Document:

exv10w16

 

Exhibit 10.16

 INDEMNIFICATION AGREEMENT

     THIS INDEMNIFICATION AGREEMENT is made and entered into this                      day of                                         , 2005
(“Agreement”), by and between Midlantic Office Trust, Inc., a Maryland corporation (the “Company”),
and (“Indemnitee”).

     WHEREAS, at the request of the Company, Indemnitee currently serves as a [director] [officer]
of the Company and may, therefore, be subjected to claims, suits or proceedings arising as a result
of [his] [her] service; and

     WHEREAS, as an inducement to Indemnitee to [serve] [continue to serve] as such [director]
[officer], the Company has agreed to indemnify and to advance expenses and costs incurred by
Indemnitee in connection with any such claims, suits or proceedings, to the maximum extent
permitted by law; and

     WHEREAS, the parties by this Agreement desire to set forth their agreement regarding
indemnification and advance of expenses;

     NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the
Company and Indemnitee do hereby covenant and agree as follows:

     Section 1. Definitions. For purposes of this Agreement:

     (a) “Change in Control” means a change in control of the Company occurring after the Effective
Date of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated
under the Securities Exchange Act of 1934, as amended (the “Act”), whether or not the Company is
then subject to such reporting requirement; provided, however, that, without limitation, such a
Change in Control shall be deemed to have occurred if after the Effective Date (i) any “person” (as
such term is used in Sections 13(d) and 14(d) of the Act) is or becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company
representing 15% or more of the combined voting power of the Company’s then outstanding securities
without the prior approval of at least a majority of the members of the Board of Directors in
office immediately prior to such person attaining such percentage interest; (ii) there occurs a
proxy contest, or the Company is a party to a merger, consolidation, sale of assets, plan of
liquidation or other reorganization not approved by at least a majority of the members of the Board
of Directors then in office, as a consequence of which members of the Board of Directors in office
immediately prior to such transaction or event constitute less than a majority of the Board of
Directors thereafter; or (iii) during any period of two consecutive years, other than as a result
of an event described in clause (a)(ii) of this Section 1, individuals who at the beginning of such
period constituted the Board of Directors (including for this purpose any new director whose
election or nomination for election by the Company’s stockholders was approved by a vote of at
least a majority of the directors then still in office who were directors at the beginning of such
period) cease for any reason to constitute at least a majority of the Board of Directors.

 

 

     (b) “Corporate Status” means the status of a person who is or was a director, trustee,
officer, employee or agent of the Company or of any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise for which such person is or was serving at the
request of the Company.

     (c) “Disinterested Director” means a director of the Company who is not and was not a party to
the Proceeding in respect of which indemnification is sought by Indemnitee.

     (d) “Effective Date” means the date set forth in the first paragraph of this Agreement.

     (e) “Expenses” shall include all reasonable and out-of-pocket attorneys’ fees, retainers,
court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs,
printing and binding costs, telephone charges, postage, delivery service fees, and all other
disbursements or expenses of the types customarily incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, or being or preparing to be a witness
in a Proceeding.

     (f) “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in
matters of corporation law and neither is, nor in the past five years has been, retained to
represent: (i) the Company or Indemnitee in any matter material to either such party, or (ii) any
other party to or witness in the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who,
under the applicable standards of professional conduct then prevailing, would have a conflict of
interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s
rights under this Agreement. If a Change of Control has not occurred, Independent Counsel shall be
selected by the Board of Directors, with the approval of Indemnitee, which approval will not be
unreasonably withheld. If a Change of Control has occurred, Independent Counsel shall be selected
by Indemnitee, with the approval of the Board of Directors, which approval will not be unreasonably
withheld.

     (g) “Proceeding” includes any threatened, pending or completed action, suit, arbitration,
alternate dispute resolution mechanism, investigation, administrative hearing or any other
proceeding, whether civil, criminal, administrative or investigative (including on appeal), except
one pending or completed on or before the Effective Date, unless otherwise specifically agreed in
writing by the Company and Indemnitee.

     Section 2. Services by Indemnitee. Indemnitee will serve as a [director] [officer] of
the Company. However, this Agreement shall not impose any obligation on Indemnitee or the Company
to continue Indemnitee’s service to the Company beyond any period otherwise required by law or by
other agreements or commitments of the parties, if any.

     Section 3. Indemnification — General. The Company shall indemnify, and advance
Expenses to, Indemnitee (a) as provided in this Agreement and (b) otherwise to the maximum extent
permitted by Maryland law in effect on the date hereof and as amended from time to time; provided,
however, that no change in Maryland law shall have the effect of reducing the benefits available to
Indemnitee hereunder based on Maryland law as in effect on the date hereof. The rights of
Indemnitee provided in this Section 3 shall include, without limitation, the rights set

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forth in the other sections of this Agreement, including any additional indemnification
permitted by Section 2-418(g) of the Maryland General Corporation Law (“MGCL”).

     Section 4. Proceedings Other Than Proceedings by or in the Right of the Company.
Indemnitee shall be entitled to the rights of indemnification provided in this Section 4 if, by
reason of [his] [her] Corporate Status, he is, or is threatened to be, made a party to or a witness
in any threatened, pending, or completed Proceeding, other than a Proceeding by or in the right of
the Company. Pursuant to this Section 4, Indemnitee shall be indemnified against all judgments,
penalties, fines and amounts paid in settlement and all Expenses actually and reasonably incurred
by [him] [her] or on [his] [her] behalf in connection with a Proceeding by reason of [his]
[her]Corporate Status unless it is established that (i) the act or omission of Indemnitee was
material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was
the result of active and deliberate dishonesty, (ii) Indemnitee actually received an improper
personal benefit in money, property or services, or (iii) in the case of any criminal Proceeding,
Indemnitee had reasonable cause to believe that [his] [her]conduct was unlawful.

     Section 5. Proceedings by or in the Right of the Company. Indemnitee shall be
entitled to the rights of indemnification provided in this Section 5 if, by reason of [his] [her]
Corporate Status, he is, or is threatened to be, made a party to or a witness in any threatened,
pending or completed Proceeding brought by or in the right of the Company to procure a judgment in
its favor. Pursuant to this Section 5, Indemnitee shall be indemnified against all amounts paid in
settlement and all Expenses actually and reasonably incurred by [him] [her] or on [his] [her]
behalf in connection with such Proceeding unless it is established that (i) the act or omission of
Indemnitee was material to the matter giving rise to such a Proceeding and (a) was committed in bad
faith or (b) was the result of active and deliberate dishonesty or (ii) Indemnitee actually
received an improper personal benefit in money, property or services.

     Section 6. Court-Ordered Indemnification. Notwithstanding any other provision of this
Agreement, a court of appropriate jurisdiction, upon application of Indemnitee and such notice as
the court shall require, may order indemnification in the following circumstances:

     (a) if it determines Indemnitee is entitled to reimbursement under Section 2-418(d)(1) of the
MGCL, the court shall order indemnification, in which case Indemnitee shall be entitled to recover
the Expenses of securing such reimbursement; or

     (b) if it determines that Indemnitee is fairly and reasonably entitled to indemnification in
view of all the relevant circumstances, whether or not Indemnitee (i) has met the standards of
conduct set forth in Section 2-418(b) of the MGCL or (ii) has been adjudged liable for receipt of
an improper personal benefit under Section 2-418(c) of the MGCL, the court may order such
indemnification as the court shall deem proper. However, indemnification with respect to any
Proceeding by or in the right of the Company or in which liability shall have been adjudged in the
circumstances described in Section 2-418(c) of the MGCL shall be limited to Expenses actually and
reasonably incurred by [him] [her]or on [his] [her] behalf in connection with a Proceeding.

     Section 7. Indemnification for Expenses of a Party Who is Wholly or Partly Successful.
Notwithstanding any other provision of this Agreement, and without limiting any

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such provision, to the extent that Indemnitee is, by reason of [his] [her] Corporate Status,
made a party to and is successful, on the merits or otherwise, in the defense of any Proceeding, he
shall be indemnified for all Expenses actually and reasonably incurred by [him] [her] or on [his]
[her] behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding
but is successful, on the merits or otherwise, as to one or more but less than all claims, issues
or matters in such Proceeding, the Company shall indemnify Indemnitee under this Section 7 for all
Expenses actually and reasonably incurred by [him] [her] or on [his] [her] behalf in connection
with each successfully resolved claim, issue or matter, allocated on a reasonable and proportionate
basis. For purposes of this Section and without limitation, the termination of any claim, issue or
matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a
successful result as to such claim, issue or matter.

     Section 8. Advance of Expenses. The Company shall advance all reasonable Expenses
actually and reasonably incurred by or on behalf of Indemnitee in connection with any Proceeding
(other than a Proceeding brought to enforce indemnification under this Agreement, applicable law,
the Charter or Bylaws of the Company, any agreement or a resolution of the stockholders entitled to
vote generally in the election of directors or of the Board of Directors) to which Indemnitee is,
or is threatened to be, made a party or a witness, within ten days after the receipt by the Company
of a statement or statements from Indemnitee requesting such advance or advances from time to time,
whether prior to or after final disposition of such Proceeding. Such statement or statements shall
reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or
accompanied by a written affirmation by Indemnitee of Indemnitee’s good faith belief that the
standard of conduct necessary for indemnification by the Company as authorized by law and by this
Agreement has been met and a written undertaking by or on behalf of Indemnitee, in substantially
the form attached hereto as Exhibit A or in such form as may be required under applicable
law as in effect at the time of the execution thereof, to reimburse the portion of any Expenses
advanced to Indemnitee relating to claims, issues or matters in the Proceeding as to which it shall
ultimately be established that the standard of conduct has not been met and which have not been
successfully resolved as described in Section 7. To the extent that Expenses advanced to
Indemnitee do not relate to a specific claim, issue or matter in the Proceeding, such Expenses
shall be allocated on a reasonable and proportionate basis. The undertaking required by this
Section 8 shall be an unlimited general obligation by or on behalf of Indemnitee and shall be
accepted without reference to Indemnitee’s financial ability to repay such advanced Expenses and
without any requirement to post security therefor.

     Section 9. Procedure for Determination of Entitlement to Indemnification.

     (a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a
written request, including therein or therewith such documentation and information as is reasonably
available to Indemnitee and is reasonably necessary to determine whether and to what extent
Indemnitee is entitled to indemnification. The Secretary of the Company (or the Chief Executive
Office if the Secretary is the Indemnitee) shall, promptly upon receipt of such a request for
indemnification, advise the Board of Directors in writing that Indemnitee has requested
indemnification.

     (b) Upon written request by Indemnitee for indemnification pursuant to the first sentence of
Section 9(a) hereof, a determination, if required by applicable law, with respect to

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Indemnitee’s entitlement thereto shall promptly be made in the specific case: (i) if a Change
in Control shall have occurred, by Independent Counsel in a written opinion to the Board of
Directors, a copy of which shall be delivered to Indemnitee; or (ii) if a Change of Control shall
not have occurred, (A) by the Board of Directors (or a duly authorized committee thereof) by a
majority vote of a quorum consisting of Disinterested Directors (as herein defined), or (B) if a
quorum of the Board of Directors consisting of Disinterested Directors is not obtainable or, even
if obtainable, such quorum of Disinterested Directors so directs, by Independent Counsel in a
written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee, or (C)
if so directed by a majority of the members of the Board of Directors, by the stockholders of the
Company. If it is so determined that Indemnitee is entitled to indemnification, payment to
Indemnitee shall be made within ten days after such determination. Indemnitee shall cooperate with
the person, persons or entity making such determination with respect to Indemnitee’s entitlement to
indemnification, including providing to such person, persons or entity upon reasonable advance
request any documentation or information which is not privileged or otherwise protected from
disclosure and which is reasonably available to Indemnitee and reasonably necessary to such
determination in the discretion of the Board of Directors or Independent Counsel if retained
pursuant to clause (ii)(B) of this Section 9. Any Expenses actually and reasonably incurred by
Indemnitee in so cooperating with the person, persons or entity making such determination shall be
borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to
indemnification) and the Company shall indemnify and hold Indemnitee harmless therefrom.

     Section 10. Presumptions and Effect of Certain Proceedings.

     (a) In making a determination with respect to entitlement to indemnification hereunder, the
person or persons or entity making such determination shall presume that Indemnitee is entitled to
indemnification under this Agreement if Indemnitee has submitted a request for indemnification in
accordance with Section 9(a) of this Agreement, and the Company shall have the burden of proof to
overcome that presumption in connection with the making of any determination contrary to that
presumption.

     (b) The termination of any Proceeding by judgment, order, settlement, conviction, a plea of
nolo contendere or its equivalent, or an entry of an order of probation prior to
judgment, does not create a presumption that Indemnitee did not meet the requisite standard of
conduct described herein for indemnification.

     Section 11. Remedies of Indemnitee.

     (a) If (i) a determination is made pursuant to Section 9 of this Agreement that Indemnitee is
not entitled to indemnification under this Agreement, (ii) advance of Expenses is not timely made
pursuant to Section 8 of this Agreement, (iii) no determination of entitlement to indemnification
shall have been made pursuant to Section 9(b) of this Agreement within 60 days after receipt by the
Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to
Section 7 of this Agreement within ten days after receipt by the Company of a written request
therefor, or (v) payment of indemnification is not made within ten days after a determination has
been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an
adjudication in an appropriate court located in the State of

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Maryland, or in any other court of competent jurisdiction, of [his] [her] entitlement to such
indemnification or advance of Expenses. Alternatively, Indemnitee, at [his] [her] option, may seek
an award in arbitration to be conducted by a single arbitrator pursuant to the commercial
Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such
proceeding seeking an adjudication or an award in arbitration within 180 days following the date on
which Indemnitee first has the right to commence such proceeding pursuant to this Section 11(a);
provided, however, that the foregoing clause shall not apply to a proceeding brought by Indemnitee
to enforce [his] [her] rights under Section 7 of this Agreement.

     (b) In any judicial proceeding or arbitration commenced pursuant to this Section 11 the
Company shall have the burden of proving that Indemnitee is not entitled to indemnification or
advance of Expenses, as the case may be.

     (c) If a determination shall have been made pursuant to Section 9(b) of this Agreement that
Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any
judicial proceeding or arbitration commenced pursuant to this Section 11, absent a misstatement by
Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s
statement not materially misleading, in connection with the request for indemnification.

     (d) In the event that Indemnitee, pursuant to this Section 11, seeks a judicial adjudication
of or an award in arbitration to enforce [his] [her] rights under, or to recover damages for breach
of, this Agreement, Indemnitee shall be entitled to recover from the Company, and shall be
indemnified by the Company for, any and all Expenses actually and reasonably incurred by him in
such judicial adjudication or arbitration. If it shall be determined in such judicial adjudication
or arbitration that Indemnitee is entitled to receive part but not all of the indemnification or
advance of Expenses sought, the Expenses incurred by Indemnitee in connection with such judicial
adjudication or arbitration shall be appropriately prorated.

     Section 12. Defense of the Underlying Proceeding.

     (a) Indemnitee shall notify the Company promptly upon being served with or receiving any
summons, citation, subpoena, complaint, indictment, information, notice, request or other document
relating to any Proceeding which may result in the right to indemnification or the advance of
Expenses hereunder; provided, however, that the failure to give any such notice shall not
disqualify Indemnitee from the right, or otherwise affect in any manner any right of Indemnitee, to
indemnification or the advance of Expenses under this Agreement unless the Company’s ability to
defend in such Proceeding or to obtain proceeds under any insurance policy is materially and
adversely prejudiced thereby, and then only to the extent the Company is thereby actually so
prejudiced.

     (b) Subject to the provisions of the last sentence of this Section 12(b) and of Section 12(c)
below, the Company shall have the right to defend Indemnitee in any Proceeding which may give rise
to indemnification hereunder; provided, however, that the Company shall notify Indemnitee of any
such decision to defend within 15 calendar days following receipt of notice of any such Proceeding
under Section 12(a) above. The Company shall not, without the prior written consent of Indemnitee,
which shall not be unreasonably withheld or delayed, consent to

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the entry of any judgment against Indemnitee or enter into any settlement or compromise which
(i) includes an admission of fault of Indemnitee or (ii) does not include, as an unconditional term
thereof, the full release of Indemnitee from all liability in respect of such Proceeding, which
release shall be in form and substance reasonably satisfactory to Indemnitee. This Section 12(b)
shall not apply to a Proceeding brought by Indemnitee under Section 11 above or Section 18 below.

     (c) Notwithstanding the provisions of Section 12(b) above, if in a Proceeding to which
Indemnitee is a party by reason of Indemnitee’s Corporate Status, (i) Indemnitee reasonably
concludes, based upon an opinion of counsel approved by the Company, which approval shall not be
unreasonably withheld, that he may have separate defenses or counterclaims to assert with respect
to any issue which may not be consistent with other defendants in such Proceeding, (ii) Indemnitee
reasonably concludes, based upon an opinion of counsel approved by the Company, which approval
shall not be unreasonably withheld, that an actual or apparent conflict of interest or potential
conflict of interest exists between Indemnitee and the Company, or (iii) if the Company fails to
assume the defense of such Proceeding in a timely manner, Indemnitee shall be entitled to be
represented by separate legal counsel of Indemnitee’s choice, subject to the prior approval of the
Company, which shall not be unreasonably withheld, at the expense of the Company. In addition, if
the Company fails to comply with any of its obligations under this Agreement or in the event that
the Company or any other person takes any action to declare this Agreement void or unenforceable,
or institutes any Proceeding to deny or to recover from Indemnitee the benefits intended to be
provided to Indemnitee hereunder, Indemnitee shall have the right to retain counsel of Indemnitee’s
choice, subject to the prior approval of the Company, which shall not be unreasonably withheld, at
the expense of the Company (subject to Section 11(d)), to represent Indemnitee in connection with
any such matter.

     Section 13. Non-Exclusivity; Survival of Rights; Subrogation; Insurance.

     (a) The rights of indemnification and advance of Expenses as provided by this Agreement shall
not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under
applicable law, the Charter or Bylaws of the Company, any agreement or a resolution of the
stockholders entitled to vote generally in the election of directors or of the Board of Directors,
or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof
shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken
or omitted by such Indemnitee in [his] [her] Corporate Status prior to such amendment, alteration
or repeal.

     (b) In the event of any payment under this Agreement, the Company shall be subrogated to the
extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers
required and take all action necessary to secure such rights, including execution of such documents
as are necessary to enable the Company to bring suit to enforce such rights.

     (c) The Company shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable or payable or reimbursable as Expenses hereunder if and to the

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extent that Indemnitee has otherwise actually received such payment under any insurance
policy, contract, agreement or otherwise.

     Section 14. Insurance. The Company will use its reasonable best efforts to acquire
directors and officers liability insurance, on terms and conditions deemed appropriate by the Board
of Directors of the Company, with the advice of counsel, covering Indemnitee or any claim made
against Indemnitee for service as a director or officer of the Company and covering the Company for
any indemnification or advance of Expenses made by the Company to Indemnitee for any claims made
against Indemnitee for service as a director or officer of the Company. Without in any way
limiting any other obligation under this Agreement, the Company shall indemnify Indemnitee for any
payment by Indemnitee arising out of the amount of any deductible or retention and the amount of
any excess of the aggregate of all judgments, penalties, fines, settlements and reasonable Expenses
actually and reasonably incurred by Indemnitee in connection with a Proceeding over the coverage of
any insurance referred to in the previous sentence.

     Section 15. Indemnification for Expenses of a Witness. Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee is or may be, by reason of [his] [her]
Corporate Status, a witness in any Proceeding, whether instituted by the Company or any other
party, and to which Indemnitee is not a party but in which the Indemnitee receives a subpoena to
testify, he shall be advanced all reasonable Expenses and indemnified against all Expenses actually
and reasonably incurred by [him] [her] or on [his] [her] behalf in connection therewith.

     Section 16. Duration of Agreement; Binding Effect.

     (a) This Agreement shall continue until and terminate ten years after the date that
Indemnitee’s Corporate Status shall have ceased; provided, that the rights of Indemnitee hereunder
shall continue until the final termination of any Proceeding then pending in respect of which
Indemnitee is granted rights of indemnification or advance of Expenses hereunder and of any
proceeding commenced by Indemnitee pursuant to Section 11 of this Agreement relating thereto.

     (b) The indemnification and advance of Expenses provided by, or granted pursuant to, this
Agreement shall be binding upon and be enforceable by the parties hereto and their respective
successors and assigns (including any direct or indirect successor by purchase, merger,
consolidation or otherwise to all or substantially all of the business or assets of the Company),
shall continue as to an Indemnitee who has ceased to be a director, trustee, officer, employee or
agent of the Company or of any other corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise which such person is or was serving at the written request of the
Company, and shall inure to the benefit of Indemnitee and [his] [her] spouse, assigns, heirs,
devisees, executors and administrators and other legal representatives.

     (c) The Company shall require and cause any successor (whether direct or indirect by purchase,
merger, consolidation or otherwise) to all, substantially all or a substantial part, of the
business and/or assets of the Company, by written agreement in form and substance satisfactory to
Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and

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to the same extent that the Company would be required to perform if no such succession had
taken place.

     Section 17. Severability. If any provision or provisions of this Agreement shall be
held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality
and enforceability of the remaining provisions of this Agreement (including, without limitation,
each portion of any section of this Agreement containing any such provision held to be invalid,
illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way
be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this
Agreement (including, without limitation, each portion of any section of this Agreement containing
any such provision held to be invalid, illegal or unenforceable, that is not itself invalid,
illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

     Section 18. Exception to Right of Indemnification or Advance of Expenses.
Notwithstanding any other provision of this Agreement, Indemnitee shall not be entitled to
indemnification or advance of Expenses under this Agreement with respect to any Proceeding brought
by Indemnitee, unless (a) the Proceeding is brought to enforce indemnification under this
Agreement, and then only to the extent in accordance with and as authorized by Sections 8 and 11 of
this Agreement, or (b) the Company’s Bylaws, as amended, the Charter, a resolution of the
stockholders entitled to vote generally in the election of directors or of the Board of Directors
or an agreement approved by the Board of Directors to which the Company is a party expressly
provide otherwise.

     Section 19. Identical Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original but all of which
together shall constitute one and the same Agreement. One such counterpart signed by the party
against whom enforceability is sought shall be sufficient to evidence the existence of this
Agreement.

     Section 20. Headings. The headings of the paragraphs of this Agreement are inserted
for convenience only and shall not be deemed to constitute part of this Agreement or to affect the
construction thereof.

     Section 21. Modification and Waiver. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of
any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other
provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

     Section 22. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand
and receipted for by the party to whom said notice or other communication shall have been directed,
or (ii) mailed by certified or registered mail with postage prepaid, on the third business day
after the date on which it is so mailed:

     (a) If to Indemnitee, to: The address set forth on the signature page hereto.

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     (b) If to the Company to:

Midlantic Office Trust, Inc.

11200 Rockville Pike, Suite 502

Rockville, MD 20852

Attn: General Counsel

or to such other address as may have been furnished to Indemnitee by the Company or to the Company
by Indemnitee, as the case may be.

     Section 23. Governing Law. The parties agree that this Agreement shall be governed
by, and construed and enforced in accordance with, the laws of the State of Maryland, without
regard to its conflicts of laws rules.

[SIGNATURE PAGE FOLLOWS]

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first
above written.

	 	 	 	 	 	 	 	 	 
	ATTEST:	 	 	 	Midlantic Office Trust, Inc.
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	 	 	(SEAL)
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 	 	 
	WITNESS:	 	 	 	INDEMNITEE
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name:	 	 
	 	 	 	 	Address:	 	 

-11-exv10w17

 

Exhibit 10.17

MIDLANTIC OFFICE TRUST, INC.

DEFERRED COMPENSATION PLAN

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page
	ARTICLE I PURPOSE AND EFFECTIVE DATE	 	 	1	 
	 
	 	 	 	 	 	 
	ARTICLE II DEFINITIONS	 	 	1	 
	 
	 	 	 	 	 	 
	2.01.
	 	Administrative Committee	 	 	1	 
	2.02.
	 	Affiliate	 	 	1	 
	2.03.
	 	Award	 	 	1	 
	2.04.
	 	Beneficiary	 	 	1	 
	2.05.
	 	Board	 	 	1	 
	2.06.
	 	Cash Compensation	 	 	2	 
	2.07.
	 	Cash Performance Bonus	 	 	2	 
	2.08.
	 	Change of Control	 	 	2	 
	2.09.
	 	Code	 	 	2	 
	2.10.
	 	Common Stock	 	 	3	 
	2.11.
	 	Company	 	 	3	 
	2.12.
	 	Deferral Account	 	 	3	 
	2.13.
	 	Deferral Election	 	 	3	 
	2.14.
	 	Deferral Subaccount	 	 	3	 
	2.15.
	 	Deferred Amount	 	 	3	 
	2.16.
	 	Deferred Stock Benefit	 	 	3	 
	2.17.
	 	Director	 	 	3	 
	2.18.
	 	Disabled or Disability	 	 	3	 
	2.19.
	 	Eligible Employee	 	 	3	 
	2.20.
	 	Employee	 	 	3	 
	2.21.
	 	Equity Compensation Plan	 	 	4	 
	2.22.
	 	ERISA	 	 	4	 
	2.23.
	 	Exchange Act	 	 	4	 
	2.24.
	 	Fair Market Value	 	 	4	 
	2.25.
	 	Initial Payment Date	 	 	4	 
	2.26.
	 	Participant	 	 	4	 
	2.27.
	 	Participation Agreement	 	 	4	 
	2.28.
	 	Performance Bonus	 	 	4	 
	2.29.
	 	Person	 	 	5	 
	2.30.
	 	Phantom Share Unit	 	 	5	 
	2.31.
	 	Plan	 	 	5	 
	2.32.
	 	Plan Year	 	 	5	 
	2.33.
	 	Separation from Service	 	 	5	 
	2.34.
	 	Specified Employee	 	 	5	 
	2.35.
	 	Stock Award	 	 	6	 
	2.36.
	 	Stock Performance Bonus	 	 	6	 
	2.37.
	 	Subsequent Deferral Election	 	 	6	 

i

 

	 	 	 	 	 	 	 
	 	 	 	 	Page
	2.38.
	 	Subsequent Payment Date	 	 	6	 
	2.39.
	 	Unforeseeable Emergency	 	 	6	 
	2.40.
	 	Valuation Date	 	 	6	 
	 
	 	 	 	 	 	 
	ARTICLE III ADMINISTRATION	 	 	6	 
	 
	 	 	 	 	 	 
	3.01.
	 	Administrative Committee; Duties	 	 	6	 
	3.02.
	 	Claims Procedure	 	 	7	 
	 
	 	 	 	 	 	 
	ARTICLE IV PARTICIPATION	 	 	9	 
	 
	 	 	 	 	 	 
	4.01.
	 	Eligibility	 	 	9	 
	4.02.
	 	Deferral Election	 	 	10	 
	4.03.
	 	Contents of Participation Agreement	 	 	11	 
	4.04.
	 	Modification or Revocation of Deferral Election	 	 	11	 
	 
	 	 	 	 	 	 
	ARTICLE V DEFERRED AMOUNTS	 	 	11	 
	 
	 	 	 	 	 	 
	5.01.
	 	Crediting of Deferred Amounts	 	 	11	 
	5.02.
	 	Vesting of Deferral Account	 	 	11	 
	 
	 	 	 	 	 	 
	ARTICLE VI MAINTENANCE AND INVESTMENT OF DEFERRAL ACCOUNTS	 	 	11	 
	 
	 	 	 	 	 	 
	6.01.
	 	Maintenance of Deferral Accounts	 	 	11	 
	6.02.
	 	Investment Benchmarks	 	 	12	 
	6.03.
	 	Valuation of Deferral Accounts	 	 	13	 
	6.04.
	 	Statement of Account	 	 	13	 
	 
	 	 	 	 	 	 
	ARTICLE VII BENEFITS	 	 	13	 
	 
	 	 	 	 	 	 
	7.01.
	 	Payment of Account	 	 	13	 
	7.02.
	 	Subsequent Deferral Elections	 	 	14	 
	7.03.
	 	Hardship Withdrawals	 	 	14	 
	7.04.
	 	Specified Employees	 	 	14	 
	7.05.
	 	Manner of Payment	 	 	15	 
	7.06.
	 	Form of Payment	 	 	15	 
	7.07.
	 	Securities Laws	 	 	15	 
	7.08.
	 	Withholding of Taxes	 	 	15	 
	 
	 	 	 	 	 	 
	ARTICLE VIII BENEFICIARY DESIGNATION	 	 	16	 
	 
	 	 	 	 	 	 
	8.01.
	 	Beneficiary Designation	 	 	16	 
	8.02.
	 	No Beneficiary Designation	 	 	16	 
	 
	 	 	 	 	 	 
	ARTICLE IX AMENDMENT AND TERMINATION OF PLAN	 	 	16	 
	 
	 	 	 	 	 	 
	9.01.
	 	Amendment	 	 	16	 
	9.02.
	 	Company’s Right to Terminate	 	 	16	 

ii

 

	 	 	 	 	 	 	 
	 	 	 	 	Page
	ARTICLE X MISCELLANEOUS	 	 	17	 
	 
	 	 	 	 	 	 
	10.01.
	 	Unfunded Plan	 	 	17	 
	10.02.
	 	Nonassignability	 	 	17	 
	10.03.
	 	Compliance with Section 409A	 	 	17	 
	10.04.
	 	Validity and Severability	 	 	17	 
	10.05.
	 	Governing Law	 	 	17	 
	10.06.
	 	Continued Service	 	 	17	 
	10.07.
	 	Underlying Equity Compensation Plan	 	 	17	 
	10.08.
	 	Notices	 	 	18	 
	10.09.
	 	Waiver	 	 	18	 
	10.10.
	 	Binding Nature	 	 	18	 
	 
	 	 	 	 	 	 
	APPENDIX
	 	 	16	 

iii

 

MIDLANTIC OFFICE TRUST, INC.

DEFERRED COMPENSATION PLAN

ARTICLE I

PURPOSE AND EFFECTIVE DATE

     The purpose of this Midlantic Office Trust, Inc. Deferred Compensation Plan is to help the
Company and its Affiliates attract and retain experienced and qualified directors and key employees
by providing them with tax-deferred savings opportunities. Directors and certain key employees
will have the opportunity to elect to defer the receipt of certain cash and stock-based
compensation and to have the deferred cash treated as if it were invested in one of several
investment options established by the Company and to have the deferred stock-based compensation
treated as if it was invested in Common Stock. The Plan shall be
effective August ___, 2005. The
Plan is unfunded and intended to be a “top-hat” plan within the meaning of Department of Labor
Regulation §2520.104-23. The Company maintains the Plan primarily for the purpose of providing
deferred compensation for directors and a select group of management or highly-compensated
employees.

ARTICLE II

DEFINITIONS

     For purposes of this Plan, the following words and phrases shall have the meanings indicated,
unless the context clearly indicates otherwise:

     2.01. Administrative Committee means the Compensation Committee of the Board, if the
Board assigns it the responsibility to administer the Plan, or the Board itself if the Compensation
Committee is not assigned the responsibility to administer the Plan. If the Board appoints the
Compensation Committee to administer the Plan, such Compensation Committee must consist of three or
more “non-employee directors” within the meaning of Rule 16b-3 under the Exchange Act.

     2.02. Affiliate means any entity in which more than fifty percent (50%) of the total
fair market value and total voting power of such entity is held by the Company or any entity in a
chain of entities beginning with the Company if each of the entities other than the last in the
chain holds more than fifty percent (50%) of the total fair market value and total voting power of
another entity in the chain.

     2.03. Award means Cash Compensation, Stock Awards and Performance Bonuses eligible for
deferral under the Plan.

     2.04. Beneficiary
means the person, persons or entity the Participant designates pursuant to Article VIII to
receive any benefits payable under the Plan after the Participant’s death.

     2.05. Board means the Board of Directors of the Company.

 

 

     2.06. Cash Compensation means salary, cash awards, wages, cash bonuses, director fees,
retainer fees, meeting fees and chairman fees, and any other award that would be paid in cash,
other than Cash Performance Bonuses, by the Company or an Affiliate for services rendered as an
Eligible Employee or as a Director pursuant to an employment or other agreement or compensation
policy, plan or program of the Company or Affiliate that may be offered from time to time, and
which has been designated by the Administrative Committee as eligible for deferral under the Plan.

     2.07. Cash Performance Bonus means any Performance Bonus that is paid in cash.

     2.08. Change of Control means the occurrence of any of the following: (i) any one
Person, or more than one Person acting as a group, acquires ownership of stock of the Company that,
together with stock held by such Person or group, constitutes more than 50 percent of the total
fair market value or total voting power of the stock of the Company, (ii) any one Person, or more
than one Person acting as a group, acquires (or has acquired during the 12-month period ending on
the date of the most recent acquisition by such Person or Persons) ownership of stock of the
Company possessing 35 percent or more of the total voting power of the stock of the Company, (iii)
a majority of members of the Board is replaced during any 12-month period by directors whose
appointment or election is not endorsed by a majority of the members of the Board prior to the date
of the appointment or election or (iv) any one Person, or more than one Person acting as a group,
acquires (or has acquired during the 12-month period ending on the date of the most recent
acquisition by such Person or Persons) assets from the Company that have a total gross fair market
value (calculated as 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 40 percent of the total gross fair market value of all of the assets of the Company
immediately prior to such acquisition or acquisitions, without regard to assets transferred to: (a)
a shareholder of the Company (immediately before the asset transfer) in exchange for or with
respect to its stock, (b) an entity, 50 percent or more of the total value or voting power of which
is owned directly or indirectly, by the Company immediately after the transfer, (c) a Person, or
more than one Person acting as a group, that owns, directly or indirectly, 50 percent or more of
the total value or voting power of all the outstanding stock of the Company or (d) an entity, at
least 50 percent of the total value or voting power of which is owned, directly or indirectly, by a
Person, or more than one Person acting as a group, that owns, directly or indirectly, 50 percent or
more of the total value or voting power of all the outstanding stock of the Company. For
purposes of this paragraph, Persons will not be considered to be acting as a group solely because
they purchase or own stock of the same corporation at the same time. However, Persons will be
considered to be acting as a group if they are owners of a corporation that enters into a merger,
consolidation, purchase or acquisition of stock, or similar business transaction with the Company.
If a Change of Control occurs on account of a series of transactions, the Change of Control is
considered to occur on the date of the last of such transactions.

     2.09. Code means the Internal Revenue Code of 1986, as amended, and any regulations
promulgated thereunder.

2

 

     2.10. Common Stock means the voting common stock, $.01 par value per share, of the
Company.

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

     2.12. Deferral Account means the bookkeeping account maintained on the books of the
Company for each Participant pursuant to Article VI to record the Participant’s Deferred Amounts.
A Deferral Account may consist of two or more Deferral Subaccounts.

     2.13. Deferral Election means an election to defer the receipt of Cash Compensation,
Stock Awards or Performance Bonuses. A Deferral Election is made by filing a Participation
Agreement with the Administrative Committee on or before the times specified in the Plan.

     2.14. Deferral Subaccount means a separate subaccount within a Participant’s Deferral
Account maintained on the books of the Company pursuant to Article VI.

     2.15. Deferred Amount means the amount of the Participant’s Cash Compensation, Stock
Awards and Performance Bonuses that are deferred under Article IV and credited to the Participant’s
Deferral Account pursuant to Article V.

     2.16. Deferred Stock Benefit
means the Stock Award or Stock Performance Bonus that the Participant elects to defer under
the Plan that must be distributed or paid in shares of Common Stock. A Deferred Stock Benefit will
be paid pursuant to the terms of this Plan and at such time or times as are set forth herein
notwithstanding the terms of any Stock Award or Stock Performance Bonus with respect to which the
receipt of Common Stock was deferred.

     2.17. Director means a non-Employee member of the Board.

     2.18. Disabled or Disability means the Participant (i) 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 can be expected to last for a continuous period of not
less than 12 months or (ii) is, by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last for a continuous
period of not less than 12 months, receiving income replacement benefits for a period of not less
than three months under an accident and health plan covering employees of the Company on an
applicable Affiliate.

     2.19. Eligible Employee means any Employee of the Company or any Affiliate whom the
Administrative Committee (i) determines to be in a select group of management or highly compensated
employees of the Company within the meaning of Section 401(a)(1) of ERISA and (ii) designates as
eligible to participate in this Plan.

     2.20. Employee means any person whom the Company or any Affiliate employs under the
rules of Section 3401(c) of the Code and the regulations thereunder.

3

 

     2.21. Equity Compensation Plan means the Midlantic Office Trust, Inc. 2005 Equity
Compensation Plan and any amendments thereto.

     2.22. ERISA means the Employee Retirement Income Security Act of 1974, as amended, and
any regulations promulgated thereunder.

     2.23. Exchange Act means the Securities Exchange Act of 1934, including amendments
thereto, or successor statutes of similar intent.

     2.24. Fair Market Value means, on any given date, the fair market value as the
Administrative Committee, in its discretion, shall determine. The Fair Market Value with respect
to shares of Common Stock generally will mean the Fair Market Value of a share of Common Stock as
reported as the closing price of a share of Common Stock on the stock exchange on which it is
traded on such date, or if the shares of Common Stock are not traded on such stock exchange on such
date, then on the next preceding date that the shares of Common Stock were traded on such stock
exchange, as reported by such source as the Administrative Committee shall select. The Fair Market
Value that the Administrative Committee determines shall be final, binding and conclusive on the
Company, Participants and Beneficiaries.

     2.25. Initial Payment Date means the initial date for payment of a Participant’s
Deferral Account or Deferral Subaccount as specified in the applicable Participation Agreement.

     2.26. Participant means any Director or Eligible Employee who is eligible to
participate in the Plan and elects to participate by filing a Participation Agreement as provided
in Article IV.

     2.27. Participation Agreement means a written agreement filed in accordance with
Article IV pursuant to which a Director or an Eligible Employee elects to defer Cash Compensation,
a Stock Award or a Performance Bonus. The Participation Agreement shall be on a form prescribed by
the Administrative Committee and shall include any amendments, attachments or appendices as the
Administrative Committee may designate.

     2.28. Performance Bonus means any bonus or other incentive payment, whether payable in
cash or Common Stock, awarded to a Director or an Eligible Employee pursuant to an employment or
other agreement or any incentive compensation plan, policy or program of the Company or any
Affiliate that may be offered from time to time, where (i) the payment of the compensation is
provided for services performed over a period of at least 12 months, (ii) the payment of the
compensation or the amount of the compensation is contingent on the satisfaction of individual,
Company, Affiliate or business unit goals, provided that the Director or Eligible Employee performs
services for the applicable Affiliate or business unit, (iii) the determination of whether the
performance goals have been satisfied is not made by the Director or Eligible Employee or a family
member of such individual, (iv) both at the time of the establishment of the performance goals and
at the time of any election to defer payment of the compensation, the performance goals are not
substantially certain to be met, (v) the payment of the compensation is not based solely on the
value of, or appreciation in value of, the Company or an Affiliate and (vi) the payment of the
compensation has been designated by the Administrative Committee as eligible
for deferral under the Plan. This definition is intended to comply with the performance-

4

 

based
compensation rules of Section 409A(a)(4)(B)(iii) of the Code and shall be interpreted accordingly.

     2.29. Person means any individual, entity or group within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act, but does not include [___].

     2.30. Phantom Share Unit means a unit of deemed investment in a share of Common Stock
as provided in Article VI.

     2.31. Plan means this Midlantic Office Trust, Inc. Deferred Compensation Plan.

     2.32. Plan Year means initially from ___, 2005 through December 31, 2005 and,
thereafter, Plan Year means each calendar year beginning January 1 and ending the following
December 31.

     2.33. Separation from Service means the termination of the Participant’s employment
with the Company and all Affiliates, including pursuant to a transaction in which the Eligible
Employee’s employer ceases to be an Affiliate, other than for death or the Participant becoming
Disabled. The Administrative Committee shall determine, subject to applicable law, whether a leave
of absence for governmental or military service, illness, temporary disability or other reasons
shall constitute a Separation from Service. This definition is intended to comply with the
separation from service rules of Section 409A(a)(2)(A)(i) of the Code and shall be interpreted
accordingly.

     2.34. Specified Employee means an Eligible Employee who at any time during the Plan
Year is (i) an officer of the Company having annual compensation greater than $135,000 (with
certain adjustments for inflation after 2005), (ii) a five-percent owner of the Company or (iii) a
one-percent owner of the Company having annual compensation from the Company of more than $150,000.
For purposes of this Section, no more than 50 employees (or, if lesser, the greater of three or 10
percent of the employees) shall be treated as officers. Employees who (i) normally work less than
17 1/2 hours per week, (ii) normally work not more than 6 months during any year, (iii) have not
attained age 21 or (iv) are included in a unit of employees covered by an agreement which the
Secretary of Labor finds to be a collective bargaining agreement between employee representatives
and the Company (except as otherwise provided in regulations issued under the Code) shall be
excluded for purposes of determining the number of officers. For purposes of this Section, the
term “five-
percent owner” (“one-percent owner”) means any person who owns more than five percent (one
percent) of the outstanding stock of the Company or stock possessing more than five percent (one
percent) of the total combined voting power of all stock of the Company. For purposes of
determining ownership, the attribution rules of Section 318 of the Code shall be applied by
substituting “five percent” for “50 percent” in Section 318(a)(2) and the rules of Sections 414(b),
414(c) and 414(m) of the Code shall not apply. For purposes of this Section, the term
“compensation” has the meaning given such term by Section 414(q)(4) of the Code. This definition
is intended to comply with the specified employee rules of Section 409A(a)(2)(B)(i) of the Code and
shall be interpreted accordingly.

5

 

     2.35. Stock Award means an award that is or will become payable in Common Stock issued
pursuant to the Equity Compensation Plan or another of the Company’s equity compensation plans,
including but not limited to nonqualified stock options, incentive stock options, restricted stock,
stock appreciation rights, restricted stock units, performance shares or other types of equity
awards or bonuses, so long as the terms of such award permit its deferral; provided, however, that
Stock Awards do not include any Stock Performance Bonuses.

     2.36. Stock Performance Bonus means any Performance Bonus that is paid in Common
Stock.

     2.37. Subsequent Deferral Election has the meaning given in Section 7.02.

     2.38. Subsequent Payment Date has the meaning given in Section 7.02.

     2.39. Unforeseeable Emergency means a severe financial hardship to the Participant
resulting from an illness or accident of the Participant, the Participant’s spouse, or a dependent
(as defined in Code Section 152(a)) of the Participant, loss of the Participant’s property due to
casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of
events beyond the control of the Participant.

     2.40. Valuation Date means the last business day of each calendar month and such other
dates as the Administrative Committee in its sole discretion may determine.

ARTICLE III

ADMINISTRATION

     3.01. Administrative Committee; Duties. The Administrative Committee shall administer
the Plan. A majority of the Members of the Administrative Committee shall constitute a quorum for
the transaction of business. All resolutions or other actions of the Administrative Committee
shall be by a vote of a majority of its Members present at any meeting or without a meeting by an
instrument in writing that a majority of its Members sign. Members of the Administrative Committee
may participate in a meeting by means of a telephone or similar communications equipment that
enables all persons participating in the meeting to hear each other, and such participation in a
meeting shall constitute presence in person at the meeting for purposes of this Plan. The
Administrative Committee may designate one of its Members as a chairperson and may retain and
supervise providers and professionals to perform any or all of the duties delegated to it
hereunder.

     The Administrative Committee shall have all powers necessary to administer this Plan (not
inconsistent with the terms of the Plan), including discretionary authority to determine
eligibility for benefits, to decide claims under the terms of this Plan and to interpret the Plan.
In particular, the Administrative Committee shall be responsible for determining issues relating to
eligibility, investment benchmarks, Deferral Account balances, crediting of Deferred Amounts and
hypothetical earnings and debiting of hypothetical losses, administration and oversight of
distributions, deferral elections and any other duties concerning the day-to-day operation of this
Plan. The Administrative Committee from time to time may establish or amend rules for the

6

 

administration of this Plan. All rules, interpretations and decisions of the Administrative
Committee shall be conclusive and binding on the Company, Participants and Beneficiaries.

     Neither the Administrative Committee nor any Member of the Administrative Committee shall be
liable for any act taken or not taken hereunder or for any act taken or not taken by any other
Member or by any agent to whom duties in connection with the administration of this Plan have been
delegated or for anything done or omitted to be done in connection with this Plan. The
Administrative Committee shall keep records of all of its respective proceedings and the
Administrative Committee shall keep records of all payments made to Participants or Beneficiaries
and for expenses or otherwise.

     Each person who is or shall have been a Member of the Administrative Committee or any delegate
of the Administrative Committee shall be indemnified and held harmless by the Company against and
from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such
person in connection with or resulting from any claim, action, suit, or proceeding to which such
person may be a party or in which such person may be involved by reason of any action taken or not
taken under the Plan and against and from any and all amounts paid by such person in settlement
thereof, with the Company’s approval, or paid by such person in satisfaction of any judgment in any
such action, suit, or proceeding provided such person shall give the Company an opportunity, at its
own expense, to handle and defend the same before such person undertakes to handle and defend it on
his own behalf. The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification to which such
persons may be entitled under the Company’s Certificate of Incorporation or Bylaws, as a matter of
law or otherwise, or under any other power that the Company may have to indemnify such person or
hold him harmless.

     Notwithstanding any other provision of this Plan, to the extent the Administrative Committee
is exercising its discretion in connection with the Plan, the Administrative Committee shall act
without any individual Member of the Administrative Committee to whom the specific action relates.

     The Company shall pay any expenses the Company or the Administrative Committee incurs in
connection with administration of this Plan.

     3.02. Claims Procedure. It is not necessary to file a claim in order to receive Plan
benefits. However, notwithstanding the preceding sentence, a Participant entitled to receive
benefits under the Plan and who is not paid such benefits must file a claim for such benefits
within ninety (90) days from the date such benefits should have been paid under the Plan. If such
claim is not filed within such ninety (90) day period, it shall be forever barred.

     On receipt of a claim for Plan benefits, the Administrative Committee must respond in writing
within 90 days. If necessary, the Administrative Committee’s first notice must indicate any
special circumstances requiring an extension of time for the Administrative Committee’s decision.
The extension notice must indicate the date by which the Administrative Committee

7

 

expects to render
a decision; an extension of time for processing may not exceed 90 days after the end of the initial
period.

     If a claim is wholly or partially denied, the Administrative Committee must give written
notice within the time provided in the preceding paragraph. An adverse notice must specify each
reason for denial. There must be specific reference to provisions of the Plan or related documents
on which the denial is based. If additional material or information is necessary for the claimant
to perfect the claim, it must be described and there must be an explanation of why that material or
information is necessary. Such adverse notice also must disclose appropriate information about the
steps that the claimant must take if he wishes to submit the claim for review and the time limits
and procedures applicable to such review, including a statement of the claimant’s right to bring a
civil action following a denial of this claim on review.

     The full value of a payment made according to the provisions of the Plan satisfies that much
of the claim and all related claims under the Plan against the Company. As a condition to a
payment from it or directed by it, the Company may require the Participant, Beneficiary, or legal
representative of either to execute a receipt and release of the claim in a form satisfactory to
the Company.

     On proper written request for review from a claimant to the Administrative Committee, there
must be a review by the Administrative Committee. The Administrative Committee must
receive the written request before 61 days after the claimant’s receipt of notice that his
claim has been denied as described above. The claimant and an authorized representative are
entitled to be present and heard if any hearing is used as part of the review. The claimant may
submit written comments, documents, records and other information relating to the claimant’s claim
for benefits. The claimant shall be provided, upon request and free of charge, reasonable access
to, and copies of, all documents, records and other information relevant to the claimant’s claim
for benefits. The Administrative Committee’s review shall take into account all such written
comments, documents, records and other information the claimant submits relating to the claim,
without regard to whether such information was submitted or considered initially.

     The Administrative Committee must determine whether there will be a hearing. Before any
hearing, the claimant or a duly authorized representative may review all Plan documents and other
papers that affect the claim and may submit issues and comments in writing. The Administrative
Committee must schedule any hearing to give sufficient time for this review and submission, giving
notice of the schedule and deadlines for submissions.

     The Administrative Committee must advise the claimant in writing of the final determination
after review. The decision on review must be written in a manner calculated to be understood by
the claimant, and it must include specific reasons for the decision and specific references to the
pertinent provisions of the Plan or related documents on which the decision is based. Such written
notification also must include a statement that the claimant is entitled to receive, upon request
and free of charge, reasonable access to, and copies of, all documents, records and other
information relevant to the claimant’s claim for benefits and a statement describing any voluntary
appeal procedures offered by the Plan, the claimant’s right to obtain the

8

 

information about such
procedures and a statement of the claimant’s right to bring a civil action following a denial on
review. The written advice must be rendered within 60 days after the request for review is
received, unless special circumstances require an extension of time for processing. If an
extension is necessary the Administrative Committee must furnish written notice of the extension to
the claimant before the end of the 60-day period and indicate the special circumstances requiring
the extension of time. The extension notice must indicate the date by which the Administrative
Committee expects to render a decision. The decision must then be rendered as soon as possible but
no later than 120 days after receipt of the request for review.

     If the Administrative Committee has regularly scheduled meetings at least quarterly, the
following rules govern the time for the decision after review. If the claimant’s written request
for review is received more than 30 days before an Administrative Committee meeting, the
Administrative Committee’s decision must be rendered at the next meeting after the request for
review is received. If the claimant’s written request for review is received 30 days or less
before an Administrative Committee meeting, the Administrative Committee’s decision must be
rendered at the Administrative Committee’s second meeting after the request for review has been
received. If special circumstances (such as the need to hold a hearing) require an extension of
time for processing, the Administrative Committee’s decision must be rendered not later than the
Administrative Committee’s third meeting after the request for review has been received. If an
extension of time for review is required, written notice of the extension must be furnished to the
claimant, describing the special circumstances and the date as of which the benefit
determination will be made, before the extension begins. The Administrative Committee shall notify
the claimant of the benefit determination as soon as possible, but not later than five days after
the benefit determination is made.

     The claimant, after the review of claims procedures described above and an adverse benefit
determination on review, has the right to bring a civil action. The claimant shall have 90 days
from the date of receipt of the Administrative Committee’s decision on review in which to file suit
regarding a claim for benefits under the Plan. If suit is not filed within such 90-day period, it
shall be forever barred.

     Notwithstanding any other provision of the Plan, if the claimant is a Member of the
Administrative Committee, the Administrative Committee acting without the claimant shall review and
process the claimant’s claim for benefits.

ARTICLE IV

PARTICIPATION

     4.01. Eligibility. Participation in the Plan is limited to Directors and Eligible
Employees. Any such Director or Eligible Employee who files a Participation Agreement in
accordance with Section 4.02 may participate in the Plan as set forth herein. In the event that a
Director or an Eligible Employee ceases to be a Director or Eligible Employee, as applicable, his
or her Deferral Elections shall be suspended. Upon any re-election or re-employment, such former
Director or Eligible Employee may again participate in the Plan pursuant to the terms

9

 

hereof, and
any distributions still to be made under prior Participation Agreements shall continue pursuant to
the terms of the Plan.

     4.02. Deferral Election. Except as otherwise provided in this Section 4.02, a
Director or Eligible Employee who desires to participate in the Plan must file a Participation
Agreement with the Administrative Committee on or before the times set forth herein.

     (a) Cash Compensation or Stock Awards. A Deferral Election with respect to
Cash Compensation or Stock Awards shall be effective with respect to Cash Compensation or
Stock Awards paid in any part for services performed during a Plan Year if the Director or
Eligible Employee files a Participation Agreement with the Administrative Committee by
[December 1] of the Plan Year immediately preceding the calendar year in which the services
are to be performed to earn the Cash Compensation or Stock Award. Notwithstanding the
foregoing, in the first year in which a Director or Eligible Employee becomes eligible to
participant in the Plan, the Director or Eligible Employee shall be able to make a Deferral
Election for Cash Compensation or Stock Awards earned for services performed subsequent to
the Deferral Election if he or she
files a Participation Agreement with the Administrative Committee as described herein
within 30 days of the date he or she becomes eligible to participate in the Plan.

     (b) Performance Bonus. A Deferral Election with respect to Performance Bonuses
shall be effective if the Director or Eligible Employee files a Participation Agreement with
the Administrative Committee more than six months in advance of the end of the service
period on which such Performance Bonus is based. A Participation Agreement to defer payment
of a Performance Bonus shall only apply to the specified Performance Bonus.

     The Administrative Committee may reject any Participation Agreement and the Administrative
Committee is not required to state a reason for any rejection provided that the rejection is made
prior to the date when such Participation Agreement would otherwise have been required to be filed
pursuant to Section 4.02. However, the Administrative Committee’s rejections must be made on a
uniform basis with respect to similarly-situated Participants. If the Administrative Committee
rejects a Participation Agreement, the Participant must be paid the amounts he or she would have
been entitled to receive and such payment must be paid to the Participant at the time he or she
would have received the payment had no Participation Agreement been filed. The Administrative
Committee may modify any Participation Agreement and the form of any distribution thereunder at any
time to the extent necessary to comply with federal or state securities laws or regulations or the
provisions of Section 409A of the Code.

     The Administrative Committee in its sole discretion may establish the types of Awards that may
be deferred and minimum and maximum limits on the amount of any Awards that may be deferred for a
Plan year. Notwithstanding any other provision of this Plan, no Deferral Election shall be made
with an Initial Payment Date which falls prior to six months after the date on which the Award
would otherwise have been paid or the end of the Plan Year in which the Award would otherwise have
been paid.

10

 

     4.03. Contents of Participation Agreement. Subject to Article VII and as the
Administrative Committee in its sole discretion shall establish, each Director or Eligible Employee
shall specify in his or her Participation Agreement (a) the amount and type of Awards that are to
be deferred under the Plan on which the Participation Agreement is effective, expressed as either a
dollar amount, a percentage of the applicable Award or a number of shares of Common Stock, (b) that
he or she agrees that the period after which payment of the Deferred Amount is to be made or
commence shall be the earlier of the Participant’s Separation from Service (except that in the case
of a Specified Employee payment shall not be made before the earlier of the date that is six months
after the date of Separation from Service or the Participant’s death), death, Disability, the
Initial Payment Date or the date of a Change of Control and (c) the form in which payments are to
be made, which shall be at the election of the Director or Eligible Employee, either a lump sum or
annual installments over five or 10 years, except that in the event any payment is made on the date
of a Change of Control, payment shall be made in a lump sum. The Participation Agreement may be
in any form, including electronic form, that the Administrative Committee designates and shall
include such other provisions as the Administrative Committee deems appropriate.

     4.04. Modification or Revocation of Deferral Election. Except as provided in Sections
7.02 and 7.03, a Participant may only modify or revoke a Participation Agreement prior to the date
on which the Participant Agreement is required to have been filed pursuant to Section 4.02. A
Participation Agreement shall be effective on the last day the Deferral Election may be made
pursuant to Section 4.02. Any writing signed by a Director or Eligible Employee expressing
intention to revoke his or her Participation Agreement and delivered to the Administrative
Committee on or before the times required for an effective revocation will constitute a valid
revocation of his or her Participation Agreement. Under no circumstances may a Participation
Agreement be made, modified or revoked retroactively nor may any Initial Payment Date or Subsequent
Payment Date be shortened or reduced other than as set forth in this Plan.

ARTICLE V

DEFERRED AMOUNTS

     5.01. Crediting of Deferred Amounts. The Administrative Committee shall credit the
Deferred Amount of a Participant to the Participant’s Deferral Account as and when such Deferred
Amount would otherwise have been paid to the Participant, regardless of whether such Deferred
Amount previously was earned or the Participant previously became entitled to such Deferred Amount.

     5.02. Vesting of Deferral Account. A Participant shall be 100 Percent vested in his
Deferral Account at all times.

ARTICLE VI

MAINTENANCE AND INVESTMENT OF DEFERRAL ACCOUNTS

     6.01. Maintenance of Deferral Accounts. A separate Deferral Account shall be
maintained for each Participant.

11

 

Deferral Subaccounts shall be maintained in a Participant’s
Deferral Account as necessary to reflect separate Deferral Elections with different Initial Payment
Dates, Subsequent Deferral Elections or forms of payment. A Participant’s Deferral Account shall
be utilized solely as a device for the measurement and determination of the amounts to be paid to
the Participant pursuant to this Plan, and it shall not constitute or be treated as a trust fund or
segregated account of any kind.

     6.02. Investment Benchmarks.
The investment benchmark for Deferral Accounts will be as follows:

     (a) Cash Compensation and Cash Performance Bonuses. Each Participant shall be
entitled to direct the manner in which his or her Cash Compensation and Cash Performance
Bonus Deferred Amounts will be deemed to be invested, selecting among the investment
benchmarks specified in APPENDIX B hereto, as the Administrative Committee may amend
from time to time, and in accordance with such rules, regulations and procedures as the
Board may establish from time to time. Deemed earnings and losses based on a Participant’s
investment elections shall begin to accrue as of the date such Participant’s Deferred
Amounts are credited to his or her Deferral Accounts. All distributions of a Participant’s
Deferral Accounts for Cash Compensation and Cash Performance Bonus shall be made in cash.

     (b) Stock Awards and Stock Performance Bonuses. The investment benchmark for
Deferred Stock Benefits will be the Company Common Stock fund. The Company Common Stock
fund shall consist of deemed investments in shares of Common Stock of the Company. Deferred
Amounts that are deemed to be invested in the Company Common Stock fund shall be converted
into Phantom Share Units based upon the Fair Market Value of the Common Stock as of the
date(s) the Deferred Amounts are to be credited to the Deferral Account. As set forth in
Article V above, Deferred Amounts are credited to a Participant’s Deferral Account as of the
date such Deferred Amount otherwise would have been paid to the Participant, regardless of
whether the Participant previously earned such amount or otherwise became entitled to it.

          Each Deferral Account that is deemed to be invested in the Company Common Stock fund
shall be credited, as of each Valuation Date, with additional Phantom Share Units of Common
Stock with respect to cash dividends paid on the Common Stock with record dates during the
period beginning on the date after the most recent Valuation Date and ending on such
Valuation Date. Shares of Common Stock to be issued under the Plan shall be delivered from
shares of Common Stock available for issuance from the underlying plan pursuant to which the
deferred Stock Award or Stock Performance Bonus was granted. If as of the Valuation Date
there are not sufficient shares of Common Stock reserved under such underlying plan for the
additional Phantom Share Units of Common Stock with respect to cash dividends paid on the
Common Stock, then any such cash dividends on the Common Stock shall be credited to a
Participant’s Deferral Subaccount as of such Valuation Date. The Participant shall be
entitled to direct the manner in which his or her deferred cash dividends will be deemed to
be invested, selecting among the investment benchmarks specified in APPENDIX B

12

 

hereto, as the Administrative Committee may amend from time to time, and in accordance with
such rules, regulations and procedures as the Board may establish from time to time. Deemed
earnings and losses based on such investment elections shall begin to accrue as of the date
the cash dividends are credited to a Participant’s Deferral Subaccount. All distributions
of a Participant’s Deferral Subaccount for such deferred cash dividends shall be made in
cash.

          When any distribution of all or a portion of any Deferral Account or Deferral
Subaccount that is deemed to be invested in the Company Common Stock fund is to be made, the
balance in such Deferral Account or Deferral Subaccount, as applicable, shall be determined
by dividing the Fair Market Value of one share of Common Stock on the most recent Valuation
Date preceding the date of such distribution into the number of Phantom Share Units to be
distributed. Upon a distribution, the amounts deemed to be invested in the Company Common
Stock fund shall be distributed in the form of shares of Common Stock equal to the same
number of shares of Common Stock into which such amounts were deemed to be invested. In the
event of a stock dividend, split-up or combination of the Common Stock, merger,
consolidation, reorganization, recapitalization or other change in the corporate structure
or capitalization effecting the Common Stock, such that the Administrative Committee
determines that an adjustment is appropriate in order to prevent the dilution or enlargement
of the benefits or potential benefits intended to be made available under the Plan, then the
Administrative Committee shall make appropriate adjustments to the number of deemed shares
of Common Stock and Phantom Share Units credited to any Deferral Account or Deferral
Subaccount, as applicable. The determination of the Administrative Committee as to such
adjustments, if any, shall be conclusive and binding on the Company, Participants and
Beneficiaries.

     6.03. Valuation of Deferral Accounts. The Administrative Committee shall determine
the balance of each Deferral Account as of each Valuation Date by adjusting the balance of such
Deferral Account as of the immediately preceding Valuation Date to reflect changes in the value of
the deemed investments thereof and credits, debits and distributions with respect to such Deferral
Account since such preceding Valuation Date.

     6.04. Statement of Account. The Administrative Committee shall distribute to each
Participant annual or more frequent statements of his Deferral Account, in such form as the
Administrative Committee deems desirable, setting forth the balance to the credit of such
Participant in his Deferral Account as of the end of the most recent Valuation Date.

ARTICLE VII

BENEFITS

     7.01. Payment of Account. Except as provided in Sections 7.02, 7.03 and 7.04, the
Company shall pay or begin paying the Participant (or in the event of the Participant’s death, the
Participant’s Beneficiary) the balance of the Participant’s Deferral Account or Deferral
Subaccount, on the earlier of the Participant’s Separation from Service (except that in the case of

13

 

a Specified Employee payment shall not be made before the earlier of the date that is six months
after the date of Separation
from Service or the Participant’s death), death, Disability, the Initial Payment Date or the
date of a Change of Control.

     7.02. Subsequent Deferral Elections. Prior to payment of a Participant’s Deferral
Account or Deferral Subaccount, a Participant may make a one-time election to extend the time for
payment (a “Subsequent Deferral Election”) for all or a portion of a Deferral Account or a Deferral
Subaccount to a specified future date (the “Subsequent Payment Date”). In conjunction with a
Subsequent Deferral Election, an electing Participant may change the form in which payments are to
be made and may choose between a lump sum or annual installment (made over a five or 10
year-period). For a Subsequent Deferral Election to be effective, (i) the Administrative Committee
must receive the Participant’s Subsequent Deferral Election at least 12 months prior to the Initial
Payment Date, (ii) the election must not take effect until at least 12 months after the date on
which the Administrative Committee receives such Subsequent Deferral Election and (iii) the
Subsequent Deferral Election must extend the first payment that would have been made (other than
pursuant to death, Disability or an Unforeseeable Emergency) for a period of not less than five
years from the date such payment otherwise would be made. Except as provided in Section 7.03, if a
Participant makes a Subsequent Deferral Election, then the Company shall pay or begin paying the
Participant (or in the event of the Participant’s death, the Participant’s Beneficiary) the balance
of the Participant’s Deferral Account or Deferral Subaccount, on the earlier of (i) the
Participant’s death, (ii) the Participant’s Disability, (iii) the Subsequent Payment Date (which
must be more than five years after the Initial Payment Date), (iv) in the event of a Change of
Control, the later of the Change of Control or five years from the date the payment would have been
made in absence of the Subsequent Deferral Election or (v) in the event of a Separation from
Service, the later of the Separation from Service or five years from the date the payment would
have been made in absence of the Subsequent Deferral Election.

     7.03. Hardship Withdrawals. Notwithstanding the provisions of any Participation
Agreement, a Participant may receive early payment of all or part of the balance in his Deferral
Account in the event of an Unforeseeable Emergency, in accordance with this Section 7.03. A
distribution pursuant to this Section 7.03 may only include amounts necessary to satisfy the
Unforeseeable Emergency plus amounts necessary to pay taxes reasonably anticipated as a result of
the payment, after taking into account the extent to which such hardship is or may be relieved
through reimbursement or compensation by insurance or otherwise or by liquidation of the
Participant’s assets (to the extent the liquidation of such assets would not itself cause severe
financial hardship). An application for an early payment under this Section 7.03 shall be made to
the Administrative Committee in such form and in accordance with such procedures as the
Administrative Committee shall determine from time to time. The Administrative Committee in its
sole and absolute discretion will determine whether and in what amount a distribution will be
permitted pursuant to this Section 7.03, except that any distribution in the event of an
Unforeseeable Emergency shall be made in one lump sum.

     7.04. Specified Employees. If at any time when the Company has any stock publicly
traded on an established securities market or otherwise, a Specified Employee would be entitled

14

 

to
a distribution under this plan upon a Separation from Service, notwithstanding any other provision
herein, no payments may be made hereunder before the date which is six months after the date of
Separation from Service (or, if earlier, the date of death of the Specified Employee).

     7.05. Manner of Payment. If the Participant elected to receive payment of his
Deferral Account or Deferral Subaccount, as applicable, in a lump sum, then no later than 30 days
after the date set for payment pursuant to Section 7.01 or 7.02, the Company shall pay the
Participant (or his Beneficiary) the balance in such Deferral Account or Deferral Subaccount, as
applicable, determined as of the most recent Valuation Date preceding the payment date. If the
Participant elected to receive payment of his Deferral Account or Deferral Subaccount, as
applicable, in installments, the Company shall make annual payments from such Deferral Account or
Deferral Subaccount, as applicable, each of which shall consist of an amount equal to (a) the
balance of such Deferral Account or Deferral Subaccount, as applicable, determined as of the most
recent Valuation Date preceding the payment date multiplied by (b) a fraction, the numerator of
which is one and the denominator of which is the number of remaining installments (including the
installment being paid). The first such installment shall be paid no later than 30 days after the
time set for payment pursuant to Section 7.01 or 7.02 and each subsequent installment shall be paid
on or about the annual anniversary of such first payment. If the Plan otherwise requires that the
Participant’s Deferral Account or Deferral Subaccount, as applicable, be paid in a lump sum, then
as of the time specified in the Plan, the Company shall pay the Participant (or his Beneficiary)
the balance in such Deferral Account or Deferral Subaccount, as applicable, determined as of the
most recent Valuation Date preceding the payment date.

     7.06.  Form of Payment. The Company shall pay any Deferred Stock Benefit in Common
Stock and any other Deferred Amount in cash; provided, however, that the Administrative Committee
may require payment of a Deferred Stock Benefit in cash if it determines that such cash payment is
necessary in order to comply with any statute, regulation or other applicable law.

     7.07. Securities Laws. Notwithstanding any other provision of this Plan, the
Administrative Committee may adopt such procedures as it determines to be necessary to ensure that
with respect to any Participant who is actually or potentially subject to Section 16(b) of the
Exchange Act, the crediting of Phantom Share Units to his or her Deferral Account or Deferral
Subaccount, as applicable, is not deemed to be a non-exempt purchase, or the distribution of
Phantom Stock Units and ultimately shares of Common Stock is not deemed to be a non-exempt sale,
for purposes of such Section 16(b).

     7.08. Withholding of Taxes. Notwithstanding any other provision of this Plan, the
Company shall withhold from payments made hereunder or obtain from the Participant any amounts
applicable law requires to be withheld. Additionally, to the extent that the Company is required
to withhold any income taxes, employment taxes (such as without limitation Social Security and
Medicare taxes) or other amounts from any Deferred Amount pursuant to any state, federal or local
law, such amounts may be taken out of other compensation or amounts eligible to be paid to the
Participant that are not deferred under the Plan and the Participant shall be required to pay to
the Administrative Committee in cash any other amounts that may be owed.

15

 

Notwithstanding the
foregoing, the Administrative Committee in its discretion and provided applicable law permits may
allow a Participant to pay all or part of any applicable withholding taxes (i) by surrendering
shares of Common Stock that the Participant has owned for at least six months (but only for the
minimum required withholding), (ii) by means of a cashless exercise through a broker, (iii) by any
other medium of payment as the Administrative Committee in its discretion shall authorize, or (iv)
by any combination of the aforementioned methods of payment. If Common Stock is used to pay all or
part of such withholding, the sum of cash and cash equivalents and other payments and the Fair
Market Value of the Common Stock surrendered must not be less than the applicable withholding
amounts.

ARTICLE VIII

BENEFICIARY DESIGNATION

     8.01. Beneficiary Designation. Each Participant shall have the right, at any time, to
designate any person, persons or entity as his Beneficiary or Beneficiaries. A Beneficiary
designation shall be made, and may be amended, by the Participant by filing a written designation
with the Administrative Committee on such form and in accordance with such procedures as the
Administrative Committee shall establish from time to time.

     8.02. No Beneficiary Designation. If a Participant fails to designate a Beneficiary
as provided above, or if all designated Beneficiaries predecease the Participant, then the
Participant’s Beneficiary shall be deemed to be the first of the following who survives the
Participant: the Participant’s spouse (the person legally married to the Participant when the
Participant dies), then the Participant’s children (including adopted children) in equal shares and
then the Participant’s estate; provided, however, that if any amounts would be paid to a child of
the Participant that is under the age of 18, then such amounts shall be paid into a trust for the
benefit of such child.

ARTICLE IX

AMENDMENT AND TERMINATION OF PLAN

     9.01. Amendment.
The Board may at any time amend this Plan in whole or in part, provided, however, that no
amendment shall be effective to decrease the vested balance in any Deferral Account as accrued at
the time of such amendment nor shall any amendment otherwise have a retroactive effect unless such
amendment is necessary for the Plan to be in compliance with Section 409A of the Code so as to
assure the continued deferred taxation of amounts under the Plan until payment thereof.

     9.02. Company’s Right to Terminate. Except as provided in this Section 9.02, the
Board may at any time terminate the Plan and upon termination of the Plan in its entirety, the
Company shall continue to honor the terms of existing Participation Agreements, but no further
Participation Agreements shall be accepted.

16

 

ARTICLE X

MISCELLANEOUS

     10.01. Unfunded Plan. This Plan is maintained primarily for the purpose of providing
deferred compensation for Directors and Eligible Employees. It is the intention of the parties
that the Plan be unfunded. Participants have the status of general unsecured creditors of the
Company and the Plan constitutes a mere promise by the Company to make benefit payments in the
future. All payments pursuant to the Plan shall be made from the general funds of the Company or
the Affiliate that employs the Participant and no special or separate fund shall be established or
other segregation of assets made to assure payment. No Participant or other person shall have
under any circumstances any interest in any particular property or assets of the Company as a
result of participating in the Plan. Notwithstanding the foregoing, the Company or an Affiliate
may (but shall not be obligated to) create one or more grantor trusts, the assets of which shall be
subject to the claims of the Company’s or Affiliate’s creditors, to assist it in accumulating funds
to pay its obligations under the Plan; provided, however, that at no time shall the assets of such
trust be located outside of the United States.

     10.02. Nonassignability. Except as specifically set forth in the Plan with respect to
the designation of Beneficiaries, a Participant’s rights to benefit payments under the Plan are not
subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment or garnishment by creditors of the Participant or his Beneficiary.

     10.03. Compliance with Section 409A. This Plan is intended to be a nonqualified
deferred compensation plan within the meaning of Section 409A of the Code and shall be construed
and interpreted in accordance with the provisions of that Code Section. Any provisions of this
Plan which are inconsistent with Section 409A of the Code or any existing or forthcoming Internal
Revenue Service guidance related thereto shall be void and without effect if not otherwise
grandfathered.

     10.04. Validity and Severability. The invalidity or unenforceability of any provision
of this Plan shall not affect the validity or enforceability of any other provision of this Plan,
which shall remain in full force and effect, and any invalidity or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

     10.05. Governing Law. The validity, interpretation, construction and performance of
this Plan shall in all respects be governed by the laws of the State of Maryland, without reference
to principles of conflict of law, except to the extent preempted by federal law.

     10.06. Continued Service. This Plan does not impose on the Participant or the Company
any obligation for the Participant to remain a Director or Eligible Employee of the Company or
change the status of the Participant’s service on the Board or employment status or the policies of
the Company regarding service on the Board or employment.

     10.07. Underlying Equity Compensation Plan. Nothing in this Plan shall prevent the
Company from modifying, amending or terminating the Equity Compensation Plan.

17

 

     10.08. Notices. Notices and elections under this Plan must be in writing or electronic
form. A notice or election is deemed delivered if it is delivered personally or it is mailed by
registered or certified mail. Notices to a Participant shall be delivered to the Participant at
his last known address. Notices and elections to the Company shall be delivered to the Company at
Midlantic Office Trust, Inc., 11140 Rockville Pike, Suite 620 Rockville MD 20852, Attention:
General Counsel.

     10.09. Waiver. The waiver of a breach of any provision in this Plan does not operate
as and may not be construed as a waiver of any later breach.

     10.10. Binding Nature. The Plan shall be binding upon the Company and its successors
and assigns and upon a Participant, his Beneficiary and either of their assigns, heirs or
executors.

18

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