Document:

Exhibit 10.6

 

THIS NOTE AND THE MEMBERSHIP UNITS ISSUABLE UPON EXCHANGE OF THIS NOTE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY
NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144
UNDER SUCH ACT.

 

SECURED
EXCHANGEABLE PROMISSORY NOTE

 

	
  $30,000,000

  	
   

  	
  Atlanta,
  Georgia

                          , 2007

  

 

 

FOR VALUE RECEIVED, the
undersigned, HELIO, INC., a Delaware corporation (the “Company”),
promises to pay to EARTHLINK, INC., a Delaware corporation (“Lender”), the principal amount of Thirty Million Dollars
($30,000,000), with interest thereon from July 25, 2007 until paid in full on
the Maturity Date at a rate per annum equal to ten percent (10.00%), calculated
on the basis of a 360-day year and the actual number of days elapsed. Capitalized
terms used in this Note without definition shall have the meanings provided in
that certain Note Purchase and Security Agreement and Guaranty entered into as
of July 23, 2007 (as amended, modified and supplemented from time to time, the “Purchase Agreement”), by and between the Company, HELIO,
LLC, a Delaware LLC (“Guarantor”,
together with the Company, the “Note Parties”,
and individually, a “Note Party”)
and Lender. To the extent set forth in the Purchase Agreement and subject to
the provisions in the Purchase Agreement, the Guarantor guarantees the payment
of the Obligations of the Company under the Note. This Note replaces the note
issued July 25, 2007 pursuant to the Purchase Agreement, which note is hereby
cancelled.

 

The principal amount of this
Note and all accrued interest thereon shall be due and payable on the Maturity
Date. On the Maturity Date the entire unpaid principal balance of this Note,
together with any and all accrued and unpaid interest (including, without limitation,
all interest that has been added to principal hereunder) and any and all costs
and expenses provided for under this Note and the other Note Documents, shall
be due and payable. This Note may be prepaid at any time without penalty.

 

All payments under this Note
shall be made to Lender or its order, in lawful money of the United States of
America and in immediately available funds delivered to Lender by wire transfer
of immediately available funds to Lender’s account, at Bank of
America, 100 West 331d Street, New York, New York 10001, ABA No. 0260-0959-3,
Swift Code: BOFAUS3N, Account Name: EarthLink, Inc., Account No. 003271085419,
or at such other place within the United States as Lender or any holder hereof
shall designate in writing for such purpose from time to time. If a payment
under this Note otherwise would become due and payable on a day that is not a
Business Day, the due date thereof shall be extended to the next Business Day
and interest shall be payable thereon during such extension. All amounts due
under this Note and the other Note Documents shall be payable without defense,
set off or counterclaim.

 

Each payment under this Note
shall be applied in the following order: (i) to the payment of costs and
expenses which the Company is required to pay pursuant to the provisions of
this Note or any of the other Note Documents; (ii) to the payment of accrued
and unpaid interest; and (iii) to the payment of outstanding principal. Lender
and each holder hereof shall have the continuing and exclusive right to apply
or reverse and reapply any and all payments under this Note.

 

Subject to the further
provisions of this Note, any holder hereof may exchange this Note (or portion
thereof) at any time through the close of business on the Maturity Date at the Exchange
Price then in effect into Preferred Membership Units of the Guarantor (the “Membership Units”). The number of Membership Units issuable
upon exchange of the Note shall be determined by dividing the outstanding

 

 

 

principal amount (excluding accrued and
unpaid interest) of the Note (or portion thereof) surrendered for exchange by
the Exchange Price in effect on the Exchange Date (as defined herein). In
connection with any such exchange, such holder also shall have the right to
receive a payment (each, an “Exchange Interest Payment”),
at the time and in the manner provided herein, of the accrued and unpaid
interest with respect to the outstanding principal amount of the Note (or
portion thereof) so exchanged, which payment shall be made, at the election of
the Guarantor, in cash, Membership Units, or a combination thereof. Subject to
adjustment or voluntary reduction as provided herein, the Exchange Price
initially shall be $3.00 per Membership Unit.

 

A holder hereof is not
entitled to any rights as a Member of the Guarantor by virtue of the Note until
such holder has exchanged its Note for Membership Units.

 

To exchange the Note, the holder
hereof must (i) complete and manually sign the exchange notice on the back
of the Note (or complete and manually sign a facsimile of such notice) and
deliver such notice to the Company and the Guarantor, (ii) surrender the
Note to the Company, (iii) have satisfied any necessary filing
requirements under the Hart-Scott-Rodino Act of 1976, as amended (the “HSR Act”), in respect of its acquisition of the Membership
Units upon such exchange and the waiting period under such HSR Act shall have
expired or been terminated without objection to such acquisition,
(iv) have received any other necessary regulatory consents to its
acquisition of the Membership Units upon such exchange and (v) pay any
transfer or similar tax if required herein. The date on which the holder hereof
satisfies all of those requirements is the “Exchange
Date.”  The notice of exchange
shall state that such holder has satisfied or will have satisfied prior to the
issuance of Membership Units upon exchange of such principal amount, and prior
to the payment of the Exchange Interest Payment, any and all legal or
regulatory requirements for exchange, including compliance with the Securities
Act of 1933, as amended (the “Securities Act”),
the Securities Exchange Act of 1934, as amended (the “Exchange Act”)
and the HSR Act. The Guarantor shall use their reasonable best efforts in
cooperating in a timely manner with the holder hereof to obtain such legal or
regulatory approvals to the extent its cooperation is necessary.

 

As soon as practicable after
the Exchange Date and in no event later than five Business Days following the Exchange
Date, the Guarantor shall deliver to the holder hereof (i) Membership Units
issuable upon the exchange of the Note or portion thereof, (ii) cash in
lieu of any fractional Membership Units and (iii) cash, Membership Units,
or a combination thereof, in an amount equal to the Exchange Interest Payment.

 

The Person or Persons in
whose name the Membership Units are registered shall be deemed to be a Member
of the Guarantor on and after the Exchange Date, as the case may be. Upon
exercise of the Note (in whole and not in part), such Person shall no longer be
a holder of the Note.

 

Upon surrender of the Note exchanged
in part, as soon as practicable after the Exchange Date and in no event later
than five Business Days following the Exchange Date, the Company shall execute
and deliver to the holder hereof, a new Note equal in principal amount to the
unexchanged portion of the Note surrendered.

 

If the last day on which a
Note may be exchanged is not a Business Day, the Note may be surrendered to the
Company on the next succeeding day that is a Business Day.

 

The Guarantor shall not
issue fractional Membership Units upon exchange of the Note. In lieu thereof,
the Guarantor shall, at the Guarantor’s option, pay an amount in cash based
upon the Exchange Price or round up the number of Membership Units issuable
upon such exchange to the next highest whole number.

 

If the holder hereof exchanges
the Note, the Guarantor shall pay any documentary, stamp or similar issue or
transfer tax due on the issue of Membership Units upon such exchange. However, such

 

2

 

holder shall pay any such tax that is due
because such holder requests the Membership Units to be issued in a name other
than such holder’s name. The Guarantor may refuse to deliver the Membership Units
being issued in a name other than such holder’s name until the Guarantor
receives a sum sufficient to pay any tax which will be due because the Membership
Units are to be issued in a name other than such holder’s name. Nothing herein
shall preclude any tax withholding required by law or regulation.

 

The
Exchange Price shall be adjusted from time to time by the Guarantor in the
event the Guarantor shall (A) make a distribution in Membership Units to
all holders of its Membership Units, (B) subdivide or split its outstanding Membership Units into a larger number of Membership Units, or (C) combine
its outstanding Membership Units into a smaller number of shares, the Exchange
Price in effect immediately prior thereto shall be adjusted so that the holder
hereof shall be entitled to receive that number of Membership Units that it
would have owned or been entitled to receive had the Note been exchanged
immediately prior to the happening of such event. If any distribution of the type
described in this paragraph is declared but not so made, the Exchange Price
shall again be adjusted to the Exchange Price that would then be in effect if
such distribution had not been declared.

 

If any of the following shall occur, namely: 
(A) any reclassification or change of Membership Units issuable upon exchange
of the Note (other than as a result of a subdivision or combination, or any
other change for which an adjustment is provided in this Note); (B) any
consolidation, merger or combination to which the Guarantor is a party other
than a merger in which the Guarantor is the continuing corporation and which
does not result in any reclassification of, or change (other than a change in
name or as a result of a subdivision or combination) in, outstanding Membership
Units; or (C) any sale, transfer or conveyance of all or substantially all
of the property and assets of the Guarantor to any Person, then the Guarantor,
or such successor or purchasing corporation or, if applicable, the parent
entity of such successor or purchasing entity, as the case may be, shall, as a
condition precedent to such reclassification, change, consolidation, merger,
combination, sale, transfer or conveyance, execute and deliver to the holder
hereof an amendment to the Note providing that such holder of the Note then
outstanding shall have the right to exchange the Note into the kind and amount
of securities and property (including cash) receivable upon such
reclassification, change, consolidation, merger, combination, sale, transfer or
conveyance by a holder of the number Membership Units deliverable upon exchange
of such Note immediately prior to such reclassification, change, consolidation,
merger, sale, transfer or conveyance.

 

No adjustment in the Exchange
Price shall be required unless the adjustment would require an increase or
decrease of at least 1% in the Exchange Price as last adjusted; provided that any adjustments which by
reason of this paragraph are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. All calculations for
adjustment shall be made to the nearest cent or to the nearest one hundredth of
a share, as the case may be. No
adjustment need be made for (i) the issuance of options or rights to purchase Membership
Units pursuant to any present or future employee, director or consultant
benefit plan or program of or assumed by the Guarantor or any subsidiary or
(ii) the issuance of Membership Units pursuant to any option, warrant,
right or exercisable, exchangeable or convertible security outstanding as of
the date hereof. To the extent that the Note becomes exchangeable into the
right to receive cash, no adjustment need be made thereafter as to the cash.
Interest will not accrue on the cash.

 

The Guarantor shall be entitled to make such
reductions in the Exchange Price, in addition to those required by the terms of
this Note, as it in its discretion shall determine to be advisable in order
that any unit distributions, subdivisions of units, distributions of rights to
purchase stock or debt or distributions of debt convertible into or
exchangeable for Equity Interests hereafter made by the Guarantor to its Members
shall not be taxable, provided
that such reduction does not have an adverse effect for tax purposes, or
otherwise, on the holder hereof.

 

3

 

Whenever the Exchange Price is adjusted, the Company
shall promptly mail to the holder hereof a notice of the adjustment and an
officers’ certificate briefly stating the facts requiring the adjustment, the
manner of computing it, the new Exchange Price and the date on which the
adjustment becomes effective.

 

In the event that (i) the Guarantor takes any
action that would require an adjustment in the Exchange Price, (ii) the Guarantor
consolidates, merges or combines with, or transfers all or substantially all of
its property and assets to, another Person and Members of the Guarantor must
approve the transaction, or (iii) there is a dissolution, liquidation or
winding up of the Guarantor, the Company shall mail to the holder hereof a
notice stating the proposed record or effective date, as the case may be. The
Company shall mail the notice at least 15 days before such date.

 

This Note is one of a series of Notes issuable to
the Lenders pursuant to the terms of the Purchase Agreement and in accordance
with the Lenders Commitments as described therein. All payments made to Lenders
under this Note and any other Notes shall be made by the Company to each Lender
at the same times and in proportion to each Lender’s Pro Rata Share. No Lender
shall have a priority of payment over another Lender with respect to payments
due under the Notes.

 

Upon the occurrence of any Event of Default, the
obligations under this Note shall become due and payable in accordance with the
provisions of the Purchase Agreement, and Lender shall have all other remedies
available under the Purchase Agreement. In addition, upon the occurrence of an
Event of Default, interest shall thereafter accrue on the entire unpaid
principal balance under this Note, including without limitation (x) any accrued
interest which has been added to the principal balance and (y) any delinquent
interest which has been added to the principal amount due under this Note
pursuant to the terms hereof, at the rate set forth herein plus two percent
(2.00%) per annum (on the basis of a 360-day year and the actual number of days
elapsed). All interest which has become payable and is then delinquent shall,
without curing the default under this Note by reason of such delinquency, be
added to the principal amount due under this Note, and shall thereafter bear
interest at the same rate as is applicable to principal, with interest on
overdue interest to bear interest, in each case to the fullest extent permitted
by applicable law, both before and after default, maturity, foreclosure,
judgment and the filing of any petition in a bankruptcy proceeding. In no event
shall interest be charged under this Note which would violate any applicable
law. If the rate of interest provided for herein would otherwise exceed the
maximum rate permitted by applicable law, then the interest rate shall be
reduced to the maximum rate permitted by applicable law.

 

This Note is secured as set forth in the Purchase
Agreement. Reference is hereby made to the Purchase Agreement for a description
of the nature and extent of the security for this Note and the rights and
remedies available to the holder of this Note. Nothing herein shall be deemed
to limit the rights of Lender under this Note or the Note Agreement, all of
which rights and remedies are cumulative.

 

No waiver or modification of any of the terms of
this Note shall be valid or binding unless set forth in a writing specifically
referring to this Note and signed by a duly authorized officer of Lender or any
holder of this Note, and then only to the extent specifically set forth
therein.

 

If any default occurs in any payment due under this
Note, the Company and all guarantors and endorsers hereof, and their successors
and assigns, promise to pay all costs and expenses, including attorneys’ fees,
incurred by each holder hereof in collecting or attempting to collect the
indebtedness under this Note, whether or not any action or proceeding is
commenced. None of the provisions hereof and none of the holder’s rights or
remedies under this Note on account of any past or future defaults shall be
deemed to have been waived by the holder’s acceptance of any past due
installments or by any indulgence granted by the holder to the Company.

 

The Company and all guarantors and endorsers hereof,
and their successors and assigns, hereby waive presentment, demand, diligence,
protest and notice of every kind (except such notices as may be

 

4

 

required
under the Purchase Agreement), and agree that they shall remain liable for all
amounts due under this Note notwithstanding any extension of time or change in
the terms of payment of this Note granted by any holder hereof, any change,
alteration or release of any property now or hereafter securing the payment
hereof or any delay or failure by the holder hereof to exercise any rights
under this Note or the Purchase Agreement. The Company and all guarantors and
endorsers hereof, and their successors and assigns, hereby waive the right to plead
any and all statutes of limitation as a defense to a demand under this Note to
the full extent permitted by law.

 

As set forth in the Purchase Agreement, the Lender
may not assign or transfer its rights and obligations under this Note without
the prior written consent of SK Telecom USA Holdings, Inc. This
Note shall inure to the benefit of Lender, its successors and assigns and shall
bind the heirs, executors, administrators, successors and assigns of the
Company. Each reference herein to powers or rights of Lender shall also be
deemed a reference to the same power or right of such assignees, to the extent
of the interest assigned to them.

 

In the event that any one or more provisions of this
Note shall be held to be illegal, invalid or otherwise unenforceable, the same
shall not affect any other provision of this Note and the remaining provisions
of this Note shall remain in full force and effect.

 

This Note shall be governed by and construed in
accordance with the laws of the State of Georgia, without giving effect to the
principles thereof relating to conflicts of law; provided, that Lender and each
holder hereof reserves any and all rights it may have under federal law,
including without limitation those relating to the charging of interest.

 

[The
remainder of this page intentionally left blank]

 

5

 

IN WITNESS WHEREOF, the
Company has caused this Secured Exchangeable Promissory Note to be duly executed
the day and year first above written.

 

 

	
   

  	
   

  	
  HELIO, INC.,

  
	
   

  	
   

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Sky Dayton

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
						

 

 

[Signature Page to
Secured Exchangeable Promissory Note]Exhibit 10.1

SL GREEN REALTY CORP.

AMENDED AND RESTATED 2005 STOCK OPTION AND
INCENTIVE  PLAN

 

 

 

 

TABLE OF
CONTENTS

 

Page

	
  1.

  	
  DEFINITIONS

  	
  1

  
	
  2.

  	
  EFFECTIVE
  DATE AND TERMINATION OF PLAN

  	
  5

  
	
  3.

  	
  ADMINISTRATION
  OF PLAN

  	
  5

  
	
  4.

  	
  SHARES
  AND UNITS SUBJECT TO THE PLAN

  	
  6

  
	
  5.

  	
  PROVISIONS
  APPLICABLE TO STOCK OPTIONS

  	
  7

  
	
  6.

  	
  PROVISIONS
  APPLICABLE TO RESTRICTED STOCK

  	
  10

  
	
  7.

  	
  PROVISIONS
  APPLICABLE TO PHANTOM SHARES

  	
  12

  
	
  8.

  	
  PROVISIONS
  APPLICABLE TO DIVIDEND EQUIVALENT RIGHTS

  	
  15

  
	
  9.

  	
  OTHER
  EQUITY-BASED AWARDS

  	
  16

  
	
  10.

  	
  PERFORMANCE
  GOALS

  	
  16

  
	
  11.

  	
  TAX
  WITHHOLDING

  	
  17

  
	
  12.

  	
  REGULATIONS
  AND APPROVALS

  	
  18

  
	
  13.

  	
  INTERPRETATION
  AND AMENDMENTS; OTHER RULES

  	
  18

  
	
  14.

  	
  CHANGES
  IN CAPITAL STRUCTURE

  	
  19

  
	
  15.

  	
  MISCELLANEOUS

  	
  20

  
	
  EXHIBIT
  A PERFORMANCE GOALS

  	
  22

  
	
  EXHIBIT B PERFORMANCE GOALS

  	
  23

  

 

 

 

i

 

SL GREEN REALTY
CORP.

AMENDED AND RESTATED

2005 STOCK OPTION AND INCENTIVE PLAN

SL Green Realty Corp., a Maryland corporation, wishes to attract and
retain qualified key employees, Directors, officers, advisors, consultants and
other personnel and encourage them to increase their efforts to make the
Company’s business more successful whether directly or through its Subsidiaries
or other affiliates.  In furtherance
thereof, the SL Green Realty Corp. Amended and Restated 2005 Stock Option and
Incentive Plan, as amended as of September 19, 2007, is designed to provide
equity-based incentives to certain Eligible Persons.  Awards under the Plan may be made to Eligible
Persons in the form of Options, Restricted Stock, Phantom Shares, Dividend
Equivalent Rights or other forms of equity-based compensation.

1. DEFINITIONS.

Whenever used herein, the
following terms shall have the meanings set forth below:

“Annual Rate” means the number of Shares subject to Awards granted in a
single year divided by the number of Shares of the Company’s outstanding Common
Stock at the end of such year.

“Award,” except where referring to a particular category of grant under
the Plan, shall include Incentive Stock Options, Non-Qualified Stock Options,
Restricted Stock, Phantom Shares, Dividend Equivalent Rights and other
equity-based Awards as contemplated herein.

“Award Agreement” means a written agreement in a form approved by the
Committee to be entered into between the Company and the Participant as
provided in Section 3.  An Award Agreement
may be, without limitation, an employment or other similar agreement containing
provisions governing grants hereunder, if approved by the Committee for use
under the Plan.

“Board” means the Board
of Directors of the Company.

“Cause” means, unless otherwise provided in the Participant’s Award
Agreement, (i) engaging in (A) willful or gross misconduct or
(B) willful or gross neglect; (ii) repeatedly failing to adhere to the
directions of superiors or the Board or the written policies and practices of the
Company or its Subsidiaries or its affiliates; (iii) the commission of a felony
or a crime of moral turpitude, dishonesty, breach of trust or unethical
business conduct, or any crime involving the Company or its Subsidiaries, or
any affiliate thereof; (iv) fraud, misappropriation or embezzlement; (v) any
illegal act detrimental to the Company its Subsidiaries or any affiliate
thereof; (vi) repeated failure to devote substantially all of the Participant’s
business time and efforts to the Company or its Subsidiaries, or any affiliate
thereof, if required by the Participant’s employment agreement; or (vii) the
Participant’s failure  adequately and
competently to perform his duties after receiving notice from the Company or
its Subsidiaries, or any affiliate thereof specifically identifying the manner
in which the Participant has failed to perform; provided, however, that, if at
any particular time the Participant is subject to an effective employment
agreement or consulting agreement with the Company, then, in lieu of the
foregoing definition, “Cause” shall at that time have such meaning as may be
specified in such employment agreement.

 

1

 

“Change in Control”
means:

 

(i)           
any “person,” including a “group” (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act, together with all “affiliates” and “associates” (as
such terms are defined in Rule 12b-2 under the Exchange Act) of such person,
shall become the “beneficial owner” (as such term is defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company
representing 25% or more of either (A) the combined voting power of the Company’s
then outstanding securities having the right to vote in an election of the
Board (“Voting Securities”) or (B) the then outstanding shares of all classes
of stock of the Company (in either such case other than as a result of the
acquisition of securities directly from the Company); or

(ii)           the
members of the Board at the beginning of any consecutive 24-calendar-month
period commencing on or after the initial effective date of the Plan (the “Incumbent
Directors”) cease for any reason including without limitation, as a result of a
tender offer, proxy contest, merger or similar transaction, to constitute at
least a majority of the Board; provided that any person becoming a director of
the Company whose election or nomination 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 24-calendar-month period, shall, for purposes
hereof, be considered an Incumbent Director; or

(iii)          the
shareholders of the Company shall approve (A) any consolidation or merger of
the Company or any subsidiary where the shareholders 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 at least 50% of the voting shares of the corporation issuing cash
or securities in the consolidation or merger (or of its ultimate parent
corporation, if any), (B) 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 or
(C) any plan or proposal for the liquidation or dissolution of the Company.

Notwithstanding the foregoing clause (i), an event described in clause
(i) shall not be a Change in Control if such event occurs solely as the result
of an acquisition of securities by the Company which, by reducing the number of
shares of stock or other Voting Securities outstanding, increases (x) the
proportionate number of shares of stock of the Company beneficially owned by
any “person” (as defined above) to 25% or more of the shares of stock then
outstanding or (y) the proportionate voting power represented by the Voting
Securities beneficially owned by any “person” (as defined above) to 25% or more
of the combined voting power of all then outstanding Voting Securities;
provided, however, that if any “person” referred to in clause (x) or (y) of
this sentence shall thereafter become the beneficial owner of any additional
stock of the Company or other Voting Securities (other than pursuant to a share
split, stock dividend, or similar transaction), then a Change in Control shall
be deemed to have occurred for purposes of the foregoing clause (i).

Notwithstanding the foregoing, no event or condition shall constitute a
Change in Control to the extent that, if it were, a 20% tax would be imposed
under Section 409A of the Code; provided that, in such a case, the event or
condition shall continue to constitute a Change in Control to the maximum
extent possible (e.g., if applicable, in regard of vesting without an
acceleration of distribution) without causing the imposition of such 20% tax.

“Code” means the Internal Revenue Code of 1986, as amended.

 

2

 

“Committee” means the Compensation Committee of the Board.

 

“Common Stock” means the
shares of common stock of the Company as constituted on the effective date of
the Plan, and any other shares into which such common stock shall thereafter be
changed by reason of a recapitalization, merger, consolidation, split-up,
combination, exchange of shares or the like.

 

“Company” means SL Green
Realty Corp., a Maryland corporation.

“Director” means a
non-employee director of the Company or its Subsidiaries.

“Disability” means, unless otherwise provided by the Committee in the
Participant’s Award Agreement, a disability which renders the Participant
incapable of performing all of his or her material duties for a period of at
least 150 consecutive or non-consecutive days during any consecutive
twelve-month period.  Notwithstanding the
foregoing, no circumstances or condition shall constitute a Disability to the
extent that, if it were, a 20% tax would be imposed under Section 409A of the
Code; provided that, in such a case, the event or condition shall continue to
constitute a Disability to the maximum extent possible (e.g., if applicable, in
regard of vesting without an acceleration of distribution) without causing the
imposition of such 20% tax.

“Dividend Equivalent Right” means a right awarded under Section 8 of
the Plan to receive (or have credited) the equivalent value of dividends paid
on Common Stock.

“Eligible Person” means a key employee, Director, officer, advisor, consultant
or other personnel of the Company and its Subsidiaries or other person expected
to provide significant services (of a type expressly approved by the Committee
as covered services for these purposes) to the Company or its Subsidiaries.

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

“Fair Market Value”
per Share as of a particular date means (i) if Shares are then listed on a
national stock exchange, the closing sales price per Share on the exchange for
the last preceding date on which there was a sale of Shares on such exchange,
as determined by the Committee, (ii) if Shares are not then listed on a
national stock exchange but are then traded on an over-the-counter market, the
average of the closing bid and asked prices for the Shares in such
over-the-counter market for the last preceding date on which there was a sale
of such Shares in such market, as determined by the Committee, or (iii) if
Shares are not then listed on a national stock exchange or traded on an
over-the-counter market, such value as the Committee in its discretion may in
good faith determine; provided that, where the Shares are so listed or traded,
the Committee may make such discretionary determinations where the Shares have
not been traded for 10 trading days.

 

“Full-Value Award” means an Award other than an Option, Stock
Appreciation Right or other Award that does not deliver the full value at grant
thereof of the underlying shares.

“Fungible Pool
Unit” shall be the measuring unit used for
purposes of the Plan, as specified in Section 4, to determine the number of
Shares which may be subject to Awards hereunder, which shall consist of Shares
in the proportions (ranging from 0.7 to 3.0) as set forth in Section 4(a).

“Grantee” means an Eligible Person granted Restricted Stock, Phantom
Shares, Dividend Equivalent Rights or such other equity-based Awards as may be
granted pursuant to Section 9.

 

3

 

“Incentive Stock Option” means an “incentive stock option” within the
meaning of Section 422(b) of the Code.

“Non-Qualified Stock
Option” means an Option which is not an Incentive Stock Option.

“Option” means the right to purchase, at a price and for the term fixed
by the Committee in accordance with the Plan, and subject to such other
limitations and restrictions in the Plan and the applicable Award Agreement, a
number of Shares determined by the Committee.

“Optionee” means an Eligible Person to whom an Option is granted, or
the Successors of the Optionee, as the context so requires.

“Option Price” means the
price per Share, determined by the Board or the Committee, at which an Option
may be exercised.

“Participant” means a
Grantee or Optionee.

 “Phantom Share” means a right,
pursuant to the Plan, of the Grantee to payment of the Phantom Share Value.

“Phantom Share Value,” per Phantom Share, means the Fair Market Value
of a Share of Class A Common Stock, or, if so provided by the Committee, such
Fair Market Value to the extent in excess of a base value established by the
Committee at the time of grant.

“Plan” means the Company’s Amended and Restated 2005 Stock Option and
Incentive Plan, as amended September 19, 2007, as set forth herein and as the
same may from time to time be amended.

“Restricted Stock” means
an award of Shares that are subject to restrictions hereunder.

“Retirement” means, unless otherwise provided by the Committee in the
Participant’s Award Agreement, the Termination of Service (other than for
Cause) of a Participant on or after the Participant’s attainment of age 65 or
on or after the Participant’s attainment of age 55 with five consecutive years
of service with the Company and or its Subsidiaries or its affiliates.

“Securities Act” means the Securities Act of 1933, as amended.

“Settlement Date” means
the date determined under Section 7.4(c).

“Shares” means shares of
Common Stock of the Company.

“Stock Appreciation Right”
means the right to settle an Option as provided for in Section 5.7.

“Subsidiary” means any corporation (other than the Company) that is a “subsidiary
corporation” with respect to the Company under Section 424(f) of the Code.  In the event the Company becomes a subsidiary
of another company, the provisions hereof applicable to subsidiaries shall,
unless otherwise determined by the Committee, also be applicable to any company
that is a “parent corporation” with respect to the Company under Section 424(e)
of the Code.

“Successor of the Optionee” means the legal representative of the
estate of a deceased Optionee or the person or persons who shall acquire the
right to exercise an Option by bequest or inheritance or by reason of the death
of the Optionee.

 

4

 

“Termination of Service” means a Participant’s termination of
employment or other service, as applicable, with the Company and its
Subsidiaries.

“Three-Year Average Annual Rate” means the average of the Annual Rates
(i) during the first three calendar years following April 1, 2005 and (ii) for
the first three calendar years following April 1, 2007.

2. EFFECTIVE DATE AND TERMINATION OF PLAN.

The effective date of the Plan is April 1, 2007.  The Plan shall not become effective unless
and until it is approved by the requisite percentage of the holders of the
Common Stock of the Company.  The Plan
shall terminate on, and no Award shall be granted hereunder on or after, the
10-year anniversary of the earlier of the approval of the Plan by (i) the Board
or (ii) the shareholders of the Company; provided, however, that the Board may
at any time prior to that date terminate the Plan; and provided, further, that
all Awards made under the Plan prior to a Plan termination shall remain in
effect until such Awards have been satisfied or terminated in accordance with
the terms and provisions of the Plan and the applicable Award Agreement.

3. ADMINISTRATION OF PLAN.

(a)   The Plan
shall be administered by the Committee appointed by the Board. Unless otherwise
determined by the Board, the Committee, upon and after such time as it is
covered in Section 16 of the Exchange Act, shall consist of at least two
individuals each of whom shall be a “nonemployee director” as defined in Rule
16b-3 as promulgated by the Securities and Exchange Commission (“Rule 16b-3”)
under the Exchange Act and shall, at such times as the Company is subject to
Section 162(m) of the Code (to the extent relief from the limitation of Section
162(m) of the Code is sought with respect to Awards), qualify as “outside
directors” for purposes of Section 162(m) of the Code; provided that no
action taken by the Committee (including without limitation grants) shall be
invalidated because any or all of the members of the Committee fails to satisfy
the foregoing requirements of this sentence. 
If and to the extent applicable, no member of the Committee may act as to
matters under the Plan specifically relating to such member.  Notwithstanding
the other foregoing provisions of this Section 3(a), any Award under the Plan
to a person who is a member of the Committee shall be made and administered by
the Board.  If no Committee is designated
by the Board to act for these purposes, the Board shall have the rights and
responsibilities of the Committee hereunder and under the Award Agreements.

(b)   Subject to
the provisions of the Plan, the Committee shall in its discretion (i) authorize
the granting of Awards to Eligible Persons; and (ii) determine the eligibility
of Eligible Persons to receive an Award, as well as determine the number of
Shares to be covered under any Award Agreement, considering the position and
responsibilities of the Eligible Persons, the nature and value to the Company
of the Eligible Person’s present and potential contribution to the success of
the Company whether directly or through its Subsidiaries and such other factors
as the Committee may deem relevant.

(c)   The Award
Agreement shall contain such other terms, provisions and conditions not
inconsistent herewith as shall be determined by the Committee.  In the event that any Award Agreement or
other agreement hereunder provides (without regard to this sentence) for the
obligation of the Company or any affiliate thereof to purchase or repurchase
Shares from a Participant or any other person, then, notwithstanding the
provisions of the Award Agreement or such other agreement, such obligation
shall not apply to the extent that the purchase or repurchase would not be
permitted under governing state law.  The
Participant shall take whatever additional actions and execute whatever
additional documents the Committee may in its reasonable judgment deem necessary
or advisable in order to carry out or effect 

 

5

 

one or more of the
obligations or restrictions imposed on the Participant pursuant to the express
provisions of the Plan and the Award Agreement.

(d)   The Committee
may provide, in its discretion, that (i) all stock issued hereunder be
initially maintained in separate brokerage account for the Participant at a
brokerage firm selected by, and pursuant to an arrangement with, the Company;
and (ii) in the case of vested Shares, the Participant may move such Shares to
another brokerage account of the Participant’s choosing or request that a stock
certificate be issued and delivered to him or her.

(e)   The
Committee, in its discretion, may delegate to the Chief Executive Officer of
the Company all or part of the Committee’s authority and duties with respect to
awards, including, without limitation, the granting of awards to individuals
who are not subject to the reporting and other provisions of Section 16 of
the Act and who are not and are not expected to be “covered employees” within
the meaning of Section 162(m) of the Code. 
Any such delegation by the Committee may, in the sole discretion of the
Committee, include a limitation as to the amount of awards that may be awarded
during the period of the delegation and may contain guidelines as to the
determination of the option exercise price, or price of other awards and the
vesting criteria.  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 that were consistent
with the terms of the Plan.

4. SHARES AND
UNITS SUBJECT TO THE PLAN.

(a)   Subject to adjustments as provided in Section
14, the total number of Shares subject to Awards granted under the Plan, in the
aggregate, may not exceed 7,000,000 (the “Fungible Pool Limit”).  Each Share issued or to be issued in
connection with Full-Value Awards that vest or are granted based on the
achievement of the performance goals set forth in Exhibit A shall be counted
against the Fungible Pool Limit as 2.0 Fungible Pool Units.  Each Share issued or to be issued in
connection with any other Full-Value Awards shall be counted against the
Fungible Pool Limit as 3.0 Fungible Pool Units.  Options, Stock Appreciation Rights and other
Awards that do not deliver the full value at grant thereof of the underlying
Shares and that expire 10 years from the date of grant shall be counted against
the Fungible Pool Limit as 1 Fungible Pool Unit.  Options, Stock Appreciation Rights and other
Awards that do not deliver the full value at grant thereof of the underlying
Shares and that expire five years from the date of grant shall be counted
against the Fungible Pool Limit as 0.7 of a Fungible Pool Unit.  (For these purposes, the number of Shares
taken into account with respect to a Stock Appreciation Right shall be the
number of Shares underlying the Stock Appreciation Rights at grant (i.e., not
the final number of Shares delivered upon exercise of the Stock Appreciation
Rights).)  Shares that have been granted
as Restricted Stock or that have been reserved for distribution in payment for
Options, Phantom Shares or other equity-based Awards but are later forfeited or
for any other reason are not payable under the Plan may again be made the
subject of Awards under the Plan.

(b)   At the end
of (i) the third calendar year following April 1, 2005 and (ii) the third
calendar year following April 1, 2007, the Three-Year Average Annual Rate,
respectively, shall not exceed the greater of (1) 2%, with respect to the third
calendar year following April 1, 2005, or 2.23%, with respect to the third
calendar year following April 1, 2007 or (2) the mean of the Company’s GICS
peer group (collectively, the “Target Rate”). 
For purposes of calculating the number of Shares granted in a year in
connection with the limitation set forth in the foregoing sentence, Shares
underlying Full-Value Awards will be taken into account as (i) 1.5 Shares if
the Company’s annual Common Stock price volatility is 53% or higher, (ii) two
Shares if the Company’s annual Common Stock price volatility is between 25% and
52%, and (iii) four Shares if the Company’s annual Common Stock price
volatility is less than 25%.  (For the
avoidance of doubt, the Annual Rate in any one year during such three-year 

 

6

 

periods may exceed
the applicable Target Rate, provided that the Three-Year Average Annual Rate
does not exceed the applicable Target Rate.)

(c)   Shares
subject to Dividend Equivalent Rights, other than Dividend Equivalent Rights
based directly on the dividends payable with respect to Shares subject to
Options or the dividends payable on a number of Shares corresponding to the
number of Phantom Shares awarded, shall be subject to the limitation of Section
4.1(a).  If any Phantom Shares, Dividend
Equivalent Rights or other equity-based Awards under Section 9 are paid out in
cash, then, notwithstanding the first sentence of Section 4.1(a) above (but
subject to the second sentence thereof) the underlying Shares may again be made
the subject of Awards under the Plan.

(d)   The
certificates for Shares issued hereunder may include any legend which the
Committee deems appropriate to reflect any rights of first refusal or other
restrictions on transfer hereunder or under the Award Agreement, or as the
Committee may otherwise deem appropriate.

(e)   No award
may be granted under the Plan to any person who, assuming exercise of all
options and payment of all awards held by such person, would own or be deemed
to own more than 9.8% of the outstanding shares of Common Stock.  Subject to adjustments as provided in Section
14, no Eligible Person shall be granted Awards (with Shares subject to Awards
being counted, depending on the type of Award, in the proportions ranging from
0.7 to 3.0, as described in Section 4(a)) in any one year covering more than
700,000 Shares, it being expressly contemplated that Awards in exclusively one
category (e.g., Options) can (but need not) be used in the discretion of the
Committee to reach the limitation set forth in this sentence.

5. PROVISIONS APPLICABLE TO STOCK OPTIONS.

5.1 Grant of
Option.

Subject to the
other terms of the Plan, the Committee (or, as expressly permitted by Section
3, the Chief Executive Officer) shall, in its discretion as reflected by the
terms of the applicable Award Agreement: (i) determine and designate from time
to time those Eligible Persons to whom Options are to be granted and the number
of Shares to be optioned to each Eligible Person; (ii) determine whether to
grant Incentive Stock Options or to grant Non-Qualified Stock Options, or both
(to the extent that any Option does not qualify as an Incentive Stock Option,
it shall constitute a separate Non-Qualified Stock Option); provided that
Incentive Stock Options may only be granted to employees; (iii) determine the
time or times when and the manner and condition in which each Option shall be
exercisable and the duration of the exercise period; (iv) designate each Option
as one intended to be an Incentive Stock Option or as a Non-Qualified Stock
Option; and (v) determine or impose other conditions to the grant or exercise
of Options under the Plan as it may deem appropriate.

5.2 Option
Price.

The Option Price shall be determined by the Committee on the date the
Option is granted and reflected in the Award Agreement, as the same may be
amended from time to time.  The Option
Price shall not be less than 100% of the Fair Market Value of a Share on the
day the Option is granted.  Any
particular Award Agreement may provide for different exercise prices for
specified amounts of Shares subject to the Option.

 

7

 

5.3 Period of
Option and Vesting.

(a)   Unless
earlier expired, forfeited or otherwise terminated, each Option shall expire in
its entirety upon the 10th anniversary of the date of grant or shall have such
other term (which may be shorter, but not longer) as is set forth in the
applicable Award Agreement (except that, in the case of an individual described
in Section 422(b)(6) of the Code (relating to certain 10% owners) who is
granted an Incentive Stock Option, the term of such Option shall be no more
than five years from the date of grant). 
The Option shall also expire, be forfeited and terminate at such times
and in such circumstances as otherwise provided hereunder or under the Award
Agreement.

(b)   Each
Option, to the extent that the Optionee has not had a Termination of Service
and the Option has not otherwise lapsed, expired, terminated or been forfeited,
shall first become exercisable according to the terms and conditions set forth
in the Award Agreement, as determined by the Committee at the time of
grant.  Unless otherwise provided in the
Award Agreement, no Option (or portion thereof) shall ever be exercisable if
the Optionee has a Termination of Service before the time at which such Option
(or portion thereof) would otherwise have become exercisable, and any Option
that would otherwise become exercisable after such Termination of Service shall
not become exercisable and shall be forfeited upon such termination.  Notwithstanding the foregoing provisions of
this Section 5.3(b), Options exercisable pursuant to the schedule set forth by
the Committee at the time of grant may be fully or more rapidly exercisable or
otherwise vested at any time in the discretion of the Committee.  Upon and after the death of an Optionee, such
Optionee’s Options, if and to the extent otherwise exercisable hereunder or
under the applicable Award Agreement after the Optionee’s death, may be
exercised by the Successors of the Optionee.

5.4 Exercisability
Upon and After Termination of Optionee.

(a)   Subject to provisions of the Award Agreement, in
the event the Optionee has a Termination of Service other than by the Company
or its Subsidiaries for Cause, or other than by reason of death, Retirement or
Disability, no exercise of an Option may occur after the expiration of the
three-month period to follow the termination, or if earlier, the expiration of
the term of the Option as provided under Section 5.3(a); provided that,
if the Optionee should die after the Termination of Service, such termination
being for a reason other than Cause, Disability or Retirement, but while the
Option is still in effect, the Option (if and to the extent otherwise
exercisable by the Optionee at the time of death) may be exercised until the
earlier of (i) one year from the date of the Termination of Service of the
Optionee, or (ii) the date on which the term of the Option expires in
accordance with Section 5.3(a).

(b)   Subject to
provisions of the Award Agreement, in the event the Optionee has a Termination
of Service on account of death or Disability or Retirement, the Option (whether
or not otherwise exercisable) may be exercised until the earlier of (i) one
year from the date of the Termination of Service of the Optionee, or (ii) the
date on which the term of the Option expires in accordance with Section 5.3.

(c)   Notwithstanding
any other provision hereof, unless otherwise provided in the Award Agreement,
if the Optionee has a Termination of Service by the Company for Cause, the
Optionee’s Options, to the extent then unexercised, shall thereupon cease to be
exercisable and shall be forfeited forthwith.

5.5 Exercise
of Options.

(a)   Subject to
vesting, restrictions on exercisability and other restrictions provided for
hereunder or otherwise imposed in accordance herewith, an Option may be
exercised, and payment in full of the aggregate Option Price made, by an
Optionee only by written notice (in the form prescribed by the Committee) to
the Company specifying the number of Shares to be purchased.

 

8

 

(b)   Without
limiting the scope of the Committee’s discretion hereunder, the Committee may
impose such other restrictions on the exercise of Incentive Stock Options
(whether or not in the nature of the foregoing restrictions) as it may deem
necessary or appropriate.

5.6 Payment.

(a)   The
aggregate Option Price shall be paid in full upon the exercise of the
Option.  Payment must be made by one of
the following methods:

(i)            a
certified or bank cashier’s check or wire transfer;

(ii)           subject
to Section 12(e), the proceeds of a Company loan program or third-party sale
program or a notice acceptable to the Committee given as consideration under
such a program, in each case if permitted by the Committee in its discretion,
if such a program has been established and the Optionee is eligible to
participate therein;

(iii)          if
approved by the Committee in its discretion, Shares of previously owned Common
Stock, which have been previously owned for more than six months, having an
aggregate Fair Market Value on the date of exercise equal to the aggregate
Option Price; or

(iv)          by
any combination of such methods of payment or any other method acceptable to
the Committee in its discretion.

(b)   Except in
the case of Options exercised by certified or bank cashier’s check, the
Committee may impose limitations and prohibitions on the exercise of Options as
it deems appropriate, including, without limitation, any limitation or
prohibition designed to avoid accounting consequences which may result from the
use of Common Stock as payment upon exercise of an Option.

(c)   The
Committee may provide that no Option may be exercised with respect to any
fractional Share.  Any fractional Shares
resulting from an Optionee’s exercise that is accepted by the Company shall in
the discretion of the Committee be paid in cash.

5.7 Stock
Appreciation Rights.

The Committee, in its discretion, may also permit (taking into account,
without limitation, the application of Section 409A of the Code, as the Committee may deem appropriate)
the Optionee to elect to exercise an Option by receiving a combination of
Shares and cash, or, in the discretion of the Committee, either Shares or
solely in cash, with an aggregate Fair Market Value (or, to the extent of
payment in cash, in an amount) equal to the excess of the Fair Market Value of
the Shares with respect to which the Option is being exercised over the
aggregate Option Price, as determined as of the day the Option is exercised.

5.8 Exercise
by Successors.

An Option may be exercised, and payment in full of the aggregate Option
Price made, by the Successors of the Optionee only by written notice (in the
form prescribed by the Committee) to the Company specifying the number of
Shares to be purchased.  Such notice
shall state that the aggregate Option Price will be paid in full, or that the
Option will be exercised as otherwise provided hereunder, in the discretion of
the Company or the Committee, if and as applicable.

 

9

 

5.9 Nontransferability
of Option. 

Each Option
granted under the Plan shall be nontransferable by the Optionee except by will
or the laws of descent and distribution of the state wherein the Optionee is
domiciled at the time of his death; provided, however, that the Committee may
(but need not) permit other transfers, where the Committee concludes that such
transferability (i) does not result in accelerated U.S. federal income
taxation, (ii) does not cause any Option intended to be an Incentive Stock
Option to fail to be described in Section 422(b) of the Code, and (iii) is
otherwise appropriate and desirable; and provided, further, that in no event
may an Option be transferred by the Optionee for consideration without
shareholder approval.

5.10  Deferral.

Except as provided in the Award Agreement, the Committee (taking into
account, without limitation, the possible application of Section 409A of the
Code, as the Committee may deem appropriate)
may establish a program under which Participants will have Phantom Shares
subject to Section 7 credited upon their exercise of Options, rather than
receiving Shares at that time.

5.11  Certain Incentive Stock Option Provisions

(a)  The
aggregate Fair Market Value, determined as of the date an Option is granted, of
the Common Stock for which any Optionee may be awarded Incentive Stock Options
which are first exercisable by the Optionee during any calendar year under the
Plan (or any other stock option plan required to be taken into account under
Section 422(d) of the Code) shall not exceed $100,000.

(b)  If Shares acquired upon
exercise of an Incentive Stock Option are disposed of in a disqualifying disposition
within the meaning of Section 422 of the Code by an Optionee prior to the
expiration of either two years from the date of grant of such Option or one
year from the transfer of Shares to the Optionee pursuant to the exercise of
such Option, or in any other disqualifying disposition within the meaning of
Section 422 of the Code, such Optionee shall notify the Company in writing as
soon as practicable thereafter of the date and terms of such disposition and,
if the Company (or any affiliate thereof) thereupon has a tax-withholding
obligation, shall pay to the Company (or such affiliate) an amount equal to any
withholding tax the Company (or affiliate) is required to pay as a result of
the disqualifying disposition.

(c) The Option Price with respect to each Incentive Stock Option shall
not be less than 100%, or 110% in the case of an individual described in
Section 422(b)(6) of the Code (relating to certain 10% owners), of the Fair
Market Value of a Share on the day the Option is granted.  In the case of an individual described in
Section 422(b)(6) of the Code who is granted an Incentive Stock Option, the
term of such Option shall be no more than five years from the date of grant.

6. PROVISIONS APPLICABLE TO RESTRICTED STOCK.

6.1 Grant of Restricted Stock.

(a)   In
connection with the grant of Restricted Stock, whether or not performance goals
(as provided for under Section 10) apply thereto, the Committee shall establish
one or more vesting periods with respect to the shares of Restricted Stock
granted, the length of which shall be determined in the discretion of the
Committee.  Subject to the provisions of
this Section 6, the applicable Award Agreement and the other provisions of the
Plan, restrictions on Restricted Stock shall lapse if the Grantee satisfies all
applicable employment or other service requirements through the end of the
applicable vesting period.  Nothing in
this Section 6 shall limit the Committee’s authority, and the Committee is

 

10

expressly
authorized, to grant Shares which are fully vested upon grant (and for which
there is no period of forfeiture), and which are subject to the rules of this
Section 6.

(b)   Subject to
the other terms of the Plan, the Committee may, in its discretion as reflected
by the terms of the applicable Award Agreement: 
(i) authorize the granting of Restricted Stock to Eligible Persons; (ii)
provide a specified purchase price for the
Restricted Stock (whether or not the payment of a purchase price is required by
any state law applicable to the Company); (iii) determine the
restrictions applicable to Restricted Stock and (iv) determine or impose other
conditions, including any applicable performance goals, to the grant of
Restricted Stock under the Plan as it may deem appropriate. 

6.2   Certificates.

(a)   Unless otherwise provided by
the Committee, each Grantee of Restricted Stock shall be issued a stock
certificate in respect of Shares of Restricted Stock awarded under the
Plan.  Each such certificate shall be registered
in the name of the Grantee. Without limiting the generality of Section 4.1(c),
the certificates for Shares of Restricted Stock issued hereunder may include
any legend which the Committee deems appropriate to reflect any restrictions on
transfer hereunder or under the Award Agreement, or as the Committee may
otherwise deem appropriate, and, without limiting the generality of the
foregoing, shall bear a legend referring to the terms, conditions, and
restrictions applicable to such Award, substantially in the following form:

The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) of the SL Green Realty Corp. 2005 Stock Option and Incentive Plan
and an Award Agreement entered into between the registered owner and SL Green
Realty Corp. Copies of such Plan and Award Agreement are on file in the offices
of SL Green Realty Corp., at 420 Lexington Avenue, New York, New York 10170.

(b)   The
Committee may require that any stock certificates evidencing such Shares be
held in custody by the Company until the restrictions hereunder shall have
lapsed, and that, as a condition of any Award of Restricted Stock, the Grantee
shall have delivered to the Company a stock power, endorsed in blank, relating
to the stock covered by such Award.  If
and when such restrictions so lapse, the stock certificates shall be delivered
by the Company to the Grantee or his or her designee as provided in Section 6.3
(and the stock power shall be so delivered
or shall be discarded).

6.3   Restrictions and
Conditions.

Unless otherwise provided by the Committee, the Shares of Restricted
Stock awarded pursuant to the Plan shall be subject to the following
restrictions and conditions:

(i)                              Subject
to the provisions of the Plan and the Award Agreements, during a period
commencing with the date of such Award and ending on the date the period of
forfeiture with respect to such Shares lapses, the Grantee shall not be
permitted voluntarily or involuntarily to sell, transfer, pledge, anticipate,
alienate, encumber or assign Shares of Restricted Stock awarded under the Plan
(or have such Shares attached or garnished). 
Subject to the provisions of the Award Agreements and clause (iii)
below, the period of forfeiture with respect to Shares granted hereunder shall
lapse as provided in the applicable Award Agreement.  Notwithstanding the foregoing, unless
otherwise expressly provided by the Committee, the period of forfeiture with
respect to such Shares shall only lapse as to whole Shares. 

 

11

 

(ii)                             Except
as provided in the foregoing clause (i), below in this clause (ii) or in
Section 14, or as otherwise provided in the applicable Award Agreement, the
Grantee shall have, in respect of the Shares of Restricted Stock, all of the
rights of a shareholder of the Company, including the right to vote the Shares
and the right to receive any cash dividends currently; provided, however that,
if provided in an Award Agreement, cash dividends on such Shares shall (A) be
held by the Company (unsegregated as a part of its general assets) until the
period of forfeiture lapses (and forfeited if the underlying Shares are
forfeited), and paid over to the Grantee (without interest) as soon as practicable
after such period lapses (if not forfeited), or (B) treated as may otherwise be
provided in an Award Agreement. 
Certificates for Shares (not subject to restrictions) shall be delivered
to the Grantee or his or her designee, at the request thereof, promptly after,
and only after, the period of forfeiture shall lapse without forfeiture in
respect of such Shares of Restricted Stock.

(iii)                            Except
as otherwise provided in the applicable Award Agreement, if the Grantee has a
Termination of Service by the Company and its Subsidiaries for Cause, or by the
Grantee for any reason, during the applicable period of forfeiture, then (A)
all Shares still subject to restriction shall thereupon, and with no further
action, be forfeited by the Grantee, and
(B) in the event the Grantee has paid a cash purchase price for the forfeited
Shares, the Company shall pay to the Grantee as soon as practicable (and in no
event more than 30 days) after such termination an amount equal to the lesser
of (x) the amount paid by the Grantee (if any) for such forfeited Restricted
Stock as contemplated by Section 6.1, and (y) the Fair Market Value on the date
of termination of the forfeited Restricted Stock. 

7. PROVISIONS
APPLICABLE TO PHANTOM SHARES.

7.1   Grant of Phantom Shares.

Subject to the other terms of the Plan, the Committee shall, in its
discretion as reflected by the terms of the applicable Award Agreement:  (i) authorize the granting of Phantom Shares
to Eligible Persons and (ii) determine or impose other conditions to the grant
of Phantom Shares under the Plan as it may deem appropriate.  

7.2   Term.

The Committee may provide in an Award Agreement that any particular
Phantom Share shall expire at the end of a specified term.

7.3   Vesting.

Phantom Shares
shall vest as provided in the applicable Award Agreement.

7.4   Settlement of Phantom Shares.

(a)   Each vested
and outstanding Phantom Share shall be settled by the transfer to the Grantee
of one Share; provided that the Committee at the time of grant may provide that
a Phantom Share may be settled (i) in cash at the applicable Phantom Share
Value or (ii) in cash or by transfer of Shares as elected by the Grantee in
accordance with procedures established by the Committee (taking into account, without limitation, Section 409A of the Code, as
the Committee may deem appropriate). 

 

12

 

(b)   Phantom
Shares shall be settled with a single-sum payment by the Company; provided
that, with respect to Phantom Shares of a Grantee which have a common
Settlement Date, the Committee may permit the Grantee to elect in accordance
with procedures established by the Committee (taking into account, without limitation, Section 409A of the Code, as
the Committee may deem appropriate) to receive installment payments over
a period not to exceed 10 years.

(c)   (i) Unless
otherwise provided in the applicable Award Agreement, the “Settlement Date”
with respect to a Phantom Share is as soon as practicable after (but not later
than the first day of the month to follow) the date on which the Phantom Share
vests; provided that a Grantee may elect, in accordance with procedures to be
established by the Committee, that such Settlement Date will be deferred as
elected by the Grantee to as soon as practicable after (but not later than the
first day of the month to follow) the Grantee’s Termination of Service, or such
other time as may be permitted by the Committee.  Unless
otherwise determined by the Committee, elections under this Section 7.4(c)(i)
must, except as may otherwise be permitted under the rules applicable under
Section 409A of the Code, (A) be effective at least one year after they are
made, or, in the case of payments to commence at a specific time, be made at
least one year before the first scheduled payment and (B) defer the
commencement of distributions for at least five years.

                (ii)           Notwithstanding Section 7.4(c)(i), the Committee may
provide that distributions of Phantom Shares can be elected at any time in
those cases in which the Phantom Share Value is determined by reference to Fair
Market Value to the extent in excess of a base value, rather than by reference
to unreduced Fair Market Value.

                (iii)          Notwithstanding the foregoing, the Settlement Date, if not
earlier pursuant to this Section 7.4(c), is the date of the Grantee’s death.

(d)   Notwithstanding
the other provisions of this Section 7, in the event of a Change in Control,
the Settlement Date shall be the date of such Change in Control and all amounts
due with respect to Phantom Shares to a Grantee hereunder shall be paid as soon
as practicable (but in no event more than 30 days) after such Change in
Control, unless such Grantee elects otherwise in accordance with procedures
established by the Committee.

(e)   Notwithstanding
any other provision of the Plan, a Grantee may receive any amounts to be paid
in installments as provided in Section 7.4(b) or deferred by the Grantee as
provided in Section 7.4(c) in the event of an “Unforeseeable Emergency.”  For these purposes, an “Unforeseeable
Emergency,” as determined by the Committee in its sole discretion, is a severe
financial hardship to the Grantee resulting from a sudden and unexpected
illness or accident of the Grantee or “dependent,” as defined in Section 152(a)
of the Code, of the Grantee, loss of the Grantee’s property due to casualty, or
other similar extraordinary and unforeseeable circumstances arising as a result
of events beyond the control of the Grantee. 
The circumstances that will constitute an Unforeseeable Emergency will
depend upon the facts of each case, but, in any case, payment may not be made
to the extent that such hardship is or may be relieved:

(i)            through
reimbursement or compensation by insurance or otherwise,

(ii)           by
liquidation of the Grantee’s assets, to the extent the liquidation of such
assets would not itself cause severe financial hardship, or

(iii)          by
future cessation of the making of additional deferrals under Section 7.4 (b)
and (c). 

 

13

 

Without
limitation, the need to send a Grantee’s child to college or the desire to
purchase a home shall not constitute an Unforeseeable Emergency.  Distributions of amounts because of an
Unforeseeable Emergency shall be permitted to the extent reasonably needed to
satisfy the emergency need.

7.5   Other Phantom Share Provisions.

(a)   Rights to
payments with respect to Phantom Shares granted under the Plan shall not be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, attachment, garnishment, levy, execution, or other legal
or equitable process, either voluntary or involuntary; and any attempt to
anticipate, alienate, sell, transfer, assign, pledge, encumber, attach or
garnish, or levy or execute on any right to payments or other benefits payable
hereunder, shall be void.

(b)   A Grantee
may designate in writing, on forms to be prescribed by the Committee, a
beneficiary or beneficiaries to receive any payments payable after his or her
death and may amend or revoke such designation at any time.  If no beneficiary designation is in effect at
the time of a Grantee’s death, payments hereunder shall be made to the Grantee’s
estate.  If a Grantee with a vested
Phantom Share dies, such Phantom Share shall be settled and the Phantom Share
Value in respect of such Phantom Shares paid, and any payments deferred
pursuant to an election under Section 7.4(c) shall be accelerated and paid, as
soon as practicable (but no later than 60 days) after the date of death to such
Grantee’s beneficiary or estate, as applicable.

(c)   The
Committee may establish a program under which distributions with respect to
Phantom Shares may be deferred for periods in addition to those otherwise
contemplated by foregoing provisions of this Section 7.  Such program may include, without limitation,
provisions for the crediting of earnings and losses on unpaid amounts, and, if
permitted by the Committee, provisions under which Participants may select from
among hypothetical investment alternatives for such deferred amounts in
accordance with procedures established by the Committee.

(d)   Notwithstanding
any other provision of this Section 7, any fractional Phantom Share will be
paid out in cash at the Phantom Share Value as of the Settlement Date.

(e)   No Phantom
Share shall be construed to give any Grantee any rights with respect to Shares
or any ownership interest in the Company. 
Except as may be provided in accordance with Section 8, no provision of
the Plan shall be interpreted to confer upon any Grantee any voting, dividend
or derivative or other similar rights with respect to any Phantom Share.

7.6   Claims Procedures.

(a)   To the
extent that the Plan is determined by the Committee to be subject to the
Employee Retirement Income Security Act of 1974, as amended, the Grantee, or
his beneficiary hereunder or authorized representative, may file a claim for
payments with respect to Phantom Shares under the Plan by written communication
to the Committee or its designee.  A
claim is not considered filed until such communication is actually
received.  Within 90 days (or, if special
circumstances require an extension of time for processing, 180 days, in which
case notice of such special circumstances should be provided within the initial
90-day period) after the filing of the claim, the Committee will either:

(i)            approve
the claim and take appropriate steps for satisfaction of the claim; or

(ii)           if
the claim is wholly or partially denied, advise the claimant of such denial by
furnishing to him a written notice of such denial setting forth (A) the 

 

14

 

specific reason or reasons for the denial; (B)
specific reference to pertinent provisions of the Plan on which the denial is
based and, if the denial is based in whole or in part on any rule of
construction or interpretation adopted by the Committee, a reference to such
rule, a copy of which shall be provided to the claimant; (C) a description of
any additional material or information necessary for the claimant to perfect
the claim and an explanation of the reasons why such material or information is
necessary; and (D) a reference to this Section 7.6 as the provision setting
forth the claims procedure under the Plan.

(b)   The
claimant may request a review of any denial of his claim by written application
to the Committee within 60 days after receipt of the notice of denial of such
claim.  Within 60 days (or, if special
circumstances require an extension of time for processing, 120 days, in which
case notice of such special circumstances should be provided within the initial
60-day period) after receipt of written application for review, the Committee
will provide the claimant with its decision in writing, including, if the
claimant’s claim is not approved, specific reasons for the decision and
specific references to the Plan provisions on which the decision is based.

8. PROVISIONS APPLICABLE TO DIVIDEND EQUIVALENT
RIGHTS.

8.1   Grant of Dividend Equivalent Rights.

Subject to the other terms of the Plan, the Committee shall, in its
discretion as reflected by the terms of the Award Agreements, authorize the
granting of Dividend Equivalent Rights to Eligible Persons based on the regular
cash dividends declared on Common Stock, to be credited as of the dividend
payment dates, during the period between the date an Award is granted, and the
date such Award is exercised, vests or expires, as determined by the Committee;
provided, however, that in no event may a Dividend Equivalent Right be granted
in connection with an Option or a Stock Appreciation Right.  Such Dividend Equivalent Rights shall be
converted to cash or additional Shares by such formula and at such time and
subject to such limitation as may be determined by the Committee.  If a Dividend Equivalent Right is granted in
respect of an Award hereunder (other than an Option or Stock Appreciation
Right), then, unless otherwise stated in the Award Agreement, in no event shall
the Dividend Equivalent Right be in effect for a period beyond the time during
which the applicable portion of the underlying Award is in effect.

8.2   Certain Terms.

(a)   The term of
a Dividend Equivalent Right shall be set by the Committee in its discretion.

(b)   Unless
otherwise determined by the Committee, except as contemplated by Section 8.4, a
Dividend Equivalent Right is exercisable or payable only while the Participant
is an Eligible Person.

(c)   Payment of
the amount determined in accordance with Section 8.1 shall be in cash, in
Common Stock or a combination of the both, as determined by the Committee.

(d)   The
Committee may impose such employment-related conditions on the grant of a
Dividend Equivalent Right as it deems appropriate in its discretion.

 

15

8.3   Other Types of Dividend Equivalent Rights.

The Committee may establish a program under which Dividend Equivalent
Rights of a type whether or not described in the foregoing provisions of this
Section 8 may be granted to Participants. 
For example, and without limitation, the Committee may grant a dividend
equivalent right with respect to a Phantom Share, which right would consist of
the right (subject to Section 8.4) to receive a cash payment in an amount equal
to the dividend distributions paid on a Share from time to time.

8.4   Deferral.

The Committee may
establish a program (taking into account, without limitation, the possible
application of Section 409A of the Code, as
the Committee may deem appropriate) under which Participants (i) will
have Phantom Shares credited, subject to the terms of Sections 7.4 and 7.5 as
though directly applicable with respect thereto, upon the granting of Dividend
Equivalent Rights, or (ii) will have payments with respect to Dividend
Equivalent Rights deferred.  In the case
of the foregoing clause (ii), such program may include, without limitation,
provisions for the crediting of earnings and losses on unpaid amounts, and, if
permitted by the Committee, provisions under which Participants may select from
among hypothetical investment alternatives for such deferred amounts in
accordance with procedures established by the Committee.

 

9. OTHER EQUITY-BASED AWARDS.

The
Committee shall have the right (i) to grant other Awards based upon the Common
Stock having such terms and conditions as the Committee may determine,
including, without limitation, the grant of shares based upon certain
conditions, the grant of convertible preferred shares, convertible debentures
and other exchangeable or redeemable securities or equity interests, and the
grant of stock appreciation rights, (ii) to grant limited-partnership or any
other membership or ownership interests (which may be expressed as units or
otherwise) in a Subsidiary or operating or other partnership (or other
affiliate of the Company), with any Shares being issued in connection with the
conversion of (or other distribution on account of) an interest granted under
the authority of this clause (ii) to be subject, for the avoidance of doubt, to
Section 4 and the other provisions of the Plan, and (iii) to grant Awards
valued by reference to book value, fair value or performance parameters relative
to the Company or any Subsidiary or group of Subsidiaries.

 

10. PERFORMANCE GOALS.

The Committee, in its discretion, (i) may establish one or more
performance goals as a precondition to the issuance or vesting of Awards, and
(ii) may provide, in connection with the establishment of the performance
goals, for predetermined Awards to those Participants (who continue to meet all
applicable eligibility requirements) with respect to whom the applicable
performance goals are satisfied.  In the case of any grant intended to
qualify as performance based compensation under Section 162(m) of the Code
(including, for these purposes, grants constituting performance based
compensation, as determined without regard to certain shareholder approval and
disclosure requirements by virtue of an applicable transition rule), the Committee (i) may use one or a combination of
the performance goals set forth in Exhibit B; and (ii) may establish other
goals (with shareholder approval of other types of goals) intended to be performance
goals as contemplated by Section 162(m) of the Code and the regulations
thereunder.  

 

16

11. TAX WITHHOLDING.

11.1      In General.

The Company shall be entitled to withhold from any payments or deemed payments
any amount of tax withholding determined by the Committee to be required by
law.  Without limiting the generality of
the foregoing, the Committee may, in its discretion, require the Participant to
pay to the Company at such time as the Committee determines the amount that the
Committee deems necessary to satisfy the Company’s obligation to withhold
federal, state or local income or other taxes incurred by reason of (i) the
exercise of any Option, (ii) the lapsing of any restrictions applicable to any
Restricted Stock, (iii) the receipt of a distribution in respect of Phantom
Shares or Dividend Equivalent Rights or (iv) any other applicable
income-recognition event (for example, an election under Section 83(b) of the
Code).

11.2      Share Withholding.

(a)   Upon
exercise of an Option, the Optionee may, if approved by the Committee in its
discretion, make a written election to have Shares then issued withheld by the
Company from the Shares otherwise to be received, or to deliver previously
owned Shares, in order to satisfy the liability for such withholding
taxes.  In the event that the Optionee
makes, and the Committee permits, such an election, the number of Shares so
withheld or delivered shall have an aggregate Fair Market Value on the date of
exercise sufficient to satisfy the applicable withholding taxes.  Where the exercise of an Option does not give
rise to an obligation by the Company to withhold federal, state or local income
or other taxes on the date of exercise, but may give rise to such an obligation
in the future, the Committee may, in its discretion, make such arrangements and
impose such requirements as it deems necessary or appropriate.

(b)   Upon
lapsing of restrictions on Restricted Stock (or other income-recognition
event), the Grantee may, if approved by the Committee in its discretion, make a
written election to have Shares withheld by the Company from the Shares
otherwise to be released from restriction, or to deliver previously owned
Shares (not subject to restrictions hereunder), in order to satisfy the
liability for such withholding taxes.  In
the event that the Grantee makes, and the Committee permits, such an election,
the number of Shares so withheld or delivered shall have an aggregate Fair
Market Value on the date of exercise sufficient to satisfy the applicable
withholding taxes.

(c)   Upon the
making of a distribution in respect of Phantom Shares or Dividend Equivalent
Rights, the Grantee may, if approved by the Committee in its discretion, make a
written election to have amounts (which may include Shares) withheld by the
Company from the distribution otherwise to be made, or to deliver previously
owned Shares (not subject to restrictions hereunder), in order to satisfy the
liability for such withholding taxes.  In
the event that the Grantee makes, and the Committee permits, such an election,
any Shares so withheld or delivered shall have an aggregate Fair Market Value
on the date of exercise sufficient to satisfy the applicable withholding taxes.

11.3      Withholding Required.

Notwithstanding anything contained in the Plan or the
Award Agreement to the contrary, the Participant’s satisfaction of any
tax-withholding requirements imposed by the Committee shall be a condition
precedent to the Company’s obligation as may otherwise be provided hereunder to
provide Shares to the Participant and to the release of any restrictions as may
otherwise be provided hereunder, as applicable; and the applicable Option,
Restricted Stock, Phantom Shares or Dividend Equivalent Rights shall be
forfeited upon the failure of the Participant to satisfy such requirements with
respect to, as applicable, (i) the exercise of the Option, (ii) the lapsing of
restrictions on the Restricted Stock (or other income-recognition event) or
(iii) distributions in respect of any Phantom Share or Dividend Equivalent
Right.

17

12. REGULATIONS AND APPROVALS.

(a)   The
obligation of the Company to sell Shares with respect to an Award granted under
the Plan shall be subject to all applicable laws, rules and regulations,
including all applicable federal and state securities laws, and the obtaining
of all such approvals by governmental agencies as may be deemed necessary or
appropriate by the Committee.

(b)   The
Committee may make such changes to the Plan as may be necessary or appropriate
to comply with the rules and regulations of any government authority or to
obtain tax benefits applicable to an Award.

(c)   Each grant
of Options, Restricted Stock, Phantom Shares (or issuance of Shares in respect
thereof) or Dividend Equivalent Rights (or issuance of Shares in respect
thereof), or other Award under Section 9 (or issuance of Shares in respect
thereof), is subject to the requirement that, if at any time the Committee
determines, in its discretion, that the listing, registration or qualification
of Shares issuable pursuant to the Plan is required by any securities exchange
or under any state or federal law, or the consent or approval of any
governmental regulatory body is necessary or desirable as a condition of, or in
connection with, the issuance of Options, Shares of Restricted Stock, Phantom
Shares, Dividend Equivalent Rights, other Awards or other Shares, no payment
shall be made, or Phantom Shares or Shares issued or grant of Restricted Stock
or other Award made, in whole or in part, unless listing, registration,
qualification, consent or approval has been effected or obtained free of any
conditions in a manner acceptable to the Committee.

(d)   In the
event that the disposition of stock acquired pursuant to the Plan is not
covered by a then current registration statement under the Securities Act, and
is not otherwise exempt from such registration, such Shares shall be restricted
against transfer to the extent required under the Securities Act, and the
Committee may require any individual receiving Shares pursuant to the Plan, as
a condition precedent to receipt of such Shares, to represent to the Company in
writing that such Shares are acquired for investment only and not with a view
to distribution and that such Shares will be disposed of only if registered for
sale under the Securities Act or if there is an available exemption for such
disposition. 

(e)   Notwithstanding
any other provision of the Plan, the Company shall not be required to take or permit
any action under the Plan or any Award Agreement which, in the good-faith
determination of the Company, would result in a material risk of a violation by
the Company of Section 13(k) of the Exchange Act.

13. INTERPRETATION AND AMENDMENTS; OTHER RULES.

The Committee may make
such rules and regulations and establish such procedures for the administration
of the Plan as it deems appropriate. 
Without limiting the generality of the foregoing, the Committee may (i)
determine the extent, if any, to which Options, Phantom Shares or Shares
(whether or not Shares of Restricted Stock) or Dividend Equivalent Rights shall
be forfeited (whether or not such forfeiture is expressly contemplated
hereunder); (ii) interpret the Plan and the Award Agreements hereunder, with
such interpretations to be
conclusive and binding on all persons and otherwise accorded the maximum
deference permitted by law, provided that the Committee’s interpretation shall
not be entitled to deference on and after a Change in Control except to the
extent that such interpretations are made exclusively by members of the
Committee who are individuals who served as Committee members before the Change
in Control; and (iii) take any other actions and make any other determinations
or decisions that it deems necessary or appropriate in connection with the Plan
or the administration or interpretation thereof.  In the event of any dispute or disagreement
as to the interpretation of the Plan or of any rule, regulation or procedure,
or as to any question, right or obligation arising from or related to the Plan,
the decision of the Committee, except as provided in clause (ii) of the
foregoing sentence, shall be final and binding upon all persons.  The
Committee may, in its discretion, delegate the authority and 

 

18

 

responsibility to act pursuant to the Plan with respect to ministerial
administrative matters, which actions shall at all times be subject to the
supervision of the Committee, and the actions of such a delegee in accordance
with the foregoing shall be considered the actions of the Committee
hereunder.  Unless otherwise expressly provided hereunder, the
Committee, with respect to any grant, may exercise its discretion hereunder at
the time of the Award or thereafter.  The
Board may amend the Plan as it shall deem advisable, except that no amendment
may adversely affect a Participant with respect to an Award previously granted
unless such amendments are required in order to comply with applicable laws; provided,
however, that the Plan may not be amended without shareholder approval in any
case in which amendment in the absence of shareholder approval would cause the
Plan to fail to comply with any applicable legal requirement or applicable
exchange or similar rule.

 

14. CHANGES IN CAPITAL STRUCTURE.

(a)   If (i) the Company or its Subsidiaries shall
at any time be involved in a merger, consolidation, dissolution, liquidation,
reorganization, exchange of shares, sale of all or substantially all of the
assets or stock of the Company or its Subsidiaries or a transaction similar
thereto, (ii) any stock dividend, stock split, reverse stock split, stock
combination, reclassification, recapitalization or other similar change in the
capital structure of the Company or its Subsidiaries, or any distribution to
holders of Common Stock other than cash dividends, shall occur or (iii) any
other event shall occur which in the judgment of the Committee necessitates
action by way of adjusting the terms of the outstanding Awards, then:

(x)  the maximum
aggregate number of Shares which may be made subject to Options and Dividend
Equivalent Rights under the Plan after April 1, 2007, the maximum aggregate
number and kind of Shares of Restricted Stock that may be granted under the Plan
after April 1, 2007, the maximum aggregate number of Phantom Shares and other
Awards which may be granted under the Plan after April 1, 2007, shall be
appropriately adjusted by the Committee; and

(y)  with respect to Awards issued on or after
April 1, 2007, the Committee shall take any such action as shall be
necessary to maintain each Participants’ rights hereunder (including under
their Award Agreements) with respect to Options, Phantom Shares and Dividend
Equivalent Rights (and, as appropriate, other Awards under Section 9), so that
they are substantially proportionate to the rights existing in such Options,
Phantom Shares and Dividend Equivalent Rights (and other Awards under Section
9) prior to such event, including, without limitation, adjustments in (A) the
number of Options, Phantom Shares and Dividend Equivalent Rights (and other
Awards under Section 9) granted, (B) the number and kind of shares or other
property to be distributed in respect of Options, Phantom Shares and Dividend
Equivalent Rights (and other Awards under Section 9 as applicable), (C) the
Option Price and Phantom Share Value, and (D) performance-based criteria
established in connection with Awards; provided that, the foregoing clause (D)
shall also be applied in the case of any event relating to a Subsidiary if the
event would have been covered under this Section 14(a) had the event related to
the Company.  For purposes of clause (x)
and this clause (y), the manner in which any of the above described adjustments
are made shall in all events be subject to approval of the Committee.

 

To the extent that such action shall include an
increase or decrease in the number of Shares (or units of other property then
available) subject to all outstanding Awards, the number of Shares (or units) available

 

19

 

under Section 4 shall be increased or decreased, as
the case may be, proportionately, as may be determined by the Committee.

(b)   Any Shares
or other securities distributed to a Grantee with respect to Restricted Stock
or otherwise issued in substitution of Restricted Stock shall be subject to the
restrictions and requirements imposed by Section 6, including depositing the
certificates therefor with the Company together with a stock power and bearing
a legend as provided in Section 6.2(a).

(c)   If the
Company shall be consolidated or merged with another corporation or other
entity, each Grantee who has received Restricted Stock that is then subject to
restrictions imposed by Section 6.3(a) may be required to deposit with the
successor corporation the certificates, if any, for the stock or securities or
the other property that the Grantee is entitled to receive by reason of
ownership of Restricted Stock in a manner consistent with Section 6.2(b), and
such stock, securities or other property shall become subject to the
restrictions and requirements imposed by Section 6.3(a), and the certificates
therefor or other evidence thereof shall bear a legend similar in form and
substance to the legend set forth in Section 6.2(a).

(d)   If a Change
in Control shall occur, then the Committee, as constituted immediately before
the Change in Control, may make such adjustments as it, in its discretion,
determines are necessary or appropriate in light of the Change in Control,
provided that the Committee determines that such adjustments do not have an
adverse economic impact on the Participant as determined at the time of the
adjustments.

(e)   The
judgment of the Committee with respect to any matter referred to in this Section
13 shall be conclusive and binding upon each Participant without the need for
any amendment to the Plan.

15. MISCELLANEOUS.

15.1         No
Rights to Employment or Other Service.

Nothing in the Plan or in any grant made pursuant to the Plan shall
confer on any individual any right to continue in the employ or other service
of the Company or its Subsidiaries or interfere in any way with the right of
the Company or its Subsidiaries and its shareholders to terminate the
individual’s employment or other service at any time.

15.2         Right of First Refusal; Right of
Repurchase.

At the time of grant, the Committee may provide in connection with any
grant made under the Plan that Shares received hereunder shall be subject to a
right of first refusal pursuant to which the Company shall be entitled to
purchase such Shares in the event of a prospective sale of the Shares, subject
to such terms and conditions as the Committee may specify at the time of grant
or (if permitted by the Award Agreement) thereafter, and to a right of
repurchase, pursuant to which the Company shall be entitled to purchase such
Shares at a price determined by, or under a formula set by, the Committee at
the time of grant or (if permitted by the Award Agreement) thereafter.

15.3         No Fiduciary Relationship.

Nothing contained in the Plan (including without limitation Sections
7.5(c) and 8.4), and no action taken pursuant to the provisions of the Plan,
shall create or shall be construed to create a trust of any kind, or a
fiduciary relationship between the Company or its Subsidiaries, or their
officers or the Committee, on the one hand, and the Participant, the Company,
its Subsidiaries or any other person or entity, on the other. 

 

20

 

15.4         No Fund Created.

Any and all payments hereunder to any Participant under the Plan shall
be made from the general funds of the Company (or, if applicable, a
Participating Company), no special or separate fund shall be established or
other segregation of assets made to assure such payments, and the Phantom
Shares (including for purposes of this Section 15.4 any accounts established to
facilitate the implementation of Section 7.4(c)) and any other similar devices
issued hereunder to account for Plan obligations do not constitute Common Stock
and shall not be treated as (or as giving rise to) property or as a trust fund
of any kind; provided, however, that the Company may establish a mere
bookkeeping reserve to meet its obligations hereunder or a trust or other
funding vehicle that would not cause the Plan to be deemed to be funded for tax
purposes or for purposes of Title I of the Employee Retirement Income Security
Act of 1974, as amended.  The obligations
of the Company under the Plan are unsecured and constitute a mere promise by
the Company to make benefit payments in the future and, to the extent that any
person acquires a right to receive payments under the Plan from the Company,
such right shall be no greater than the right of a general unsecured creditor
of the Company.  (If any affiliate of the
Company is or is made responsible with respect to any Awards, the foregoing
sentence shall apply with respect to such affiliate.)  Without limiting the foregoing, Phantom
Shares and any other similar devices issued hereunder to account for Plan
obligations are solely a device for the measurement and determination of the
amounts to be paid to a Grantee under the Plan, and each Grantee’s right in the
Phantom Shares and any such other devices is limited to the right to receive
payment, if any, as may herein be provided.

15.5         Notices.

All notices under the Plan shall be in writing, and if
to the Company, shall be delivered to the Board or mailed to its principal
office, addressed to the attention of the Board; and if to the Participant,
shall be delivered personally, sent by facsimile transmission or mailed to the
Participant at the address appearing in the records of the Company.  Such addresses may be changed at any time by
written notice to the other party given in accordance with this Section 15.5.

15.6         Exculpation and Indemnification.

The Company shall indemnify and hold harmless the members of the Board
and the members of the Committee from and against any and all liabilities,
costs and expenses incurred by such persons as a result of any act or omission
to act in connection with the performance of such person’s duties,
responsibilities and obligations under the Plan, to the maximum extent
permitted by law.

15.7         Captions.

The use of captions in this Plan is for convenience.  The captions are not intended to provide
substantive rights.

15.8         Governing Law.

THE PLAN SHALL BE GOVERNED BY THE LAWS OF MARYLAND
WITHOUT REFERENCE TO PRINCIPLES OF CONFLICT OF LAWS.

 

 

21

EXHIBIT A

PERFORMANCE GOALS

 

(i) 7% FFO growth.

(ii) 10% total return to
shareholders.

(iii) Total return to
shareholders in the top one-third of the “peer group”.

For purposes of this
Exhibit A, “peer group” shall be Alexandria Real Estate Equities, Inc.,
American Financial Realty Trust, Boston Properties, Inc., Brandywine Realty
Trust, Corporate Office Properties Trust, Crescent Real Estate Equities
Company, Douglas Emmett, Duke Realty Corporation, Highwoods Properties, Inc.,
HRPT Properties, Kilroy Realty Corporation, Liberty Property Trust, Mack-Cali
Realty Corporation, Maguire Properties, Parkway Properties, SL Green Realty
Corp., and Washington REIT.  Such “peer
group” may not change with respect to any particular Award.

 

22

EXHIBIT B

PERFORMANCE GOALS

Performance-Based Awards intended to qualify as “performance based”
compensation under Section 162(m) of the Code, may be payable upon the
attainment of objective performance goals that are established by the Committee
and relate to one or more Performance Criteria, in each case on specified date
or over any period, up to 10 years, as determined by the Committee.  Performance Criteria may (but need not) be
based on the achievement of the specified levels of performance under one or
more of the measures set out below relative to the performance of one or more
other corporations or indices.

“Performance Criteria”
means the following business criteria (or any combination thereof) with respect
to one or more of the Company, any Subsidiary or any division or operating unit
thereof:

	
  (i)

  	
   

  	
  pre-tax income,

  	 

	
  (ii)

  	
   

  	
  after-tax income,

  
	
  (iii)

  	
   

  	
  net income (meaning net income as reflected in the Company’s
  financial reports for the applicable period, on an aggregate, diluted and/or
  per share basis),

  
	
  (iv)

  	
   

  	
  operating income,

  
	
  (v)

  	
   

  	
  cash flow,

  
	
  (vi)

  	
   

  	
  earnings per share,

  
	
  (vii)

  	
   

  	
  return on equity,

  
	
  (viii)

  	
   

  	
  return on invested capital or assets,

  
	
  (ix)

  	
   

  	
  cash and/or funds available for distribution,

  
	
  (x)

  	
   

  	
  appreciation in the fair market value of the Common Stock,

  
	
  (xi)

  	
   

  	
  return on investment,

  
	
  (xii)

  	
   

  	
  total return to shareholders,

  
	
  (xiii)

  	
   

  	
  net earnings growth,

  
	
  (xiv)

  	
   

  	
  stock appreciation (meaning an increase in the price or value of the
  Common Stock after the date of grant of an award and during the applicable
  period),

  
	
  (xv)

  	
   

  	
  related return ratios,

  
	
  (xvi)

  	
   

  	
  increase in revenues,

  
	
  (xvii)

  	
   

  	
  net earnings,

  

 

 

23

	
  (xviii)

  	
   

  	
  changes (or the absence of changes) in the per share or aggregate
  market price of the Company’s Common Stock,

  
	
  (xix)

  	
   

  	
  number of securities sold,

  
	
  (xx)

  	
   

  	
  earnings before any one or more of the following items: interest,
  taxes, depreciation or amortization for the applicable period, as reflected
  in the Company’s financial reports for the applicable period,

  
	
  (xxi)

  	
   

  	
  total revenue growth (meaning the increase in total revenues after
  the date of grant of an award and during the applicable period, as reflected
  in the Company’s financial reports for the applicable period),

  
	
  (xxii)

  	
   

  	
  the Company’s published ranking against its peer group of real estate
  investment trusts based on total shareholder return, and

  
	
  (xxiii)

  	
   

  	
  FFO.

  

 

Performance Goals
may be absolute amounts or percentages of amounts or may be relative to the
performance of other companies or of indexes.

 

Except as
otherwise expressly provided, all financial terms are used as defined under
Generally Accepted Accounting Principles (“GAAP”) and all determinations shall
be made in accordance with GAAP, as applied by the Company in the preparation
of its periodic reports to shareholders.

 

To the extent
permitted by Section 162(m) of the Code, unless the Committee provides
otherwise at the time of establishing the Performance Goals, for each fiscal
year of the Company, the Committee may provide for objectively determinable
adjustments, as determined in accordance with GAAP, to any of the Performance
Criteria described above for one or more of the items of gain, loss, profit or
expense: (A) determined to be extraordinary or unusual in nature or infrequent
in occurrence, (B) related to the disposal of a segment of a business, (C)
related to a change in accounting principle under GAAP, (D) related to
discontinued operations that do not qualify as a segment of a business under
GAAP, and (E) attributable to the business operations of any entity
acquired by the Company during the fiscal year.

 

24

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