Document:

ex10-1.htm

    

      
        Exhibit
10.1

      

      CEC
ENTERTAINMENT, INC.

      AMENDED
AND RESTATED 2004 RESTRICTED STOCK PLAN

      

      The CEC
Entertainment, Inc. 2004 Restricted Stock Plan (hereinafter called the “Plan” as
amended, from time to time) was adopted by the Board of Directors of CEC
Entertainment, Inc., a Kansas corporation (hereinafter called the “Company”), on
March 29, 2004, became effective in 2004 as of the date the Plan was
approved by the stockholders of the Company, and was amended by the Board of
Directors of the Company on April 17, 2007 and became effective in 2007 as
of the date the amendments to the Plan were approved by the stockholders of the
Company. Further amendments to the Plan were approved by the Board of Directors
of the Company on April 15, 2008 and became effective in 2008 as of the date the
amendments to the Plan were approved by the stockholders of the
Company.  The amendments to the Plan, as contained herein, were
approved by the Board of Directors of the Company on February 24, 2009 and will
be effective upon approval by the stockholders of the Company.

      

      ARTICLE
1

      

      PURPOSE

      

      The
purpose of the Plan is to attract, retain, and reward the services of the
employees of the Company and its Subsidiaries and to provide such persons with a
proprietary interest in the Company through the granting of restricted stock and
rights to receive restricted stock, that will:

      

      
        	 
      	
                (a)

              	
                increase
      the interest of such persons in the Company’s welfare;

              
	 
      	 
      	 
      
	 
      	
                (b)

              	
                furnish
      an incentive to such persons to continue their services to the Company;
      and

              
	 
      	 
      	 
      
	 
      	
                (c)

              	
                provide
      a means through which the Company may attract able persons as
      employees.

              

      

      

      ARTICLE
2

      

      DEFINITIONS

      

      For the
purpose of the Plan, unless the context requires otherwise, the following terms
shall have the meanings indicated:

      

      2.1
“Award” means a Restricted Stock Award or a Restricted Stock Unit.

      

      2.2
“Award Agreement” means the written document evidencing the grant of an Award
executed by the Company, including any amendments thereto. Each Award Agreement
shall be subject to the terms and conditions of the Plan and need not be
executed by the Participant receiving the Award pursuant to the
Agreement.

      

      2.3
“Board” means the Board of Directors of the Company.

      

      2.4
“Change of Control” means any of the following: (i) any consolidation,
merger or share exchange of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which shares of the Company’s
Common Stock would be converted into cash, securities or other property, other
than a consolidation, merger or share exchange of the Company in which the
holders of the Company’s Common Stock immediately prior to such transaction have
the same proportionate ownership of Common Stock of the surviving corporation
immediately after such transaction; (ii) any sale, lease, exchange or other
transfer (excluding transfer by way of pledge or hypothecation) in one
transaction or a series of related transactions, of all or substantially all of
the assets of the Company; (iii) the stockholders of the Company approve
any plan or proposal for the liquidation or dissolution of the Company;
(iv) the cessation of control (by virtue of their not constituting a
majority of directors) of the Board by the individuals (the “Continuing
Directors”) who were members of the Board for the immediately preceding two
(2) years (unless the election, or the nomination for election by the
Company’s stockholders, of each new director was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who were directors
at the beginning of such a period); (v) the acquisition of beneficial
ownership (within the meaning of Rule 13d-3 under the Exchange Act, as defined
in Section 2.13) of an aggregate of 30% of the voting power of the
Company’s outstanding voting securities by any person or group (as such term is
used in Rule 13d-5 under the Exchange Act, as defined in Section 2.13) who
beneficially owned less than 15% of the voting power of the Company’s
outstanding voting securities on the date of this Plan, or the acquisition of
beneficial ownership of an additional 15% of the voting power of the Company’s
outstanding voting securities by any person or group who beneficially owned at
least 15% of the voting power of the Company’s outstanding voting securities on
the date of this Plan, provided, however, that notwithstanding the foregoing, an
acquisition shall not constitute a Change of Control hereunder if the acquirer
is  (A) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company and acting in such capacity, (B) a
Subsidiary of the Company or a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of voting securities of the Company or (C) any other person whose
acquisition of shares of voting securities is approved in advance by a majority
of the Continuing Directors; or (vi) in a Title 11 bankruptcy proceeding,
the appointment of a trustee or the conversion of a case involving the Company
to a case under Chapter 7.

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

      
 

      2.5
“Code” means the Internal Revenue Code of 1986, as amended.

      

      2.6
“Committee” means the committee appointed or designated by the Board to
administer the Plan in accordance with Article 3 of this Plan.

      

      2.7
“Common Stock” means the common stock of the Company, par value $ 0.10 per
share, which the Company is currently authorized to issue or may in the future
be authorized to issue.

      

      2.8 “Date
of Grant” means the effective date on which an Award is made, as determined in
accordance with the corporate laws of the state of Kansas, to a Participant as
set forth in the applicable Award Agreement.

      

      2.9
“Director” means a member of the Board.

      

      2.10
“Disability” means the “disability” of a person as defined in a then effective
long-term disability plan maintained by the Company that covers such person, or
if such a plan does not exist at any relevant time, “Disability” means the
permanent and total disability of a person within the meaning of
Section 22(e)(3) of the Code. Section 22(e)(3) of the Code provides
that an individual is totally and permanently disabled if he is unable to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or which
has lasted or can be expected to last for a continuous period of not less than
twelve (12) months.

      

      2.11
“Dividend Equivalents” means rights granted to a Participant with respect to
Restricted Stock Units to receive the equivalent value of dividends paid on the
shares of the Common Stock prior to vesting of the Award.  Dividend
Equivalents shall be converted to cash or additional shares of Common Stock by
such formulas and at such time and subject to such limitations as may be
determined by the Committee.

      

      2.12
“Employee” means a common law employee, including an employee who is also an
Officer or Director, (as defined in accordance with the Regulations and Revenue
Rulings then applicable under Section 3401(c) of the Code) of the Company
or any Subsidiary. “Employee” does not include Non-employee
Directors.

      

      2.13
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and any
successor statute. Reference in the Plan to any section of the Exchange Act
shall be deemed to include any amendments or successor provisions to such
section and rules and regulations relating to such section.

      

      2.14
“Fair Market Value” of a share of Common Stock means, as of any given date, the
closing price of the Common Stock as reported on the New York Stock Exchange
Consolidated Tape, or such reporting service as the Committee may select, or, if
the Common Stock is not traded on the New York Stock Exchange, the closing price
of the Common Stock on the principal national securities exchange or national
market system on which the Common Stock is listed, on the date of determination,
as reported on such source as the Committee deems reliable (or if no sale
occurred on such date, on the first immediately preceding trading date on which
a sale occurred), or, if the Common Stock is not listed on the New York Stock
Exchange or another securities exchange or market system, but is regularly
quoted on an automated quotation system (including the OTC Bulletin Board) or by
a recognized securities dealer, the Fair Market Value shall be the closing sales
price for the Common Stock as quoted on such system or by such securities dealer
on the date of determination (or if no sale occurred on that date, on the first
immediately preceding date on which a sale is reported), as reported on such
source as the Committee deems reliable, or, in the in the absence of an
established market of the Common Stock of the type described in the foregoing,
the “Fair Market Value” of a share of Common Stock shall be as determined by the
Committee in good faith in accordance with such fair and reasonable means as the
Board or the Committee shall specify.

      

      2.15
“Officer” means a person who is an “officer” of the Company or a Subsidiary
within the meaning of Section 16 of the Exchange Act (whether or not the
Company is subject to the requirements of the Exchange Act).

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      2.16
“Non-employee Director” means a member of the Board who is not an
Employee.

      

      2.17
“Participant” means an Employee to whom an Award is granted under the
Plan.

      

      2.18
“Performance Awards” means an Award subject to Performance Goals, as provided
for in Section 6.1 of this Plan.

       

      2.19
“Restriction Period” means the period during which the Common Stock under a
Restricted Stock Award is nontransferable and subject to “Forfeiture
Restrictions” as defined in Section 6.2 of this Plan and set forth in any
related Award Agreement.

      

      2.20
“Restricted Stock” means shares of Common Stock issued or transferred to a
Participant pursuant to a Restricted Stock Award under Section 6.4 of this
Plan which are subject to restrictions or limitations set forth in this Plan and
in any related Award Agreement.

      

      2.21
“Restricted Stock Award” means an award granted under Section 6.4 of this
Plan of shares of Common Stock issued to the Participant for such consideration,
if any, and subject to such restrictions on transfer, rights of first refusal,
repurchase provisions, forfeiture provisions and other terms and conditions as
are established by the Committee.

      

      2.22
“Restricted Stock Unit” means the right to receive a share of Common Stock, or
the Fair Market Value of a share of Common stock in cash, granted pursuant to
Section 6.5 of this Plan and shall be evidenced by a bookkeeping entry
representing the equivalent of one share of Common Stock.

      

      2.23
“Securities Act” means the Securities Act of 1933, as amended, and any successor
statute. Reference in the Plan to any section of the Securities Act shall be
deemed to include any amendments or successor provisions to such section and any
rules and regulations relating to such section.

      

      2.24
“Subsidiary” means (i) any corporation in an unbroken chain of corporations
beginning with the Company, if each of the corporations other than the last
corporation in the unbroken chain owns stock possessing a majority of the total
combined voting power of all classes of stock in one of the other corporations
in the chain, (ii) any limited partnership, if the Company or any
corporation described in item (i) above owns a majority of the general
partnership interests and a majority of the limited partnership interests
entitled to vote on the removal and replacement of the general partner, and
(iii) any partnership or limited liability company, if the partners or
members thereof are composed only of the Company, any corporation listed in item
(i) above or any limited partnership listed in item (ii) above.
“Subsidiaries” means more than one of any such corporations, limited
partnerships, partnerships or limited liability companies.

      

      2.25
“Termination of Service” occurs when a Participant shall cease to serve as an
Employee for any reason.

      

      

      ARTICLE
3

      

      ADMINISTRATION

      

      The Plan
shall be administered by the Committee. The Committee shall consist of not fewer
than two persons. Any member of the Committee may be removed at any time, with
or without cause, by resolution of the Board. Any vacancy occurring in the
membership of the Committee may be filled by appointment by the
Board.

      

      While the
Common Stock of the Company is publicly traded, if necessary to satisfy the
requirements of Code Section 162(m) and/or Rule 16b-3 promulgated under the
Exchange Act, membership on the Committee shall be limited to those members of
the Board who are “outside directors” under Section 162(m) of the Code
and/or “non-employee directors” as defined in Rule 16b-3 promulgated under the
Exchange Act, and/or who exhibit the independence necessary to comply with the
rules of any exchange upon which the Company’s securities are traded, and any
other applicable law, as necessary. The Committee shall select one of its
members to act as its Chairman. A majority of the Committee shall constitute a
quorum, and the act of a majority of the members of the Committee present at a
meeting at which a quorum is present shall be the act of the
Committee.

      

      The
Compensation Committee of the Board shall serve as the Committee unless and
until such time as the Board appoints other members of the Board to serve as the
Committee.

       

      The
Committee shall determine the Participants to whom Awards shall be granted, and
shall set forth in the Award
Agreement of each Participant the Award, the Restriction Period, the vesting
schedule, the Date of Grant, and such other terms, provisions, and limitations
as are approved by the Committee, but not inconsistent with the
Plan.

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      

      The
Committee, in its discretion, shall (i) interpret the Plan,
(ii) prescribe, amend, and rescind any rules and regulations necessary or
appropriate for the administration of the Plan, and (iii) make such other
determinations and take such other action as it deems necessary or advisable in
the administration of the Plan. Any interpretation, determination, or other
action made or taken by the Committee shall be final, binding, and conclusive on
all interested parties.

      

      With
respect to restrictions in the Plan that are based on the rules of any exchange
or inter-dealer quotation system upon which the Company’s securities are listed
or quoted, or any other applicable law, rule or restriction, to the extent that
any such restrictions are no longer required by applicable law, the Committee
shall have the sole discretion and authority to prescribe terms for Awards that
are not subject to such mandated restrictions and/or to waive any such mandated
restrictions with respect to outstanding Awards.

      

      ARTICLE
4

      

      ELIGIBILITY

      

      Any
Employee whose judgment, initiative and efforts are expected to contribute to
the successful performance of the Company is eligible to participate in the
Plan. Awards may be granted by the Committee at any time and from time to time
to new Participants, or to then Participants, or to a greater or lesser number
of Participants, and may include or exclude previous Participants, as the
Committee may determine. Except as required by this Plan, Awards granted at
different times need not contain similar provisions. The Committee’s
determinations under the Plan (including without limitation recommendations
regarding which Employees, if any, are to receive Awards, the form, amount and
timing of such Awards, the terms and provisions of such Awards and the
agreements evidencing same) need not be uniform and may be made by it
selectively among Employees who receive, or are eligible to receive, Awards
under the Plan.

      

      ARTICLE
5

      

      SHARES
SUBJECT TO THE PLAN

      

      Shares to
be issued may be made available from Common Stock held by the Company in its
treasury or Common Stock that is newly issued; provided, however, that to the
extent an Award is made to a newly hired Employee as a condition of employment,
only shares of Common Stock held by the Company in its treasury may be
used.

      

      Subject
to adjustment as provided in Articles 9 and 10, the maximum number of shares of
Common Stock that may be issued pursuant to Awards granted under the Plan is
2,000,000 shares. Shares of Common Stock previously subject to Awards which are
forfeited or terminated, are withheld for payment of any applicable employment
taxes and/or withholding obligations or are settled in cash may be reissued
pursuant to future Awards.

      

      ARTICLE
6

      

      GRANT OF
RESTRICTED STOCK AWARD AND RESTRICTED STOCK UNITS

      

      6.1 (a)
In General. The grant of an
Award shall be authorized by the Committee and shall be evidenced by an Award
Agreement setting forth the number of shares of Common Stock subject to the
Award, the Restriction Period (in the case of a Restricted Stock Award), the
vesting conditions and vesting schedule, the Date of Grant, and such other
terms, provisions, and limitations as are approved by the Committee, but not
inconsistent with the Plan. The Company shall issue an Award Agreement to the
Participant after the Committee approves the issuance of an Award.

       

      Each
Award Agreement shall be in such form and shall contain such terms and
conditions as the Committee shall deem appropriate. The terms and conditions of
such Award Agreements may change from time to time and the terms and conditions
of separate Award Agreements need not be identical, but each such Award
Agreement shall be subject to the applicable terms and conditions of this
Article 6.

      

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      
        (b) Performance Awards. The Committee may
grant Performance Awards to one or more Participants. The terms and conditions
of Performance Awards shall be specified at the time of the grant and may
include provisions establishing the performance period, the Performance Goals to
be achieved during a performance period, and the maximum or minimum settlement
values, provided that such terms and conditions are (i) not inconsistent
with the Plan and  (ii) to
the extent a Performance Award issued under the Plan is subject to
Section 409A of the Code, in compliance with the applicable requirements of
Section 409A of the Code and the regulations or other guidance issued
thereunder.
Performance Awards granted in the form of Restricted Stock Awards shall provide
for the issuance of the shares of Restricted Stock at the time of the grant of
the Performance Award and Performance Awards granted in the form of Restricted
Stock Units shall provide for the issuance of the shares of Common Stock at the
time of the certification by the Committee that the Performance Goals for the
performance period have been met; provided, however, if shares of Restricted
Stock are issued at the time of the grant of the Performance Award (granted in
the form of a Restricted Stock Award), the consideration for the issuance of
such shares shall be the achievement of the Performance Goals established at the
time of the grant of the Performance Award, and if, at the end of the
performance period, the Performance Goals are not certified by the Committee to
have been fully satisfied, then, notwithstanding any other provisions of this
Plan to the contrary, the Restricted Stock shall be forfeited in accordance with
the terms of the grant to the extent the Committee determines that the
Performance Goals were not met. The forfeiture of Restricted Stock issued at the
time of the grant of the Performance Award due to failure to achieve the
established Performance Goals shall be separate from and in addition to any
other Forfeiture Restrictions (as defined in Section 6.2 hereof) provided
for in this Plan. Each Performance Award granted to one or more Participants
shall have its own terms and conditions.

      

      

      If it is
determined to be necessary in order to satisfy Code Section 162(m), the
Committee shall, at the time of the grant of a Performance Award, and to the
extent permitted under Code Section 162(m) and the regulations issued
thereunder, provide for the manner in which the Performance Goals shall be
reduced to take into account the negative effect on the achievement of specified
levels of the Performance Goals which may result from enumerated corporate
transactions, extraordinary events, accounting changes and other similar
occurrences which were unanticipated at the time of the grant. In no event,
however, may the Committee increase the shares of Common Stock that may be
earned under a Performance Award, unless the reduction in the Performance Goals
would reduce or eliminate the number of shares of Common Stock to be earned
under the Performance Award and the Committee determines not to make such
reduction or elimination. The extent to which any applicable performance
objective has been achieved shall be conclusively determined by the
Committee.

      

      With
respect to a Performance Award that is not intended to satisfy the requirements
of Code Section 162(m), if the Committee determines, in its sole
discretion, that the established performance measures or objectives are no
longer suitable because of a change in the Company’s business, operations,
corporate structure, or for other reasons that the Committee deemed
satisfactory, the Committee may modify the performance measures or objectives
and/or the performance period.

      

      (c) Maximum Performance Award.
Notwithstanding the foregoing, in order to comply with the requirements of
Section 162(m) of the Code, no Employee may receive in any calendar year
Performance Awards having an aggregate value of more than $3,000,000.00, based
on the Fair Market Value of the Common Stock subject to the Award on the Date of
Grant.

      

      (d) Performance Goals. Performance Awards
may be made subject to the attainment of Performance Goals relating to one or
more business criteria which, where applicable, shall be within the meaning of
Section 162(m) of the Code and consist of one or more or any combination of
the following criteria: cash flow; cost; revenues; same store or general sales;
ratio of debt to debt plus equity; net borrowing, credit quality or debt
ratings; profit before tax; economic profit; earnings before interest and taxes;
earnings before interest, taxes, depreciation and amortization; gross margin;
earnings per share (whether on a pre-tax, after-tax, operational or other
basis); operating earnings; capital expenditures; expenses or expense levels;
economic value added; ratio of operating earnings to capital spending or any
other operating ratios; free cash flow; net profit; net sales; net asset value
per share; the accomplishment of mergers, acquisitions, dispositions, public
offerings or similar extraordinary business transactions; sales growth; price of
the Company’s Common Stock; return on assets, equity or stockholders’ equity;
market share; inventory levels, inventory turn or shrinkage; or total return to
stockholders (“Performance Criteria”). Any Performance Criteria may be used to
measure the performance of the Company as a whole or any business unit of the
Company and may be measured relative to a peer group or index. Any Performance
Criteria may include or exclude (i) extraordinary, unusual and/or
non-recurring items of gain or loss, (ii) gains or losses on the
disposition of a business, (iii) changes in tax or accounting regulations
or laws, (iv) the effect of a merger or acquisition, as identified in the
Company’s quarterly and annual earnings releases, or (v) other similar
occurrences. In all other respects, Performance Criteria shall be calculated in
accordance with the Company’s financial statements, under generally accepted
accounting principles, or under a methodology established by the Committee prior
to the issuance of a Performance Award.

      

      6.2 Forfeiture Restrictions. Shares of
Common Stock that are the subject of a Restricted Stock Award shall be subject
to restrictions on disposition by the Participant and to an obligation of the
Participant to forfeit and surrender the shares to the Company under certain
circumstances (the “Forfeiture Restrictions”). The Forfeiture Restrictions shall
be determined by the Committee, in its sole discretion, and the Committee may
provide that the Forfeiture Restrictions shall lapse on the passage of time or
the occurrence of such other event or events determined to be appropriate by the
Committee. The Forfeiture Restrictions applicable to a particular Restricted
Stock Award (which may differ from any other such Restricted Stock Award) shall
be stated in the Award Agreement.

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

       

      

      6.3 Minimum Vesting Restrictions. The
Forfeiture Restrictions for any particular Restricted Stock Award or vesting
schedule applicable to a Restricted Stock Unit shall not provide for (i) a
vesting period of less than one year nor more than five years, (ii)  full
vesting within a period of less than three years and (iii) vesting that is more
favorable than a pro rata vesting over a period of three years.

      

      6.4 Restricted Stock Awards. At the time
any Restricted Stock Award is granted under the Plan, the Company shall issue to
the Participant an Award Agreement setting forth each of the matters addressed
in this Article 6 and such other matters as the Committee may determine to be
appropriate. Shares of Common Stock awarded pursuant to a Restricted Stock Award
shall be represented by a stock certificate registered in the name of the
Participant of such Restricted Stock Award or by a book entry account with the
Company’s transfer agent. The Participant shall have the right to receive
dividends with respect to the shares of Common Stock subject to a Restricted
Stock Award, to vote the shares of Common Stock subject thereto and to enjoy all
other stockholder rights with respect to the shares of Common Stock subject
thereto, except that, unless provided otherwise in the Award Agreement,
(i) the Participant shall not be entitled to delivery of the certificate
evidencing the shares of Common Stock covered by a Restricted Stock Award until
the Forfeiture Restrictions have expired, (ii) the Company or an escrow
agent shall retain custody of the certificate evidencing the shares of Common
Stock (or such shares shall be held in a book entry account with the Company’s
transfer agent) until the Forfeiture Restrictions have expired, (iii) the
Participant may not sell, transfer, pledge, exchange, hypothecate or otherwise
dispose of the shares of Common Stock until the Forfeiture Restrictions have
expired, and (iv) a breach of the terms and conditions established by the
Committee and set forth in the Award Agreement shall cause a forfeiture of the
Restricted Stock Award. At the time of such Restricted Stock Award, the
Committee may, in its sole discretion, prescribe additional terms, conditions or
restrictions relating to the Restricted Stock Award, including rules pertaining
to the Participant’s Termination of Service prior to expiration of the
Forfeiture Restrictions. Such additional terms, conditions or restrictions shall
also be set forth in the Award Agreement made in connection with the Restricted
Stock Award.

      

      6.5 Restricted Stock Units.  The
Committee is authorized to award Restricted Stock Units to any Employee selected
by the Committee covering such number of shares of Common Stock and subject to
such terms and conditions as determined by the Committee and, including rules
pertaining to the Participant’s Termination of Service prior to vesting of the
Restricted Stock Units.  At the time of grant, the Committee shall
specify the date or dates on which the Restricted Stock Units shall vest and
become nonforfeitable, and may specify such conditions to vesting as it deems
appropriate.  On the vesting date, the Company shall transfer to the
Participant one unrestricted, fully transferable share of Common Stock for each
Restricted Stock Unit scheduled to be paid out on such date and not previously
forfeited.  Alternatively, settlement of a Restricted Stock Unit may
be made in cash (in an amount reflecting the Fair Market Value of the Common
Stock that would have been issued) or any combination of cash and shares of
Common Stock, as determined by the Committee, in its sole discretion, at the
time of grant or settlement of the Restricted Stock Unit.  The
Committee may authorize Dividend Equivalents to be paid on outstanding
Restricted Stock Units.  If Dividend Equivalents are authorized to be
paid, they may be paid at the time dividends are declared on the shares of
Common Stock or at the time the Restricted Stock Units vest and they may be paid
in either cash or shares of Common Stock, in the discretion of the
Committee.  At the time of grant, the Committee shall specify the
settlement date applicable to a Restricted Stock Unit, which shall be no earlier
than the vesting date(s) applicable to the applicable Restricted Stock Unit and
may be later than the vesting date(s) to the extent and under the terms
determined by the Committee.  A Restricted Stock Unit shall be granted
in compliance with the applicable requirements of Section 409A of the Code and
the treasury regulations and other guidance issued thereunder.  At the
time any Restricted Stock Unit is granted under the Plan, the Company shall
issue to the Participant an Award Agreement setting forth each of the matters
addressed in this Section 6.5 and other applicable matters in this Article 6 and
such other matters as the Committee may determine to be
appropriate.

      

      6.6 Rights and Obligations of Participant.
One or more stock certificates representing shares of Common Stock, free of
Forfeiture Restrictions, shall be delivered to the Participant promptly after,
and only after, the Forfeiture Restrictions have expired and vesting conditions,
including Performance Goals, if any, have been satisfied and the Participant has
satisfied all applicable federal, state and local income and employment tax
withholding requirements. Each Award Agreement covering a Restricted Stock Award
shall require that (i) the Participant, by his or her acceptance of the
Award, shall irrevocably grant to the Company a power of attorney to transfer
any shares that are forfeited to the Company and agrees to execute any documents
requested by the Company in connection with such forfeiture and transfer, and
(ii) such provisions regarding transfers of forfeited shares of Common
Stock shall be specifically performable by the Company in a court of equity or
law.

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

       

       

      6.7 Restriction Period. The Restriction
Period for a Restricted Stock Award shall commence on the Date of Grant of the
Restricted Stock Award and, unless otherwise established by the Committee and
stated in the Award Agreement, shall expire upon satisfaction of the conditions
set forth in the Award Agreement pursuant to which the Forfeiture Restrictions
will lapse. The Committee may, in its sole discretion, accelerate the
Restriction Period for all or a part of a Restricted Stock Award; provided,
however, that the Committee shall have no discretion to accelerate the
Restriction Period for any Participant unless that Participant has been
continuously an Employee for at least one (1) year after the Date of
Grant.

      

      6.8 Securities Restrictions. The Committee
may impose other conditions on any shares of Common Stock subject to an Award as
it may deem advisable, including (i) restrictions under applicable state or
federal securities laws, and (ii) the requirements of any stock exchange or
national market system upon which shares of Common Stock are then listed or
quoted.

      

      6.9 Payment for Common Stock. The
Committee shall determine the amount and form of any payment for shares of
Common Stock received pursuant to an Award; provided, that in the absence of
such a determination, the Participant shall not be required to make any payment
for shares of Common Stock received pursuant to an Award, except to the extent
otherwise required by law.

      

      6.10
Forfeiture of Restricted Stock.
Subject to the provisions of the particular Award Agreement, on Participant’s
Termination of Service during the Restriction Period, the shares of Common Stock
still subject to the Forfeiture Restrictions contained in the Award shall be
forfeited by the Participant. Upon any forfeiture, all rights of the Participant
with respect to the forfeited shares of Common Stock subject to the Award shall
cease and terminate, without any further obligation on the part of the Company,
except that if so provided in the Award Agreement applicable to the Restricted
Stock Award, the Company shall repurchase each of the shares of Common Stock
forfeited for the purchase price per share paid by the Participant. The
Committee will have discretion to determine the date of the Participant’s
Termination of Service.

      

      6.11
Lapse of Forfeiture Restrictions and
Vesting Conditions in Certain Events; Committee’s Discretion.
Notwithstanding the provisions of Section 6.10 or any other provision in
the Plan to the contrary, the Committee may, on account of the Participant’s
Disability or retirement, in its discretion and as of a date determined by the
Committee, fully vest any Restricted Stock Unit or all Common Stock awarded to
the Participant pursuant to a Restricted Stock Award, and upon such vesting, all
Forfeiture Restrictions or vesting conditions applicable to such Award shall
lapse or terminate; provided, however, that the Committee shall have no
discretion to fully vest any Common Stock awarded unless the Participant has
been continuously an Employee for at least one (1) year after the Date of
Grant. The Committee shall have discretion to determine whether a Participant’s
Termination of Service was as a result of Disability or retirement.
Notwithstanding the foregoing provisions of this Section 6.11, the Committee
shall not have the discretion or the right, in the case of a Participant’s
retirement, to grant to or permit a Participant to vest in an Award that is a
Performance Award designated by the Committee as being an Award to which Section
162(m) of the Code applies, except to the extent the Performance Goals which
were established in order for such Performance Award to be granted or to be
retained have been met.  Any action by the Committee pursuant to this
Section 6.11 may vary among individual Participants and may vary among the
Awards held by any individual Participant.

      

      6.12
Lapse of Forfeiture Restrictions Upon
Death. Notwithstanding the provisions of Section 6.10 or any other
provision in the Plan or the applicable Award Agreement to the contrary, all
Restricted Stock Units or Common Stock awarded to a Participant pursuant to a
Restricted Stock Award shall fully vest upon the death of such Participant, and
upon such vesting all Forfeiture Restrictions applicable to a Restricted Stock
Award or Restricted Stock Unit shall lapse or terminate; even though the
Participant’s death occurs before he has been continuously an Employee for at
least one (1) year after the Date of Grant.

      

      6.13
Withholding Taxes. The Committee
may establish such rules and procedures as it considers desirable in order to
satisfy any obligation of the Company to withhold applicable federal, state and
local income and employment taxes with respect to the lapse of Forfeiture
Restrictions or issuance of shares or any other taxable event applicable to
Awards, including allowing the Participant to elect to have the Company withhold
shares otherwise issuable under an Award (or allow the return of shares) having
a Fair Market Value equal to the sum required to be
withheld.  Notwithstanding any other provision of the Plan, the number
of shares which may be withheld with respect to the issuance, vesting or payment
of any Award (or which may be repurchased from the Participant after such shares
were acquired by the Participant from the Company) in order to satisfy the
Participant’s federal, state and local income and employment tax liabilities
with respect to the issuance, vesting or payment of the Award shall be limited
to the number of shares which have a Fair Market Value on the date of
withholding or repurchase equal to the aggregate amount of such liabilities
based on the minimum statutory withholding rates for federal, state and local
income tax and payroll tax purposes that are applicable to such taxable
income.  Prior to delivery of shares of Common Stock upon the lapse of
Forfeiture Restrictions applicable to an Award, the Participant shall pay or
make adequate provision acceptable to the Committee for the satisfaction of all
tax withholding obligations of the Company.

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

       

      

      ARTICLE
7

      

      AMENDMENT
OR DISCONTINUANCE

      

      Subject
to the limitations set forth in this Article 7, the Board or the Committee may
at any time and from time to time, alter, amend, revise, suspend, or discontinue
the Plan in whole or in part; provided, however, that any amendment to the Plan
must be approved by the stockholders of the Company if the amendment would
(a) materially increase the aggregate number of shares of Common Stock
which may be issued under the Plan, (b) materially modify the requirements
as to eligibility for participation in the Plan, (c) materially increase
the benefits accruing to Participants under the Plan, or (d) otherwise
require stockholder approval due to the requirements of any securities exchange
or inter-dealer quotation system on which the Common Stock is listed or traded
or in order for the Plan or Awards to continue to comply with sections of the
Code or any other laws applicable to Awards made under this Plan. Any such
amendment shall, to the extent deemed necessary by the Committee, be applicable
to any outstanding Awards theretofore granted under the Plan, notwithstanding
any contrary provisions contained in any Award Agreement. In the event of any
such amendment to the Plan, the holder of any Awards outstanding under the Plan
shall, upon request of the Committee and as a condition to the applicable lapse
of Forfeiture Restrictions thereon, execute a conforming amendment in the form
prescribed by the Committee to any Award Agreement relating thereto.
Notwithstanding anything contained in this Plan to the contrary, unless required
by law, no action contemplated or permitted by this Article 7 shall adversely
affect any rights of Participants or obligations of the Company to Participants
with respect to any Awards theretofore granted under the Plan without the
consent of the affected Participant.

      

      ARTICLE
8

      

      TERM

      

      Unless
sooner terminated by action of the Board, the Plan will terminate on
December 31, 2014, but Awards granted before that date will continue to be
effective in accordance with the terms and conditions of the respective Award
Agreement.

      

      ARTICLE
9

      

      CAPITAL
ADJUSTMENTS

      

      If at any
time while the Plan is in effect, or Awards are outstanding, there shall be any
increase or decrease in the number of issued and outstanding shares of Common
Stock resulting from (1) the declaration or payment of a stock dividend,
(2) any recapitalization resulting in a stock split up, combination, or
exchange of shares of Common Stock, or (3) other increase or decrease in
such shares of Common Stock effected without receipt of consideration by the
Company, then and in such event:

       

      
        	 
      	
                (a)

              	
                An
      appropriate adjustment shall be made in the maximum number of shares of
      Common Stock then subject to being awarded under the Plan and in the
      maximum number of shares of Common Stock that may be awarded to a
      Participant to the end that the same proportion of the Company’s issued
      and outstanding shares of Common Stock shall continue to be subject to
      being so awarded.

              
	 
      	 
      	 
      
	 
      	
                (b)

              	
                Appropriate
      adjustments shall be made in the number of outstanding shares of
      Restricted Stock with respect to which Forfeiture Restrictions have not
      yet lapsed or outstanding shares of Common Stock that are subject to a
      Restricted Stock Unit that have not vested or have yet been issued prior
      to any such change.

              

      

      

      Except as
otherwise expressly provided herein, the issuance by the Company of shares of
its capital stock of any class, or securities convertible into shares of capital
stock of any class, either in connection with direct sale or upon the exercise
of rights or warrants to subscribe therefore, or upon conversion of shares or
obligations of the Company convertible into such shares or other securities,
shall not affect, and no adjustment by reason thereof shall be made
with respect to the number of outstanding shares of Restricted Stock or shares
of Common Stock subject to an Award.

         

               
Upon the occurrence of each event requiring an adjustment with respect to any
Award, the Company shall communicate by reasonable means intended to reach each
affected Participant its computation of such adjustment which shall be
conclusive and shall be binding upon each such Participant.

      

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

       

      

      ARTICLE
10

      

      RECAPITALIZATION,
MERGER AND

      CONSOLIDATION;
CHANGE IN CONTROL

      

      10.1 The
existence of this Plan and Awards granted hereunder shall not affect in any way
the right or power of the Company or its stockholders to make or authorize any
or all adjustments, recapitalizations, reorganizations, or other changes in the
Company’s capital structure and its business, or any merger or consolidation of
the Company, or any issue of bonds, debentures, preferred or preference stocks
ranking prior to or otherwise affecting the Common Stock or the rights thereof
(or any rights, options, or warrants to purchase same), 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.

      

      10.2
Subject to any required action by the stockholders, if the Company shall be the
surviving or resulting corporation in any merger, consolidation or share
exchange, any Awards granted hereunder shall pertain to and apply to the
securities or rights (including cash, property, or assets) to which a holder of
the number of shares of Common Stock subject to the Awards would have been
entitled.

      

      10.3 In
the event of any merger, consolidation or share exchange pursuant to which the
Company is not the surviving or resulting corporation, there shall be
substituted for each share of Common Stock subject to the outstanding Awards,
that number of shares of each class of stock or other securities or that amount
of cash, property, or assets of the surviving, resulting or consolidated company
which were distributed or distributable to the stockholders of the Company in
respect to each share of Common Stock held by them, such outstanding Awards to
be thereafter applicable to such stock, securities, cash, or property in
accordance with their terms. Notwithstanding the foregoing, however, all such
Awards may be canceled by the Company as of the effective date of any such
reorganization, merger, consolidation, or share exchange by giving notice to
each holder thereof or his personal representative of its intention to do so and
by permitting the purchase by the Company during the thirty (30) day period
next preceding such effective date of all of the shares of Common Stock subject
to such outstanding Awards at a price equal to the Fair Market Value of such
shares on the date of purchase.

      

      10.4 In
the event of a Change of Control, then, notwithstanding any other provision in
this Plan to the contrary, all Awards outstanding shall thereupon automatically
be vested. The determination of the Committee that any of the foregoing
conditions has been met shall be binding and conclusive on all
parties.

      

      ARTICLE
11

      

      LIQUIDATION
OR DISSOLUTION

      

      In case
the Company shall, at any time while any Award under this Plan shall be in force
and remain unexpired, (i) sell all or substantially all of its property, or
(ii) dissolve, liquidate, or wind up its affairs, then each Participant
shall be thereafter entitled to receive, in lieu of each share of Common Stock
of the Company in which the Participant is vested, pursuant to the terms of the
Participant’s Award Agreement, as of the date the Company sells all or
substantially all of its property, or dissolves, liquidates or winds up its
affairs, the same kind and amount of any securities or assets as may be
issuable, distributable, or payable upon any such sale, dissolution,
liquidation, or winding up with respect to each share of Common Stock of the
Company. Notwithstanding the foregoing, the Committee may, in its sole and
absolute discretion accelerate the vesting of any Participant’s Award in
connection with any sale, dissolution, liquidation, or winding up contemplated
in this Article 11.

      

      ARTICLE
12

      

      MISCELLANEOUS
PROVISIONS

      

      12.1
Investment Intent. The Company
may require that there be presented to and filed with it by any Participant
under the Plan, such evidence as it may deem necessary to establish that the
shares of Common Stock to be received from an Award are being acquired for
investment and not with a view to their distribution.

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

       

      12.2
No Right to Continued
Employment. Neither the Plan nor any Award granted under the Plan shall
confer upon any Participant any right with respect to continuance of employment
by the Company or any Subsidiary.

      

      12.3
Indemnification of Board and
Committee. No member of the Board or the Committee, nor any Officer or
Employee acting on behalf of the Board or the Committee, shall be personally
liable for any action, determination, or interpretation taken or made in good
faith with respect to the Plan, and all members of the Board or the Committee
and each and any Officer or Employee acting on their behalf shall, to the extent
permitted by law, be fully indemnified and protected by the Company in respect
of any such action, determination, or interpretation.

      

      12.4
Effect of the Plan. Neither the
adoption of this Plan nor any action of the Board or the Committee shall be
deemed to give any person any right to be granted an Award or any other rights
except as may be evidenced by an Award Agreement, or any amendment thereto, duly
authorized by the Committee and executed on behalf of the Company, and then only
to the extent and upon the terms and conditions expressly set forth
therein.

      

      12.5
Severability And Reformation.
The Company intends all provisions of the Plan to be enforced to the fullest
extent permitted by law. Accordingly, should a court of competent jurisdiction
determine that the scope of any provision of the Plan is too broad to be
enforced as written, the court should reform the provision to such narrower
scope as it determines to be enforceable. If, however, any provision of the Plan
is held to be wholly illegal, invalid, or unenforceable under present or future
law, such provision shall be fully severable and severed, and the Plan shall be
construed and enforced as if such illegal, invalid, or unenforceable provision
were never a part hereof, and the remaining provisions of the Plan shall remain
in full force and effect and shall not be affected by the illegal, invalid, or
unenforceable provision or by its severance.

      

      12.6
Governing Law. The Plan shall be
construed and interpreted in accordance with the laws of the State of
Kansas.

      

      12.7
Compliance With Other Laws and
Regulations. Notwithstanding anything contained herein to the contrary,
the Company shall not be required to sell or issue shares of Common Stock under
any Award if the issuance thereof would constitute a violation by the
Participant or the Company of any provisions of any law or regulation of any
governmental authority or any national securities exchange or inter-dealer
quotation system or other forum in which shares of Common Stock are quoted or
traded (including without limitation Section 16 of the Exchange Act); and,
as a condition of any sale or issuance of shares of Common Stock under an Award,
the Committee may require such agreements or undertakings, if any, as the
Committee may deem necessary or advisable to assure compliance with any such law
or regulation. The Plan and the grant of Awards hereunder, and the obligation of
the Company to sell and deliver shares of Common Stock, shall be subject to all
applicable federal and state laws, rules and regulations and to such approvals
by any government or regulatory agency as may be required.

       

      12.8
Legend. Each certificate
representing shares of Restricted Stock issued to a Participant shall bear the
following legend, or a similar legend deemed by the Company to constitute an
appropriate notice of the provisions hereof (any such certificate not having
such legend shall be surrendered upon demand by the Company and so
endorsed):

      

      On the
face of the certificate:

      

      “Transfer
of this stock is restricted in accordance with conditions printed on the reverse
of this certificate.”

      

      On the
reverse:

      

      “The
shares of stock evidenced by this certificate are subject to and transferable
only in accordance with that certain CEC Entertainment, Inc. 2004 Restricted
Stock Plan and the related Award Agreement, copies of which are on file at the
principal office of the Company in Irving, Texas. No transfer or pledge of the
shares evidenced hereby may be made except in accordance with and subject to the
provisions of said Plan and Agreement. By acceptance of this certificate, any
holder, transferee or pledgee hereof agrees to be bound by all of the provisions
of said Plan and Agreement.”

      

      The
following legend shall be inserted on a certificate evidencing Common Stock
issued under the Plan if the shares were not issued in a transaction registered
under the applicable federal and state securities laws:

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

      “Shares
of stock represented by this certificate have been acquired by the holder for
investment and not for resale, transfer or distribution, have been issued
pursuant to exemptions from the registration requirements of applicable state
and federal securities laws, and may not be offered for sale, sold or
transferred other than pursuant to effective registration under such laws, or in
transactions otherwise in compliance with such laws, and upon evidence
satisfactory to the Company of compliance with such laws, as to which the
Company may rely upon an opinion of counsel satisfactory to the
Company.”

      

      12.9
Limits on
Transfer.  No right or interest of a Participant in any Award
may be pledged, encumbered, or hypothecated to or in favor of any party other
than the Company or a Subsidiary, or shall be subject to any lien, obligation,
or liability of such Participant to or for the benefit of any other party other
than the Company or a Subsidiary.  Except as otherwise provided by the
Committee, no Award shall be assigned, transferred, or otherwise disposed of by
a Participant other than by will or the laws of descent and distribution or
pursuant to beneficiary designation procedures approved from time to time by the
Committee.  The Committee by express provision in the Award or an
amendment thereto may, to the extent permitted by applicable law, permit an
Award to be transferred or paid to certain persons or entities related to the
Participant, including, but not limited to, members of the Participant’s family,
charitable institutions, or trusts or other entities whose beneficiaries or
beneficial owners are members of the Participant’s family and/or charitable
institutions, or to such other persons or entities as may be expressly approved
by the Committee, pursuant to such conditions and procedures as the Committee
may establish.  Any permitted transfer shall be subject to the
condition that the Committee receive evidence satisfactory to it that the
transfer is being made for estate and/or tax planning purposes (or to a “blind
trust” in connection with the Participant’s termination of employment or service
with the Company or a Subsidiary to assume a position with a governmental,
charitable, educational or similar non-profit institution) and on a basis
consistent with the Company’s lawful issue of securities.

      

      12.10
Fractional Shares.  No
fractional shares shall be issued and the Committee shall determine, in its
discretion, whether cash shall be given in lieu of fractional shares or whether
such fractional shares shall be eliminated by rounding up or down as
appropriate.

      

      12.11
Unfunded Status of
Awards.  The Plan is intended to be an “unfunded” plan for
incentive compensation.  With respect to any payments not yet made or
any obligations owing to a Participant pursuant to an Award, nothing contained
in the Plan or any Award Agreement shall give the Participant any rights that
are greater than those of a general creditor of the Company or any
Subsidiary.

      

      12.12
Internal Revenue Code Section
409A.  It is the intent that the Plan, the Award Agreement and
any Award granted hereunder shall either be exempt from or comply with Section
409A of the Code, and any ambiguity in the terms to which Awards are subject
shall be so construed.  In furtherance of this interest, to the extent
that any regulations or other guidance issued under Section 409A after the
effective date of this Plan would result in a Participant being subject to
payment of interest and tax penalty under Section 409A, the Committee may amend
the Plan or any Award Agreement, without the Participant’s consent, including
with respect to the timing of payment of benefits, in order to avoid the
application of, or to comply with the requirements of, Section 409A; provided,
however, that the Company makes no representation that compensation or benefits
payable under this Plan or Award granted under this Plan shall be exempt from or
comply with Section 409A and makes no representation to preclude Section 409A
from applying to the compensation or benefits payable under the
Plan.

      

            A copy of this Plan shall be kept
on file in the principal office of the Company in Irving, Texas.

      

      
        
           

        

        
          11PRIME REALTY INCOME TRUST, INC. Exhibit 4.6

Exhibit 4.6

FORM OF

PRIME REALTY INCOME TRUST, INC.

2009 EQUITY INCENTIVE PLAN

 

	
Article 1. 
 	
Establishment, Objectives, and Duration
 

 

1.1         Establishment of the Plan.  Prime Realty Income Trust, Inc., a Maryland corporation, has established this Prime Realty Income Trust, Inc. 2009 Equity Incentive Plan (the “Plan”).  Capitalized terms will have the meanings given to them in Article 2.  The Plan permits the grants of nonqualified stock options, incentive stock options, restricted shares, restricted stock unit, share appreciation rights, dividend equivalent rights, and other equity-based awards.

 

1.2         Objectives of the Plan.  The Plan’s purpose is to furnish Participants with the incentive to improve the Company’s operations and to increase the Company’s profits, encourage Participants to accept or continue employment with any Company Party, and increase the interest of the Company’s officers and independent directors in the Company’s welfare through their participation in the growth in the value of the Company’s shares.

 

1.3         Effective Date and Term of the
 Plan.  The Plan will be effective _________, 2009.  Subject to the right of the Board to amend or terminate the Plan at any time pursuant to Article 12, the Plan will terminate upon the date on which all shares of Stock available for issuance under the Plan have been issued or transferred according to the Plan’s provisions or, if earlier, the tenth anniversary of the Effective Date.  Upon such Plan termination, all Awards outstanding under the Plan will continue to have full force and effect in accordance with the terms of the Award Agreement evidencing such Award.

 

	
Article 2. 
 	
Definitions
 

 

The following capitalized terms will have the meanings indicated below for purposes of the Plan and any Award.

 

“Advisor” means The Prime Group, Inc. or any successor advisor that is appointed by the Company in accordance with that certain Advisory Agreement dated as of ______, 2009 by and between the Company, Prime Realty Income Operating Partnership, LP and the Prime Group, Inc. or any successor or replacement agreement thereto.

 

“Affiliate” means (a) for purposes of Incentive Stock Options, any corporation that is a parent or subsidiary of the Company (as defined in Code Section 424(e) and (f)), and (b) for all other purposes, with respect to any Person, any other Person controlling, controlled by or under common control with such Person, any partner of such other Person if such Person is a partnership, and any member of such other Person if such Person is a limited liability company.

 

“Award” means a grant under, and pursuant to the terms of, the Plan of an Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, or Other Equity-Based Award.

 

“Award Agreement” means any written agreement, contract, or other instrument or document that evidences an Award granted to a Participant and that sets forth the terms and conditions of the Award.

 

“Award Date” means, with respect to an Award, the grant date specified by the Board or Committee in a resolution or other writing, duly adopted, and as set forth in the Award Agreement, provided that such Award Date will not be earlier than the date of such Board or Committee action.

 

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

 

“Cause” will have the meaning set forth in any employment, consulting, or other agreement between any of the Company Parties and the Participant.  If there is no employment, consulting, or other agreement between any of the Company Parties and the Participant, or if such agreement does not define “Cause,” then “Cause” will mean: (i) theft or embezzlement, or attempted theft or embezzlement, of money or property of any of the Company Parties, perpetration or attempted perpetration of fraud, or participation in a fraud or attempted fraud, on any of the Company Parties, or unauthorized appropriation of, or attempt to misappropriate, any tangible or intangible assets or property of any of the Company Parties, (ii) act or acts of disloyalty, moral turpitude, or material misconduct that is injurious to the interest, property, value,
operations, business or reputation of any of the Company Parties, or conviction of a crime that results in injury to any of the Company Parties; or (iii) repeated refusal (other than by reason of Disability) to carry out reasonable instructions from his or her superiors or the Board.  A Participant’s service will be deemed to have terminated for Cause if, after the Participant’s service has terminated (for a reason other than Cause), facts and circumstances are discovered that would have justified a termination for Cause.

 

“Change in Control” means the occurrence of any of the following events in which any one person, or more than one person acting as a group (as defined in Treas. Reg. §1.409A-3(i)(5)(v)(B)):

 

	
 
 	
(a)
 	
acquires ownership of the Company’s Stock that, together with the Stock held by such person or group, constitutes more than fifty percent (50%) of the total fair market value or total voting power of the Stock of the Company; or 
 

 

	
 
 	
(b)
 	
acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or group) assets from the Company that have a total gross fair market value (which, for this purpose, means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets) equal to or more than fifty percent (50%)
of the total gross fair market value of all of the assets of the Company immediately before such acquisition or acquisitions.  
 

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time, and the rules and regulations promulgated thereunder.

 

2

“Committee” means the Compensation Committee of the Board, or such other committee of the Board as the Board may from time to time designate to administer the  Plan.

 

“Company” means Prime Realty Income Trust, Inc., a Maryland corporation.

 

“Company Parties” means, collectively and without duplication, the Company and any of its Subsidiaries.

 

“Consultant” means a consultant or other independent service provider engaged by a Company Party to render services to such Company Party and who is not a Director or an Employee.

 

“Director” means an individual who is a member of the Board or the board of directors (or similar governing body) of any other Company Party.

 

“Disability” will have the meaning set forth in any employment, consulting, or other agreement between any of the Company Parties and the Participant.  If there is no employment, consulting, or other agreement between any of the Company Parties and the Participant, or if such agreement does not define “Disability,” then “Disability” will mean: (i) the Participant’s inability to engage in substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve months or (ii) the Participant’s receipt of income replacement benefits for a period of not less than three months under an accident and health plan of any of the Company Parties that covers the Participant.

 

“Dividend Equivalent Right” means a right to receive on the payment date for any dividends on any share of Stock underlying an Award, cash compensation from the Company equal to the dividends that would have been paid on each such share of Stock (or the Fair Market Value of such dividends, if such dividends would not have been paid in cash), if such share of Stock had been issued and outstanding, fully vested and held by the Participant on the record date for payment of such dividends.  Notwithstanding the foregoing, if such dividends would not have been paid in cash, the Dividend Equivalent Right with respect thereto will not be paid unless and until a certificate evidencing the share of Stock with respect to which it is paid is issued to the Participant.  Dividend Equivalents Right may be provided, in the Committee’s discretion, in connection
with any Award under the Plan.

 

“Effective Date” means __________, 2009.

 

“Employee” means a common law employee of any of the Company Parties.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations promulgated thereunder.

 

“Exercise Price” means the price at which a Participant may purchase shares of Stock pursuant to an Option or Stock Appreciation Right.

 

“Fair Market Value” means, on any date:  (a) if the Stock is readily tradeable on a national securities exchange or other market system, the closing sales price of the Stock on such date (or on the last preceding trading date if the Stock was not traded on such date), or (b) if the 

 

3

Stock is not readily tradeable on a national securities exchange or other market system, the fair market value as determined in good faith by the Committee, by a reasonable application of a reasonable valuation method consistent with the Code, or Treasury Regulations thereunder, as the Committee in its discretion selects and applies as of such date.

 

“Incentive Stock Option” or “ISO” means an Option that is intended to qualify as an “incentive stock option” within the meaning of Code Section 422 and that is so designated in the applicable Award Agreement.

 

“Non-Qualified Stock Option” means an Option that is not an Incentive Stock Option, including an Option designated as an Incentive Stock Option but which, for any reason, fails to qualify as an Incentive Stock Option.

 

“Option” means an option, granted to a Participant pursuant to Article 6, to purchase a share of Stock and which may be an Incentive Stock Option or a Non-Qualified Stock Option.

 

“Other Equity-Based Awards” means a right or other interest, granted to a Participant pursuant to Article 9, that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to Stock, including, but not limited to, unrestricted shares of Stock or Dividend Equivalent Rights.

 

“Participant” means any eligible Person who is selected by the Committee to receive an Award under the Plan.

 

“Person” means any natural person, corporation, partnership, association, limited liability company, estate, trust, joint venture, any federal, state, or municipal government or any bureau, department or agency thereof or any other legal entity and any fiduciary acting in such capacity on behalf of the foregoing.

 

“Plan” means the Prime Realty Income Trust, Inc. 2009 Equity Incentive Plan, as set forth in this document and as amended from time to time.

 

“Restricted Stock” means shares of Stock, granted to a Participant pursuant to Article 7, that are subject to such restrictions as the Committee deems appropriate or desirable, including restrictions on transferability, risks of forfeiture, and certain other items and conditions under the Plan or specified by the Committee.  

 

“Restricted Stock Unit” or “RSU” means a fixed or variable Stock denominated unit, granted to a Participant pursuant to Article 7, that is (a) subject to such restrictions as the Committee deems appropriate or desirable and (b) payable in Stock or in cash equal to the Fair Market Value of the Stock.

 

“Restriction Period” means a period of time during which an Award is subject to forfeiture and/or restrictions on transfer, commencing on the Award Date and ending on such date on which such Award is no longer restricted or subject to forfeiture. 

 

4

“Securities Act” means the Securities Act of 1933, as amended from time to time, and the rules and regulations promulgated thereunder.

 

“Stock” means shares of the common stock of the Company, $0.01 par value per share.

 

“Stock Appreciation Right” or “SAR” means a right, granted to a Participant pursuant to Article 8, to receive upon exercise of the right an amount measured by the excess of the Fair Market Value of a share of Stock on the date of exercise over the Exercise Price.

 

“Subsidiary” means, with respect to any Person, (i) a corporation more than 50% of the combined voting power of the outstanding stock of which is owned, directly or indirectly, by such Person or by one or more other Subsidiaries of such Person or by such Person and one or more Subsidiaries thereof, or (ii) any other Person (other than a corporation) in which such Person, or one or more other Subsidiaries of such Person or such Person and one or more other Subsidiaries thereof, directly or indirectly, has the power to direct the policies, management and affairs thereof.

 

	
Article 3. 
 	
Administration
 

 

3.1         Plan Administration.  Except as otherwise determined by the Board, the Plan will be administered by the Committee.

 

3.2         Authority of the Committee.  Except as limited by law and subject
to the provisions of the Plan, the Committee will have full power to:  (i) select eligible Persons to participate in the Plan; (ii) grant Awards; (iii) determine the sizes
and types of Awards; (iv) determine the terms and conditions of Awards in a manner consistent with the Plan; (v) construe and interpret the Plan and any Award Agreement or other instrument entered
into under the Plan; (vi) establish, amend or waive rules and regulations for the Plan’s administration; and (vii) subject to the provisions of Article 12, amend the terms and conditions of any
 outstanding Award to the extent the terms are within the Board’s discretion under the Plan.  Further, the Committee will make all other determinations that
may be necessary or advisable to administer the Plan.  As permitted by law, the Committee may delegate some or all of its authority under the Plan.

 

3.3         Decisions Binding.  All determinations and decisions made by the Committee pursuant to the provisions of the Plan will be final, conclusive and binding on all Persons, including, without limitation, the Company, the Board, the Company’s stockholders, all Affiliates, Employees and Participants, and their estates and beneficiaries.

 

	
Article 4. 
 	
Shares Subject to the Plan and Maximum Awards
 

 

4.1         Number of Shares Available for Grants.  Subject to adjustment as provided in Section 4.3, the total number of common shares of Stock available for Awards and reserved for issuance under the Plan is equal to 5.0% of the Company’s outstanding shares of Stock on a fully diluted basis at any time, but in no event more than 2,000,000 shares of Stock.  Shares of Stock subject to the Plan may be authorized but unissued shares, treasury shares or shares acquired through purchases in the open market, private transactions of otherwise.  Notwithstanding anything in the Plan to the contrary, (i) in no event will more than 2,000,000 shares of Stock be 

 

5

issued pursuant to Incentive Stock Options under the Plan, and (ii) in no event will more than 2,400,000 shares of Stock be cumulatively available for Awards other than Options or Stock Appreciation Rights.  Subject to adjustment as set forth in Section 4.3, the maximum number of shares of Stock with respect to which Awards may be granted in any calendar year to any single Participant under the Plan will be 500,000 shares.

 

4.2         Lapsed Awards.  If any Award granted under this Plan is canceled, terminates, expires, or lapses for any reason, any shares of Stock subject to such Award will again be available for an Award under the Plan.

 

4.3         Adjustments in Authorized Shares.  If the shares of Stock, as currently constituted, are changed into or exchanged for a different number or kind of shares or other securities of the Company or of another entity (whether because of merger, consolidation, recapitalization, reclassification, split, reverse split, combination of shares, or otherwise, but not including a sale of the Company’s Stock or other equity pursuant to an effective registration statement under the Securities Act, filed with the Securities and Exchange Commission, or other capital infusion from any source) or if the number of shares of Stock is increased through the payment of a dividend or other distribution, then the Committee will substitute for or add to each share of Stock previously appropriated, later
subject to, or which may become subject to, an Award, the number and kind of shares or other securities into which each outstanding share of Stock was changed, for which each such share was exchanged, or to which each such share is entitled, as the case may be.  The Committee also will amend outstanding Awards as to price and other terms, to the extent necessary to reflect the events described above.  If there is any other change in the number or kind of the outstanding shares into which the outstanding shares of Stock have been changed, or for which they have been exchanged, the Committee will adjust any Award already granted or that may be afterward granted.

 

Fractional shares resulting from any adjustments in Awards, or in the number of shares of Stock subject to an Award, pursuant to this Section 4.3 may be settled in cash or otherwise as the Committee determines.  The Company will give notice of any adjustment to each Participant who holds an Award that has been adjusted, and the adjustment (whether or not such notice is given) will be effective and binding for all Plan purposes.

 

	
Article 5. 
 	
Eligibility and Participation
 

 

5.1         Eligibility.  The following Persons are eligible to receive Awards under this Plan: (i) Employees of any Company Party, (ii) Employees of any entity, other than the Advisor or any of its Affiliates, that provides services to any Company Party, (iii) Directors and members of the board of directors of any entity, other than the Advisor or any of its Affiliates, that provides services to any Company Party, and (iv) Consultants, other than the Advisor or any of its Affiliates.  No Employee, Director, Consultant, or Participant will have the right to receive an Award under this Plan or, having received any Award, to receive a future Award.

 

5.2         Actual Participation.  The Committee will determine, within the limits set forth below, those eligible Persons to whom it will grant Awards.  Each eligible Person whom the Committee has selected to receive an Award will become a Participant in the Plan upon execution of an Award Agreement.

 

6

	
Article 6. 
 	
Options
 

 

6.1         Grant of Options.  The Committee may grant, at any time and from time to time, Options to any eligible Person (as set forth in Section 5.1) in the number and upon the terms as the Committee determines and sets forth in the Award Agreement.  Notwithstanding the above, the Committee may grant Incentive Stock Options only to Employees.

 

6.2         Terms and Conditions of Options.  Each Option grant will be evidenced by an Award Agreement that specifies the duration of the Option, the type of Option, the Exercise Price, the number of shares of Stock to which the Option pertains, the manner, time and rate of exercise and/or vesting of the Option, and such other terms and conditions not inconsistent with Plan as the Committee determines and sets forth in the Award Agreement.  Options granted under the Plan will be subject to the following terms and conditions:

 

	
 
 	
(a)
 	
Exercise Price.  The Exercise Price of each Option will be such price as the Committee determines in its discretion, except that the Exercise Price will not be less than one hundred percent (100%) of the Fair Market Value of a share of Stock as determined on the Award Date.
 

 

	
 
 	
(b)
 	
Vesting and Exercise of Option.  Options will become vested and exercisable at such times and be subject to such restrictions and conditions as the Committee in each instance approves and sets forth in each Award Agreement.  The Committee, in any Award Agreement, may provide that a Participant may exercise Options before the Options become vested; provided that upon the Participant’s termination of
service with the Company Parties, the Participant will forfeit any shares of Stock attributable to the exercise of any Options that were not vested at the time of such termination of service.  Restrictions and conditions on the exercise of an Option need not be the same for each Award or for each Participant.
 

 

	
 
 	
(c)
 	
Payment Upon Exercise of Option.  The holder of an Option may exercise the Option only by delivering a written notice of exercise to the Company (or its delegate) setting forth the number of shares of Stock as to which the Option is to be exercised, together with full payment of the Exercise Price of such exercised Option and any withholding tax relating to the exercise of the Option.  The Exercise Price and any related withholding taxes will be payable
to the Company in full either:  (i) in United States dollars, in cash or by personal check payable to the order of the Company; (ii) with shares of Stock owned by the Participant with a Fair Market Value equal to the Exercise Price and related withholding tax, being duly endorsed for transfer to the Company free and clear of any encumbrance; (iii) by surrendering to the Company vested Options with an aggregate value equal to the Exercise Price and any related withholding tax (the aggregate value of any surrendered Options being the spread between the aggregate Exercise Price of the surrendered Options and the aggregate Fair Market Value of the shares of Stock underlying the surrendered Options); or (iv) any combination of (i) through (iii) above or by any other means the Committee determines to be consistent with the Plan’s purposes and applicable law.
 

 

7

	
 
 	
(d)
 	
Duration of Option.  Each Option will expire at the time determined by the Committee at the time of grant and specified in the Award Agreement, but no later than the tenth anniversary of the Award Date.
 

 

	
 
 	
(e)
 	
Termination of Service.  Each Award Agreement for an Option will set forth the extent to which the Participant has the right to exercise the Option after his or her termination of service with the Company Parties.  These terms will be determined by the Committee in its sole discretion, need not be uniform among all Options, and may reflect, among other things, distinctions based on the reasons for termination of service.
 

 

	
 
 	
(f)
 	
Nontransferability.  Except as otherwise provided in a Participant’s Award Agreement, no Option granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution.  Further, except as otherwise provided in a Participant’s Award Agreement, all Options will be exercisable during the Participant’s lifetime only by the Participant or his or
her guardian or legal representative.  The Committee may require, in its discretion, a Participant’s guardian or legal representative to supply it with such evidence the Committee deems necessary to establish the authority of the guardian or legal representative to act on behalf of the Participant.
 

 

	
 
 	
(g)
 	
Other Restrictions.  In addition, the Committee may impose such restrictions on any shares of Stock acquired through exercise of an Option as it deems necessary or advisable, including, without limitation, restrictions under applicable federal securities laws, under the requirements of any stock exchange or market upon which the shares of Stock are then listed and/or traded, and under any blue sky or state securities laws applicable to the shares of
Stock.
 

 

6.3         Special Provisions Applicable to ISOs.    Notwithstanding any other provision of this Article 6, the following special provisions will apply to Incentive Stock Options:

 

	
 
 	
(a)
 	
$100,000 Limit.  The Committee will not award Incentive Stock Options under this Plan if it would cause the aggregate Fair Market Value of Stock (as of the Award Date of the Incentive Stock Options) with respect to which Incentive Stock Options are exercisable by the Participant for the first time during a calendar year (under all plans of the Company and its Affiliates) to exceed $100,000.  If a Participant is granted Options in excess of this $100,000
limitation, or if such Options otherwise become exercisable with respect to a number of shares of Stock that would exceed the $100,000 limitation, such Options will be Non-Qualified Stock Options.
 

 

	
 
 	
(b)
 	
Ten Percent Owners.  If the Employee to whom the Incentive Stock Option is granted is a Ten Percent Owner, then (A) the Exercise Price for each share of Stock subject to the Option will be at least one hundred ten percent (110%) of the Fair Market Value of the Stock on the Award Date; and (B) the Option will expire upon the earlier of (i) the time specified by the Committee in the Award 
 

 

8

Agreement or (ii) the fifth anniversary of the Award Date.  For purposes of the Plan, “Ten Percent Owner” means an Employee who, at the time an Option is granted under this Plan, owns, directly or indirectly, Stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any of its Affiliates.

 

	
 
 	
(c)
 	
Stockholder Approval.  No Option that is intended to be an Incentive Stock Option may be granted under the Plan until the Company’s stockholders approve the Plan.  If such stockholder approval is not obtained within twelve (12) months after the Board’s adoption of the Plan, then no Options that are intended to be Incentive Stock Options may be granted under the Plan.
 

 

	
 
 	
(d)
 	
Termination of Service.  An Incentive Stock Option must be exercised, if at all, within three (3) months after the Participant’s termination of service with the Company Parties for a reason other than death or Disability, and within twelve (12) months after the Participant’s termination of service for death or Disability.
 

 

	
Article 7. 
 	
Restricted Stock and Restricted Stock Units
 

 

7.1         Grant of Restricted Stock or RSUs.  The Committee may grant, at any time and from time to time, Restricted Stock and/or Restricted Stock Units to eligible Persons (as set forth in Section 5.1) in such amounts and upon the terms as the Committee determines and sets forth in the Award Agreement.  Restricted Stock and RSUs will be subject to a Restriction Period.

 

7.2         Award Agreement.  Each Restricted Stock or RSU grant will be evidenced by an Award Agreement that specifies the applicable Restriction Period, the number shares of Restricted Stock or Restricted Stock Units granted, the purchase price, if any, and such other terms and conditions not inconsistent with Plan as the Committee determines and sets forth in the Award Agreement.

 

7.3         Nontransferability.  Except as otherwise provided in a Participant’s Award Agreement, no Restricted Stock or RSUs granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution, until the end of the applicable Restriction Period or upon earlier satisfaction of any other conditions specified by the Committee in its sole discretion and set forth in the Award Agreement.  Further, except as otherwise provided in a Participant’s Award Agreement, all rights with respect to Restricted Stock or RSU will be available during the Participant’s lifetime only to the Participant or the Participant’s guardian or legal representative.  The Committee may require, in its
discretion, a Participant’s guardian or legal representative to supply it with such evidence the Committee deems necessary to establish the authority of the guardian or legal representative to act on behalf of the Participant.

 

7.4         Other Restrictions.  The Committee may impose such other conditions and/or restrictions on any Restricted Stock or RSU as it deems advisable and sets forth in the applicable Award Agreement including, without limitation, restrictions based upon the achievement of specific performance objectives (Company-wide, business unit, and/or individual), time-based restrictions on vesting and/or restrictions under applicable federal or state securities laws.  The 

 

9

Committee may provide that restrictions applicable to Restricted Stock or RSUs will lapse all at once or in installments.  The Company may retain the certificates representing shares of Restricted Stock in its possession until the Restriction Period lapses and all other conditions and/or restrictions applicable to such Award have been satisfied.

 

7.5         Payment of Awards.  At the expiration of the applicable Restriction Period, shares of Stock subject to each Restricted Stock grant will become transferable by the Participant.  Each RSU will be paid to a Participant as soon as administratively feasible following the expiration of the applicable Restriction Period or on the date provided in the Award Agreement.

 

7.6         Voting Rights.  The applicable Award Agreement may specify that Participants holding shares of Restricted Stock may exercise any voting rights that apply to those shares during the Restriction Period.

 

7.7         Distributions. The applicable Award Agreement may specify that Participants awarded shares of Restricted Stock will be paid or credited with any regular dividends or other distributions paid on those shares, or that Participants awarded Restricted Stock Units will be paid or credited with Dividend Equivalent Rights paid on those units, during the Restriction Period.  The Committee may establish such terms and apply any restrictions it deems appropriate or necessary with respect to the crediting and payment of dividends and Dividend Equivalent Rights, including the timing, form of payment, and payment contingencies, provided that in no event will any cash dividends or distributions be paid later than two and one-half months following the end of the calendar year in which the
underlying shares of Stock or Dividend Equivalent Rights become nonforfeitable.

 

7.8         Termination of Service.  Each Award Agreement for Restricted Stock or RSUs will set forth the extent to which the Participant has the right to retain Restricted Stock or RSUs after his or her termination of service with the Company Parties.  These terms will be determined by the Committee in its sole discretion, need not be uniform among all Awards of Restricted Stock or RSUs, and may reflect, among other things, distinctions based on the reasons for termination of service.

 

	
Article 8
 	
Stock Appreciation Rights
 

 

8.1         Grant of SARs.  The Committee may grant, at any time and from time to time, SARs to any eligible Persons (as set forth in Section 5.1) in such amounts and upon the terms as the Committee determines and sets forth in the Award Agreement.  

 

8.2         Award Agreement.  Each SAR grant will be evidenced by an Award Agreement that specifies the duration of the SAR, the Exercise Price, the number shares of Stock subject to the SAR grant, the manner, time and rate of exercise and/or vesting of the SAR, and such other terms and conditions not inconsistent with the Plan as the Committee determines and sets forth in the Award Agreement.

 

8.3         Exercise Price.  The Exercise Price of each SAR will be such price as the Committee determines in its discretion, except that the Exercise Price will not be less than one 

 

10

hundred percent (100%) of the Fair Market Value of a share of Stock as determined on the Award Date.

 

8.4         Vesting and Exercise of SARs.  SARs will become vested and exercisable at such times and be subject to such restrictions and conditions as the Committee in each instance approves and sets forth in each Award Agreement.  Restrictions and conditions on the exercise of an SARs need not be the same for each Award or for each Participant.

 

8.6         Payment.  The holder of an SAR may exercise the SAR only by delivering a written notice of exercise to the Company (or its delegate) setting forth the number of SARs to be exercised, together with full payment of the Exercise Price of such exercised SARs and any withholding tax relating to the exercise of the SARs.  The Exercise Price and any related withholding taxes will be payable to the Company in full either:  (i) in United States dollars, in cash or by personal check payable to the order of the Company; (ii) with shares of Stock owned by the Participant with a Fair Market Value equal to the Exercise Price and related withholding tax, being duly endorsed for transfer to the Company free and clear of any encumbrance; (iii) by surrendering to the Company vested SARs with an
aggregate value equal to the Exercise Price and related withholding tax (the aggregate value of any surrendered SARs being the spread between the aggregate Exercise Price of the surrendered SARs and the aggregate Fair Market Value of the shares of Stock underlying the surrendered SARs); or (iv) any combination of (i) through (iii) above or by any other means the Committee determines to be consistent with the Plan’s purposes and applicable law.

 

8.7         Duration.  Each SAR will expire at the time determined by the Committee at the time of grant and specified in the Award Agreement, but no later than the tenth anniversary of the Award Date.

 

8.8         Termination of Service.  Each Award Agreement for an SAR will set forth the extent to which the Participant has the right to exercise the SAR after his or her termination of service with the Company Parties.  These terms will be determined by the Committee in its sole discretion, need not be uniform among all SARs, and may reflect, among other things, distinctions based on the reasons for termination of service.

 

8.9         Nontransferability of SARs.  Except as otherwise provided in a Participant’s Award Agreement, no SAR granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution.  Further, except as otherwise provided in a Participant’s Award Agreement, all SARs will be exercisable during the Participant’s lifetime only by the Participant or his or her guardian or legal representative.  The Committee may require, in its discretion, a Participant’s guardian or legal representative to supply it with such evidence the Committee deems necessary to establish the authority of the guardian or legal representative to act on behalf of the Participant.

 

	
Article 9
 	
Other Equity-Based Awards
 

 

 

11

9.1         Grant of Other-Equity Based Awards.  The Committee may grant, at any time and from time to time, Other-Equity Based Awards to eligible Persons (as set forth in Section 5.1).  

 

9.2         Award Agreement.  Each Other-Equity Based Award grant will be evidenced by an Award Agreement that specifies the number shares of Stock granted and such other terms and conditions not inconsistent with the Plan as the Committee determines and sets forth in the Award Agreement.

 

	
Article 10
 	
Change in Control
 

 

The Committee will have the right, in its sole discretion, to take the following actions that the following provisions will apply in the event of a Change in Control:

 

(a)       Each outstanding Option and SAR will immediately become vested and exercisable in full;

 

	
 
 	
(b)
 	
The restrictions on any Restricted Stock or RSU will lapse; and
 

 

	
 
 	
(c)
 	
Each other Award will become fully vested;
 

 

provided that; full vesting of all outstanding Awards will be immediate unless the Company is the surviving entity and the Committee, in its discretion, determines that any adjustments necessary to preserve the value of the Participant’s outstanding Awards have been made, or the Company’s successor at the time of the Change in Control irrevocably assumes the Company’s obligations under this Plan or replaces each Participant’s outstanding Award with an award of equal or greater value and having terms and conditions no less favorable to the Participant then those applicable to the Participant’s Award immediately prior to the Change in Control.  In addition, the Committee will have the discretion to provide for the termination of all outstanding Awards as of the effective date of the Change in Control in exchange for a payment equal to the value of such Award, as such value is
determined by the Committee in its sole discretion.

 

	
Article 11
 	
Breach of Restrictive Covenants
 

 

An Award Agreement may provide that, notwithstanding any other provision of this Plan to the contrary, if the Participant breaches any non-competition, non-solicitation or other restrictive covenants of the Award Agreement, whether during or after termination of service with the Company Parties, in addition to any other penalties or restrictions that may apply under any employment agreement, state law, or otherwise, the Participant will:

 

(a)       forfeit and/or repay to the Company any and all Awards granted to him or her under the Plan, including Awards that have become vested and exercisable; and

 

(b)       forfeit the profit the Participant has realized on the exercise of any Options or SARs, which is the difference between the Exercise Price and the Fair Market Value of the Stock (determined as of the date of exercise) under any Option or SAR the Participant exercised after terminating service and within the six month period immediately preceding the Participant’s termination of service.

 

12

	
Article 12. 
 	
Amendment, Modification and Termination
 

 

The Board or Committee may at any time and from time to time, alter, amend, modify or terminate the Plan in whole or in part.  Subject to the terms and conditions of the Plan, the Board or Committee may modify, extend or renew outstanding Awards under the Plan, or accept the surrender of outstanding Awards (to the extent not already exercised) and grant new Awards in substitution of them (to the extent not already exercised).  The Board or Committee will not, however, modify any outstanding Option to specify a lower Exercise Price.  Notwithstanding the foregoing, no modification of an Award will, without the prior written consent of the Participant, materially impair any rights or obligations under any Award already granted under the Plan; provided that, the Committee will have the right at any time, without a Participant’s consent, to modify the Award in any manner the Committee
determines to be necessary and advisable to comply with any law, regulation or other legal requirement.

 

Awards will comply with requirements of Code Section 162(m) if the Committee determines that such compliance is desired with respect to an Award.  In addition, if changes are made to Code Section 162(m) to permit greater flexibility as to any Award available under the Plan, the Committee may, subject to this Article 12, make any adjustments it deems appropriate.

 

	
Article 13. 
 	
Rights of Participants
 

 

Nothing in the Plan will interfere with or limit in any way the right of any of the Company Parties to terminate any Participant’s service at any time, or confer upon any Participant any right to continue in the service of any of the Company Parties.  A Participant will have no rights as a shareholder with respect shares of Stock covered by an Award until the date the Participant or his or her nominee, guardian or legal representative is the holder of record of the shares of Stock.

 

	
Article 14. 
 	
Withholding
 

 

The Company will have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount (in cash or shares of Stock) sufficient to satisfy federal, state, and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to any taxable event arising under this Plan.

 

	
Article 15. 
 	
Successors
 

 

All obligations of the Company under the Plan or any Award Agreement will be binding on any successor to the Company, whether the existence of the successor results from a direct or indirect purchase of all or substantially all of the business and/or assets of the Company, purchase of the Company’s Stock, or a merger, consolidation, or otherwise.

 

	
Article 16. 
 	
Legal Construction
 

 

16.1         Number.  Except where otherwise indicated by the context, any plural term used in this Plan includes the singular and a singular term includes the plural.

 

13

16.2         Severability.  If any provision of the Plan is held illegal or invalid for any reason, the illegality or invalidity will not affect the remaining parts of the Plan, and the Plan will be construed and enforced as if the illegal or invalid provision had not been included.

 

16.3         Requirements of Law.  The granting of Awards and the issuance of Stock and/or cash payouts under the Plan will be subject to all applicable laws, rules, and regulations, and to any approvals by governmental agencies or national securities exchanges as may be required.

 

16.4         Securities Law Compliance.  As to  any individual who is, on the relevant date, an officer, director or ten percent beneficial owner of any class of the Company’s equity securities that is registered pursuant to Section 12 of the Exchange Act, all as defined under Section 16 of the Exchange Act, transactions under this Plan are intended to comply with all applicable conditions of Rule 16b-3 under the Exchange Act, or any successor rule.  To the extent any provision of the Plan or action by the Board or the Committee fails to so comply, it will be deemed null and void, to the extent permitted by law and deemed advisable by the Board.

 

16.5         Unfunded Status of the Plan.  The Plan is intended to constitute an “unfunded” plan for incentive and deferred compensation.  With respect to any payments or deliveries of shares of Stock not yet made to a Participant by the Company, the Participant’s rights are no greater than those of a general creditor of the Company.  The Committee may authorize the establishment of trusts or other arrangements to meet the obligations created under the Plan, so long as the arrangement does not cause the Plan to lose its legal status as an unfunded plan.

 

16.6         Non-U.S. Based Person.  Notwithstanding any other provision of the Plan to the contrary, the Committee may make Awards to Persons who are not citizens or residents of the United States on such terms and conditions different from those specified in the Plan as may, in the Committee’s judgment, be necessary or desirable to foster and promote achievement of the Plan’s purposes.  In furtherance of such purposes, the Committee may make such modifications, amendments, procedures and subplans as may be necessary or advisable to comply with provisions of laws in other countries or jurisdictions in which the Company operates or has employees.

 

16.7         Governing Law.  To the extent

not preempted by federal law, the Plan and all agreements hereunder will be
construed and enforced in accordance with, and governed by, the laws of the
State of Maryland, without giving effect to its conflict of laws principles. Any
action or proceeding arising out of or in connection with this Plan or any
Agreement will be brought only in the Federal Courts located in Baltimore,
Maryland, and the Participant will consent to submit to the exclusive
jurisdiction of the such court for purposes of any action or proceeding arising
out of or in connection with this Plan or any Award Agreement.

 

	
Article 17. 
 	
Code Section 409A
 

 

The Plan and all Awards granted under the Plan are intended to be exempt from or comply with Code Section 409A and the guidance issued thereunder by the U.S. Internal Revenue Service in all respects and shall be administered in a manner consistent with such intent.  If an unintentional operational failure occurs with respect to Code Section 409A 

 

14

requirements, any affected Participant or beneficiary shall fully cooperate with the Company to correct the failure, to the extent possible, in accordance with any correction procedure established by the U.S. Internal Revenue Service.  Any reference herein to Code Section 409A or to Section 1.409A of the Treasury Regulations shall be interpreted to refer to any successor section of the Code, the Treasury Regulations or other guidance issued by the U.S. Internal Revenue Service, as appropriate.

 

 

15

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00157-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00157-of-00352.parquet"}]]