Document:

exv10w14

 

Exhibit 10.14

EMPLOYMENT AGREEMENT

(Paul J. Zambrotta)

     EMPLOYMENT AGREEMENT dated as of August ___, 2005, by and between MIDLANTIC OFFICE TRUST,
INC., with its principal place of business at 11200 Rockville Pike, Suite 502, Rockville, MD 20852
(the “Company”) and Paul J. Zambrotta, residing at the address set forth on the signature page
hereof (the “Executive”).

     WHEREAS, the Company wishes to employ the Executive, and the Executive wishes to accept such
offer, on the terms set forth below:

     Accordingly, the parties hereto agree as follows:

     1.   Term. The Company hereby employs the Executive, and the Executive hereby accepts
such employment, for an initial term commencing as of the date hereof and continuing for a
three-year period following such date, unless sooner terminated in accordance with the provisions
of Section 4 or Section 5; with such employment to continue for successive one-year periods in
accordance with the terms of this Agreement (subject to termination as aforesaid) unless either
party notifies the other party of non-renewal in writing prior to three months before the
expiration of the initial term and each annual renewal, as applicable (the period during which the
Executive is employed hereunder being hereinafter referred to as the “Term”).

     2.   Duties. During the Term, the Executive shall be employed by the Company as
Executive Vice President, Chief Financial Officer and Treasurer of the Company, and, as such, the
Executive shall faithfully perform for the Company the duties of said offices and shall perform
such other duties of an executive, managerial or administrative nature as shall be specified and
designated from time to time by the Chief Executive Officer of the Company or by the audit
committee of the board of directors of the Company (the “Board”). The Executive shall devote
substantially all of his business time and effort to the performance of his duties hereunder.

 

 

     3.   Compensation.

     3.1 Salary. The Company shall pay the Executive during the Term a salary at a minimum
rate of Two Hundred Fifty Thousand Dollars and No Cents ($250,000) per annum (the “Annual Salary”),
in accordance with the customary payroll practices of the Company applicable to senior executives.
The Board periodically shall review the Executive’s Annual Salary and may provide for such
increases therein as it may in its discretion deem appropriate. (Any such increased salary shall
constitute the “Annual Salary” as of the time of the increase.)

     3.2 Bonus. During the Term, in addition to the Annual Salary, for each fiscal year of
the Company ending during the Term, the Executive shall have the opportunity to receive an annual
bonus in an amount and on such terms to be determined by the Compensation Committee of the Board of
Directors of the Company, but which Bonus shall not be less than 50% of the Annual Salary. The
Bonus payable with respect to a fiscal year of the Company shall be paid no later than the
fifteenth day of the third month after the end of the fiscal year. The forgoing shall not limit
the Executive’s eligibility to receive any other bonus under any other bonus plan, stock option or
equity–based plan, or other policy or program of the Company.

     3.3 Participation in 2005 Equity Incentive Plan. The Company has established the 2005
Equity Incentive Plan (“Equity Incentive Plan”). Subject to the terms and conditions of the Equity
Incentive Plan and the Long-Term Incentive Plan Unit Vesting Agreement ( which shall provide
for the grant to Executive of 50,000 LTIP units subject to and in accordance with the terms
thereof) between the Company and the Executive, the Executive shall be eligible to
participate in the Equity Incentive Plan, and shall be eligible to receive annual long term
incentive plan units, restricted stock awards and/or stock options under the Equity Incentive Plan.
The Compensation Committee shall approve any such awards made to the Executive pursuant to the
Equity Incentive Plan.

     3.4 Benefits-In General. The Executive shall be permitted during the Term to
participate in any group life, hospitalization or disability insurance plans, health programs,
retirement plans, fringe benefit

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programs and other benefits that may be available to other executive officers of the Company
generally, in each case to the extent that the Executive is eligible under the terms of such plans
or programs.

     3.5 Vacation. The Executive shall be entitled to vacation of no less than 20 business
days per year, to be credited in accordance with ordinary Company policies.

     3.6 Life and Disability Insurance Premium Reimbursement. The Company shall during the
term of this Agreement reimburse the Executive up to $1,500 annually for premiums incurred by the
Executive with respect to supplemental life and long-term disability insurance policies.

     3.7 Expenses-In General. The Company shall pay or reimburse the Executive for all
ordinary and reasonable out-of-pocket expenses actually incurred (and, in the case of
reimbursement, paid) by the Executive during the Term in the performance of the Executive’s
services under this Agreement, in accordance with the Company’s policies regarding such
reimbursements.

     4.   Termination upon Death or Disability. If the Executive dies during the Term, this
Agreement shall terminate as of the date of death, and the obligations of the Company to or with
respect to the Executive shall terminate in their entirety upon such date except as otherwise
provided under this Section 4. If the Executive is unable to perform substantially and
continuously the duties assigned to him due to a disability as defined for purposes of the
Company’s long-term disability plan then in effect, or, if no such plan is in effect, by virtue of
ill health or other disability for more than 180 consecutive or non-consecutive days out of any
consecutive 12-month period, the Company shall have the right, to the extent permitted by law, to
terminate the employment of the Executive upon notice in writing to the Executive. Upon
termination of employment due to death or disability, (i) the Executive (or the Executive’s estate
or beneficiaries in the case of the death of the Executive) shall be entitled to receive any Annual
Salary and other benefits earned and accrued under this Agreement prior to the date of termination
(and reimbursement under this Agreement for expenses incurred prior to the date of termination);
(ii) without duplication of any amounts due under clause (i), the Executive (or the Executive’s
estate or beneficiaries in the case of the death of the Executive) shall receive an amount equal to
the annual bonus that, in the absence of such termination, would have been payable for the fiscal
year in which termination occurs,

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payable at such time as would have applied in the absence of such termination, with such
amount to be multiplied by a fraction (x) the numerator of which is the number of days in the
fiscal year preceding the termination and (y) the denominator of which is 365; (iii) all
outstanding unvested equity-based awards (including, without limitation, stock options, LTIP units
and restricted stock) held by or granted to the Executive shall fully vest and become immediately
exercisable, as applicable, and subject to the terms of such awards; and (iv) the Executive (or the
Executive’s estate or beneficiaries in the case of the death of the Executive) shall have no
further rights to any other compensation or benefits hereunder, or any other rights hereunder (but,
for the avoidance of doubt, shall receive such disability and death benefits as may be provided
under the Company’s plans and arrangements in accordance with their terms).

     5.   Certain Terminations of Employment; Certain Benefits.

     5.1 Termination by the Company for Cause; Termination by the Executive without Good
Reason.

           (a) For purposes of this Agreement, “Cause” shall mean the Executive’s:

	 	(i)	 	commission of, and indictment for or formal
admission to, a felony, a crime of moral turpitude, dishonesty, breach
of trust or unethical business conduct, or any crime involving the
Company;

	 	(ii)	 	continued engagement in the performance of his
duties hereunder in willful misconduct, willful or gross neglect,
fraud, misappropriation or embezzlement, and then, with respect to
willful misconduct or willful or gross neglect (but not with respect to
fraud, misappropriation or embezzlement), only after appropriate notice
of Executive’s misconduct or neglect and an appropriate period, as
determined by the Board, to remedy such misconduct or neglect;

	 	(iii)	 	continued failure to materially adhere to the
clear directions of the Board or to adhere to the Company’s policies
and practices or to devote substantially all of his business time and
efforts to the Company and its subsidiaries;

	 	(iv)	 	continued failure to substantially perform his
duties properly assigned to the Executive by the Board of Directors of
the Company in writing (other than any such failure resulting from his
Disability);

	 	(v)	 	material breach of any of the provisions of
Section 6; or

	 	(vi)	 	material and willful breach of the terms and
provisions of this Agreement and failure to cure such breach within 15
days following written notice from the Company specifying such breach;

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provided that the Company shall not be permitted to terminate the Executive for Cause except on
written notice given to the Executive at any time not more than 30 days following the occurrence of
any of the events described in clause (ii) through (vi) above (or, if later, the Company’s
knowledge thereof).

           (b) The Company may terminate this Agreement and the Executive’s employment hereunder for
Cause, and the Executive may terminate his employment on at least 60 days’ written notice given to
the Company. If the Company terminates the Executive for Cause, or the Executive terminates his
employment and the termination by the Executive is not for Good Reason in accordance with Section
5.2, (i) the Executive shall receive Annual Salary and other benefits (including any LTIP units or
other equity incentive awards that are vested as of the date immediately preceding the date of
termination and any bonus for a fiscal year completed before termination and awarded but not yet
paid), or in the event of a partial fiscal year, a pro rata bonus earned through the date of such
termination, which is to be calculated based on the average bonus paid in the prior three fiscal
years (or such shorter period of time bonuses have been paid or, if the termination occurs before
any bonus has been paid, $125,000) with such bonus amount to be multiplied by a fraction (x) the
numerator of which is the number of days in the fiscal year preceding the termination and (y) the
denominator of which is 365) earned and accrued under this Agreement prior to the termination of
employment (and reimbursement under this Agreement for expenses incurred prior to the termination
of employment); and (ii) the Executive shall have no further rights to any other compensation or
benefits under this Agreement on or after the termination of employment.

     5.2 Termination by the Company without Cause; Termination by the Executive for Good
Reason; Non-Renewal of this Agreement.

           (a) The Company may terminate the Executive’s employment and the Executive may terminate the
Executive’s employment with the Company at any time for any reason or no reason. If the Company
terminates the Executive’s employment and the termination is not covered by Section 4 or 5.1, or
the Executive terminates his employment for Good Reason:

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	 	(i)	 	the Executive shall receive Annual Salary and
other benefits (including any bonus for a fiscal year completed before
termination) earned and accrued under this Agreement prior to the
termination of employment (and reimbursement under this Agreement for
expenses incurred prior to the termination of employment);

	 	(ii)	 	the Executive shall receive a single-sum cash
payment equal to the Severance Multiple (as defined below) times the
sum of (x) the Executive’s Annual Salary as in effect immediately
before such termination as calculated for a period of 12 months, and
(y) the Executive’s average bonus paid for the prior three fiscal years
(or such shorter period of time bonuses have been paid, or if the
termination occurs before any bonus has been paid, $250,000), payable
no later than ten days after such termination or, if the Executive is a
“specified person” (as defined in Section 409A of the Internal Revenue
Code), the date that is six months after such termination;

	 	(iii)	 	for a period of one year after termination of
employment, such continuing coverage under the group health plans the
Executive would have received under this Agreement as would have
applied in the absence of such termination, provided that the Company
shall in no event be required to provide any benefits otherwise
required by this clause after such time as the Executive becomes
entitled to receive benefits of the same type from another employer or
recipient of the Executive’s services; and

	 	(iv)	 	all outstanding unvested equity-based awards
(including without limitation LTIP units, stock options and restricted
stock) held by the Executive shall fully vest and shall become
immediately exercisable, as applicable, in the case of options and
shall continue to be exercisable for their full terms;

provided that the Company will not be obligated to pay the amounts in
clauses (a)(ii), (a)(iii) or (a)(iv) unless the Executive shall have
delivered a release, in form and substance reasonably satisfactory to the
Company, of claims against the Company or its affiliates.

For purposes of Section 5.2(a)(ii), “Severance Multiple” shall mean (a) 1.00
if the termination date occurs prior to the first anniversary of the date of
this Agreement, (b) 2.00 if the termination date occurs prior to the second
anniversary of the date of this Agreement and (c) 2.99 if the termination
date occurs on or any time after the second anniversary of the date of this
Agreement.

           (b) For purposes of this Agreement, “Good Reason” shall mean, unless otherwise consented to by
the Executive,

	 	(i)	 	the material reduction of the Executive’s
title, authority, duties and responsibilities or the assignment to the
Executive of duties materially inconsistent with the Executive’s
position or positions with the Company;

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	 	(ii)	 	a reduction in Annual Salary of the Executive;

	 	(iii)	 	the relocation of the Executive’s office to
more than 50 miles from Rockville, Maryland; or

	 	(iv)	 	the Company’s breach of any material provision
of this Agreement.

Notwithstanding the foregoing, (i) Good Reason shall not be deemed to exist unless notice of
termination on account thereof (specifying a termination date no later than 30 days from the date
of such notice) is given no later than 30 days after the time at which the event or condition
purportedly giving rise to Good Reason first occurs or arises or, if later, Executive’s knowledge
thereof and (ii) if there exists (without regard to this clause (ii)) an event or condition that
constitutes Good Reason, the Company shall have 15 days from the date notice of such a termination
is given to cure such event or condition and, if the Company does so, such event or condition shall
not constitute Good Reason hereunder.

           (c) In the event of any notice of non-renewal of this Agreement by the Company, as described
in Section 1, then (i) the Executive shall receive Annual Salary and other benefits (including any
bonus for a fiscal year completed before termination) earned and accrued under this Agreement prior
to the non-renewal of this Agreement (and reimbursement under this Agreement for expenses incurred
prior to the termination of employment), (ii) the Executive shall receive a single-sum cash payment
equal to the sum of (x) the Executive’s Annual Salary as in effect immediately before such
non-renewal, and (y) the Executive’s average bonus paid in the prior three fiscal years (or such
shorter period of time bonuses have been paid), payable upon the expiration of the Term; provided,
however, that if the Executive is a “specified person” (as defined in Section 409A of the Internal
Revenue Code), such amount shall be payable upon the date that is six months after the Executive’s
termination of employment, and (iii) all outstanding unvested equity-based awards (including
without limitation stock options and restricted stock) held by the Executive shall fully vest and
shall become immediately exercisable, as applicable.

     5.3 Change of Control. Without duplication of the foregoing, upon a “Change of
Control” (as defined below) while the Executive is employed, all outstanding unvested equity-based
awards (including stock options and restricted stock) shall fully vest and shall become immediately
exercisable, as

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applicable. In addition, if, after a Change of Control, the Executive terminates his
employment with the Company within the six-month anniversary of the Change of Control, such
termination shall be deemed a termination by the Executive for Good Reason covered by Section 5.2
(other than for purposes of Section 6.1(a)) and further provided that the amount payable under
Section 5.2(a)(ii) shall be payable no later than ten days after such termination (rather than the
date prescribed in Section 5.2(a)(ii)), if the “Change in Control” satisfies the requirements of a
change in control under Section 409A of the Code. For purposes of this Agreement, “Change in
Control” shall mean the happening of any of the following:

	 	(i)	 	any “person,” including a “group” (as such
terms are used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), but excluding the
Company, any entity controlling, controlled by or under common control
with the Company, any employee benefit plan of the Company or any such
entity, and Executive and any “group” (as such term is used in Section
13(d)(3) of the Exchange Act) of which the Executive is a member) is or
becomes the “beneficial owner” (as defined in Rule 13(d)(3) under the
Exchange Act), directly or indirectly, of securities of the Company
representing 50% or more of either (A) the combined voting power of the
Company’s then outstanding securities or (B) the then outstanding
Common Stock of the Company (in either such case other than as a result
of an acquisition of securities directly from the Company); provided,
however, that, in no event shall a Change in Control be deemed to have
occurred upon an initial public offering or a subsequent public
offering of the Common Stock under the Securities Act of 1933, as
amended; or

	 	(ii)	 	any consolidation or merger of the Company
where the stockholders of the Company, immediately prior to the
consolidation or merger, would not, immediately after the consolidation
or merger, beneficially own (as such term is defined in Rule 13d-3
under the Exchange Act), directly or indirectly, shares representing in
the aggregate 50% or more of the combined voting power of the
securities of the corporation issuing cash or securities in the
consolidation or merger (or of its ultimate parent corporation, if
any); or

	 	(iii)	 	there shall occur (A) any sale, lease,
exchange or other transfer (in one transaction or a series of
transactions contemplated or arranged by any party as a single plan) of
all or substantially all of the assets of the Company, other than a
sale or disposition by the Company of all or substantially all of the
Company’s assets to an entity, at least 50% of the combined voting
power of the voting securities of which are owned by “persons” (as
defined above) in substantially the same proportion as their ownership
of the Company immediately prior to such sale or (B) the approval by
stockholders of the Company of any plan or proposal for the liquidation
or dissolution of the Company; or

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	 	(iv)	 	the members of the Board at the beginning of
any consecutive 12-calendar-month period (the “Incumbent Directors”)
cease for any reason other than due to death to constitute at least a
majority of the members of the Board; provided that any director whose
election, or nomination for election by the Company’s stockholders, was
approved by a vote of at least a majority of the members of the Board
then still in office who were members of the Board at the beginning of
such 12-calendar-month period, shall be deemed to be an Incumbent
Director.

     5.4 Parachutes. If any amount payable to or other benefit receivable by the Executive
pursuant to this Agreement is deemed to constitute a Parachute Payment (as defined below), alone or
when added to any other amount payable or paid to or other benefit receivable or received by the
Executive which is deemed to constitute a Parachute Payment (whether or not under a plan,
arrangement or other agreement), and would result in the imposition on the Executive of an excise
tax under Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), then, in
addition to any other benefits to which the Executive is entitled under this Agreement, the
Executive shall be paid by the Company an amount in cash equal to the sum of the excise taxes
payable by the Executive by reason of receiving Parachute Payments plus the amount necessary to put
the Executive in the same after-tax position (taking into account any and all applicable federal,
state and local excise, income or other taxes at the highest applicable rates on such Parachute
Payments and on any payments under this Section 5.4 as if no excise taxes had been imposed with
respect to Parachute Payments). “Parachute Payment” shall mean a “parachute payment” as defined in
Section 280G of the Code. The calculation under this Section 5.4 shall be as determined by the
Company’s accountants.

     6.   Covenants of the Executive.

     6.1 Covenant Against Competition; Other Covenants. The Executive acknowledges that
(i) the principal business of the Company (which expressly includes for purposes of this Section 6
(and any related enforcement provisions hereof), its successors and assigns) is investing in,
managing and leasing commercial office buildings (the “Activities”) located primarily in the
Washington, D.C., Virginia, Maryland, Pennsylvania, New Jersey and Delaware markets (such
geographic area, together with such other geographic markets in which the Company may engage in the
Activities during the

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employ of the Executive, is herein referred to as the “Geographic Area” and such Activities as
conducted in such Geographic Area are herein referred to as the “Business”); (ii) the Executive’s
work for the Company has given and will continue to give him access to the confidential affairs and
proprietary information of the Company; (iii) the covenants and agreements of the Executive
contained in this Section 6 are essential to the business and goodwill of the Company; and (iv) the
Company would not have entered into this Agreement but for the covenants and agreements set forth
in this Section 6. Accordingly, the Executive covenants and agrees that:

           (a) By and in consideration of the salary and benefits to be provided by the Company
hereunder, and subject to Executive receiving all monies due to him under the severance
arrangements set forth herein, and further in consideration of the Executive’s access to the
proprietary information of the Company, the Executive covenants and agrees that, during the period
commencing on the date hereof and ending one year following the date upon which the Executive shall
cease to be an employee of the Company and its affiliates, he shall not in the Geographic Area,
directly or indirectly, except with the prior approval of the Board, (i) engage in a business that
is substantially similar to the Business (other than for the Company or its affiliates), or (ii)
render any services to any person, corporation, partnership or other entity (other than the Company
or its affiliates) whose principal business is substantially similar to the Business or who has
taken substantial measures, or made material investments, evidencing an intention to engage in a
business that is substantially similar to the Business other than incidentally as is necessary to
engage in its principal business, or (iii) become interested in any person, corporation,
partnership or other entity (other than the Company or its affiliates) principally engaged in a
business that is substantially similar to the Business, as a partner, shareholder, principal,
agent, employee, consultant or in any other relationship or capacity; provided, however, that,
notwithstanding the foregoing, the Executive may invest in up to 5% of the securities of any
entity, solely for investment purposes and without participating in the business thereof, if (A)
such securities are traded on any national securities exchange or the National Association of
Securities Dealers, Inc. Automated Quotation System, and (B) the Executive is not a controlling
person of, or a member of a group which controls, such entity. In

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addition, the restrictions of this Section 6(a) shall not apply to the existing investments or
other activities of the Executive set forth on Schedule A hereto.

           (b) During and after the period of the Executive’s employment with the Company and its
affiliates, the Executive shall keep secret and retain in strictest confidence, except in
connection with the business and affairs of the Company and its affiliates, all confidential
matters relating to the Company’s Business and the business of any of its affiliates and to the
Company and any of its affiliates, learned by the Executive heretofore or hereafter directly or
indirectly from the Company or any of its affiliates (the “Confidential Company Information”); and
shall not disclose such Confidential Company Information to anyone outside of the Company except
with the Company’s express written consent and except for Confidential Company Information which is
at the time of receipt or thereafter becomes publicly known through no wrongful act of the
Executive or is received from a third party not under an obligation to keep such information
confidential and without breach of this Agreement.

           (c) During the period commencing on the date hereof and ending one year following the date
upon which the Executive shall cease to be an employee of the Company and its affiliates, (i) the
Executive shall not, without the Company’s prior written consent, directly or indirectly, knowingly
(A) solicit or encourage to leave the employment or other service of the Company, or any of its
affiliates, any employee or independent contractor thereof or (B) hire (on behalf of the Executive
or any other person or entity) any employee who has left the employment of the Company or any of
its affiliates within the one-year period which follows the termination of such employee’s
employment with the Company and its affiliates, and (ii) the Executive will not, whether for his
own account or for the account of any other person, firm, corporation or other business
organization, intentionally interfere with the Company’s or any of its affiliates’ relationship
with, or endeavor to entice away from the Company or any of its affiliates, any person who during
the Term is or was a customer or client of the Company or any of its affiliates.

     6.2 Rights and Remedies upon Breach. The Executive acknowledges and agrees that any
breach by him of any of the provisions of Section 6.1 (the “Restrictive Covenants”) would result in
irreparable

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injury and damage for which money damages would not provide an adequate remedy. Therefore, if
the Executive breaches, or threatens to commit a breach of, any of the provisions of Section 6.1,
the Company and its affiliates, in addition to, and not in lieu of, any other rights and remedies
available to the Company and its affiliates under law or in equity (including, without limitation,
the recovery of damages), shall have the right and remedy to have the Restrictive Covenants
specifically enforced by any court having equity jurisdiction, including, without limitation, the
right to an entry against the Executive of restraining orders and injunctions (preliminary,
mandatory, temporary and permanent) against violations, threatened or actual, and whether or not
then continuing, of such covenants.

     7.   Other Provisions.

     7.1 Severability. The Executive acknowledges and agrees that (i) he has had an
opportunity to seek advice of counsel in connection with this Agreement and (ii) the Restrictive
Covenants are reasonable in geographical and temporal scope and in all other respects. If it is
determined that any of the provisions of this Agreement, including, without limitation, any of the
Restrictive Covenants, or any part thereof, is invalid or unenforceable, the remainder of the
provisions of this Agreement shall not thereby be affected and shall be given full effect, without
regard to the invalid portions.

     7.2 Duration and Scope of Covenants. If any court or other decision-maker of
competent jurisdiction determines that any of the Executive’s covenants contained in this
Agreement, including, without limitation, any of the Restrictive Covenants, or any part thereof, is
unenforceable because of the duration or geographical scope of such provision, then, after such
determination has become final and unappealable, the duration or scope of such provision, as the
case may be, shall be reduced so that such provision becomes enforceable and, in its reduced form,
such provision shall then be enforceable and shall be enforced.

     7.3 Enforceability; Jurisdiction; Arbitration. Any controversy or claim arising out
of or relating to this Agreement or the alleged breach of this Agreement (other than a controversy
or claim arising under Section 6, to the extent necessary for the Company (or its affiliates, where
applicable) to avail itself of the rights and remedies referred to in Section 6.2) that is not
resolved by the Executive and the

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Company (or its affiliates, where applicable) shall first be submitted to mediation pursuant
to the Employment Mediation Rules of the American Arbitration Association. If the mediation is
terminated without a settlement agreement, the controversy or claim shall be submitted to
arbitration in Rockville, Maryland pursuant to the National Rules for the Resolution of Employment
Disputes of the American Arbitration Association then in effect. The substantive law of Maryland
shall apply in the interpretation and application of this Agreement, in aid of the arbitration
proceedings and in the enforcement of the award. The arbitrator shall apply the procedural rules
of the American Arbitration Association, except as to discovery matters, which shall be governed by
the Federal Rules of Civil Procedure. The arbitrator shall issue an award within 30 days of the
close of the hearing, which shall be conclusive and binding on the Company (or its affiliates,
where applicable) and the Executive and judgment may be entered on the arbitrator’s award in any
court having jurisdiction. The arbitrator shall award reasonable attorney fees and the costs of
arbitration to the prevailing party pursuant to the substantive law of Maryland in cases where
prevailing parties are entitled to such fees.

     7.4 Legal Fees. The Company shall pay directly or reimburse the Executive for up to
$5,000.00 of the reasonable legal fees and expenses incurred by the Executive in connection with
the review, negotiation and execution of this Agreement.

     7.5 Notices. Any notice or other communication required or permitted hereunder shall
be in writing and shall be delivered personally, telegraphed, telexed, sent by facsimile
transmission or sent by certified, registered or express mail, postage prepaid. Any such notice
shall be deemed given when so delivered personally, telegraphed, telexed or sent by facsimile
transmission or, if mailed, five days after the date of deposit in the United States mails as
follows:

	 	(i)	 	If to the Company, to:

Midlantic Office Trust, Inc.

11200 Rockville Pike, Suite 502

Rockville, MD 20852

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Attention: Sidney M. Bresler, Chief Executive Officer

with a copy to:

Hunton & Williams LLP

Riverfront Plaza, East Tower

951 East Byrd Street

Richmond, VA 23219

Attention: Daniel M. LeBey, Esq.

	 	(ii)	 	If to the Executive, to the address set forth
on the signature page hereof.

     Any such person may by notice given in accordance with this Section 7.5 to the other parties hereto
designate another address or person for receipt by such person of notices hereunder.

     7.6 Entire Agreement. This Agreement contains the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior agreements, written or
oral, with respect thereto.

     7.7 Waivers and Amendments. This Agreement may be amended, superseded, canceled,
renewed or extended, and the terms hereof may be waived, only by a written instrument signed by the
parties or, in the case of a waiver, by the party waiving compliance. No delay on the part of any
party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any waiver on the part of any party of any such right, power or privilege nor any single or
partial exercise of any such right, power or privilege, preclude any other or further exercise
thereof or the exercise of any other such right, power or privilege.

     7.8 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF MARYLAND WITHOUT REGARD TO ANY PRINCIPLES OF CONFLICTS OF LAW WHICH
COULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF MARYLAND.

     7.9 Assignment. This Agreement shall be binding upon and inure to the benefit of the
Parties and their respective successors, heirs (in the case of the Executive) and assigns. No
rights or obligations of the Company under this Agreement may be assigned or transferred by the
Company except that such

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rights or obligations may be assigned or transferred, subject to Section 5.3, pursuant to a
merger or consolidation in which the Company is not the continuing entity, or the sale or
liquidation of all or substantially all of the assets of the Company; provided, however, that the
assignee or transferee is the successor to all or substantially all of the assets of the Company
and such assignee or transferee assumes the liabilities, obligations and duties of the Company, as
contained in this Agreement, either contractually or as a matter of law.

     7.10 Withholding. The Company shall be entitled to withhold from any payments or
deemed payments any amount of tax withholding it determines to be required by law.

     7.11 Binding Effect. This Agreement shall be binding upon and inure to the benefit of
the parties and their respective successors, permitted assigns, heirs, executors and legal
representatives.

     7.12 Counterparts. This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original but all such
counterparts together shall constitute one and the same instrument. Each counterpart may consist
of two copies hereof each signed by one of the parties hereto.

     7.13 Survival. Anything contained in this Agreement to the contrary notwithstanding,
the provisions of Sections 5 and 6 and any other provisions of this Agreement expressly imposing
obligations that survive termination of Executive’s employment hereunder, and the other provisions
of this Section 7 to the extent necessary to effectuate the survival of such provisions, shall
survive termination of this Agreement and any termination of the Executive’s employment hereunder.

     7.14 Existing Agreements. The Executive represents to the Company that he is not
subject or a party to any employment or consulting agreement, non-competition covenant or other
agreement, covenant or understanding which might prohibit him from executing this Agreement or
limit his ability to fulfill his responsibilities hereunder.

     7.15 Headings. The headings in this Agreement are for reference only and shall not
affect the interpretation of this Agreement.

15exv10w15

 

Exhibit 10.15

MIDLANTIC OFFICE TRUST, INC.

2005 EQUITY COMPENSATION PLAN

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	Section	 	 	 	Page
	ARTICLE I DEFINITIONS	 	 	1	 
	1.01.
	 	Acquiring Person	 	 	1	 
	1.02.
	 	Affiliate	 	 	1	 
	1.03.
	 	Aggregate Limit	 	 	1	 
	1.04.
	 	Agreement	 	 	1	 
	1.05.
	 	Award	 	 	1	 
	1.06.
	 	Board	 	 	1	 
	1.07.
	 	Cause	 	 	1	 
	1.08.
	 	Change in Control	 	 	2	 
	1.09.
	 	Code	 	 	3	 
	1.10.
	 	Committee	 	 	3	 
	1.11.
	 	Common Stock	 	 	3	 
	1.12.
	 	Company	 	 	3	 
	1.13.
	 	Continuing Director	 	 	3	 
	1.14.
	 	Control Change Date	 	 	3	 
	1.15.
	 	Conversion Factor	 	 	3	 
	1.16.
	 	Corresponding SAR	 	 	4	 
	1.17.
	 	Deferred Compensation Plan	 	 	4	 
	1.18.
	 	Deferred Stock Benefit	 	 	4	 
	1.19.
	 	Exchange Act	 	 	4	 
	1.20.
	 	Fair Market Value	 	 	4	 
	1.21.
	 	Incentive Award	 	 	5	 
	1.22.
	 	Initial Public Offering	 	 	5	 
	1.23.
	 	Initial Value	 	 	5	 
	1.24.
	 	LTIP Units	 	 	5	 
	1.25.
	 	Midlantic Partnership, LP	 	 	5	 
	1.26.
	 	Named Executive Officer	 	 	5	 
	1.27.
	 	Option	 	 	5	 
	1.28.
	 	OP Unit	 	 	6	 
	1.29.
	 	Participant	 	 	6	 
	1.30.
	 	Partnership Agreement	 	 	6	 
	1.31.
	 	Performance Shares	 	 	6	 
	1.32.
	 	Person	 	 	6	 
	1.33.
	 	Plan	 	 	6	 
	1.34.
	 	Related Entity	 	 	6	 
	1.35.
	 	SAR	 	 	7	 
	1.36.
	 	Stock Award	 	 	7	 

-i-

 

	 	 	 	 	 	 	 
	Section	 	 	 	Page
	ARTICLE II PURPOSES	 	 	8	 
	 
	 	 	 	 	 	 
	ARTICLE III ADMINISTRATION	 	 	9	 
	 
	 	 	 	 	 	 
	ARTICLE IV ELIGIBILITY	 	 	11	 
	 
	 	 	 	 	 	 
	ARTICLE V COMMON STOCK SUBJECT TO PLAN	 	 	12	 
	5.01.
	 	Common Stock Issued	 	 	12	 
	5.02.
	 	Aggregate Limit	 	 	12	 
	5.03.
	 	Individual Limit	 	 	12	 
	5.04.
	 	Reallocation of Shares	 	 	12	 
	5.05.
	 	Deferred Shares	 	 	13	 
	5.06.
	 	LTIP Units	 	 	13	 
	 
	 	 	 	 	 	 
	ARTICLE VI OPTIONS	 	 	14	 
	6.01.
	 	Grant	 	 	14	 
	6.02.
	 	Option Price	 	 	14	 
	6.03.
	 	Maximum Option Period	 	 	14	 
	6.04.
	 	Nontransferability	 	 	14	 
	6.05.
	 	Transferable Options	 	 	14	 
	6.06.
	 	Exercise	 	 	15	 
	6.07.
	 	Payment	 	 	15	 
	6.08.
	 	Employee Status	 	 	15	 
	6.09.
	 	Change in Control	 	 	15	 
	6.10.
	 	Stockholder Rights	 	 	16	 
	 
	 	 	 	 	 	 
	ARTICLE VII SARS	 	 	17	 
	7.01.
	 	Grant	 	 	17	 
	7.02.
	 	Maximum SAR Period	 	 	17	 
	7.03.
	 	Nontransferability	 	 	17	 
	7.04.
	 	Transferable SARs	 	 	17	 
	7.05.
	 	Exercise	 	 	17	 
	7.06.
	 	Change in Control	 	 	18	 
	7.07.
	 	Employee Status	 	 	18	 
	7.08.
	 	Settlement	 	 	19	 
	7.09.
	 	Stockholder Rights	 	 	19	 
	 
	 	 	 	 	 	 
	ARTICLE VIII STOCK AWARDS	 	 	20	 
	8.01.
	 	Award	 	 	20	 
	8.02.
	 	Vesting	 	 	20	 
	8.03.
	 	Performance Objectives	 	 	20	 
	8.04.
	 	Employee Status	 	 	20	 
	8.05.
	 	Change in Control	 	 	21	 
	8.06.
	 	Stockholder Rights	 	 	21	 

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	Section	 	 	 	Page
	ARTICLE IX PERFORMANCE SHARE AWARDS	 	 	22	 
	9.01.
	 	Grant	 	 	22	 
	9.02.
	 	Earning the Award	 	 	22	 
	9.03.
	 	Maximum Performance Share Award Period	 	 	22	 
	9.04.
	 	Payment	 	 	22	 
	9.05.
	 	Stockholder Rights	 	 	23	 
	9.06.
	 	Nontransferability	 	 	23	 
	9.07.
	 	Transferable Performance Shares	 	 	23	 
	9.08.
	 	Employee Status	 	 	23	 
	9.09.
	 	Change in Control	 	 	23	 
	 
	 	 	 	 	 	 
	ARTICLE X INCENTIVE AWARDS	 	 	25	 
	10.01.
	 	Grant	 	 	25	 
	10.02.
	 	Terms and Conditions	 	 	25	 
	10.03.
	 	Maximum Incentive Award Period	 	 	25	 
	10.04.
	 	Nontransferability	 	 	25	 
	10.05.
	 	Transferable Incentive Awards	 	 	26	 
	10.06.
	 	Employee Status	 	 	26	 
	10.07.
	 	Change in Control	 	 	26	 
	10.08.
	 	Stockholder Rights	 	 	26	 
	 
	 	 	 	 	 	 
	ARTICLE XI ADJUSTMENT UPON CHANGE IN COMMON STOCK	 	 	28	 
	 
	 	 	 	 	 	 
	ARTICLE XII COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES	 	 	29	 
	12.01.
	 	Compliance	 	 	29	 
	12.02.
	 	Postponement of Exercise or Payment	 	 	29	 
	12.03.
	 	Forfeiture of Payment	 	 	30	 
	12.04.
	 	Compliance with Section 409A	 	 	30	 
	 
	 	 	 	 	 	 
	ARTICLE XIII GENERAL PROVISIONS	 	 	31	 
	13.01.
	 	Effect on Employment and Service	 	 	31	 
	13.02.
	 	Unfunded Plan	 	 	31	 
	13.03.
	 	Rules of Construction	 	 	31	 
	13.04.
	 	Tax Withholding and Reporting	 	 	31	 
	13.05.
	 	Reservation of Shares	 	 	32	 
	13.06.
	 	Governing Law	 	 	32	 
	13.07.
	 	Other Actions	 	 	32	 
	13.08.
	 	Other Conditions	 	 	32	 
	13.09.
	 	Forfeiture Provisions	 	 	33	 

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	Section	 	 	 	Page
	ARTICLE XIV DEFERRED BENEFITS	 	 	34	 
	 
	 	 	 	 	 	 
	ARTICLE XV AMENDMENT	 	 	35	 
	 
	 	 	 	 	 	 
	ARTICLE XVI DURATION OF PLAN	 	 	36	 
	 
	 	 	 	 	 	 
	ARTICLE XVII EFFECTIVE DATE OF PLAN	 	 	37	 

-iv-

 

ARTICLE I

DEFINITIONS

1.01. Acquiring Person

     Acquiring Person means that a Person, considered alone or as part of a “group” within the
meaning of Section 13(d)(3) of the Exchange Act, is or becomes directly or indirectly the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of securities representing more
than 50 percent of the Company’s then outstanding securities entitled to vote generally in the
election of the Board.

1.02. Affiliate

     Affiliate means any Related Entity after “50 percent” is substituted for “80 percent” in the
regulations under Code Section 414(c) for purposes of defining Related Entity.

1.03. Aggregate Limit

     Aggregate Limit has the meaning given in Section 5.02.

1.04. Agreement

     Agreement means a written agreement (including any amendment or supplement thereto) between
the Company and a Participant specifying the terms and conditions of an Award granted to such
Participant.

1.05. Award

     Award means an Incentive Award, Option, Performance Share, SAR or Stock Award granted under
this Plan.

1.06. Board

     Board means the Board of Directors of the Company.

1.07. Cause

     Cause has the same definition as under any employment or service agreement between the Company
or any Affiliate and the Participant or, if no such employment or service agreement exists or if
such employment or service agreement does not contain any such definition, Cause means that the
Participant (i) has committed fraud or misappropriated, stolen or embezzled funds or property from
the Company or an Affiliate or secured or attempted to secure personally any profit in connection
with any transaction entered into on behalf of the Company or any Affiliate, (ii) has been
convicted of, or entered a plea of guilty or “nolo contendere” to, any criminal act or has
committed any other act of willful misconduct which brings the Participant into disrepute or

-1-

 

is likely to cause material harm to the Company’s (or any Affiliate’s) reputation, business,
customer or supplier relations, financial condition or prospects, (iii) has, notwithstanding not
less than 30 days’ prior written notice, willfully failed to perform (other than by reason of
illness or temporary disability ) his or her material duties or to comply with any lawful
directives of the Board, the Board of Directors of any Affiliate or any supervisory personnel of
the Participant, (iv) has violated or breached any material law or regulation to the material
detriment of the Company or any Affiliate or its or their business, (v) has breached any
confidentiality, non-competition, non-disclosure or non-solicitation agreement which causes or is
reasonably likely to cause material harm to the Company or any Affiliate or (vi) has committed any
act of willful malfeasance or gross negligence in a matter of material importance to the Company or
any Affiliate. For purposes of the Plan, other than where the definition of Cause is determined
under any employment or service agreement between the Company or any Affiliate and the Participant,
in which case such employment or service agreement shall control, in no event shall any termination
of employment or service be deemed for Cause unless the Company’s Chief Executive Officer concludes
that the situation warrants a determination that the Participant’s employment or service terminated
for Cause; in the case of the Chief Executive Officer, any determination that the Chief Executive
Officer’s employment terminated for Cause shall be made by the Board acting without the Chief
Executive Officer.

1.08. Change in Control

     “Change in Control” means (i) a Person is or becomes an Acquiring Person; (ii) a transfer of
all or substantially all of the Company’s total assets on a consolidated basis, as reported in the
Company’s consolidated financial statements filed with the Securities and Exchange Commission,
other than a transfer of all or substantially all of such assets to an entity, at least 50 percent
of the combined voting power of the voting securities of which are owned by Persons in
substantially the same proportion as their ownership of the Company immediately prior to such
transfer; (iii) a merger, consolidation, statutory share exchange or similar event with a Person,
regardless of whether the Company is intended to be the surviving or resulting entity after the
merger, consolidation, statutory share exchange or similar event, other than a transaction that
results in the voting securities of the Company carrying the right to vote in elections of persons
to the Board outstanding immediately prior to the closing of the transaction continuing to
represent (either by remaining outstanding or by being converted into voting securities of the
surviving entity) at least 50 percent of the Company’s voting securities carrying the right to vote
in elections of persons to the Company’s Board, or such securities of such surviving entity,
outstanding immediately after the closing of such transaction; (iv) the Continuing Directors cease
for any reason to constitute a majority of the Board; (v) the liquidation of the Company or the
commencement of actions constituting a plan of liquidation or the closing of a liquidation
agreement; or (vi) the Board adopts a resolution to the effect that, in its judgment, as a
consequence of any one or more transactions or events or series of transactions or events, a change
in control of the Company has effectively occurred. The Board shall be entitled to exercise its
sole and absolute discretion in exercising its judgment and in the adoption of such resolution,
whether or not any such transaction(s) or event(s) might be deemed, individually or

-2-

 

collectively, to satisfy any of the criteria set forth in subparagraphs (i) through (v) above.
Notwithstanding the foregoing, no event resulting from the Initial Public Offering shall
constitute a Change in Control.

1.09. Code

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

1.10. Committee

     Committee means the Compensation Committee of the Board if the Board appoints one to
administer the Plan, or the Board itself if no such Compensation Committee is appointed. If such
Compensation Committee is appointed, if and to the extent deemed necessary by the Board, such
Compensation Committee shall consist of two or more directors, all of whom are “non-employee
directors” within the meaning of Rule 16b-3 under the Exchange Act and, after the transition period
prescribed by the regulations under Code Section 162(m), “outside directors” within the meaning of
Code Section 162(m).

1.11. Common Stock

     Common Stock means the common stock, par value $0.01 per share, of the Company.

1.12. Company

     Company means Midlantic Office Trust, Inc., a Maryland corporation or any successor thereto.

1.13. Continuing Director

     Continuing Director means any member of the Board, while a member of the Board and (i) who was
a member of the Board on the closing date of the Company’s Initial Public Offering or (ii) whose
nomination for or election to the Board was recommended or approved by a majority of the Continuing
Directors.

1.14. Control Change Date

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

1.15. Conversion Factor

     Conversion Factor has the meaning given in the Partnership Agreement.

-3-

 

1.16. Corresponding SAR

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

1.17. Deferred Compensation Plan

     Deferred Compensation Plan means the Midlantic Office Trust, Inc. Deferred Compensation Plan
that the Company established to constitute a deferred compensation plan for a select group of
management and highly compensated employees of the Company and its Affiliates, pursuant to which
eligible individuals may elect to defer the receipt of specified benefits or to which specified
benefits otherwise deferred will be credited (whether or not such benefits are deferred in
connection with Awards granted under this Plan).

1.18. Deferred Stock Benefit

     Deferred Stock Benefit means an Award under the Plan that a Participant elected to defer under
the Deferred Compensation Plan that must be distributed or paid, if at all, in shares of Common
Stock. A Deferred Stock Benefit will be paid pursuant to the terms of the Deferred Compensation
Plan and at such time or times as are set forth therein (which may be more than 10 years from the
date of grant of the Award in connection with which the receipt of Common Stock or cash or other
consideration was deferred).

1.19. Exchange Act

     Exchange Act means the Securities Exchange Act of 1934, as amended.

1.20. Fair Market Value

     Fair Market Value of a share of Common Stock means, on any given date, the fair market value
of a share of Common Stock as the Committee in its discretion shall determine; provided, however,
that the Committee shall determine Fair Market Value without regard to any restriction other than a
restriction which, by its terms, will never lapse and, if the shares of Common Stock are traded on
any national stock exchange or quotation system, the Fair Market Value of a share of Common Stock
shall be the closing price of a share of Common Stock as reported on such stock exchange or
quotation system on such date, or if the shares of Common Stock are not traded on such stock
exchange or quotation system on such date, then on the next preceding day that the shares of Common
Stock were traded on such stock exchange or quotation system, all as reported by such source as the
Committee shall select. The Fair Market Value that the Committee determines shall be final,
binding and conclusive on the Company, any Affiliate and each Participant.

-4-

 

1.21. Incentive Award

     Incentive Award means an award stated with reference to a specified dollar amount which,
subject to such terms and conditions as may be prescribed by the Committee, entitles the
Participant to receive shares of Common Stock from the Company or an Affiliate.

1.22. Initial Public Offering

     Initial Public Offering
means the initial public offering of the Company’s securities as
contemplated by the Company’s Registration Statement on Form S-II,
as amended (Registration No. 333-124933) initially filed with the Securities and Exchange Commission (the “Commission”)
on May 13, 2005.

1.23. Initial Value

     Initial Value means, with respect to a Corresponding SAR, the option price per share of the
related Option and, with respect to an SAR granted independently of an Option, the Fair Market
Value of one share of Common Stock on the date of grant.

1.24.LTIP Units

     LTIP Units have the meaning given in the Partnership Agreement.

1.25. Management LTIP Vesting Agreement

     Management LTIP Vesting Agreement
means the Management LTIP Vesting Agreement by and between
Midlantic Partnership, LP and holders of LTIP Units who are executive officers of the Company upon the completion of the
Initial Public Offering.

1.25.  Midlantic Partnership, LP

     Midlantic Partnership, LP means Midlantic Partnership, LP, a limited partnership formed under
the laws of the State of Delaware, by and among Midlantic Office Properties, LLC, a Delaware
limited liability company and Midlantic Office Trust, Inc., a Maryland corporation, as well as the
other limited partners who from time to time may execute the Partnership Agreement or counterparts
thereof as limited partners.

1.26. Named Executive Officer

     Named Executive Officer means a Participant who, as of the last day of a taxable year, is the
Chief Executive Officer of the Company (or is acting in such capacity) or one of the four highest
compensated officers of the Company (other than the Chief Executive Officer) or is otherwise one of
the group of “covered employees,” as defined in the Treasury Regulations promulgated under Code
Section 162(m).

1.27. Option

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

-5-

 

1.28. OP Unit

     OP Unit has the meaning given in the Partnership Agreement.

1.29. Participant

     Participant means an employee of the Company or an Affiliate, a non-employee member of the
Board, or a person or entity that provides services to the Company or an Affiliate and who
satisfies the requirements of Article IV and is selected by the Committee to receive an Award.

1.30. Partnership Agreement

     Partnership Agreement means the
Amended and Restated Agreement of Limited Partnership of
Midlantic Partnership, LP and any amendments thereto.

1.31. Performance Shares

     Performance Shares means an award, in the amount determined by the Committee, stated with
reference to a specified number of shares of Common Stock, that in accordance with the terms of an
Agreement entitles the holder to receive a cash payment or shares of Common Stock or a combination
thereof.

1.32. Person

     “Person” means any human being, firm, corporation, partnership, or other entity. “Person”
also includes any human being, firm, corporation, partnership, or other entity as defined in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act. The term “Person” does not include the Company
or any Related Entity, and the term Person does not include any employee-benefit plan maintained by
the Company or any Related Entity, or any person or entity organized, appointed, or established by
the Company or any Related Entity for or pursuant to the terms of any such employee-benefit plan,
unless the Board determines that such an employee-benefit plan or such person or entity is a
“Person”.

1.33. Plan

     Plan means the Midlantic Office Trust, Inc. 2005 Equity Compensation Plan, in its current form
and as hereafter amended.

1.34. Related Entity

     Related Entity means any entity that is part of a controlled group of corporations or is under
common control with the Company within the meaning of Sections 1563(a), 414(b) or 414(c) of the
Code.

-6-

 

1.35. SAR

     SAR means a stock appreciation right that in accordance with the terms of an Agreement
entitles the holder to receive a number of shares of Common Stock, or in the discretion of the
Committee, a cash award, or a combination of shares of Common Stock and cash, based on the increase
in the Fair Market Value of the shares underlying the stock appreciation right during a stated
period specified by the Committee. References to “SARs” include both Corresponding SARs and SARs
granted independently of Options, unless the context requires otherwise.

1.36. Stock Award

     Stock Award means shares of Common Stock granted to a Participant under Article VIII.

-7-

 

ARTICLE II

PURPOSES

     The Plan is intended to assist the Company and its Affiliates in recruiting and retaining
individuals and other service providers with ability and initiative by enabling such persons or
entities to participate in the future success of the Company and its Affiliates and to associate
their interests with those of the Company and its stockholders. The Plan is intended to permit the
grant of Options not qualifying under Section 422 of the Code, and the grant of SARs, Stock Awards,
Performance Shares and Incentive Awards in accordance with the Plan and procedures that may be
established by the Committee. The proceeds received by the Company from the sale of shares of
Common Stock pursuant to this Plan shall be used for general corporate purposes.

-8-

 

ARTICLE III

ADMINISTRATION

     The Plan shall be administered by the Committee. The Committee shall have authority to grant
Awards upon such terms (not inconsistent with the provisions of this Plan) as the Committee may
consider appropriate. Such terms may include conditions (in addition to those contained in this
Plan) on the exercisability of all or any part of an Option or SAR, the transferability or
forfeitability of a Stock Award, or the grant or settlement of Performance Shares or an Incentive
Award. Notwithstanding any such conditions, the Committee may, in its discretion, accelerate the
time at which any Option or SAR may be exercised, or the time at which a Stock Award may become
transferable or nonforfeitable or the time at which an Incentive Award or award of Performance
Shares may be settled. In addition, the Committee shall have complete authority to interpret all
provisions of this Plan; to prescribe the form of Agreements; to adopt, amend, and rescind rules
and regulations pertaining to the administration of the Plan; and to make all other determinations
necessary or advisable for the administration of this Plan. The express grant in the Plan of any
specific power to the Committee shall not be construed as limiting any power or authority of the
Committee. Any decision made, or action taken, by the Committee in connection with the
administration of this Plan shall be final and conclusive. The members of the Committee shall not
be liable for any act done in good faith with respect to this Plan or any Agreement or Award. All
expenses of administering this Plan shall be borne by the Company.

     To the extent applicable law so permits, the Committee, in its discretion, may delegate to one
or more officers of the Company all or part of the Committee’s authority and duties with respect to
Awards to be granted to individuals who are not subject to the reporting and other provisions of
Section 16 of the Exchange Act and, after the transition period prescribed by the regulations under
Code Section 162(m), who are not Named Executive Officers. The Committee may revoke or amend the
terms of a delegation at any time but such action shall not invalidate any prior actions of the
Committee’s delegate or delegates that were consistent with the terms of the Plan and the
Committee’s prior delegation. If and to the extent deemed necessary by the Board, all Awards
granted to any individual who is subject to the reporting and other provisions of Section 16 of the
Exchange Act shall be made by a Committee comprised solely of two or more directors, all of whom
are “non-employee directors” within the meaning of Rule 16b-3 under the Exchange Act, and, after
the transition period prescribed by the regulations under Code Section 162(m), all Awards granted
to any individual who is a Named Executive Officer shall be made by a Committee comprised solely of
two or more directors, all of whom are “outside directors” within the meaning of Code Section
162(m).

     The Company shall indemnify and hold harmless each person who is or shall have been a member
of the Committee acting as administrator of the Plan, or any delegate of such, against and from any
cost, liability, loss or expense that may be imposed upon or reasonably incurred by such person in
connection with or resulting from any action, claim, suit, or proceeding to which such person may
be a party or in which such person may be involved by reason of any action taken or not taken under
the Plan and against and from any and all amounts paid by such person

-9-

 

in settlement thereof, with the Company’s approval, or paid by such person in satisfaction of
any judgment in any such action, suit, or proceeding against such person, 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. Notwithstanding the foregoing, the
Company shall not indemnify and hold harmless any such person if (i) applicable law or the
Company’s Charter or Bylaws prohibit such indemnification or (ii) such person did not act in good
faith and in a manner that such person believed to be consistent with the Plan or such person’s
conduct constituted gross negligence or willful misconduct. The foregoing right of indemnification
shall not be exclusive of any other rights of indemnification to which such persons may be entitled
under the Company’s Charter or Bylaws, as a matter of law or otherwise, or under any other power
that the Company may have to indemnify such person or hold him or her harmless. The provisions of
the foregoing indemnity shall survive indefinitely the term of this Plan.

-10-

 

ARTICLE IV

ELIGIBILITY

     Any employee of the Company or an Affiliate (including an entity that becomes an Affiliate
after the adoption of this Plan) and any non-employee member of the Board is eligible to
participate in this Plan. In addition, any other person or entity that provides services to the
Company or an Affiliate is eligible to participate in this Plan if the Board, in its sole
discretion, determines that it is in the best interest of the Company. For purposes of this Plan,
a person shall be treated as an employee or service provider of the Company or an Affiliate to the
extent such person or entity is an employee or service provider of a disregarded entity under Code
Section 7701 that is treated as part of the Company or an Affiliate.

-11-

 

ARTICLE V

COMMON STOCK SUBJECT TO PLAN

5.01. Common Stock Issued

     Upon the issuance of shares of Common Stock pursuant to an Award, the Company may deliver to
the Participant shares of Common Stock or treasury shares from its authorized but unissued Common
Stock. On the distribution or payment of Deferred Stock Benefits, the Company may issue shares of
Common Stock or treasury shares from its authorized but unissued Common Stock.

5.02. Aggregate Limit

     Subject to Sections 5.04, 5.05 and 5.06, the maximum aggregate number of shares of Common
Stock that may be issued under this Plan (i) pursuant to Awards granted under the Plan, (ii) upon
distribution or payment of Deferred Stock Benefits and (iii) upon the conversion of LTIP Units (after
conversion of LTIP Units into OP Units) (the “Aggregate Limit”) is the lesser of 615,825, or 3.5%
percent of the number of shares of Common Stock outstanding upon completion of the Company’s
Initial Public Offering, taking into account any exercise by the underwriters in the Initial Public
Offering of their over-allotment option (an “IPO Over-Allotment Adjustment”). In addition, the
Aggregate Limit shall be subject to adjustment as provided in Article XI.

5.03. Individual Limit

     In any calendar year, no Participant may receive Options, SARs, Stock Awards, Performance
Shares or any combination thereof that relate to more than 150,000 shares. This Section 5.03
applies only with respect to Awards that are made after the transition period prescribed by the
regulations under Code Section 162(m).

5.04. Reallocation of Shares

     If an Option is terminated, in whole or in part, for any reason other than its exercise or the
exercise of a Corresponding SAR that is settled with shares of Common Stock, the number of shares
of Common Stock allocated to the Option or portion thereof shall be available again for use under
the Plan. If an SAR is terminated, in whole or in part, for any reason other than its exercise
that is settled with shares of Common Stock or the exercise of a related Option, the number of
shares of Common Stock allocated to the SAR or portion thereof shall be available again for use
under the Plan. If an award of Performance Shares is terminated, in whole or in part, for any
reason other than its settlement with shares of Common Stock, the number of shares allocated to the
Performance Shares or portion thereof shall be available again for use under the Plan. If a Stock
Award is forfeited, in whole or in part, for any reason, the number of shares of Common Stock
allocated to the Stock Award or portion thereof shall be available again for use under the Plan.

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5.05. Deferred Shares

     Shares of Common Stock issued in settlement of Deferred Stock Benefits and shares of Common
Stock subject to Awards with respect to which there is a Deferred Stock Benefit shall be counted
against the Aggregate Limit unless and until such shares of Common Stock shall not be issued
because of the surrender, lapse, expiration, forfeiture or termination of any rights in such shares
of Common Stock or the Deferred Stock Benefits; provided, however, that shares of Common Stock
shall be counted toward the Aggregate Limit only once (so that in the case of shares of Common
Stock subject to Awards that are cancelled in connection with Deferred Stock Benefits, such shares
of Common Stock shall only be counted once). If a Deferred Stock Benefit is forfeited, in whole or
in part, the number of shares of Common Stock allocated to such Deferred Stock Benefit or portion
thereof shall be available again for use under the Plan. However, shares of Common Stock issued in
settlement of or representing Deferred Stock Benefits that constitute earnings on deferred shares
of Common Stock shall be counted separately towards the Aggregate Limit.

5.06. LTIP Units

     Except
as provided in this Section 5.06, the Aggregate Limit shall be reduced by the number of
shares of Common Stock into which outstanding LTIP Units or OP Units resulting from the conversion of
LTIP Units could be converted (assuming all appropriate conditions are met), based on the then-current
Conversion Factor and assuming the outstanding LTIP Units are first converted into OP Units. In the
event the Conversion Factor is later adjusted pursuant to the Partnership Agreement, the number of
shares of Common Stock available at that time under the Aggregate Limit shall be increased or
decreased based on the change in the number of shares of Common Stock into which the outstanding
LTIP Units or OP Units resulting from the conversion of LTIP Units could be converted (assuming all
appropriate conditions are met), based on the then-current Conversion Factor and assuming the
outstanding LTIPS are first converted into OP Units.

     If any of
the outstanding LTIP Units are forfeited pursuant to the terms of the Partnership
Agreement the Management LTIP Vesting Agreement, or otherwise, the number of shares of Common Stock into which such LTIP Units could have been converted
(assuming all appropriate conditions are met), shall be available again for use under the Plan. In
the event that outstanding LTIP Units are converted into OP Units and such OP Units are redeemed in
return for cash and not for Common Stock, then the number of shares of Common Stock into which such
OP Units could have been converted shall not be available again for use under the Plan.

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ARTICLE VI

OPTIONS

6.01. Grant

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

6.02. Option Price

     The price per share of Common Stock purchased on the exercise of an Option shall be determined
by the Committee on the date of grant, but shall not be less than the Fair Market Value of a share
of Common Stock on the date the Option is granted.

6.03. Maximum Option Period

     The maximum period in which an Option may be exercised shall be determined by the Committee on
the date of grant, except that no Option shall be exercisable after the expiration of ten years
from the date such Option was granted.

6.04. Nontransferability

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

6.05. Transferable Options

     Section 6.04 to the contrary notwithstanding, if the Agreement so provides, an Option may be
transferred by a Participant to the Participant’s children, grandchildren, spouse, one or more
trusts for the benefit of such family members or a partnership in which such family members are the
only partners, on such terms and conditions as appropriate so that such transferees are included in
the class of transferees who may rely on a Form S-8 Registration Statement under the Securities Act
of 1933 to sell shares issuable upon exercise of Options granted under the Plan. The holder of an
Option transferred pursuant to this Section shall be bound by the same terms and conditions that
governed the Option during the period that it was held by the Participant; provided, however, that
such transferee may not transfer the Option except by will or the laws of descent and distribution.
In the event of any transfer of an Option

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(by the Participant or his transferee), the Option and any Corresponding SAR that relates to
such Option must be transferred to the same person or persons or entity or entities.

6.06. Exercise

     Subject to the provisions of this Plan and the applicable Agreement, an Option may be
exercised in whole at any time or in part from time to time at such times and in compliance with
such requirements as the Committee shall determine. An Option granted under this Plan may be
exercised with respect to any number of whole shares less than the full number for which the Option
could be exercised. A partial exercise of an Option shall not affect the right to exercise the
Option from time to time in accordance with this Plan and the applicable Agreement with respect to
the remaining shares subject to the Option. The exercise of an Option shall result in the
termination of any Corresponding SAR to the extent of the number of shares with respect to which
the Option is exercised.

6.07. Payment

     Subject to rules established by the Committee and unless otherwise provided in an Agreement,
payment of all or part of the Option price may be made (i) in cash or certified check, (ii) by
tendering shares of Common Stock (which, if acquired from the Company, have been held by the
Participant for at least six months) with an aggregate Fair Market Value on the date of exercise
equal to the Option price, (iii) by a broker-assisted cashless exercise in accordance with
procedures established by the Federal Reserve Board or (iv) such other method approved by the
Committee. If shares of Common Stock are used to pay all or part of the Option price, the sum of
the cash and cash equivalent and the Fair Market Value (determined as of the day preceding the date
of exercise) of the shares surrendered must not be less than the Option price of the shares for
which the Option is being exercised.

6.08. Employee Status

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

6.09. Change in Control

     Notwithstanding any provision of any Agreement, in the event of or in anticipation of a Change
in Control, the Committee in its discretion (i) may declare that some or all outstanding Options
previously granted under the Plan, whether or not then exercisable, shall terminate as of a date
before or on the Control Change Date without any payment to the holder of the Option, provided the
Committee gives prior written notice to the Participants of such termination and gives such
Participants the right to exercise their outstanding Options before such date to the

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extent then exercisable or (ii) may terminate before or on the Control Change Date some or all
outstanding Options previously granted under the Plan, whether or not then exercisable, in
consideration of payment to the holder of the Option, with respect to each share of Common Stock
for which the Option is then exercisable, of the excess, if any, of the Fair Market Value on such
date of the Common Stock subject to the exercisable portion of the Option over the Option price.
The payment described in (ii) above may be made in any manner the Committee determines, including
in cash, stock or other property. The Committee may take the actions described in (i) or (ii)
above with respect to Options that are not then exercisable whether or not the Participant will
receive any payment therefor. The Committee in its discretion may take the actions described in
(i) or (ii) above contingent on consummation of the Change in Control and with respect to some or
all outstanding Options, whether or not then exercisable, or on an Option-by-Option basis, which
actions need not be uniform with respect to all outstanding Options. However, the Options shall
not be terminated to the extent that written provision is made for their continuance, assumption or
substitution by the Company or a successor employer or its parent or subsidiary in connection with
the Change in Control. The Committee may provide in an applicable Agreement that a Participant’s
outstanding Options shall be fully exercisable on and after a Control Change Date or immediately
before the date the Options will be terminated in connection with the Change in Control, as
described above.

6.10. Stockholder Rights

     No Participant shall have any rights as a stockholder with respect to shares subject to his
Option until the date of exercise of such Option.

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ARTICLE VII

SARS

7.01. Grant

     In accordance with the provisions of Article IV, the Committee will designate each individual
or entity to whom SARs are to be granted and will specify the number of shares of Common Stock
covered by such grant. For purposes of the foregoing limit, an Option and Corresponding SAR shall
be treated as a single Award.

7.02. Maximum SAR Period

     The term of each SAR shall be determined by the Committee on the date of grant, except that no
SAR shall have a term of more than ten years from the date such SAR was granted.

7.03. Nontransferability

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

7.04. Transferable SARs

     Section 7.03 to the contrary notwithstanding, if the Agreement so provides, an SAR may be
transferred by a Participant to the Participant’s children, grandchildren, spouse, one or more
trusts for the benefit of such family members or a partnership in which such family members are the
only partners, on such terms and conditions as appropriate so that such transferees are included in
the class of transferees who may rely on a Form S-8 Registration Statement under the Securities Act
of 1933 to sell shares received pursuant to Awards granted under the Plan. The holder of an SAR
transferred pursuant to this Section shall be bound by the same terms and conditions that governed
the SAR during the period that it was held by the Participant; provided, however, that such
transferee may not transfer the SAR except by will or the laws of descent and distribution. In the
event of any transfer of a Corresponding SAR (by the Participant or his transferee), the
Corresponding SAR and the related Option must be transferred to the same person or person or entity
or entities.

7.05. Exercise

     Subject to the provisions of this Plan and the applicable Agreement, an SAR may be exercised
in whole at any time or in part from time to time at such times and in compliance with

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such requirements as the Committee shall determine; provided, however, that an SAR may be
exercised (i) only to the extent that the related Option is exercisable and (ii) only when the Fair
Market Value of the Common Stock that is subject to the exercise exceeds the Initial Value of the
SAR. An SAR granted under this Plan may be exercised with respect to any number of whole shares
less than the full number for which the SAR could be exercised. A partial exercise of an SAR shall
not affect the right to exercise the SAR from time to time in accordance with this Plan and the
applicable Agreement with respect to the remaining shares subject to the SAR. The exercise of a
Corresponding SAR shall result in the termination of the related Option to the extent of the number
of shares with respect to which the SAR is exercised.

7.06. Change in Control

     Notwithstanding any provision of any Agreement, in the event of or in anticipation of a Change
in Control, the Committee in its discretion (i) may declare that some or all outstanding SARs
previously granted under the Plan, whether or not then exercisable, shall terminate as of a date
before or on the Control Change Date without any payment to the holder of the SAR, provided the
Committee gives prior written notice to the Participants of such termination and gives such
Participants the right to exercise their outstanding SARs at least 15 days before such termination
date to the extent then exercisable or (ii) may terminate before or on the Control Change Date some
or all outstanding SARs previously granted under the Plan, whether or not then exercisable, in
consideration of payment to the holder of the SAR, with respect to each share of Common Stock for
which the SAR is then exercisable, of the excess, if any, of the Fair Market Value of such Common
Stock on such date over the Initial Value of the SAR. The payment described in (ii) above may be
made in any manner the Committee determines, including in cash, stock or other property. The
Committee may take the actions described in (i) or (ii) above with respect to SARs that are not
then exercisable whether or not the Participant will receive any payment therefor. The Committee
in its discretion may take the actions described in (i) or (ii) above contingent on consummation of
the Change in Control and with respect to some or all outstanding SARs, whether or not then
exercisable, or on an SAR-by-SAR basis, which actions need not be uniform with respect to all
outstanding SARs. Notwithstanding the foregoing, no payment shall be made with respect to a
Corresponding SAR to the extent the Committee made a payment with respect to the Option that
relates to the Corresponding SAR. No SARs shall be terminated to the extent that written provision
is made for their assumption, continuance or substitution by the Company or a successor employer or
its parent or subsidiary in connection with the Change in Control. The Committee may provide in an
applicable Agreement that a Participant’s outstanding SARs shall be fully exercisable on and after
a Control Change Date or immediately before the date the SARs will be terminated in connection with
the Change in Control, as described above.

7.07. Employee Status

     If the terms of any SAR provide that it may be exercised only during employment or continued
service or within a specified period of time after termination of employment or continued service,
the Committee may decide to what extent leaves of absence for governmental

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or military service, illness, temporary disability or other reasons shall not be deemed
interruptions of continuous employment or service.

7.08. Settlement

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

7.09. Stockholder Rights

     No Participant shall, as a result of receiving an SAR, have any rights as a stockholder of the
Company or any Affiliate until the date that the SAR is exercised and then only to the extent that
the SAR is settled by the issuance of Common Stock.

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ARTICLE VIII

STOCK AWARDS

8.01. Award

     In accordance with the provisions of Article IV, the Committee will designate each individual
or entity to whom a Stock Award is to be granted and will specify the number of shares of Common
Stock covered by such grant.

8.02. Vesting

     The Committee, on the date of grant, may prescribe that a Participant’s rights in the Stock
Award shall be forfeitable and nontransferable for a period of time and subject to such conditions
as may be set forth in the Agreement. By way of example and not of limitation, the Committee may
prescribe that a Participant’s rights in a Stock Award shall be forfeitable and nontransferable
subject to (a) the attainment of objectives stated with reference to the Company’s, an Affiliate’s
or a business unit’s attainment of objectives stated with respect to performance criteria listed in
Section 8.03, (b) the Participant’s completion of a specified period of employment or service with
the Company or an Affiliate, (c) the Participant’s death, disability or retirement or (d)
satisfaction of a combination of any of the foregoing factors. To the extent the Participant’s
rights in a Stock Award are forfeitable and nontransferable for a period of time, the Committee on
the date of grant shall determine the maximum period over which the rights may become
nonforfeitable and transferable, except that such period shall not exceed ten years.

8.03. Performance Objectives

     In accordance with Section 8.02, the Committee may prescribe in an applicable Agreement that
Stock Awards will become nonforfeitable and transferable based on objectives stated with respect to
the Company’s, an Affiliate’s or a business unit’s (a) total stockholder return, (b) total
stockholder return as compared to total return (on a comparable basis) of a publicly available
index, (c) net income, (d) pretax earnings, (e) funds from operations, (f) earnings before interest
expense, taxes, depreciation and amortization, (g) operating margin, (h) earnings per share, (i)
return on equity, capital, assets or investment, (j) operating earnings, (k) working capital, (l)
ratio of debt to stockholders equity and (m) revenue. If the Committee, on the date of grant,
prescribes that a Stock Award shall become nonforfeitable and transferable only upon the attainment
of any of the above performance objectives, the shares of Common Stock subject to such Stock Award
shall become nonforfeitable and transferable only to the extent that the Committee certifies in
writing that such objectives have been achieved.

8.04. Employee Status

     In the event that the terms of any Stock Award provide that shares may become nonforfeitable
and transferable thereunder only after completion of a specified period of employment or continuous
service, the Committee may decide in each case to what extent leaves

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of absence for governmental or military service, illness, temporary disability, or other
reasons shall not be deemed interruptions of continuous employment or service.

8.05. Change in Control

     Notwithstanding any provision of any Agreement, in the event of or in anticipation of a Change
in Control, the Committee in its discretion may terminate before or on the Control Change Date
outstanding Stock Awards previously granted under the Plan that are not then nonforfeitable and
transferable without any payment to the holder of the Stock Awards. The Committee in its
discretion may take the action described in this Section 8.05 contingent on the consummation of the
Change in Control and with respect to some or all outstanding Stock Awards or on a Stock
Award-by-Stock Award basis, which actions need not be uniform with respect to all outstanding Stock
Awards. The preceding sentences to the contrary notwithstanding, the Stock Awards shall not be
terminated to the extent that written provision is made for their assumption, continuance or
substitution by the Company or a successor employer or its parent or subsidiary in connection with
the Change in Control. The Committee may provide in an applicable Agreement that a Participant’s
outstanding Stock Awards shall be nonforfeitable and transferable on and after a Control Change
Date or immediately before the date the Stock Awards would otherwise be terminated in connection
with the Change in Control, as described above.

8.06. Stockholder Rights

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

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ARTICLE IX

PERFORMANCE SHARE AWARDS

9.01. Grant

     In accordance with the provisions of Article IV, the Committee will designate each individual
or entity to whom a grant of Performance Shares is to be made and will specify the number of shares
covered by such grant.

9.02. Earning the Award

     The Committee, on the date of grant of the Performance Shares, shall prescribe that the
Performance Shares will be earned and become payable subject to such conditions as are set forth in
the Agreement. By way of example and not of limitation, the Committee may prescribe that the
Performance Shares will be earned and become payable upon (a) the satisfaction of performance
objectives as described below, (b) the Participant’s completion of a specified period of employment
or service with the Company or an Affiliate, (c) the Participant’s death, disability or retirement
or (d) satisfaction of a combination of any of the foregoing factors. The performance objectives
may be stated with respect to the Company’s, an Affiliate’s or a business unit’s (a) total
stockholder return, (b) total Stockholder return as compared to total return (on a comparable
basis) of a publicly available index, (c) net income, (d) pretax earnings, (e) funds from
operations, (f) earnings before interest expense, taxes, depreciation and amortization, (g)
operating margin, (h) earnings per share, (i) return on equity, capital, assets or investment, (j)
operating earnings, (k) working capital, (l) ratio of debt to stockholders equity and (m) revenue.
If the Committee, on the date of grant, prescribes that Performance Shares will be earned and
payable only upon the attainment of such performance objectives, no Performance Shares will be
considered earned and no payments will be made with respect to such Performance Shares unless, and
then only to the extent that, the Committee certifies in writing that such objectives have been
achieved.

9.03. Maximum Performance Share Award Period

     The Committee, on the date of grant, shall determine the maximum period over which Performance
Share Awards may be earned, except that such period shall not exceed ten years.

9.04. Payment

     In the discretion of the Committee, the amount payable when an award of Performance Shares is
earned may be settled in cash, by the issuance of shares of Common Stock, or a combination thereof.
A fractional share of Common Stock shall not be deliverable when an award of Performance Shares is
earned, but a cash payment will be made in lieu thereof.

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9.05. Stockholder Rights

     No Participant shall, as a result of receiving a grant of Performance Shares, have any rights
as a stockholder until and then only to the extent that the Performance Shares are earned and
settled in shares of Common Stock. After Performance Shares are earned and settled in shares, a
Participant will have all the rights of a stockholder with respect to such shares including the
right to receive dividends and vote the shares.

9.06. Nontransferability

     Except as provided in Section 9.07, Performance Shares granted under this Plan shall be
nontransferable except by will or by the laws of descent and distribution. No right or interest of
a Participant in any Performance Shares shall be liable for, or subject to, any lien, obligation,
or liability of such Participant.

9.07. Transferable Performance Shares

     Section 9.06 to the contrary notwithstanding, if the Agreement so provides, an award of
Performance Shares may be transferred by a Participant to the Participant’s children,
grandchildren, spouse, one or more trusts for the benefit of such family members or a partnership
in which such family members are the only partners, on such terms and conditions as appropriate so
that such transferees are included in the class of transferees who may rely on a Form S-8
Registration Statement under the Securities Act of 1933 to sell shares received pursuant to Awards
granted under the Plan. The holder of Performance Shares transferred pursuant to this Section
shall be bound by the same terms and conditions that governed the Performance Shares during the
period that they were held by the Participant; provided, however that such transferee may not
transfer Performance Shares except by will or the laws of descent and distribution.

9.08. Employee Status

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

9.09. Change in Control

     Notwithstanding any provision of any Agreement, in the event of or in anticipation of a Change
in Control, the Committee in its discretion may terminate before or on the Control Change Date some
or all outstanding Performance Shares previously granted under the Plan that are not then earned
and payable without any payment to the holder of the Performance Shares. The Committee in its
discretion may take the action described in this Section 9.09 contingent on consummation of the
Change in Control and with respect to some or all outstanding Performance

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Shares or on a Performance Share-by-Performance Share basis, which actions need not be uniform
with respect to all outstanding Performance Shares. The Performance Shares shall not be terminated
to the extent that written provision is made for their assumption, continuance or substitution by
the Company or a successor employer or its parent or subsidiary in connection with the Change in
Control. The Committee may provide in an applicable Agreement that a Participant’s outstanding
Performance Shares shall be deemed earned (and any shares of Common Stock to be paid in settlement
of such Performance Shares shall be nonforfeitable and transferable) as of a Control Change Date or
immediately before the date the Performance Shares would otherwise be terminated in connection with
the Change in Control, as described above.

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ARTICLE X

INCENTIVE AWARDS

10.01. Grant

     The Committee shall designate Participants to whom Incentive Awards are to be granted. All
Incentive Awards shall be finally determined exclusively by the Committee under the procedures
established by the Committee; provided, however, that no Participant may receive an Incentive Award
payment in any calendar year that exceeds $2,000,000.

10.02. Terms and Conditions

     The Committee, on the date of grant of an Incentive Award, shall specify in the applicable
Agreement the terms and conditions which govern the grant. By way of example and not of
limitation, the Committee may prescribe that the Incentive Award shall be earned and payable upon
(a) the satisfaction of performance objectives as described below, (b) the Participant’s completion
of a specified period of employment or service with the Company or an Affiliate, (c) the
Participant’s death, disability or retirement or (d) satisfaction of a combination of any of the
foregoing factors. The performance objectives may be stated with respect to the Company’s, an
Affiliate’s or a business unit’s (a) total stockholder return, (b) total Stockholder return as
compared to total return (on a comparable basis) of a publicly available index, (c) net income, (d)
pretax earnings, (e) funds from operations, (f) earnings before interest expense, taxes,
depreciation and amortization, (g) operating margin, (h) earnings per share, (i) return on equity,
capital, assets or investment, (j) operating earnings, (k) working capital, (l) ratio of debt to
stockholders equity and (m) revenue. If the Committee, on the date of grant, prescribes that the
Incentive Awards will be earned and payable only upon the attainment of such performance
objectives, no Incentive Awards will be considered earned and no payments will be made with respect
to such Incentive Awards unless, and then only to the extent that, the Committee certifies in
writing that such objectives have been achieved.

10.03. Maximum Incentive Award Period

     The Committee, at the time an Incentive Award is made, shall determine the maximum period over
which the Incentive Award may be earned, except that such period shall not exceed ten years.

10.04. Nontransferability

     Except as provided in Section 10.05, Incentive Awards granted under this Plan shall be
nontransferable except by will or by the laws of descent and distribution. No right or interest of
a Participant in an Incentive Award shall be liable for, or subject to, any lien, obligation, or
liability of such Participant.

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10.05. Transferable Incentive Awards

     Section 10.04 to the contrary notwithstanding, if so provided in an Agreement, an Incentive
Award may be transferred by a Participant to the Participant’s children, grandchildren, spouse, one
or more trusts for the benefit of such family members or to a partnership in which such family
members are the only partners, on such terms and conditions as appropriate so that such transferees
are included in the class of transferees who may rely on a Form S-8 Registration Statement under
the Securities Act of 1933 to sell shares received pursuant to Awards granted under the Plan. The
holder of an Incentive Award transferred pursuant to this Section shall be bound by the same terms
and conditions that governed the Incentive Award during the period that it was held by the
Participant; provided, however, that such transferee may not transfer the Incentive Award except by
will or the laws of descent and distribution.

10.06. Employee Status

     If the terms of an Incentive Award provide that a payment will be made thereunder only if the
Participant completes a stated period of employment or continuous service, the Committee may decide
to what extent leaves of absence for governmental or military service, illness, temporary
disability or other reasons shall not be deemed interruptions of continuous employment or service.

10.07. Change in Control

     Notwithstanding any provision of any Agreement, in the event of or in anticipation of a Change
in Control, the Committee in its discretion may terminate before or on the Control Change Date some
or all outstanding Incentive Awards previously granted under the Plan that are not then earned and
payable without any payment to the holder of the Incentive Award. The Committee in its discretion
may take the action described in this Section contingent on consummation of the Change in Control
and with respect to some or all outstanding Incentive Awards or on an Incentive Award-by-Incentive
Award basis, which actions need not be uniform with respect to all outstanding Incentive Awards.
The Incentive Awards shall not be terminated to the extent that written provision is made for their
assumption, continuance or substitution by the Company or a successor employer or its parent or
subsidiary in connection with the Change in Control. The Committee may provide in an applicable
Agreement that a Participant’s outstanding Incentive Awards shall be deemed earned (and any shares
of Common Stock to be paid in settlement of such Incentive Awards shall be nonforfeitable and
transferable) as of a Control Change Date or immediately before the date the Incentive Awards would
otherwise be terminated in connection with the Change in Control, as described above.

10.08. Stockholder Rights

     No Participant shall, as a result of receiving an Incentive Award, have any rights as a
stockholder of the Company or any Affiliate on account of such Incentive Award, unless and until
that the Incentive Award is earned and shares of Common Stock paid in settlement thereof.

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After an Incentive Award is earned and settled in shares, a Participant will have all the
rights of a stockholder with respect to such shares, including the right to receive dividends and
vote the shares.

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ARTICLE XI

ADJUSTMENT UPON CHANGE IN COMMON STOCK

     The Aggregate Limit and the per individual limitations on the number of shares of Common Stock
that may be issued pursuant to Awards shall be adjusted as the Board shall determine to be
equitably required in the event that (i) the Company (a) effects one or more stock dividends, stock
split-ups, subdivisions or consolidations of shares or (b) engages in a transaction described under
Section 424 of the Code or (ii) there occurs any other transaction or event which, in the judgment
of the Board necessitates such action. In addition, the Committee may make such other adjustments
to the terms of any Awards or Deferred Stock Benefits to the extent equitable and necessary to
prevent an enlargement or dilution of the Participant’s rights thereunder as a result of any such
event or similar transaction. Notwithstanding the foregoing, the Committee in its sole discretion
may elect not to adjust the terms of any Award or Deferred Stock Benefit that is intended to
qualify as performance-based compensation under Code Section 162(m) if it determines that such
adjustment would cause such Award or Deferred Stock Benefit to fail to qualify as performance-based
compensation. Any determination made under this Article XI by the Board shall be final and
conclusive.

     The issuance by the Company of stock of any class, or securities convertible into stock of any
class, for cash or property, or for labor or services, either upon direct sale or upon the exercise
of rights or warrants to subscribe therefor, or upon conversion of stock or obligations of the
Company convertible into such stock or other securities, shall not affect, and no adjustment by
reason thereof shall be made with respect to, the Aggregate Limit, the per individual limitations
on the number of shares that may be issued pursuant to Awards or the terms of outstanding Awards or
Deferred Stock Benefits.

     The Committee may grant Awards in substitution for performance shares, incentive awards, stock
awards, stock options, stock appreciation rights, or similar awards held by an individual who
becomes an employee of the Company or an Affiliate, or a non-employee member of the Board, in
connection with a transaction described in the first paragraph of this Article XI. Notwithstanding
any provision of the Plan (other than the limitation of Section 5.02), the terms of such
substituted Awards shall be as the Committee, in its discretion, determines is appropriate.

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ARTICLE XII

COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES

12.01. Compliance

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

     No Option or SAR shall be exercisable, no shares of Common Stock shall be issued, no
certificates for shares of Common Stock shall be delivered, and no payment shall be made under this
Plan, that would result in a Participant or other person owning, directly or indirectly, shares of
Common Stock, or any other class of capital stock which would be inconsistent with (i) the Real
Estate Investment Trust ownership rules contained in the Code and regulations or (ii) the
restrictions contained in the Company’s Charter that are in effect to preserve the Company’s status
as a Real Estate Investment Trust. Among other things, with enumerated exceptions, the Company’s
Charter provides that (a) generally no person may own, or be deemed to own by virtue of the
attribution provisions of the Code, either (i) more than 9.9 percent in value of the Company’s
capital stock or (ii) more than 9.9 percent in value or in number of shares, whichever is more
restrictive, of the outstanding shares of Common Stock and (b) no person may beneficially or
constructively own or transfer shares of the Company’s capital stock if that ownership or transfer
would result in the Company being “closely held” under Section 856(h) of the Code.

12.02. Postponement of Exercise or Payment

     The Committee may postpone any grant, exercise, vesting or payment of an Award for such time
as the Committee in its sole discretion may deem necessary in order to permit the Company (i) to
effect, amend or maintain any necessary registration of the Plan or the shares of Common Stock
issuable pursuant to the Award under the securities laws; (ii) to permit any action to be taken in
order to (A) list such shares of Common Stock or other shares of stock of the Company on a stock
exchange if shares of Common Stock or other shares of stock of the Company are not then listed on
such exchange or (B) comply with restrictions or regulations incident to the maintenance of a
public market for its shares of Common Stock or other shares of

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stock of the Company, including any rules or regulations of any stock exchange on which the
shares of Common Stock or other shares of stock of the Company are listed; (iii) to determine that
such shares of Common Stock in the Plan are exempt from such registration or that no action of the
kind referred to in (ii)(B) above needs to be taken; (iv) to comply with any other applicable law,
including without limitation, securities laws; (v) during any such time the Company or any
Affiliate is prohibited from doing any of such acts under applicable law, including without
limitation, during the course of an investigation of the Company or any Affiliate, or under any
contract, loan agreement or covenant or other agreement to which the Company or any Affiliate is a
party; (vi) to otherwise comply with any prohibition on such acts or payments during any applicable
blackout period; (vii) to maintain its Real Estate Investment Trust status under the Code or (viii)
to enforce the shareholder ownership restrictions under the Company’s Charter; and the Company
shall not be obligated by virtue of any terms and conditions of any Agreement or any provision of
the Plan to recognize the grant, exercise, vesting or payment of an Award or to grant, sell or
issue shares of Common Stock or make any such payments in violation of the securities laws or the
laws of any government having jurisdiction thereof or any of the provisions hereof. Any such
postponement shall not extend the term of the Award and neither the Company nor its directors and
officers nor the Committee shall have any obligation or liability to any Participant or to any
other person with respect to shares of Common Stock or payments as to which the Award shall lapse
because of such postponement.

12.03. Forfeiture of Payment

     A Participant shall be required to forfeit any and all rights under Awards or to reimburse the
Company for any payment under any Award (with interest as necessary to avoid imputed interest or
original issue discount under the Code or as otherwise required by applicable law) to the extent
applicable law requires such forfeiture or reimbursement.

12.04. Compliance with Section 409A

     If any provision of the Plan or any Agreement would result in a Participant becoming subject
to any penalty under Section 409A of the Code, the Committee may, in its sole discretion, modify or
limit any rights of the Participant or other terms of the Award to the extent necessary to avoid
imposition of such penalty; it being intended that any Awards granted under the Plan comply with
the requirements of Section 409A of the Code so as to avoid such penalty, unless the Committee
specifically provides otherwise.

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ARTICLE XIII

GENERAL PROVISIONS

13.01. Effect on Employment and Service

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

13.02. Unfunded Plan

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

13.03. Rules of Construction

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

13.04. Tax Withholding and Reporting

     Unless an Agreement provides otherwise, each Participant shall be responsible for satisfying
in cash or cash equivalent acceptable to the Committee any income and employment (including
without limitation Social Security and Medicare) tax withholding obligations attributable to
participation in the Plan and the grant, exercise, vesting or payment of Awards granted thereunder.
In accordance with procedures that the Committee establishes, the Committee, to the extent
applicable law permits, may allow a Participant to pay such amounts (i) in cash, (ii) by certified
check, (iii) by tendering shares of Common Stock (which, if acquired from the Company, have been
held by the Participant for at least six months) and which do not exceed the Company’s minimum
statutory withholding obligation, (iv) by a broker-assisted cashless exercise or (v) by any
combination of the aforementioned methods of payment. The Company shall comply with all such
reporting and other requirements relating to the administration of this Plan and the grant,
exercise, vesting or payment of any Award hereunder as applicable law requires.

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13.05. Reservation of Shares

     The Company, during the term of this Plan, shall at all times reserve and keep available such
number of shares of Common Stock as shall be sufficient to satisfy the requirements of the Plan.
Additionally, the Company, during the term of this Plan, shall use its best efforts to seek to
obtain from appropriate regulatory agencies any requisite authorizations needed in order to issue
and to sell such number of shares of Common Stock as shall be sufficient to satisfy the
requirements of the Plan. However, the inability of the Company to obtain from any such regulatory
agency the requisite authorizations the Company’s counsel deems to be necessary for the lawful
issuance and sale of any shares of Common Stock hereunder, or the inability of the Company to
confirm to its satisfaction that any issuance and sale of any shares of Common Stock hereunder will
meet applicable legal requirements, shall relieve the Company of any liability in respect to the
failure to issue or to sell such shares of Common Stock as to which such requisite authority shall
not have been obtained.

13.06. Governing Law

     This Plan and all Awards granted hereunder shall be governed by the laws of the State of
Maryland, except to the extent federal law applies.

13.07. Other Actions

     Nothing in the Plan shall be construed to limit the authority of the Company to exercise its
corporate rights and powers, including, by way of illustration and not by way of limitation, the
right to grant options, stock appreciation rights, stock awards, incentive awards or performance
shares for proper corporate purposes otherwise than under the Plan to any employee or to any other
person, firm, corporation, association or other entity, or to grant options, stock appreciation
rights, stock awards, incentive awards or performance shares to, or assume such awards of any
person in connection with, the acquisition, purchase, lease, merger, consolidation, reorganization
or otherwise, of all or any part of the business and assets of any person, firm, corporation,
association or other entity.

13.08. Other Conditions

     The Committee, in its discretion, may, as a condition to the grant, exercise, payment or
settlement of an Award, require the Participant on or before the date of grant, exercise, payment
or settlement of the Award to enter into (i) a covenant not to compete (including a
confidentiality, non-solicitation, non-competition or other similar agreement) with the Company or
any Affiliate, which may become effective on the date of termination of employment or service of
the Participant with the Company or any Affiliate or any other date the Committee may specify and
shall contain such terms and conditions as the Committee shall otherwise specify and/or (ii) an
agreement to cancel any other employment agreement, service agreement, fringe benefit or
compensation arrangement in effect between the Company or any Subsidiary and such Participant. If
the Participant shall fail to enter into any such agreement at the

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Committee’s request, then no Award shall be granted, exercised, paid or settled and the number
of shares of Common Stock that would have been subject to such Award, if any, shall be added to the
remaining shares of Common Stock available under the Plan.

13.09. Forfeiture Provisions

     Notwithstanding any other provisions of the Plan or any Agreement, all rights to any Award
that a Participant has will be immediately discontinued and forfeited, and the Company shall not
have any further obligation hereunder to the Participant with respect to any Award and the Award
will not be exercisable (whether or not previously exercisable) or become vested or payable on and
after the time the Participant is discharged from employment or service with the Company or any
Affiliate for Cause.

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ARTICLE XIV

DEFERRED BENEFITS

     In accordance with rules the Committee prescribes, a Participant who is eligible to
participate in the Deferred Compensation Plan may elect to defer the receipt of Common Stock
issuable or cash or other consideration payable to the Participant pursuant to any Award to the
extent prescribed by the Committee. The Committee in its discretion may prescribe the types of
Awards that are subject to deferral under the Deferred Compensation Plan, the Participants eligible
to participate in the Deferred Compensation Plan and all other administrative rules thereto
relating to Awards.

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ARTICLE XV

AMENDMENT

     The Board may amend or terminate this Plan at any time; provided, however, that no amendment
may adversely impair the rights of a Participant with respect to outstanding Awards without the
Participant’s consent. In addition, an amendment will be contingent on approval of the Company’s
stockholders, to the extent required by law or by the rules of any stock exchange on which the
Company’s securities are traded or if the amendment would (i) permit a repricing or a decrease in
the exercise price of any outstanding Options (which is not currently permitted under the Plan),
(ii) increase the Aggregate Limit, (iii) modify the requirements as to eligibility for
participation in the Plan or, (iv) after the transition period prescribed by the regulations under
Code Section 162(m), change the performance objectives set forth in Sections 8.03, 9.02 or 10.02.
Additionally, if and to the extent the Board deems appropriate to comply with Code Section 162(m)
and the regulations thereunder, the performance objectives set forth in Sections 8.03, 9.02 and
10.02 shall be disclosed to and reapproved by the Company’s stockholders no later than the first
stockholders meeting that occurs in the fifth year following the year in which the stockholders
previously approved the Plan or the performance objectives.

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ARTICLE XVI

DURATION OF PLAN

     No Award may be granted under this Plan after 10 years following the effective date of the
Plan as set forth in Article XVII. Awards granted before that date shall remain valid in
accordance with their terms.

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ARTICLE XVII

EFFECTIVE DATE OF PLAN

     Awards may be granted under this Plan after its effective date; provided that, this Plan shall
not be effective and no Common Stock may be issued unless and until the Plan is approved by
unanimous consent of the Company’s stockholders or by a majority of the votes cast by the Company’s
stockholders, voting either in person or by proxy, at a duly held stockholders’ meeting at which a
stockholder quorum is present, within one year after the Plan is adopted by the Board. The
effective date of the Plan shall be date of the adoption of the Plan by the Board.

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