Document:

Exhibit 4.2

EXHIBIT 4.2

	 	 	 
	To:

	 	Sytner Group Limited (Company number 02883766) (the “Borrower”)
	 

	 	2 Penman Way
	 

	 	Grove Park
	 

	 	Leicester
	 

	 	Leicestershire
	 

	 	LE18 1ST

27 July 2010

Dear Sirs

SYTNER GROUP LIMITED — THE FACILITIES AGREEMENTS (AS DEFINED BELOW)

	1.	 	INTRODUCTION AND DEFINITIONS

	1.1	 	We refer to:

	 	1.1.1	 	a £30,000,000 term loan facility agreement dated 31 August 2006 (as amended
on 20 September 2008 and 3 September 2009 and as further amended, varied,
supplemented, replaced or novated from time to time) and made between The Royal Bank
of Scotland plc (the “Bank”) as agent for National Westminster Bank Plc (“Natwest”)
and the Borrower (the “Term Loan Facility Agreement”);

	 	1.1.2	 	a £100,000,000 multi-option facilities agreement dated 31 August 2006 (as
amended on 29 September 2008 and 3 September 2009 and as further amended, varied,
supplemented, replaced or novated from time to time) and made between the Bank (as
agent for Natwest) and the Borrower (the “MOF Facilities Agreement”); and

	 	1.1.3	 	an overdraft facility agreement dated on or about the date of this letter
(as amended, varied supplemented, replaced or novated from time to time) and made
between Natwest, UAG UK Holdings Limited (the “Parent”) and others (the “Overdraft
Facility Agreement”).

	1.2	 	The Term Loan Facility Agreement and the MOF Facilities Agreement shall be referred to in
this letter as the “Facilities Agreements”. Terms defined in the Facilities Agreements, unless
otherwise defined in this letter, have the same meaning in this letter. The principles of
construction set out in the Facilities Agreements shall have effect as if set out in this
letter.

	1.3	 	In addition, the following terms shall have the following meanings in this letter:-

	 	1.3.1	 	“Acquisition” means the acquisition by the Parent of the entire issued share
capital in the Target;

	 	1.3.2	 	“Amendments” means the amendments referred to in paragraph 3 below;

	 	1.3.3	 	“Consents” means the consents referred to in paragraph 2 below;

	 	1.3.4	 	“Dividend” means the First Dividend and the Second Dividend;

	 	1.3.5	 	“Exchange Rate” means:-

	 	(a)	 	in relation to the conversion of US dollars ($) to sterling
(£), 0.6694;

	 	(b)	 	in relation to the conversion of sterling (£) to US dollars
($), 1.4939; and

	 	(c)	 	in relation to the conversion of euros (€) to sterling (£),
0.8186.

	 	1.3.6	 	“First Dividend” means the dividend more particularly described in paragraph
2.3.1 below;

 

 

 

	 	1.3.7	 	“Independent Valuation” shall have the meaning given to that term in
paragraph 2.3.2(b) below;

	 	1.3.8	 	“Loan Notes” means the unsecured loan notes issued by the Parent to UAG Inc
in an amount not exceeding the amount set out in paragraph 2.2 below;

	 	1.3.9	 	“Maximum Amount” means US$78,483,000 (or its sterling (£) equivalent at the
Exchange Rate) plus, for the purposes of calculating the amount of the Second Dividend
at paragraph 2.3.2(a) only, an amount equal to the amount of accrued interest (capped
at 2.0% per annum above the Bank of England base rate) on those Loan Notes permitted
to be issued pursuant to paragraph 2.2.1 below;

	 	1.3.10	 	“Second Dividend” means the dividend more particularly described in paragraph 2.3.2
below;

	 	1.3.11	 	“Subordination Letter” means the letter of subordination addressed to Natwest
substantially in the form attached to this letter;

	 	1.3.12	 	“Target” means Penske Automotive Europe GmbH; and

	 	1.3.13	 	“UAG Inc” means UAG International Holdings, Inc.

	2.	 	CONSENTS

	2.1	 	We refer to Clause 10.13 of the Term Loan Facility Agreement and Clause 10.12 of the MOF
Facilities Agreement which would, if it were not for the consent contained in this letter,
prohibit the Borrower from declaring and paying Dividends in cash to the Parent for the
purposes of:-

	 	2.1.1	 	enabling the Parent to make the Acquisition;

	 	2.1.2	 	funding the initial consideration payable by the Parent on completion of the
Acquisition; and

	 	2.1.3	 	funding the repayment of the Loan Notes by the Parent.

	2.2	 	We understand that the consideration for the Acquisition will be partially satisfied by the
issue of the Loan Notes by the Parent to UAG Inc. The Borrower shall procure that the
aggregate principal amount outstanding under the Loan Notes shall at no time exceed:-

	 	2.2.1	 	an amount equal to the Maximum Amount less the amount of the First Dividend
declared in accordance with paragraph 2.3.1 below; or

	 	2.2.2	 	(where the consideration for the Acquisition as expressed in the Independent
Valuation exceeds the Maximum Amount, an amount equal to US$90,000,000 (or its
sterling (£) equivalent at the Exchange Rate) less the amount of the First Dividend
declared in accordance with paragraph 2.3.1 below.

	2.3	 	Subject to paragraph 2.4 below, we are pleased to inform you that, at your request and on the
basis of the information which you have supplied to us, consent has been obtained to the
extent (and only to the extent) necessary to permit the Borrower to:-

	 	2.3.1	 	declare and pay a dividend in cash in the sum of up to £35,000,000 to the
Parent on or about the Effective Date (as defined below) (the “First Dividend”) for
the purpose specified in paragraph 2.1;

	 	2.3.2	 	subject paragraph 2.5 below, declare and pay a dividend in cash in the sum
of up to the lower of:-

	 	(a)	 	the Maximum Amount less the amount of the First Dividend
declared; and

 

2

 

	 	(b)	 	the aggregate of (i) amount (expressed in US dollars ($) at the Exchange
Rate) being not more than the amount set out in an independent valuation
of the Target and its business prepared by Ernst & Young LLP (or such
other valuer acceptable to the Bank) and on the basis agreed by the Bank
(the “Independent Valuation”) after deducting the amount of the First
Dividend; and (ii) an amount equal to the amount of accrued interest
(capped at 2.0% per annum above the Bank of England base rate) on those
Loan Notes permitted to be issued pursuant to paragraph 2.2.1 above,

	 	 	 	(the “Second Dividend”) for the purpose specified in paragraph 2.1. Such Second
Dividend to be declared and paid on or before 31 December 2011 or such later date
as may be agreed by the Bank (acting reasonably).

	2.4	 	The Consents referred to in paragraph 2.2 above shall take effect on and from the Effective
Date.

	2.5	 	The declaration and payment of the Second Dividend or the issue of Loan Notes in an amount
specified at clause 2.2.2 above shall not be permitted until the later to occur of the
Effective Date and the date that the Bank has received in a form and substance satisfactory to
it:-

	 	2.5.1	 	the Independent Valuation expressed in sterling (£), euros (€) or US dollars
($);

	 	2.5.2	 	the management accounts of the Borrower (consolidated to include the Group)
for the 12 month period ending (and including) the monthly period falling immediately
prior to the month in which the Second Dividend is proposed to be paid;

	 	2.5.3	 	a certificate signed by two directors of the Borrower giving calculations
showing in reasonable detail that the ratio of Consolidated Net Borrowings to
Consolidated EBITDA less Stocking Interest (having taken into consideration the First
Dividend and the Second Dividend in the calculation of Consolidated Net Borrowings) is
not more than 1.5:1 for the 12 month period ending on the latest compliance date as
specified in Clause 11.3 of the Facilities Agreements occurring immediately prior to
the proposed date of payment for the Second Dividend (the “Relevant Compliance Date”),
to which is attached a copy of the latest management accounts referred to in paragraph
2.5.2 above; and

	 	2.5.4	 	the budget or forecasts for the 15 month period following the Relevant
Compliance Date demonstrating that the ratio of Consolidated Net Borrowings to
Consolidated EBITDA less Stocking Interest (having taken into consideration the First
Dividend and the Second Dividend in the calculation of Consolidated Net Borrowings)
shall not be more than 1.5:1 at any time during that period.

	3.	 	AMENDMENTS

	3.1	 	At your request and on the basis of the information you have supplied to us, we are pleased
to confirm the following amendments to the Facilities Agreement (the “Amendments”). Such
Amendments to take effect on and from the Effective Date (as defined below):-

	 	3.1.1	 	in clause 1.1 of both Facilities Agreements the definition of “Finance
Documents” shall be extended to include the following new limbs (d) and (e):-

	 	“(d)	 	any Subordination Letter (as such term is defined in a
consent letter dated 27 July 2010 and made between, amongst others, the Bank
and the Borrower (the “Consent Letter”); or

	 	(e)	 	the Charge over Securities (as such term is defined in
the Consent Letter).”

	 	3.1.2	 	in clause 1.1 of both Facilities Agreements there shall be added the following new definitions:-

	 
	 	 	 	““German Group” means PAE GmbH and each of its Subsidiary Undertakings from time to time;

	 
	 	 	 	“PAE GmbH” means Penske Automotive Europe GmbH (a company incorporated in Germany);

	 
	 	 	 	“Parent”
means UAG UK Holdings Limited (company number 04334322).”

 

3

 

	 	3.1.3	 	the following new Clause 10.21 (Undertakings in relation to the Parent) shall be
inserted in the Term Loan Facility Agreement-

	 
	 	 	 	“Undertakings in relation to the Parent

	 	10.21	 	Without prejudice to the other provisions of Clause 10 (Undertakings):-

	 	(a)	 	the undertakings contained in Clause 10.6 (Negative Pledge)
shall also be given by the Borrower in relation to the Parent such that, for
the purposes of this Clause 10.21(a) only:-

	 	(i)	 	references in that Clause to “any of its
Subsidiaries”, “a Subsidiary”, “any member of the
Group”, “a member
of the Group” or “Group” shall be construed as the
“Parent”; and

	 	(ii)	 	an equivalent provision to Clause 10.6(g)
shall not apply to this Clause 10.21(a);

	 	(b)	 	the undertakings contained in Clause 10.7 (Other
Obligations), Clause 10.8 (Material Change in Business), Clause 10.9
(Disposal of Assets), Clause 10.11 (Acquisitions), Clause 10.12 (Loans),
Clause 10.17 (Insurances) and Clause 10.18 (Environment) shall also be given
by the Borrower in relation to the Parent such that, for the purposes of this
Clause 10.21(b) only:-

	 	(i)	 	references to “its
Subsidiaries” shall be construed as the “Parent”;

	 	(ii)	 	references to “members of the Group” “a
member of the Group” or “any member of the Group” shall be construed
to include the “Parent”;

	 	(ii)	 	equivalent provisions to Clause 10.7(d),
Clause 10.7(e), Clause 10.9(g) and Clauses 10.12(b) to (d) shall
not apply to this Clause 10.21(b); and

	 	(c)	 	the undertakings contained in Clause 10.10 (Mergers) and
Clause 10.13 (Dividends) shall also be given by the Borrower in relation to
the Parent such that, for the purposes of this Clause 10.21(c) only,
references in those Clauses to the “Borrower” or “it” shall be construed as
“the Parent”. ”

	 	3.1.4	 	the following new clause 10.21 (Undertakings in relation to the Parent)
shall be inserted in the MOF Facilities Agreement:-

	 
	 	 	 	“Undertakings in relation to the Parent

	 	10.21	 	Without prejudice to the other provisions of Clause 10 (Undertakings):-

	 	(a)	 	the undertakings contained in Clause 10.5 (Negative Pledge)
shall also be given by the Borrower in relation to the Parent such that, for
the purposes of this Clause 10.21(a) only:-

	 	(i)	 	references in that Clause to “any of its
Subsidiaries”, “a Subsidiary”, “any member of the
Group”, “a member
of the Group” or “Group” shall be construed as the
“Parent”; and

	 	(ii)	 	an equivalent provision to Clause 10.5(g)
shall not apply to this Clause 10.21(a);

 

4

 

	 	(b)	 	the undertakings contained in Clause 10.6 (Other
Obligations), Clause 10.7 (Material Change in Business), Clause 10.8
(Disposal of Assets), Clause 10.10 (Acquisitions), Clause 10.11 (Loans),
Clause 10.16 (Insurances) and Clause 10.17 (Environment) shall also be given
by the Borrower in relation to the Parent such that, for the purposes of this
Clause 10.21(b) only:-

	 	(i)	 	references to “its
Subsidiaries” shall be construed as the “Parent”;

	 	(ii)	 	references to “members
of the Group”,
“any member of the Group” or “a member of the Group” shall be
construed to include the “Parent”;

	 	(ii)	 	equivalent provisions to Clause 10.6(d),
Clause 10.6(e), Clause 10.8(g) and Clauses 10.11(b) to (d) shall not
apply to this Clause 10.21(b); and

	 	(c)	 	the undertakings contained in Clause 10.9 (Mergers) and
Clause 10.12 (Dividends) shall also be given by the Borrower in relation to
the Parent such that, for the purposes of this Clause 10.21(c) only,
references in those Clauses to the “Borrower” or “it” shall be construed as
“the Parent”. ”

	 	3.1.5	 	the following new clause 10.22 (Wider group loans) shall be inserted in both
Facilities Agreements:-

	 
	 	 	 	“Wider group loans

	 	10.22	 	The Borrower shall not:-

	 	(a)	 	(and the Borrower shall procure that no
member of the Group or the German Group or the Parent will) make any
loan to or repay or pay any principal or interest on any loan
granted to it by UAG Inc or its holding company (as defined in
section 1159 of the Companies Act 2006) other than (i) the issue of
the Loan Notes in accordance with the terms of the Consent Letter
and payment of interest and principal on such Loan Notes if
permitted under the terms of the Subordination Letter; or (ii) with
the prior written consent of the Bank (such consent not to be
unreasonably withheld or delayed); and

	 	(b)	 	(and the Borrower shall procure that no
member of the Group or the Parent will) make any loan to or repay or
pay any principal or interest on any loan granted to it by any
member of the German Group except with the prior written consent of
the Bank (such consent not to be unreasonably withheld or
delayed).”

	 	3.1.6	 	the following new clause 10.23 (Arms length basis) shall be inserted in the
Term Loan Facility Agreement:-

	 
	 	 	 	“Arms length basis

	 	10.23	 	Except as permitted under clauses 10.12 (Loans), the
Borrower shall not and the Borrower shall procure that (a) no member of the
Group or the Parent will enter into any transaction with any person that is
not a member of the Group except on arm’s length terms and for full market
value; and (b) no member of the German Group will enter into any transaction
with any person that is not a member of the German Group except on arm’s
length terms and for full market value. ”

	 	3.1.7	 	the following new clause 10.23 (Arms length basis) shall be inserted in the
MOF Facilities Agreement:-

	 
	 	 	 	“Arms length basis

	 	10.23	 	Except as permitted under clauses 10.11 (Loans), the
Borrower shall not and the Borrower shall procure that (a) no member of the
Group or the Parent will enter into any transaction with any person that is
not a member of the Group except on arm’s length terms and for full market
value; and (b) no member of the German Group will enter into any transaction
with any person that is not a member of the German Group except on arm’s
length terms and for full market value. ”

 

5

 

	 	3.1.8	 	in clause 13.1 of the Term Loan Facility Agreement, the following new clause
13.1(l) (The Parent) shall be inserted before the words “then in
any such case”:-

	 
	 	 	 	“The Parent

	 	(l)	 	Without prejudice to any other provisions of this clause
13.1, the Events of Default at Clauses 13.1(d) (Cross Default) and Clauses
13.1(e) to (i) (inclusive) (Insolvency and Analogous Proceedings) of this
Agreement shall, for the purposes of this sub-clause (l) only, extend to the
Parent such that references to “its Subsidiaries” shall be construed to
include the “Parent”. ”

	 	3.1.9	 	in clause 14.1 of the MOF Facilities Agreements, the following new clause
14.1(n) (The Parent) shall be inserted before the words “then in
any such case”:-

	 
	 	 	 	“The Parent

	 	(n)	 	Without prejudice to any other provisions of this clause
14.1, the Events of Default at Clauses 14.1(f) (Cross Default) and Clauses
14.1(g) to (k) (inclusive) (Insolvency and Analogous Proceedings) of this
Agreement shall, for the purposes of this sub-clause (n) only, extend to the
Parent such that references to “its Subsidiaries” shall be construed to
include the “Parent”. ”

	 	3.1.10	 	the definition of “Seasonal Excess” in the Overdraft Facility Agreement shall be
deleted and replaced with the following:-

	 
	 	 	 	“Seasonal Excess:
not used”

	 	3.1.11	 	the definition of “Seasonal Excess Periods” in the Overdraft Facility Agreement
shall be deleted and replaced with the following:-

	 
	 	 	 	“Seasonal Excess
Periods: not used”

	 	3.1.12	 	the definition of “Sterling Interest Rate” in the Overdraft Facility Agreement shall
be deleted and replaced with the following:-

	 	 	 	“Sterling Interest Rate: 0% p.a. on the total of the debit balances equal to the
total of the credit balances on the Sterling Facility Accounts.

	 
	 	 	 	1.75% p.a. over Base Rate on the next £10,000,000.

	 
	 	 	 	3% p.a. over Base Rate on
the remainder”

	4.	 	EFFECTIVE DATE

	 
	 	 	The Consents and Amendments shall take effect on the date (the “Effective Date”) that the
Bank receives in a form and substance satisfactory to it:-

	4.1	 	a copy (or copies) of this letter countersigned by you by which you acknowledge and agree to
the terms of this letter;

	4.2	 	a copy of the resolution of the board of directors of the Borrower and the Parent:-

	 	4.2.1	 	approving the terms of, and the transactions contemplated by, this letter,
the Subordination Letter and the document listed in paragraph 4.3 below (the “New
Finance Documents”) and resolving that it execute, deliver and perform the New Finance
Documents to which it is party;

 

6

 

	 	4.2.2	 	authorising a specified person or persons to execute the New Finance Documents on
its behalf; and

	 	4.2.3	 	authorising a specified person or persons, on its behalf, to sign and/or
despatch all documents and notices to be signed and/or despatched by it under or in
connection with the New Finance Documents;

	4.3	 	an original of the deed of accession to the group cross guarantee dated 27 February 2007 and
made between the Bank, the Borrower and others, duly executed by the Parent;

	4.4	 	the agreed form Loan Notes together with an original of the Subordination Letter duly
executed by UAG Inc, the Parent and the Borrower; and

	4.5	 	the Overdraft Facility Agreement duly executed by all members of the Group party to it.

	5.	 	REPRESENTATIONS

	5.1	 	Without prejudice to clause 9 of both Facilities Agreement, the Borrower and the Parent
represents and warrants to the Bank on the date of this letter, the Effective Date and on each
date on which interest is payable:-

	 	5.1.1	 	each of the representations and warranties contained in clause 9.1 of both
Facilities Agreements are true by reference to the facts and circumstances existing at
each such date and as if each reference to “this Agreement”
or “the Finance Documents”
includes a reference to this letter;

	 	5.1.2	 	each of the representations and warranties contained in clauses 9.1(a), (e),
(h) and (j) of both Facilities Agreement are true by reference to the facts and
circumstances existing at each such date and as if each reference to
“Subsidiaries”
shall be construed as the Subsidiaries of the Parent, “Group” shall be construed as
the German Group (as defined in paragraph 3.1.2 above) and “Borrower” or “it” shall be
construed as the Borrower and the Parent;

	 	5.1.3	 	all information provided to the Bank by or on behalf of any member of the
Group, the Parent or the German Group in connection with the matters contained in this
letter is accurate and not misleading in any material respect and all projections
provided to the Bank on or before the Effective Date have been prepared in good faith
on the basis of assumptions which were reasonable at the time at which they were
prepared and supplied;

	 	5.1.4	 	no member of the German Group has incurred any Financial Indebtedness which
is outstanding to any member of the Wider Group (as defined below) or is a creditor in
respect of any Financial Indebtedness outstanding by any member of the Wider Group in
each case in excess of £1,000,000 in the aggregate;

	 	5.1.5	 	no member of the German Group has entered into any transaction with any
member of the Wider Group except on arm’s length terms and for full market value; and

	 	5.1.6	 	no event or circumstance is outstanding which constitutes (or, with the
expiry of a grace period, the giving of notice, the making of any determination, the
completion of the Acquisition or any combination of the foregoing, would constitute) a
default or termination event (howsoever described) under any joint venture agreement
or financing agreement which is binding on members of the German Group or which those
members of the German Group’s assets are subject.

	 	 	For the purpose of paragraph 5.1.4 and 5.1.5 the “Wider Group” shall mean Penske Automotive
Group, Inc and it’s Subsidiary Undertakings (other than the German Group).

 

7

 

	6.	 	CONDITIONS SUBSEQUENT

	6.1	 	The Borrower shall procure that, within 45 days of the date of this letter, it shall
deliver (in a form and substance satisfactory to the Bank) to the Bank:-

	 	6.1.1	 	two originals of a charge over securities duly executed by the Parent over
the shares in the Target (the “Charge over Securities”) together with all share
certificates, transfers and stock transfer forms or equivalent duly executed by the
Parent in blank in relation to the assets subject to the Charge over Securities; and

	 	6.1.2	 	such information as may be reasonably required and requested from it to
enable a legal opinion of the legal advisers to the Bank in Germany to be delivered to
the Bank in the form distributed to the Bank prior to the Effective Date.

	7.	 	FEES, COSTS AND EXPENSES

	7.1	 	Transaction Expenses

	 
	 	 	The Borrower shall, promptly on demand, reimburse the Bank for all reasonable costs and
expenses (including legal fees) reasonably incurred by any of them in connection with the
negotiation, preparation, execution and perfection of this letter and the transactions
contemplated by this letter.

	7.2	 	Consent Fee

	 
	 	 	The Borrower shall pay to the Bank a consent fee of £183,876 which shall be payable on the
date of this letter.

	8.	 	MISCELLANEOUS

	8.1	 	The parties agree that, with effect from the Effective Date, the Margin in both Facilities
Agreements will, subject to Schedule 2 of the Term Facility Agreement or Schedule 1 of the MOF
Facilities Agreement (as the case may be), be reset at 1.35 per cent per annum.

	8.2	 	Each of the Parent and the Borrower acknowledges the arrangements contained in this letter
and that the provisions of the Facilities Agreements shall continue in full force and effect.

	8.3	 	The provisions of Clause 17.5 and Clause 18.1 of the MOF Facilities Agreement shall be
incorporated into this letter as if set out in full in this letter. This letter may be
executed in any number of counterparts and this has the same effect as if the signatories or
the counterparts were on a single copy of this letter.

	8.4	 	References in the Facilities Agreement to “this Agreement” or “the Finance Documents” shall
include references to this letter. Any breach by the Parent or the Borrower of any term or
condition of this letter shall be an Event of Default.

	8.5	 	This letter is a designated Finance Document.

	8.6	 	This letter is governed by English law.

EXECUTED AND DELIVERED AS A DEED by the parties to this letter on the date which first appears in
this letter

 

8

 

	 	 	 	 	 
	The Borrower
	 	 	 	 
	 
	 	 	 	 
	EXECUTED (but not delivered until the date

	 	)	 
	hereof) AS A DEED by SYTNER GROUP

	 	)	 
	LIMITED

	 	)	 
	/s/ Mark Carpenter

	 	Director

	 
	 	 	 	 
	 

	 	Director/Secretary

	 
	 	 	 	 
	The Parent
	 	 	 	 
	 
	 	 	 	 
	EXECUTED (but not delivered until the date

	 	)	 
	 hereof) AS A DEED by UAG UK HOLDINGS

	 	)	 
	LIMITED

	 	)	 
	/s/ Mark Carpenter

	 	Director

	 
	 	 	 	 
	 

	 	Director/Secretary

	 
	 	 	 	 
	The Bank
	 	 	 	 
	 
	 	 	 	 
	EXECUTED (but not delivered until the date

	 	)	 
	hereof) AS A DEED by

	 	)	 
	as attorney for and on behalf of THE ROYAL

	 	)	 
	BANK OF SCOTLAND PLC (as agent for

	 	)	 
	NATIONAL WESTMINSTER BANK PLC)

	 	) /s/ Jason Necker

	 
	 	 	 	 
	in the presence of:-
	 	 	 	 
	 
	 	 	 	 
	Signature of witness: /s/ R. Garner-Jones
	 	 	 	 
	 
	 	 	 	 
	Name of witness: R. Garner Jones
	 	 	 	 
	 
	 	 	 	 
	Address: RBS
	 	 	 	 
	 
	               Birmingham
	 	 	 	 

 

9Exhibit 10.1

Exhibit 10.1

(Trust Manager Form)

AMENDMENT NO. 1 TO AMENDED AND RESTATED

MASTER EXCHANGE AGREEMENT

This Amendment No. 1 to the Amended and Restated Master Exchange Agreement (this “Amendment”)
is made by Camden Property Trust (the “Company”) and is effective as of the date on which it is
approved and adopted by the Compensation Committee of the Board of Trust Managers of the Company.

WHEREAS, the Company previously entered into an Amended and Restated Master Exchange
Agreement, which is an Option Agreement for purposes of the KEYSOP (the “Option Agreement”), with
the Recipient pursuant to which the Recipient was granted certain Modified Rights to Repurchase
relating to the repurchase of Restricted Shares and certain options to acquire marketable
securities pursuant to the KEYSOP (collectively, “Options”); and

WHEREAS, Section 409A (“Code Section 409A”) of the Internal Revenue Code of 1986, as amended
(the “Code”), was enacted on October 22, 2004, and related Treasury Regulations were published
April 10, 2007 and are effective January 1, 2008, and are applicable to deferred compensation,
including the Options and certain other equity compensation rights, that vest after December 31,
2004; and

WHEREAS, the Modified Rights to Repurchase that vested on and before December 31, 2004 (the
“Grandfathered Modified Rights to Repurchase”) are not subject to Code Section 409A, provided they
are not materially modified on or after October 3, 2004; and

WHEREAS, the Modified Rights to Repurchase that vest after December 31, 2004 (the
“Non-Grandfathered Modified Rights to Repurchase”) are subject to Code Section 409A; and

WHEREAS, the Committee has the authority, pursuant to Section 4.3 of the KEYSOP, to amend an
Option Agreement issued pursuant to the KEYSOP if the Committee determines that an amendment is
necessary or advisable as a result of, among other things, a change in the Code or any regulation,
which occurs after the grant date and applies to the Option; and

WHEREAS, the Committee has determined it to be necessary and advisable to amend certain
provisions of the Option Agreement to (i) cause the Non-Grandfathered Modified Rights to Repurchase
to comply with applicable provisions of Code Section 409A and the Treasury Regulations issued
thereunder and (ii) provide that the Grandfathered Modified Rights to Repurchase will not be
materially modified after October 3, 2004; and

WHEREAS, the Company and the Committee intend that this Amendment and the Option Agreement be
interpreted and administered consistent with Code Section 409A and the Treasury Regulations issued
thereunder;

 

 

 

NOW, THEREFORE, the Committee does hereby amend the Option Agreement as follows:

1. Section 3 of the Option Agreement is hereby amended and restated to read in its entirety as
follows:

“The Restricted Shares are (and shall continue to be) held in a rabbi trust (the
“Trust”) established by and for the benefit of the Company. The Trust shall be
administered by an independent trustee selected by the Company. Unless otherwise
agreed by Recipient and the Company, the Company agrees, whenever any dividend is
declared on common shares of beneficial interest of the Company, $.01 par value per
share (the “Common Shares”), to pay to the Recipient an amount per Restricted Share
held hereunder as of such date(s) by the Trust equal to the amount per Common Share
paid to the holders of record of Common Shares of the Company (the “Dividend
Equivalents”). The Recipient may elect that any Dividend Equivalents payable on
account of dividends declared on the Common Shares shall be paid to the Trust
instead of to the Recipient. In such event, the Dividend Equivalents shall be paid
into the Trust on a quarterly basis and shall be subject to a six month vesting
period beginning on the date that the Dividend Equivalents are deposited into the
Trust. The Trustee will invest the Dividend Equivalents in marketable securities
selected at the discretion of the Committee, and the Recipient will receive an
option to purchase assets from the Trust in accordance with the terms of the KEYSOP.
Any such election to pay Dividend Equivalents to the Trust must be made no later
than December 31 of the year preceding the year in which the Dividend Equivalents
may be payable on account of dividends declared on the Common Shares during such
succeeding calendar year, and shall be irrevocable for those Dividend Equivalents;
provided, however, upon the occurrence of any event that results in the Recipient no
longer being a trust manager of the Company which is a Separation from Service (as
defined in Code Section 409A) of the Recipient (a “Termination Event”), then solely
with respect to Dividend Equivalents that would otherwise be subject to such an
election after the Recipient’s Separation from Service, such an election shall
terminate as of the date of the Recipient’s Separation from Service. The Dividend
Equivalents payable under this Section 3 shall be distributed directly to the
Recipient via payroll or to the Trust, as elected, on a quarterly basis. Upon the
occurrence of a Termination Event, no Dividend Equivalents shall be payable on any
Restricted Shares that are forfeited by the Recipient. Any Dividend Equivalents paid
to the Trust shall accumulate in the Trust and be subject to the terms and
provisions of the KEYSOP. In this regard, the Committee shall invest such Dividend
Equivalents in marketable securities.”

2. The first sentence of Section 4 of the Option Agreement is hereby amended and restated to
read in its entirety as follows:

“Pursuant to the Modified Rights to Repurchase, the Recipient shall have the right
to purchase all or any part of any fully-vested Restricted Shares related to such
Modified Right to Repurchase held in the Trust.”

 

2

 

3. Section 5 of the Option Agreement is hereby amended to delete the last sentence thereof.

4. Section 7 of the Option Agreement is hereby amended and restated to read in its entirety as
follows:

“The Committee shall not exchange or substitute any Common Shares or Designated
Property subject to a Modified Right to Repurchase or an Option.”

5. Section 8 of the Option Agreement is hereby amended and restated to read in its entirety as
follows:

	 	“8.	 	The Modified Rights to Repurchase shall be exercisable as described in
this Section 8. Subject to Section 14 hereof, if a Termination Event occurs
before the vesting of the Modified Rights to Repurchase, the Modified Rights to
Repurchase not theretofore vested shall terminate on the date of the
Termination Event (the “Termination Date”). Any unexercised Modified Rights to
Repurchase that are not exercised within the requisite time period prescribed
in this Section 8 shall terminate and be of no further force and effect.

	 	a.	 	This Section 8.a. is applicable to Grandfathered
Modified Rights to Repurchase. Recipient’s vested Grandfathered
Modified Rights to Repurchase shall be exercisable for a period of time
following the Termination Date equal to the lesser of:

	 	(i)	 	the expiration of the Post Termination
Period (as hereinbelow defined), and

	 
	 	(ii)	 	Thirty (30) years after the applicable vesting
date.

For purposes hereof, the “Post Termination Period” means, as to the
Recipient, the period commencing on the day immediately following
the Termination Date and ending on the later of (i) one year from
the Termination Date or (ii) the number of complete years of service
by the Recipient as a trust manager of the Company through the
Termination Date (provided, that, if the Recipient has completed at
least ten (10) complete years of service as a trust manager, as
calculated hereunder, then such period shall end with respect to
each Grandfathered Modified Right to Repurchase thirty (30) years
from the applicable vesting date). For purposes hereof, any period
of service by a Recipient as a trust manager that is less than one
year shall be disregarded in calculating the Post Termination
Period. In the event of any merger of any entity with and into the
Company or any of its subsidiaries, any former trust manager or
director of such merged
entity who becomes a trust manager of the Company may, in

 

3

 

the sole
discretion of the Committee, receive credit for all or a portion of
such director’s or trust manager’s complete years of service as a
trust manager or director with such merged entity for purposes of
calculating the Post Termination Period hereunder. In the event
that Recipient was a trust manager of the Company and there was a
Termination Event with respect to such Recipient and later the
Recipient became a trust manager of the Company again, then, unless
a waiver (in writing) is granted to the Recipient by the Committee,
for purposes of calculating the Post Termination Period, only the
complete years of service by the Recipient immediately preceding the
current Termination Event shall be considered (i.e. the Post
Termination Period will be calculated based on the period beginning
upon the date that such Recipient re-commenced service as a trust
manager of the Company and ending upon the date of the later
Termination Event). Notwithstanding any provision hereof to the
contrary, (i) upon the date that is six months after the date of the
death of a Recipient (the “Six Month Date”), and at any time
thereafter, the Post Termination Period applicable to such
Recipient’s Grandfathered Modified Rights to Repurchase held by any
person or entity other than the surviving spouse of the Recipient or
a trust in which such surviving spouse is a then-living beneficiary
(a “Specified Beneficiary”), including without limitation any such
Grandfathered Modified Rights to Repurchase that were originally
held by a Specified Beneficiary on the Six Month Date that are no
longer so held due to the death of the surviving spouse or any
subsequent transfer of such Grandfathered Modified Rights to
Repurchase, shall be equal to the shorter of (A) the Post
Termination Period (as calculated above) and (B) one year from the
Six Month Date, or if the Grandfathered Modified Rights to
Repurchase were held by a Specified Beneficiary on the Six Month
Date, one year from the first date thereafter that such
Grandfathered Modified Rights to Repurchase are no longer held by a
Specified Beneficiary; and (ii) in the event that the Committee
determines that any act or omission of the Recipient constitutes
fraud or a violation of applicable law or any act or omission of the
Recipient in connection with the business or affairs of the Company
constitutes gross negligence or intentional misconduct (including,
without limitation, any violation of a Company policy in any
material respect), then the Committee in its sole discretion, may,
upon delivery of written notice to the Recipient, reduce the Post
Termination Period to the shorter of (A) the Post Termination Period
and (B) sixty (60) days from the date that the Committee determines
that the Recipient has committed such act or omission.

 

4

 

	 	b.	 	This Section 8.b. is applicable to Non-Grandfathered
Modified Rights to Repurchase. The Recipient to whom such a
Non-Grandfathered Modified Right to Repurchase was awarded shall make
an election, no later than December 31, 2007, as to the date on which
such Non-Grandfathered Modified Right to Repurchase will be
exercisable. The Recipient may make a separate election, no later than
December 31, 2007, as to the date on which such Non-Grandfathered
Modified Right to Repurchase will be exercisable following the
Recipient’s Separation from Service or the occurrence of a change in
control (as defined in Code Section 409A and referred to herein as a
“409A Change in Control”), provided, however, that in the event of a
Recipient’s Separation from Service, the Non-Grandfathered Modified
Right to Repurchase may not be exercised before the expiration of six
months from the date of the Recipient’s Separation from Service. If no
such elections are made, such Non-Grandfathered Modified Right to
Repurchase shall be exercisable on the later of the following dates:

	 	(i)	 	The later of January 1, 2012, or two
years following the date on which the Non-Grandfathered
Modified Right to Repurchase vests; or

	 
	 	(ii)	 	The earlier of the 16th month following
the month in which the Recipient Separates from Service or the
16th month following the month in which a 409A Change in
Control occurs.

The exercise date elected by the Recipient with respect to a
Non-Grandfathered Modified Right to Repurchase may not be prior to
January 1, 2008 and may not be later than 30 years following the
date on which the Non-Grandfathered Modified Right to Repurchase
vests. In the event of the Recipient’s Separation from Service, the
exercise date applicable to the Recipient’s Separation from Service
may not be later than the date on which the Post-Termination Period
expires. If the Recipient Separates from Service prior to the
otherwise applicable exercise date and the exercise date applicable
to the Recipient’s Separation from Service is later than the date on
which the Post-Termination Period expires, such elected exercise
date shall be disregarded and the exercise date related to a
Separation from Service shall be the date on which the
Post-Termination Period expires. For purposes of this Section 8.b.,
the Post-Termination Period shall have the meaning described in the
first paragraph of Section 8 hereof, except that a Recipient’s
Termination Date shall be the date on which the Recipient Separates from Service and a Termination Event must be caused by a
Separation from Service.

 

5

 

With respect to a Non-Grandfathered Modified Right to Repurchase,
the Recipient may elect, on and after January 1, 2008, to defer the
date on which such Non-Grandfathered Modified Right to Repurchase is
exercisable if the following requirements are satisfied:

	 	(i)	 	An election to defer the exercise date
must be submitted to the Employer no later than twelve (12)
months and one day prior to the otherwise scheduled exercise
date;

	 
	 	(ii)	 	The election must defer the exercise
date to a date no earlier than five years from the otherwise
scheduled exercise date; and

	 
	 	(iii)	 	The election will not be effective for
at least twelve (12) months following the date on which the
election is filed.

Such an election may not defer the exercise date to a date later
than 30 years following the date on which the Non-Grandfathered
Modified Right to Repurchase vests or the expiration of the
Post-Termination Period, if applicable. If the Recipient Separates
from Service prior to the otherwise applicable exercise date and the
exercise date elected by the Recipient with respect to Separation
from Service is later than the date on which the Post-Termination
Period expires, such elected exercise date shall be disregarded and
the exercise date related to a Separation from Service shall be the
date on which the Post-Termination Period expires.

The Non-Grandfathered Modified Right to Repurchase may be exercised
on the applicable exercise date or within the 90-day period that
begins with the exercise date. Following December 31 of the year in
which the exercise date occurs, the Non-Grandfathered Modified Right
to Repurchase expires and is no longer exercisable.

 

6

 

6. The sixth sentence of Section 16 of the Option Agreement is hereby amended and restated to
read in its entirety as follows:

“Without limiting any other remedies available to the Company, upon a failure by a
Recipient or his or her transferees or assignees to timely pay any such Costs of
Administration, (i) the Committee may cancel one or more of the Grandfathered
Modified Rights to Repurchase originally issued to the Recipient and deliver the
underlying Company shares to the Company to fund such Costs of Administration; (ii) the Committee may cancel one or more of the Non-Grandfathered
Rights to Repurchase originally issued to the Recipient, one day following the date
that is six months from the Recipient’s Separation from Service, and deliver the
underlying Company shares to the Company to fund such Costs of Administration;
and/or (iii) the Committee may withhold an amount equal to such Costs of
Administration from the Dividend Equivalents otherwise payable to the Recipient or
his transferees or assignees and apply such withheld Dividend Equivalents to the
payment of the Costs of Administration.

7. Section 17 of the Option Agreement is hereby deleted.

8. This Amendment shall be construed in accordance with the laws of the State of Texas.

9. To the extent any provision of this Amendment is held to be unenforceable, illegal or
invalid under any current or future law, such provision shall be fully separable and this Amendment
shall be construed and enforced as if such illegal, invalid or unenforceable provision had never
comprised a part thereof, the remaining provisions of this Amendment shall remain in full force and
effect and shall not be affected by the illegal, invalid or unenforceable provision or by its
severance therefrom. In lieu of such illegal, invalid or unenforceable provision, there shall be
added automatically as a part of this Amendment, a legal, valid and enforceable provision as
similar in terms to such illegal, invalid or unenforceable provision as may be possible, and the
parties hereto request the court or any arbitrator to whom disputes relating to this Amendment are
submitted to reform the otherwise illegal, invalid or unenforceable provision in accordance with
this Section 9.

10. The terms of the written award documents executed by the Company with respect to the
Modified Rights to Repurchase (an “Award Agreement”) have been amended contemporaneously with
adoption of this Amendment to reflect any applicable changes made hereunder for compliance with
Code Section 409A, as attached hereto as Exhibit B. To the extent any provisions of this
Amendment conflict with (i) the provisions of any employment agreement entered into between the
Company or any subsidiary thereof and the Recipient, the terms of the employment agreement shall
control or (ii) the terms of any Award Agreement, the terms of the Award Agreement shall control;
provided, however, that with regard to both (i) and (ii), to the extent required for compliance
with Code Section 409A, the provisions of this Amendment shall control. For purposes hereof, the
Option Agreement shall not constitute an Award Agreement.

11. Capitalized terms used and not defined herein shall have the meanings assigned to such
terms in the Option Agreement.

 

7

 

IN WITNESS WHEREOF this Amendment has been executed on and effective as of November 27, 2007.

	 	 	 	 	 
	 	CAMDEN PROPERTY TRUST

 	 
	 	By:  	 	 
	 	 	Dennis M. Steen 	 
	 	 	Chief Financial Officer, Senior Vice
President-Finance and Secretary 	 
	 

ACKNOWLEDGED BY THE RECIPIENT:

	 	 	 
	 

Name:

	 	 

 

8

 

EXHIBIT A

Intentionally omitted

 

 

 

EXHIBIT B

 

 

 

RESTRICTED SHARE BONUS (AWARD)

Shares to the Rabbi Trust

DATED: [Current date]

XXXX Restricted Common Shares of Beneficial Interest (the “Shares”) in Camden Property Trust
(the “Company”) were previously awarded and placed into the Rabbi Trust for the benefit of Name
(the “Recipient”), subject to the terms and conditions of the Amended and Restated Master Exchange
Agreement executed by the Company and the Recipient with respect to such Shares, as amended by
Amendment No. 1 to the Amended and Restated Master Exchange Agreement (as amended, the “Master
Exchange Agreement”). These shares have been awarded pursuant to the Company’s incentive
compensation plans administered by the Compensation Committee of the Board of Trust Managers. The
Shares are further subject to the following terms and conditions.

As of the date indicated above,
 _____ 
Shares of the above award remain subject to your right
to repurchase such Shares from the Rabbi Trust at a price of $XX.XX per share. Such repurchase may
occur at the time or times specified in accordance with the Master Exchange Agreement and any
applicable elections made by the Recipient related to such time or times.

1. Vesting of Shares.

(a) Of the above award, the Shares that remain subject to your right to repurchase as of the
date indicated above vest as determined in accordance with the schedule set forth below:

	 	 	 	 	 
	Aggregate Number Vested	 	Vesting Date

Any Shares awarded hereunder that have vested pursuant to the above schedule are referred to
herein as “Vested Shares.” Any Shares awarded hereunder that have not vested pursuant to the above
schedule are referred to herein as “Unvested Shares.” The grant by the Company to the Recipient of
the Shares hereunder is hereinafter referred to as the “Restricted Share Bonus Award.”

(b) The Unvested Shares may not be sold, exchanged, pledged, transferred, assigned or
otherwise encumbered or disposed of until they have become nonforfeitable in accordance with this
Section 1. The Company shall place a stop order with the Transfer Agent against any transfer of
the Unvested Shares, until such time as the Unvested Shares shall become nonforfeitable in
accordance with this Section 1.

 

 

 

(c) Notwithstanding Section 1(a) hereof, if the employment or relationship with the Company
and its Affiliates (as defined below) of the Recipient is terminated for Cause (as defined below)
before satisfaction of the terms and conditions for the vesting (within the meaning of Section 83
of the Internal Revenue Code of 1986, as amended) of all Unvested Shares, the number of Unvested
Shares not theretofore vested shall be returned to the Company and forfeited without remuneration
by the Company. If the employment or relationship with the Company and its Affiliates of the
Recipient is terminated without Cause or as a result of a general layoff, job elimination, death or
disability before satisfaction of the terms and conditions of the vesting of all Restricted Shares,
the Recipient shall immediately vest in two-thirds of the Unvested Shares, and the remaining
one-third of the Unvested Shares shall be returned to the Company and forfeited without
remuneration by the Company. If Unvested Shares issued shall be returned to the Company and
forfeited as provided above, the Recipient, or in the event of the Recipient’s death, the
Recipient’s personal representative, shall forthwith deliver to the Secretary of the Company the
certificates representing such Restricted Shares, accompanied by such instrument of transfer, if
any, as may reasonably be required by the Company. For purposes of this Section 1(c) the term
“Affiliate” means any corporation more than 50% of whose stock having general voting power is owned
by the Company or by another Affiliate of the Company.

For purposes of this Section 1(c), the term “Cause” shall mean any one or more of the following:
(i) the Recipient’s conviction of a felony; (ii) the Recipient’s commission of fraud, embezzlement,
theft or other acts involving dishonesty, or crimes constituting moral turpitude, in any case
whether or not involving the Company, that, in the reasonable opinion of the Company, render his or
her continued employment harmful to the Company; (iii) the voluntary resignation of the Recipient
without the prior consent of the Company, or (iv) excessive absenteeism not related to illness.

(d) The Recipient shall not receive any dividends payable on the Shares or be entitled to vote
the Shares while they are held by the Rabbi Trust. However, the Recipient shall receive dividend
equivalent payments equal to the dividends payable on the Shares (the “Dividend Equivalents”) at or
about the same time that the Company pays dividends to holders of its Common Shares of Beneficial
Interest. The Dividend Equivalents shall be paid in accordance with elections made pursuant to the
Master Exchange Agreement; either to the Beneficiary through payroll as W-2 compensation, or
directly to the Camden Property Trust Key Employee Share Option Plan, as amended (“KEYSOP”). If
the Recipient forfeits any of the Shares pursuant to Section 1(c) above, then the Recipient shall
no longer receive any Dividend Equivalents with respect to such forfeited Shares. After the
Recipient exercises any of the Rights to Repurchase the Shares from the Rabbi Trust, he or she
shall no longer receive any Dividend Equivalents with respect to Shares that he or she has
purchased.

2. Share Incentive Plan. The Company and the Recipient each hereby agree to be bound
by the terms and conditions set forth in the 2002 Share Incentive Plan of Camden Property Trust, as
may be amended from time to time, and each and every successor plan thereto (collectively, the
“Share Incentive Plan”); provided, however, that in the event of any conflict between the terms and
conditions of the Share Incentive Plan and the terms and conditions of this Award, the terms and
conditions of this Award shall govern and control.

 

 

 

3. Acceleration. Notwithstanding any other provision of this Award to the contrary,
all or any part of the Restricted Share Bonus Award not theretofore vested shall vest: (a) upon
the occurrence of such special circumstance or event as in the opinion of the Committee merits
special consideration, or (b) upon a Change in Control (as defined below) in which case the date on
which such immediate exercisability and accelerated vesting shall occur shall be the date of the
occurrence of the Change in Control; provided, however, that with respect to any portion of this
Award that vests on and after January 1, 2005, such accelerated vesting shall in no way affect the
exercise date applicable to such portion under the terms of the Master Exchange Agreement.

A “Change in Control” shall be deemed to have occurred if:

(a) any “person” (as such term is used in Section 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”)) (other than the Company, any trustee or other
fiduciary holding securities under an employee benefit plan of the Company, or any company owned,
directly or indirectly, by the shareholders of the Company in substantially the same proportions as
their ownership of Shares the Company) together with its “affiliates” and “associates” (as such
terms are defined in Rule 12b-2 of the Exchange Act) makes a tender or exchange offer for or is or
becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), or has become the
beneficial owner during the most recent twelve-month period ending on the date of the most recent
acquisition by such person directly or indirectly, of securities of the Company representing 40% or
more of the combined voting power of the Company’s then outstanding securities; or

(b) during any period of two consecutive years (not including any period prior to the
effective date of this Award), individuals who at the beginning of such period constitute the Board
of trust Managers of the Company, and any new Trust Manager (other than a Trust Manager designated
by a person who has entered into an agreement with the Company to effect a transaction described in
clause (a), (c) or (d) of this definition) whose election by the Board or nomination for election
by the Company’s shareholders was approved by a vote of at least two-thirds of the Trust Managers
then still in office who either were Trust Managers at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any reason to constitute
at least a majority thereof; or

(c) the shareholders of the Company approve a merger or consolidation of the Company with any
other company other than (i) a merger or consolidation which would result in the voting securities
of the Company outstanding immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving entity) more than 80% of
the combined voting power of the voting securities of the Company (or such surviving entity)
outstanding immediately after such merger or consolidation or (ii) a merger or consolidation
effected to implement a recapitalization of the Company (or similar transaction) in which no
“person” (as hereinabove defined) acquires more than 25% of the combined voting power of the
Company’s then outstanding securities; or

 

 

 

(d) the shareholders of the Company adopt a plan of complete liquidation of the Company or
approve an agreement for the sale, exchange or disposition by the Company of all or a significant
portion of the Company’s assets. For purposes of this clause (d), the term “the
sale, exchange or disposition by the Company of all or a significant portion of the Company’s
assets” shall mean a sale or other disposition transaction or series of related transactions
involving assets of the Company or any subsidiary of the Company (including the stock of any
subsidiary of the Company) in which the value of the assets or stock being sold or otherwise
disposed of as measured by the purchase price being paid therefore or by such other method as the
Board determines is appropriate in a case where there is no readily ascertainable purchase price)
constitutes more than 33-1/3% of the Fair Market Value of the Company (as hereinafter defined).
For purposes of the preceding sentence, the “Fair Market Value of the Company” shall be the
aggregate market value of the outstanding shares of beneficial interest of the Company (on a fully
diluted basis) plus the aggregate market value of the Company’s other outstanding equity
securities. The aggregate market value of the Common Shares shall be determined by multiplying the
number of Common Shares (on a fully diluted basis) outstanding on the date of the execution and
delivery of a definitive agreement with respect to the transaction or series of related
transactions (the “Transaction Date”) by the average closing price of the Common Shares for the ten
trading days immediately preceding the Transaction Date. The aggregate market value of the Common
Shares or by such other method as the Board of Trust Managers shall determine is appropriate.

Notwithstanding the foregoing, a Change in Control shall not be deemed to have occurred if,
prior to the time a Change in Control would otherwise be deemed to have occurred pursuant to the
above provisions, the Board of Trust Managers determines otherwise.

4. Notices. Any notices or other communications given in connection with this Award
shall be mailed, and shall be sent by registered or certified mail, return receipt requested, to
the indicated address as follows:

If to the Company:

Camden Property Trust

Three Greenway Plaza, Suite 1300

Houston, Texas 77046

Attention: Chief Financial Officer

or to such changed address as to which either party has given notice to the other party in
accordance with this Section 4. All notices shall be deemed given when so mailed, except that a
notice of a change of address shall be deemed given when received.

5. Entire Award. This Award (and the certificate, if any, issued to the Recipient
with respect to the Shares) together with the Share Incentive Plan, the Master Exchange Agreement
and the KEYSOP constitute the whole agreement between the parties hereto with respect to the
subject matter hereof, and supersede all prior oral and written communications and agreements, and
all contemporaneous oral communications and agreements with respect to the subject matter hereof.

 

 

 

6. No Employment Agreement. This Award shall not be construed as creating any
contract of employment between the Company and the Recipient, and the Company shall have the same
control over the Recipient as if this Award had never been executed.

7. Successors and Assigns. This Award shall inure to the benefit of, and be binding
on, the Company and its successors and assigns, and shall inure to the benefit of, and be binding
on, the Recipient and the Recipient’s heirs, executors, administrators and legal representatives.
This Award shall not be assignable by the Recipient. Neither the Recipient nor the Recipient’s
estate, personal representative or beneficiary shall have the power or right to sell, exchange,
pledge, transfer, assign or otherwise encumber or dispose of the Recipient’s, estate’s, personal
representative’s or beneficiary’s interest in the Restricted Share Bonus Award and to the extent
any such interest is awarded to a spouse pursuant to any divorce proceeding, such interest shall be
deemed to be terminated and forfeited, notwithstanding any vesting provisions or other terms
herein.

8. Governing Law. This Award shall be subject to, and construed in accordance with,
the laws of the State of Texas without giving effect to principles of conflicts of law.

9. Preemption. Notwithstanding anything in this Award to the contrary, if, at any
time specified herein for the making of any determination or payment, or the issuance or other
distribution of the Shares, any law, regulation or requirement of any governmental authority having
jurisdiction in the premises shall require either the Company or the Recipient (or the Recipient’s
beneficiary), as the case may be, to take any action in connection with any such determination,
payment, issuance or distribution, the issuance or distribution of such Shares or the making of
such determination or payment, as the case may be, shall be deferred until such action shall have
been taken.

10. Construction. Titles and headings to Sections herein are for purposes of
reference only, and shall in no way limit, define or otherwise affect the meaning or interpretation
of any provisions of this Award.

IN WITNESS WHEREOF, Camden Property Trust has executed this Award as of the date and year
first above written.

	 	 	 	 	 
	 	CAMDEN PROPERTY TRUST

 	 
	 	By:  	 	 
	 	 	Dennis Steen 	 
	 	 	Chief Financial Officer 	 

 

 

 

	 	 	 	 	 

RESTRICTED SHARE AWARD

Shares to the Rabbi Trust

DATED: [Current date]

                     Restricted Common Shares of Beneficial Interest (“Restricted Shares”) in Camden
Property Trust (“CPT”) were previously awarded by the Compensation Committee of the Board of Trust
Managers and placed in the Rabbi Trust for the benefit of                                          (“Recipient”),
subject to the terms and conditions set forth in the Amended and Restated Master Exchange Agreement
executed by Recipient and CPT, as amended by Amendment No. 1 to the Amended and Restated Master
Exchange Agreement (as amended, the “Master Exchange Agreement”). As of the date indicated above,

 _____ 
Restricted Shares of the above award remain subject to your right to repurchase such Shares
from the Rabbi Trust at a price of $XX.XX per share; such repurchase may occur at the time or times
specified in accordance with the Master Exchange Agreement and any applicable elections made by the
Recipient related to such time or times.

Of the above award, the Restricted Shares that remain subject to your right to repurchase as of the
date indicated above vest as follows:

	 	 	 	 	 
	Aggregate	 	Vesting	 
	Number Vested:	 	Date	 
	 
	 	May 1, 20__
	 
	 	May 1, 20__
	 
	 	May 1, 20__
	 
	 	May 1, 20__
	 
	 	May 1, 20__

Dividend Equivalent payments on these Restricted Shares shall be paid in accordance with elections
made pursuant to the Master Exchange Agreement with respect to these Restricted Shares. Such
Dividend Equivalent payments will be paid to the Recipient through payroll as W-2 compensation or
deferred into the Camden Property Trust Key Employee Share Option Plan (the “KEYSOP”), as elected.

Subject to the terms of the Master Exchange Agreement, in the event of a Change of Control (as
defined therein), upon termination of employment, any unvested Restricted Shares shall be forfeited
by the undersigned and canceled. Any vested shares and related dividend equivalents held by the
Rabbi Trust shall be subject to the terms and conditions of the Master Exchange Agreement, the
Rabbi Trust and the KEYSOP.

	 	 	 	 	 
	 	CAMDEN PROPERTY TRUST

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

THIS CERTIFICATE IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT AN ACTUAL SHARE CERTIFICATE.

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