Document:

Exhibit 10.2

 

BANK OF HAWAII CORPORATION

130 Merchant Street

Honolulu, Hawaii  96813

 

July 23, 2010

 

Mr. Allan
R. Landon

Chairman and
Chief Executive Officer

Bank
of Hawaii Corporation

130
Merchant Street

Honolulu,
Hawaii  96813

 

Dear
Al:

 

The
Board of Directors has asked me to accept on its behalf your decision to retire
as Chairman and Chief Executive Officer and to resign from the Board and your
other positions at Bank of Hawaii Corporation and its affiliates (collectively,
the Company) effective at 12:00 noon HST on July 30, 2010.  We unanimously agree that it has been an
honor and a privilege to work with someone of your business acumen, leadership
skills and unquestioned integrity.

 

The
Board has reviewed carefully your record of accomplishment during your period
of service, your positions of increasing responsibility since you came to the
Company in 2000 and your many accomplishments as Chief Executive Officer as
well as corporate and your individual performance for the first half of the
year.  I am pleased to tell you that,
following that review, the Board, with the recommendation and approval of its
compensation committee, has decided to take the following actions:

 

1.  In light
of the Company’s financial performance for the first half of 2010 and your
accomplishments during that period, you will receive $435,000 as your pro rated
final award for 2010 under the Executive Incentive Plan (“EIP”) in addition to
your salary and vested benefits.

 

2.  In
consideration of your extraordinary achievements, your requests to limit your
compensation in recent years and your agreement to the non-competition and
other covenants set out below, you will receive an additional payment of
$1,125,000 and a further payment of $100,000 to help defray your moving and
other expenses associated with the relocation of your principal residence to
the mainland.

 

3.  You will
be entitled to receive these payments as soon as practicable on or after August 2,
2010.  They will be provided less all
applicable withholdings.  The payment described
in Section 1 will count as compensation for purposes of any other Company
compensation or benefit plans, programs or arrangements to the same extent as
EIP payments made by the Company in respect of full year performance.  The payments described in Section 2 will
not count as compensation for purposes of any other Company compensation or
benefit plan, program or arrangement.

 

 

Your
services for the Company have been unique, you have had access to our most
sensitive and confidential information, you have made extensive connections and
played a valuable role in the community, and you, in very significant ways,
have been the public face of the Company during your tenure as Chief Executive
Officer.  As a matter of proper
stewardship, then, the Board asks that you sign this letter agreeing during the
first twelve months after your retirement, to neither, directly or indirectly:

 

(a) become involved as an employee, director or
consultant with any commercial bank or savings institution headquartered in the
state of Hawaii (or parent or affiliate of any such bank or savings institution
if you have responsibility for operations in Hawaii),

 

(b) solicit business of the same or similar
type being carried on by the Company from any person or entity known by you to
be a customer of the Company, whether or not you had personal contact with such
person or entity by reason of your employment with the Company, or

 

(c) whether for yourself or any other person or
entity, solicit, employ, or otherwise engage as an employee, independent
contractor, or otherwise, any employee of the Company or induce or attempt to
induce any employee of the Company to terminate his or her employment with the
Company.

 

Al,
let me reiterate the Board’s deep appreciation for your extraordinary
dedication and service to the Company. 
You truly have represented the values and mission of our
organization.  We wish you and Sue all
the best as you enter this next stage of your lives and we look forward to
remaining in touch over the years ahead.

 

	
   

  	
   

  	
  Sincerely
  yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Mary
  G. F. Bitterman,

  
	
   

  	
   

  	
  Lead
  Independent Director

  
	
   

  	
   

  	
  On
  behalf of Bank of Hawaii Corporation

  
	
   

  	
   

  	
   

  
	
  Agreed
  and accepted

  	
   

  	
   

  
	
  as
  of the date first above written

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Allan
  R. Landon

  	
   

  	
   

  

 

2Exhibit 10.1

 

INLAND AMERICAN REAL ESTATE TRUST, INC.

 

AMENDED AND RESTATED

INDEPENDENT DIRECTOR STOCK OPTION PLAN

(As of July 20, 2010)

 

ARTICLE I

GENERAL

 

1.1           PURPOSE. 
Effective as of August 31, 2005, Inland American Real Estate
Trust, Inc., a Maryland corporation (the “Company”), adopted the
Independent Director Stock Option Plan (the “Original Plan”).  The Company hereby amends and restates the
Original Plan as this Amended and Restated Independent Director Stock Option
Plan (the “Plan”).  The purpose of
the Plan is to foster and promote the long-term financial success of the
Company by attracting and retaining outstanding non-employee directors by
enabling them to participate in the Company’s growth through the granting of
Options (as defined in Section 2.1(a) hereof) that entitle
them to purchase shares of the Company’s common stock, par value $0.001 per
share (“Shares”).

 

1.2           PARTICIPATION. 
Only directors of the Company who, at the time an Option is granted, are
“Non-Employee Directors” as such term is defined in Rule 16b-3 promulgated
under the Securities Exchange Act of 1934, as amended (“Rule 16b-3”),
or any similar rule which may subsequently be in effect (the “Independent
Directors”), are eligible to receive Options under the Plan.

 

1.3           SHARES SUBJECT TO THE PLAN.  Shares to be issued upon exercise of Options
granted under the Plan shall be from authorized but unissued Shares of the
Company.  A maximum of 75,000 Shares, including
Shares issued under the Original Plan (the “Plan Maximum”), may be issued
for all purposes under the Plan (subject to adjustment pursuant to Section 3.2
hereof), and the Company reserved 75,000 authorized but unissued Shares as of
the date the Original Plan was established for issuance upon exercise of
Options granted under the Plan.  Any
Shares reserved for issuance under Options that for any reason are canceled or
terminated without having been exercised shall not be counted in determining
whether the Plan Maximum has been reached. 
Options for fractional shares shall not be granted.

 

1.4           GENDER AND NUMBER.  Except when otherwise indicated by the
context, words in the masculine gender when used in the Plan shall include the
feminine gender, the singular shall include the plural, and the plural shall include
the singular.

 

ARTICLE II

STOCK OPTION AWARDS

 

2.1           AWARD OF STOCK OPTIONS.

 

(a)           Effective on the date on which an Independent
Director becomes a member of the Board of Directors of the Company (the “Board
of Directors”), each Independent Director who satisfies the conditions set
forth in Section 1.2 hereof will automatically be awarded a stock
option (an “Initial Option”) under the Plan to purchase 3,000 Shares
(subject to adjustment pursuant to Section 3.2 hereof).  Effective on the date 

 

 

of each Annual Meeting of Stockholders of the
Company (an “Annual Meeting”) after the award of an Initial Option, each
Independent Director then in office who satisfies the conditions set forth in Section 1.2
hereof will automatically be awarded a stock option (a “Subsequent Option”
or the “Subsequent Options”, collectively with the “Initial Options”
referred to herein as an “Option” or “Options”) to purchase 500
Shares (subject to adjustment pursuant to Section 3.2 hereof).  The Options are not intended to qualify as “incentive
stock options” as defined in Section 422 of the Internal Revenue Code of
1986, as amended (the “Code”).

 

(b)           Notwithstanding any other provision of this
Plan, no Options shall be issued pursuant to Section 2.1(a) hereof
to the extent that the issuance of such Options would: (i) enable the
Independent Directors as a group to hold more than ten percent (10.0%) of the
issued and outstanding Shares if such Options were exercised; (ii) result
in the Company being “closely held” within the meaning of Code Section 856(h);
(iii) cause the Company to own, directly or constructively, ten percent
(10.0%) or more of the ownership interests in a tenant of the property of the
Company (or of the property of one or more partnerships in which the Company is
a partner), within the meaning of Code Section 856(d)(2)(B); or (iv) cause,
in the opinion of counsel to the Company, the Company to fail to qualify (or
create, in the opinion of counsel to the Company, a material risk that the
Company would no longer qualify) as a real estate investment trust within the
meaning of Code Section 856.  To the
extent that the issuance of Options pursuant to Section 2.1(a) hereof
would violate any of the foregoing limitations, the number of Shares that may
be purchased under the Options to be issued to each of the Independent
Directors shall be reduced pro rata.  To the extent that the number of Shares that
may be purchased under Options issued to an Independent Director is reduced in
any year as a result of the application of the foregoing limitations, Options
to purchase such Shares shall be issued to the Independent Director in any
subsequent year in which issuance of such Options, after taking into account
the Options to be issued to the Independent Directors in such subsequent year
under Section 2.1(a) hereof, would not violate the limitations
imposed by this Section 2.1(b). 
To the extent that the issuance of an Option is delayed until a
subsequent year under this Section 2.1, the Option shall be treated
for all purposes under this Plan as having been issued in such subsequent year.

 

2.2           STOCK OPTION CERTIFICATES.  The award of an Option shall be evidenced by
a certificate executed by an officer of the Company in substantially the form
attached hereto as Exhibit A.

 

2.3           EXERCISE PRICE.  The purchase price of a Share (the “Exercise
Price”) under each Initial Option granted shall be the Fair Market Value
(as defined in Section 3.5 hereof) of a Share on the date of the
grant.  The Exercise Price under each
Subsequent Option granted on the date of any Annual Meeting shall be the Fair
Market Value of a Share on the last business day immediately preceding the date
of the Annual Meeting.

 

2.4           EXERCISE AND TERM OF OPTIONS.

 

(a)           Options may be exercised by the delivery of
written notice of exercise and payment of the aggregate Exercise Price for the
Shares to be purchased to the Secretary 

 

2

 

of the Company. 
The Exercise Price may be paid in cash, by check, bank draft or money
order.  No Shares shall be issued in
connection with the exercise of an Option until full payment of the aggregate
Exercise Price for such Shares has been made to the Company.  Except to the extent expressly authorized by
the Board of Directors, the Company shall not issue share certificates
representing the purchased Shares.  All
Shares issued upon exercise of an Option shall be recorded on the books and
records of the Company.  As soon as
practicable after receipt of each notice and full payment of the aggregate
Exercise Price pursuant to this Section 2.4(a), the Company shall
issue the purchased Shares to the Independent Director along with a statement
containing information substantially similar to Exhibit B hereto
and any other information required pursuant to applicable law.  All Shares issued upon exercise of an Option
shall be subject to the restrictions contained in the Company’s Articles of
Incorporation and Bylaws.  An Independent
Director shall have none of the rights of a stockholder in the Company until
the Shares underlying the Option(s) exercised are issued and the foregoing
statement delivered to the Independent Director.

 

(b)           To the extent expressly authorized by the
Board of Directors, each certificate for Shares issued upon exercise of an
Option shall bear a legend containing information substantially similar to Exhibit B.  Any certificate for Shares issued at any time
in exchange or substitution for any other certificate bearing such legend shall
also bear a legend containing information substantially similar to Exhibit B.  Each certificate for Shares issued upon
exercise of an Option shall also bear any legends required by the Company’s
Articles of Incorporation or Bylaws applicable law, and the transferability of
the certificate and the Shares represented thereby shall be subject to the
restrictions contained in the Company’s Articles of Incorporation and Bylaws.

 

(c)           An Independent Director’s Initial Option shall
(subject to Section 3.1 hereof) become exercisable as follows: (i) 1,000
shares on the date of grant; (ii) an additional 1,000 shares on the first
anniversary of the date of grant; and (iii) an additional 1,000 shares on
the second anniversary of the date of grant; and shall continue to be
exercisable until the first to occur of: (i) the tenth anniversary of the
date of grant; (ii) the removal for cause of the Independent Director as
an Independent Director; or (iii) three months following the date the
Independent Director ceases to be an Independent Director for any other reason
except death or disability.  Each of an
Independent Director’s Subsequent Options shall (subject to Section 3.1
hereof) become fully exercisable on the second anniversary of the date on which
the Subsequent Option(s) was granted and shall continue to be exercisable
until the first to occur of: (i) the tenth anniversary of the date of
grant; (ii) the removal for cause of the Independent Director as an
Independent Director; or (iii) three months following the date the
Independent Director ceases to be an Independent Director for any other reason
except death or disability. 
Notwithstanding the foregoing, Options granted under this Plan shall
continue to be exercisable in the case of death or disability for a period of
one year after death or the disabling event; provided that the death or
disabling event occurs while the person is an Independent Director and prior to
his or her removal for cause, resignation or ceasing to be an Independent
Director for any other reason and the Option is otherwise exercisable on the
date of the death or disabling event; provided, however, if the
Option is exercised within the first six months after it becomes exercisable,
any Shares issued pursuant to such exercise may not be sold 

 

3

 

until the six month anniversary of the date of the
grant of the Option. An Independent Director is removed “for cause” for gross
negligence or willful misconduct in the execution of his duties, or for
conviction of, or entry of a plea of guilty or nolo
contendere to, any felony or any act of fraud, embezzlement,
misappropriation, or a crime involving moral turpitude.

 

(d)           Notwithstanding any other terms or provisions
herein to the contrary, no Option may be exercised if, in the opinion of the
Company’s counsel, such exercise would jeopardize the Company’s status as a
real estate investment trust under the Code.

 

ARTICLE III

MISCELLANEOUS PROVISIONS

 

3.1           NONTRANSFERABILITY; BENEFICIARIES.  No Option awarded under the Plan shall be
transferable by the Independent Director otherwise than by will or, if the
Independent Director dies intestate, by the laws of descent and distribution.
All Options exercised during the Independent Director’s lifetime shall be
exercised only by the Independent Director or his legal representative.  Any transfer contrary to this Section 3.1
will nullify the Option.  Notwithstanding
any other provisions of this Plan, Options granted under this Plan shall
continue to be exercisable in the case of death or disability for a period of
one year after death or the disabling event in accordance with the terms of Section 2.4(c) hereof.  Each Independent Director may name, from time
to time, any beneficiary or beneficiaries (who may be named contingently or
successively) who may exercise his or her Options.  Each designation will revoke all prior
designations by the Independent Director, must be in writing and will be
effective only when filed with the Secretary of the Company during the
Independent Director’s lifetime.

 

3.2           ADJUSTMENT UPON CERTAIN CHANGES.

 

(a)           If the outstanding Shares are (i) increased
or decreased or (ii) changed into, or exchanged for, a different number or
kind of shares or securities of the Company, through a reorganization or merger
in which the Company is the surviving entity, or through a combination,
recapitalization, reclassification, stock split, stock dividend, stock
consolidation or otherwise, an appropriate adjustment shall be made in the
number and kind of Shares that may be issued pursuant to an Option and in the
minimum number of Shares that must be issued and outstanding prior to the
issuance of the Initial Options pursuant to Section 2.1(a)(iii) hereof.  A corresponding adjustment to the
consideration payable with respect to all Options granted prior to any such
change shall also be made.  Any such
adjustment, however, shall be made without change in the total payment, if any,
applicable to the portion of the Option not exercised but with a corresponding
adjustment in the Exercise Price for each Share.

 

(b)           Upon the dissolution or liquidation of the
Company, or upon a reorganization, merger or consolidation of the Company with
one or more corporations as a result of which the Company is not the surviving
corporation, or upon sale of all or substantially all of the Company’s assets,
the Plan shall terminate, and any outstanding Options shall terminate and be
forfeited; provided, however, holders of Options may exercise any
Options that are otherwise exercisable immediately prior to the dissolution, 

 

4

 

liquidation, consolidation or merger.  Notwithstanding the foregoing, the Board of
Directors may provide in writing in connection with, or in contemplation of,
any such transaction for any or all of the following alternatives (separately
or in combinations): (i) for the assumption by the successor corporation
of the Options theretofore granted or the substitution by such corporation for
such Options of awards covering the stock of the successor corporation, or a
parent or subsidiary thereof, with appropriate adjustments as to the number and
kind of shares and prices; (ii) for the continuance of the Plan by such
successor corporation in which event the Plan and the Options shall continue in
the manner and under the terms so provided; or (iii) for the payment in
cash or Shares in lieu of and in complete satisfaction of such Options.

 

3.3           AMENDMENT, SUSPENSION AND TERMINATION OF
PLAN.  The Board of Directors may suspend
or terminate the Plan or any portion thereof at any time and may amend it from
time to time in such respects as the Board of Directors may deem necessary,
appropriate or advisable in order that any Options thereunder shall conform to
or otherwise reflect any change in applicable laws or regulations, or to permit
the Company or the Independent Directors to enjoy the benefits of any change in
applicable laws or regulations, or in any other respect the Board of Directors
may deem to be in the best interests of the Company; provided, however,
that no such amendment shall, without stockholder approval to the extent
required by law, or any agreement or the rules of any national securities
exchange upon which the Shares may be listed or of any inter-dealer quotation
system on which Shares may be traded: (a) except as provided in Section 3.2
hereof, materially increase the number of Shares that may be issued under the
Plan; (b) materially modify the requirements as to eligibility for
participation in the Plan; (c) materially increase the benefits accruing
to Independent Directors under the Plan; or (d) extend the termination
date of the Plan.  No such amendment,
suspension or termination shall: (x) impair the rights of Independent
Directors under any outstanding Option without the consent of the Independent
Directors affected thereby; or (y) make any change that would disqualify
the Plan, or any other plan of the Company intended to be so qualified, from
the exemption provided by Rule 16b-3.

 

3.4           TAX WITHHOLDING.

 

(a)           The Company shall have the power to withhold,
or require an Independent Director to remit to the Company, an amount
sufficient to satisfy any withholding or other tax due from the Company with
respect to any amount payable or Shares issuable under the Plan, and the
Company may defer such payment or issuance unless indemnified to its satisfaction.

 

(b)           Subject to the consent of the Board of
Directors, due to the exercise of an Option, an Independent Director may make
an irrevocable election (an “Election”) to: (a) have Shares
otherwise issuable hereunder withheld; (b) tender back to the Company
Shares received; or (c) deliver back to the Company previously acquired
Shares having a Fair Market Value sufficient to satisfy all or part of the
Independent Director’s estimated tax obligations associated with the
transaction.  Such Election must be made
by an Independent Director prior to the date on which the relevant tax
obligation arises.  The Board of
Directors may disapprove of any Election, may suspend or terminate the right to

 

5

 

make Elections, or may provide with respect to any
Option under this Plan that the right to make Elections shall not apply to such
Option.

 

3.5           DEFINITION OF FAIR MARKET VALUE.  As used in this Plan, “Fair Market Value”
means: on any date, the average of the Closing Price (as defined below) per
Share for the five consecutive Trading Days (as defined below) ending on such
date. The “Closing Price” on any date shall mean the last sale price,
regular way (as defined below), or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on the principal
national securities exchange on which the Shares are listed or admitted to
trading or, if the Shares are not listed or admitted to trading on any national
securities exchange, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Shares selected
by the Board or, if there is no professional market maker making a market in
the Shares, the price at which the Company is then offering Shares to the
public if the Company is then engaged in a public offering of Shares, or if the
Company is not then offering Shares to the public, the price per Share at which
a Stockholder may purchase Shares pursuant to the Company’s Distribution
Reinvestment Plan (the “DRP”) if such DRP is then in existence, provided
that, if the DRP permits purchase at a price per Share based on a discount from
the value per Share, the value per Share at which the DRP price per Share is
based, or if the DRP is not then in existence, the fair market value of a Share
as determined by the Company, in its sole discretion.  “Trading Day” shall mean a day on
which the principal national securities exchange or national automated
quotation system on which the Shares are listed or admitted to trading is open
for the transaction of business or, if the Shares are not listed, shall mean
any day other than a Saturday, a Sunday or a day on which banking institutions
in the State of Illinois are authorized or obligated by law or executive order
to close. The term “regular way” means a trade that is effected in a
recognized securities market for clearance and settlement pursuant to the rules and
procedures of the National Securities Clearing Corporation, as opposed to a
trade effected “ex-clearing” for same-day or next-day settlement.

 

3.6           PLAN NOT EXCLUSIVE.  The adoption of the Plan shall not preclude
the adoption by appropriate means of any other stock option or other incentive
plan for Independent Directors or other directors of the Company.

 

3.7           LISTING, REGISTRATION AND LEGAL COMPLIANCE.

 

(a)           Each Option shall be subject to the requirement
that if at any time counsel to the Company shall determine that the listing,
registration or qualification thereof or of any Shares or other property
subject thereto upon any national securities exchange or inter-dealer quotation
system, or under any foreign, federal or state securities or other law or
regulation, or the consent or approval of any governmental body or the taking
of any other action to comply with or otherwise, with respect to any such law
or regulation, is necessary, appropriate or advisable as a condition to or in
connection with the award of such Option or the issue, delivery or purchase of
Shares or other property thereunder, no such Option may be exercised or paid in
Shares or other property unless such listing, registration, qualification,
consent, approval or other action shall have been effected or obtained free of
any conditions not acceptable to the Company, and the holder of the 

 

6

 

award will supply the Company with such certificates,
representations and information as the Company shall request and shall
otherwise cooperate with the Company in effecting or obtaining such listing,
registration, qualification, consent, approval or other action.

 

(b)           The Company may at any time impose any
limitations upon the exercise, delivery or payment of any Option which, in the
opinion of the Board of Directors, are necessary, appropriate or advisable in
order to cause the Plan or any other plan of the Company to comply with Rule 16b-3.  If the Company, as part of an offering of
securities or otherwise, finds it desirable because of foreign, federal or
state legal or regulatory requirements to reduce the period during which
Options may be exercised, the Board of Directors may, without the holders’
consent, so reduce such period on not less than fifteen (15) days written
notice to the holders thereof.

 

3.8           RIGHTS OF INDEPENDENT DIRECTORS.  Nothing in the Plan shall confer upon any
Independent Director any right to serve as an Independent Director for any
period of time or to continue serving at his present or any other rate of
compensation.

 

3.9           NO OBLIGATION TO EXERCISE OPTION.  The granting of an Option shall impose no
obligation upon the Independent Director to exercise such Option.

 

3.10         REQUIREMENTS OF LAW; GOVERNING LAW.  The granting of Options under this Plan shall
be subject to all applicable laws, rules, and regulations, and to such
approvals by any governmental agencies or any national securities exchange or
inter-dealer quotation system as may be required.  The Plan, and all agreements hereunder, shall
be construed in accordance with and governed by the internal laws of the State
of Illinois without giving effect to its conflicts of law principles.  The provisions of this Plan shall be interpreted
so as to comply with the conditions or requirements of Rule 16b-3, unless
a contrary interpretation of any such provision is otherwise required by
applicable law.

 

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blank]

 

7

 

EXHIBIT A

FORM OF OPTION CERTIFICATE

 

THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS. 
THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR
OTHERWISE DISTRIBUTED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OR AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS.

 

INLAND AMERICAN REAL ESTATE TRUST, INC.

AMENDED AND RESTATED

INDEPENDENT DIRECTOR STOCK OPTION PLAN

OPTION CERTIFICATE

 

CERTIFICATE NO.
    

 

THIS OPTION CERTIFICATE (this “Certificate”) is
made and entered into as of the
             day of
                                ,
20     (the “Grant Date”), by and between INLAND
AMERICAN REAL ESTATE TRUST, INC., a Maryland corporation (the “Company”),
and
                                                      
(the “Optionee”) under and pursuant to the Inland American Real Estate
Trust, Inc. Amended and Restated Independent Director Stock Option Plan
(the “Plan”).

 

Except where the context otherwise requires, all
capitalized terms that are not defined in this Certificate shall have the
meanings set forth in the Plan.

 

The parties hereto agree as follows:

 

1.             GRANT OF OPTION.  In consideration of the services rendered and
to be rendered to the Company by the Optionee as an Independent Director of the
Company, and upon the determination by the Board of Directors of the Company
that the Optionee satisfies the conditions set forth in Section 1.2
of the Plan, the Company hereby grants to the Optionee an Option (the “Option”)
to purchase a total of up to
                            
(                        )
shares of the Company’s common stock, par value $0.001 per share (each share of
such common stock, a “Share” and collectively, the “Shares”).  The purchase price for each Share (the “Exercise
Price”) granted by this Option shall be
$              
per Share, upon and subject to the terms and conditions set forth in this
Certificate and the Plan.  Shares that
may be purchased upon exercise of this Option are hereafter referred to as “Option
Shares.”

 

2.             ACKNOWLEDGMENT BY OPTIONEE.  The Optionee hereby acknowledges:

 

(a)           that he or she has had an opportunity to
review a copy of the Plan;

 

A-1

 

(b)           that any questions pertaining to the Plan, to
this Option and to the Option Shares have been answered by the Company to his
or her satisfaction;

 

(c)           that he or she understands that the Plan is
incorporated in this Certificate by reference and is made a part of this
Certificate as if fully set forth in this Certificate; and

 

(d)           that the Plan shall control in the event that
there is any conflict between the Plan and this Certificate, and also with
respect to any matter not addressed in this Certificate.

 

3.             TIME OF EXERCISE.

 

(a)           [USE THE FOLLOWING SENTENCE FOR THE INITIAL OPTION
GRANT ONLY — IF OTHERWISE, DELETE.]  Subject to the provisions of this Section 3
and the restrictions imposed in the Plan, this Option may be exercised in
accordance with the provisions of Section 4 below, in whole or in
part, as follows:  (i) 1,000 Option
Shares on or after the Grant Date ([INSERT
DATE]); (ii) an additional 1,000 Option Shares on or after the
first anniversary of the Grant Date ([INSERT
DATE]); and (iii) an additional 1,000 Option Shares on or after
the second anniversary of the Grant Date ([INSERT
DATE]).  [USE THE FOLLOWING SENTENCE FOR SUBSEQUENT OPTION
GRANTS ONLY — IF OTHERWISE, DELETE.] 
Subject to the provisions of this Section 3 and the
restrictions imposed in the Plan, this Option may be exercised in accordance
with the provisions of Section 4 below, in whole or in part, on or
after the second anniversary of the Grant Date ([INSERT DATE]).  [THE FOLLOWING SENTENCES SHOULD NOT BE DELETED IN
EITHER CASE.]  Notwithstanding
the foregoing sentence, except as otherwise provided in paragraph (b) below
of this Section 3, this Option may not be exercised after the
earliest to occur of the following dates: 
(i) the date that is ten (10) years from the Grant Date ([INSERT DATE]); (ii) the removal for
cause of the Optionee as an Independent Director; or (iii) three (3) months
following the date that the Optionee ceases to be an Independent Director of
the Company for any reason except death or disability.  For purposes of this Option, the term “disability”
(or any similar term) shall mean any bodily injury, disease, illness, or
emotional or nervous disorder that prevents the Optionee from performing all of
his or her material duties as an Independent Director of the Company for a
period of at least thirty (30) consecutive days.

 

(b)           Subject to the provisions of this Section 3
and the restrictions imposed in the Plan, in the event that the Optionee
becomes disabled or dies while serving as an Independent Director of the
Company, all outstanding Options as to which the Optionee’s rights have become
vested but which have not yet been exercised may be exercised in accordance
with the provisions of Section 4 below by the Optionee (or his or
her legal representative or designated beneficiary, as the case may be) for a
period of one (1) year following the date of the disabling event or the
Optionee’s death; provided, however, that if this Option is
exercised within the first six (6) months after it becomes exercisable,
any Shares issued pursuant to such exercise may not be sold until the six-month
anniversary of the Grant Date ([INSERT DATE]).

 

A-2

 

4.             MANNER OF EXERCISE.

 

(a)           This Option may be exercised during the
Optionee’s lifetime by the Optionee or, in the case of the Optionee’s
disability, the Optionee’s legal representative.  Each Optionee may name, from time to time,
any beneficiary or beneficiaries (who may be named contingently or
successively) who may exercise this Option following the Optionee’s death (the “Optionee’s
beneficiaries”); provided, that in no event shall the Optionee’s
beneficiaries be able to exercise this Option at any time prior to the Optionee’s
death unless the beneficiary also is the Optionee’s legal representative.  Each designation will revoke all prior
designations by the Optionee, must be in writing to be valid and will be
effective only when filed with the Secretary of the Company during the Optionee’s
lifetime.  The Optionee also may revoke a
designation without designating a new beneficiary.  To be valid, the revocation must be in
writing and will be effective only when filed with the Secretary of the Company
during the Optionee’s lifetime.

 

(b)           This Option may be exercised only by delivery
of a written notice of exercise to the Company at its principal executive
offices at 2901 Butterfield Road, Oak Brook, Illinois 60523, Attn:
Secretary.  In the event that the Company
moves its principal executive offices, it shall notify the Optionee in writing
of the new address and this Option will thereafter be exercisable only by the
delivery of written notice of exercise to the Company at its new principal
executive offices.  Each notice of
exercise shall state the number of Option Shares being exercised and shall be
signed by either the Optionee or, in the event that this Option is being
exercised by the Optionee’s legal representative or the Optionee’s
beneficiaries, by the Optionee’s legal representative or the Optionee’s
beneficiaries, as applicable.  In the
case of exercise by the Optionee’s legal representative, the notice shall be
accompanied by written evidence reasonably satisfactory to the Company of his
or her authority to act on behalf of the Optionee.  In the case of exercise by the Optionee’s
beneficiaries, the notice shall be accompanied by a copy of the Optionee’s
death certificate.  Each notice also must
be accompanied by (x) the original executed copy of this Certificate, (y) the
aggregate Exercise Price for the Option Shares being purchased and (z) such
other documents or instruments as the Company may require to comply with the
then current federal and state income tax and securities laws.

 

(c)           The Exercise Price may be paid in cash, by
check, bank draft or money order.  No
Option Shares shall be issued in connection with an exercise of this Option
until full payment of the aggregate Exercise Price for such Option Shares has
been made to the Company.

 

(d)           In the event that this Option is exercised for
less than all of the Option Shares covered by this Certificate, and subject to
the terms and conditions of the Plan, the Company shall deliver an executed
copy of a new option certificate to the Optionee (or the legal representative
of the Optionee or the Optionee’s beneficiaries, if applicable) within sixty
(60) days of exercise, for the number of remaining Option Shares covered by
this Certificate.

 

A-3

 

5.             DELIVERY OF CERTIFICATES.

 

(a)           Except to the extent expressly authorized by
the Board of Directors, the Company shall not issue share certificates
representing the purchased Shares.  All
Shares issued upon exercise of an Option shall be recorded on the books and
records of the Company.  As soon as practicable
after receipt of each notice and full payment of the aggregate Exercise Price
pursuant to Section 4 of this Certificate, the Company shall issue
the purchased Shares to the Optionee along with a statement containing
information substantially similar to Exhibit B to the Plan and any
other information required pursuant to applicable law.  All Shares issued upon exercise of an Option
shall be subject to the restrictions contained in the Company’s Articles of
Incorporation and Bylaws.  An Optionee shall
have none of the rights of a stockholder in the Company until the Shares
underlying the Option(s) exercised are issued and the foregoing statement
delivered to the Optionee.

 

(b)           To the extent expressly authorized by the
Board of Directors, each certificate for Shares issued upon exercise of an
Option shall bear a legend containing information substantially similar to Exhibit B
to the Plan.  Any certificate for Shares
issued at any time in exchange or substitution for any other certificate
bearing such legend shall also bear a legend containing information
substantially similar to Exhibit B to the Plan.  Each certificate for Shares issued upon
exercise of an Option shall also bear any legends required by the Company’s
Articles of Incorporation or Bylaws or applicable law, and the transferability
of the certificate and the Shares represented thereby shall be subject to the
restrictions contained in the Company’s Articles of Incorporation and Bylaws.

 

6.             EFFECT OF CERTAIN CHANGES.  In accordance with Section 3.2 of
the Plan, if the number of outstanding shares of Common Stock shall be changed
by reason of a reorganization or merger in which the Company is the surviving
entity, or through a combination, recapitalization, reclassification, stock
split, stock dividend, stock consolidation or otherwise, the number of Option
Shares which are granted, the number of Option Shares which can be purchased on
a particular date and the Exercise Price per Option Share shall be
appropriately adjusted, as determined by the Company, to give proper effect to
these changes.  All adjustments made by
the Company in good faith pursuant to this Section 6 shall be
final, conclusive and binding on the Optionee.

 

7.             OPTIONS ARE NON-TRANSFERABLE.  This Option may not be assigned, transferred,
pledged or hypothecated in any way whether by operation of law or otherwise
(except by will, or if the Director dies intestate, by the laws of descent and
distribution).

 

8.             NO GUARANTEE OF DIRECTORSHIP.  Nothing in this Certificate shall be deemed
or construed to confer upon the Optionee any right to serve as a Director for
any period of time or to continue serving at his or her present or any other
rate of compensation.

 

9.             LIMITATION ON LIABILITY.  In the event that the Optionee shall have
designated a beneficiary or beneficiaries in accordance with Section 4
of this Certificate and has not revoked such designation in accordance with Section 4
of this Certificate, the Company shall 

 

A-4

 

be
absolved of all further liability to the Optionee, the Optionee’s estate, the
Optionee’s spouse and the Optionee’s heirs, successors and assigns to the
extent that the Company issues Option Shares as directed by the beneficiary or
beneficiaries so designated upon exercise of this Option following the death of
the Optionee in accordance with the requirements of Section 4 of
this Certificate.  In addition, the
Company shall be absolved of all further liability to the Optionee, the
Optionee’s estate, the Optionee’s spouse and the Optionee’s heirs, successors
and assigns to the extent that the Company issues Option Shares as directed by
the Optionee’s legal representative upon exercise of this Option following the
disability of the Optionee in accordance with the requirements of Section 4
of this Certificate.

 

10.           TAX WITHHOLDING.  Subject to Section 3.4 of the
Plan, the Company shall have the power to withhold, or require the Optionee to
remit to the Company, an amount sufficient to satisfy any withholding or other
tax due from the Company with respect to any amount payable or the Option
Shares issuable under the Plan, and the Company may defer payment or issuance
unless indemnified to its satisfaction by the Optionee for such amounts.

 

11.           MISCELLANEOUS.

 

(a)           This Option may not be exercised with respect
to a fraction of any Option Share.

 

(b)           Except as provided in Section 2(c) and
Section 2(d) of this Certificate, this Certificate (i) constitutes
the entire agreement between the Company and the Optionee regarding the subject
matter of this Option and (ii) supersedes and replaces all correspondence,
understandings and communications between the parties hereto with regard to
this Option, which, if claimed or believed by any person to exist, shall be
disregarded and shall not be relied upon for any purpose.  No modification or amendment of any of the
terms of this Certificate shall be valid if not made in writing and no such
writing shall be binding on the Company if not signed by its Chairman,
President or one of its Vice Presidents and attested by its Secretary or an
Assistant Secretary.

 

(c)           This Certificate shall be governed by and
construed in accordance with the internal laws of the State of Illinois without
giving effect to its conflicts of law principles, except to the extent
preempted by federal law.

 

(d)           This Certificate shall be binding upon the
successors and assigns of the Optionee and the Company.

 

(e)           If any provision of this Certificate, or the
application of such provision to any person or circumstance, shall be held
invalid, the remainder of this Certificate, or the application of such
provisions to persons or circumstances other than those to which it is held
invalid, shall not be affected thereby.

 

[The remainder of this page intentionally blank]

 

A-5

 

IN WITNESS WHEREOF, the Company has caused this
Certificate to be executed by its duly authorized corporate officers, and the
Optionee has duly executed this Certificate, all as of the date and year first
above written.

 

	
   

  	
  INLAND AMERICAN REAL ESTATE TRUST, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Its:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ATTEST:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
                                                                ,
  Secretary

  

 

 

ACKNOWLEDGED AND AGREED:

 

OPTIONEE

 

	
  Signature:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
				

 

 

EXHIBIT B

STATEMENT TO BE ISSUED UPON
EXERCISE OF OPTIONS

 

The Shares are subject to restrictions on Beneficial
Ownership and Constructive Ownership and Transfer for the purpose of the
Company’s maintenance of its status as a Real Estate Investment Trust (“REIT”)
under the Internal Revenue Code of 1986, as amended (the “Code”).  Subject to certain further restrictions and
except as expressly provided in the Company’s Articles of Incorporation:
(i) no Person may Beneficially Own or Constructively Own shares of the
Company’s Common Stock in excess of 9.8% (in value or number of shares) of the
outstanding shares of Common Stock of the Company unless such Person is an
Excepted Holder (in which case the Excepted Holder Limit shall be applicable);
(ii) no Person may Beneficially Own or Constructively Own shares of Equity
Stock of the Company in excess of 9.8% of the value of the total outstanding
shares of Equity Stock of the Company, unless such Person is an Excepted Holder
(in which case the Excepted Holder Limit shall be applicable); (iii) no
Person may Beneficially Own or Constructively Own Equity Stock that would
result in the Company being “closely held” under Section 856(h) of
the Code or otherwise cause the Company to fail to qualify as a REIT; and
(iv) no Person may Transfer shares of Equity Stock if such Transfer would
result in the Equity Stock of the Company being owned by fewer than one hundred
(100) Persons.  Any Person who
Beneficially Owns or Constructively Own or attempts to Beneficially Own or
Constructively Own shares of Equity Stock which causes or will cause a Person
to Beneficially or Constructively Own shares of Equity Stock in excess or in
violation of the above limitations must immediately notify the Company.  If any of the restrictions on transfer or
ownership are violated, the shares of Equity Stock represented hereby will be
automatically transferred to a Trustee of a Trust for the benefit of one or
more Charitable Beneficiaries.  In
addition, upon the occurrence of certain events, attempted Transfers in
violation of the restrictions described above may be void ab initio.  All capitalized terms in this statement have
the meanings defined in the Company’s Articles of Incorporation, as the same
may be amended from time to time, a copy of which, including the restrictions
on transfer and ownership, will be furnished to each holder of Equity Stock of
the Company on request and without charge.

 

B-1

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