Document:

FORM
      OF
      THE EMPLOYEE
      AND DIRECTOR 

     

    INCENTIVE RESTRICTED SHARE PLAN 

     

    OF
      

     

    LIGHTSTONE
      VALUE PLUS REAL ESTATE INVESTMENT TRUST II, INC.

     

    SECTION
      1.  PURPOSES
      OF THE PLAN AND DEFINITIONS

     

    1.1  Purposes.
      The
      purposes of the Employee and Director Incentive Restricted Share Plan
      (this “Plan”)
      of
      Lightstone Value Plus Real Estate Investment Trust II, Inc. (the “Company”)
      are
      to:

     

    (1)  provide
      incentives to individuals chosen to receive share-based awards because of their
      ability to improve operations and increase profits;

     

    (2)  encourage
      selected persons to accept positions with or continue to provide services to
      the
      Company, the Advisor and Affiliates of the Company; and

     

    (3)  increase
      the interest of Directors in the Company’s welfare through their participation
      in the growth in value of the Company’s Shares.

     

    To
      accomplish these purposes, this Plan provides a means whereby employees of
      the
      Advisor and Affiliates of the Company, officers of the Company, the Advisor
      and
      Affiliates of the Company, Directors and other enumerated persons may receive
      Awards.

     

    1.2  Definitions.
      For
      purposes of this Plan, the following terms have the following
      meanings:

     

    “Advisor”
means
      the Person or Persons, if any, appointed, employed or contracted with by the
      Company to be responsible for directing or performing the day-to-day business
      affairs of the Company, including any Person to whom the Advisor subcontracts
      substantially all of such functions. The initial Advisor is Lightstone Value
      Plus REIT II LLC.

     

    “Affiliate”
means
      any Person (other than an Advisor), whose employees, directors or officers
      are
      eligible to receive Awards under this Plan. The determination of whether a
      Person is an Affiliate shall be made by the Board acting in its sole and
      absolute discretion.

     

    “Applicable
      Laws”
means
      the requirements relating to the administration of Awards under state
      corporation laws, U.S. federal and state securities laws, the Code, any stock
      exchange or quotation system on which the Shares are listed or quoted and the
      applicable laws of any foreign country or jurisdiction where Awards are, or
      will
      be, granted under this Plan.

     

    “Articles
      of Incorporation”
means
      the articles of incorporation of the Company as the same may be amended from
      time to time.

     

    “Award”
means
      any award of Restricted Shares under this Plan.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Award
      Agreement”
means,
      with respect to each Award, the written agreement executed by the Company and
      the Participant or other written document approved by the Board setting forth
      the terms and conditions of the Award.

     

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

     

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

     

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

     

    “Company”
means
      Lightstone Value Plus Real Estate Investment Trust II, Inc. 

     

    “Director”
means
      a
      person elected or appointed and serving as a member of the Board in accordance
      with the Articles of Incorporation and the Maryland General Corporation
      Law.

     

    “Director
      Shares”
means
      Shares issued under Section
      6.

     

    “Effective
      Date”
has
      the
      meaning given it in Section
      15.

     

    “Employment
      Termination”
means
      that a Participant has ceased, for any reason and with or without cause, to
      be
      an employee or Director of, or a consultant to, the Company, the Advisor or
      any
      Affiliate of the Company. However, the term “Employment Termination” shall not
      include a Non-Employee Director’s ceasing to be a Director or a transfer of a
      Participant from the Company to the Advisor or an Affiliate or vice versa,
      or
      from one Affiliate to another, or a leave of absence duly authorized by the
      Company unless the Board has provided otherwise.

     

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

     

    “Fair
      Market Value”
means
      with respect to Shares:

     

    (i)  If
      the
      Shares are listed on any established stock exchange or a national market system,
      their Fair Market Value shall be the closing sales price for the Shares, or
      the
      mean between the high bid and low asked prices if no sales were reported, as
      quoted on such system or exchange (or, if the Shares are listed on more than
      one
      exchange, then on the largest such exchange) for the date the value is to be
      determined (or if there are no sales or bids for such date, then for the last
      preceding business day on which there were sales or bids), as reported in
The
      Wall Street Journal.

     

    (ii)  If
      the
      Shares are regularly quoted by a recognized securities dealer but selling prices
      are not reported, or if there is no secondary trading market for the Shares,
      their Fair Market Value shall be determined in good faith by the
      Board.

     

    “Grant
      Date”
has
      the
      meaning set forth in Section
      5.1(c).
      

     

    “Non-Employee
      Director”
means
      a
      person who is a Director of the Company, but who is not also an employee or
      officer of the Company.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Participant”
means
      an eligible person who is granted an Award.

     

    “Person”
means
      an individual, a corporation, partnership, trust, association, or any other
      entity.

     

    “Plan”
means
      this Employee and Director Incentive Restricted Share Plan.

     

    “Restricted
      Shares”
means
      an Award granted under Section
      5.2.
      

     

    “Retainer”
has
      the
      meaning given it in Section
      6.1.

     

    “Rule
      16b-3”
means
      Rule 16b-3 adopted under Section 16(b) or any successor rule, as it may be
      amended from time to time, and references to paragraphs or clauses of Rules
      16b-3 refer to the corresponding paragraphs or clauses of Rule 16b-3 as it
      exists at the Effective Date or the comparable paragraph or clause of Rule
      16b-3
      or successor rule, as that paragraph or clause may thereafter be
      amended.

     

    “Section
      16(b)”
means
      Section 16(b) of the Exchange Act.

     

    “Section
      409A
      of the Code” 

     

    means
      the
      nonqualified deferred compensation rules under Section 409A of the Code and
      any
      applicable Treasury regulation or other official guidance promulgated
      thereunder.

     

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

     

    SECTION
      2.  ELIGIBLE
      PERSONS 

     

    Every
      person who, at or as of the Grant Date, is 

     

    (a)  a
      full-time employee of the Advisor, the Company or any Affiliate of the
      Company;

     

    (b)  an
      officer of the Company, the Advisor or any Affiliate of the
      Company;

     

    (c)  a
      Director of the Company; 

     

    (d)  a
      director of the Advisor or any Affiliate of the Company; or

     

    (e)  someone
      whom the Board designates as eligible for an Award because the person:

     

    (i)  performs
      bona fide consulting or advisory services for the Company, the Advisor or any
      Affiliate of the Company pursuant to a written agreement (other than services
      in
      connection with the offer or sale of securities in a capital-raising
      transaction), and 

     

    (ii)  has
      a
      direct and significant effect on the financial development of the Company or
      any
      Affiliate of the Company, 

     

    shall
      be
      eligible to receive Awards hereunder. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Directors
      of the Company who are not full-time employees are only eligible to receive
      Director Shares under Section
      6.1.

     

    SECTION
      3.  SHARES
      SUBJECT TO THIS PLAN 

     

    The
      total
      number of Shares that may be issued under Awards is a number of Shares equal
      to
      0.5% of the Company’s outstanding Shares on a fully diluted basis, with such
      number of Shares not to exceed 255,000. The number of Shares reserved for
      issuance under this Plan is subject to adjustment in accordance with the
      provisions for adjustment in Section
      5.1.
      If any
      Shares awarded under this Plan are forfeited for any reason, the number of
      forfeited Shares shall again be available for purposes of granting Awards under
      this Plan.

     

    SECTION
      4.  ADMINISTRATION
      

     

    4.1  Administration.
      This
      Plan shall be administered by the Board.

     

    4.2  Board’s
      Powers.
      Subject
      to the express provisions of this Plan, the Board shall have the authority,
      in
      its sole discretion:

     

    (a)  to
      adopt,
      amend and rescind administrative and interpretive rules and regulations relating
      to this Plan;

     

    (b)  to
      determine the eligible persons to whom, and the time or times at which, Awards
      shall be granted;

     

    (c)  to
      determine the number of Shares that shall be the subject of each
      Award;

     

    (d)  to
      determine the terms and provisions of each Award (which need not be identical)
      and any amendments thereto, including provisions defining or otherwise relating
      to:

     

    (i)  the
      extent to which the transferability of Shares issued or transferred pursuant
      to
      any Award is restricted;

     

    (ii)  the
      effect of Employment Termination on an Award;

     

    (iii)  the
      effect of approved leaves of absence;

     

    (iv)  to
      construe the respective Award Agreements and this Plan;

     

    (v)  to
      make
      determinations of the Fair Market Value of Shares;

     

    (vi)  to
      waive
      any provision, condition or limitation set forth in an Award
      Agreement;

     

    (vii)  to
      delegate its duties under this Plan to such agents as it may appoint from time
      to time; and

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (viii)  to
      make
      all other determinations, perform all other acts and exercise all other powers
      and authority necessary or advisable for administering this Plan, including
      the
      delegation of those ministerial acts and responsibilities as the Board deems
      appropriate.

     

    The
      Board
      may correct any defect, supply any omission or reconcile any inconsistency
      in
      this Plan, in any Award or in any Award Agreement in the manner and to the
      extent it deems necessary or desirable to implement this Plan, and the Board
      shall be the sole and final judge of that necessity or desirability. The
      determinations of the Board on the matters referred to in this Section
      4.2
      shall be
      final and conclusive. Notwithstanding any provision in this Plan to the
      contrary, Awards will be made to Non-Employee Directors only under Section
      6.1
      of this
      Plan. In addition, notwithstanding any provision of this Plan to the contrary,
      the Board may not in any manner exercise discretion under this Plan with respect
      to any Awards made to Non-Employee Directors.

     

    4.3  Term
      of Plan.
      No
      Awards shall be granted under this Plan after 10 years from the Effective Date
      of this Plan.

     

    SECTION
      5.  CERTAIN
      TERMS AND CONDITIONS OF AWARDS

     

    5.1  All
      Awards.
      All
      Awards shall be subject to the following terms and conditions:

     

    (a)  Changes
      in Capital Structure.
      If the
      number of outstanding Shares is increased by means of a share dividend payable
      in Shares, a share split or other subdivision or by a reclassification of
      Shares, then, from and after the record date for such dividend, subdivision
      or
      reclassification, the number and class of Shares subject to this Plan shall
      be
      increased in proportion to such increase in outstanding Shares. If the number
      of
      outstanding Shares is decreased by means of a share split or other subdivision
      or by a reclassification of Shares, then, from and after the record date for
      such split, subdivision or reclassification, the number and class of Shares
      subject to this Plan shall be decreased in proportion to such decrease in
      outstanding Shares.

     

    (b)  Certain
      Corporate Transactions.
      In the
      event of any change in the capital structure or business of the Company by
      reason of any recapitalization, reorganization, merger, consolidation, split-up,
      combination, exchange of Shares or any similar change affecting the Company’s
      capital structure or business, then the aggregate number and kind of Shares
      which thereafter may be issued under this Plan shall be appropriately adjusted
      consistent with such change in such manner as the Board may deem equitable
      to
      prevent substantial dilution or enlargement of the rights granted to, or
      available for, Participants under this Plan, and any such adjustment determined
      by the Board in good faith shall be binding and conclusive on the Company and
      all Participants and employees and their respective heirs, executors,
      administrators, successors and assigns.

     

    (c)  Grant
      Date.
      Each
      Award Agreement shall specify the date as of which it shall be effective (the
      “Grant
      Date”).

     

    (d)  Vesting.
      Each
      Award shall vest, and any restrictions thereunder shall lapse, as the case
      may
      be, at such times and in such amounts as may be specified by the Board in the
      applicable Award Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (e)  Nonassignability
      of Rights.
      Awards
      shall not be transferable other than with the consent of the Board or by will
      or
      the laws of descent and distribution. 

     

    (f)  Termination
      of Employment from the Company, the Advisor or any Affiliate of the
      Company.
      The
      Board shall establish, in respect of each Award when granted, the effect of
      an
      Employment Termination on the rights and benefits thereunder and in so doing
      may, but need not, make distinctions based upon the cause of termination (such
      as retirement, death, disability or other factors) or which party effected
      the
      termination (the employer or the employee). 

     

    (g)  Minimum
      Purchase Price.
      Notwithstanding any provision of this Plan to the contrary, if authorized but
      previously unissued Shares are issued under this Plan, such Shares shall not
      be
      issued for a consideration which is less than as permitted under Applicable
      Law,
      and in no event, shall such consideration be less than the par value per Share
      multiplied by the number of Shares to be issued. 

     

    (h)  Other
      Provisions.
      Each
      Award Agreement may contain such other terms, provisions and conditions not
      inconsistent with this Plan, as may be determined by the Board.

     

    5.2  Restricted
      Shares.
      Restricted Shares shall be subject to the following terms and
      conditions:

     

    (a)  Grant.
      The
      Board may grant one or more Awards of Restricted Shares to any Participant
      other
      than Non-Employee Directors. Each Award of Restricted Shares shall specify
      the
      number of Shares to be issued to the Participant, the date of issuance and
      the
      restrictions imposed on the Shares including the conditions of release or lapse
      of such restrictions. Upon the issuance of Restricted Shares, the Participant
      may be required to furnish such additional documentation or other assurances
      as
      the Board may require to enforce restrictions applicable thereto. 

     

    (b)  Restrictions.
      Except
      as specifically provided elsewhere in this Plan or the Award Agreement regarding
      Restricted Shares, Restricted Shares may not be sold, assigned, transferred,
      pledged or otherwise disposed of or encumbered, either voluntarily or
      involuntarily, until the restrictions have lapsed and the rights to the Shares
      have vested. The Board may in its sole discretion provide for the lapse of
      such
      restrictions in installments and may accelerate or waive such restrictions,
      in
      whole or in part, based on service, performance or such other factors or
      criteria as the Board may determine.

     

    (c)  Dividends.
      Unless
      otherwise determined by the Board, cash dividends with respect to Restricted
      Shares shall be paid to the recipient of the Award of Restricted Shares on
      the
      normal dividend payment dates, and dividends payable in Shares shall be paid
      in
      the form of Restricted Shares having the same terms as the Restricted Shares
      upon which such dividend is paid. Each Award Agreement for Awards of Restricted
      Shares shall specify whether and, if so, the extent to which the Participant
      shall be obligated to return to the Company any cash dividends paid with respect
      to any Restricted Shares which are subsequently forfeited.

     

    (d)  Forfeiture
      of Restricted Shares.
      Except
      to the extent otherwise provided in the applicable Award Agreement, when a
      Participant’s Employment Termination occurs, the Participant shall automatically
      forfeit all Restricted Shares still subject to restriction.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SECTION
      6.  DIRECTOR
      SHARES

     

    6.1  Election.
      The
      Company shall pay to each individual who is a Non-Employee Director an annual
      fee in the amount set from time to time by the Board (the “Retainer”).
      Each
      Non-Employee Director shall be entitled to receive his or her Retainer
      exclusively in cash, exclusively in unrestricted Shares (“Director
      Shares”)
      or any
      portion in cash and Director Shares. Following the approval of this Plan by
      the
      stockholders of the Company, each Non-Employee Director shall be given the
      opportunity, during the month in which the Non-Employee Director first becomes
      a
      Non-Employee Director, and during each December thereafter, to elect among
      these
      choices for the balance of the calendar year (in the case of the election made
      during the month the Non-Employee Director first becomes a Non-Employee
      Director) and for the ensuing calendar year (in the case of a subsequent
      election made during any December). If the Non-Employee Director chooses to
      receive at least some of his or her Retainer in Director Shares, the election
      shall also indicate the percentage of the Retainer to be paid in Director
      Shares. If a Non-Employee Director makes no election during his or her first
      opportunity to make an election, the Non-Employee Director shall be assumed
      to
      have elected to receive his or her entire Retainer in cash.

     

    6.2  Issuance.
      The
      Company shall make the first issuance of Director Shares to electing Directors
      on the first business day following the last day of the full calendar quarter
      following the approval of this Plan by the Company’s stockholders. Subsequent
      issuances of Director Shares shall be made on the first business day of each
      subsequent calendar quarter and shall be made to all persons who are
      Non-Employee Directors on that day except any Non-Employee Director whose
      Retainer is to be paid entirely in cash. The number of Shares issuable to those
      Non-Employee Directors on the relevant date indicated above shall
      equal:

     

    (%
      x
      R/4)/P, where:

     

    %
      = the
      percentage of the Non-Employee Director’s Retainer that the Non-Employee
      Director elected or is deemed to have elected to receive in the form of Director
      Shares, expressed as a decimal;

     

    R
      = the
      Non-Employee Director’s Retainer for the year during which the issuance occurs;
      and 

     

    P
      = the
      Fair Market Value.

     

    Director
      Shares shall not include any fractional Shares. Fractions shall be rounded
      to
      the nearest whole Share (with one-half being rounded upward).

     

    SECTION
      7.  SECURITIES
      LAWS 

     

    Nothing
      in this Plan or in any Award or Award Agreement shall require the Company to
      issue any Shares with respect to any Award if, in the opinion of counsel for
      the
      Company, that issuance could constitute a violation of any Applicable Laws.
      As a
      condition to the grant of any Award, the Company may require the Participant
      (or, in the event of the Participant’s death, the Participant’s legal
      representatives, heirs, legatees or distributees) to provide written
      representations concerning the Participant’s (or such other person’s) intentions
      with regard to the retention or disposition of the Shares covered by the Award
      and written covenants as to the manner of disposal of such Shares as may be
      necessary or useful to ensure that the grant or disposition thereof will not
      violate the Securities Act, any other law or any rule of any applicable
      securities exchange or securities association then in effect. The Company shall
      not be required to register any Shares under the Securities Act or register
      or
      qualify any Shares under any state or other securities laws.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SECTION
      8.  EMPLOYMENT
      OR
      OTHER
      RELATIONSHIP 

     

    Nothing
      in this Plan or any Award shall in any way interfere with or limit the right
      of
      the Company, the Advisor or any Affiliate of the Company to terminate any
      Participant’s employment or status as a consultant or Director at any time, nor
      confer upon any Participant any right to continue in the employ of, or as a
      Director or consultant of, the Company, the Advisor or any Affiliate of the
      Company.

     

    SECTION
      9.  AMENDMENT,
      SUSPENSION AND TERMINATION OF THIS PLAN 

     

    The
      Board
      may at any time amend, suspend or discontinue this Plan provided that such
      amendment, suspension or discontinuance meets the requirements of Applicable
      Laws, including without limitation, the requirements for stockholder approval.
      Notwithstanding the above, an amendment, alteration, suspension or
      discontinuation shall not be made if it would impair the rights of any
      Participant under any Award previously granted, without the Participant’s
      consent, except to conform this Plan and Awards granted to the requirements
      of
      Applicable Laws. The provisions of this Plan relating to Awards for Non-Employee
      Directors may not be amended more than once each six months. Notwithstanding
      any provision of the Plan to the contrary, in the event that the Board
      determines that any Award may be subject to Section 409A of the Code, the
      Board may adopt such amendment to the Plan and the applicable Award Agreement
      or
      adopt other policies and procedures (including amendments, policies and
      procedures with retroactive effect), or take any other actions that the Board
      determines are necessary or appropriate, without the consent of the Participant,
      to (1) exempt the Award from Section 409A of the Code and/or preserve
      the intended tax treatment of the benefits provided with respect to the Award
      or
      (2) comply with the requirements of Section 409A of the Code.

     

    SECTION
      10.    LIABILITY
      AND INDEMNIFICATION OF THE BOARD 

     

    No
      person
      constituting, or member of the group constituting, the Board shall be liable
      for
      any act or omission on such person’s part, including but not limited to the
      exercise of any power or discretion given to such member under this Plan, except
      for those acts or omissions resulting from such member’s gross negligence or
      willful misconduct. The Company shall indemnify each present and future person
      constituting, or member of the group constituting, the Board against, and each
      person or member of the group constituting the Board shall be entitled without
      further act on his or her part to indemnity from the Company for, all expenses
      (including the amount of judgments and the amount of approved settlements made
      with a view to the curtailment of costs of litigation) reasonably incurred
      by
      such person in connection with or arising out of any action, suit or proceeding
      to the fullest extent permitted by law and by the Articles of Incorporation
      and
      Bylaws of the Company.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SECTION
      11.    SEVERABILITY
      

     

    If
      any
      provision of this Plan is held to be illegal or invalid for any reason, that
      illegality or invalidity shall not affect the remaining portions of this Plan,
      but such provision shall be fully severable and this Plan shall be construed
      and
      enforced as if the illegal or invalid provision had never been included in
      this
      Plan. Such an illegal or invalid provision shall be replaced by a revised
      provision that most nearly comports to the substance of the illegal or invalid
      provision. If any of the terms or provisions of this Plan or any Award Agreement
      conflict with the requirements of Applicable Laws, those conflicting terms
      or
      provisions shall be deemed inoperative to the extent they conflict with
      Applicable Law.

     

    SECTION
      12.  SECTION
      409A OF THE CODE

     

    Awards
      granted under the Plan are intended to be exempt from Section 409A of the Code.
      To the extent that the Plan is not exempt from the requirements of Section
      409A
      of the Code, the Plan is intended to comply with the requirements of Section
      409A of the Code and shall be limited, construed and interpreted in accordance
      with such intent. Notwithstanding the foregoing, in no event whatsoever shall
      the Company be liable for any additional tax, interest or penalty that may
      be
      imposed on a Participant by Section 409A of the Code or any damages for failing
      to comply with Section 409A of the Code.

     

    SECTION
      13.  WITHHOLDING

     

    The
      Company shall have the right to deduct from any payment to be made to a
      Participant, or to otherwise require, prior to the issuance or delivery of
      any
      Shares or the payment of any cash hereunder, payment by the Participant of,
      any
      federal, state or local taxes required by law to be withheld. Upon the vesting
      of Restricted Shares, or upon making an election under Section 83(b) of the
      Code, a Participant shall pay all required withholding to the Company. The
      Board
      may permit any such statutory withholding obligation with regard to any
      Participant to be satisfied by reducing the number of Shares otherwise
      deliverable or by delivering Shares already owned. 

     

    SECTION
      14.  GOVERNING
      LAW

     

    This
      Plan
      shall be governed and construed in accordance with the laws of the State of
      Maryland (regardless of the law that might otherwise govern under applicable
      principles of conflict of laws).

     

    SECTION
      15.   EFFECTIVE
      DATE AND PROCEDURAL HISTORY 

     

    This
      Plan
      was originally approved by the Company’s Board on 2008. It was approved in that
      form by the holders of the Company’s voting Shares on          ,
      2009 (the “Effective
      Date”).LIGHTSTONE
      VALUE PLUS REAL ESTATE INVESTMENT TRUST II, INC.

     

    FORM
      OF 2009 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN

     

    Adopted
      by Board of Directors: , 2008

     

    Approved
      by Stockholders: , 2009

     

      
        

      

    

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    TABLE
      OF CONTENTS

     

    Page

    

    
      	
              1.

            	 	 	
              Purpose
                of the Plan.

            	 	 	
              1

            	 
	
              2.

            	 	 	
              Definitions.

            	 	 	
              1

            	 
	
              3.

            	 	 	
              Effective
                Date/Expiration of Plan.

            	 	 	
              3

            	 
	
              4.

            	 	 	
              Administration.

            	 	 	
              3

            	 
	
              5.

            	 	 	
              Shares;
                Adjustment Upon Certain Events.

            	 	 	
              4

            	 
	
              6.

            	 	 	
              Awards
                and Terms of Options.

            	 	 	
              6

            	 
	
              7.

            	 	 	
              Effect
                of Termination of Service.

            	 	 	
              9

            	 
	
              8.

            	 	 	
              Nontransferability
                of Options.

            	 	 	
              10

            	 
	
              9.

            	 	 	
              Rights
                as a Stockholder.

            	 	 	
              10

            	 
	
              10.

            	 	 	
              Determinations.

            	 	 	
              10

            	 
	
              11.

            	 	 	
              Termination,
                Amendment and Modification.

            	 	 	
              10

            	 
	
              12.

            	 	 	
              Non-Exclusivity.

            	 	 	
              11

            	 
	
              13.

            	 	 	
              Use
                of Proceeds.

            	 	 	
              11

            	 
	
              14.

            	 	 	
              General
                Provisions.

            	 	 	
              11

            	 
	
              15.

            	 	 	
              Uncertificated
                Shares; Payment of Expenses; and Section 16(b) of the Act.

            	 	 	
              12

            	 
	
              16.

            	 	 	
              Listing
                of Shares and Related Matters.

            	 	 	
              13

            	 
	
              17.

            	 	 	
              Governing
                Law.

            	 	 	
              13

            	 

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    LIGHTSTONE
      VALUE PLUS REAL ESTATE INVESTMENT TRUST II, INC.

     

    FORM
      OF 2009 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN

     

    Adopted
      by Board of Directors: , 2008

     

    Approved
      by Stockholders: , 2009

     

    
      	
              1.
                

            	
              Purpose
                of the Plan.

            

    

     

    The
      purpose of this Lightstone Value Plus Real Estate Investment Trust II, Inc.
      2009
      Non-Employee Director Stock Option Plan is to enhance the Company’s
      profitability and value for the benefit of stockholders, to enable the Company
      to attract, retain and motivate Non-Employee Directors who are important to
      the
      success of the Company and to create and strengthen a mutuality of interest
      between the Non-Employee Directors and the stockholders of the Company by
      granting such directors options to purchase Common Stock of the
      Company.

     

    
      	
              2.
                

            	
              Definitions.

            

    

     

    (a)
       “Acquisition
      Event”
      means a
      merger or consolidation in which the Company is not the surviving entity, or
      any
      transaction that results in the acquisition of all or substantially all of
      the
      Company’s outstanding Common Stock by a single person or entity or by a group of
      persons and/or entities in concert, or the sale or transfer of all or
      substantially all of the Company’s assets.

     

    (b)
       “Act”
      means
      the Securities Exchange Act of 1934, as amended and the rules and regulations
      promulgated thereunder.

     

    (c)
       “Board”
      means
      the Board of Directors of the Company.

     

    (d)
       “Cause”
      has the
      meaning set forth in Section 7(b).

     

    (e)
       “Change
      of Control”
      has the
      meaning set forth in Section 6(d).

     

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

     

    (g)
       “Common
      Stock”
      means
      the voting common stock of the Company, par value $.01, any common stock into
      which the common stock may be converted and any common stock resulting from
      any
      reclassification of the common stock.

     

    (h)
       “Company”
      means
Lightstone
      Value Plus Real Estate Investment Trust II, Inc., a
      Maryland corporation.

     

    (i)
       “Company
      Voting Securities”
      has the
      meaning set forth in Section 6(d)(i).

     

    (j)
       “Corporate
      Transaction”
      has the
      meaning set forth in Section 6(d)(i).

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (k)
       “Disability”
      means a
      permanent and total disability, as determined by the Board in its sole
      discretion, provided that in no event shall any disability that is not permanent
      and total disability within the meaning of Section 22(e)(3) of the Code be
      treated as a Disability. A Disability shall be deemed to occur at the time
      of
      the determination by the Board of the Disability.

     

    (l)
       “Effective
      Date”
      has the
      meaning set forth in Section 3.

     

    (m)
       “Fair
      Market Value” 
      means,
      for purposes of this Plan, unless otherwise required by any applicable provision
      of the Code or any regulations issued thereunder, as of any date, (a) if the
      Common Stock is not readily tradeable on an established securities market as
      determined under Section 409A of the Code, a value determined by the Board
      by
      the reasonable application of a reasonable valuation method in accordance with
      Section 409A of the Code or (b) if the Common Stock is readily tradeable on
      an
      established securities market as determined under Section 409A of the Code,
      a
      value based on the closing price reported for the Common Stock on the applicable
      date in accordance with Section 409A of the Code. For purposes of the grant
      of
      any Option, the applicable date shall be the date for which the last sales
      price
      is available at the time of grant.

     

    (n)
       “FINRA”
      means
      the
      Financial Industry Regulatory Authority, Inc.

     

    (o)
       “Incumbent
      Board”
      has the
      meaning set forth in Section 6(d)(ii).

     

    (p)
       “Non-Employee
      Directors”
      means
      directors of the Company who are not officers or employees of the Company or
      its
      subsidiaries.

     

    (q)
       “Option”
      means
      the right to purchase the number of Shares granted in the Option agreement
      at a
      prescribed purchase price on the terms specified in the Plan and the Option
      agreement. No Option awarded under this Plan is intended to be an “incentive
      stock option” within the meaning of Section 422 of the Code.

     

    (r)
       “Participant”
      means a
      Non-Employee Director who is granted an Option under the Plan, which Option
      has
      not expired or been cancelled.

     

    (s)
       “Person”
      means an
      individual, entity or group within the meaning of Section l3d-3 or 14d-1 of
      the
      Act.

     

    (t)
       “Plan”
      means
      this Lightstone Value Plus Real Estate Investment Trust II, Inc. 2009
      Non-Employee Director Stock Option Plan, as amended from time to
      time.

     

    (u)
       “Purchase
      Price”
      means
      the purchase price per Share.

     

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

     

    (w)
       “Section
      409A of the Code”
      means
      the nonqualified deferred compensation rules under Section 409A of the Code
      and
      any applicable Treasury regulation or other official guidance promulgated
      thereunder.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    (x)
       “Share”
      means a
      share of Common Stock.

     

    (y)
       “Termination
      of Service”
      means
      termination of the relationship with the Company so that an individual is no
      longer a director of the Company.

     

    
      	
              3.
                

            	
              Effective
                Date/Expiration of Plan.

            

    

     

    The
      Plan
      shall become effective , 2009 (the “Effective
      Date”).
      No
      Option shall be granted under the Plan on or after the tenth anniversary of
      the
      Effective Date, but Options previously granted may extend beyond that
      date.

     

    
      	
              4.
                

            	
              Administration.

            

    

     

    (a)
       Duties
      of the Board.
      The
      Plan shall be administered by the Board. The Board shall have full authority
      to
      interpret the Plan and to decide any questions and settle all controversies
      and
      disputes that may arise in connection with the Plan; to establish, amend, and
      rescind rules for carrying out the Plan, to administer the Plan, subject to
      its
      provisions; to prescribe the form or forms of instruments evidencing Options
      and
      any other instruments required under the Plan (which need not be uniform) and
      to
      change such forms from time to time; and to make all other determinations and
      to
      take all such steps in connection with the Plan and the Options as the Board,
      in
      its sole discretion, deems necessary or desirable; provided,
      that
      all such determinations shall be in accordance with the express provisions,
      if
      any, contained in the Plan or Option agreement. The Board shall not be bound
      to
      any standards of uniformity or similarity of action, interpretation or conduct
      in the discharge of its duties hereunder, regardless of the apparent similarity
      of the matters coming before it. The determination, action or conclusion of
      the
      Board in connection with the foregoing shall be final, conclusive and binding
      on
      all parties. 

     

    (b)
       Advisors.
      The
      Board may designate the Secretary of the Company, other officers or employees
      of
      the Company or competent professional advisors to assist the Board in the
      administration of the Plan, and may grant authority to such persons (other
      than
      professional advisors) to grant an Option or to execute Option agreements or
      other documents on behalf of the Board, provided that no Participant may grant
      an Option or execute any Option agreement granting Options to such Participant.
      The Board may employ such legal counsel, consultants and agents as it may deem
      desirable for the administration of the Plan, and may rely upon any opinion
      received from any such counsel or consultant and any computation received from
      any such consultant or agent. Expenses incurred by the Board in the engagement
      of such counsel, consultant or agent shall be paid by the Company.

     

    (c)
       Indemnification.
      To the
      maximum extent permitted by law, no officer, member or former officer or member
      of the Board shall be liable for any action or determination made in good faith
      with respect to the Plan or any Option granted under it. To the maximum extent
      permitted by applicable law or the Certificate of Incorporation or By-Laws
      of
      the Company, as may be amended from time to time, and to the extent not covered
      by insurance, each officer, member or former officer or member of the Board
      shall be indemnified and held harmless by the Company against any cost or
      expense (including reasonable fees of counsel reasonably acceptable to the
      Company) or liability (including any sum paid in settlement of a claim with
      the
      approval of the Company), and advanced amounts necessary to pay the foregoing
      at
      the earliest time and to the fullest extent permitted, arising out of any act
      or
      omission to act in connection with the Plan, except to the extent arising out
      of
      such officer’s, member’s or former officer’s or member’s own fraud or bad faith.
      Such indemnification shall be in addition to any rights of indemnification
      the
      officers, members or former officers or members may have as directors under
      applicable law or under the Certificate of Incorporation or By-Laws of the
      Company or otherwise.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    
      	
              5.
                

            	
              Shares;
                Adjustment Upon Certain
                Events.

            

    

     

    (a)
       Shares
      to be Delivered; Fractional Shares.
      Shares
      to be issued under the Plan shall be made available, at the discretion of the
      Board, either from authorized but unissued Shares or from issued Shares
      reacquired by the Company and held in treasury. No fractional Shares will be
      issued or transferred upon the exercise of any Option. In lieu thereof, the
      Company shall pay a cash adjustment equal to the same fraction of the Fair
      Market Value of one Share on the date of exercise.

     

    (b)
       Number
      of Shares.
      Subject
      to adjustment as provided in this Section 5, the maximum aggregate number of
      Shares authorized for issuance under the Plan shall be 75,000 Shares. If an
      Option is for any reason canceled, or expires or terminates unexercised, the
      Shares covered by such Option shall again be available for the grant of Options,
      within the limits provided by the preceding sentence. In addition, if Common
      Stock has been exchanged by a Participant as full or partial payment to the
      Company of the Purchase Price or if the number of shares of Common Stock
      otherwise deliverable has been reduced for full or partial payment to the
      Company of the Purchase Price, the number of shares of Common Stock exchanged
      or
      reduced shall again be available under the Plan.

     

    (c)
       Adjustments;
      Recapitalization, etc.
      The
      existence of the Plan and the Options granted hereunder shall not affect in
      any
      way the right or power of the Board or the stockholders of the Company to make
      or authorize any adjustment, recapitalization, reorganization or other change
      in
      the Company’s capital structure or its business, any merger or consolidation of
      the Company, any issue of bonds, debentures, preferred or prior preference
      stocks ahead of or affecting Common Stock, the dissolution or liquidation of
      the
      Company or any sale or transfer of all or part of its assets or business or
      any
      other corporate act or proceeding. If and whenever the Company takes any such
      action, however, the following provisions, to the extent applicable, shall
      govern:

     

    (i) If
      and
      whenever the Company shall effect a stock split, stock dividend, subdivision,
      recapitalization or combination of Shares or other changes in the Company’s
      Common Stock, (x) the Purchase Price (as defined herein) per Share and the
      number and class of Shares and/or other securities with respect to which
      outstanding Options thereafter may be exercised, and (y) the total number and
      class of Shares and/or other securities that may be issued under this Plan,
      shall be proportionately adjusted by the Board. The Board may also make such
      other adjustments as it deems necessary to take into consideration any other
      event (including, without limitation, accounting changes) if the Board
      determines that such adjustment is appropriate to avoid distortion in the
      operation of the Plan.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    (ii) Subject
      to Section 5(c)(iii), if the Company merges or consolidates with one or more
      corporations, then from and after the effective date of such merger or
      consolidation, upon exercise of an Option theretofore granted, the Participant
      shall be entitled to purchase under such Option, in lieu of the number of Shares
      as to which such Option shall then be exercisable but on the same terms and
      conditions of exercise set forth in such Option, the number and class of Shares
      and/or other securities or property (including cash) to which the Participant
      would have been entitled pursuant to the terms of the agreement of merger or
      consolidation if, immediately prior to such merger or consolidation, the
      Participant had been the holder of record of the total number of Shares
      receivable upon exercise of such Option (whether or not then exercisable).
      In
      connection with any event described in this paragraph, the Board may provide,
      in
      its sole discretion, for the cancellation of any outstanding Options and payment
      in cash or other property in exchange therefor.

     

    (iii) In
      the
      event of an Acquisition Event, the Board may, in its discretion, and without
      any
      liability to any Participant, terminate all outstanding Options as of the
      consummation of the Acquisition Event by delivering notice of termination to
      each Participant at least 20 days prior to the date of consummation of the
      Acquisition Event; provided that, during the period from the date on which
      such
      notice of termination is delivered to the consummation of the Acquisition Event,
      each Participant shall have the right to exercise in full all of the Options
      that are then outstanding (without regard to limitations on exercise otherwise
      contained in the outstanding Option agreements or the Plan) but any such
      exercise shall be contingent upon and subject to the occurrence of the
      Acquisition Event, provided that if the Acquisition Event does not take place
      within a specified period after giving such notice for any reason whatsoever,
      the notice and exercise pursuant thereto shall be null and void. If the
      Acquisition Event does take place after giving such notice, any Option not
      exercised prior to the date of the consummation of such Acquisition Event shall
      be forfeited simultaneous with the consummation of the Acquisition Event. If
      an
      Acquisition Event occurs and the Board does not terminate the outstanding
      Options pursuant to the foregoing provisions, then the provisions of Section
      5(c)(ii) shall apply.

     

    (iv) If,
      as a
      result of any adjustment made pursuant to the preceding paragraphs of this
      Section 5, any Participant shall become entitled upon exercise of an Option
      to
      receive any securities other than Common Stock, then the number and class of
      securities so receivable thereafter shall be subject to adjustment from time
      to
      time in a manner and on terms as nearly equivalent as practicable to the
      provisions with respect to the Common Stock set forth in this Section 5, as
      determined by the Board in its discretion.

     

    (v) Except
      as
      hereinbefore expressly provided, the issuance by the Company of shares of stock
      of any class, or securities convertible into shares of stock of any class,
      for
      cash, property, labor or services, upon direct sale, upon the exercise of rights
      or warrants to subscribe therefor, or upon conversion of shares or other
      securities, and in any case whether or not for fair value, shall not affect,
      and
      no adjustment by reason thereof shall be made with respect to the number and
      class of Shares and/or other securities or property subject to Options
      theretofore granted of the Purchase Price per Share.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    (d)
       Unless
      determined otherwise by the Board, any adjustment made to outstanding Options
      under this Section 5 shall be made in such a manner that is (i) for Options
      that
      are not subject to Section 409A of the Code, consistent with the requirements
      of
      Section 409A of the Code in order for any such Options to remain exempt from
      the
      requirements of Section 409A of the Code, or (ii) for Options that are subject
      to Section 409A of the Code, in accordance with the requirements of Section
      409A
      of the Code.

     

    
      	
              6.
                

            	
              Awards
                and Terms of Options.

            

    

     

    (a)
       Grant.
      Options
      shall not be issued hereunder unless and until either (i) the Company offers
      options to the general public on the same terms or (ii) the rules of the North
      American Securities Administrators Association permit real estate investment
      trusts to grant compensatory stock options to independent directors without
      offering such options to the general public. 

     

    (b)
       Purchase
      Price.
      The
      Purchase Price per Share of Common Stock subject to an Option granted hereunder
      shall be determined by the Board at the time of grant; provided, that the
      Purchase Price per Share shall not be less than 100% of the Fair Market Value
      of
      the Share of Common Stock at the time of grant.

     

    (c)
       Exercisability.
      Except
      as
      otherwise provided herein or in the applicable Option agreement, any Option
      granted to a Participant shall vest and become exercisable on the second
      anniversary of the date of grant, subject to the Participant’s continued service
      as a Non-Employee Director through such date. No Option shall be exercisable
      after the expiration of ten (10) years from the date of grant.

     

    (d)
       Acceleration
      of Exercisability on Change of Control. All
      Options granted and not previously exercisable shall become exercisable
      immediately upon a Change of Control (as defined herein). For this purpose,
      a
“Change of Control” shall be deemed to have occurred upon:

     

    (i) an
      acquisition by any Person of beneficial ownership (within the meaning of Rule
      13d-3 promulgated under the Act) of 33% or more of either (A) the then
      outstanding Shares or (B) the combined voting power of the then outstanding
      voting securities of the Company entitled to vote generally in the election
      of
      directors (the “Company
      Voting Securities”);
      excluding, however, the following: (w) any acquisition directly from the
      Company, other than an acquisition by virtue of the exercise of a conversion
      privilege unless the security being so converted was itself acquired directly
      from the Company, (x) any acquisition by the Company, (y) any acquisition by
      an
      employee benefit plan (or related trust) sponsored or maintained by the Company
      or (z) any acquisition by any entity pursuant to a reorganization, merger,
      consolidation or similar corporate transaction (in each case, a “Corporate
      Transaction”),
      if,
      pursuant to such Corporate Transaction, the conditions described in clauses
      (A),
      (B) and (C) of paragraph (iii) of this Section are satisfied; or 

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    (ii) a
      change
      in the composition of the Board such that the individuals who, as of the
      Effective Date hereof, constitute the Board (the Board as of the Effective
      Date
      hereof shall be hereinafter referred to as the “Incumbent
      Board”)
      cease
      for any reason to constitute at least a majority of the Board; provided that
      for
      purposes of this subsection any individual who becomes a member of the Board
      subsequent to the Effective Date hereof whose election, or nomination for
      election by the Company’s stockholders, was approved by a vote of at least a
      majority of those individuals who are members of the Board and who are also
      members of the Incumbent Board (or deemed to be such pursuant to this proviso)
      shall be considered as though such individual were a member of the Incumbent
      Board; but, provided further, that any such individual whose initial assumption
      of office occurs as a result of either an actual or threatened election contest
      (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under
      the
      Act) or other actual or threatened solicitation of proxies or consents by or
      on
      behalf of a Person other than the Board shall not be so considered as a member
      of the Incumbent Board; or 

     

    (iii) the
      approval by the stockholders of the Company of a Corporate Transaction or,
      if
      consummation of such Corporate Transaction is subject, at the time of such
      approval by stockholders, to the consent of any government or governmental
      agency, the obtaining of such consent (either explicitly or implicitly by
      consummation); excluding, however, such a Corporate Transaction pursuant to
      which (A) all or substantially all of the individuals and entities who are
      the
      beneficial owners, respectively, of the outstanding Shares and Company Voting
      Securities immediately prior to such Corporate Transaction will beneficially
      own, directly or indirectly, more than 60% of, respectively, the outstanding
      shares of common stock of the entity resulting from such Corporate Transaction
      and the combined voting power of the outstanding voting securities of such
      entity entitled to vote generally in the election of directors, in substantially
      the same proportions as their ownership, immediately prior to such Corporate
      Transaction, of the outstanding Shares and Company Voting Securities, as the
      case may be, (B) no Person (other than the Company, any employee benefit plan
      (or related trust) of the Company or the entity resulting from such Corporate
      Transaction and any Person beneficially owning, immediately prior to such
      Corporate Transaction, directly or indirectly, 33% or more of the outstanding
      Shares or Company Voting Securities, as the case may be) will beneficially
      own,
      directly or indirectly, 33% or more of, respectively, the outstanding shares
      of
      Common Stock of the entity resulting from such Corporate Transaction or the
      combined voting power of the then outstanding securities of such entity entitled
      to vote generally in the election of directors and (C) individuals who were
      members of the Incumbent Board will constitute at least a majority of the
      members of the board of directors of the corporation resulting from such
      Corporate Transaction; notwithstanding the foregoing, no Change of Control
      will
      occur if two-thirds (2/3)
      of the
      Incumbent Board approves the Corporate Transaction; or 

     

    (iv) the
      approval of the stockholders of the Company of (A) a complete liquidation or
      dissolution of the Company or (B) the sale or other disposition of all or
      substantially all of the assets of the Company; excluding; however, such a
      sale
      or other disposition to an entity with respect to which, following such sale
      or
      other disposition, (x) more than 60% of, respectively, the then outstanding
      shares of common stock of such entity and the combined voting power of the
      then
      outstanding voting securities of such entity entitled to vote generally in
      the
      election of directors will be then beneficially owned, directly or indirectly,
      by all or substantially all of the individuals and entities who were the
      beneficial owners respectively, of the outstanding Shares and Company Voting
      Securities immediately prior to such sale or other disposition in substantially
      the same proportion as their ownership, immediately prior to such sale or other
      disposition, of the outstanding Shares and Company Voting Securities, as the
      case may be, (y) no Person (other than the Company and any employee benefit
      plan
      (or related trust) of the Company or such entity and any Person beneficially
      owning, immediately prior to such sale or other disposition, directly or
      indirectly, 33% or more of the outstanding Shares or Company Voting Securities,
      as the case may be) will beneficially own, directly or indirectly, 33% or more
      of, respectively, the then outstanding shares of common stock of such entity
      and
      the combined voting power of the then outstanding voting securities of such
      entity entitled to vote generally in the election of directors and (z)
      individuals who were members of the Incumbent Board will constitute at least
      a
      majority of the members of the board of directors of such entity. 

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    (e)
       Exercise
      of Options.

     

    (i) A
      Participant may elect to exercise an Option by giving written notice to the
      Board of such election and of the number of Shares such Participant has elected
      to purchase pursuant to the Option, accompanied by payment in full of the
      aggregate Purchase Price for the number of Shares for which the Option is being
      exercised.

     

    (ii) Shares
      purchased pursuant to the exercise of an Option shall be paid for at the time
      of
      exercise as follows:

     

    (A) in
      cash
      or by check, bank draft or money order payable to the order of the Company;
      

     

    (B) if
      so
      permitted by the Board: (x) through the delivery of unencumbered Shares
      (including Shares being acquired pursuant to the Option then being exercised),
      provided such Shares (or such Option) have been owned by the Participant for
      such period as may be required by applicable accounting standards to avoid
      a
      charge to earnings or (y) through a combination of Shares and cash as provided
      above, provided, that, if the Shares delivered upon exercise of the Option
      is an
      original issue of authorized Shares, at least so much of the Purchase Price
      as
      represents the par value of such Shares shall be paid in cash or by a
      combination of cash and Shares; 

     

    (C)
      to
      the extent permitted by applicable law, if the Common Stock is traded on a
      national securities exchange, the Nasdaq Stock Market or quoted on a national
      quotation system sponsored by FINRA, through the delivery of irrevocable
      instructions to a broker to deliver promptly to the Company an amount equal
      to
      the aggregate Purchase Price; or 

     

    (D) on
      such
      other terms and conditions as may be acceptable to the Committee and in
      accordance with applicable law. The Company will not issue Shares in
      certificated form. The Company's transfer agent maintains a stock ledger that
      contains the name and address of each stockholder and the number of Shares
      that
      the stockholder holds. The Company shall provide the Participant, pursuant
      to
      the Company's Articles of Amendment and Restatement, with a notice containing
      information about the Shares purchased, in lieu of issuance of a Share
      certificate.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    (iii) REIT
      Status.
      Notwithstanding anything herein to the contrary, no Option granted under this
      Plan may be exercised if such exercise would jeopardize the Company’s status as
      a “real estate investment trust” as defined under the Code. 

     

    
      	
              7.
                

            	
              Effect
                of Termination of Service.

            

    

     

    (a)
       Death,
      Disability, or Retirement. Except
      as
      otherwise provided in the Participant’s Option agreement or in this Plan, upon a
      Termination of Service, all outstanding Options then exercisable and not
      exercised by the Participant prior to such Termination of Service shall remain
      exercisable by the Participant to the extent not theretofore exercised for
      the
      following time periods (subject to Section 6(c)):

     

    (i) in
      the
      event of the Participant’s death, such Options shall remain exercisable (by the
      Participant’s estate or by the person given authority to exercise such Options
      by the Participant’s will or by operation of law) for a period of one (1) year
      from the date of the Participant’s death; and 

     

    (ii) in
      the
      event the Participant retires at or after age 65 (or, with the consent of the
      Board, before age 65), or, if the Participant’s services terminate due to
      Disability, such Options shall remain exercisable for one (1) year from the
      date
      of the Participant’s Termination of Service.

     

    (b)
       Cause.
      Upon
      the Termination of Service of a Participant for Cause (as defined herein) or
      if
      it is discovered after a Termination of Service that such Participant had
      engaged in conduct that would have justified a Termination of Service for Cause,
      all outstanding Options (whether vested or unvested) shall immediately be
      canceled, provided that upon any such termination the Board may, in its
      discretion, require the Participant to promptly pay to the Company (and the
      Company shall have the right to recover) any gain the Participant realized
      as a
      result of the exercise of any Option that occurred within one (1) year prior
      to
      such Termination of Service or the discovery of conduct that would have
      justified a Termination of Service for Cause. Termination of Service shall
      be
      deemed to be for “Cause” for purposes of this Section 7(b) if the Participant
      shall have committed fraud or any felony in connection with the Participant’s
      duties as a director of the Company or willful misconduct or any act of
      disloyalty, dishonesty, fraud or breach of trust, confidentiality or fiduciary
      duties as to the Company or the commission of any other act which causes or
      may
      reasonably be expected to cause economic or reputational injury to the Company
      or any other act or failure to act that constitutes “cause” for removal of a
      director under applicable Maryland law.

     

    (c)
       Other
      Termination.
      In the
      event of a Termination of Service for any reason other than as provided in
      Sections 7(a) and 7(b), all outstanding Options then exercisable and not
      exercised by the Participant prior to such Termination of Service shall remain
      exercisable (to the extent exercisable by such Participant immediately before
      such termination) for a period of three (3) months after such termination,
      but
      not beyond the original stated term of the Option.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    
      	
              8.
                

            	
              Nontransferability
                of Options.

            

    

     

    No
      Option
      shall be transferable by the Participant otherwise than by will or under
      applicable laws of descent and distribution, and during the lifetime of the
      holder may be exercised only by the holder or his or her guardian or legal
      representative. In addition, no Option shall be assigned, negotiated, pledged
      or
      hypothecated in any way (whether by operation of law or otherwise), and no
      Option shall be subject to execution, attachment or similar process. Upon any
      attempt to transfer, assign, negotiate, pledge or hypothecate any Option, or
      in
      the event of any levy upon any Option by reason of any execution, attachment
      or
      similar process contrary to the provisions hereof, such Option shall immediately
      be cancelled. Notwithstanding the foregoing, the Board may determine at the
      time
      of grant or thereafter, that an Option that is otherwise non transferable is
      transferable in whole or in part and in such circumstances, and under such
      conditions, as specified by the Board.

     

    
      	
              9.
                

            	
              Rights
                as a Stockholder.

            

    

     

    A
      holder
      of an Option shall have no rights as a stockholder with respect to any Shares
      covered by such holder’s Option until such holder shall have become the holder
      of record of such Shares, and no adjustments shall be made for dividends in
      cash
      or other property or distributions or other rights in respect to any such
      Shares, except as otherwise specifically provided for in this Plan.

     

    
      	
              10.
                

            	
              Determinations.

            

    

     

    Each
      determination, interpretation or other action made or taken pursuant to the
      provisions of this Plan by the Board shall be final, conclusive and binding
      for
      all purposes and upon all persons, including, without limitation, the holders
      of
      any Options and Non-Employee Directors and their respective heirs, executors,
      administrators, personal representatives and other successors in
      interest.

     

    
      	
              11.
                

            	
              Termination,
                Amendment and
                Modification.

            

    

     

    Notwithstanding
      any other provision of this Plan, the Board may at any time, and from time
      to
      time, amend, in whole or in part, any or all of the provisions of this Plan,
      or
      suspend or terminate it entirely, retroactively or otherwise; provided, however,
      that, unless otherwise required by law or specifically provided herein, the
      rights of a Participant with respect to Options granted prior to such amendment,
      suspension or termination, may not be impaired without the consent of such
      Participant; provided further, that no amendment may be made without stockholder
      approval if stockholder approval is required under applicable law.

     

    The
      Board
      may amend the terms of any Option theretofore granted, prospectively or
      retroactively, but, subject to Section 5 above or as otherwise specifically
      provided herein, no such amendment or other action by the Board shall impair
      the
      rights of any holder without the holder’s consent.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    Notwithstanding
      any provision of the Plan to the contrary, in the event that the Board
      determines that any Option may be subject to Section 409A of the Code, the
      Board may adopt such amendment to the Plan and the applicable Option agreement
      or adopt other policies and procedures (including amendments, policies and
      procedures with retroactive effect), or take any other actions that the Board
      determines are necessary or appropriate, without the consent of the Participant,
      to (1) exempt the Option from Section 409A of the Code and/or preserve
      the intended tax treatment of the benefits provided with respect to the Option
      or (2) comply with the requirements of Section 409A of the Code.

     

    
      	
              12.
                

            	
              Non-Exclusivity.

            

    

     

    The
      adoption of the Plan by the Board shall not be construed as creating any
      limitations on the power of the Board to adopt such other incentive arrangements
      as it may deem desirable, including, without limitation, the granting or
      issuance of Options, Shares and/or other incentives otherwise than under the
      Plan, and such arrangements may be either generally applicable or limited in
      application.

     

    
      	
              13.
                

            	
              Use
                of Proceeds.

            

    

     

    The
      proceeds of the sale of Shares subject to Options under the Plan are to be
      added
      to the general funds of the Company and used for its general corporate purposes
      as the Board shall determine.

     

    
      	
              14.
                

            	
              General
                Provisions.

            

    

     

    (a)
       Right
      to Terminate Services.
      Neither
      the adoption of the Plan nor the grant of Options shall impose any obligations
      on the Company to retain any Participant as a director nor shall it impose
      any
      obligation on the part of any Participant to remain a director.

     

    (b)
       Purchase
      for Investment. If
      the
      Board determines that the law so requires, the holder of an Option granted
      hereunder shall, upon any exercise or conversion thereof, execute and deliver
      to
      the Company a written statement, in form satisfactory to the Company,
      representing and warranting that such Participant is purchasing or accepting
      the
      Shares then acquired for such Participant’s own account and not with a view to
      the resale or distribution thereof, that any subsequent offer for sale or sale
      of any such Shares shall be made either pursuant to (i) a registration statement
      in appropriate form under the Securities Act, which registration statement
      shall
      have become effective and shall be current with respect to the Shares being
      offered and sold, or (ii) a specific exemption from the registration
      requirements of the Securities Act, and that in claiming such exemption the
      holder will, prior to any offer for sale or sale of such Shares, obtain a
      favorable written opinion, satisfactory in form and substance to the Company,
      from counsel approved by the Company as to the availability of such
      exception.

     

    (c)
       Trusts,
      etc. Nothing
      contained in the Plan and no action taken pursuant to the Plan (including,
      without limitation, the grant of any Option thereunder) shall create or be
      construed to create a trust of any kind, or a fiduciary relationship, between
      the Company and any Participant or the executor, administrator or other personal
      representative or designated beneficiary of such Participant, or any other
      persons. Any reserves that may be established by the Company in connection
      with
      the Plan shall continue to be part of the general funds of the Company, and
      no
      individual or entity other than the Company shall have any interest in such
      funds until paid to a Participant. If and to the extent that any Participant
      or
      such Participant’s executor, administrator, or other personal representative, as
      the case may be, acquires a right to receive any payment from the Company
      pursuant to the Plan, such right shall be no greater than the right of an
      unsecured general creditor of the Company.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    (d)
       Notices.
      Each
      Participant shall be responsible for furnishing the Board with the current
      and
      proper address for the mailing to such Participant of notices and the delivery
      to such Participant of agreements, Shares and payments. Any notices required
      or
      permitted to be given shall be deemed given if directed to the person to whom
      addressed at such address and mailed by regular United States mail, first class
      and prepaid. If any item mailed to such address is returned as undeliverable
      to
      the addressee, mailing will be suspended until the Participant furnishes the
      proper address.

     

    (e)
       Severability
      of Provisions.
      If any
      provisions of the Plan shall be held invalid or unenforceable, such invalidity
      or unenforceability shall not affect any other provisions of the Plan, and
      the
      Plan shall be construed and enforced as if such provisions had not been
      included.

     

    (f)
       Payment
      to Minors, Etc. Any
      benefit payable to or for the benefit of a minor, an incompetent person or
      other
      person incapable of receipting therefor shall be deemed paid when paid to such
      person’s guardian or to the party providing or reasonably appearing to provide
      for the care of such person, and such payment shall fully discharge the Board,
      the Company and their employees, agents and representatives with respect
      thereto.

     

    (g)
       Readings
      and Captions.
      The
      headings and captions herein are provided for reference and convenience only.
      They shall not be considered part of the Plan and shall not be employed in
      the
      construction of the Plan.

     

    (h)
       Other
      Benefits.
      No
      award under this Plan shall be deemed compensation for purposes of computing
      benefits under any retirement plan of the Company or its subsidiaries nor affect
      any benefits under any other benefit plan now or subsequently in effect under
      which the availability or amount of benefits is related to the level of
      compensation. 

     

    (i)
       Section
      409A of the Code.
      Options
      granted under the Plan are intended to be exempt from Section 409A of the Code.
      Notwithstanding the foregoing, in no event whatsoever shall the Company be
      liable for any additional tax, interest or penalty that may be imposed on a
      Participant by Section 409A of the Code or any damages for failing to comply
      with Section 409A of the Code.

     

    
      	
              15.
                

            	
              Uncertificated
                Shares; Payment of Expenses; and Section 16(b) of the
                Act.

            

    

     

    (a)
       Uncertificated
      Shares.
      Upon
      any exercise of an Option and payment of the Purchase Price as provided in
      such
      Option, Shares as to which such Option has been exercised shall be issued by
      the
      Company in the name of the person or persons exercising such Option along with
      a
      notice to the Participant containing information about the Shares purchased,
      in
      lieu of issuance of a Share certificate, and the Company's transfer agent
      maintains a stock ledger that contains the name and address of each stockholder
      and the number of Shares that the stockholder holds. The Company will not issue
      Shares in certificated form.

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    (b)
       Payment
      of Expenses.
      The
      Company shall pay all issue or transfer taxes with respect to the issuance
      or
      transfer of Shares, as well as all fees and expenses necessarily incurred by
      the
      Company in connection with such issuance or transfer and with the administration
      of the Plan.

     

    (c)
       Section
      16(b) of the Act.
      All
      elections and transactions under the Plan by persons subject to Section 16
      of
      the Act involving Shares are intended to comply with any applicable condition
      under Rule 16b-3, provided,
      however, noncompliance with the requirements of Rule 16b-3 shall not affect
      the
      validity of an Option granted under this Plan.
      To the
      extent any provision of the Plan or action by the Board fails to so comply,
      it
      shall be deemed null and void. The Board may establish and adopt written
      administrative guidelines, designed to facilitate compliance with Section 16(b)
      of the Act, as it may deem necessary or proper for the administration and
      operation of the Plan and the transaction of business thereunder.

     

    
      	
              16.
                

            	
              Listing
                of Shares and Related
                Matters.

            

    

     

    If
      at any
      time the Board shall determine in its sole discretion that the listing,
      registration or qualification of the Shares covered by the Plan upon any
      national securities exchange or under any state or federal law, or the consent
      or approval of any governmental regulatory body, is necessary or desirable
      as a
      condition of, or in connection with, the award or sale of Shares under the
      Plan,
      no Shares will be delivered unless and until such listing, registration,
      qualification, consent or approval shall have been effected or obtained, or
      otherwise provided for, free of any conditions not acceptable to the
      Board.

     

    
      	
              17.
                

            	
              Governing
                Law.

            

    

     

    This
      Plan
      shall be governed and construed in accordance with the laws of the State of
      Maryland (regardless of the law that might otherwise govern under applicable
      principles of conflict of laws). 

     

    
      
         

      

      
        13

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