Document:

exv10w1

 

Exhibit 10.1

AMENDMENT TO THE

ANNUITY AND LIFE RE (HOLDINGS), LTD.

INITIAL STOCK OPTION PLAN

     WHEREAS, Annuity and Life Re (Holdings), Ltd., a Bermuda corporation (the
“Company”), adopted the Annuity and Life Re (Holdings), Ltd. Initial Stock
Option Plan (the “Plan”), as amended and restated, effective April 29, 1999,
for the benefit of its eligible employees, directors, and consultants; and

     WHEREAS, the Company desires to amend the Plan to provide that the number
of non-qualified stock options granted annually to certain Non-Employee
Directors under the Plan be increased to 5,000 options.

     NOW, THEREFORE, effective on and after the date of adoption of this
Amendment, Section 8(a)(2) of the Plan is amended to read in its entirely as
follows:

“In addition, with respect to the Company’s first
annual shareholders’ meeting after December 31, 2003
and each subsequent annual shareholder’s meeting of the
Company, each Non-Employee Director whose term as a
director has not ended as of the date of such annual
shareholder’s meeting shall be granted an NQSO to
purchase 5,000 Common Shares as of the day of such
annual shareholder’s meeting.”

     IN WITNESS WHEREOF, the Company has caused this Amendment to be duly
executed as of this 5th day of May, 2004.

	 	 	 	 	 	 	 
	Attest:	 	 	 	ANNUITY AND LIFE RE (HOLDINGS), LTD.
	

	 	 	 	 	 	 
	/s/
Maria Teresa Andrews

	 	 	 	By:
	 	/s/ John W. Lockwood
	
 

	 	 	 	 	 	
 
	

	 	 	 	 	 	John W. Lockwood, Chief Financial Officer<PAGE>

                                                                    EXHIBIT 10.1

                             LIBERTY PROPERTY TRUST

                    AMENDED AND RESTATED SHARE INCENTIVE PLAN

        1.      Purpose. The Liberty Property Trust Amended and Restated Share
Incentive Plan (the "Plan") is intended to recognize the contributions made to
Liberty Property Trust (the "Company") by key employees, consultants and
advisors of the Company or an Affiliate (including employees who are members of
the Board of Trustees) of the Company or any Affiliate, to provide such persons
with additional incentive to devote themselves to the future success of the
Company or an Affiliate, and to improve the ability of the Company or an
Affiliate to attract, retain, and motivate individuals upon whom the Company's
sustained growth and financial success depend, by providing such persons with an
opportunity to acquire or increase their proprietary interest in the Company
through receipt of rights to acquire common shares of beneficial interest, $.001
par value per share (the "Shares"), in the Company, and through transfers of
Shares subject to conditions of forfeiture. In addition, the Plan is intended as
an additional incentive to members of the Board of Trustees (the "Trustees") who
are not employees of the Company or an Affiliate to serve on the Board of
Trustees and to devote themselves to the future success of the Company by
providing them with an opportunity to acquire or increase their proprietary
interest in the Company through the receipt of Options to acquire Shares.

        2.      Definitions. Unless the context clearly indicates otherwise, the
following terms shall have the following meanings:

                (a)     "Affiliate" means a corporation which is a parent
        corporation or a subsidiary corporation with respect to the Company
        within the meaning of Section 424(e) or (f) of the Code. In addition,
        "Affiliate" means any other entity in which the Company owns an interest
        which would be an Affiliate as defined in the preceding sentence but for
        the fact that such entity is not a corporation. Employees of any such
        non-corporate affiliate shall not be granted ISOs under the Plan.

                (b)     "Award" means a grant of Shares subject to conditions of
        forfeiture made pursuant to the terms of the Plan.

                (c)     "Award Agreement" means the agreement between the
        Company and a Grantee with respect to an Award made pursuant to the
        Plan.

                (d)     "Awardee" means a person to whom an Award has been
        granted pursuant to the Plan.

<PAGE>

                (e)     "Board of Trustees" means the Board of Trustees of the
        Company.

                (f)     "Change of Control" has the meaning as set forth in
        Section 10 of the Plan.

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

                (h)     "Committee" has the meaning set forth in Section 3 of
        the Plan.

                (i)     "Company" means Liberty Property Trust, a Maryland real
        estate investment trust.

                (j)     "Disability" has the meaning set forth in Section
        22(e)(3) of the Code.

                (k)     "Fair Market Value" has the meaning set forth in
        Subsection 8(b) of the Plan.

                (l)     "Grantee" means a person to whom an Option or an Award
        has been granted pursuant to the Plan.

                (m)     "ISO" means an Option granted under the Plan which is
        intended to qualify as an "incentive stock option" within the meaning of
        Section 422(b) of the Code.

                (n)     "Non-employee Trustee" means a member of the Board of
        Trustees who is not an employee of the Company or an Affiliate and who
        qualifies both as a "non-employee director" as that term is used in Rule
        16b-3 and as an "outside director" as that term is used in applicable
        IRS regulations promulgated under Code Section 162(m).

                (o)     "Non-qualified Stock Option" means an Option granted
        under the Plan which is not intended to qualify, or otherwise does not
        qualify, as an "incentive stock option" within the meaning of Section
        422(b) of the Code.

                (p)     "Option" means either an ISO or a Non-qualified Stock
        Option granted under the Plan.

                (q)     "Optionee" means a person to whom an Option has been
        granted under the Plan, which Option has not been exercised and has not
        expired or terminated.

                (r)     "Option Document" means the document described in
        Section 8 or Section 9 of the Plan, as applicable, which sets forth the
        terms and conditions of each grant of Options.

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<PAGE>

                (s)     "Option Price" means the price at which Shares may be
        purchased upon exercise of an Option, as calculated pursuant to
        Subsection 8(b) or Subsection 9(a) of the Plan.

                (t)     "Restricted Share" means a Share subject to conditions
        of forfeiture and transfer granted to any person pursuant to an Award
        under the Plan.

                (u)     "Retirement" shall mean a termination of an Optionee's
        employment or services for the Company or an Affiliate at any time after
        such Optionee has (i) reached age 65, (ii) attained age 55 with at least
        10 years of employment or services for the Company or an Affiliate, or
        (iii) attained an age of 55 or greater which when combined with the
        Optionee's years of employment or services for the Company or an
        Affiliate equals 65.

                (v)     "Rule 16b-3" means Rule 16b-3 promulgated under the
        Securities Exchange Act of 1934, as amended, or any successor rule.

                (w)     "Section 16 Officer" means any person who is an
        "officer" within the meaning of Rule 16a-1(f) promulgated under the
        Securities Exchange Act of 1934, as amended, or any successor rule.

                (x)     "Shares" means the shares of beneficial interest, $.01
        par value per share, of the Company.

                (y)     "Trustee" means a member of the Board of Trustees.

        3.      Administration of the Plan. The Plan shall be administered by
the Board of Trustees of the Company if all members of the Board of Trustees are
Non-employee Trustees; provided, however, that the Board of Trustees may
designate a committee or committee(s) of the Board of Trustees composed of two
or more of its Trustees to administer the Plan in its stead. If any member of
the Board of Trustees is not a Non-employee Trustee, the Board of Trustees shall
(i) designate a committee composed of two or more Trustees, each of whom is a
Non-employee Trustee (the "Non-employee Trustee Committee"), to operate and
administer the Plan in its stead, (ii) designate two committees to operate and
administer the Plan in its stead, one of such committees composed of two or more
of its Non-employee Trustees (the "Non-employee Trustee Committee") to operate
and administer the Plan with respect to the Company's Section 16 Officers and
the Trustees who are not members of the Non-employee Trustee Committee, and
another committee composed of two or more Trustees (which may include Trustees
who are not Non-employee Trustees) to operate and administer the Plan with
respect to persons other than Section 16 Officers or Trustees or (iii) designate
only one committee composed of two or more Non-employee Trustees (the
"Non-employee Trustee Committee") to operate and administer the Plan with
respect to the Company's Section 16 Officers and Trustees (other than those
Trustees serving on the Non-employee Trustee Committee) and itself operate and
administer the Plan with respect to persons other than Section 16 Officers or
Trustees. Any of such committees designated by the

                                       3
<PAGE>

Board of Trustees, and the Board of Trustees itself in its administrative
capacity with respect to the Plan, is referred to as the "Committee." With the
exception of the timing of grants of Options, the price at which Shares may be
purchased, and the number of Shares covered by Options granted to each member of
the Non-employee Trustee Committee, all of which shall be as specifically set
forth in Section 9, the other provisions set forth herein, as it pertains to
members of the Non-employee Trustee Committee, shall be administered by the
Board of Trustees.

                (a)     Meetings. The Committee shall hold meetings at such
        times and places as it may determine. Acts approved at a meeting by a
        majority of the members of the Committee or acts approved in writing by
        the unanimous consent of the members of the Committee shall be the valid
        acts of the Committee.

                (b)     Grants and Awards. Except with respect to Options
        granted under Subsection 8(j) and to Non-employee Trustee Committee
        Members pursuant to Section 9, the Committee shall from time to time at
        its discretion direct the Company to grant Options and Awards pursuant
        to the terms of the Plan. The Committee shall have plenary authority to
        (i) determine the persons to whom, and the times at which Options and
        Awards are to be granted as well as the terms applicable to Options and
        Awards, (ii) determine the type of Option to be granted and the number
        of Shares subject thereto, (iii) determine the Awardees to whom, and the
        times at which, Restricted Shares are granted, the number of Shares
        awarded, and the purchase price per Share, if any, and (iv) approve the
        form and terms and conditions of the Option Documents and Award
        Agreements; all subject, however, to the express provisions of the Plan.
        In making such determinations, the Committee may take into account the
        nature of the Grantee's services and responsibilities, the Grantee's
        present and potential contribution to the Company's success and such
        other factors as it may deem relevant. Notwithstanding the foregoing,
        grants of Options to Non-employee Trustee Committee Members shall be
        made exclusively in accordance with Section 9 and such other provisions
        of the Plan that specifically apply to such Options. The interpretation
        and construction by the Committee of any provisions of the Plan or of
        any Option or Award granted under it shall be final, binding and
        conclusive.

                (c)     Exculpation. No member of the Committee shall be
        personally liable for monetary damages as such for any action taken or
        any failure to take any action in connection with the administration of
        the Plan or the granting of Options or Awards thereunder unless (i) the
        member of the Committee has breached or failed to perform the duties of
        his office under applicable law and (ii) the breach or failure to
        perform constitutes self-dealing, willful misconduct or recklessness;
        provided, however, that the provisions of this Subsection 3(c) shall not
        apply to the responsibility or liability of a member of the Committee
        pursuant to any criminal statute or to the liability of a member of the
        Committee for the payment of taxes pursuant to local, state or federal
        law.

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<PAGE>

                (d)     Indemnification. Service on the Committee shall
        constitute service as a member of the Board of Trustees. Each member of
        the Committee shall be entitled without further act on his part to
        indemnity from the Company to the fullest extent provided by applicable
        law and the Company's Declaration of Trust and/or By-laws in connection
        with or arising out of any action, suit or proceeding with respect to
        the administration of the Plan or the granting of Options or Awards
        thereunder in which he or she may be involved by reason of his or her
        being or having been a member of the Committee, whether or not he or she
        continues to be such member of the Committee at the time of the action,
        suit or proceeding.

        4.      Grants and Awards under the Plan. Options under the Plan may be
in the form of a Non-qualified Stock Option, an ISO, or Awards of Restricted
Shares, or any combination thereof, at the discretion of the Committee.

        5.      Eligibility. All key employees, consultants and advisors of the
Company or an Affiliate and members of the Board of Trustees shall be eligible
to receive Options and Awards hereunder. The Committee, in its sole discretion,
shall determine whether an individual qualifies as a key employee.
Notwithstanding anything to the contrary contained herein, consultants and
advisors shall only be eligible to receive Options or Awards provided bona fide
services shall be rendered by such persons, and such services are not in
connection with a capital raising transaction.

        6.      Shares Subject to the Plan. The aggregate maximum number of
Shares for which Options or Awards may be granted pursuant to the Plan
(including Shares for which Options or Awards were granted under the Plan prior
to this restatement) is Eleven Million Four Hundred Twenty-Six Thousand Two
Hundred Fifty Six (11,426,256), subject to adjustment as provided in Section 11
of the Plan. The Shares shall be issued from authorized and unissued Shares or
Shares held in or hereafter acquired for the treasury of the Company. If an
Option terminates or expires without having been fully exercised for any reason,
or if Shares granted pursuant to an Award have been conveyed back to the Company
pursuant to the terms of an Award Agreement, the Shares for which the Option was
not exercised or the Shares that were conveyed back to the Company may again be
the subject of one or more Options or Awards granted pursuant to the Plan.

        7.      Term of the Plan. The amended and restated Plan is effective as
of March 23, 2004 (the "Approval Date"), subject to the approval of the amended
and restated Plan within twelve months after the Approval Date by a majority of
the votes cast at a duly called meeting of the shareholders at which a quorum
representing a majority of all outstanding voting interests of the Company is,
either in person or by proxy, present and voting, or by a method and in a degree
that would be treated as adequate under applicable state law in the case of an
action requiring shareholder approval. No Option or Award may be granted under
the Plan ten years after the Approval Date.

        8.      Option Documents and Terms. Each Option granted under the Plan
shall be a Non-qualified Stock Option unless the Option shall be specifically
designated at the

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<PAGE>

time of grant to be an ISO for federal income tax purposes. To the extent any
Option designated an ISO is determined for any reason not to qualify as an
incentive stock option within the meaning of Section 422 of the Code, such
Option shall be treated as a Non- qualified Stock Option for all purposes under
the provisions of the Plan. Options granted pursuant to the Plan shall be
evidenced by the Option Documents in such form as the Committee shall from time
to time approve, which Option Documents shall comply with and be subject to the
following terms and conditions and such other terms and conditions as the
Committee shall from time to time require which are not inconsistent with the
terms of the Plan. However, the provisions of this Section 8 shall not be
applicable to Options granted to non-employee members of the Board of Trustees,
except as otherwise provided in Subsection 9(c).

                (a)     Number of Option Shares. Each Option Document shall
        state the number of Shares to which it pertains. An Optionee may receive
        more than one Option, which may include Options which are intended to be
        ISO's and Options which are not intended to be ISO's, but only on the
        terms and subject to the conditions and restrictions of the Plan.
        Notwithstanding anything to the contrary contained herein, no employee
        shall be granted Options to acquire more than Seven Hundred Fifty
        Thousand (750,000) Shares during any calendar year.

                (b)     Option Price. Each Option Document shall state the
        Option Price which, for a Non-qualified Stock Option, may be less than,
        equal to, or greater than the Fair Market Value of the Shares on the
        date the Option is granted and, for an ISO, shall be at least 100% of
        the Fair Market Value of the Shares on the date the Option is granted as
        determined by the Committee in accordance with this Subsection 8(b);
        provided, however, that if an ISO is granted to an Optionee who then
        owns, directly or by attribution under Section 424(d) of the Code,
        interests in the Company or any parent or subsidiary corporation
        possessing more than ten percent of the total combined voting power of
        all classes of interests of the Company or such parent or subsidiary,
        then the Option Price shall be at least 110% of the Fair Market Value of
        the Shares on the date the Option is granted. If the Shares are traded
        in a public market, then the Fair Market Value per Share shall be, if
        the Shares are listed on a national securities exchange or included in
        the NASDAQ National Market System, the last reported sale price thereof
        on the relevant date, or, if the Shares are not so listed or included
        (or if there was no reported sale on the relevant date), the mean
        between the last reported "bid" and "asked" prices thereof on the
        relevant date, as reported on NASDAQ or by the exchange, as applicable,
        or, if not so reported, as reported by the National Daily Quotation
        Bureau, Inc. or as reported in a customary financial reporting service,
        as applicable, or, in the event such method of determination of fair
        market value is determined to be inaccurate or such information as is
        needed for such determination as set forth above is not available, as
        the Committee determines in good faith.

                (c)     Exercise. No Option shall be deemed to have been
        exercised prior to the receipt by the Company of written notice of such
        exercise and of payment

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<PAGE>

        in full of the Option Price for the Shares to be purchased. Each such
        notice shall specify the number of Shares to be purchased and shall
        (unless the Shares are covered by a then current registration statement
        or qualified Offering Statement under Regulation A under the Securities
        Act of 1933, as amended (the "Act"), contain the Optionee's
        acknowledgment in form and substance satisfactory to the Company that
        (a) such Shares are being purchased for investment and not for
        distribution or resale (other than a distribution or resale which, in
        the opinion of counsel satisfactory to the Company, may be made without
        violating the registration provisions of the Act), (b) the Optionee has
        been advised and understands that (i) the Shares have not been
        registered under the Act and are "restricted securities" within the
        meaning of Rule 144 under the Act and are subject to restrictions on
        transfer and (ii) the Company is under no obligation to register the
        Shares under the Act or to take any action which would make available to
        the Optionee any exemption from such registration, (c) such Shares may
        not be transferred without compliance with all pplicable federal and
        state securities laws, and (d) an appropriate legend referring to the
        foregoing restrictions on transfer and any other restrictions imposed
        under the Option Documents may be endorsed on the certificates.
        Notwithstanding the foregoing, if the Company determines that issuance
        of Shares should be delayed pending (A) registration under federal or
        state securities laws, (B) the receipt of an opinion of counsel
        satisfactory to the Company that an appropriate exemption from such
        registration is available, (C) the listing or inclusion of the Shares on
        any securities exchange or an automated quotation system or (D) the
        consent or approval of any governmental regulatory body whose consent or
        approval is deemed necessary in connection with the issuance of such
        Shares, the Company may defer exercise of any Option granted hereunder
        until any of the events described in this sentence has occurred.

                (d)     Medium of Payment. An Optionee shall pay for Shares (i)
        in cash, (ii) by certified or cashier's check payable to the order of
        the Company, or (iii) by such other mode of payment as the Committee may
        approve, including payment through a broker in accordance with
        procedures permitted by Regulation T of the Federal Reserve Board.
        Furthermore, the Committee may provide in an Option Document that
        payment may be made in whole or in part in Shares held by the Optionee.
        If payment is made in whole or in part in Shares, then the Optionee
        shall deliver to the Company certificates registered in the name of such
        Optionee representing the Shares owned by such Optionee, free of all
        liens, claims and encumbrances of every kind and having an aggregate
        Fair Market Value on the date of delivery that is at least as great as
        the Option Price of the Shares (or relevant portion thereof) with
        respect to which such Option is to be exercised by the payment in
        Shares, endorsed in blank or accompanied by stock powers duly endorsed
        in blank by the Optionee. In the event that certificates for Shares
        delivered to the Company represent a number of Shares in excess of the
        number of Shares required to make payment for the Option Price of the
        Shares (or relevant portion thereof) with respect to which such Option
        is to be exercised by payment in Shares, the certificate or certificates
        issued to the Optionee shall

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<PAGE>

        represent (i) the Shares in respect of which payment is made, and (ii)
        such excess number of Shares. Notwithstanding the foregoing, the
        Committee may impose from time to time such limitations and prohibitions
        on the use of Shares to exercise an Option as it deems appropriate.

                (e)     Termination of Options.

                        (i)     No Option shall be exercisable after the first
                to occur of the following:

                                (A)     Expiration of the Option term specified
                        in the Option Document, which, in the case of an ISO,
                        shall not occur after (1) ten years from the date of
                        grant, or (2) five years from the date of grant of an
                        ISO if the Optionee on the date of grant owns, directly
                        or by attribution under Section 424(d) of the Code,
                        interests in the Company or any parent or subsidiary
                        corporation possessing more than ten percent (10%) of
                        the total combined voting power of all classes of
                        interests of the Company or such parent or subsidiary;

                                (B)     The third month anniversary of the date
                        of termination of the Optionee's services or employment
                        with the Company or an Affiliate for any reason other
                        than death, Disability or Retirement, or the
                        thirty-sixth month anniversary of the date of
                        termination of the Optionee's services or employment
                        with the Company or an Affiliate as a result of the
                        Optionee's death, Disability or Retirement;

                                (C)     A finding by the Committee, after full
                        consideration of the facts presented on behalf of both
                        the Company and the Optionee, that the Optionee has
                        breached his or her employment or service contract with
                        the Company or an Affiliate, or has been engaged in
                        disloyalty to the Company or an Affiliate, including,
                        without limitation, fraud, embezzlement, theft,
                        commission of a felony or proven dishonesty in the
                        course of his or her employment or service, or has
                        disclosed trade secrets or confidential information of
                        the Company or an Affiliate. In such event, in addition
                        to immediate termination of the Option, the Optionee
                        shall automatically forfeit all Shares for which the
                        Company has not yet delivered the Share certificates
                        upon refund by the Company of the Option Price.
                        Notwithstanding anything herein to the contrary, the
                        Company may withhold delivery of Share certificates
                        pending the resolution of any inquiry that could lead to
                        a finding resulting in a forfeiture;

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<PAGE>

                                (D)     The date, if any, set by the Board of
                        Trustees as an accelerated expiration date in the event
                        of the liquidation or dissolution of the Company; or

                                (E)     The occurrence of such other event or
                        events as may be set forth in the Option Document as
                        causing an accelerated expiration of the Option.

                        (ii)    Notwithstanding the foregoing, the Committee may
                extend the period during which all or any portion of an Option
                may be exercised to a date no later than the Option term
                specified in the Option Document pursuant to Subsection
                8(e)(i)(A), provided that any change pursuant to this Subsection
                8(e)(ii) which would cause an ISO to become a Non-qualified
                Stock Option may be made only with the consent of the Optionee.

                        (iii)   The terms of an executive severance agreement or
                other agreement between the Company and an Optionee, approved by
                the Committee, whether entered into prior or subsequent to the
                grant of an Option, which provide for Option exercise dates
                later than those set forth in Subsection 8(e)(i) but permitted
                by this Subsection 8(e)(ii) shall be deemed to be Option terms
                approved by the Committee and consented to by the Optionee.

                        (iv)    Unless otherwise expressly permitted in the
                Option Document, no Option granted pursuant to this Section 8
                shall be exercisable following the termination of the Optionee's
                services as a member of the Board of Trustees or employment with
                the Company or any Affiliate for any reason other than death,
                Disability, or Retirement with respect to any Shares in excess
                of those which could have been acquired by exercise of the
                Option on the date of such termination of services or
                employment. Unless otherwise specified in the Option Document,
                upon termination of the Optionee's services as a member of the
                Board of Trustees or employment with the Company or any
                Affiliate as a result of death, Disability, or Retirement, the
                portion of the Option not exercisable upon such termination
                shall become exercisable.

                (f)     Transfers. No Option granted under the Plan may be
        transferred, except by will or by the laws of descent and distribution.
        During the lifetime of the person to whom an Option is granted, such
        Option may be exercised only by such person. Notwithstanding the
        foregoing, (1) a Non-qualified Stock Option may be transferred pursuant
        to the terms of a "qualified domestic relations order," within the
        meaning of Sections 401(a)(13) and 414(p) of the Code or within the
        meaning of Title I of the Employee Retirement Income Security Act of
        1974, as amended, and (2) the Committee may provide, in an Option
        Document, that an Optionee may transfer Options to his or her children,
        grandchildren or spouse or

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<PAGE>

        to one or more trusts for the benefit of such family members or to
        partnerships in which such family members are the only partners (a
        "Family Transfer"), provided that the Optionee receives no consideration
        for such Family Transfer and the Option Documents relating to Options
        transferred in such Family Transfer continue to be subject to the same
        terms and conditions that were applicable to such Options immediately
        prior to the Family Transfer.

                (g)     Limitation on ISO Grants. In no event shall the
        aggregate Fair Market Value of the Shares with respect to which ISOs
        issued under the Plan and incentive stock options issued under any other
        incentive stock option plans of the Company or its Affiliates which are
        exercisable for the first time by the Optionee during any calendar year
        exceed $100,000. Any ISOs issued in excess of this limitation shall be
        treated as Non-qualified Stock Options issued under the Plan. For
        purposes of this subsection 8(g), the Fair Market Value of Shares shall
        be determined as of the date of grant of the ISO or other incentive
        stock option.

                (h)     Other Provisions. Subject to the provisions of the Plan,
        the Option Documents shall contain such other provisions including,
        without limitation, provisions authorizing the Committee to accelerate
        the exercisability of all or any portion of an Option granted pursuant
        to the Plan, additional restrictions upon the exercise of the Option or
        additional limitations upon the term of the Option, as the Committee
        shall deem advisable.

                (i)     Amendment. Subject to the provisions of the Plan, the
        Committee shall have the right to amend Option Documents issued to an
        Optionee, subject to the Optionee's consent if such amendment is not
        favorable to the Optionee, except that the consent of the Optionee shall
        not be required for any amendment made pursuant to Subsection 8(e)(i)(C)
        or Section 10 of the Plan, as applicable.

                (j)     Five or Fewer. No Options shall be granted under the
        Plan if, taking into account the grant of such options, five or fewer
        individuals would own more than 50% of the outstanding Shares, as
        computed for purposes of Code Section 856(h).

        9.      Special Provisions Relating to Grants of Options to Non-Employee
Members of the Board of Trustees. Options granted pursuant to the Plan to
non-employee members of the Board of Trustees shall be granted, without any
further action by the Committee, in accordance with the terms and conditions set
forth in this Section 9. Options granted pursuant to this Section 9 shall be
evidenced by Option Documents in such form as the Committee shall from time to
time approve, which Option Documents shall comply with and be subject to the
following terms and conditions and such other terms and conditions as the
Committee shall from time to time require which are not inconsistent with the
terms of the Plan and would not cause a Non-employee Trustee to lose his or her
status as a "non-employee director" (as that term is used for purposes of Rule
16b-3) due to the grant of Options to such person pursuant to this Section 9.

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<PAGE>

                (a)     Timing of Grants; Number of Shares Subject of Options;
        Exercisability of Options; Option Price. Each non-employee member of the
        Board of Trustees shall be granted annually, commencing on the date of
        the initial public offering of Shares, and on each anniversary of such
        date thereafter, an Option to purchase five thousand (5,000) Shares
        provided such person is a member of the Board of Trustees on such grant
        date. Each such Option shall be a Non-qualified Stock Option exercisable
        with respect to twenty percent (20%) of the Shares subject to such
        Option after the first anniversary of the date of grant, exercisable
        with respect to fifty percent (50%) of the Shares after the second
        anniversary of the date of grant, and fully exercisable after the third
        anniversary of the date of grant. The Option Price shall be equal to the
        Fair Market Value of the Shares on the date the Option is granted.

                (b)     Termination of Options Granted Pursuant to Section 9. No
        Option granted pursuant to this Section 9 shall be exercisable after the
        first to occur of the following:

                        (i)     The tenth anniversary of the date of grant.

                        (ii)    The third month anniversary of the date of
                termination of the Optionee's services as a member of the Board
                of Trustees for any reason other than death, Disability or
                Retirement, or the thirty-sixth month anniversary of the date of
                termination of the Optionee's services as a member of the Board
                of Trustees as a result of the Optionee's death, Disability or
                Retirement.

                Except as provided in Subsection 8(e)(iv), no Option granted
        pursuant to this Section 9 shall be exercisable following the
        termination of the Optionee's services as a member of the Board of
        Trustees with respect to any Shares in excess of those which could have
        been acquired by exercise of the Option on the date of such termination
        of services.

                (c)     Applicability of Section 8 to Options Granted Pursuant
        to Section 9. The following provisions of Section 8 shall be applicable
        to Options granted pursuant to this Section 9: Subsection 8(a) (provided
        that all Options granted pursuant to this Section 9 shall be
        Non-qualified Stock Options); the last sentence of Subsection 8(b);
        Subsection 8(c); Subsection 8(d) (provided that Option Documents
        relating to Options granted pursuant to this Section 9 shall provide
        that payment may be made in whole or in part in Shares); and Subsection
        8(f) (provided that Option Documents relating to Options granted
        pursuant to this Section 9 shall not permit Family Transfers).

        10.     Change of Control. In the event of a Change of Control, the
Committee may take whatever action it deems necessary or desirable with respect
to the Options and Awards outstanding (other than Options granted pursuant to
Subsection 8(j) and Section 9), including, without limitation, accelerating the
expiration or termination date in the

                                       11
<PAGE>

respective Option Documents to a date no earlier than thirty (30) days after
notice of such acceleration is given to the Optionees. In addition to the
foregoing, in the event of a Change of Control, Options granted pursuant to the
Plan and held by Optionees who are employees of the Company or an Affiliate or
members of the Board of Trustees at the time of a Change of Control shall become
immediately exercisable in full and the restrictions applicable to Restricted
Shares awarded to Awardees who are employees of the Company or an Affiliate or
members of the Board of Trustees at the time of a Change of Control shall
immediately lapse. Any amendment to this Section 10 which diminishes the rights
of Optionees, shall not be effective with respect to Options outstanding at the
time of adoption of such amendment, whether or not such outstanding Options are
then exercisable.

        A "Change of Control" shall be deemed to have occurred upon the earliest
to occur of the following events: (i) the date on which the shareholders of the
Company (or the Board of Trustees, if shareholder action is not required)
approve a plan or other arrangement pursuant to which the Company will be
dissolved or liquidated, or (ii) the date on which the transactions contemplated
by a definitive agreement to sell or otherwise dispose of substantially all of
the assets of the Company are consummated, other than a transaction in which the
holders of the Shares immediately prior to the transaction will have at least
fifty percent (50%) of the voting power of the acquiring entity's voting
securities immediately after such transaction (without regard to such holders'
ownership of such acquiring entity's voting securities immediately before or
contemporaneously with such transaction), which voting securities are to be held
by such holders immediately following such transaction in substantially the same
proportion among themselves as such holders' ownership of the Shares immediately
before such transaction, or (iii) the first date on which (A) the transactions
contemplated by a definitive agreement to merge or consolidate the Company with
or into the other constituent entity, or to merge such other entity with or into
the Company, have been consummated, other than, in any such case, a merger or
consolidation of the Company in which the holders of the Shares immediately
prior to the merger or consolidation will have at least fifty percent (50%) of
the voting power of the surviving entity's voting securities immediately after
such merger or consolidation (without regard to such holders' ownership of such
acquiring entity's voting securities immediately before or contemporaneously
with such merger or consolidation), which voting securities are to be held by
such holders immediately following such merger or consolidation in substantially
the same proportion among themselves as such holders' ownership of the Shares
immediately before such merger or consolidation, and (B) members of the Board of
Trustees prior to the consummation of such merger or consolidation cease to
constitute a majority of the Board of Trustees, or (iv) the date on which any
entity, person or group, within the meaning of Section 13(d)(3) or Section
14(d)(2) of the Securities Exchange Act of 1934, as amended (other than the
Company or any Subsidiary or any employee benefit plan sponsored or maintained
by the Company or any Subsidiary), shall have become the beneficial owner of, or
shall have obtained voting control over, more than twenty percent (20%) of the
outstanding Shares (without regard to any contractual or other restriction on
the conversion or other exchange of securities into or for Shares), or (v) the
first day after which a majority of the members of the Board of Trustees shall

                                       12
<PAGE>

have been members of the Board of Trustees for less than two (2) years, unless
the nomination for election of each new trustee who was not a trustee at the
beginning of such two (2)-year period was approved by a vote of at least
two-thirds of the trustees then still in office who were trustees at the
beginning of such period.

        11.     Adjustments on Changes in Capitalization.

                (a)     Corporate Transactions. In the event that the
        outstanding Shares are changed by reason of a reorganization, merger,
        consolidation, recapitalization, reclassification, stock split-up,
        combination or exchange of shares and the like (not including the
        issuance of Shares on the conversion of other securities of the Company
        which are outstanding on the date of grant and which are convertible
        into Shares) or dividends payable in Shares, an equitable adjustment
        shall be made by the Committee in the aggregate number of Shares
        available under the Plan and in the number of Shares and price per Share
        subject to outstanding Options. Unless the Committee makes other
        provisions for the equitable settlement of outstanding options, if the
        Company shall be reorganized, consolidated, or merged with another
        corporation, or if all or substantially all of the assets of the Company
        shall be sold or exchanged, an Optionee shall at the time of issuance of
        the Shares under such corporate event be entitled to receive upon the
        exercise of his or her Option the same number and kind of shares or the
        same amount of property, cash or securities as he or she would have been
        entitled to receive upon the occurrence of any such corporate event as
        if he or she had been, immediately prior to such event, the holder of
        the number of shares covered by his or her Option.

                (b)     Proportionate Application. Any adjustment under this
        Section 11 in the number of Shares subject to Options shall apply
        proportionately to only the unexercised portion of any Option granted
        hereunder. If fractions of a Share would result from any such
        adjustment, the adjustment shall be revised to the next lower whole
        number of Shares.

                (c)     Committee Authority. The Committee shall have authority
        to determine the adjustments to be made under this Section, and any such
        determination by the Committee shall be final, binding and conclusive.

        12.     Terms and Conditions of Awards. Awards granted pursuant to the
Plan shall be evidenced by written Award Agreements in such form as the
Committee shall from time to time approve, which Award Agreements shall comply
with and be subject to the following terms and conditions and such other terms
and conditions which the Committee shall from time to time require which are not
inconsistent with the terms of the Plan. The Committee may, in its sole
discretion, shorten or waive any term or condition with respect to all or any
portion of any Award. Notwithstanding the foregoing, all restrictions shall
lapse or terminate with respect to Restricted Shares upon the death or
Disability of the Awardee. The total number of Shares which may be granted
pursuant to Awards under the Plan shall not exceed Two Million (2,000,000).

                                       13
<PAGE>

                (a)     Number of Shares. Each Award Agreement shall state the
        number of Shares to which it pertains.

                (b)     Purchase Price. Each Award Agreement shall specify the
        purchase price, if any, which applies to the Award. If the Board of
        Trustees specifies a purchase price, the Awardee shall be required to
        make payment on or before the date specified in the Award Agreement. An
        Awardee shall pay for such Shares (i) in cash, (ii) by certified check
        payable to the order of the Company, or (iii) by such other mode of
        payment as the Committee may approve.

                (c)     Restrictions on Transfer and Forfeitures. A share
        certificate representing the Restricted Shares granted to an Awardee
        shall be registered in the Awardee's name but shall be held in escrow by
        the Company or an appropriate officer of the Company, together with an
        undated share transfer power executed by the Awardee with respect to
        each share certificate representing Restricted Shares in such Awardee's
        name. The Awardee shall generally have the rights and privileges of a
        shareholder as to such Restricted Shares including the right to vote
        such Restricted Shares and to receive and retain all cash dividends with
        respect to such Shares, except that the following restrictions shall
        apply: (i) the Awardee shall not be entitled to delivery of the
        certificate until the expiration or termination of any period designated
        by the Committee ("Restricted Period") and the satisfaction of any other
        conditions prescribed by the Committee; and (ii) all distributions with
        respect to the Restricted Shares other than cash dividends, such as
        share dividends, share splits or distributions of property, and any
        distributions (other than cash dividends) subsequently made with respect
        to other distributions, shall be delivered to the Company or an
        appropriate officer of the Company, together with appropriate share
        transfer powers or other instruments of transfer signed and delivered to
        the Company or appropriate officer of the Company by the Awardee, to be
        held by the Company or appropriate officer of the Company and released
        to either the Awardee or the Company, as the case may be, together with
        the Shares to which they relate; (iii) the Awardee will have no right to
        sell, exchange, transfer, pledge, hypothecate or otherwise dispose of
        any of the Restricted Shares or distributions (other than cash
        dividends) with respect thereto; and (iv) all of the Restricted Shares
        shall be forfeited and all rights of the Awardee with respect to such
        Restricted Shares shall terminate without further obligation on the part
        of the Company unless the Awardee has remained a regular full-time
        employee of the Company or an Affiliate, any of its subsidiaries or any
        parent or any combination thereof until the expiration or termination of
        the Restricted Period and the satisfaction of any other conditions
        prescribed by the Committee applicable to such Restricted Share. Upon
        the forfeiture of any Restricted Share, such forfeited shares shall be
        transferred to the Company without further action by the Awardee.

                (d)     Lapse of Restrictions. Upon the expiration or
        termination of the Restricted Period and the satisfaction of any other
        conditions prescribed by the

                                       14
<PAGE>

        Committee as provided for in the Plan, the restrictions applicable to
        the Restricted Share shall lapse and a stock certificate for the number
        of shares of Common Stock with respect to which the restrictions have
        lapsed shall be delivered, free of all such restrictions, except any
        that may be imposed by law, to the Awardee or the beneficiary or estate,
        as the case may be. The Company shall not be required to deliver any
        fractional share of Common Stock but will pay, in lieu thereof, the fair
        market value (determined as of the date the restrictions lapse) of such
        fractional share to the Awardee or the Awardee's beneficiary or estate,
        as the case may be. The Award may provide for the lapse of restrictions
        on transfer and forfeiture conditions in installments. Notwithstanding
        the foregoing, unless the Shares are covered by a then current
        registration statement or a Notification under Regulation A under the
        Act, the Company may require as a condition to the transfer of Share
        certificates to an Awardee under this Subsection 12(d) that the Awardee
        provide the Company with an acknowledgment in form and substance
        satisfactory to the Company that (a) such Shares are being purchased for
        investment and not for distribution or resale (other than a distribution
        or resale which, in the opinion of counsel satisfactory to the Company,
        may be made without violating the registration provisions of the Act),
        (b) the Optionee has been advised and understands that (i) the Shares
        have not been registered under the Act and are "restricted securities"
        within the meaning of Rule 144 under the Act and are subject to
        restrictions on transfer and (ii) the Company is under no obligation to
        register the Shares under the Act or to take any action which would make
        available to the Optionee any exemption from such registration, (c) such
        Shares may not be transferred without compliance with all applicable
        federal and state securities laws, and (d) an appropriate legend
        referring to the foregoing restrictions on transfer may be endorsed on
        the certificates. Notwithstanding the foregoing, if the Company
        determines that the transfer of Share certificates should be delayed
        pending (A) registration under federal or state securities laws, (B) the
        receipt of an opinion of counsel satisfactory to the Company that an
        appropriate exemption from such registration is available, (C) the
        listing or inclusion of the Shares on any securities exchange or an
        automated quotation system or (D) the consent or approval of any
        governmental regulatory body whose consent or approval is necessary in
        connection with the issuance of such Shares, the Company may defer
        transfer of Share certificates hereunder until any of the events
        described in this sentence has occurred.

                (e)     Section 83(b) Election. An Awardee who files an election
        with the Internal Revenue Service to include the fair market value of
        any Restricted Share in gross income while they are still subject to
        restrictions shall promptly furnish the Company with a copy of such
        election together with the amount of any federal, state, local or other
        taxes required to be withheld to enable the Company to claim an income
        tax deduction with respect to such election.

                (f)     Rights as Shareholder. Upon payment of the purchase
        price, if any, for Shares covered by an Award and compliance with the
        acknowledgment requirement of subsection 12(d), the Grantee shall have
        all of the rights of a

                                       15
<PAGE>

        shareholder with respect to the Shares covered thereby, including the
        right to vote the Shares and receive all dividends and other
        distributions paid or made with respect thereto, except to the extent
        otherwise provided by the Committee or in the Award Agreement.

                (g)     Amendment. Subject to the provisions of the Plan, the
        Committee shall have the right to amend Awards issued to an Awardee,
        subject to the Awardee's consent if such amendment is not favorable to
        the Awardee, except that the consent of the Awardee shall not be
        required for any amendment made pursuant to Section 10 of the Plan.

        13.     Amendment of the Plan. The Board of Trustees of the Company may
amend the Plan from time to time in such manner as it may deem advisable.
Nevertheless, the Board of Trustees of the Company may not change the class of
individuals eligible to receive an ISO or increase the maximum number of Shares
as to which Options or Awards may be granted without obtaining approval, within
twelve months before or after such action, by vote of a majority of the votes
cast at a duly called meeting of the shareholders at which a quorum representing
a majority of all outstanding voting interests of the Company is, either in
person or by proxy, present and voting on the matter, or by a method and in a
degree that would be treated as adequate under applicable state law in the case
of an action requiring shareholder approval. No amendment to the Plan shall
adversely affect any outstanding Option or Award, however, without the consent
of the Grantee.

        14.     No Commitment to Retain. The grant of an Option or an Award
pursuant to the Plan shall not be construed to imply or to constitute evidence
of any agreement, express or implied, on the part of the Company or any
Affiliate to retain the Grantee in the employ of the Company or an Affiliate
and/or as a member of the Company's Board of Trustees or in any other capacity.

        15.     Withholding of Taxes. Whenever the Company proposes or is
required to deliver or transfer Shares in connection with an Award or the
exercise of an Option, the Company shall have the right to (a) require the
recipient to remit or otherwise make available to the Company an amount
sufficient to satisfy any federal, state and/or local withholding tax
requirements prior to the delivery or transfer of any certificate or
certificates for such Shares or (b) take whatever other action it deems
necessary to protect its interests with respect to its tax liabilities. The
Company's obligation to make any delivery or transfer of Shares shall be
conditioned on the Grantee's compliance, to the Company's satisfaction, with any
withholding requirement.

        16.     Interpretation. The Plan is intended to enable transactions
under the Plan with respect to Trustees and officers (within the meaning of
Section 16(a) under the Securities Exchange Act of 1934, as amended) to satisfy
the conditions of Rule 16b-3; to the extent that any provision of the Plan would
cause a conflict with such conditions or would cause the administration of the
Plan as provided in Section 3 to fail to satisfy the conditions of Rule 16b-3,
such provision shall be deemed null and void to the extent

                                       16
<PAGE>

permitted by applicable law. This section shall not be applicable if no class of
the Company's equity securities is then registered pursuant to Section 12 of the
Securities Exchange Act of 1934, as amended.

                                       17

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