate that includes provisions in which the Participant is permitted to resign for Good Reason. Any Awards shall thereafter continue or lapse in accordance with the other provisions of the Plan and the
Award Certificate. To the extent that this provision causes Incentive Stock Options to exceed the dollar limitation set forth in Section 7.2(c), the excess Options shall be deemed to be Nonstatutory Stock Options. 

14.9. ACCELERATION FOR ANY REASON. Regardless of whether an event has occurred as described in Section 14.7 or 14.8 above,
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 14.9. Notwithstanding anything in
the Plan, including this Section 14.9, the Committee may not accelerate the payment of any Award if such acceleration would violate Section 409A(a)(3) of the Code. 

14.10. TERMINATION OF EMPLOYMENT. Whether military, government or other service or other leave of absence shall constitute a
termination of employment shall be determined in each case by the Committee at its discretion, and any determination by the Committee shall be final and conclusive. A Participant’s Continuous Status as a Participant shall not be deemed to
terminate (i) in a circumstance in which a Participant transfers from the Company to an Affiliate, transfers from an Affiliate to the Company, or transfers from one Affiliate to another Affiliate, 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. To the extent that this provision causes Incentive Stock Options to extend beyond three
months from the date a Participant is deemed to be an employee of the Company or a Parent or Subsidiary which constitute a “parent corporation” or a “subsidiary corporation” for purposes of Sections 424(e) and 424(f) of the Code,
respectively, the Options held by such Participant shall be deemed to be Nonstatutory Stock Options. 
 14.11. 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 non-competition, confidentiality or other restrictive covenants that may apply to the Participant, or other conduct by the Participant that is detrimental to the business or reputation of the Company or any Affiliate. 

14.12. 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. 

 

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 ARTICLE 15 

CHANGES IN CAPITAL STRUCTURE 

15.1. MANDATORY ADJUSTMENTS. In the event of a nonreciprocal transaction between the Company and its shareholders 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. Section 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. 
 15.2 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 15.1), 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. The Committee’s determination need not be uniform and may be different for different Participants whether or not
such Participants are similarly situated. 
 15.3 GENERAL. Any discretionary adjustments made pursuant to this Article 15
shall be subject to the provisions of Section 16.2. To the extent that any adjustments made pursuant to this Article 15 cause Incentive Stock Options to cease to qualify as Incentive Stock Options, such Options shall be deemed to be
Nonstatutory Stock Options. 
 ARTICLE 16 

AMENDMENT, MODIFICATION AND TERMINATION 

16.1. 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 to (i) permit Awards made hereunder to be exempt
from liability under Section 16(b) of the 1934 Act, (ii) to comply with the listing or other requirements of an exchange, or (iii) to satisfy any other tax, securities or other applicable laws, policies or regulations. 

16.2. 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: 
  

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 (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; 
 (b) The
original term of an Option may not be extended without the prior approval of the stockholders of the Company; 
 (c) Except as
otherwise provided in Article 15, the Committee shall not be permitted to (i) lower the exercise price per Share of an Option after it is granted, (b) cancel an Option when the exercise price per Share exceeds the Fair Market Value of the
underlying Shares in exchange for another Award, or (c) take any other action with respect to an Option that may be treated as a repricing under the rules and regulations of an exchange, without the prior approval of the stockholders of the
Company; and 
 (d) No termination, amendment, or modification of the Plan shall adversely affect any Award previously granted
under the Plan, without the written consent of the Participant affected thereby. 
 ARTICLE 17 

GENERAL PROVISIONS 

17.1. NO RIGHTS TO AWARDS; NON-UNIFORM DETERMINATIONS. 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). 

17.2. NO SHAREHOLDER RIGHTS. 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. 
 17.3. 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. If Shares are surrendered to the Company to satisfy withholding obligations in excess of the minimum withholding
obligation, such Shares must have been held by the Participant as fully vested shares for such period of time, if any, as necessary to avoid the recognition of an expense under generally accepted accounting principles. The Company shall have the
authority to require a Participant to remit cash to the Company in lieu of the surrender of Shares for tax withholding obligations if the surrender of Shares in satisfaction of such withholding obligations would result in the Company’s
recognition of expense under generally accepted accounting principles. 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. 
 17.4. NO RIGHT TO CONTINUED SERVICE. 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 consultant at any time, nor confer upon any Participant any right to continue as an employee, officer or consultant of the Company or any Affiliate, whether for the duration of a Participant’s Award or otherwise. 

17.5. 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 the Employment Retirement Income Security Act of 1974, as amended. 
  

 xiv 

 17.6. 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. 

17.7. EXPENSES. The expenses of administering the Plan shall be borne by the Company and, if applicable, its Affiliates. The
allocation of expenses among the Company and its Affiliates shall be as agreed to by the Company and the applicable Affiliates. 

17.8. 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. 
 17.9. 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. 

17.10. 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. 

17.11. 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. 

17.12. GOVERNING LAW. To the extent not governed by federal law, the Plan and all Award Certificates shall be construed in
accordance with and governed by the laws of the State of Maryland. 
 17.13. 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. 

17.14. 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. 
  

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 17.15. INDEMNIFICATION. Each person who is or shall have been a member of the
Committee, or of the Board, or an officer of the Company to whom authority was delegated in accordance with Article 4 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 Articles of
Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless. 

17.16. 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.

 (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 
  

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 (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. 
 (e) Grants to Employees of Affiliates. Eligible Participants who are service providers to an
Affiliate may be granted Options or SARs under this Plan only if the Company 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 Section 409A
of the Code. 
 (f) Fair Market Value of Unlisted Stock. If the Stock is not listed on a securities exchange, the Fair Market
Value of the Stock as of any given date shall, for purposes of the Plan and any Award, be determined by such method as the Committee determines in good faith to be reasonable and in compliance with Section 409A of the Code. 

(g) Design Limits on Options and SARs. Notwithstanding anything in this Plan or any Award Certificate, no Option or SAR granted under
this Plan shall (i) provide for Dividend Equivalents or (ii) have any feature for the deferral of compensation other than the deferral of recognition of income until the exercise or disposition of the Option or SAR. 

(h) Timing of Distribution of Dividend Equivalents. Unless otherwise provided in the applicable Award Certificate, any Dividend
Equivalents granted with respect to an Award hereunder will be paid or distributed no later than the 15th day of the 3rd month following the later of (i) the calendar year in which the corresponding dividends were paid to shareholders, or
(ii) the first calendar year in which the Participant’s right to such Dividends Equivalents is no longer subject to a substantial risk of forfeiture. 

The foregoing is hereby acknowledged as being the Phillips Edison – ARC Shopping Center REIT Inc. 2010 Long-Term Incentive Plan as
adopted by the Board on                     , 2010, approved by the sole stockholder on
                    , 2010. 
  

			
	 PHILLIPS EDISON – ARC SHOPPING

CENTER REIT, INC.

		
	 By:
	 	  

	 Name:
	 	
	 Title:
	 	

  

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