Document:

EnerSys 2006 Equity Incentive Plan

 Exhibit 10.1 
 
ENERSYS  
 2006 EQUITY INCENTIVE PLAN 
  

	 	1.	Purpose. 

 The EnerSys 2006 Equity Incentive Plan
(the “Plan”) is intended to provide an incentive to employees and non-employee directors of EnerSys, a Delaware corporation (the “Company”), and its Subsidiaries to remain in the service of the Company and its
Subsidiaries and to increase their interest in the success of the Company in order to promote the long-term interests of the Company. The Plan seeks to promote the highest level of performance by providing an economic interest in the long-term
performance of the Company. 
  

	 	2.	Definitions. 

 For purposes of the Plan, the
following terms have the following meanings: 
 “Affiliate” means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by or under common control with, such Person. For purposes of this definition, “control” (including with correlative meanings, the terms “controlling”, “controlled
by” or “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities or by contract or otherwise. 
 “Agreement” means an agreement between
the Company and an Eligible Person providing for the grant of an Award hereunder. 
 “Award” means any Option, Stock
Appreciation Right, Restricted Shares, Bonus Stock, Stock Unit, Performance Share, or other incentive payable in cash or in shares of Common Stock as may be designated by the Compensation Committee from time to time under the Plan. 
 “Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the Act. 
 “Beneficiary” or “Beneficiaries” means the person(s) designated by a Participant or his Permitted Transferee in writing
to the Company to receive payments or other distributions or rights pursuant to the Plan upon the death of such Participant or his Permitted Transferee. If no Beneficiary is so designated or if no Beneficiary is living at the time a payment,
distribution or right becomes payable or distributable pursuant to the Plan, such payment, distribution or right shall be made to the estate of the Participant or a Permitted Transferee thereof. The Participant or Permitted Transferee, as the case
may be, shall have the right to change the designated Beneficiaries from time to time by written instrument filed with the Compensation Committee in accordance with such rules as may be specified by the Compensation Committee. 
 “Board of Directors” means the Board of Directors of the Company. 
 “Bonus Shares” mean an Award of shares of Common Stock granted under Section 9 that are fully vested when granted. 
 “Cashless Exercise” means an exercise of Vested Options outstanding under the Plan through (a) the delivery of irrevocable
instructions to a broker to make a sale of a number of Option Shares that results in proceeds thereon in an amount required to pay the aggregate exercise price for all the shares underlying such Vested Options being so exercised (and any required
withholding tax) and to deliver such proceeds to the Company in satisfaction of such aggregate exercise price or (b) any other surrender to the Company of Option Shares or Vested Options outstanding under the Plan to satisfy the applicable
aggregate exercise price (and any withholding tax) required to be paid upon such exercise. 
 “Cause” means, with respect to
any Participant, (a) “cause” as defined in an employment agreement applicable to the Participant (so long as any act or omission constituting “cause” for such purpose was willful), or 

  

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(b) in the case of a Participant who does not have an employment agreement that defines “cause”: (i) any act or omission that constitutes
a material breach by the Participant of any of his obligations under his employment agreement (if any) with the Company or any of its Subsidiaries, the applicable Agreement or any other agreement with the Company or any of its Subsidiaries;
(ii) the willful and continued failure or refusal of the Participant substantially to perform the duties required of him as an employee of the Company or any of its Subsidiaries, or performance significantly below the level required or expected
of the Participant, as determined by the Compensation Committee; (iii) any willful violation by the Participant of any federal or state law or regulation applicable to the business of the Company or any of its Subsidiaries or Affiliates, or the
Participant’s commission of any felony or other crime involving moral turpitude, or any willful perpetration by the Participant of a common law fraud; or (iv) any other misconduct by the Participant that is materially injurious to the
financial condition or business reputation of, or is otherwise materially injurious to, the Company or any of its Subsidiaries or Affiliates. 
 “Change in Control” means the occurrence of any one of the following: 
 (a) any Person, including any
“group”, as defined in Section 13(d)(3) of 1934 Act, (other than any stockholder at the 2004 Closing or Metalmark Capital LLC, a Delaware limited liability company) is or becomes the Beneficial Owner, directly or indirectly, of
securities of the Company representing a majority of the combined voting power of the Company’s then Outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a Qualifying Business Combination described
in paragraph (c) below or who becomes such a Beneficial Owner as a result of a change in ownership percentage resulting solely from an acquisition of securities by the Company; or 
 (b) the following individuals cease for any reason to constitute a majority of the number of directors then serving on the Board of Directors:
individuals who, as of the 2004 Closing, constitute the Board of Directors and any new director whose appointment or election by the Board of Directors or nomination for election by the Company’s stockholders was approved or recommended by a
vote of at least 66-2/3% of the directors then still in office who either were directors at the 2004 Closing or whose appointment, election or nomination for election was previously so approved or recommended; or 
 (c) there is consummated a reorganization, merger or consolidation of the Company with, or sale or other disposition of at least 80% of the assets of the
Company in one or a series of related transactions to, any other Person (a “Business Combination”), other than a Business Combination that would result in the voting securities of the Company Outstanding immediately prior to such
Business Combination continuing to represent (either by remaining Outstanding or by being converted into voting securities of the surviving entity or any parent thereof) more than 50% of the combined voting power of the securities of the Company or
such surviving entity or any parent thereof Outstanding immediately after such Business Combination (a “Qualifying Business Combination”); or 
 (d) the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of
the Company’s assets, other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, more than 50% of the combined voting power of the Outstanding securities of which is owned by
stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale. 
 “Code” means the Internal Revenue Code of 1986, as amended, including the rules and regulations promulgated thereunder. 
 “Common Stock” means shares of Common Stock, par value $0.01 per share, of the Company. 
 “Compensation
Committee” means the Compensation Committee of the Board of Directors. 
  

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 “Competing Business” means a business or enterprise (other than the Company and its
direct or indirect Subsidiaries) that is engaged in any or all of the manufacture, importing, development, distribution, marketing or sale of: 
 (a) motive power batteries and chargers (including, without limitation, batteries and chargers for industrial forklift trucks and other materials handling equipment; 
 (b) stationary batteries and chargers (including, without limitation, standby batteries and power supply equipment for wireless and wireline
telecommunications applications, such as central telephone exchanges, microwave relay stations, and switchgear and other instrumentation control systems); or 
 (c) any other product the Company now makes or is currently (or at a relevant time in the future) researching or developing, such as lithium batteries. 
 “Competing Business” also includes the design, engineering, installation or service of stationary and DC power systems, and any
consulting and/or turnkey services relating thereto. 
 “Date of Grant” means the date of grant of an Award as set forth in
the applicable Agreement. 
 “Eligible Persons” means employees and non-employee directors of the Company and its
Subsidiaries. 
 “Fair Market Value” means, with respect to a share of Common Stock on any relevant day, (a) if such
Common Stock is traded on a national securities exchange, the closing price on such day, or if the Common Stock did not trade on such day, the closing price on the most recent preceding day on which there was a trade, (b) if such Common Stock
is quoted on an automated quotation system, the closing price on such day, or if the Common Stock did not trade on such day, the mean between the closing bid and asked prices on such day, or (c) in all other cases, the “fair market
value” as determined by the Compensation Committee in good faith and using such financial sources as it deems relevant and reliable (but in any event not less than fair market value within the meaning of Section 409A of the Code).

 “Good Reason” means, with respect to any Participant, (a) “good reason” as defined in an employment
agreement applicable to such Participant, or (b) in the case of a Participant who does not have an employment agreement that defines “good reason”, a failure by the Company to pay material compensation due and payable to the
Participant in connection with his employment. 
 “Incentive Stock Option” means an Option granted with the intention that
it qualify as an “incentive stock option” as that term is defined in Section 422 of the Code or any successor provision. 
 “1933 Act” means the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder. 
 “1934 Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder. 
 “Nonqualified Stock Option” means an Option other than an Incentive Stock Option. 
 “Option” means a right to purchase Common Stock granted pursuant to Section 8. 
 “Option
Price” means, with respect to any Option, the exercise price per share of Common Stock to which it relates. 
 “Option
Shares” means the shares of Common Stock acquired by a Participant upon exercise of an Option. 
 “Outstanding”,
with respect to any share of Common Stock, means, as of any date of determination, all shares that have been issued on or prior to such date, other than shares repurchased or otherwise reacquired by the Company or any Affiliate thereof, on or prior
to such date. 
  

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 “Participant” means any Eligible Person who has been granted an Award. 
 “Performance Share” has the meaning set forth in Section 12. 
 “Permanent Disability”, with respect to any Participant who is an employee of the Company or any of its Subsidiaries, shall be defined
in the same manner as such term or a similar term is defined in an employment agreement applicable to the Participant or, in the case of a Participant who does not have an employment agreement that defines such term or a similar term, means that the
Participant is unable to perform substantially all his duties as an employee of the Company or any of its Subsidiaries by reason of illness or incapacity for a period of more than six months, or six months in the aggregate during any 12-month
period, established by medical evidence reasonably satisfactory to the Compensation Committee. 
 “Permitted Transferee”
means, (A) with respect to outstanding shares of Common Stock held by any Participant, any Person with respect to which the Board of Directors shall have adopted a resolution stating that the Board of Directors has no objection if a transfer of
shares is made to such Person, and (B) with respect to Awards, or any other share of Common Stock issued as or pursuant to any Award, held by any Participant, (i) any Person to whom such Awards or other shares are transferred by will or
the laws of descent and distribution or (ii) the Company. 
 “Person” means an individual, a partnership, a joint
venture, a corporation, an association, a trust, an estate or other entity or organization, including a government or any department or agency thereof. 
 “Qualifying Performance Criteria” has the meaning set forth in Section 14(a) of the Plan. 
 “Restricted Shares” mean shares of Common Stock awarded to a Participant subject to the terms and conditions of the Plan under Section 9, the rights of ownership of which are subject to restrictions prescribed by the
Compensation Committee. 
 “Retirement”, with respect to any Participant who is an employee of the Company or any of its
Subsidiaries, means resignation or termination of employment on or after the Participant’s 65th birthday (other than termination for Cause); provided, however, that the Compensation Committee may determine in its sole discretion
that a resignation or termination of employment under other circumstances shall be considered “Retirement” for purposes of the Plan. 
 “Stock Appreciation Right” means a right that entitles the Participant to receive, in cash or Common Stock (as determined by the Compensation Committee in its sole discretion) value equal to or otherwise based on the excess
of (a) the Fair Market Value of a specified number of shares of Common Stock at the time of exercise over (b) the exercise price of the right, as established by the Compensation Committee on the Date of Grant. 
 “Stock Unit” means an Award granted under Section 11 denominated in units of Common Stock. 
 “Subsidiary” means any corporation in which more than 50% of the total combined voting power of all classes of stock is owned, either
directly or indirectly, by the Company or another Subsidiary. 
 “2004 Closing” means the closing of the Company’s
initial Public Offering. 
 “Vested Options” means, as of any date of determination, Options that by their terms have vested
and are exercisable on such date. 
 “Vested Restricted Shares” means, as of any date of determination, Restricted Shares
that by their terms have vested as of such date. 
 A “Wrongful Solicitation” shall be deemed to occur when a Participant or
former Participant directly or indirectly (except in the course of his employment with the Company), for the purpose of conducting or engaging 

  

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in a Competing Business, calls upon, solicits, advises or otherwise does, or attempts to do, business with any Person who is, or was, during the then most
recent 12-month period, a customer of the Company or any of its Affiliates, or takes away or interferes or attempts to take away or interfere with any custom, trade, business, patronage or affairs of the Company or any of its Affiliates, or hires or
attempts to hire any Person who is, or was during the most recent 12-month period, an employee, officer, representative or agent of the Company or any of its Affiliates, or solicits, induces, or attempts to solicit or induce any person who is an
employee, officer, representative or agent of the Company or any of its Affiliates to leave the employ of the Company or any of its Affiliates, or violate the terms of their contract, or any employment agreement, with it. 
  

	 	3.	Administration of the Plan. 

 (a) Members of the
Compensation Committee. The Plan shall be administered, and Awards shall be granted hereunder, by the Compensation Committee; provided, however, that for all purposes of the Plan all actions of the Compensation Committee shall
require the approval of the Board of Directors. 
 (b) Authority of the Compensation Committee. Subject to Section 3(a), the
Compensation Committee shall have full discretionary power and authority, subject to such resolutions not inconsistent with the provisions of the Plan or applicable law as may from time to time be adopted by the Board, to (a) interpret and
administer the Plan and any instrument or agreement entered into under the Plan, (b) establish such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan, and (c) make any
determination and take any other action that the Compensation Committee deems necessary or desirable for administration of the Plan. All questions of interpretation, administration and application of the Plan shall be determined in good faith by a
majority of the members of the Compensation Committee then in office, except that the Compensation Committee may authorize any one or more of its members, or any officer of the Company, to execute and deliver documents on behalf of the Compensation
Committee, and the determination of such majority shall be final and binding in all matters relating to the Plan. 
  

	 	4.	Number of Shares Issuable in Connection with Awards. 

 (a) Original Limit. The maximum aggregate number of shares of Common Stock that may be issued in connection with Awards granted under the Plan is 2,600,000 shares. The maximum number of shares that may be granted in connection with
Awards granted under the Plan to any Participant during any calendar year shall not exceed 300,000 shares. 
 (b) Replenishment
Provisions. Shares subject to any Awards that expire without being exercised or that are forfeited, shall again be available for future grants of Awards. Shares subject to Awards that have been retained by the Company in payment or satisfaction
of the purchase price or tax withholding obligation of an Award shall not count against the limit set forth in paragraph (a) above. The Company shall not be under any obligation, however, to make any such future Awards. In addition, only the
number of Shares delivered in the settlement of Stock Appreciation Rights shall count against the limit set forth in paragraph (a) above. 
 (c) Adjustments. The limits provided for in this Section 4 shall be subject to adjustment as provided in Section 16(a). 
  

	 	5.	Eligible Persons. 

 Awards may be granted or offered
only to Eligible Persons. The Compensation Committee shall have the authority to select the individual Participants to whom Awards may be granted from among such class of Eligible Persons and to determine the number and form of Awards to be granted
to each Participant. 
  

	 	6.	Agreement. 

 The terms and conditions of each grant
or sale of Awards shall be embodied in an Agreement in a form approved by the Compensation Committee, which shall contain terms and conditions not inconsistent with the 

  

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Plan and which shall incorporate the Plan by reference. Each Agreement shall: (a) state the date as of which the Award was granted or sold, and
(i) in the case of Options and Stock Appreciation Rights, set forth the number of Options and Stock Appreciation Rights being granted to the Participant and the applicable Option Price and/or exercise price (for Stock Appreciation Rights) and
expiration date(s), and (ii) in the case of Restricted Shares and other Awards, set forth the number of Restricted Shares or other Awards being granted or offered to the Participant and, if applicable, the purchase price or other consideration
for such Restricted Shares or other Awards; (b) set forth the vesting schedule (if any); (c) set forth any other terms and conditions established by the Compensation Committee; (d) be signed by the recipient of the Award and a person
designated by the Compensation Committee; and (e) be delivered to the recipient of the Award. 
  

	 	7.	Restrictions on Transfer. 

 (a) Restrictions on
Transfer. No Restricted Share, Bonus Stock, Performance Share or Option Share or other share of Common Stock issued as or pursuant to any Award may be sold, transferred, assigned, pledged, or otherwise encumbered or disposed of (or made the
subject of any derivative transaction) to or with any third party (other than a Permitted Transferee); provided, however, that any such restriction on transfer shall terminate as to any such share when such share is no longer subject
to any term, condition or other restriction under the Plan (other than Section 7(b)). No Option, Stock Appreciation Right, Stock Unit or other Award not in the form of a share of Common Stock may be sold, transferred, assigned, pledged, or
otherwise encumbered or disposed of (or made the subject of any derivative transaction) to or with any third party other than a Permitted Transferee. Each Permitted Transferee (other than the Company) by will or the laws of descent and distribution
or otherwise, of any Award (or share issued in respect thereof) shall, as a condition to the transfer thereof to such Permitted Transferee, execute an agreement pursuant to which it shall become a party to the Agreement applicable to the transferor.

 (b) No Participant will, directly or indirectly, offer, sell, assign, transfer, grant or sell a participation in, create any encumbrance
on or otherwise dispose of any Award or any Shares with respect thereto (or solicit any offers to buy or otherwise acquire, or take a pledge of, any Award or any Shares with respect thereto), in any manner that would conflict with or violate the
1933 Act. 
  

	 	8.	Options. 

 (a) Terms of Options Generally.
The Compensation Committee may grant Options designated as Incentive Stock Options or Nonqualified Stock Options. Options may be granted to any Eligible Person. Each Option shall entitle the Participant to whom such Option was granted to purchase,
upon payment of the relevant Option Price, one share of Common Stock. Options granted under the Plan shall comply with the following terms and conditions: 
 (i) Option Price. 
 A. The Option Price for shares purchased under an Option shall be
as determined by the Compensation Committee, but shall not be less than the Fair Market Value of the Common Stock as of the Date of Grant, except in the case of substitute awards issued by the Company in connection with an acquisition or other
corporate transaction. 
 B. The Option Price for shares purchased under an Option shall be paid in full to the Company by
delivery of consideration equal to the product of the Option Price and the number of shares purchased, together with any amounts required to be withheld for tax purposes under Section 17(c) of this Plan. Such consideration must be paid before
the Company will issue the shares being purchased and must be in a form or a combination of forms acceptable to the Compensation Committee for that purchase, which forms may (but are not required to) include: 
 (A) cash; 
 (B) check or wire transfer; 
  

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 (C) tendering (either actually or by attestation) shares of Common Stock already owned
by the Participant, provided that the shares have been held for the minimum period required by applicable accounting rules to avoid a charge to the Company’s earnings for financial reporting purposes or were not acquired from the Company as
compensation; 
 (D) to the extent permitted by applicable law, Cashless Exercise; or 
 (E) such other consideration as the Compensation Committee may permit in its sole discretion; provided, however, that any
Participant may, at any time, exercise any Vested Option (or portion thereof) owned by him pursuant to a Cashless Exercise without any prior approval or consent of the Compensation Committee. 
 (ii) Vesting of Options. Each Option shall vest and become exercisable on such terms and conditions as shall be prescribed by the
Compensation Committee. 
 (iii) Duration of Options. Subject to earlier termination in accordance with the terms of
the Plan and the instrument evidencing the Option, the maximum term of an Option shall be as established for that Option by the Compensation Committee but in no event shall be greater than ten years from the Date of Grant. 
 (iv) Exercise Following Termination of Employment. Upon termination of a Participant’s employment with the Company and its
Subsidiaries, unless otherwise determined by the Compensation Committee in its sole discretion, the following terms and conditions shall apply: 
 A. if the Participant’s employment is terminated by the Company other than for Cause, or as a result of the Participant’s resignation for Good Reason, or as a result of death, Permanent Disability or
Retirement, the Participant (or, in the case of the Participant’s death, his Beneficiary) may exercise any Options, to the extent vested as of the date of such termination, at any time until the earlier of (I) the 60th day following the
date of such termination of employment, and (II) the expiration of the Option under the provisions of clause (iii) above; and 
 B. if the Participant’s employment is terminated by the Company for Cause, or as a result of the Participant’s resignation other than for Good Reason, all of the Participant’s Options (whether or not vested) shall expire and
be canceled without any payment therefor as of the date of such termination. 
 Any Options not exercised within the applicable time period
specified above shall expire at the end of such period and be canceled without any payment therefor. 
 (v) Certain
Restrictions. Options granted hereunder shall be exercisable during the Participant’s lifetime only by the Participant. 
 (vi) Stockholder Rights; Option and Share Adjustments. A Participant shall have no rights as a stockholder with respect to any shares of Common Stock issuable upon exercise of an Option until a certificate or certificates evidencing
such shares shall have been issued to such Participant. Except as otherwise provided by the Board of Directors, no adjustment (including an adjustment of an Option’s exercise price) shall be made with respect to (A) outstanding Options for
dividends or other distributions, whether made with respect to Common Stock or otherwise, or (B) dividends, distributions or other rights in respect of any share of Common Stock for which the record date is prior to the date upon which the
Participant shall become the holder of record thereof. 
 (vii) Dividends and Distributions. Any shares of Common Stock
or other securities of the Company received by the Participant as a result of a stock dividend or other distribution in respect of Option Shares shall be subject to the same restrictions as such Option Shares. 
 (viii) Incentive Stock Options. Incentive Stock Options granted under this Plan shall be subject to the following additional
conditions, limitations and restrictions: 
 A. Incentive Stock Options may be granted only to employees of the Company or a
Subsidiary or parent corporation of the Company, within the meaning of Section 424 of the Code. 
  

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 B. No Incentive Stock Option may be granted under this Plan after the 10-year anniversary
of the date on which the Plan is adopted by the Board or, if earlier, the date on which the Plan is approved by the Company’s stockholders. 
 C. The aggregate Fair Market Value (as of the Date of Grant) of the Common Stock with respect to which the Incentive Stock Options awarded to any Participant first become exercisable during any calendar year may not
exceed $100,000. For purposes of the $100,000 limit, the Participant’s Incentive Stock Options under this Plan and all other plans maintained by the Company and its Subsidiaries will be aggregated. To the extent any Incentive Stock Option would
exceed the $100,000 limit, the Incentive Stock Option will thereafter be treated as a Nonqualified Stock Option for all purposes. No Incentive Stock Option may be granted to any individual who owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or any Subsidiary. 
 D. If the Compensation Committee exercises
its discretion to permit an Incentive Stock Option to be exercised by a Participant more than three months after the termination of a Participant’s employment for any reason (or more than 12 months if the Participant is permanently and totally
disabled, within the meaning of Section 22(e) of the Code), the Incentive Stock Option will thereafter be treated as a Nonqualified Stock Option for all purposes. For purposes of this subclause D, a Participant’s employment
relationship will be treated as continuing uninterrupted during any period that the Participant is on military leave, sick leave or another Approved Leave of Absence if the period of leave does not exceed 90 consecutive days, or a longer period
to the extent that the Participant’s right to reemployment with the Company or a Subsidiary is guaranteed by statute or by contract. If the period of leave exceeds 90 consecutive days and the Participant’s right to reemployment is not
guaranteed by statute or contract, the employment relationship will be deemed to have ceased on the 91st day of the leave. 
 (ix) Additional Terms and Conditions. Each Option granted hereunder, and any shares of Common Stock issued in connection with such Option, shall be subject to such additional terms and conditions not inconsistent with the Plan as are
prescribed by the Compensation Committee and set forth in the applicable Agreement. 
 (b) Unvested Options. Upon termination of a
Participant’s employment with the Company and its Subsidiaries, all Options granted to such Participant that have not theretofore vested (and which do not vest by reason of such termination of employment) shall terminate and be canceled without
any payment therefor. 
  

	 	9.	Restricted Shares and Bonus Shares. 

 (a) Terms
of Restricted Shares and Bonus Shares Generally. Restricted Shares and Bonus Shares awarded by the Compensation Committee shall not require payment of any consideration by Participants, except as otherwise determined by the Compensation
Committee in its sole discretion. 
 (b) Restricted Shares and Bonus Shares shall comply with the following terms and conditions: 

(i) Vesting. Any Awards of Restricted Shares shall vest in accordance with a vesting schedule to be specified by the
Compensation Committee. Except (A) with respect to grants to the Company’s non-employee directors, or (B) as vesting may be accelerated pursuant to the terms of the Plan, such restrictions shall not terminate prior to three years
after the Date of Grant. Bonus Shares shall be fully vested when granted. 
 (ii) Stockholder Rights. Unless otherwise
determined by the Compensation Committee in its sole discretion, a Participant shall have all rights of a stockholder as to the Restricted Shares and Bonus Shares awarded to such Participant, including the right to receive dividends and the right to
vote in accordance with the Company’s Certificate of Incorporation, subject to the restrictions set forth in the Plan and the applicable Agreement. 
  

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 (iii) Dividends and Distributions. Any shares of Common Stock or other securities
of the Company received by a Participant as a result of a stock distribution to holders of Restricted Shares or as a stock dividend on Restricted Shares shall be subject to the same restrictions as such Restricted Shares or Bonus Shares and all
references to Restricted Shares or Bonus Shares hereunder shall be deemed to include such shares of Common Stock or other securities. 
 (iv) Additional Terms and Conditions. Each Restricted Share and Bonus Share granted or offered for sale hereunder shall be subject to such additional terms and conditions not inconsistent with the Plan as are
prescribed by the Compensation Committee and set forth in the applicable Agreement. 
 (c) Unvested Restricted Shares. Unless
otherwise determined by the Compensation Committee in its sole discretion, upon termination of a Participant’s employment with the Company and its Subsidiaries, all Restricted Shares granted or sold to such Participant that have not theretofore
vested (and that do not vest by reason of such termination of employment) shall terminate and be canceled without any payment therefor. 
  

	 	10.	Stock Appreciation Rights. 

 Stock Appreciation
Rights may be granted to Participants either alone (“freestanding”) or in addition to or in tandem with other Awards granted under the Plan and may, but need not, relate to a specific Option granted hereunder. The provisions of
Stock Appreciation Rights need not be the same with respect to each grant or each recipient. Any Stock Appreciation Right granted in tandem with an Option may be granted at the same time such Option is granted or at any time thereafter before
exercise or expiration of such Option. All Stock Appreciation Rights granted under the Plan shall be granted subject to the same terms and conditions applicable to Nonqualified Stock Options as set forth in Section 8(a); provided,
however, that Stock Appreciation Rights granted in tandem with a previously granted Option shall have the terms and conditions as such Option. Subject to the provisions of Section 8, the Compensation Committee may impose such other
conditions or restrictions on any Stock Appreciation Right as it shall deem appropriate. Stock Appreciation Rights may be settled in Common Stock or cash as determined by the Compensation Committee in its sole discretion. 
  

	 	11.	Stock Units. 

 The Compensation Committee may also
grant Awards of Stock Units under the Plan. With respect to each grant of Stock Units, the Compensation Committee shall determine in its sole discretion the period or periods, including any conditions for determining such period or periods, during
which any restrictions on vesting shall apply, provided that in no event, other than in connection with a termination of employment, or with respect to grants to non-employee directors, shall such period or periods be less than three years (the
“Unit Restriction Period”). The Compensation Committee may also make any Award of Stock Units subject to the satisfaction of other conditions, including the attainment of performance goals, or contingencies (“Unit Vesting
Condition”), in order for a Participant to receive payment of such Stock Unit Award, which shall be established by the Compensation Committee at the Date of Grant thereof. The Compensation Committee may specify that the grant, vesting or
retention of any or all Stock Units shall be a measure based on one or more Qualifying Performance Criteria selected by the Compensation Committee and specified at the Date of Grant thereof. If required by Section 162(m) of the Code, the
Compensation Committee shall certify the extent to which any Qualifying Performance Criteria have been satisfied, and the amount payable as a result thereof, prior to payment of any Stock Units that are intended to satisfy the requirements for
“performance-based compensation” under Section 162(m) of the Code. Awards of Stock Units shall be payable in Common Stock or cash as determined by the Compensation Committee in its sole discretion. The Compensation Committee may
permit a Participant to elect to defer receipt of payment of all or part of any Award of Stock Units pursuant to rules and regulations adopted by the Compensation Committee. Unless the Compensation Committee provides otherwise at the Date of Grant
of an Award of Stock Units, the provisions of Section 9 of this Plan relating to the vesting of Restricted Shares shall apply during the Unit Restriction Period or prior to the satisfaction of any Unit Vesting Condition for such Award.

  

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	 	12.	Performance Shares. 

 The Compensation Committee may
grant Awards of Performance Shares and designate the Participants to whom Performance Shares are to be awarded and determine the number of Performance Shares, the length of the performance period and the other terms and conditions of each such
Award. Each Award of Performance Shares shall entitle the Participant to a payment in the form of shares of Common Stock upon the attainment of performance goals (which may be Qualifying Performance Criteria) and other terms and conditions specified
by the Compensation Committee. Notwithstanding satisfaction of any performance goals, the number of shares issued under an Award of Performance Shares may be adjusted on the basis of such further considerations as the Compensation Committee shall
determine, in its sole discretion. However, the Compensation Committee may not, in any event, increase the number of shares earned upon satisfaction of any performance goal by any Participant subject to Section 162(m) of the Code to the extent
such Section is applicable. The Compensation Committee, in its sole discretion, may make a cash payment equal to the Fair Market Value of the Common Stock otherwise required to be issued to a Participant pursuant to an Award of Performance Shares.

  

	 	13.	Other Stock-Based Awards. 

 In addition to the
Awards described in Sections 8 through 12, and subject to the terms of the Plan, the Compensation Committee may grant other incentives payable in cash or in shares of Common Stock under the Plan as it determines to be in the best interests of the
Company and subject to such other terms and conditions as it deems appropriate. 
  

	 	14.	Performance-Based Awards. 

 (a) Performance
Criteria. Awards of Options, Restricted Shares, Stock Units, Performance Shares and other Awards made pursuant to the Plan may be made subject to the attainment of performance goals relating to one or more business criteria. For purposes of the
Plan, such business criteria shall mean any one or more of the following performance criteria, either individually, alternatively or in any combination: (a) cash flow; (b) earnings (including, without limitation, gross margin, earnings
before interest and taxes (“EBIT”), earnings before taxes (“EBT”), earnings before interest, taxes, depreciation and amortization (“EBITDA”), and net earnings); (c) earnings per share; (d) growth
in earnings or earnings per share; (e) stock price; (f) return on equity or average stockholders’ equity; (g) total stockholder return; (h) return on capital; (i) return on assets or net assets; (j) return on
investment; (k) sales, growth in sales or return on sales; (l) income or net income; (m) operating income or net operating income; (n) operating profit or net operating profit; (o) operating margin; (p) return on
operating revenue; (q) economic profit, (r) market share; (s) overhead or other expense reduction; (t) growth in stockholder value relative to various indices, including, without limitation, the S&P 500 Index or the Russell
2000 Index, (u) strategic plan development and implementation, (v) net debt, (w) working capital (including components thereof), and (x) during the “reliance period” (as defined in Treasury Regulation section
1.162-27(f)(2)), any other performance measure selected by the Compensation Committee in its sole discretion (collectively, the “Qualifying Performance Criteria”). To the extent required by or consistent with Section 162(m) of
the Code, the Compensation Committee may appropriately adjust any evaluation of performance under a Qualifying Performance Criteria to exclude any of the following events that occur during a performance period: (z) asset write-downs or
write-ups, (aa) litigation, claims, judgments or settlements, (bb) the effect of changes in tax law, accounting principles or other such laws or provisions affecting reported results, (cc) accruals for reorganization and restructuring programs, (dd)
any extraordinary, unusual or non-recurring items as described in Accounting Principles Board Opinion No. 30 and/or in management’s discussion and analysis of financial condition and results of operations appearing in the Company’s
Annual Report to stockholders for the applicable year, and (ee) amounts paid in reimbursement to stockholders pursuant to agreements in place at the 2004 Closing. 
 (b) Any Performance Criteria may be used to measure the performance of the Company as a whole or with respect to any business unit, subsidiary or business segment of the Company, either individually, alternatively or
in any combination, and may be measured either annually or cumulatively over a period of years, on an absolute 

  

 10 

 
basis or relative to a pre-established target, to previous period results or to a designated comparison group, in each case as specified by the Compensation
Committee in the Award. To the extent required by Section 162(m) of the Code, prior to the payment of any compensation under an Award intended to qualify as “performance-based compensation” under Code Section 162(m), the
Compensation Committee shall certify the extent to which any such Performance Criteria and any other material terms under such Award have been satisfied (other than in cases where such relate solely to the increase in the value of the Common Stock).
To the extent Section 162(m) of the Code is applicable, the Compensation Committee may not in any event increase the amount of compensation payable to a Participant subject to Section 162(m) of the Code upon the satisfaction of any
Performance Criteria. 
  

	 	15.	Certain Forfeitures. 

 In the event a Participant or
former Participant engages in a Competing Business or in Wrongful Solicitation while in the employ of the Company or a Subsidiary, or during the period of 13 months immediately following termination of such employment, the following rules shall
apply: 
 (a) all Awards then held by the Participant (whether vested or not) shall be forthwith forfeited without payment or other
compensation of any kind; provided, however, that the Company shall remit to the Participant the lesser of (1) the amount (if any) he paid for forfeited Awards and (2) in the case of Restricted Shares or Performance Shares,
the Fair Market Value of such Restricted Shares as of the date of termination; 
 (b) notwithstanding subclause (a), in the event Vested
Restricted Shares or vested Performance Shares were disposed of (for or without receipt of value) during the period commencing one year prior to the initial engagement in a Competing Business or in Wrongful Solicitation through the 13-month
anniversary of his termination of employment with the Company or a Subsidiary, then, upon written demand by the Company, the Participant or former Participant, as the case may be, shall forthwith remit to the Company the Fair Market Value of such
Vested Restricted Shares or vested Performance Shares, as determined on the date of disposition, less the amount (if any) paid by the Participant for such shares; and 
 (c) in the event Option Shares, Shares obtained pursuant to the exercise of a Stock Appreciation Right or other Shares obtained pursuant to Awards under the Plan (and not described in subparagraph (b)) were disposed
of (for or without receipt of value) during the period commencing one year prior to the initial engagement in a Competing Business or in Wrongful Solicitation through the 13-month anniversary of his termination of employment with the Company or a
Subsidiary, then, upon written demand by the Company, the Participant or former Participant, as the case may be, shall forthwith remit to the Company the Fair Market Value of such Shares, as determined on the date of disposition, less the Option
Price or other amount (if any) paid therefor. 
  

	 	16.	Effect of Certain Corporate Changes and Changes in Control. 

 (a) Dilution and Other Adjustments. If the Outstanding shares of Common Stock or other securities of the Company, or both, for which the Award is then exercisable or as to which the Award is to be settled shall at any time be changed
or exchanged by declaration of a stock dividend, stock split, combination of shares, extraordinary dividend of cash and/or assets, recapitalization, or reorganization, the Compensation Committee may, and if such event occurs after a Change of
Control, the Compensation Committee shall, appropriately and equitably adjust the number and kind of shares of Common Stock or other securities that are subject to the Plan or subject to any Awards theretofore granted, and the exercise or settlement
prices of such Awards, so as to maintain the proportionate number of shares of Common Stock or other securities without changing the aggregate exercise or settlement price. 
 (b) Change in Control. The Compensation Committee may provide, either at the time an Award is granted or thereafter, that a Change in Control
shall have such effect as is specified by the Compensation Committee, or no effect, as the Compensation Committee in its sole discretion may provide. Without limiting the foregoing, the Compensation Committee may provide, either at the Date of Grant
of an Award or thereafter, that if such a 

  

 11 

 
Change in Control occurs, then effective as of a date selected by the Compensation Committee, the Compensation Committee, acting in its sole discretion
without the consent or approval of any Participant, will effect one or more of the following actions or combination of actions with respect to some or all outstanding Awards (which actions may be conditional on the occurrence of such Change in
Control and which may vary among individual Participants): (1) accelerate the time at which Awards then outstanding vest and (as applicable) may be exercised in full for a limited period of time on or before a specified date (which will permit
the Participant to participate with the Common Stock received upon exercise of an Option, a Stock Appreciation Right or another Award in the event of such Change in Control) fixed by the Compensation Committee, after which specified date all
unexercised Awards and all rights of Participants thereunder shall terminate, (2) accelerate the time at which Awards then outstanding vest (and, in the case of Options and Stock Appreciation Rights, may be exercised so that such Options and
Stock Appreciation Rights may be exercised in full for their then remaining term), (3) require the mandatory surrender to the Company of outstanding Awards held by such Participant (irrespective of whether such Awards are then vested or
exercisable under the provisions of the Plan) as of a date, before or not later than 60 days after such Change in Control, specified by the Compensation Committee, and in such event the Compensation Committee shall thereupon cancel such Awards and
the Company shall pay to each Participant an amount of cash equal to the excess of the Fair Market Value of the aggregate shares of Common Stock subject to such Award over the aggregate price (if any) of such shares, or (4) take such other
actions as the Compensation Committee deems appropriate in its discretion (whether or not related to any of the foregoing). 
  

	 	17.	Miscellaneous. 

 (a) No Rights to Grants or
Continued Employment or Engagement. No Participant shall have any claim or right to receive grants of Awards under the Plan. Neither the Plan nor any action taken or omitted to be taken hereunder shall be deemed to create or confer on any
Participant any right to be retained in the employ or as a director of the Company or any Subsidiary or other Affiliate thereof, or to interfere with or to limit in any way the right of the Company or any Subsidiary or other Affiliate thereof to
terminate the employment or other retention of such Participant at any time. 
 (b) Right of Company to Assign Rights and Delegate
Duties. The Company shall have the right to assign any of its rights and delegate any of its duties hereunder to any of its Affiliates. The terms and conditions of any Award under the Plan shall be binding upon and shall inure to the benefit of
the personal representatives, heirs, legatees and permitted successors and assigns of the relevant Participant and the Company. 
 (c) Tax
Withholding. The Company and its Subsidiaries may require the Participant to pay to the Company the amount of any taxes that the Company is required by applicable federal, state, local or other law to withhold with respect to the grant, vesting
or exercise of an Award. The Company shall not be required to issue any shares of Common Stock under the Plan until such obligations are satisfied in full. The Compensation Committee may in its sole discretion permit or require a Participant to
satisfy all or part of his or her tax withholding obligations by (1) paying cash to the Company, (2) having the Company withhold a number of shares of Common Stock that would otherwise be issued to the Participant (or become vested in the
case of Restricted Shares), having a Fair Market Value equal to the tax withholding obligations, (3) surrendering a number of shares of Common Stock the Participant already owns, having a Fair Market Value equal to the tax withholding
obligations, or (4) entering into such other arrangement as is acceptable to the Compensation Committee in its sole discretion. The value of any shares withheld or surrendered may not exceed the employer’s minimum tax withholding
obligation and, to the extent such shares were acquired by the Participant from the Company as compensation, the shares must have been held for the minimum period required by applicable accounting rules to avoid a charge to the Company’s
earnings for financial reporting purposes. The Company and its Subsidiaries shall also have the right to deduct from any and all cash payments otherwise owed to a Participant any federal, state, local or other taxes required to be withheld with
respect to the Participant’s participation in the Plan. 
 (d) No Restriction on Right of Company to Effect Corporate Changes.
The Plan shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, 

  

 12 

 
recapitalizations, reorganizations or other changes in the Company’s capital structure or its business, or any merger or consolidation of the Company,
or any issue of stock or of options, warrants or rights to purchase stock or of bonds, debentures, preferred or prior preference stocks whose rights are superior to or affect the Common Stock or the rights thereof or that are convertible into or
exchangeable for Common Stock, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. 

(e) 1934 Act. Notwithstanding anything contained in the Plan or any Agreement to the contrary, if the consummation of any transaction under the
Plan would result in the possible imposition of liability on a Participant pursuant to Section 16(b) of the 1934 Act, the Compensation Committee shall have the right, in its sole discretion, but shall not be obligated, to defer such transaction
to the extent necessary to avoid such liability. 
 (f) Securities Laws. Notwithstanding any other provision of the Plan, the Company
shall have no obligation to issue or deliver any shares of Common Stock under the Plan or make any other distribution of benefits under the Plan unless, in the judgment of the Compensation Committee, such issuance, delivery or distribution would
comply with all applicable laws (including, without limitation, the requirements of the 1933 Act and 1934 Act or the laws of any state or foreign jurisdiction) and the applicable requirements of any securities exchange or similar entity. 

(g) Severability. If any provision of the Plan or any Award is determined to be invalid, illegal or unenforceable in any jurisdiction, or as to
any Person, or would disqualify the Plan or any Award under any law deemed applicable by the Compensation Committee, such provision shall be construed or deemed amended to conform to applicable laws, or, if it cannot be so construed or deemed
amended without, in the Compensation Committee’s determination, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, person or Award, and the remainder of the Plan and any such Award
shall remain in full force and effect. 
  

	 	18.	Amendment. 

 The Board of Directors may at any time
and from time to time alter, amend, suspend or terminate the Plan in whole or in part. No termination or amendment of the Plan may, without the consent of the Participant to whom any Awards shall previously have been granted, adversely affect the
rights of such Participant in such Awards. In addition, no amendment of the Plan shall, without the approval of the stockholders of the Company: 
 A. increase the maximum number of shares of Common Stock for which Awards may be granted under this Plan; 
 B. reduce the price at which Options may be granted below the price provided for in Section 8(a) hereof; 
 C. reduce the Option Price of outstanding Options; or 
 D. extend the term of this Plan.

  

	 	19.	Termination of the Plan. 

 The Plan shall continue
until terminated by the Board of Directors pursuant to Section 18 or as otherwise set forth in this Plan, and no further Awards shall be made hereunder after the date of such termination. Unless earlier terminated, the Plan shall terminate ten
(10) years after its initial approval by the Board of Directors (provided the awards granted before that date shall continue in accordance with their terms) 
  

	 	20.	Conditions to Issuance of Shares. 

 (a) The Company
shall be under no obligation to any Participant to register for offering or resale or to qualify for exemption under the 1933 Act, or to register or qualify under the laws of any state or foreign 

  

 13 

 
jurisdiction, any shares of Common Stock, security or interest in a security paid or issued under, or created by, the Plan, or to continue in effect any such
registrations or qualifications if made. The Company may issue certificates for shares with such legends and subject to such restrictions on transfer and stop-transfer instructions as the Compensation Committee deems necessary or desirable for
compliance by the Company with federal, state and foreign securities laws. The Company may also require such other action or agreement by the Participants as may from time to time be necessary to comply with applicable securities laws. 

(b) To the extent the Plan or any instrument evidencing an Award provides for issuance of stock certificates to reflect the issuance of shares of
Common Stock, the issuance may be effected on a noncertificated basis, to the extent not prohibited by applicable law or the applicable rules of any stock exchange. 
  

	 	21.	Headings; Number; Gender. 

 The headings of sections
and subsections herein are included solely for convenience of reference and shall not affect the meaning of any of the provisions of the Plan. 
 Words used herein in the singular form shall be construed as being used in the plural form, as appropriate in the relevant context, and vice versa. Pronouns used herein of one gender shall be construed as referring to either or both
genders, as appropriate in the relevant context. 
  

	 	22.	Limited Waiver. 

 The waiver by the Company of any
of its rights under the Plan with respect to any Participant, whether express or implied, shall not operate or be construed as a waiver of any other rights the Company has with respect to such Participant or of any of its rights with respect to any
other Participant. 
  

	 	23.	Governing Law. 

 The Plan and all rights hereunder
shall be governed by and construed in accordance with the laws of the State of New York without reference to rules relating to conflicts of law. 
  

	 	24.	Compliance with Section 409A of the Code 

 This Plan
is intended to comply and shall be administered in a manner that is intended to comply with Section 409A of the Code and shall be construed and interpreted in accordance with such intent. To the extent that an Award or the payment, settlement
or deferral thereof is subject to Section 409A of the Code, the Award shall be granted, paid, settled or deferred in a manner that will comply with Section 409A of the Code, including regulations or other guidance issued with respect
thereto, except as otherwise determined by the Compensation Committee. Any provision of this Plan that would cause the grant of an Award or the payment, settlement or deferral thereof to fail to satisfy Section 409A of the Code shall be amended
to comply with Section 409A of the Code on a timely basis, which may be made on a retroactive basis, in accordance with regulations and other guidance issued under Section 409A of the Code. 
  

	 	25.	Effective Date. 

 The Plan shall become effective
upon adoption by the Board of Directors, subject to approval by the stockholders of the Company. 
  

 14EXHIBIT 4.1

 Exhibit 4.1 
 Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to the Trust (as defined below) or its agent for registration of transfer, exchange, or payment,
and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. 
  

			
	REGISTERED No.: 2	  	PRINCIPAL AMOUNT: $50,000,000

 CUSIP NUMBER: 939653 AH 4 
 WASHINGTON REAL ESTATE INVESTMENT TRUST 
 5.95%
SENIOR NOTE DUE JUNE 15, 2011 
 WASHINGTON REAL ESTATE INVESTMENT TRUST, a Maryland real estate investment trust (hereinafter called the
“Trust,” which term shall include any successor trust or corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or registered assigns, upon presentation, the principal
sum of FIFTY MILLION DOLLARS ($50,000,000) on June 15, 2011, and to pay interest on the outstanding principal amount thereon from June 6, 2006, or from the most recent Interest Payment Date to which interest has been paid or duly provided
for, semi-annually in arrears on June 15 and December 15 in each year, commencing December 15, 2006, at the rate of 5.95% per annum, until the entire principal amount hereof is paid or made available for payment. The interest so
payable, and punctually paid or duly provided for on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Note (or one or more Predecessor Notes) is registered at the close of business on the Regular
Record Date for such interest which shall be 15 calendar days (whether or not a Business Day) next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder
on such Regular Record Date, and may either be paid to the Person in whose name this Note (or one or more Predecessor Notes) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Notes of this series not more than 15 days and not less than 10 days prior to such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Notes may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture. Payment of the principal of, Make Whole Amount, if any, on, and interest
on this Note will be made at the office or agency of the Trust maintained for that purpose in the City of New York, State of New York, or elsewhere as provided in the Indenture, in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts; provided, however, that at the option of the Trust payment of interest may be made by (i) check mailed to the address of the Person entitled thereto 

 as such address shall appear in the Security Register kept for the Notes pursuant to Section 305 of the Indenture
(the “Note Register”) or (ii) transfer to an account of the Person entitled thereto located inside the United States. 
 This
Note is one of a duly authorized issue of securities of the Trust (herein called the “Notes”), issued and to be issued in one or more series under an Indenture, dated as of August 1, 1996 (herein called the “Indenture”),
between the Trust and J.P. Morgan Trust Company, National Association (successor to The First National Bank of Chicago) (herein called the “Trustee,” which term includes any successor trustee under the Indenture with respect to the Notes),
to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Trust, the Trustee and the Holders of the Notes and of the
terms upon which the Notes are, and are to be, authenticated and delivered. This Note is one of the series designated as the “5.95% Senior Notes due June 15, 2011”, limited in aggregate principal amount to $150,000,000. 
 The Notes may be redeemed at any time at the option of the Trust, in whole or in part, upon notice of not more than 60 nor less than 30 days prior to the
Redemption Date, at a redemption price equal to the sum of (i) the principal amount of the Notes being redeemed plus accrued interest thereon to the Redemption Date and (ii) the Make-Whole Amount, if any, with respect to such Notes.

 The following definitions apply with respect to any redemption or accelerated payment of the Notes: 
 “Make-Whole Amount” means, in connection with any optional redemption or accelerated payment of any Notes, the excess, if any,
of (a) the aggregate present value as of the date of such redemption or accelerated payment of each dollar of principal being redeemed or paid and the amount of interest (exclusive of interest accrued to the date of redemption or accelerated
payment) that would have been payable in respect of each such dollar if such redemption or accelerated payment had not been made, determined by discounting, on a semi-annual basis, such principal and interest at the Reinvestment Rate (determined on
the third Business Day preceding the date such notice of redemption is given or declaration of acceleration is made) from the respective dates on which such principal and interest would have been payable if such redemption or accelerated payment had
not been made, over (b) the aggregate principal amount of the Notes being redeemed or paid. 
 “Reinvestment
Rate” means 0.15% plus the arithmetic mean of the yields under the heading “Week Ending” published in the most recent Statistical Release under the caption “Treasury Constant Maturities” for the maturity (rounded to the
nearest month) corresponding to the remaining life to maturity of the Note, as of the payment date of the principal of the Notes being redeemed or paid. If no maturity exactly corresponds to such maturity, yields for the two published maturities
most closely corresponding to such maturity shall be calculated pursuant to the immediately preceding sentence and the Reinvestment Rate shall be interpolated or extrapolated from such yields on a straight-line basis, rounding in each of such
relevant periods to the nearest month. For the purposes of calculating the Reinvestment Rate, the most recent Statistical Release published prior to the date of determination of the Make-Whole Amount shall be used. 
  

 -2- 

 “Statistical Release” means the statistical release designated
“H.15(519)” or any successor publication which is published weekly by the Federal Reserve System and which establishes yields on actively traded United States government securities adjusted to constant maturities, or, if such statistical
release is not published at the time of any determination of the Make-Whole Amount, then such other reasonably comparable index which shall be designated by the Trust. 
 The Indenture contains provisions for defeasance at any time of (a) the entire indebtedness of the Trust on this Note and (b) certain restrictive covenants and the related defaults and Events of Default
applicable to the Trust, in each case, upon compliance by the Trust with certain conditions set forth in the Indenture, which provisions apply to this Note. 
 If an Event of Default with respect to the Notes of this series shall occur and be continuing, the principal of, and the Make-Whole Amount, if any, on, the Notes of this series may be declared due and payable in the
manner and with the effect provided in the Indenture. 
 As provided in and subject to the provisions of the Indenture, the Holder of this
Note shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of
a continuing Event of Default with respect to the Notes of this series, the Holders of not less than 25% in principal amount of the Notes of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings
in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity and the Trustee shall not have received from the Holders of a majority in principal amount of the Notes of this series at the time Outstanding a direction
inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Note for the
enforcement of any payment of principal hereof or any interest on or after the respective due dates expressed herein. 
 The Indenture
permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Trust and the rights of the Holders of the Notes under the Indenture at any time by the Trust and the Trustee with
the consent of the Holders of not less than a majority in principal amount of the Outstanding Notes. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Notes at the time Outstanding, on
behalf of the Holders of all Notes, to waive compliance by the Trust with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall be
conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon
this Note. 
 No reference herein to the Indenture and no provision of this Note or of the Indenture 
  

 -3- 

 shall alter or impair the obligation of the Trust, which is absolute and unconditional, to pay the principal of,
Make-Whole Amount, if any, on, and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed. 
 As
provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registrable in the Note Register, upon surrender of this Note for registration of transfer at the office or agency of the Trust in any Place
of Payment where the principal of, Make-Whole Amount, if any, on, and interest on this Note are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Trust and the Security Registrar for the Notes
(the “Note Registrar”) duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes of this series, of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees. 
 The Notes of this series are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Notes of this series are exchangeable for a like aggregate principal amount of Notes of this series of a
different authorized denomination, as requested by the Holder surrendering the same. 
 No service charge shall be made for any such
registration of transfer or exchange, but the Trust may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. 
 Prior to due presentment of this Note for registration of transfer, the Trust, the Trustee and any agent of the Trust or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for
all purposes, whether or not this Note be overdue, and neither the Trust, the Trustee nor any such agent shall be affected by notice to the contrary. 
 The obligations of the Trust under the Indenture and this Note and all documents delivered in the name of the Trust in connection herewith and therewith do not and shall not constitute personal obligations of the
trustees, officers, employees, agents or shareholders of the Trust or any of them, and shall not involve any claim against or personal liability on the part of any of them, and all persons including the Trustee shall look solely to the assets of the
Trust for the payment of any claim thereunder or for the performance thereof and shall not seek recourse against such trustees, officers, employees, agents or shareholders of the Trust or any of them or any of their personal assets for such
satisfaction. The performance of the obligations of the Trust under the Indenture and this Note and all documents delivered in the name of the Trust in connection therewith shall not be deemed a waiver of any rights or powers of the Trust, trustees
or shareholders under the Trust’s Declaration of Trust. 
 All terms used in this Note which are defined in the Indenture shall have the
meanings assigned to them in the Indenture. 
  

 -4- 

 THE INDENTURE AND THE NOTES, INCLUDING THIS NOTE, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAW OF THE STATE OF NEW YORK. 
 Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures,
the Trust has caused “CUSIP” numbers to be printed on the Notes as a convenience to the Holders of the Notes. No representation is made as to the correctness or accuracy of such CUSIP numbers as printed on the Notes, and reliance may be
placed only on the other identification numbers printed hereon. 
 Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee by manual signature, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. 
 IN WITNESS WHEREOF, the Trust has caused this instrument to be duly executed this July 26, 2006. 
  

			
	WASHINGTON REAL ESTATE INVESTMENT TRUST
		
	By:	 	  

	Name:	 	Edmund B. Cronin, Jr.
	Title:	 	Chairman and Chief Executive Officer

 Attest: 
  

			
	By:	 	  

	Name:	 	Laura M. Franklin
	Title:	 	Corporate Secretary

  

 -5- 

 TRUSTEE’S CERTIFICATE OF AUTHENTICATION: 
 This is one of the Notes of the series designated “5.95% Senior Notes due June 15, 2011” pursuant to the within-mentioned Indenture. 
 J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION 
 as Trustee 
  

			
	By:	 	  

		 	Authorized Signatory

  

 -6- 

 ASSIGNMENT FORM 
 FOR VALUE RECEIVED, the undersigned hereby 
 sells, assigns and transfers unto 
 PLEASE INSERT SOCIAL 
 SECURITY OR OTHER IDENTIFYING
                                        
     
 NUMBER OF ASSIGNEE 
  

	
	  

	(Please Print or Typewrite Name and Address, including Zip Code, of Assignee)

 the within Note of Washington Real Investment Trust and
                                        
hereby does irrevocably constitute and appoint 

	
	  

	Attorney to transfer said Note on the books of the within-named Trust with full power of substitution in the premises.

 Dated:
                     
  

			
	Signature:	 	  

 NOTICE: The signature to this assignment must correspond with the name as it appears on the first page of the
within Note in every particular, without alteration or enlargement or any change whatever. 
  

			
	Signature Guaranteed:	 	  

 NOTICE: Signatures) must be guaranteed by an “eligible guarantor institution” that is a member or
participant in a “signature guarantee program” (e.g., the Securities Transfer Agents Medallion Program, the Stock Exchange Medallion Program or the New York Stock Exchange, Inc. Medallion Signature Program). 
  

 -7-

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