Document:

exv10w03

Exhibit 10.03

March 27, 2008

Alan Marks

Dear Alan:

     eBay Inc. (the “Company” or “eBay”) is pleased to offer you the exempt position of Senior Vice
President, Corporate Communications at a bi-weekly salary of $11,538.47 which is equivalent to an
annualized salary of $300,000.22. In addition, the Company may award you discretionary bonuses
from time to time.

     You will be entitled to the benefits that eBay customarily makes available to employees in
positions comparable to yours and it will be recommended to the Compensation Committee of the Board
of Directors of eBay Inc. (the “Compensation Committee”) that you be granted a stock option to
purchase 75,000 shares of eBay’s common stock under the Company’s current stock plan. The exercise
price for the stock option will be no less than the fair market value of eBay’s common stock on the
date of grant, as determined by the Board of Directors. Generally, the stock option will vest and
become exercisable (assuming your continued employment with an eBay company on each vesting date)
over four years at the rate of 25% of the shares subject to the option one year after the
commencement of your employment and, at the end of each month thereafter, with respect to an
additional 1/48 of the shares subject to the option.

     Additionally, it will also be recommended to the Compensation Committee that you be granted a
target award of 10,000 performance based restricted stock units (“PBRSUs”) under the Company’s
current stock plan. The PBRSUs will have a two-year performance period beginning January 1, 2008.
The actual amount of the award will be determined at the end of the two-year performance period and
will be based on Company performance under non-GAAP operating margin and revenue growth measures,
which, in turn, will be modified by a return on invested capital performance metric, all set by the
Compensation Committee. The award will vest and become non-forfeitable (assuming your continued
employment with an eBay company on each vesting date) at the rate of 50% of the shares subject to
the award on the date of grant, which is expected to be March 1, 2010, and as to the remaining 50%
of the shares on the first anniversary of the date of grant, subject to necessary withholding for
applicable taxes.

     Enclosed is an Insider Trading Agreement, which outlines the procedures and guidelines
governing securities trades by company personnel. Please review the Agreement carefully, execute
the certification and return it to me.

     You will be eligible to participate in the 2008 eBay Incentive Plan (eIP) available to
employees in positions comparable to yours. Payouts under the plan for Senior Vice Presidents are
based on individual achievements as well as Company performance and are paid on an annual cycle.
Your target bonus for eIP is 55% of your base salary. The Company reserves the right to amend,
change or cancel the plan at its sole discretion.

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     You will also be eligible to receive a bonus of $1,000,000 (less deductions and applicable
taxes) to assist with you with the purchase of a home in the Bay Area. This bonus will be payable
as soon as administratively possible following your notice to the Company that you are prepared to
purchase a home in the Bay Area. In the event that your employment ceases for reasons of cause or
resignation prior to completion of one year of service from your start date, you will be required
to repay the bonus in full to eBay. If your employment ceases for reasons of cause or resignation
after one year but prior to the third anniversary of your start date, your repayment obligation
with respect to the bonus will be reduced by 1/36 for every full month of employment. No repayment
would be required for termination after three years of employment with the Company.

     In addition, you will also be eligible to receive a one-time make good bonus of $65,000 (less
deductions and applicable taxes) payable August 1, 2008.

     eBay will assist with expenses incurred for your relocation from Portland, Oregon, to San
Jose, California, under the terms of eBay’s relocation assistance program for employees in
positions comparable to yours. This assistance includes up to 6 months of temporary corporate
housing. In the event that your employment ceases for reasons of cause or resignation prior to
completion of one year of service from your start date, the relocation assistance is fully
refundable to eBay. If your employment ceases after one year but prior to two years from your
start date, your repayment obligation will be reduced by 1/24 for every full month of active
employment. No repayment would be required upon termination after two years of employment.

     Under federal immigration laws, the Company is required to verify each new employee’s identity
and legal authority to work in the United States. Accordingly, please be prepared to furnish
appropriate documents satisfying those requirements; this offer of employment is conditioned on
submission of satisfactory documentation. Enclosed is a list of the required documents.

     Your employment at the Company is “at-will” and either you or the Company may terminate your
employment at any time, with or without cause or advance notice. The at-will nature of the
employment relationship can only be changed by written agreement signed by eBay’s SVP of Human
Resources. Other terms, conditions, job responsibilities, compensation and benefits may be adjusted
by the Company from time to time in its sole discretion.

     All of us at eBay are very excited about you joining our team and look forward to a beneficial
and fruitful relationship. However, should any dispute arise with respect to your employment or the
termination of that employment, we both agree that such dispute shall be conclusively resolved by
final, binding and confidential arbitration rather than by a jury court or administrative agency.
The Company will bear those expenses unique to arbitration. Please review the enclosed Mutual
Arbitration Agreement carefully.

     As a condition of your employment, you must complete both the Mutual Arbitration Agreement and
the enclosed Employee Proprietary Information and Inventions Agreement prior to commencing
employment. In part, the Employee Proprietary Information and Inventions Agreement requires that a
departing employee refrain from unauthorized use or disclosure of the Company’s confidential
information (as defined in that Agreement). This Agreement does not prevent a former employee from
using know-how and expertise in any new field or position. If you should have any questions about
the Employee Proprietary Information and Inventions Agreement,

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please call me. Otherwise, please sign and date this document and return it to me in the
enclosed envelope.

     This letter, the Mutual Arbitration Agreement, and the Employee Proprietary Information and
Inventions Agreement contain the entire agreement with respect to your employment. Should you have
any questions with regard to any of the items indicated above, please call me. Kindly indicate your
consent to this agreement by signing copies of this letter, the Mutual Arbitration Agreement, and
the Employee Proprietary Information and Inventions Agreement and returning them to me, along with
the Insider Trading Agreement certification.

     This offer is contingent upon your background verification. Upon your signature below, this
will become our binding agreement with respect to your employment and its terms merging and
superseding in their entirety all other or prior offers, agreements and communications, whether
written or oral, by you and the Company as to the specific subjects of this letter.

     Alan, as we build an enduring success at eBay, I am confident you will play a critical role. I
look forward to your partnership with me and the rest of our leadership team.

Very truly yours,

	 	 	 
	/s/ John Donahoe
	 	 
	 

John Donahoe

	 	 
	Chief Executive Officer, eBay Inc.
	 	 
	 
	 	 
	ACCEPTED:
	 	 
	 
	 	 
	/s/ Alan Marks	 	 
	 

Alan Marks

	 	 
	 
	 	 
	March 29, 2008	 	 
	 

Date

	 	 

	 	 	 	 	 
	Anticipated Start Date:
	 	April 28, 2008	 	 
	 

	 	 

	 	 

3EX-10.1 2008 STOCK OPTION PLAN

Exhibit 10.1

Cole
Credit Property Trust III, Inc.

2008 Stock Option Plan

for

Independent Directors

 

 

Cole
Credit Property Trust III, Inc.

2008 Stock Option Plan

for

Independent Directors

1 Purpose

     The purpose of this Plan is to promote the interests of the Company by providing the
opportunity to purchase or receive Shares or to receive compensation that is based upon
appreciation in the value of Shares to Eligible Recipients in order to attract and retain Eligible
Recipients and providing Eligible Recipients an incentive to work to increase the value of Shares
and a stake in the future of the Company that corresponds to the stake of each of the Company’s
stockholders. The Plan provides for the grant of non-qualified stock options to aid the Company in
obtaining these goals.

2 Definitions

     Each term set forth in this Section shall have the meaning set forth opposite such term for
purposes of this Plan and any Option Agreements under this Plan (unless noted otherwise), and for
purposes of such definitions, the singular shall include the plural and the plural shall include
the singular, and reference to one gender shall include the other gender. Note that some
definitions may not be used in this Plan, and may be inserted here solely for possible use in
Option Agreements issued under this Plan.

     2.1 Board means the Board of Directors of the Company.

     2.2 Cause shall mean an act or acts by an Eligible Recipient involving (a) the use for profit
or disclosure to unauthorized persons of confidential information or trade secrets of the Company,
a Parent or a Subsidiary, (b) the breach of any contract with the Company, a Parent or a
Subsidiary, (c) the violation of any fiduciary obligation to the Company, a Parent or a Subsidiary,
(d) the unlawful trading in the securities of the Company, a Parent or a Subsidiary, or of another
corporation based on information gained as a result of the performance of services for the Company,
a Parent or a Subsidiary, (e) a felony conviction or the failure to contest prosecution of a
felony, or (f) willful misconduct, dishonesty, embezzlement, fraud, deceit or civil rights
violations, or other unlawful acts.

     2.3 Change of Control means either of the following:

     (a) any transaction or series of transactions pursuant to which the Company sells,
transfers, leases, exchanges or disposes of substantially all (i.e., at least eighty-five
percent (85%)) of its assets for cash or property, or for a combination of cash and
property, or for other consideration; or

     (b) any transaction pursuant to which persons who are not current stockholders of the
Company acquire by merger, consolidation, reorganization, division or other business
combination or transaction, or by a purchase of an interest in the Company, an interest in
the Company so that after such transaction, the stockholders of the Company immediately
prior to such transaction no longer have a controlling (i.e., 50% or more) voting interest
in the Company.

     2.4 Code means the Internal Revenue Code of 1986, as amended.

     2.5 Committee means any committee appointed by the Board to administer the Plan, as specified
in Section 5 hereof. Any such committee shall be comprised entirely of Directors.

     2.6 Common Stock means the common stock of the Company.

     2.7 Company means Cole Credit Property Trust III, Inc., a Maryland corporation, and any successor to
such organization.

     2.8 Director means a member of the Board.

     2.9 Effective Date means the “Effective Date” as set forth in Section 4 of this Plan.

     2.10 Eligible Recipient means a member of the Board who is not an Employee.

     2.11 Employee means a common law employee of the Company, a Subsidiary or a Parent.

     2.12 Exchange Act means the Securities Exchange Act of 1934, as amended.

 

 

     2.13 Exercise Price means the price that shall be paid to purchase one (1) Share upon the
exercise of an Option granted under this Plan.

     2.14 Fair Market Value of each Share on any date means the price determined below as of the
close of business on such date (provided, however, if for any reason, the Fair Market Value per
share cannot be ascertained or is unavailable for such date, the Fair Market Value per share shall
be determined as of the nearest preceding date on which such Fair Market Value can be ascertained):

     (a) If the Share is listed or traded on any established stock exchange or a national
market system, including without limitation the Global or Global Select Markets of the
National Association of Securities Dealers, Inc. Automated Quotation (“NASDAQ”) System, its
Fair Market Value shall be the closing sale price for the Share (or the mean of the closing
bid and ask prices, if no sales were reported), on such exchange or system on the date of
such determination, as reported in The Wall Street Journal or such other source as the Board
deems reliable; or

     (b) If the Share is not listed or traded on any established stock exchange or a
national market system, its Fair Market Value shall be the average of the closing dealer
“bid” and “ask” prices of a Share as reflected on the NASDAQ interdealer quotation system of
the National Association of Securities Dealers, Inc. on the date of such determination; or

     (c) In the absence of an established public trading market for the Share, the Fair
Market Value of a Share shall be determined in good faith by the Board.

     2.15 Initial Public Offering means the closing of the Company’s initial public offering of any
class or series of the Company’s equity securities pursuant to an effective registration statement
filed by the Company under the 1933 Act.

     2.16 Insider means an individual who is, on the relevant date, an officer, director or ten
percent (10%) beneficial owner of any class of the Company’s equity securities that is registered
pursuant to Section 12 of the Exchange Act, all as defined under Section 16 of the Exchange Act.

     2.17 Option means an option granted under this Plan to purchase Shares that is not intended by
the Company to satisfy the requirements of Code §422.

     2.18 Option Agreement means an agreement between the Company, a Parent or a Subsidiary, and a
Participant evidencing an award of an Option.

     2.19 Outside Director means a Director who is not an Employee and who qualifies as a
“non-employee director” under Rule 16b-3(b)(3) under the 1934 Act, as amended from time to time.

     2.20 Parent means any corporation in an unbroken chain of corporations if each of the
corporations owns stock possessing fifty percent (50%) or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain.

     2.21 Participant means an individual who receives an Option hereunder.

     2.22 Plan means this Cole Credit Property Trust III, Inc. 2008 Stock Option Plan for Independent
Directors, as may be amended from time to time.

     2.23 Share means a share of the Common Stock of the Company.

     2.24 Subsidiary means any corporation in an unbroken chain of corporations if each of the
corporations other than the last corporation in the unbroken chain owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.

3 Shares Subject to Options

     3.1 Maximum Aggregate Shares Issuable Pursuant to Options. The total number of Shares that
may be issued pursuant to Options under this Plan shall not exceed One Million (1,000,000), all as
adjusted pursuant to Section 10. Such Shares shall be reserved, to the extent that the Company
deems appropriate, from authorized but unissued Shares, from Shares which have been reacquired by
the Company, from Shares paid to the Company pursuant to the exercise of Options issued under the
Plan, or from Shares withheld by the Company for payment of taxes.

Cole
Credit Property Trust III, Inc. 2008 Stock Option Plan for Independent Directors

Page 2

 

 

     3.2 Determination of Maximum Aggregate Shares Issuable. Any Shares subject to an Option that
remain un-issued after the cancellation, expiration, lapse or exchange of such Option thereafter
shall again become available for use under this Plan. Only the net number of Shares that are
issued pursuant to the exercise of an Option shall be counted as issued in applying the provisions
of Section 3.1 above in the case of an Option which is exercised through a “cashless” or “net
share” exercise as described in Section 7.2(e).

4 Effective Date

     The Effective Date of this Plan shall be the date it is adopted by the Board, or such delayed
effective date as the Board may specify, as noted in resolutions effectuating such adoption. This
Plan shall be subject to the approval of the stockholders of the Company within twelve (12) months
after the date on which this Plan is adopted by the Board, disregarding any contingencies or
delayed effective date relative to such adoption. In the event that stockholder approval of this
Plan is not obtained, or in the event that this Plan is not subjected to the approval of the
stockholders, then any Options granted under this Plan shall nonetheless be deemed granted pursuant
to the authority of the Board. Should this Plan be rejected by the stockholders after being
submitted to the stockholders for their approval, the Plan shall immediately terminate at that
time, and no further grants shall be made under this Plan thereafter.

5 Administration

     5.1 General Administration. This Plan shall be administered by the Board. The Board, acting
in its absolute discretion, shall exercise all such powers and take all such action as it deems
necessary or desirable to carry out the purposes of this Plan. The Board shall have the power to
interpret this Plan and, subject to the terms and provisions of this Plan, to take such other
action in the administration and operation of the Plan as it deems equitable under the
circumstances. The Board’s actions shall be binding on the Company, on each affected Eligible
Recipient, and on each other person directly or indirectly affected by such actions.

     5.2 Authority of the Board. Except as limited by law or by the Articles of Incorporation or
Bylaws of the Company, and subject to the provisions herein, the Board shall have full power to
select Eligible Recipients who shall participate in the Plan, to determine the sizes and types of
Options in a manner consistent with the Plan, to determine the terms and conditions of Options in a
manner consistent with the Plan, to construe and interpret the Plan and any agreement or instrument
entered into under the Plan, to establish, amend or waive rules and regulations for the Plan’s
administration, and to amend the terms and conditions of any outstanding Options as allowed under
the Plan and such Options. Further, the Board may make all other determinations that may be
necessary or advisable for the administration of the Plan.

     5.3 Delegation of Authority. The Board may delegate its authority under the Plan, in whole or
in part, to a Committee appointed by the Board consisting of not less than one (1) Director or to
one or more other persons to whom the powers of the Board hereunder may be delegated in accordance
with applicable law. The members of the Committee and any other persons to whom authority has been
delegated shall be appointed from time to time by, and shall serve at the discretion of, the Board.
The Committee or other delegate (if appointed) shall act according to the policies and procedures
set forth in the Plan and to those policies and procedures established by the Board, and the
Committee or other delegate shall have such powers and responsibilities as are set forth by the
Board. Reference to the Board in this Plan shall specifically include reference to the Committee
or other delegate where the Board has delegated its authority to the Committee or other delegate,
and any action by the Committee or other delegate pursuant to a delegation of authority by the
Board shall be deemed an action by the Board under the Plan. Notwithstanding the above, the Board
may assume the powers and responsibilities granted to the Committee or other delegate at any time,
in whole or in part. With respect to Committee appointments and composition, only a Committee (or
a sub-committee thereof) comprised solely of two (2) or more Outside Directors may grant Options to
Insiders that will be exempt from Section 16(b) of the Exchange Act.

     5.4 Decisions Binding. All determinations and decisions made by the Board (or its delegate)
pursuant to the provisions of this Plan and all related orders and resolutions of the Board shall
be final, conclusive and binding on all persons, including the Company, its stockholders,
Directors, Eligible Recipients, Participants, and their estates and beneficiaries.

     5.5 Indemnification for Decisions. No member of the Board or the Committee (or a
sub-committee thereof) shall be liable in connection with or by reason of any act or omission
performed or omitted to

Cole
Credit Property Trust III, Inc. 2008 Stock Option Plan for Independent Directors

Page 3

 

 

be performed on behalf of the Company in such capacity, provided, that the
Board has determined, in good faith, that the course of conduct that caused the loss or liability was in the best interests of the
Company. Service on the Committee (or a sub-committee thereof) shall constitute service as a
director of the Company so that the members of the Committee (or a sub-committee thereof) shall be
entitled to indemnification and reimbursement as directors of the Company pursuant to its articles
of incorporation, bylaws and applicable law. In addition, the members of the Board, Committee (or
a sub-committee thereof) shall be indemnified by the Company against the following losses or
liabilities reasonably incurred in connection with or by reason of any act or omission performed or
omitted to be performed on behalf of the Company in such capacity, provided, that the Board has
determined, in good faith, that the course of conduct which caused the loss or liability was in the
best interests of the Company: (a) the reasonable expenses, including attorneys’ fees actually and
necessarily incurred in connection with the defense of any action, suit or proceeding, to which
they or any of them may be a party by reason of any action taken or failure to act under or in
connection with the Plan, any Option granted hereunder, and (b) against all amounts paid by them in
settlement thereof (provided such settlement is approved by independent legal counsel selected by
the Company) or paid by them in satisfaction of a judgment in any such action, suit or proceeding,
except in relation to matters as to which it shall be adjudged in such action, suit or proceeding
that such individual is liable for gross negligence or misconduct in the performance of his duties,
provided that within 60 days after institution of any such action, suit or proceeding a Committee
member or delegatee shall in writing offer the Company the opportunity, at its own expense, to
handle and defend the same. The Company shall not indemnify or hold harmless the member of the
Board or the Committee (or a subcommittee thereof) if: (a) in the case of a director (other than an
independent director of the Company), the loss or liability was the result of negligence or
misconduct by the director, or (b) in the case that the director is an independent director of the
Company, the loss or liability was the result of gross negligence or willful misconduct by the
director. Any indemnification of expenses or agreement to hold harmless may be paid only out of
the net assets of the Company, and no portion may be recoverable from Stockholders.

6 Eligibility

     Eligible Recipients selected by the Board shall be eligible for the grant of Options under
this Plan, but no Eligible Recipient shall have the right to be granted an Option under this Plan
merely as a result of his or her status as an Eligible Recipient.

7 Terms of Options

     7.1 Terms & Conditions of All Options.

     (a) Grants of Options. The Board, in its absolute discretion, shall grant Options
under this Plan from time to time and shall have the right to grant new Options in exchange
for outstanding Options, including, but not limited to, exchanges of Stock Options for the
purpose of achieving a lower Exercise Price. Options shall be granted to Eligible
Recipients selected by the Board, and the Board shall be under no obligation whatsoever to
grant any Options, or to grant Options to all Eligible Recipients, or to grant all Options
subject to the same terms and conditions.

     (b) Shares Subject to Options. The number of Shares as to which an Option shall be
granted shall be determined by the Board in its sole discretion, subject to the provisions
of Section 3 as to the total number of Shares available for grants under the Plan.

     (c) Option Agreements. Each Option shall be evidenced by an Option Agreement executed
by the Company, a Parent or a Subsidiary, and the Participant, which shall be in such form
and contain such terms and conditions as the Board in its discretion may, subject to the
provisions of the Plan, from time to time determine.

     (d) Date of Grant. The date an Option is granted shall be the date on which the Board
(1) has approved the terms and conditions of the Option Agreement, (2) has determined the
recipient of the Option and the number of Shares covered by the Option, (3) has taken all
such other action necessary to direct the grant of the Option, and (4) if applicable, any
conditions imposed on such grant by the Board have been fulfilled.

Cole
Credit Property Trust III, Inc. 2008 Stock Option Plan for Independent Directors

Page 4

 

 

     7.2 Terms & Conditions of Options. 

     (a) Necessity of Option Agreements. Each grant of an Option shall be evidenced by an
Option Agreement that shall incorporate such other terms and conditions as the Board, acting
in its
absolute discretion, deems consistent with the terms of this Plan, including (without
limitation) a restriction on the number of Shares subject to the Option that first become
exercisable during any calendar year. The Board and/or the Company shall have complete
discretion to modify the terms and provisions of an Option in accordance with Section 12 of
this Plan.

     (b) Determining Optionees. In determining Eligible Recipient(s) to whom an Option
shall be granted and the number of Shares to be covered by such Option, the Board may take
into account the recommendations of the Chief Executive Officer of the
Company, the duties of the Eligible Recipient, the present and potential contributions
of the Eligible Recipient to the success of the Company, and other factors deemed relevant
by the Board, in its sole discretion, in connection with accomplishing the purpose of this
Plan. An Eligible Recipient who has been granted an Option to purchase Shares, whether
under this Plan or otherwise, may be granted one or more additional Options.

     (c) Exercise Price. Subject to adjustment in accordance with Section 10 and the other
provisions of this Section, the Exercise Price shall be as set forth in the applicable
Option Agreement. The Exercise Price for a Share shall be no less than (1) the minimum
price required by applicable state law, or (2) the minimum price required by the Company’s
governing instrument, or (3) $0.01, whichever price is greater. Any Option that is intended
to avoid taxation under Code §409A as a “nonqualified deferred compensation plan” must be
granted with an Exercise Price equivalent to or greater than the Fair Market Value of a
Share determined as of the date of such grant, consistent with Treas. Reg.
§1.409A-1(b)(5)(iv), and any other applicable guidance or regulations issued by the Internal
Revenue Service. Notwithstanding the foregoing, the Exercise Price of an Option granted in
substitution of an existing option pursuant to Treas. Reg.
§1.424-1(a) or Treas. Reg. §1.409A-1(b)(5)(v)(D) may be
established under the requirements of those provisions without regard to the foregoing (see
subsection (h) below).

     (d) Option Term. Each Option granted under this Plan shall be exercisable in whole or
in part at such time or times as set forth in the related Option Agreement, but no Option
Agreement shall:

     (1) make an Option exercisable before the date such Option is granted; or

     (2) make an Option exercisable after the earlier of:

     (i) the date such Option is exercised in full, or

     (ii) the date that is the tenth (10th) anniversary of the date such
Option is granted.

A
Option Agreement may provide for the exercise of an Option after the
Participant is no longer a Director of the Company for any reason whatsoever, including death or disability. The
Participant’s rights, if any, after service on the Board will be set forth in the
applicable Option Agreement.

     (e) Payment. Options shall be exercised by the delivery of a written notice of
exercise to the Company, setting forth the number of Shares with respect to which the Option
is to be exercised accompanied by full payment for the Shares. Payment for shares of Stock
purchased pursuant to exercise of an Option shall be made in cash or, unless the Option
Agreement provides otherwise, by delivery to the Company of a number of Shares having an
aggregate Fair Market Value equal to the amount to be tendered (including a “cashless” or
“net share” exercise), or a combination thereof. In addition, unless the Option Agreement
provides otherwise, the Option may be exercised through a brokerage transaction following
registration of the Company’s equity securities under Section 12 of the Exchange Act as
permitted under the provisions of Regulation T applicable to cashless exercises promulgated
by the Federal Reserve Board, unless prohibited by Section 402 of the Sarbanes-Oxley Act of
2002. However, notwithstanding the foregoing, with respect to any Option recipient who is
an Insider, a tender of shares or a cashless exercise must (1) have met the requirements of
an exemption under Rule 16b-3 promulgated under the Exchange Act, or (2) be a subsequent
transaction the terms of which were provided for in a transaction initially meeting the
requirements of an exemption under

Cole
Credit Property Trust III, Inc. 2008 Stock Option Plan for Independent Directors

Page 5

 

 

Rule 16b-3 promulgated under the Exchange Act. Unless the
Option Agreement provides otherwise, the foregoing exercise payment methods shall be
subsequent transactions approved by the original grant of an Option. Except as provided in
subparagraph (f) below, payment shall be made at the time that the Option or any part
thereof is exercised, and no Shares shall be issued or delivered upon exercise of an
Option until full payment has been made by the Participant. The holder of an Option,
as such, shall have none of the rights of a stockholder.

     (f) Conditions to Exercise of an Option. Each Option granted under the Plan shall vest
and shall be exercisable at such time or times, or upon the occurrence of such event or
events, and in such amounts, as the Board shall specify in the Option Agreement; provided,
however, that subsequent to the grant of an Option, the Board, at any time before complete
termination of such Option, may accelerate the time or times at which such Option may vest
or be exercised in whole or in part. The Board may impose such restrictions on any Shares
acquired pursuant to the exercise of an Option as it may deem advisable, including, without
limitation, vesting or performance-based restrictions, voting restrictions, investment
intent restrictions, restrictions on transfer, “first refusal” rights of the Company to
purchase Shares acquired pursuant to the exercise of an Option prior to their sale to any
other person, “drag along” rights requiring the sale of shares to a third party purchaser in
certain circumstances, “lock up” type restrictions in the case of an Initial Public Offering
of the Company’s stock, rights of the Company to re-purchase Shares acquired pursuant to the
exercise of an Option, restrictions or limitations or other provisions that would be applied
to stockholders under any applicable agreement among the stockholders, and restrictions
under applicable federal securities laws, under the requirements of any stock exchange or
market upon which such Shares are then listed and/or traded, and/or under any blue sky or
state securities laws applicable to such Shares.

     (g) Transferability of Options. An Option shall not be transferable or assignable
except by will or by the laws of descent and distribution and shall be exercisable, during
the Participant’s lifetime, only by the Participant; provided, however, that in the event
the Participant is incapacitated and unable to exercise his or her Option, such Option may
be exercised by such Participant’s legal guardian, legal representative, or other
representative whom the Board deems appropriate based on applicable facts and circumstances.
The determination of incapacity of a Participant and the determination of the appropriate
representative of the Participant who shall be able to exercise the Option if the
Participant is incapacitated shall be determined by the Board in its sole and absolute
discretion. Notwithstanding the foregoing, except as otherwise provided in the Option
Agreement, an Option may also be transferred by a Participant as a bona fide gift or through
a domestic relations order to any “family member” (as that term is defined in 17 CFR
§230.701(c)(3)) of the Participant, and in each case the transferee shall be subject to all
provisions of the Plan, the Option Agreement and other agreements with the Participant in
connection with the exercise of the Option. In the event of such a gift or transfer by
domestic relations order, the Participant shall promptly notify the Board of such transfer
and deliver to the Board such written documentation as the Board may in its discretion
request, including, without limitation, the written acknowledgment of the donee that the
donee is subject to the provisions of the Plan, the Option Agreement and other agreements
with the Participant. Notwithstanding the foregoing, an Option
Agreement may provide for more limited transferability than is
described above.

     (h) Special Provisions for Certain Substitute Options. Notwithstanding anything to the
contrary in this Section, any Option in substitution for a stock option previously issued by
another entity, which substitution occurs in connection with a transaction to which Treas.
Reg. §1.409A-1(b)(5)(v)(D) is applicable, may provide for an exercise price computed in
accordance with Treas. Reg. §1.409A-1(b)(5)(v)(D) and may
contain such other terms and conditions as the Board may prescribe to cause such substitute
Option to contain as nearly as possible the same terms and conditions (including the
applicable vesting and termination provisions) as those contained in the previously issued
stock option being replaced thereby.

     (i) Potential Repricing of Stock Options. With respect to any one or more Options
granted pursuant to, and under, this Plan, the Board may determine that the repricing of all
or any portion of such existing outstanding Options is appropriate
without the need for any additional approval of the Stockholders of the Company. For this purpose, “repricing” of
Options shall include, but not be limited to, any of the following actions (or any similar
action): (1) lowering the Exercise Price of an existing Option; (2) any action which would
be treated as a “repricing” under generally accepted accounting

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================================================================================

principles; or (3) canceling
of an existing Option at a time when its Exercise Price exceeds the Fair Market Value of the
underlying stock subject to such Option, in exchange for another Option.

8 Securities Regulation

     Each Option Agreement may provide that, upon the receipt of Shares as a result of the exercise
of an Option or otherwise, the Participant shall, if so requested by the Company, hold such Shares
for investment and not with a view of resale or distribution to the public and, if so requested by
the Company, shall deliver to the Company a written statement satisfactory to the Company to that
effect. Each Option Agreement may also provide that, if so requested by the Company, the
Participant shall make a written representation to the Company that he or she will not sell or
offer to sell any of such Shares unless a registration statement shall be in effect with respect to
such Shares under the Securities Act of 1933, as amended (“1933 Act”), and any applicable state
securities law or, unless he or she shall have furnished to the Company an opinion, in form and
substance satisfactory to the Company, of legal counsel acceptable to the Company, that such
registration is not required. Certificates representing the Shares transferred upon the exercise
of an Option granted under this Plan may at the discretion of the Company bear a legend to the
effect that such Shares have not been registered under the 1933 Act or any applicable state
securities law and that such Shares may not be sold or offered for sale in the absence of an
effective registration statement as to such Shares under the 1933 Act and any applicable state
securities law or an opinion, in form and substance satisfactory to the Company, of legal counsel
acceptable to the Company, that such registration is not required.

     The Company shall not be required to issue any
Shares under any Option if the issuance of such shares would constitute a violation by the Participant, the
Company or any other person of any provisions of any law or regulation of any governmental authority,
including any federal or state securities laws or regulations. The Company may, but shall in no event be
obligated to, register any securities covered hereby pursuant to the Securities Act. The Company shall not
be obligated to take any affirmative action in order to cause the issuance of Shares pursuant hereto or
pursuant to a grant of an Option to comply with any law or regulation of any governmental authority. As to
any jurisdiction that expressly imposes the requirement that Shares may not be issued pursuant to an Option
unless and until the Shares covered by such grant are registered or are exempt from registration, the issuance
of Shares pursuant to such grant (under circumstances in which the laws of such jurisdiction apply) shall be
deemed conditioned upon the effectiveness of such registration or the availability of such an exemption.

9 Life of Plan

     No Option shall be granted under this Plan on or after the earlier of:

     9.1 the tenth (10th) anniversary of the Effective Date of this Plan, or

     9.2 the date on which all of the Shares available for issuance under Section 3 of this Plan
have (as a result of the exercise of Options granted under this Plan) been issued or no longer are
available for use under this Plan.

After such date, this Plan shall continue in effect with respect to any then-outstanding Options
until all then-outstanding Options have been exercised in full or are no longer exercisable.

10 Adjustment

     Notwithstanding anything in Section 12 to the contrary, the number of Shares reserved under
Section 3 of this Plan, the number and type of Shares subject to Options granted under this Plan,
and the Exercise Price of any Options, may be adjusted by the Board in its sole discretion in an
equitable manner to reflect any change in the capitalization of the Company, including, but not
limited to, such changes as stock dividends or stock splits; provided, however, that the Board
shall be required to make such adjustments if such change in the capitalization of the Company
constitutes an “equity restructuring” as defined in FAS 123R. Furthermore, the Board shall have
the right to, and may in its sole discretion, adjust (in a manner that satisfies the requirements
of Treas. Reg. §1.409A-1(b)(5)(v)(D)) the number of Shares reserved under Section 3, and the number
of Shares subject to Options granted under this Plan, and the Exercise Price of any Options in the
event of any corporate transaction described in Treas. Reg. §1.409A-1(b)(5)(v)(D) that provides for
the substitution or assumption of such Options; provided, however, that the Board shall be required
to make such adjustments if such corporate transaction constitutes an “equity restructuring” as
defined in FAS 123R. If any adjustment under this Section creates a fractional Share or a right to
acquire a fractional Share, such fractional Share shall be disregarded, and the number of Shares
reserved under this Plan and the number subject to any Options granted under this Plan shall be the
next lower number of Shares, rounding all fractions downward. An adjustment made under this
Section by the Board shall be conclusive and binding on all affected persons and, further, shall
not constitute an increase in the number of Shares reserved under Section 3.

11 Change of Control of Company

     Except as otherwise provided in an Option Agreement, if a Change of Control occurs, and if the
agreements effectuating the Change of Control do not provide for the assumption or substitution of
all Options granted under this Plan, with respect to any Option granted under this Plan that is not
so assumed or substituted (a “Non-Assumed Option”), the Committee, in its sole and absolute
discretion, may, with respect to

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any or all of such Non-Assumed Options, take any or all of the
following actions to be effective as of the date of the Change of Control (or as of any other date
fixed by the Committee occurring within the thirty (30) day period ending on
the date of the Change of Control, but only if such action remains contingent upon the
effectuation of the Change of Control) (such date referred to as the “Action Effective Date”):

     11.1 Accelerate the vesting and/or exercisability of any such Non-Assumed Option on or before
a specified Action Effective Date; and/or

     11.2 Unilaterally cancel any such Non-Assumed Option which has not vested and/or which has not
become exercisable as of a specified Action Effective Date; and/or

     11.3 Unilaterally cancel any such Non-Assumed Option as of a specified Action Effective Date
in exchange for:

     (a)
whole and/or fractional Shares (or for whole Shares and cash in lieu of any
fractional Share) that, in the aggregate, are equal in value to the excess of the Fair
Market Value of the Shares that could be purchased subject to such Non-Assumed Option
determined as of the Action Effective Date (taking into account vesting and/or
exercisability) over the aggregate Exercise Price for such Shares; and/or

     (b)
cash or other property equal in value to the excess of the Fair Market Value of any
Shares (or fractional Shares) that could be purchased subject to such Non-Assumed Option
determined as of the Action Effective Date (taking into account vesting and/or
exercisability) over the aggregate Exercise Price for such Shares; and/or

     11.4 Unilaterally cancel any such Non-Assumed Option after a specified Action Effective Date
after providing the holder of such Option with (1) an opportunity to exercise such Non-Assumed
Option to the extent vested and/or exercisable (taking into account vesting and/or exercisability
as of the date of the Change of Control) on or before such Action Effective Date, and (2)
reasonable notice of such opportunity to exercise prior to such Action Effective Date; and/or

     11.5 Unilaterally require the exercise of, and unilaterally cause the exercise of, any such
Non-Assumed Option by a “cashless” or “net share”
exercise (as described in Section 7.2(e)) as of a specified Action Effective Date; and/or

     11.6 Unilaterally cancel any such Non-Assumed Option as of a specified Action Effective Date
and notify the holder of such Option of such action, but only if the Fair Market Value of the
Shares that could be purchased subject to such Non-Assumed Option determined as of such Action
Effective Date (taking into account vesting and/or exercisability) does not exceed the aggregate
Exercise Price for such Shares.

With respect to Section 11.4 above, notwithstanding any provision of this Plan or any Option
Agreement to the contrary, unless prohibited by the Sarbanes-Oxley Act of 2002, the Committee may,
in its sole and absolute discretion, allow the holder of any such Non-Assumed Option to exercise
such Non-Assumed Option under the provisions of Section 11.4 above with a promissory note which
shall become due and payable as of, or shortly after, the date of the Change of Control on such
terms and conditions as the Committee may determine, consistent with the requirements of Code
§7872. However, notwithstanding the foregoing, to the extent that the recipient of a Non-Assumed
Option is an Insider, payment of cash in lieu of whole or fractional Shares or shares of a
successor may only be made to the extent that such payment (1) has met the requirements of an
exemption under Rule 16b-3 promulgated under the Exchange Act, or (2) is a subsequent transaction
the terms of which were provided for in a transaction initially meeting the requirements of an
exemption under Rule 16b-3 promulgated under the Exchange Act. Unless an Option Agreement provides
otherwise, the payment of cash in lieu of whole or fractional Shares or in lieu of whole or
fractional shares of a successor shall be considered a subsequent transaction approved by the
original grant of an Option.

12 Amendment or Termination

     This Plan may be amended by the Board from time to time to the extent that the Board deems
necessary or appropriate; provided, however, stockholder approval of an amendment to the Plan may
be necessary in order for the Plan to comply with rules promulgated by an established stock
exchange or a national market system if the Company is, or becomes, listed or traded on any such
established stock exchange or national market system, and, in all cases, the Board shall determine
whether approval by the stockholders shall be requested and/or required in its sole and absolute
discretion after due consideration of such matters. The Board also may suspend the granting of Options under this Plan at any
time and may terminate this Plan at any time. The Company shall have the right to modify, amend or
cancel any Option after it has been granted if (a) the modification, amendment or cancellation does
not diminish the rights or benefits of the Option recipient under the Option (provided, however,
that a modification, amendment or cancellation that results solely in a change in the tax
consequences with respect to an Option shall not be deemed as a diminishment of rights or benefits
of such Option), (b) the Participant consents in writing to such modification, amendment or
cancellation, (c) there is a dissolution or liquidation of the Company, (d) this Plan and/or the
Option Agreement expressly provides for such modification, amendment or cancellation, or (e) the
Company would otherwise have the right to make such modification, amendment or cancellation by
applicable law. (See also Section 4 for a special provision providing for automatic termination of
this Plan in certain circumstances.)

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13 Miscellaneous

     13.1 Stockholder Rights. No Participant shall have any rights as a stockholder of the Company
as a result of the grant of an Option to him or to her under this Plan or his or her exercise of
such Option pending the actual delivery of Shares subject to such Option to such Participant.

     13.2 No Guarantee of Continued Relationship. The grant of an Option to a Participant under
this Plan shall not constitute a contract of employment or a contract to perform services and shall
not confer on a Participant any rights upon his or her termination of employment or relationship
with the Company in addition to those rights, if any, expressly set forth in the Option Agreement
that evidences his or her Option.

     13.3 Withholding. The Company shall have the power and the right to deduct or withhold, or
require a Participant to remit to the Company as a condition precedent for the fulfillment of any
Option, an amount sufficient to satisfy Federal, state and local taxes, domestic or foreign,
required by law or regulation to be withheld with respect to any
taxable event arising as a result of this Plan and/or any action taken by a Participant with
respect to an Option. Whenever Shares are to be issued to a Participant upon exercise of an
Option, the Company shall have the right to require the Participant to remit to the Company, as a
condition of exercise of the Option, an amount in cash (or, unless the Option Agreement provides
otherwise, in Shares) sufficient to satisfy federal, state and local withholding tax requirements
at the time of such exercise. However,
notwithstanding the foregoing, to the extent that a Participant is an Insider, satisfaction of
withholding requirements by having the Company withhold Shares may only be made to the extent that
such withholding of Shares (1) has met the requirements of an exemption under Rule 16b-3
promulgated under the Exchange Act, or (2) is a subsequent transaction the terms of which were
provided for in a transaction initially meeting the requirements of an exemption under Rule 16b-3
promulgated under the Exchange Act. Unless the Option Agreement provides otherwise, the
withholding of shares to satisfy federal, state and local withholding tax requirements shall be a
subsequent transaction approved by the original grant of an Option. Notwithstanding the foregoing,
in no event shall payment of withholding taxes be made by retention of Shares by the Company
unless the Company retains only Shares with a Fair Market Value equal
to or less than the minimum amount of
taxes required to be withheld.

     13.4 Governing Law. The laws of the State of Maryland shall govern this Plan and any Option
Agreement issued hereunder. If Maryland’s conflict of law rules would apply another state’s laws,
the laws of the State of Maryland shall still govern.

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