Document:

Exhibit 106 CIC Severance Plan for May 2015 8-K

		
			GUARANTY BANCORP
		

		
			AMENDED AND RESTATED
		

		
			CHANGE IN CONTROL SEVERANCE PLAN
		

		
			(As Amended and Restated Effective May 15, 2015)
		

			
	
			
				 1.
			 Purpose. The purpose of the Amended and Restated Guaranty Bancorp Change in Control Severance Plan (as Amended and Restated Effective May 15, 2015) (the “Plan”) is to recruit and foster the continuous employment of key management personnel of the Company and to reinforce and encourage their continued attention and dedication to their duties in the event of any threat or occurrence of a Change in Control (as defined in Section 2), although no such change is now apparent or contemplated.

			
	
			
				 2.
			Definitions. As used in this Plan, the following terms shall have the respective meanings set forth below:

			
	
			
				 (a)
			 “Annual Bonus” means the annual bonus awarded under the Company’s Executive Cash Incentive Plan or Annual Incentive Plan (or, in each case, any predecessor, substitute or successor plan designated as such by the Board), as in effect from time to time, or any discretionary annual bonus awarded by the Board.

			
	
			
				 (b)
			 “Base Salary” means the Participant’s annual base salary in effect immediately before the occurrence of the circumstance giving rise to the Participant’s termination, or, if greater, the Participant’s annual base salary in effect immediately before the Change in Control.

			
	
			
				 (c)
			 “Board” means the Board of Directors of the Company and, after a Change in Control, the “board of directors” of the surviving company.

			
	
			
				 (d)
			 “Bonus Amount” means the average of a Participant’s 2 Annual Bonuses for the 2 fiscal years ending before the Participant’s Date of Termination; provided that (i) if a Participant has been an employee of the Company through the end of only one fiscal year before the Participant’s Date of Termination and was eligible for an Annual Bonus for such fiscal year (including on a pro rata basis), the Bonus Amount shall be the average of (x) the Annual Bonus for the fiscal year ending before the Date of Termination (if such bonus was made on a pro rata basis, such bonus shall be annualized for the purpose of calculating the Bonus Amount) and (y) the Participant’s target Annual Bonus, expressed as a percentage of base salary in the event the relevant goals are 100% achieved, for the fiscal year in which the Date of Termination occurs and (ii) if a Participant (x) has been an employee of the Company through the end of only one fiscal year before the Participant’s Date of Termination and was not eligible for an Annual Bonus for such fiscal year or (y) has not been an employee of the Company through the end of one fiscal year with the Company before the Participant’s Date of Termination, the Bonus Amount shall be the Participant’s target Annual Bonus, expressed as a percentage of base salary in the event the relevant goals are 100% achieved, for the year in which the Date of Termination occurs.

			
	
			
				 (e)
			 “Cause” means (i) an intentional and continued failure of a Participant to perform duties with the Company and its subsidiaries (for the avoidance of doubt, excluding any failure due to physical or mental illness) and such failure continues after a written demand for substantial performance is delivered by the Company to the Participant that specifically identifies the manner in which the Participant has failed to perform; (ii) an intentional act of illegal conduct or gross misconduct that is demonstrably injurious (other than to a de minimis extent) to the business, reputation or regulatory relationships of the Company; (iii) an intentional act of fraud, embezzlement or theft in connection with the business of the Company; (iv) intentional disclosure of confidential information or trade secrets of the Company or confidential information relating to customers of the Company or its parent, a subsidiary or affiliate; (v) an act constituting a felony or a misdemeanor involving moral turpitude for which the Participant is convicted by any federal, state or local authority, or to which the Participant enters a plea of guilty or nolo contendere; (vi) an act or omission that causes the Participant to be disqualified or barred by any governmental or self-regulatory authority from serving in his or her employment capacity or losing any governmental or self-regulatory license that is reasonably necessary for the Participant to perform his or her responsibilities to the Company; or (vii) intentional breach of corporate fiduciary duty involving personal profit. For the purposes of this Plan, no act, or failure to act, on the part of the Participant shall be deemed “intentional” unless done, or omitted to be done, by the Participant not in good faith and without reasonable belief that his or her action 
		

		 

 

			or omission was in the best interest of the Company. Notwithstanding the foregoing, the Participant shall not be deemed to have been terminated for Cause hereunder unless and until there shall have been delivered to the Participant a copy of a resolution duly adopted by the affirmative vote of not less than two-thirds of the members of the Board then in office at a meeting of the Board called and held for such purpose (after reasonable notice to the Participant and an opportunity for the Participant, together with his or her counsel to be heard before the Board), finding that, in the good faith opinion of the Board, the Participant had committed an act set forth above in clauses (i) through (vii) and specifying the particulars thereof in detail. Nothing herein shall limit the right of the Participant or his or her beneficiaries to contest the validity or propriety of any such determination.

			
	
			
				 (f)
			 “Change in Control” means the occurrence of any one of the following events:

			
	
			
				 (i)
			any “Person” or “Group” (as such terms are defined in Section 13(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) and the rules and regulations promulgated thereunder) is or becomes the “Beneficial Owner” (within the meaning of Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company, or of any entity resulting from a merger or consolidation involving the Company, representing more than 50% of the combined voting power of the then outstanding securities of the Company or such entity;

			
	
			
				 (ii)
			the individuals who, as of the date hereof, are members of the Board (the “Existing Directors”), cease, for any reason, to constitute more than 50% of the number of authorized directors of the Company as determined in the manner prescribed in the Company’s Certificate of Incorporation and Bylaws; provided that if the election, or nomination for election, by the Company’s stockholders of any new director was approved by a vote of at least 50% of the Existing Directors, such a new director shall be considered an Existing Director; provided further, that no individual shall be considered an Existing Director if such individual initially assumed office as a result of either an actual or threatened election contest (“Election Contest”) or other actual or threatened solicitation of proxies by or on behalf of anyone other than the Board (a “Proxy Contest”), including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest; or

			
	
			
				 (iii)
			the consummation of a plan of reorganization, merger or consolidation involving the Company or the sale of all or substantially all of the assets or deposits of the Company, except for a reorganization, merger, consolidation or sale where (A) the stockholders of the Company immediately before such reorganization, merger, consolidation or sale own directly or indirectly at least 55% of the combined voting power of the outstanding voting securities of the Company resulting from such reorganization, merger or consolidation or purchasing the assets or deposits (the “Surviving Company”) in substantially the same proportion as their ownership of voting securities of the Company immediately before such reorganization, merger, consolidation or sale, and (B) the Existing Directors immediately before the execution of the agreement providing for such reorganization, merger, consolidation or sale constitute at least half of the members of the board of directors of the Surviving Company, or of a company beneficially owning, directly or indirectly, a majority of the voting securities of the Surviving Company (a “Resulting Parent”).

		
			If there is a reorganization, merger, consolidation or sale of the Company that does not result in a Change in Control pursuant to clause (iii), references to “the Company” in this definition will be deemed to have been replaced by references to the Resulting Parent (or if there is no Resulting Parent, the Surviving Company).
		

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

			
	
			
				 (h)
			 “Company” means Guaranty Bancorp and the tax-controlled group of which it is a member.

			
	
			
				 (i)
			 “Date of Termination” means (i) if a Participant’s employment is terminated for Disability, 30 days after notice of termination is given by the Company (provided that the Participant shall not have returned to the full-time performance of his or her duties during such 30 day period); (ii) if a Participant’s employment is terminated by the Participant, the date specified in the notice of termination, which shall not be less 
		

		 

 

			than 30 days after notice of termination is given (unless the Company selects an earlier Date of Termination); or (iii) if a Participant’s employment is terminated for any other reason, the date specified in the notice of termination.

			
	
			
				 (j)
			 “Disability” shall occur if a Participant is incapacitated and absent from his or her duties on a full-time basis for 4 consecutive months or for at least 180 days (which need not be consecutive) during any 12 month period.

			
	
			
				 (k)
			 “Good Reason” means, without the Participant’s express written consent, the occurrence of any of the following events after a Change in Control:

			
	
			
				 (i)
			the assignment to the Participant of any duties inconsistent with his or her title, position, duties, responsibilities and status with the Company as in effect immediately before the Change in Control, or any other action by the Company that results in a diminution of the Participant’s title, duties, position or reporting relationships, or any removal of the Participant from, or any failures to re-elect the Participant to, any of such positions, except in connection with the termination of his or her employment for Cause or as a result of his or her Disability or death, or termination by the Participant other than for Good Reason; provided that insubstantial or inadvertent actions not taken in bad faith which are remedied by the Company promptly after receipt of notice thereof given by the Participant shall not constitute Good Reason;

			
	
			
				 (ii)
			any reduction in the Participant’s base salary, or a significant reduction in the aggregate employee benefits provided to the Participant, unless such reduction applies equally to other similarly situated employees of the Company, in each case, which is not remedied within 10 calendar days after receipt by the Company of written notice from the Participant of such change or reduction, as the case may be;

			
	
			
				 (iii)
			the Company requiring the Participant to be based more than 30 miles from the location of his or her place of employment immediately before the Change in Control, except for normal business travel in connection with his or her duties with the Company; or

			
	
			
				 (iv)
			the failure by the Company to require any successor (whether direct or indirect, by purchase, merger consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume this Plan and all obligation hereunder.

		
			An isolated, insubstantial and inadvertent action taken in good faith implicating clauses (i), (ii) or (iii) of this definition which is fully corrected by the Company before the Date of Termination specified in the notice of termination shall not constitute Good Reason. A Participant must provide a notice of termination for Good Reason within 90 days following the Participant’s knowledge of existence of the event constituting Good Reason or such event shall not constitute Good Reason under this Plan.
		

			
	
			
				 (l)
			 “Participant” means each of the employees of the Company who are selected by the Board for coverage by this Plan and identified on Schedule A.

			
	
			
				 (m)
			 “Qualifying Termination” means a termination of the Participant’s employment (i) by the Company other than for Cause or (ii) by the Participant for Good Reason. Termination of the Participant’s employment with the Company on account of death, Disability or retirement (in accordance with the normal retirement policy of the Company as in effect before the Change in Control) shall not be treated as a Qualifying Termination. Notwithstanding the preceding sentence, the death or Disability of the Participant after notice of termination for Good Reason or without Cause has been validly provided shall be deemed to be a Qualifying Termination.

			
	
			
				 (n)
			 “Severance Multiple” means, for each Participant, a number determined by the Board in its sole discretion and noted on Schedule A.

		 

 

			
	
			
				 (o)
			 “Termination Period” means the period of time beginning with a Change in Control and ending 2 years following such Change in Control. Notwithstanding anything in this Plan to the contrary, if a Participant’s employment with the Company is terminated before the occurrence of a Change in Control, the Participant’s employment will be deemed to have been terminated by the Company without Cause on the day after the occurrence of the Change in Control if (i) a Change in Control actually occurs, (ii) during the Change in Control Period (as defined in Section 16(d)) ending on such Change in Control, the Participant’s employment is terminated by the Company other than for Cause or by the Participant for Good Reason or (iii) the Participant reasonably demonstrates that the Company terminated the Participant’s employment, or gave the Participant Good Reason, at the request of a Person (other than the Company) who has indicated an intention or taken steps reasonably calculated to effect a Change in Control, or otherwise in connection with, or in anticipation of, the Change in Control.

		
			For purposes of determining the timing of payments and benefits to the Participant under Section 4, (A) if a Participant’s employment is terminated prior to the date of the Change in Control, the date of the actual Change in Control shall be treated as the Participant’s Date of Termination under Section 2(i) and (B) if a Participant’s employment is terminated after the date of the Change in Control, the Participant’s Date of Termination shall be determined under Section 2(i). For purposes of determining the amount of payments and benefits owed to the Participant under Section 4, the date the Participant’s employment is actually terminated shall be treated as the Participant’s Date of Termination under Section 2(i).
		

			
	
			
				 3.
			Eligibility. The Board shall determine in its sole discretion which employees of the Company shall be Participants. Once an employee becomes a Participant, the employee shall remain a Participant until the earlier of (1) the expiration of the Participant’s “participation period” noted on Schedule A and (2) the Board’s removal of the employee as a Participant in this Plan. The Board may remove an employee as a Participant in this Plan at any time in its sole discretion except that a Participant may not be removed as a Participant without his or her prior written consent either (i) during a Change in Control Period or Termination Period or (ii) unless the Company provides Participant with at least 6 months prior notice of such removal which is not during a Change in Control Period or Termination Period. For the avoidance of doubt, if a Participant is removed as a Participant in this Plan pursuant to clause (ii) in the immediately preceding sentence and during such 6 month notice period a Change in Control Period is triggered pursuant to which an actual Change in Control occurs, the Participant shall not be removed or be deemed to have been removed from this Plan.

			
	
			
				 4.
			Payments Upon Termination of Employment. If during the Termination Period the employment of the Participant is terminated pursuant to a Qualifying Termination, then, subject to the Participant’s execution of a Separation Agreement and Release in the form attached to this Plan as Schedule B (the “Separation Agreement and Release”), the Company shall provide to the Participant:

			
	
			
				 (a)
			his or her full base salary through the Date of Termination at the rate in effect at the time notice of termination is given, plus all other amounts to which he or she is entitled under any compensation plan of the Company, as the case may be, in effect immediately before the Change in Control, at the time such payments are due;

			
	
			
				 (b)
			on the sixtieth (60th) day following the Date of Termination, provided the Participant has not revoked the Separation Agreement and Release as of such date, a lump sum cash payment equal to the result of multiplying (i) the Participant’s current target Annual Bonus, expressed as a percentage of base salary in the event the relevant goals are 100% achieved, for the year in which the Date of Termination occurs by (ii) a fraction, (A) the numerator of which is the number of days elapsed from the beginning of the relevant period for which performance is measured in determining such Annual Bonus until the Date of Termination and (B) the denominator of which is the number of days of such relevant period;

			
	
			
				 (c)
			on the sixtieth (60th) day following the Date of Termination, provided the Participant has not revoked the Separation Agreement and Release as of such date, a lump sum cash payment equal to the result of multiplying (i) the sum of (A) the Participant’s Base Salary, plus (B) the Participant’s Bonus Amount by (ii) the Participant’s Severance Multiple; and

			
	
			
				 (d)
			for the lesser of (i) the number of years from the Date of Termination equal to the Severance Multiple and (ii) through the date the Participant ceases to be eligible for COBRA, continued provision of 
		

		 

 

			medical, dental, and vision benefits to the Participant, his or her spouse and his or her eligible dependents on the same basis as such benefits are then currently provided to such Participant (the “Medical Benefits”); provided that such benefits shall be secondary to any other coverage obtained by the Participant and shall be paid or provided in accordance with Section 8 below; provided further that if the Company’s welfare plans do not permit such coverage, the Company will provide the Participant the Medical Benefits with the same tax effect.

			
	
			
				 (e)
			Maximum Payments by the Company.

			
	
			
				 (i)
			It is the objective of this Plan to maximize the Participant’s net after-tax benefit if payments or benefits provided under this Plan are subject to excise tax under Section 4999 of the Code. Notwithstanding any other provisions of this Plan, in the event that any payment or benefit by the Company or otherwise to or for the benefit of the Participant, whether paid or payable or distributed or distributable pursuant to the terms of this Plan or otherwise, including, by example and not by way of limitation, acceleration by the Company or otherwise of the date of vesting or payment or rate of payment under any plan, program, arrangement or agreement of the Company (all such payments and benefits being hereinafter referred to as the “Total Payments”), would be subject (in whole or in part) to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the cash severance payments shall first be reduced, and the non-cash severance payments shall thereafter be reduced, to the extent necessary so that no portion of the Total Payments shall be subject to the Excise Tax, but only if (A) the net amount of such Total Payments, as so reduced (and after subtracting the net amount of federal, state and local income taxes on such reduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such reduced Total Payments), is greater than or equal to (B) the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state and local income taxes on such Total Payments and the amount of Excise Tax to which Participant would be subject in respect of such unreduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such unreduced Total Payments).

			
	
			
				 (ii)
			The Total Payments shall be reduced by the Company in the following order: (A) reduction of any cash severance payments otherwise payable to Participant that are exempt from Section 409A of the Code, (B) reduction of any other cash payments or benefits otherwise payable to the Participant that are exempt from Section 409A of the Code, but excluding any payments attributable to the acceleration of vesting or payments with respect to any equity award with respect to the Company’s common stock that is exempt from Section 409A of the Code, (C) reduction of any other payments or benefits otherwise payable to Participant on a pro-rata basis or such other manner that complies with Section 409A of the Code, but excluding any payments attributable to the acceleration of vesting and payments with respect to any equity award with respect to the Company’s common stock that are exempt from Section 409A of the Code, and (D) reduction of any payments attributable to the acceleration of vesting or payments with respect to any other equity award with respect to the Company’s common stock that are exempt from Section 409A of the Code.

			
	
			
				 (iii)
			For purposes of determining whether and the extent to which the Total Payments will be subject to the Excise Tax, (A) no portion of the Total Payments the receipt or enjoyment of which Participant shall have waived at such time and in such manner as not to constitute a “payment” within the meaning of Section 280G(b) of the Code shall be taken into account, (B) no portion of the Total Payments shall be taken into account which, in the written opinion of independent auditors of nationally recognized standing (“Independent Advisors”) selected by the Company, does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code (including by reason of Section 280G(b)(4)(A) of the Code) and, in calculating the Excise Tax, no portion of such Total Payments shall be taken into account which, in the opinion of Independent Advisors, constitutes reasonable compensation for services actually rendered, within the meaning of Section 280G(b)(4)(B) of the Code, in excess of the “base amount” (as defined in Section 280G(b)(3) of the Code) allocable to such reasonable compensation, and (C) the value of any non-cash benefit or any deferred payment or benefit included in the Total Payments shall be determined by the Independent Advisors in accordance with the principles of Sections 280G(d)(3) and (4) of the Code. The costs of obtaining such determination shall be borne by the Company.

		

		

		 

 

		Except as otherwise expressly provided pursuant to this Plan, this Plan shall be construed and administered in a manner which avoids duplication of compensation and benefits which may be provided under any other plan, program, policy, or other arrangement or individual contract. In the event a Participant is covered by any other plan, program, policy, individually negotiated agreement or other arrangement, in effect as of his or her Date of Termination, that may duplicate the payments and benefits provided for in this Section 4, the Board is specifically empowered to reduce or eliminate the duplicative benefits provided for under the Plan, provided such elimination or reduction does not cause the Participant to incur additional tax or interest under Section 409A of the Code (“Section 409A”).
		

		
			This Plan does not abrogate any of the usual entitlements which a Participant has or will have, first, while a regular employee, and subsequently, after termination, and thus a Participant shall be entitled to receive all benefits payable to him or her under each and every qualified plan, welfare plan and any other plan or program relating to benefits and deriving from his or her employment with the Company, but solely in accordance with the terms and provisions thereof.
		

			
	
			
				 5.
			Withholding Taxes. The Company may withhold from all payments due to the Participant (or his or her beneficiary or estate) hereunder all taxes which, by applicable federal, state, local or other law, the Company is required to withhold therefrom.

			
	
			
				 6.
			Reimbursement of Expenses. If a Change in Control actually occurs and any contest or dispute shall arise under this Plan involving termination of a Participant’s employment with the Company or involving the failure or refusal of the Company to perform fully in accordance with the terms hereof, the Company shall reimburse the Participant on a current basis (and in accordance with Section 8 below) for all reasonable legal fees and related expenses, if any, incurred by the Participant in connection with such contest or dispute, provided that the Participant shall be required to repay immediately any such amounts to the Company to the extent that a court or an arbitration panel issues a final and non- appealable order setting forth the determination that the position taken by the Participant was frivolous or advanced by the Participant in bad faith.

			
	
			
				 7.
			Scope of Plan. Nothing in this Plan shall be deemed to entitle the Participant to continued employment with the Company, and if a Participant’s employment with the Company shall terminate before a Change in Control, the Participant shall have no further rights under this Plan (except as specifically provided herein); provided that any termination of a Participant’s employment during the Termination Period shall be subject to all of the provisions of this Plan.

			
	
			
				 8.
			Certain Additional Agreements under Section 409A.

			
	
			
				 (a)
			The Plan is not intended to constitute a “nonqualified deferred compensation plan” within the meaning of Section 409A. Notwithstanding the foregoing, if and to the extent that (i) any payment or benefit is determined by the Company to constitute “non-qualified deferred compensation” subject to Section 409A, (ii) such payment or benefit under this Plan or otherwise is provided to a Participant who is a “specified employee” (within the meaning of Section 409A and as determined pursuant to procedures established by the Company) and (iii) such payment or benefit must be delayed for six months from the Participant’s Date of Termination (or an earlier date) in order to comply with Section 409A(a)(2)(B)(i) of the Code and not cause the Participant to incur any additional tax under Section 409A, then the Company will delay making any such payment or providing such benefit until the expiration of such six month period. Any payment or benefit due upon a termination of the Participant’s employment that represents a “deferral of compensation” within the meaning of Section 409A shall only be paid or provided to the Executive upon a “separation from service” (within the meaning of Treas. Reg. 1.409A-1(h)). If a Participant dies within 6 months following such separation from service, any such delayed payments or benefits shall not be further delayed, and shall be immediately payable to his or her estate in accordance with the applicable provisions of this Plan.

			
	
			
				 (b)
			Notwithstanding anything to the contrary herein, any payment or benefit under Section 4 or 6 or otherwise that is exempt from Section 409A pursuant to Treas. Reg. 1.409A-1(b)(9)(v)(A), (B) or (C) shall be paid or provided to the Participant only to the extent that the expenses are not incurred, or the benefits are not provided, beyond the last day of the second taxable year of the Participant following the taxable year of the Participant in which the “separation from service” occurs; and provided further that such expenses are reimbursed 
		

		 

 

			no later than the last day of the third taxable year following the taxable year of the Participant in which the “separation from service” occurs. For purposes of this Section 8(b), the taxable year of the Participant’s “separation from service” is the year determined in accordance with the Code.

			
	
			
				 (c)
			Except as otherwise expressly provided herein, to the extent any expense reimbursement or the provision of any in-kind benefit under this Plan is determined to be subject to Section 409A, the amount of any such expenses eligible for reimbursement, or the provision of any in-kind benefit, in one calendar year shall not affect the expenses eligible for reimbursement in any other taxable year (except for any life-time or other aggregate limitation applicable to medical expenses), in no event shall any expenses be reimbursed after the last day of the calendar year following the calendar year in which the Participant incurred such expenses, and in no event shall any right to reimbursement or the provision of any in-kind benefit be subject to liquidation or exchange for another benefit.

			
	
			
				 (d)
			For the purposes of this Plan, each payment made pursuant to Section 4(b) or (c) shall be deemed to be separate payments, and amounts payable under Section 4 of this Plan shall be deemed not to be a “deferral of compensation” subject to Section 409A to the extent provided in the exceptions in Treas. Reg. Sections 1.409A-1(b)(4) (“short-term deferrals”) and (b)(9) (“separation pay plans,” including the exception under subparagraph (iii)) and other applicable provisions of Treas. Reg. Section 1.409A-1 through A-6.

			
	
			
				 9.
			Participant Covenants.

			
	
			
				 (a)
			In the performance of the Participant’s duties, the Participant has previously had, and may in the future have, access to confidential records and information, including, but not limited to, development, marketing, purchasing, organizational, strategic, financial, managerial, administrative, manufacturing, production, distribution and sales information, data, specifications and processes presently owned or at any time hereafter developed by the Company or its agents or consultants or used presently or at any time hereafter in the course of its business, that are not otherwise part of the public domain (collectively, the “Confidential Material”). All such Confidential Material is considered secret and has been and/or will be disclosed to the Participants in confidence. By executing a Separation Agreement and Release, a Participant shall agree that:

			
	
			
				 (i)
			the Confidential Material constitutes propriety information of the Company which draws independent economic value, actual or potential, from not being generally known to the public or to other persons who could obtain economic value from its disclosure or use, and that the Company has taken efforts reasonable under the circumstances, of which this Section 9(a) is an example, to maintain its secrecy;

			
	
			
				 (ii)
			except in the performance of a Participant’s duties to the Company, he or she shall not, directly or indirectly for any reason whatsoever, disclose or use any such Confidential Material that (x) has been publicly disclosed or was within the Participant’s possession before its being furnished to him or her by the Company or becomes available to him or her on a nonconfidential basis from a third party (in any of such cases, not due to a breach by the Participant or his or her obligations to the Company or by breach of any other person of a confidential, fiduciary or confidential obligation, the breach of which the Participant knows or reasonably should know), (y) is required to be disclosed by the Participant pursuant to applicable law, and the Participant provides notice to the Company of such requirement as promptly as possible, or (z) was independently acquired or developed by the Participant without violating any of the obligations under this Plan and without relying on Confidential Material of the Company; and

			
	
			
				 (iii)
			All records, files, drawings, documents, equipment and other tangible items, wherever located, relating in any way to the Confidential Material or otherwise to the Company’s business, which a Participant has prepared, used or encountered shall be and remain the Company’s sole and exclusive property and shall be included in the Confidential Material, and, upon a Participant’s termination of employment with the Company, or whenever requested by the Company, he or she shall promptly deliver to the Company any and all of the Confidential Material and copies thereof, not previously delivered to the Company, that may be, or at any previous time has been, in his or her possession or under his or her control.

		 

 

			
	
			
				 (b)
			By executing a Separation Agreement and Release, a Participant shall agree that, for a number of years following his or her Date of Termination equal to the Severance Multiple (except in the case of a Participant whose Severance Multiple is more than 2, in which case the restrictions of this Section 9(b) shall apply for two years following his or her Date of Termination), he or she shall not, in any manner, directly or indirectly (without the prior written consent of the Company): (i) Solicit any Client to transact business with a Competitive Enterprise or to reduce or refrain from doing any business with the Company, (ii) interfere with or damage any relationship between the Company and a Client or (iii) Solicit anyone who is then an employee of the Company (or who was an employee of the Company within the prior 12 months) to resign from the Company or to apply for or accept employment with any other business or enterprise. For purposes of this Plan: (i) “Competitive Enterprise” means any business enterprise that either (A) engages in any activity closely associated with commercial banking or the operation of an institution, the deposits of which are insured by the Federal Deposit Insurance Corporation, in a Restricted Territory (as defined below), or (B) holds a 25% or greater equity, voting or profit participation interest in any enterprise that engages in such a competitive activity; (ii) “Client” means any client or prospective client of the Company to whom the Participant provided services, or for whom the Participant transacted business; and (iii) “Solicit” means any direct or indirect communication of any kind, regardless of who initiates it, that in any way invites, advises, encourages or requests any person to take or refrain from taking any action. Nothing in this Section 9(b), however, shall prohibit a Participant or any Person or entity in which he or she has an interest from placing advertisements in periodicals of general circulation soliciting applications for employment, or from employing any person who answers any such advertisement. A Participant shall not be deemed to violate this Section 9(b) solely by virtue of his or her interest in a Person whose stock is publicly traded if he or she is the owner of not more than 2% of the outstanding shares of any class of stock of such corporation, provided he or she has no active participation in the business of such corporation (other than voting his or her stock) and he or she does not provide services to such corporation in any capacity (whether as an employee, an independent contractor or consultant, a board member, or otherwise).

			
	
			
				 (c)
			Solely in the case of a Participant whose Severance Multiple is more than 2, by his or her executing a Separation Agreement and Release, he or she agrees that, for 18 months following the Date of Termination, he or she shall not directly or indirectly (without the prior written consent of the Company) associate (including as a director, officer, employee, partner, consultant, agent or advisor) with a Competitive Enterprise in a Restricted Territory and in connection with such Participant’s association engage, or directly or indirectly manage or supervise personnel engaged, in any activity:

			
	
			
				 (i)
			that is substantially related to any activity that the Participant was engaged in with the Company during the 12 months before the date of termination of the Participant’s employment,

			
	
			
				 (ii)
			that is substantially related to any activity for which the Participant had direct or indirect managerial or supervisory responsibility with the Company during the 12 months before the Date of Termination, or

			
	
			
				 (iii)
			that calls for the application of specialized knowledge or skills substantially related to those used by the Participant in his or her activities with the Company during the 12 months before the Date of Termination.

		
			For purposes of this Plan, “Restricted Territory” means the geographic area of all counties in which the Company (or its subsidiaries) has a branch. In addition, for the purposes of this Plan, each Participant whose Severance Multiple is more than 2 is part of “executive and management personnel” of the Company within the meaning of C.R.S. § 8-2-113(2).
		

			
	
			
				 (d)
			By a Participant’s acceptance of payments under this Plan, he or she shall be deemed to have acknowledged that violation of Sections 9(a), 9(b) or 9(c) of this Plan would cause the Company irreparable damage for which the Company cannot be reasonably compensated in damages in an action at law, and that therefore, in the event of any breach by him or her of such Sections, the Company shall be entitled to make application to a court of competent jurisdiction for equitable relief by way of injunction or otherwise (without being required to post a bond). This provision shall not, however, be construed as a waiver of any of the rights which the Company may have for damages under this Plan or otherwise, and, except as limited in Section 13(b), all of the Company’s rights and remedies shall be unrestricted.

		 

 

			
	
			
				 10.
			Successors; Binding Agreement.

			
	
			
				 (a)
			The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to unconditionally assume all of the obligations of the Company hereunder. Failure of the Company to obtain such assumption before the effectiveness of any such succession shall constitute Good Reason hereunder and shall entitle the Participant to compensation and other benefits from the Company in the same amount and on the same terms as the Participant would be entitled hereunder if the Participant’s employment were terminated following a Change in Control by reason of a Qualifying Termination, except that for purposes of implementing the foregoing, the date on which any succession becomes effective shall be deemed the Date of Termination.

			
	
			
				 (b)
			The benefits provided under this Plan shall inure to the benefit of and be enforceable by the Participant’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Participant shall die while any amounts would be payable to the Participant hereunder had the Participant continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Plan to such person or persons appointed in writing by the Participant to receive such amounts or, if no person is so appointed, to the Participant’s estate.

			
	
			
				 11.
			Notice of Termination. Any purported termination of a Participant’s employment by the Company, or by a Participant, as the case may be, shall be communicated by written notice of termination to the other party hereto in accordance with Section 12 hereof. For purposes of this Plan, a “notice of termination” shall mean a notice which shall indicate the specific termination provision in this Plan relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Participant’s employment under the provision so indicated. The failure by the Participant or the Company to set forth in such notice any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Participant or the Company hereunder or preclude the Participant or the Company from asserting such fact or circumstance in enforcing the Participant’s or the Company’s rights hereunder.

			
	
			
				 12.
			Notice. For purposes of this Plan, all notices and other communications required or permitted hereunder shall be in writing and shall be deemed to have been duly given when delivered or 5 days after deposit in the United States mail, certified and return receipt requested, postage prepaid, addressed as follows:

		
			If to the Participant: the address listed as the Participant’s address in the Company’s personnel files.
		

		
			If to the Company:
		

		
			Guaranty Bancorp
		

		
			1331 Seventeenth Street, Suite 200
		

		
			Denver, Colorado  80202
		

		
			Attention:  Corporate Secretary
		

		
			or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.
		

			
	
			
				 13.
			Full Settlement; Resolution of Disputes.

			
	
			
				 (a)
			The Company’s obligation to make any payments provided for in this Plan and otherwise to perform its obligations hereunder shall be in lieu and in full settlement of all other severance payments to the Participant under any other severance or employment agreement between the Participant and the Company, and any severance plan of the Company. In no event shall the Participant be obligated to seek other employment or take other action by way of mitigation of the amounts payable to the Participant under any of the provisions of this Plan and, except as provided in the Separation Agreement and Release, such amounts shall not be reduced whether or not the Participant obtains other employment.

		 

 

			
	
			
				 (b)
			Any controversy or claim between the Participant and the Company arising out of or relating to or concerning this Plan (including the covenants contained in Section 9) and any dispute regarding the Participant’s employment or the termination of Participant’s employment or any dispute regarding the application, interpretation or validity of this Plan (each, an “Employment Matter”) will be finally settled by arbitration in Denver County, Colorado and administered by the American Arbitration Association (the “AAA”) under its Commercial Arbitration Rules then in effect. In the event of any conflict between this Plan and the rules of the American Arbitration Association, the provisions of this Plan shall be determinative. If the parties are unable to agree upon an arbitrator, they shall select a single arbitrator from a list of 5 arbitrators designated by the office of the American Arbitrator Association having responsibility for Denver County, Colorado, all of whom shall be retired judges who are actively involved in hearing private cases or members of the National Academy of Arbitrators, and who, in either event, are residents of such forum. If the parties are unable to agree upon an arbitrator from such list, they shall each strike names alternatively from the list, with the first to strike being determined by lot. After each party has used 2 strikes, the remaining name on the list shall be the arbitrator. The AAA’s Commercial Arbitration Rules will be modified in the following ways: (i) each arbitrator will agree to treat as confidential evidence and other information presented to them, (ii) there will be no authority to award punitive damages, (iii) there will be no authority to amend or modify the terms of the Plan and (iv) a decision must be rendered within 10 business days of the parties’ closing statements or submission of post-hearing briefs. A Participant or the Company may bring an action or special proceeding in a state or federal court of competent jurisdiction sitting in Denver County, Colorado to enforce any arbitration award under this Section 13(b).

			
	
			
				 14.
			Survival. The respective obligations and benefits afforded to the Company and the Participant as provided in Sections 4 (to the extent that payments or benefits are owed as a result of a termination of employment that occurs during the term of this Plan) 5, 6, 9, 10(b), 12, 13, 14 and 15 shall survive the termination of this Plan.

			
	
			
				 15.
			GOVERNING LAW; VALIDITY. THE INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF THIS PLAN SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF COLORADO, WITHOUT REGARD TO THE PRINCIPLE OF CONFLICTS OF LAWS, AND APPLICABLE FEDERAL LAWS. 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 OTHER PROVISIONS SHALL REMAIN IN FULL FORCE AND EFFECT.

			
	
			
				 16.
			Term; Amendment and Termination.

			
	
			
				 (a)
			This Plan shall continue in full force and effect until its terms and provisions are completely carried out except that (i) the Board may terminate this Plan at a time that is both before a Change in Control and not during a Change in Control Period and (ii) the Board may terminate this Plan as to future Changes in Control beginning on the second anniversary of the last Change in Control then to occur.

			
	
			
				 (b)
			This Plan may be amended in any respect by the Board so long as the amendment is made at a time that is both before a Change in Control and not during a Change in Control Period and so long as any such amendment does not cause a Participant to incur additional tax or penalties under Section 409A. In addition, the Board may amend this Plan as to future Changes in Control beginning on the second anniversary of the last Change in Control then to occur.

			
	
			
				 (c)
			For the avoidance of doubt, during a Change in Control Period or Termination Period, this Plan shall not be subject to amendment, change, substitution, deletion, revocation or termination in any respect.

			
	
			
				 (d)
			A “Change in Control Period” shall begin on the occurrence of any of (i) the Company (or any Person acting on the Company’s behalf) conducting negotiations to effect a Change in Control and (ii) the Company (or any Person acting on its behalf) executing a letter of intent (whether or not binding) or a definitive agreement to effect a Change in Control and shall end on the earlier of (A) the date of the occurrence of a Change in Control and (B) 90 days after both (x) the Company (or any Person acting on the Company’s behalf) ceases conducting negotiations to effect a Change in Control and (y) any letter of intent (whether or not binding) or a definitive agreement to effect a Change in Control has terminated or expired (other than with respect to provisions 
		

		 

 

			relating to confidentiality or other provisions reasonably determined by the Board to be unrelated to effecting a future Change in Control).

			
	
			
				 17.
			Interpretation and Administration. The Plan shall be administered by the Board. The Board may delegate any of its powers under the Plan to a committee thereof. Unless otherwise provided in this Plan, actions of the Board or such committee shall be taken by a majority vote of its members. All references to the “Board” herein shall be deemed to be references to such delegate, as appropriate. The Board shall have the authority (i) to exercise all of the powers granted to it under the Plan, (ii) to construe, interpret and implement the Plan, (iii) to prescribe, amend and rescind rules and regulations relating to the Plan, (iv) to make all determinations necessary or advisable in administration of the Plan and (v) to correct any defect, supply any omission and reconcile any inconsistency in the Plan. Notwithstanding any other provisions of the Plan to the contrary and to the extent applicable, it is intended that the Plan comply with the requirements of Section 409A, and the Plan shall be interpreted, construed and administered in accordance with this intent, so as to avoid the imposition of taxes and penalties on the Participant pursuant to Section 409A. However, the Company shall have no liability to any Participant, beneficiary or otherwise if the Plan or any amounts paid or payable hereunder are subject to the additional tax and penalties under Section 409A.

			
	
			
				 18.
			Type of Plan. This Plan is intended to be, and shall be interpreted as an unfunded employee welfare plan under Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and Section 2520.104-24 of the Department of Labor Regulations, maintained primarily for the purpose of providing employee welfare benefits, to the extent that it provides welfare benefits, and under Sections 201, 301 and 401 of ERISA, as a plan that is unfunded and maintained primarily for the purpose of providing deferred compensation, to the extent that it provides such compensation, in each case for a select group of management or highly compensated employees.

			
	
			
				 19.
			Severability. If a provision of this Plan shall be held illegal or invalid, the illegality or invalidity shall not affect the remaining parts of this Plan and this Plan shall be construed and enforced as if the illegal or invalid provision had not been included.

			
	
			
				 20.
			Nonassignability. Except as otherwise provided in Section 10(b), benefits under the Plan may not be sold, assigned, transferred, pledged, anticipated, mortgaged, or otherwise encumbered, transferred, hypothecated, or conveyed in advance of actual receipt the amounts, if any, payable hereunder, or any part thereof by the Participant.

			
	
			
				 21.
			Effective Date. The Plan was adopted and became effective as of December 11, 2006, was amended and restated as of May 7, 2007, January 1, 2009, December 31, 2012 and February 3, 2015 and was further amended and restated effective as of May 15, 2015.

		
			 
		

		

		

		 

 

		Schedule A
		

		
			 
		

			
					
						Employee

					
					
						 

					
					
						Severance Multiple

					
					
						 

					
					
						Participation Period

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						Paul W. Taylor

					
					
						 

					
					
						3

					
					
						 

					
					
						Until removed by the Board in accordance with Section 3.

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						Michael B. Hobbs

					
					
						 

					
					
						2

					
					
						 

					
					
						Until removed by the Board in accordance with Section 3.

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						Cathy P. Goss

					
					
						 

					
					
						2

					
					
						 

					
					
						Until removed by the Board in accordance with Section 3.

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						Christopher G. Treece

					
					
						 

					
					
						2

					
					
						 

					
					
						Until removed by the Board in accordance with Section 3.

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						Michael J. Noesen

					
					
						 

					
					
						1

					
					
						 

					
					
						Until removed by the Board in accordance with Section 3.

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						Michael J. DiPetro

					
					
						 

					
					
						1

					
					
						 

					
					
						Until removed by the Board in accordance with Section 3.

				

		
			 
		

		
			 
		

		
			 
		

		

		

		 

 

		Schedule B
		

		
			FORM OF CIC SEPARATION AGREEMENT AND RELEASE
		

		
			(HEREIN “AGREEMENT”)
		

		
			In connection with the termination of your employment by Guaranty Bancorp (the “Company”), effective _____________, 20__, and in accordance with the terms and conditions of the Guaranty Bancorp Change In Control Severance Plan, as amended and restated effective May 15, 2015 and as further amended from time to time (the “Plan”), the Company agrees to provide you, contingent upon your execution of this Agreement, with the following severance payment and benefits:
		

		
			□[description of severance payment and benefits to be inserted]
		

		
			In consideration of the payment and benefits set forth above, you agree knowingly and voluntarily as follows:
		

			
	
			
				 1.
			

			
	
			
			You knowingly and voluntarily waive and release forever whatever claims you ever had, now have or hereafter may have against the Company and any subsidiary or affiliate of the Company, any of their successors or assigns and any of their present and former employees, directors, officers and agents (collectively referred to as “Releasees”), based upon any matter, occurrence or event existing or occurring before the execution of this Agreement, including anything relating to your employment with the Company and any of its subsidiaries or affiliates or to the termination of such employment or to your status as a shareholder or creditor of the Company.

		
			This release and waiver includes but is not limited to any rights or claims under United States federal, state or local law and the national or local law of any foreign country (statutory or decisional), for wrongful or abusive discharge, for breach of any contract, for misrepresentation, for breach of any securities laws, or for discrimination based upon race, color, ethnicity, sex, age, national origin, religion, disability, sexual orientation, or any other unlawful criterion or circumstance, including rights or claims under the Age Discrimination in Employment Act of 1967 (“ADEA”)(except that you do not waive ADEA rights or claims that may arise after the date of this Agreement).
		

			
	
			
				 2.
			

			
	
			
			You agree never to institute any claim, suit or action at law or in equity against any Releasee in any way by reason of any claim you ever had, now have or hereafter may have relating to the matters described in the two preceding paragraphs.

			
	
			
				 3.
			

			
	
			
			The payment and benefits described herein shall be in lieu of any and all other amounts to which you might be, are now or may become entitled from the Company, its subsidiaries and affiliates and, without limiting the generality of the foregoing, you hereby expressly waive any right or claim that you may have or assert to payment for salary, bonuses, medical, dental or hospitalization benefits, life insurance benefits or attorneys’ fees; provided that notwithstanding any other provision of this Agreement, you do not waive any of your rights and the Company shall comply with its obligations with respect to continuation coverage requirements under Section 4980B of the Internal Revenue Code of 1986, as amended (commonly referred to as “COBRA”).

			
	
			
				 4.
			

			
	
			
			You hereby expressly agree to comply with the restrictions on your conduct set forth in Section 9 of the Plan for the periods applicable to you (as if such Section 9 were directly incorporated in this Agreement). You acknowledge that your compliance with Section 9 of the Plan is a material condition to the Company providing you with the payment and benefits described herein and that the Company would not have agreed to provide such payment or benefits absent your agreement. You also acknowledge that Section 9 of the Plan limits your ability to earn a livelihood in a Competitive Enterprise (as defined in the Plan) and your relationships with Clients (as defined in 
		

		 

 

			the Plan). You acknowledge, however, that complying with Section 9 of the Plan will not result in severe economic hardship for you or your family.

		
			[Your signature below will also constitute confirmation that (i) you have been given at least 21 days within which to consider this release and its consequences, (ii) you have been advised before signing this Agreement to consult, and have consulted, with an attorney of your choice, and (iii) you have been advised that you may revoke this Agreement at any time during the 7 day period immediately following the date you signed this letter.] [Subject to revision based on circumstances of participant, and in accordance with applicable law]
		

		
			This Agreement shall be governed by the laws of State of Colorado.
		

		
			Please confirm by returning to _________________ the enclosed copy of this Agreement, signed in the place provided, that you have knowingly and voluntarily decided to accept and agree to the foregoing.
		

		
			 
		

			
					
						 

					
					
						GUARANTY BANCORP

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						Name:

				
	
					
						 

					
					
						Title:

				
	
					
						AGREED AND ACKNOWLEDGED:

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						Name:

					
					
						 

					
					
						 

				
	
					
						Date:PKY-2015.05.14-8K-EX 10.1 2015 EQUITY PLAN

EXHIBIT 10.1

PARKWAY PROPERTIES, INC. 
AND PARKWAY PROPERTIES LP
2015 OMNIBUS EQUITY INCENTIVE PLAN

1.    Introduction. 
Parkway Properties, Inc. (the “Company”) established this Parkway Properties, Inc. and Parkway Properties LP 2015 Omnibus Equity Incentive Plan (the “Plan”), effective as of the Amendment Date (as defined below), subject to approval of the Plan by the Company’s shareholders at the first annual meeting of the shareholders occurring after the Amendment Date (the “Annual Meeting Date”).  The Plan is an amendment and restatement of the Parkway Properties, Inc. and Parkway Properties LP 2013 Omnibus Equity Incentive Plan (the “Prior Plan”).  Following the Annual Meeting Date, any awards granted under the Prior Plan will be subject to the terms and conditions of the Plan, except to the extent that the terms and conditions of the Plan are inconsistent with the terms and conditions of such awards.  
2.    Purpose.
The purposes of the Plan are to promote the growth and success of the Company and Parkway Properties LP (the “Partnership”) by aligning the interests of Employees, Directors, and Consultants with those of the Company’s shareholders and to attract, retain, and reward Employees, Directors, and Consultants.  To serve these purposes, the Plan offers equity-based incentive awards.
3.    Definitions.  
As used in this Plan:
(a)    “Amendment Date” shall mean the date on which the Board adopts this Plan, subject to approval of the Plan by the Company’s shareholders on the Annual Meeting Date.

(b)    “Award” shall mean a grant under the Plan of Options (either Incentive Stock Options or Nonstatutory Stock Options), Stock Appreciation Rights, Restricted Shares, Restricted Share Units, Profits Interest Units, Dividend Equivalents, and other Share-based awards (as described in Section 12).

(c)    “Award Agreement” shall mean a written agreement entered into between the Company and a Participant or other documentation issued by the Company, in either case setting forth the terms and conditions applicable to an Award granted under the Plan.  An Award Agreement shall be subject to the terms of the Plan.

(d)    “Board of Directors” or “Board” shall mean the Board of Directors of the Company.

(e)    “Cause” shall mean, with respect to a Participant, unless otherwise provided in an applicable agreement between such Participant and the Company, the Partnership, or a Subsidiary, (A) the Participant’s continued failure to perform material responsibilities and 

duties toward the Company (other than any such failure resulting from the Participant’s incapacity due to physical or mental illness); (B) the Participant’s engaging in willful or reckless conduct that is demonstrably injurious to the Company monetarily or otherwise; (C) the Participant’s conviction of, or pleading guilty or nolo contendere to, a felony; or (D) the Participant’s commission or omission of any act that is materially inimical to the best interests of the Company and that constitutes on the part of the Participant common law fraud or malfeasance, misfeasance, or nonfeasance of duty; provided, however, that Cause shall not include the Participant’s lack of professional qualifications.  For purposes of this Plan, an act, or failure to act, on the Participant’s part shall be considered “willful” or “reckless” only if done, or omitted, by the Participant not in good faith and without reasonable belief that the action or omission was in the best interest of the Company.

(f)    “Change in Control” of the Company shall mean and shall be deemed to have occurred if (A) any person (as such term is used in Section 13(d) and 14(d) of the Exchange Act) is or becomes a beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing forty-five percent (45%) or more of the combined voting power of the Company’s then outstanding securities; or (B) the Company closes on a merger or consolidation with any other corporation, other than a merger or consolidation that would result in the voting securities of the Company outstanding immediately before the merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of such surviving entity) more than fifty-five percent (55%) of the combined voting power of the voting securities of the Company or of such surviving entity outstanding immediately after such merger or consolidation; or (C) the Company closes on an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets; or (D) there has been a change in fifty percent (50%) or more of the voting power of the members of the Board in any rolling twelve (12)-month period.

(g)    “Committee” shall mean a committee of the Board of Directors of the Company, which committee shall be composed of those members of the Compensation Committee of the Board of Directors who are (i) non-employee directors, as that term is defined in Rule 16b-3 under the Exchange Act, (ii) outside directors, as that term is defined for the purposes of Internal Revenue Code section 162(m), and (iii) for so long as the Shares are listed on the New York Stock Exchange, independent directors, as that term is defined in Section 303A of the New York Stock Exchange Listed Company Manual; provided that, should there be fewer than two (2) members of the Compensation Committee who are non-employee directors, outside directors, and independent directors, the Committee shall be composed of two (2) or more members of the Board of Directors designated by the Board who are non-employee directors, outside directors, and independent directors, including anyone who is a member of the Compensation Committee.

(h)    “Common Shares” or “Shares” shall mean the shares of common stock, $0.001 par value, of the Company.

(i)    “Consultant” shall mean any consultant or advisor of the Company, the Partnership, or any Subsidiary who qualifies as a consultant or advisor under the applicable rules of the Form S-8 Registration Statement.

(j)    “Director” shall mean a member of the Board of Directors of the Company.

2

(k)    “Dividend Equivalent” shall mean a right to receive the equivalent value (in cash or Shares) of dividends paid on Shares, awarded under Section 12(b) hereof.

(l)    “Employee” shall mean, for Awards other than Incentive Stock Options, an employee of the Company, the Partnership, or a Subsidiary, and for Incentive Stock Options, an employee of the Company or a subsidiary (within the meaning of Code section 424).  

(m)    “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, or any successor thereto.

(n)    “Fair Market Value” of a Common Share shall mean, on a given date: 
(i)    If the Common Shares are (A) listed on any established securities exchange (such as the New York Stock Exchange, the NASDAQ Global Market, and the NASDAQ Global Select Market), (B) listed on any national market system, or (C) listed, quoted, or traded on any automated quotation system, the Fair Market Value shall be the closing sales price for a Share as quoted on such exchange or system for such date or, if there is no closing sales price for a Share on the date in question, the closing sales price for a Share on the last preceding date for which such quotation exists, as reported in The Wall Street Journal or such other source as the Committee deems reliable;
(ii)     If the Common Shares are not listed on an established securities exchange, national market system, or automated quotation system, but the Common Shares are regularly quoted by a recognized securities dealer, the Fair Market Value shall be the average of the mean of the high bid and low asked prices for such date or, if there are no high bid and low asked prices for a Share on such date, the high bid and low asked prices for a Share on the last preceding date for which such information exists, as reported in The Wall Street Journal or such other source as the Committee deems reliable; or
(iii)     If the Common Shares are neither listed on an established securities exchange, national market system, or automated quotation system nor regularly quoted by a recognized securities dealer, the Fair Market Value shall be established by the Committee in good faith by the reasonable application of a reasonable valuation method, in a manner consistent with Code section 409A.
(o)    “Family Member” shall mean, with respect to any Participant as of any date of determination, (i) a person who is a spouse, former spouse, child, stepchild, grandchild, parent, stepparent, grandparent, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother, sister, brother-in-law, or sister-in-law, including adoptive relationships, of the Participant; (ii) any person sharing the Participant’s household (other than a tenant or employee); (iii) a trust in which any one or more of the persons specified in clauses (i) and (ii) above (and such Participant) own more than fifty percent (50%) of the beneficial interest; (iv) a foundation in which any one or more of the persons specified in clauses (i) and (ii) above (and such Participant) control the management of assets; and (v) any other entity in which one or more of the persons specified in clauses (i) and (ii) above (and such Participant) own more than fifty percent (50%) of the voting interests. 

3

(p)    “Full Value Award” shall mean any Award that is settled in Shares other than (i) an Option or (ii) a Stock Appreciation Right.

(q)    “Good Reason” shall mean, with respect to a Participant, unless otherwise provided in an applicable agreement between such Participant and the Company, the Partnership, or a Subsidiary, the occurrence of any of the following:

(i)    the material diminution, following a Change in Control, of the Participant’s authority, duties, or responsibilities;

(ii)    a material diminution by the Company in the Participant’s base salary in effect immediately before a Change in Control; or

(iii)    a change of the Participant’s principal place of employment to a location more than fifty (50) miles from such principal place of employment as of immediately before a Change in Control.

A termination for Good Reason must be communicated by the Participant to the Company by written notice that specifies the event or events claimed to provide a basis for termination for Good Reason; provided that the Participant’s written notice must be tendered within ninety (90) days of the first occurrence of such event or events and provided further that the Company shall have failed to remedy such act or omission within thirty (30) days following its receipt of such notice and the Participant actually terminates Service within fourteen (14) days after the Company’s failure to timely remedy such act or omission.
(r)    “Incentive Stock Option” or “ISO” shall mean an incentive stock option as defined in Internal Revenue Code section 422.

(s)    “Internal Revenue Code” or “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, or any successor thereto. 

(t)    “Misconduct” shall mean conduct of a Participant that, in the Committee’s judgment, constitutes:

(i)    a commission of an act of theft, embezzlement, fraud, dishonesty, or other criminal act, harmful to the Company, the Partnership, or a Subsidiary,

(ii)    a breach of a fiduciary duty owed to the Company, the Partnership, or a Subsidiary,

(iii)    a deliberate and serious disregard of rules of the Company, the Partnership, or a Subsidiary,

(iv)    an unauthorized disclosure of any of the trade secrets or confidential information of the Company, the Partnership, or a Subsidiary, 

(v)    competition with the Company, the Partnership, or a Subsidiary, or

4

(vi)    “cause” as defined in any other agreement between the Company, the Partnership, or a Subsidiary, on the one hand, and such Participant, on the other hand.

(u)    “Non-Employee Director” shall mean a Director who is not also an Employee.

(v)    “Nonstatutory Stock Option” shall mean an Option that is not an Incentive Stock Option.

(w)    “Option” shall mean an option awarded pursuant to Section 8 to purchase a Common Share and may refer to an Incentive Stock Option or a Nonstatutory Stock Option.

(x)    “Participant” shall mean an Employee, Director, or Consultant who holds an outstanding Award under the Plan.

(y)    “Partnership Agreement” shall mean the Amended and Restated Agreement of Limited Partnership of Parkway Properties LP, as amended from time to time.

(z)    “Performance Goal” shall mean an objective test  of performance based on one or more of the following criteria: (i) revenue; (ii) earnings; (iii) net earnings; (iv) operating earnings; (v) earnings before taxes; (vi) earnings before income tax expense, interest expense, and depreciation and amortization expense (EBITDA); (vii) earnings per Share; (viii) stock price; (ix) costs; (x) return on equity; (xi) return on assets; (xii) assets management; (xiii) asset quality; (xiv) asset growth; (xv) budget achievement; (xvi) net operating income (NOI); (xvii) average occupancy; (xviii) year-end occupancy; (xix) funds from operations (FFO); (xx) adjusted funds from operations (AFFO); (xxi) funds available for distribution (FAD); (xxii) dividend or FAD payment; (xxiii) total shareholder return on an absolute basis or a relative basis measured against comparable peers or a real estate index; (xxiv) leverage ratios; (xxv) capital expenditures; (xxvi) customer satisfaction survey results; (xxvii) property operating expense savings; (xxviii) design, development, permitting, or other progress on designated properties; (xxix) third-party fee generation; (xxx) leasing goals; (xxxi) goals relating to mergers and acquisitions or divestitures, targeted financing, or capital market objectives; (xxxii) lease retention; (xxxiii) liability management; (xxxiv) credit management; (xxxv) certain levels of operating expense; (xxxvi) growth in assets, unit volume, revenue, sales, or market share; or (xxxvii) strategic business criteria consisting of one or more objectives based on meeting specified revenue goals, market penetration goals, geographic business expansion goals, or cost targets.  Performance Goals may differ from Participant to Participant and Award to Award and may be established for the Company as a whole, on a per Share basis, or for the Company’s various properties, groups, divisions, or Subsidiaries, or the Partnership, or a combination of them.  Performance Goals may be based on absolute performance or on performance relative to performance of unrelated businesses specified by the Committee, on other external measures of the selected performance criteria, or on comparison to any prior period or to budget or target.  All calculations and financial accounting matters relevant to this Plan and to which generally accepted accounting principles (GAAP) apply shall be determined in accordance with GAAP as in effect on the date of an Award, except as otherwise specified by the Committee.  For example, the Committee may specify that the measurement of performance shall include or exclude particular items, such as losses from discontinued operations, debt prepayment penalties, extraordinary gains or losses, the cumulative effect of accounting changes, acquisitions or divestitures, or nonrecurring gains or losses.

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(aa)    “Permanent Disability” shall mean a medically determinable physical or mental impairment that may be expected to result in death or to last at least a year and that renders a Participant incapable of performing that Participant’s duties with the Company.  A determination of Permanent Disability shall be made by the Committee in a uniform, nondiscriminatory manner on the basis of medical evidence.  Notwithstanding the foregoing, in the case of a determination that would accelerate payment of Restricted Share Units or other Awards or amounts that are deferred compensation subject to Code section 409A, a Participant shall be considered to have a Permanent Disability only if the Participant is “disabled” within the meaning of Code section 409A or the regulations issued under that section.

(bb)    “Profits Interest Unit” or “LTIP Unit” shall mean, to the extent authorized by the Partnership Agreement (as either a “Profits Interest Unit” or an “LTIP Unit”), a unit of the Partnership that is granted pursuant to Section 12(c) and is intended to constitute a “profits interest” within the meaning of the Code.

(cc)    “Restricted Period” shall mean the period described in Section 10(b)(i) or Section 11(b)(i).

(dd)    “Restricted Share” shall mean an Award granted pursuant to Section 10.

(ee)    “Restricted Share Unit” or “RSU” shall mean an Award granted pursuant to Section 11.

(ff)    “Service” shall mean service as an Employee, Director, or Consultant to the Company, the Partnership, or a Subsidiary.  Unless otherwise stated in the applicable Award Agreement, a Participant’s change in position or duties shall not result in interrupted or terminated Service, so long as such Participant continues to be an Employee, a Director, or  a Consultant to the Company, the Partnership, or a Subsidiary.  Subject to the preceding sentence, whether a termination of Service shall have occurred for purposes of the Plan shall be determined by the Committee, which determination shall be final, binding, and conclusive.  

(gg)    “Stock Appreciation Right” or “SAR” shall mean an Award granted pursuant to Section 9.

(hh)    “Subsidiary” shall mean a corporation, partnership, joint venture, or other entity in which the Company has an equity, profit, or voting interest of at least fifty percent (50%).

4.    Administration.  
The Committee shall administer the Plan.  The Committee shall have all the powers vested in it by the terms of the Plan.  The Committee shall have full authority to interpret the Plan and Award Agreements; to prescribe, amend, and rescind rules and regulations relating to the Plan; and to make any determinations it finds necessary or advisable for the administration of the Plan.  The Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any Award Agreement in the manner and to the extent the Committee deems desirable.  Any decision of the Committee in the administration and interpretation of the Plan shall be in its 

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sole discretion and shall be final, binding, and conclusive on all persons.  The Committee may act only by a majority of its members in office, except that:
(a)    The Committee may authorize any one or more of its members or any officer of the Company to execute and deliver documents on behalf of the Committee.

(b)    The Committee may delegate ministerial duties and authority to interpret the Plan and respond to claims to a Senior Vice President or an Executive Vice President, provided that the Committee may not delegate authority to (i) grant or amend Awards that are (A) held by individuals who are subject to Section 16 of the Exchange Act, (B) intended to qualify for the performance-based pay exception under Code section 162(m), or (C) held by officers of the Company (or Directors) to whom authority to grant or amend Awards has been delegated, or (ii) with respect to the certification of the satisfaction of Performance Goals.

No Committee member and no delegate of the Committee shall be liable for any determination made in good faith with respect to the Plan, an Award, or a Participant.

5.    Shares Subject to Plan and Limits on Awards. 

(a)    Shares Available.  Subject to adjustment pursuant to Section 14, the maximum number of Common Shares with respect to which Awards may be granted under the Plan is the sum of (i) two million five hundred thousand (2,500,000) (the “Share Increase”), plus (ii) the number of Common Shares available for future awards under the Prior Plan as of the Annual Meeting Date, plus (iii) the number of Common Shares related to awards outstanding under the Prior Plan as of the Annual Meeting Date that thereafter terminate by expiration or forfeiture, cancellation, or otherwise without the issuance of such Common Shares (the “Share Limit”); provided, however, that with respect to the Share Increase, the maximum aggregate number of Common Shares available for issuance under the Plan in settlement of (x) any Full Value Award shall be two million (2,000,000) and (y) any Awards that are not Full Value Awards shall be five hundred thousand (500,000); provided, further, that the shares that become available for issuance under the Plan pursuant to Section 5(a)(ii) and 5(a)(iii) above shall only be available for Full Value Awards or Awards that are not Full Value Awards to the same extent as under the Prior Plan.  Any Shares distributed pursuant to an Award may consist, in whole or in part, of authorized and unissued Common Shares or Common Shares purchased on the open market.

(b)    Limits on Awards.  Subject to adjustment pursuant to Section 14, the following additional limits shall apply to Awards under the Plan:

(i)    The maximum aggregate number of Common Shares that may be issued pursuant to Incentive Stock Options granted under the Plan is five hundred thousand (500,000).

(ii)    The maximum number of Common Shares that may be made subject to Options or SARs granted under the Plan to any Participant during any one calendar year is five hundred thousand (500,000).

(iii)    The maximum number of Common Shares that may be made subject to Awards, other than Options or SARs, granted under the Plan that are Share-denominated and are 

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either Share- or cash-settled to any Participant during any one calendar year is one million (1,000,000).

(c)    Share Usage.  Shares subject to an Award shall be counted as used for purposes of the Share Limit as of the date of grant.  With respect to SARs, the number of Shares subject to an Award of SARs will be counted against the aggregate number of Common Shares available for issuance under the Plan in settlement of Options and Stock Appreciation Rights regardless of the number of Shares actually issued to settle the SAR upon exercise.  The target number of Shares issuable under an Award that vests based upon the attainment of Performance Goals or other performance-based objectives shall be counted against the aggregate number of Common Shares available for issuance under the Plan as of the date of grant, but such number shall be adjusted to equal the actual number of Shares issued upon settlement of such Award to the extent different from such target number of Shares.  If any Shares subject to an Award are forfeited or expire or such Award is settled for cash (in whole or in part), the Shares subject to such Award shall, to the extent of such forfeiture, expiration, or cash settlement, again be available for future grants of Awards under the Plan.  Notwithstanding anything to the contrary contained herein, the following Shares shall not be added to the Share Limit and shall not be available for future grants of Awards: (i) Shares tendered by a Participant or withheld by the Company in payment of the exercise price of an Option; (ii) Shares tendered by a Participant or withheld by the Company to satisfy any tax withholding obligation with respect to an Option or a Stock Appreciation Right; (iii) Shares subject to a Stock Appreciation Right that are not issued in connection with the Share-settlement of the Stock Appreciation Right on exercise thereof; and (iv) Shares purchased on the open market with the cash proceeds from the exercise of Options.  Any Shares repurchased by the Company at the same price paid by the Participant, so that such Shares are returned to the Company, shall again be available for future grants of Awards.  The payment of Dividend Equivalents in cash in conjunction with any outstanding Awards shall not be counted against the Shares available for issuance under the Plan.  Notwithstanding the provisions of this Section 5(c), no Shares may again be optioned, granted, or awarded if such action would cause an ISO to fail to qualify as an incentive stock option under section 422 of the Code.

6.    Eligibility. 
Employees, Directors, and Consultants shall be eligible to receive Awards under the Plan, provided that no Employee, Director, or Consultant shall be entitled to an Award except as determined by the Committee or as provided by any Non-Employee Director Compensation Policy described in Section 13.
7.    Awards. 

(a)    Award Agreements.  The Committee shall set forth the terms of each Award in an Award Agreement.  An Award Agreement may contain any provision approved by the Committee, subject to the terms of the Plan.  An Award Agreement may make provision for any matter that is within the discretion of the Committee or may reserve for the Committee discretion to approve or authorize any action with respect to the Award.

(b)    Nonuniform Determinations.  The Committee’s determinations under the Plan or Award Agreements, including, without limitation, the selection of Participants to receive 

8

Awards; the type, form, amount, and timing of Awards; and the terms of specific Award Agreements, need not be uniform, regardless of whether Participants are similarly situated.

(c)    Qualification for Section 162(m) Exception.

(i)    Committee’s Certification of Satisfaction of Performance Goals.  If the exercisability, payment, or vesting of an Award is conditioned upon the satisfaction of Performance Goals, and the Award is intended to qualify for the exception under Code section 162(m) for performance-based pay, the condition shall not be considered satisfied, and the Award shall not be exercisable, payable, or vest, as applicable, unless the Committee certifies that the Performance Goal has been satisfied.

(ii)    Satisfaction of Other Requirements.  To the extent an Award is intended to qualify for the exception under Code section 162(m) for performance-based pay, the Committee shall make such provisions in Award Agreements and follow such procedures as may be required to satisfy the conditions of the exception.  By way of example, the Committee shall establish any Performance Goal associated with such an Award by the time within the performance period required for such exception, and the payment terms for such an Award shall conform to the requirements of the exception.

(d)    Discretion.  The Committee shall have no discretion to increase the amount of an outstanding Award but may reserve discretion to decrease the amount of an outstanding Award or the extent to which it is exercisable or payable.

(e)    Provisions Governing All Awards.  All Awards will be subject to the following provisions:

(i)    Transferability.  Except for transfers pursuant to Section 8(b)(vi) or Section 9(b)(v), an Award shall not be transferable, other than by will or the laws of descent and distribution.  Awards requiring exercise shall be exercisable during the lifetime of a Participant only by the Participant or, in the event the Participant becomes legally incompetent, by the Participant’s guardian or legal representative.

(ii)    Continued Service Rights.  Neither the adoption of the Plan nor the grant of an Award shall confer on a Participant the right to continued Service with the Company, the Partnership, or a Subsidiary, nor shall it interfere with the right of the Company, the Partnership, or a Subsidiary to terminate a Participant’s Service at any time for any reason, with or without Cause.

(f)    Prohibition on Repricing of Options and Stock Appreciation Rights.  Except for adjustments pursuant to Section 14, the exercise price of an Option or a Stock Appreciation Right may not be repriced.  For purposes of this Section 7(f), repricing means any of the following or any other action that has the same effect:

(i)    reduction of the exercise price after the grant of the Option or Stock Appreciation Right;

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(ii)    any other action that is treated as a repricing under generally accepted accounting principles; or

(iii)    cancellation of an Option or Stock Appreciation Right when its exercise price exceeds the Fair Market Value of the underlying Common Shares, in exchange for cash or another Option, Stock Appreciation Right, or other Award, unless the cancellation and exchange occur in connection with a merger, acquisition, spin-off, or other similar corporate transaction.

(g)    Misconduct.  Should the Committee determine that a Participant has committed Misconduct, then the Participant shall forfeit all rights under outstanding Awards and all further benefits under or attributable to the Plan, so neither the Participant nor his estate, successors, or beneficiaries shall be entitled to exercise outstanding Options and Stock Appreciation Rights; become vested in Restricted Shares, Restricted Share Units, Profits Interest Units, Dividend Equivalents, or other Awards; be paid any Shares or amounts remaining to be paid upon settlement of an Award or due under a deferred payment arrangement with respect to an Award; or otherwise be entitled to any further benefit under or attributable to the Plan, any Award, or any Award Agreement.  Before making such a determination, the Committee shall give the Participant a reasonable opportunity to be heard.

(h)    Recoupment of Awards.  

(i)    The Committee may provide in an Award Agreement or in a policy applicable to an Award under this Plan that, under conditions specified in the Award Agreement or policy, the Participant shall forfeit all rights under the Award and all further benefits under or attributable to the Award or the Plan, and the Participant shall be obliged to pay back or return to the Company amounts or Shares previously paid, distributed, or vested under the Award, including dividends and Dividend Equivalents.  Such conditions may include, by way of illustration and not by way of limitation, the occurrence of an error in financial statements that results in the payment of a greater amount of performance-based compensation than would have been paid based on correct financial statements.  

(ii)    All Awards (including any proceeds, gains, or other economic benefit actually or constructively received by the Participant upon any receipt or exercise of any Award or upon the receipt or resale of any Shares underlying the Award) shall be subject to the provisions of any claw-back policy implemented by the Company, including without limitation, any claw-back policy adopted to comply with the requirements of applicable law, including without limitation the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or regulations promulgated thereunder, to the extent set forth in such claw-back policy and/or in the applicable Award Agreement.

(iii)    This Section 7(h) and Section 7(g) shall be construed independently of each other; one shall not limit the application of the other.

(i)    Share Issuance/Book Entry.  Notwithstanding any provision of the Plan to the contrary, the ownership of the Common Shares issued under the Plan may be evidenced in such a manner as the Committee, in its discretion, deems appropriate, including, without limitation, book-entry or direct registration or the issuance of one or more certificates.

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8.    Options.  

(a)    Option Grants.  The Company shall grant Options to Participants under the Plan in such number, upon such terms, and at such times as the Committee shall determine.  

(b)    Terms of Options.  The Award Agreement for an Option shall set forth such terms and conditions as the Committee shall determine and as are consistent with the Plan, including the following:

(i)    Exercise Price.  The Committee shall determine the exercise price of each Common Share subject to an Option, which exercise price shall not be less than the Fair Market Value of a Share on the date the Option is granted.  

(ii)    Exercise Period.  An Option may be exercised in whole or in part from time to time during such period as the Award Agreement shall specify, provided that no Option shall be exercisable more than ten (10) years after the date of the grant of the Option.

(iii)    Payment of Price.  The exercise price of each Share as to which an Option is exercised must be paid in full at the time of exercise.  The Committee may, in its discretion, provide in an Award Agreement that payment of the exercise may be made:

(1)    in cash;

(2)    by tender of Common Shares owned by the Participant valued at Fair Market Value as of the date of exercise; 

(3)    in Common Shares otherwise issuable to the Participant upon exercise of the Option valued at Fair Market Value as of the date of exercise (“net exercise”);

(4)    in such other form of consideration as the Committee deems appropriate; or

(5)    in a combination of cash, Shares (whether then owned or issuable on exercise), and such other consideration as the Committee deems appropriate.

(iv)    Conditions on Exercise.  An Option shall be exercisable at such times and subject to such restrictions and conditions as the Committee shall determine.  The Committee may in its discretion accelerate or waive any condition applicable to the exercise of an Option.

(v)    Termination of Service.  The Award Agreement shall specify whether and, if so, the extent to which an Option shall remain exercisable after the termination of the Participant’s Service, whether by death or otherwise, provided that nothing in this Section 8(b)(v) shall authorize the exercise of an Option later than ten (10) years after the date of the grant of the Option.

(vi)    Family Transfers.  The Committee may, in the original Award Agreement or an amendment thereto, specify that a Participant may transfer, not for value, all or part of a Nonstatutory Stock Option to any Family Member.  For the purpose of this Section 8(b)(vi), a “not 

11

for value” transfer is a transfer which is (A) a gift; (B) a transfer under a domestic relations order in settlement of marital property rights; or (C) unless applicable laws do not permit such transfer, a transfer to an entity in which more than fifty percent (50%) of the voting interests are owned by Family Members (and/or the Participant) in exchange for an interest in such entity.  Following a transfer under this Section 8(b)(vi), any such Nonstatutory Stock Option shall continue to be subject to the same terms and conditions as were applicable immediately prior to such transfer (including without limitation the provisions of Section 8(b)(v) relating to termination of Service as applied with respect to the original Participant), and Shares acquired pursuant to the Nonstatutory Stock Option shall be subject to the same restrictions with respect to transfer of such Shares as would have applied to the Participant.  Subsequent transfers of transferred Nonstatutory Stock Options shall be prohibited except to Family Members of the original Participant in accordance with this Section 8(b)(vi) or by will or the laws of descent and distribution.  

(vii)    No Voting or Dividend Rights.  An Option shall carry with it no voting or dividend or other rights associated with Common Share ownership until the Shares subject thereto are fully paid and issued to such Participant or other person.  In addition, no Dividend Equivalents shall be payable with respect to Options.

(viii)    Incentive Stock Option or Nonstatutory Stock Option.  The Award Agreement for an Option granted to an Employee shall state whether any part of the Option is intended to be an Incentive Stock Option.

(c)    Additional Terms of Incentive Stock Options.  An Incentive Stock Option may be granted only to an Employee of the Company or a subsidiary (within the meaning of Code section 424) and shall be subject to the following additional terms and conditions:

(i)    10 Percent Shareholder.  The exercise price of each Common Share subject to an Incentive Stock Option granted to an Employee who, at the time the Option is granted, owns (directly and within the meaning of Code section 424(d)) Shares possessing more than ten percent (10%) of the combined voting power of all classes of Shares of the Company, shall not be less than one hundred ten percent (110%) of the Fair Market Value of a Share on the date the Option is granted, and the Option shall not be exercisable more than five (5) years after the date of grant.

(ii)    ISO Limit.  To the extent the aggregate Fair Market Value (determined as of the date an Option is granted) of the Common Shares for which an Employee is granted Options designated as Incentive Stock Options first exercisable in any calendar year (under this Plan and under all plans of the Company and its Subsidiaries) exceeds $100,000, the Option or the lesser excess part shall be treated as a Nonstatutory Stock Option.

(iii)    Disqualified Disposition.  If a Participant disposes of Common Shares acquired pursuant to the exercise of an Incentive Stock Option in a disqualifying disposition within the time periods identified in Code section 422, the Participant shall notify the Company of such disposition and provide the Company with information as to the date of disposition, sales price, number of Shares involved, and any other information about the disposition that the Company may reasonably request.

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9.    Stock Appreciation Rights. 

(a)    Grant of Stock Appreciation Rights.  A Stock Appreciation Right shall entitle a Participant to receive from the Company, on the exercise date of the SAR, with respect to each Share for which the SAR is exercised, an amount equal to any excess of the Fair Market Value of a Share on the exercise date over the exercise price of the SAR.  The Company shall grant SARs to Participants under the Plan in such number, upon such terms, and at such times as the Committee shall determine.  

(b)    Terms of Stock Appreciation Rights.  The Award Agreement for a Stock Appreciation Right shall set forth  such terms and conditions as the Committee shall determine and as are consistent with the provisions of the Plan, including the following:

(i)    Exercise Price.  The Committee shall determine the exercise price of each Common Share subject to the Stock Appreciation Right, which price shall not be less than the Fair Market Value of a Common Share on the date the SAR is granted.

(ii)    Exercise Period.  A Stock Appreciation Right may be exercised in whole or in part from time to time during such period as the Award Agreement shall specify, provided that no SAR shall be exercisable more than ten (10) years after the date of the grant of the SAR.

(iii)    Conditions on Exercise.  A Stock Appreciation Right shall be exercisable at such times and subject to such restrictions and conditions as the Committee shall determine.  The Committee may in its discretion accelerate or waive any condition applicable to the exercise of a SAR.
        
(iv)    Termination of Service.  The Award Agreement shall specify whether and, if so, the extent to which a Stock Appreciation Right shall remain exercisable after the termination of the Participant’s Service, whether by death or otherwise, provided that nothing in this Section 9(b)(iv) shall authorize the exercise of a SAR later than ten (10) years after the date of the grant of the SAR.

(v)    Family Transfers.  The Committee may, in the original Award Agreement or an amendment thereto, specify that a Participant may transfer, not for value, all or part of a Stock Appreciation Right to any Family Member.  For the purpose of this Section 9(b)(v), a “not for value” transfer is a transfer which is (A) a gift; (B) a transfer under a domestic relations order in settlement of marital property rights; or (C) unless applicable laws do not permit such transfer, a transfer to an entity in which more than fifty percent (50%) of the voting interests are owned by Family Members (and/or the Participant) in exchange for an interest in such entity.  Following a transfer under this Section 9(b)(v), any such SAR shall continue to be subject to the same terms and conditions as were applicable immediately prior to such transfer (including without limitation the provisions of Section 9(b)(iv) relating to termination of Service as applied with respect to the original Participant), and Shares acquired pursuant to the SAR shall be subject to the same restrictions with respect to transfer of such Shares as would have applied to the Participant.  Subsequent transfers of transferred SARs shall be prohibited except to Family Members of the original Participant in accordance with this Section 9(b)(v) or by will or the laws of descent and distribution.  

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(vi)    No Voting or Dividend Rights.  A SAR shall carry with it no voting or dividend or other rights associated with Common Share ownership until, if the SAR is fully or partially settled in Shares pursuant to Section 9(c), the Shares subject thereto are fully issued to such Participant or other person.  In addition, no Dividend Equivalents shall be payable with respect to SARs.   
 
(c)    Settlement of Stock Appreciation Rights.  On the exercise date of a Stock Appreciation Right, the Company shall settle the SAR, to the extent exercised, by payment of the amount due in the form of cash, Common Shares valued at their Fair Market Value on the exercise date, or a combination of cash and Shares, as the Committee may determine.

10.    Restricted Shares. 

(a)    Grant of Restricted Shares.  The Company shall grant Restricted Shares to Participants under the Plan at such times, in such numbers, and upon such terms as the Committee shall determine.

(b)    Terms of Restricted Shares.  The Award Agreement for a grant of Restricted Shares shall set forth such terms, conditions, restrictions, and limits on the Restricted Shares as the Committee shall determine and as are consistent with the provisions of the Plan, including the following:

(i)    Conditions on Vesting.  The Participant’s interest in Restricted Shares shall be forfeitable when the Award is granted.  In the Award Agreement, the Committee shall prescribe conditions that must be satisfied and the time by which, or time period during which, the conditions must be satisfied, in order for the Participant’s interest to become vested.  The conditions may include one or more of the following:

(1)    the satisfaction of specified Performance Goals or other performance-based objectives by a specified time or during a specified period,

(2)    the continuance of the Participant’s Service for a specified period,   or

(3)    the satisfaction of other specified conditions.

The Award Agreement may provide that the extent of the Participant’s vested interest shall be determined by the extent to which a condition is satisfied.  The limited period of time provided for the satisfaction of the conditions on an Award shall be referred to as the “Restricted Period.”
(ii)    Vesting.  Upon the satisfaction, within the Restricted Period, of the conditions established by the Committee, or as provided in Section 10(b)(iii), the Participant’s interest in the Restricted Shares shall become vested to the extent provided in the Award Agreement; provided, however, Restricted Shares granted to Employees shall become vested over a period of not less than three (3) years (or, in the case of vesting based upon the attainment of Performance Goals or other performance-based objectives, over a period of not less than one year measured from the commencement of the period over which performance is evaluated) following the date the Award 

14

is made.  The restrictions applicable to those vested Restricted Shares shall lapse at that time, and the Company shall deliver evidence of ownership of the vested Shares, consistent with Section 7(i), to the Participant or the Participant’s estate or the person to whom the Participant’s rights are transferred by will or under the laws of descent and distribution, as the case may be, free of all restrictions, subject to the satisfaction of the Company’s withholding obligations as described in Section 19(c).

(iii)    Accelerated Vesting.  The Committee may provide in an Award Agreement that upon the termination of the Participant’s Service during the Restricted Period by reason of death, Permanent Disability, retirement, or any other specified termination of Service, or upon the consummation of a Change in Control, the conditions and restrictions on all or a portion of the Restricted Shares shall lapse, and the Participant’s interest in those Shares shall become vested.

(iv)    Forfeiture.  Except as provided by the Committee in accordance with Section 10(b)(iii), the Participant shall forfeit Restricted Shares upon the expiration of the Restricted Period, to the extent the conditions prescribed by the Committee have not been satisfied.  Upon such a forfeiture, all of the Participant’s interest in the forfeited Restricted Shares shall automatically revert to the Company.

(v)    Registration; Restricted Share Certificate.  Pursuant to Section 7(i), to the extent that ownership of Restricted Shares is evidenced by a book-entry registration or direct registration, such registration shall be notated to evidence the restrictions imposed on such Award of Restricted Shares under the Plan and the applicable Award Agreement.  Subject to Section 7(i) and the immediately following sentence, the Company may issue, in the name of each Participant to whom Restricted Shares have been granted, certificates representing the total number of Restricted Shares granted to the Participant, as soon as reasonably practicable after the date of grant of such Restricted Shares.  The Committee may provide in an Award Agreement with respect to an Award of Restricted Shares that either (i) the Company shall hold such certificates for the Participant’s benefit until such time as the Restricted Shares are forfeited to the Company or the restrictions applicable thereto lapse and such Participant shall deliver a stock power to the Company with respect to each certificate, or (ii) such certificates shall be delivered to the Participant; provided, however, that such certificates shall bear a legend or legends that comply with the applicable securities laws and regulations and make appropriate reference to the restrictions imposed on such Restricted Shares under the Plan and the applicable Award Agreement.

(vi)    Voting and Dividend Rights.  Unless otherwise provided by the Committee in the Award Agreement, the Participant to whom Restricted Shares have been granted shall be entitled, during the Restricted Period, to vote those Shares and to receive the dividends payable with respect to those Shares.  If the vesting of an Award of Restricted Shares is conditioned on the satisfaction of Performance Goals or other performance-related conditions, dividends on such Restricted Shares shall be deferred and held in escrow or deemed reinvested in additional Restricted Shares during the Restricted Period and shall not vest unless the Performance Goals or other performance-related conditions for the underlying Award of Restricted Shares are achieved, and if such Performance Goals or other performance-related conditions are not achieved, the Participant shall promptly forfeit such deferred or reinvested dividend payments.

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11.    Restricted Share Units. 

(a)    Grant of Restricted Share Units.  A Restricted Share Unit shall entitle a Participant to a Share, the Fair Market Value of a Share in cash, or a combination of the two, at a future date, subject to the satisfaction of any terms and conditions specified by the Committee.  The Company shall grant Restricted Share Units to Participants under the Plan at such times, in such numbers, and upon such terms as the Committee shall determine.

(b)    Terms of Restricted Share Units.  The Award Agreement for Restricted Share Units shall set forth such terms, conditions, restrictions, and limits on the RSUs as the Committee shall determine and as are consistent with the provisions of the Plan, including the following:

(i)    Conditions on Vesting.  The Participant’s interest in an Award of Restricted Share Units shall be forfeitable when the Award is granted.  In the Award Agreement, the Committee shall prescribe conditions that must be satisfied and the time by which, or time period during which, the conditions must be satisfied, in order for the Participant’s interest to become vested.  The conditions may include one or more of the following:

(1)    the satisfaction of specified Performance Goals or other performance-based objectives by a specified time or during a specified period,

(2)    the continuance of the Participant’s Service for a specified period, 
or

(3)    the satisfaction of other specified conditions.
The Award Agreement may provide that the extent of the Participant’s vested interest shall be determined by the extent to which a condition is satisfied.  The limited period of time provided for the satisfaction of the conditions on an Award shall be referred to as the “Restricted Period.”
(ii)    Vesting.  Upon the satisfaction, within the Restricted Period, of the conditions established by the Committee, or as provided in Section 11(b)(iii), the Participant’s interest in the Restricted Share Units shall become vested to the extent provided in the Award Agreement; provided, however, Restricted Share Units granted to Employees shall become vested over a period of not less than three (3) years (or, in the case of vesting based upon the attainment of Performance Goals or other performance-based objectives, over a period of not less than one year measured from the commencement of the period over which performance is evaluated) following the date the Award is made.

(iii)    Accelerated Vesting.  The Committee may provide that upon the termination of the Participant’s Service during the Restricted Period by reason of death, Permanent Disability, retirement, or any other specified termination of Service, or upon the consummation of a Change in Control, the conditions and restrictions on all or a portion of the Restricted Share Units shall lapse, and the Restricted Period with respect to those RSUs shall expire.

(iv)    Forfeiture.  Except as provided by the Committee in accordance with Section 11(b)(iii), the Participant shall forfeit Restricted Share Units upon the expiration of the Restricted 

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Period, to the extent the conditions prescribed by the Committee have not been satisfied.  Upon such a forfeiture, all of the Participant’s interest in the forfeited Restricted Share Units shall automatically revert to the Company.

(v)    No Voting or Dividend Rights.  A Restricted Share Unit shall carry with it no voting or dividend or other rights associated with Common Share ownership.

(vi)    Dividend Equivalents.  Notwithstanding Section 11(b)(v), and subject to Section 12(b), the  Committee may but need not provide that a bookkeeping account established for a Participant shall be credited with an amount equivalent to the amount of dividends that would be payable with respect to a number of Shares equal to the number of Restricted Share Units awarded to the Participant.  The Committee may provide for the crediting of interest on any Dividend Equivalents credited to a Participant’s account or may provide that the Dividend Equivalent credit be adjusted for hypothetical investment experience in such manner as the Committee may determine.  If the Participant forfeits his or her interest in a Restricted Share Unit, the Participant shall simultaneously forfeit any Dividend Equivalents (as adjusted) attributable to those Restricted Share Units.    

(c)    Payment of Vested Restricted Share Units.  
        
(i)    Payment of vested Restricted Share Units and other amounts credited to a Participant’s account shall be made at such time or times after the expiration of the Restricted Period as the Committee may establish.  The Committee may but need not provide that a Participant may elect to defer payment until such time or times as the Committee may allow.  The Committee may provide for payments in lump sums or installments or both.  The Committee shall establish procedures for its establishment of the time of payment and for the form and timing of a Participant’s deferral and payment elections.  All elections shall conform to the Committee’s procedures.  The Committee's procedures shall conform to the requirements of Code section 409A.

(ii)    The Committee may, in its discretion, change the procedures for elections, change the time to which payment may be deferred, and change the availability of lump sum or installment payments.  The Committee may provide that such changes will apply to Restricted Share Units and other amounts already credited to a Participant’s account, with respect to which a Participant may have already made deferral and payment elections, but only to the extent such changes would not cause the Plan to fail to conform to the requirements of Code section 409A.

(iii)    The Company shall not establish any special fund with respect to a Participant’s account.  Any credit entries made to a Participant’s account shall constitute a mere promise by the Company to make payments to the Participant, subject to and in accordance with the Plan, from the general assets of the Company, when the payments become due.

(iv)    To the extent that any person acquires a right to receive payments from the Company under this Plan, such right shall be no greater than the right of any unsecured general creditor of the Company.

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12.    Other Awards. 

(a)    General.  The Committee may determine, subject to the terms of the Plan, that the Company shall grant Awards that are not described in Sections 8 through 11, but that provide for the issuance of Common Shares, or that are denominated in or measured by the Fair Market Value of a Share, or that provide for payment in the form of Shares, rather than cash under any Company bonus or incentive program.  The Committee shall determine the terms and conditions of any such other Awards and the Participants to whom and the numbers in which such other Awards shall be granted.  The Committee may condition the exercisability, vesting, and payment of such other Awards upon the satisfaction of Performance Goals or other performance-based objectives.

(b)    Dividend Equivalents.  Subject to Section 8(b)(vii) and Section 9(b)(vi), Dividend Equivalents may be granted by the Committee, either alone or in tandem with another Award, based on dividends declared on the Common Shares, to be credited as of dividend payment dates during the period between the date the Dividend Equivalents are granted to a Participant and the date such Dividend Equivalents terminate or expire, as determined by the Committee.  Such Dividend Equivalents shall be converted to cash or additional Shares by such formula, at such time, and subject to such limitations as may be determined by the Committee.  Dividend Equivalents with respect to Shares covered by an Award whose vesting is conditioned on the satisfaction of a Performance Goal, other performance-related objectives, or Service vesting shall only be paid out to the Participant at the same time or times and to the same extent that such vesting conditions are subsequently satisfied and the Award vests with respect to such Shares.  Nothing in this Section 12(b) or otherwise under the Plan shall be construed to prohibit the payment of distributions from the Partnership in respect of Profits Interests Units as provided for by the Committee in the Award Agreement for such Profits Interests Units (or which otherwise may apply to Awards of Profits Interest Units under the Partnership Agreement).

(c)    Profits Interest Units (LTIP Units).  

(i)    The Committee is authorized to grant Profits Interest Units in such amount and subject to such terms and conditions as may be determined by the Committee; provided, however, that Profits Interest Units may only be issued to a Participant for the performance of services to or for the benefit of the Partnership (i) in the Participant’s capacity as a partner of the Partnership, (ii) in anticipation of the Participant becoming a partner of the Partnership, or (iii) as otherwise determined by the Committee, provided that the Profits Interest Units are intended to constitute “profits interests” within the meaning of the Code, including, to the extent applicable, Revenue Procedure 93-27, 1993-2 C.B. 343 and Revenue Procedure 2001-43, 2001-2 C.B. 191.  

(ii)    The Committee shall specify the conditions and dates upon which the Profits Interest Units shall vest and become nonforfeitable.  The conditions may include one or more of the following: (1) the satisfaction of specified Performance Goals or other performance-based objectives by a specified time or during a specified period, (2) the continuance of the Participant’s Service for a specified period, or (3) the satisfaction of other specified conditions.   Notwithstanding the foregoing, Profits Interest Units granted to Employees shall become vested over a period of not less than three (3) years (or, in the case of vesting based upon the attainment of Performance Goals or other performance-based objectives, over a period of not less than one year measured from the commencement of the period over which performance is evaluated) following the date the Award 

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is made; provided, further, that the Committee may provide that such vesting restrictions may lapse or be waived upon the Participant’s death, Permanent Disability, retirement, or any other specified termination of Service or upon the consummation of a Change in Control.  Profits Interest Units shall be subject to the terms and conditions of the Partnership Agreement and such other restrictions, including restrictions on transferability, as the Committee may impose.  These restrictions may lapse separately or in combination at such times, pursuant to such circumstances, in such installments, or otherwise, as the Committee determines at the time of the grant of the Award or thereafter.

13.    Awards to Non-Employee Directors.  Notwithstanding any other provision of the Plan, the grant of any Award to a Non-Employee Director shall be made by the Board only pursuant to a written nondiscretionary formula established by the Board (a “Non-Employee Director  Compensation Policy”).  A Non-Employee Director Compensation Policy shall set forth the type of Awards to be granted to Non-Employee Directors; the number of Shares to be subject to Awards to be granted to Non-Employee Directors; the conditions on which such Awards shall be granted, become exercisable, payable, and expire; and such other terms and conditions as the Board determines in its discretion.  Awards granted to Non-Employee Directors shall be subject to all  of the limits set forth in this Plan.  Notwithstanding any provision to the contrary in the Plan or in a Non-Employee Director Compensation Policy, the maximum aggregate grant date fair value of one or more Awards granted to a Non-Employee Director during any calendar year shall be one million dollars ($1,000,000).

14.    Required Adjustments in Authorized Shares. In the event of any change in corporate capitalization, such as a stock split, or a corporate transaction, such as a merger, consolidation, separation, including a spin off, or other distribution of stock or property of the Company, any reorganization (whether or not such reorganization comes within the definition of such term in Code section 368), or any partial or complete liquidation of the Company, such adjustment shall be made in the number and class of Shares available for Awards under Section 5, in the number of Shares subject to outstanding Awards, in the exercise or purchase price under outstanding Awards, and in the limits on Awards and the issuance of Shares set forth in Section 5, as determined by the Committee to be appropriate and equitable to prevent dilution or enlargement of the benefits available under the Plan and of the rights of Participants; provided, however, that the number of Shares subject to an Award shall always be a whole number.  In a stock-for-stock acquisition of the Company, the Committee may, in its discretion, substitute securities of another issuer for any Shares subject to outstanding Awards.

Except as expressly provided in this Section 14, the issuance by the Company of shares of any class or securities convertible into shares of any class, for cash, property, labor, or services, upon direct sale, upon the exercise of rights or warrants, or upon the conversion of shares or obligations of the Company convertible into such shares or other securities, and in any case whether or not for fair value, shall not affect, and no adjustment shall be made with respect to, the number of Shares subject to Awards previously granted or the exercise or purchase price per Share under outstanding Awards.

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15.    Change in Control.  

The following provisions shall apply in the event of a Change in Control:
(a)    If and to the extent that outstanding Awards under the Plan (i) are assumed by the successor corporation (or an affiliate of the successor) or continued or (ii) are replaced with equity awards that preserve the existing value of the Awards at the time of the Change in Control and provide for subsequent payout in accordance with a vesting schedule and Performance Goals or other performance-based objectives, as applicable, that are the same or more favorable to the Participants than the vesting schedule and Performance Goals or other performance-based objectives applicable to the Awards, then all such Awards or such substitutes for them shall remain outstanding and be governed by their respective terms and the provisions of the Plan subject to Section 15(d).

(b)    If and to the extent that outstanding Awards under the Plan are not assumed, continued, or replaced in accordance with Section 15(a), then upon the Change in Control, the Committee may, in its sole discretion, provide that: (i) outstanding Options and SARs shall immediately vest and become exercisable; and (ii) the restrictions and other conditions applicable to outstanding Restricted Shares, Restricted Share Units, and other Share-based Awards, including vesting requirements, shall immediately lapse, and any Performance Goals or other performance-based objectives relevant to such Awards shall be deemed to have been achieved at the target performance level; such Awards shall be free of all restrictions and fully vested; and, with respect to Restricted Share Units, shall be payable immediately in accordance with their terms or, if later, as of the earliest permissible date under Code section 409A (collectively, the “Change in Control Treatment”).  Notwithstanding anything in the Plan to the contrary, unless the Change in Control is a change in the ownership or effective control or of ownership of a substantial portion of the assets of the Company (within the meaning of Code section  409A), a Change in Control shall not accelerate the time of payment of Restricted Share Units and other Awards and amounts payable under the Plan that are deferred compensation subject to Code section 409A.

(c)    In addition, if and to the extent that outstanding Awards under the Plan are not assumed, continued, or replaced in accordance with Section 15(a), then in connection with the Committee determination in Section 15(b) above, the Committee may, in its sole discretion, provide for cancellation of such outstanding Awards at the time of the Change in Control in which case a payment of cash, property, or a combination of cash and property shall be made to each such Participant upon the consummation of the Change in Control that is determined by the Committee in its sole discretion and that is at least equal to the excess (if any) of the value of the consideration that would be received in such Change in Control by the holders of the Company’s securities relating to such Awards over the exercise or purchase price (if any) for such Awards (except that, in the case of an Option or SAR, such payment shall be limited as necessary to prevent the Option or SAR from being subject to Code section 409A).

(d)    If and to the extent that (i) outstanding Awards are assumed, continued, or replaced in accordance with Section 15(a) above and (ii) a Participant’s Service is terminated by the Company (or a successor corporation or an affiliate of such successor) for any reason other than Cause or by such Participant for Good Reason, in each case, within the two (2)-year period commencing on the Change in Control, then, as of the date of such Participant’s termination, the Change-in-Control 

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Treatment set forth in Section 15(b) above shall automatically apply to all assumed or replaced Awards of such Participant then outstanding.

(e)    Outstanding Options or SARs that are assumed, continued, or replaced in accordance with Section 15(a) may be exercised by the Participant in accordance with the applicable terms and conditions of such Award as set forth in the applicable Award Agreement or elsewhere; provided, however, that Options or SARs that become exercisable in accordance with Section 15(d) may be exercised until the expiration of the original full term of such Option or SAR notwithstanding the other original terms and conditions of such Award.

16.    Approval of Shareholders; Term of Awards. If shareholder approval of the Plan, as amended and restated, is not obtained within twelve (12) months of the Amendment Date, any Awards granted under the Plan following the Amendment Date shall automatically be cancelled, except to the extent such Award could have been made under the Prior Plan, as determined and provided by the Committee.  Notwithstanding anything herein to the contrary, no ISO shall be granted under the Plan after the tenth (10th) anniversary of the Amendment Date.

17.    Amendment of Awards.  Subject to Section 7(f) (prohibition against repricing of Options and Stock Appreciation Rights), the Committee may at any time unilaterally amend any outstanding Award to the extent the Committee determines necessary or desirable; provided, however, that an amendment that would be adverse to the interests of the Participant or, with respect to an Incentive Stock Option, that would prevent the Option from qualifying as an ISO, shall not be effective without the holder’s consent.  

18.    Term; Amendment and Termination of Plan.  The Plan shall terminate automatically on the tenth (10th) anniversary of the Amendment Date, unless terminated earlier in accordance with this Section 18.  The Board may amend, suspend, or terminate the Plan or any portion of the Plan at any time; provided no amendment may be made without shareholder approval if such approval is required by applicable law or the requirements of an applicable stock exchange, or if such amendment would allow the grant of Options or Stock Appreciation Rights at an exercise price below Fair Market Value at the date of grant; provided further that no such amendment, suspension, or termination shall adversely affect the rights under any outstanding Award without the holder’s consent.

19.    Miscellaneous. 

(a)    Beneficiary Designation.  Each Participant may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under the Plan is to be paid in case of the Participant’s death before the Participant receives any or all of such benefit.  Each such designation shall revoke all prior designations by the same Participant with respect to such benefit, shall be in a form prescribed by the Company, and shall be effective only when filed by the Participant in writing with the Company during the Participant’s lifetime.  In the absence of any such designation, any benefits remaining payable under the Plan at the Participant’s death shall be paid when due to the Participant’s estate unless otherwise provided in the Award Agreement.

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(b)    Deferrals.  Pursuant to the applicable requirements of Code section 409A, the Committee may permit or require a Participant to defer receipt of the payment of cash or the delivery of Shares that would otherwise be due pursuant to the lapse or waiver of restrictions with respect to Restricted Shares or Restricted Share Units, or in connection with any other Awards.  If any such deferral is required or permitted, the Committee shall establish rules and procedures for such deferrals in compliance with the requirements of Code section 409A.

(c)    Satisfaction of Tax Liabilities.

(i)    The Company, the Partnership, and its Subsidiaries shall have the power and the right to deduct or withhold, or to require a Participant to remit to the Company, the Partnership, or a Subsidiary, an amount that the Company, the Partnership, or a Subsidiary reasonably determines to be required to comply with federal, state, local, or foreign tax withholding requirements with respect to the vesting, settlement, or exercise of, or payment with respect to, an Award.  The Company, the Partnership, or a Subsidiary may require the payment of such taxes before Shares or cash deliverable pursuant to such Award are transferred to the holder of the Award.

(ii)    The Committee may allow a Participant to elect to pay the Company’s, the Partnership’s, or a Subsidiary’s minimum statutory withholding tax obligation with respect to an Award to be settled in Shares by the withholding of Shares from the total number of Shares deliverable pursuant to the Award, or by delivering to the Company a sufficient number of previously-acquired Shares, in each case in accordance with rules and procedures established by the Committee.  Previously-acquired Shares delivered in payment for such taxes may be subject to such conditions as the Committee may require.  The value of each Share withheld, or delivered, shall be the Fair Market Value of a Share on the date on which the amount of tax to be withheld is to be determined.

(d)    No Alienation.  Except to the extent required by law, the right of a Participant or beneficiary to payment under this Plan shall not be subject to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors of the Participant or beneficiary.

20.    Restrictions on Issuance of Common Shares.

Should the Board of Directors determine that the listing, registration, or qualification of Common Shares upon any securities exchange or under any state or federal law or the consent or approval of any governmental regulatory body is necessary or desirable as a condition to or in connection with the issuance or delivery of Common Shares under the Plan, no such Common Shares shall be issued or delivered unless such listing, registration, qualification, consent, or approval has been effected or obtained free of any conditions not acceptable to the Board of Directors.  The Company shall not be required to offer, sell, or issue any Common Shares under any Award, whether pursuant to the exercise of an Option or SAR or otherwise, if the offer, sale, or issuance of such Shares would constitute a violation by the Participant, any other individual or entity exercising an Option or SAR, or the Company, the Partnership, or a Subsidiary of any provision of applicable laws, including without limitation any federal or state securities laws or regulations.    

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The certificates representing Common Shares issued by the Company under the Plan may bear a legend describing any restrictions on resale of such Common Shares under applicable securities laws, and stop transfer orders with respect to such certificates may be entered on the Company’s stock transfer records.
21.    Construction.  The Plan shall be construed in accordance with the law of the State of Maryland, other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of the Plan, the Awards, and any Award Agreement to the substantive laws of any other jurisdiction.  With respect to Options granted under the Plan that are intended to qualify as Incentive Stock Options, the terms of the Plan and of each Incentive Stock Option granted pursuant to the Plan shall be construed to give effect to such intention.  With respect to Awards granted under the Plan that are intended to qualify for the exception under Code section 162(m) for performance-based pay, the terms of the Plan and the Award Agreement shall be construed and administered to give effect to such intention, unless the Committee determines to waive the application of such exception.  With respect to Awards granted under the Plan that provide for the payment of deferred compensation (within the meaning of Code section 409A), the terms of the Plan and the Award Agreement shall be construed to conform to the requirements of Code section 409A for the deferral (until payment) of the inclusion of the compensation in gross income. 

22.    Section 83(b) Election.  No Participant may make an election under Code section 83(b) with respect to any Award under the Plan without the consent of the Committee, which the Committee may grant or withhold in its sole discretion.  If, with the consent of the Committee, a Participant makes an election under Code section 83(b) to be taxed with respect to an Award as of the date of transfer of the Award, rather than as of the date or dates upon which the Award would otherwise be taxable under Code section 83(a), the Participant shall be required to deliver a copy of such election to the Company promptly after filing such election with the Internal Revenue Service.

23.    Grant of Awards to Certain Employees or Consultants.  The Company, the Partnership, or any Subsidiary may provide, through the establishment of a formal written policy or otherwise, for the method by which Shares or other securities and/or payment therefor may be exchanged or contributed among such entities, or may be returned upon any forfeiture of Shares or other securities by the Participant, for the purpose of ensuring that the relationship between the Company, the Partnership, and any Subsidiary remains at arm’s-length.

24.    REIT Status.  The Plan shall be interpreted and construed in a manner consistent with the Company’s status as a real estate investment trust (REIT).  No Award shall be granted or awarded, and with respect to any Award granted under the Plan, such Award shall not vest, be exercisable, or be settled: 

(a)    to the extent that the grant, vesting, exercise, or settlement of such Award could cause the Participant or any other person to be in violation of the Ownership Limit (as defined in the Company’s Articles of Incorporation, dated May 6, 1996, as amended and supplemented from time to time) or any other provision of the Company’s charter, including without limitation Section 2 thereof; or 

23

(b)    if, in the discretion of the Committee, the grant, vesting, exercise, or settlement of such Award could impair the Company’s status as a REIT.

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