Document:

EX-10.1

EXHIBIT 10.1

ILLUMINA, INC.

AMENDED AND RESTATED 2005 STOCK AND INCENTIVE PLAN

1. Purposes of the Plan. The purposes of this 2005 Stock and Incentive Plan are to attract
and retain the best available personnel for positions of substantial responsibility, to provide
additional incentive to Service Providers, and to promote the success of the Company’s business.
Options granted under the Plan may be Incentive Stock Options or Nonstatutory Stock Options, as
determined by the Administrator at the time of grant. Stock Awards (including Stock Grants, Stock
Units and Stock Appreciation Rights) and Cash Awards may also be granted under the Plan.

2. Definitions. As used herein, the following definitions shall apply:

	 	(a)	 	“Administrator” means the Board or any of its Committees as shall be
administering the Plan, in accordance with Section 4 hereof.

	 	(b)	 	“Applicable Laws” means the requirements relating to the administration of
stock option and restricted stock plans, the grant of options and the issuance of
            shares under U.S. state corporate laws, U.S. federal and state securities laws, the
Code, any Nasdaq National Market, stock exchange or quotation system on which the
Common Stock is listed or quoted and the applicable laws of any other country or
jurisdiction where Options or Awards are granted under the Plan, as such laws, rules,
regulations and requirements shall be in place from time to time.

	 	(c)	 	“Award” means an Option, a Stock Award or a Cash Award granted in accordance
with the terms of the Plan.

	 	(d)	 	“Award Agreement” means a Stock Award Agreement, Cash Award Agreement and/or
Option Agreement, which may be in written or electronic format, in such form and with
such terms and conditions as may be specified by the Administrator, evidencing the
terms and conditions of an individual Award. Each Award Agreement is subject to the
terms and conditions of the Plan.

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

	 	(f)	 	“Cash Award” means a bonus opportunity awarded under Section 15 pursuant to
which a Participant may become entitled to receive an amount based on the satisfaction
of such performance criteria as are specified in the agreement or other documents
evidencing the Award (the “Cash Award Agreement”).

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

	 	(h)	 	“Committee” means a committee of Directors appointed by the Board in
accordance with Section 4 hereof.

	 	(i)	 	“Common Stock” means the common stock of the Company.

	 	(j)	 	“Company” means Illumina, Inc., a Delaware corporation.

	 	(k)	 	“Consultant” means any natural person, including an advisor, engaged by the
Company or a Parent or Subsidiary to render services to such entity.

	 	(l)	 	“Corporate Transaction” means any of the following, unless the Administrator
provides otherwise:

	 	(i)	 	any merger or consolidation in which the Company shall not be
the surviving entity (or survives only as a subsidiary of another entity whose
stockholders did not own all or substantially all of the Common Stock in
substantially the same proportions as immediately prior to such transaction),

	 	(ii)	 	the sale of all or substantially all of the Company’s assets
to any other person or entity (other than a wholly-owned subsidiary),

	 	(iii)	 	the acquisition of beneficial ownership of a controlling
interest (including, without limitation, power to vote) the outstanding shares
of Common Stock by any person or entity (including a “group” as defined by or
under Section 13(d)(3) of the Exchange Act),

	 	(iv)	 	a contested election of Directors, as a result of which or in
connection with which the persons who were Directors before such election or
their nominees (the “Incumbent Directors”) cease to constitute a majority of
the Board; provided however that if the election, or nomination for election
by the Company’s stockholders, of any new director was approved by a vote of
at least fifty percent (50%) of the Incumbent Directors, such new Director
shall be considered as an Incumbent Director, or

	 	(v)	 	any other event specified by the Board or a Committee,
regardless of whether at the time an Award is granted or thereafter.

	 	(m)	 	“Director” means a member of the Board.

	 	(n)	 	“Disability” means total and permanent disability as defined in Section 21
(e)(3) of the Code.

	 	(o)	 	“Effective Date” means the date on which the Company’s stockholders approve
the Plan.

	 	(p)	 	“Employee” means any person, including Officers and Inside Directors,
employed by the Company or any Parent or Subsidiary of the Company. An Employee shall
not be deemed to cease Employee status by reason of (i) any leave of absence approved
by the Company or (ii) transfers between locations of the Company or between the
Company, its Parent, any Subsidiary, or any successor. For purposes of Incentive
Stock Options, no such leave may exceed ninety days, unless reemployment upon
expiration of such leave is guaranteed by statute or contract. If reemployment upon
expiration of a leave of absence approved by the Company is not so guaranteed, then
three (3) months following the 91st day of such leave any Incentive Stock Option held
by the Optionee shall cease to be treated as an Incentive Stock Option and shall be
treated for tax purposes as a Nonstatutory Stock Option. Neither service as Director
nor payment of a director’s fee by the Company shall be sufficient to constitute
“employment” by the Company.

	 	(q)	 	“Exchange Act” means the Securities Exchange Act of 1934, as amended.

	 	(r)	 	“Fair Market Value” means, as of any date, the value of a Share determined as
follows:

	 	(i)	 	If the Common Stock is listed on any established stock
exchange or traded on a national market system, including without limitation
the Nasdaq National Market or the Nasdaq SmallCap Market of The Nasdaq Stock
Market, the Fair Market Value of a Share shall be the closing selling price
for such stock (or the closing bid, if no sales were reported) as quoted on
such exchange or system on the day of determination, as reported in The Wall
Street Journal or such other source as the Administrator deems reliable;

	 	(ii)	 	If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value
of a Share shall be the mean between the high bid and low asked prices for the
Common Stock on the day of determination, as reported in The Wall Street
Journal or such other source as the Administrator deems reliable; or

	 	(iii)	 	In the absence of an established market for the Common
Stock, the Fair Market Value shall be determined in good faith by the
Administrator.

	 	(s)	 	“Incentive Stock Option” means an Option intended to qualify as an incentive
stock option within the meaning of Section 422 of the Code and the regulations
promulgated thereunder and as designated in the applicable Option Agreement.

	 	(t)	 	“Inside Director” means a Director who is an Employee.

	 	(u)	 	“Nonstatutory Stock Option” means an Option not intended to qualify as an
Incentive Stock Option and/or as designated in the applicable Option Agreement.

	 	(v)	 	“Notice of Grant” means a written or electronic notice evidencing certain
terms and conditions of an individual Option grant. The Notice of Grant is part of
the Option Agreement.

	 	(w)	 	“Officer” means a person who is an executive officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

	 	(x)	 	“Option” means a stock option granted pursuant to the Plan.

	 	(y)	 	“Option Agreement” means an agreement between the Company and an Optionee
evidencing the terms and conditions of an individual Option grant. The Option
Agreement is subject to the terms and conditions of the Plan.

	 	(z)	 	“Optioned Shares” means the Shares subject to an Option.

	 	(aa)	 	“Optionee” means the holder of an outstanding Option granted under the Plan.

	 	(bb)	 	“Outside Director” means a Director who is not an Employee.

	 	(cc)	 	“Parent” means a “parent corporation,” whether now or hereafter existing, as
defined in Section 424(e) of the Code or any successor provision.

	 	(dd)	 	“Participant” means any holder of one or more Options, Stock Awards or Cash
Awards, or the Shares issuable or issued upon exercise of such Awards, under the Plan.

	 	(ee)	 	“Plan” means this 2005 Stock and Incentive Plan.

	 	(ff)	 	“Predecessor Plan” means the Illumina, Inc. 2000 Stock Plan, as amended.

	 	(gg)	 	“Qualifying Performance Criteria” means any one or more of the following
performance criteria, either individually, alternatively or in any combination,
applied to either the Company as a whole or to a business unit, Parent, Subsidiary or
business segment, either individually, alternatively or in any combination, and
measured either annually or cumulatively over a period of years, on an absolute basis
or relative to a pre-established target, to previous years’ results or to a designated
comparison group, in each case as specified by the Committee in the Award: (i) cash
flow; (ii) earnings (including gross margin, earnings before interest and taxes,
earnings before taxes, and net earnings); (iii) earnings per share; (iv) growth in
earnings or earnings per share; (v) stock price; (vi) return on equity or average
stockholders’ equity; (vii) total stockholder return; (viii) return on capital; (ix)
return on assets or net assets; (x) return on investment; (xi) revenue; (xii) income
or net income; (xiii) operating income or net operating income; (xiv) operating profit
or net operating profit; (xv) operating margin; (xvi) return on operating revenue;
(xvii) market share; (xviii) contract awards or backlog; (xix) overhead or other
expense reduction; (xx) growth in stockholder value relative to the moving average of
the S&P 500 Index or a peer group index; (xxi) credit rating; (xxii) strategic plan
development and implementation (including individual performance objectives that
relate to achievement of the Company’s or any business unit’s strategic plan); (xxiii)
improvement in workforce diversity, and (xxiv) any other similar criteria as may be
determined by the Administrator. The Committee may appropriately adjust any
evaluation of performance under a Qualifying Performance Criteria to exclude any of
the following events that occurs during a performance period: (A) asset write-downs;
(B) litigation or claim judgments or settlements; (C) the effect of changes in tax
law, accounting principles or other such laws or provisions affecting reported
results; (D) accruals for reorganization and restructuring programs; and (E) any gains
or losses classified as extraordinary or as discontinued operations in the Company’s
financial statements.

	 	(hh)	 	“Rule 16b-3” means Rule 16b-3 of the Exchange Act, as the same may be amended
from time to time, or any successor to Rule 16b-3, as in effect when discretion is
being exercised with respect to the Plan.

	 	(ii)	 	“Service Provider” means (i) an individual rendering services to the Company
or any Parent or Subsidiary of the Company in the capacity of an Employee or
Consultant or (ii) an individual serving as a Director.

	 	(jj)	 	“Share” means a share of the Common Stock, as adjusted in accordance with
Section 17 hereof.

	 	(kk)	 	“Stock Appreciation Right” means a right to receive cash and/or Shares based
on a change in the Fair Market Value of a specific number of Shares granted under
Section 14.

	 	(ll)	 	“Stock Award” means a Stock Grant, a Stock Unit or a Stock Appreciation Right
granted under Sections 13 or 14 below or other similar awards granted under the Plan
(including phantom stock rights).

	 	(mm)	 	“Stock Award Agreement” means a written agreement, the form(s) of which shall
be approved from time to time by the Administrator, between the Company and a holder
of a Stock Award evidencing the terms and conditions of an individual Stock Award
grant. Each Stock Award Agreement shall be subject to the terms and conditions of the
Plan.

	 	(nn)	 	“Stock Grant” means the award of a certain number of Shares granted under
Section 13 below.

	 	(oo)	 	“Stock Unit” means a bookkeeping entry representing an amount equivalent to
the Fair Market Value of one Share, payable in cash, property or Shares. Stock Units
represent an unfunded and unsecured obligation of the Company, except as otherwise
explicitly provided for by the Administrator.

	 	(pp)	 	“Subsidiary” means a “subsidiary corporation,” whether now or hereafter
existing, as defined in Section 424(f) of the Code, or any successor provision.

	 	(qq)	 	“Withholding Taxes” means the federal, state and local income and employment
withholding taxes, or any other taxes required to be withheld, to which the holder of
an Award may be subject in connection with the grant, exercise, or vesting of an Award
or the issuance or transfer of Shares issued or issuable pursuant to an Award.

3. Stock Subject to the Plan.

	 	(a)	 	Subject to the provisions of Section 17 hereof, the maximum aggregate number
of Shares that may be issued and sold under the Plan is 11,542,358 Shares. This
maximum number of Shares reserved and available for issuance under the Stock Plan
consists of Shares reserved for issuance under the Predecessor Plan that as of May 2,
2005 were either (i) available for grant pursuant to awards that may be made under the
Predecessor Plan or (ii) subject to outstanding options granted under the Predecessor
Plan which Shares might be returned to the Predecessor Plan but such Shares shall
become available for issuance hereunder only if and to the extent the options granted
under the Predecessor Plan to which they are subject terminate or expire or become
unexercisable for any reason without having been exercised in full.

	 	(b)	 	An annual increase in the number of Shares reserved for issuance hereunder
shall automatically occur on the first day of each fiscal year of the Company,
beginning with fiscal year 2006 and ending with fiscal year 2010, equal to the lesser
of (i) 1,200,000 Shares (subject to adjustment under Section 17), (ii) 5% of the
outstanding Shares as of the last day of the immediately preceding fiscal year or
(iii) a number of Shares determined by the Board. The Shares may be authorized, but
unissued, or reacquired Shares, including Shares repurchased by the Company on the
open market.

	 	(c)	 	If an outstanding Award expires or terminates for any reason prior to
exercise in full, or without the Shares subject thereto having been issued in full,
the unpurchased or unissued Shares which were subject thereto shall become available
for future grant or sale under the Plan (unless the Plan has terminated); provided,
however, that Shares that have actually been issued under the Plan pursuant to an
Award shall not be returned to the Plan and shall not become available for future
distribution under the Plan, except that if unvested Shares are repurchased by the
Company at their original purchase price or otherwise forfeited to the Company in
connection with termination of a Participant’s status as a Service Provider, such
Shares shall become available for future grant under the Plan. Should the exercise or
purchase price of an Award under the Plan be paid with Shares (including by
withholding Shares from the Award) or should Shares otherwise issuable under the Plan
be withheld by the Company in satisfaction of the Withholding Taxes incurred in
connection with the exercise, purchase or issuance of Shares under an Award, then the
number of Shares available for issuance under the Plan shall be reduced by the gross
number of Shares issued in connection with the Award, and not by the net number of
Shares issued to the holder of such Award.

4. Administration of the Plan.

	 	(a)	 	Procedure.

	 	(i)	 	Multiple Administrative Bodies. Different Committees with
respect to different groups of Service Providers may administer the Plan.

	 	(ii)	 	Section 162(m). To the extent that the Administrator
determines it to be desirable to qualify Awards granted hereunder as
“performance-based compensation” within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee of two or more “outside
directors” within the meaning of Section 162(m) of the Code.

	 	(iii)	 	Rule 16b-3. To the extent desirable to qualify transactions
hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder
shall be structured to satisfy the requirements for exemption under Rule
16b-3.

	 	(iv)	 	Other Administration. Other than as provided above, the Plan
shall be administered by (A) the Board, (B) a Committee, which committee shall
be constituted to satisfy Applicable Laws or (C) subject to the Applicable
Laws, one or more officers of the Company to whom the Board or Committee has
delegated the power to grant Awards to persons eligible to receive Awards
under the Plan provided such grantees may not be officers or Directors.

	 	(b)	 	Powers of the Administrator. Subject to the provisions of the Plan, and in
the case of a Committee, subject to the specific duties delegated by the Board to such
Committee, the Administrator shall have the authority, in its discretion:

(A) to determine the Fair Market Value of the Common Stock in
accordance with Section 2(r) of the Plan;

(B) to select the Service Providers to whom Awards may be granted
hereunder;

(C) to determine the number of Shares or amount of cash to be covered
by each Award granted hereunder;

(D) to approve forms of Award Agreements for use under the Plan;

(E) to determine the terms and conditions, not inconsistent with the
terms of the Plan, of any Award granted hereunder, which terms and
conditions include, but are not limited to, the exercise price and/or
purchase price (if applicable), the time or times when Awards may be
exercised (which may be based on performance criteria), the vesting
schedule, any vesting and/or exercisability acceleration or waiver of
forfeiture restrictions, the acceptable forms of consideration, the term
and any restriction or limitation regarding any Award or the Shares
relating thereto, based in each case on such factors as the Administrator,
in its sole discretion, shall determine and may be established at the time
an Award is granted or thereafter;

(F) to construe and interpret the terms of the Plan and Awards
granted pursuant to the Plan;

(G) to prescribe, amend and rescind rules and regulations relating to
the Plan, including rules and regulations relating to sub-plans
established for the purpose of satisfying applicable foreign laws;

(H) to modify or amend each Award (subject to Section 19) hereof),
including the discretionary authority to extend the post-termination
exercisability or purchase period of Awards longer than is originally
provided for in the Award Agreement;

(I) to allow Participants to satisfy Withholding Tax obligations by
electing to have the Company withhold from the Shares to be issued upon
exercise or settlement of an Award that number of Shares having a Fair
Market Value equal to the minimum amount required to be withheld. The
Fair Market Value of the Shares to be withheld shall be determined on the
date that the amount of Withholding Tax is to be determined. All
elections by a Participant to have Shares withheld for this purpose shall
be made in such form and under such conditions as the Administrator may
deem necessary or advisable;

(J) to authorize any person to execute on behalf of the Company any
instrument required to effect the grant of an Award previously granted by
the Administrator;

(K) to make all other determinations deemed necessary or advisable
for administering the Plan.

	 	(c)	 	Effect of Administrator’s Decision. The Administrator’s decisions,
determinations and interpretations shall be final and binding on all Participants and
any other holders of Options, Stock Awards, Cash Awards or Shares issued under the
Plan.

5. Eligibility. Nonstatutory Stock Options and Stock Awards may be granted to Service
Providers. Incentive Stock Options and Cash Awards may be granted only to Employees.

6. Limitations.

	 	(a)	 	Each Option shall be designated in the Option Agreement as either an
Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding
designation as an Incentive Stock Option, no installment under such an Option shall
qualify for favorable tax treatment as an Incentive Stock Option if (and to the
extent) the aggregate Fair Market Value of the Shares (determined at the date of
grant) for which such installment first becomes exercisable hereunder would, when
added to the aggregate value (determined as of the respective date or dates of grant)
of the Shares or other securities for which such Option or any other Incentive Stock
Options granted to Optionee prior to the date of grant (whether under the Plan or any
other plan of the Company or any Parent or Subsidiary of the Company) first become
exercisable during the same calendar year, exceed One Hundred Thousand Dollars
($100,000) in the aggregate. Should such One Hundred Thousand Dollar ($100,000)
limitation be exceeded in any calendar year, the Option shall nevertheless become
exercisable for the excess Optioned Shares in such calendar year as a Nonstatutory
Stock Option. For purposes of this Section 6(a), Incentive Stock Options shall be
taken into account in the order in which they were granted.

	 	(b)	 	Neither the Plan nor any Award shall confer upon a Participant any right with
respect to continuing the Participant’s relationship as a Service Provider with the
Company, nor shall they interfere in any way with the Participant’s right or the
Company’s right to terminate such relationship at any time, with or without cause.

	 	(c)	 	The following limitations shall apply to grants of Options and Stock Awards:

	 	(i)	 	No Service Provider shall be granted, in any fiscal year of
the Company, Awards covering more than 500,000 Shares, subject to adjustment
as provided in Section 17 below.

	 	(ii)	 	However, in connection with his or her commencement of
Service Provider status, an individual may be granted Awards covering up to an
additional 1,000,000 Shares during the fiscal year in which such commencement
occurs, which shall not count against the limit set forth in subsection (i)
above and subject to adjustment as provided in Section 17 below.

7. Term of Plan. The Plan shall become effective on the Effective Date. Unless the Plan is
terminated earlier pursuant to Section 19 hereof, the Plan shall terminate upon the earliest to
occur of (a) June 28, 2015, (b) the date on which all Shares available for issuance under the Plan
shall have been issued as fully vested Shares or (c) the termination of all outstanding Awards in
connection with a dissolution or liquidation pursuant to Section 17(b) hereof or a Corporate
Transaction pursuant to Section 17(c) hereof. Should the Plan terminate on June 28, 2015, then all
Awards outstanding at that time shall continue to have force and effect in accordance with the
provisions of the applicable Award Agreement.

8. Term of Option. The term of each Option shall be stated in the Option Agreement; provided,
however that the term shall be no more than ten (10) years from the date of grant or such shorter
term as may be provided in the Option Agreement. Moreover, in the case of an Incentive Stock
Option granted to an Optionee who, at the time the Incentive Stock Option is granted, owns stock
representing more than ten percent (10%) of the total combined voting power of all classes of stock
of the Company or any Parent or Subsidiary, the term of the Incentive Stock Option shall be five
(5) years from the date of grant or such shorter term as may be provided in the Option Agreement.

9. Option Exercise Price and Consideration.

	 	(a)	 	Exercise Price. The per Share exercise price for the Shares to be issued
pursuant to exercise of an Option shall be determined by the Administrator, subject to
the following:

	 	(i)	 	In the case of an Incentive Stock Option

(A) granted to an Employee who, at the time the Incentive Stock
Option is granted, owns stock representing more than ten percent (10%) of
the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price shall be no less than 110% of the
Fair Market Value per Share on the date of grant.

(B) granted to any Employee other than an Employee described in
paragraph (A) immediately above, the per Share exercise price shall be no
less than 100% of the Fair Market Value per Share on the date of grant.

	 	(ii)	 	In the case of a Nonstatutory Stock Option, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share
on the date of grant.

	 	(b)	 	Waiting Period and Exercise Dates. At the time an Option is granted, the
Administrator shall fix the period within which the Option may be exercised and shall
determine any conditions (including any vesting conditions) that must be satisfied
before the Option may be exercised.

	 	(c)	 	Form of Consideration. The Administrator shall determine the acceptable form
of consideration for exercising an Option, including the method of payment. Such
consideration may consist entirely of:

	 	(i)	 	cash;

	 	(ii)	 	check;

	 	(iii)	 	other Shares which, in the case of Shares acquired directly
or indirectly from the Company, (A) have been owned by the Optionee for more
than six (6) months on the date of surrender (if it is required to eliminate
or reduce accounting charges incurred by the Company in connection with the
Option, or such other period (if any) required to so eliminate or reduce such
charges), and (B) have a Fair Market Value on the date of surrender equal to
the aggregate exercise price of the Shares as to which said Option shall be
exercised;

	 	(iv)	 	consideration received through a special sale and remittance
procedure pursuant to which the Optionee shall concurrently provide
irrevocable instructions to (A) a Company-designated brokerage firm to effect
the immediate sale of the purchased Shares and remit to the Company, out of
the sale proceeds available on the settlement date, sufficient funds to cover
the aggregate exercise price payable for the purchased Shares plus all
Withholding Taxes required to be withheld by the Company by reason of such
exercise and (B) the Company to deliver the certificates for the purchased
Shares directly to such brokerage firm in order to complete the sale;

	 	(v)	 	a reduction in the amount of any Company liability to the
Optionee, including any liability attributable to the Optionee’s participation
in any Company-sponsored deferred compensation program or arrangement;

	 	(vi)	 	any combination of the foregoing methods of payment; or

	 	(vii)	 	such other consideration and method of payment for the
issuance of Optioned Shares as determined by the Administrator and to the
extent permitted by Applicable Laws.

	 	(d)	 	No Option Repricings. Other than in connection with a change in the
Company’s capitalization (as described in Section 17(a) of the Plan), the exercise
price of an Option may not be reduced without stockholder approval.

10. Exercise of Option.

	 	(a)	 	Procedure for Exercise; Rights as a Stockholder.

	 	(i)	 	Any Option granted hereunder shall be exercisable according
to the terms of the Plan and at such times and under such conditions as
determined by the Administrator and set forth in the Option Agreement. Unless
the Administrator provides otherwise, vesting of Options granted hereunder
shall be suspended during any unpaid leave of absence. An Option may not be
exercised for a fraction of a Share.

	 	(ii)	 	An Option shall be deemed exercised when the Company
receives: (A) written or electronic notice of exercise (in accordance with the
Option Agreement) from the person entitled to exercise the Option, and (B)
full payment for the Optioned Shares with respect to which the Option is
exercised and (C) satisfaction of any Withholding Taxes. Full payment may
consist of any consideration and method of payment authorized by the
Administrator and permitted by the Plan and shall be set forth in the Option
Agreement. Shares issued upon exercise of an Option shall be issued in the
name of the Optionee or, if requested by the Optionee, in the name of the
Optionee and his or her spouse. Until the Shares are issued (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company), no right to vote or receive dividends or any
other rights as a stockholder shall exist with respect to the Optioned Shares,
notwithstanding the exercise of the Option. The Company shall issue (or cause
to be issued) such Shares promptly after the Option is exercised. No
adjustment will be made for a dividend or other right for which the record
date is prior to the date the Shares are issued, except as provided in Section
17 hereof.

	 	(iii)	 	Exercising an Option in any manner shall decrease the number
of Optioned Shares thereafter available, both for purposes of the Plan and for
sale under the Option, by the number of Shares as to which the Option is
exercised.

	 	(b)	 	Termination of Relationship as a Service Provider. If an Optionee ceases to
be a Service Provider, other than upon the Optionee’s death or Disability, such
Optionee may exercise his or her Option for a period of three (3) months measured from
the date of termination, or such longer period of time as specified in the Option
Agreement, to the extent that the Option is vested on the date of termination (but in
no event later than the expiration of the term of the Option as set forth in the
Option Agreement). If, on the date of termination, the Optionee is not vested as to
his or her entire Option, the Option shall immediately terminate as to all the
Optioned Shares covered by the unvested portion of the Option, and those Optioned
Shares shall revert immediately to the Plan. To the extent the Optionee does not,
within the post-termination time period specified in the Option Agreement, exercise
the Option for the Optioned Shares in which Optionee is vested at the time of such
termination of Service Provider status, the Option shall terminate with respect to
those vested Optioned Shares at the end of such period, and those Optioned Shares
shall revert to the Plan.

	 	(c)	 	Disability of Optionee. If an Optionee ceases to be a Service Provider as a
result of the Optionee’s Disability, the Optionee may exercise his or her Option
within twelve (12) months of termination, or such longer period of time as specified
in the Option Agreement, to the extent the Option is vested on the date of termination
(but in no event later than the expiration of the term of such Option as set forth in
the Option Agreement). If, on the date of termination, the Optionee is not vested as
to his or her entire Option, the Option shall immediately terminate as to the Optioned
Shares covered by the unvested portion of the Option, and those Optioned Shares shall
revert immediately to the Plan. To the extent the Optionee does not, within the
post-termination time period specified in the Option Agreement, exercise the Option
for the Optioned Shares in which Optionee is vested at the time of such termination of
Service Provider status, the Option shall terminate with respect to those vested
Optioned Shares at the end of such period, and those Optioned Shares shall revert to
the Plan.

	 	(d)	 	Death of Optionee. If an Optionee dies while a Service Provider, the Option
may be exercised within twelve (12) months following Optionee’s death, or such longer
period of time as specified in the Option Agreement, to the extent that the Option is
vested on the date of death (but in no event later than the expiration of the term of
such Option as set forth in the Option Agreement) by the Optionee’s designated
beneficiary, provided such beneficiary has been designated prior to Optionee’s death
in a form acceptable to the Administrator. If no such beneficiary has been designated
by the Optionee, then such Option may be exercised by the personal representative of
the Optionee’s estate or by the person(s) to whom the Option is transferred pursuant
to the Optionee’s will or in accordance with the laws of descent and distribution.
If, at the time of death, the Optionee is not vested as to his or her entire Option,
the Option shall immediately terminate as to the Optioned Shares covered by the
unvested portion of the Option, and those Optioned Shares shall immediately revert to
the Plan. To the extent the Option is not, within the post-termination time period
specified in the Option Agreement, exercised for the Optioned Shares in which Optionee
is vested at the time of such termination of Service Provider status, the Option shall
terminate with respect to those vested Optioned Shares, and those Optioned Shares
shall revert to the Plan.

11. Formula Option Grants to Outside Directors. Outside Directors shall automatically be
granted Options in accordance with the following provisions:

	 	(a)	 	All Options granted pursuant to this Section shall be Nonstatutory Stock
Options and, except as otherwise provided in this Section 11, shall be subject to the
other terms and conditions of the Plan.

	 	(b)	 	Each individual who becomes an Outside Director after the Effective Date
shall be automatically granted an Option to purchase 20,000 Shares subject to
adjustment as set forth in Section 17(a) below (the “First Option”) on the date such
individual is elected as a Director, whether through election by the stockholders of
the Company or appointment by the Board to fill a vacancy; provided, however, that an
Inside Director who ceases to be an Inside Director but who remains a Director shall
not receive a First Option.

	 	(c)	 	On each annual stockholder meeting commencing with the Effective Date, each
Outside Director who continues to serve in such capacity immediately after such annual
stockholder meeting shall be automatically granted an Option to purchase 8,000 Shares
subject to adjustment as set forth in Section 17(a) below (a “Subsequent Option”);
provided that the Outside Director has served on the Board for at least six calendar
months prior to the date of such annual stockholder meeting.

	 	(d)	 	The terms of a First Option or a Subsequent Option granted pursuant to this
Section shall be as follows:

	 	(i)	 	The term of the Option shall be ten (10) years measured from
the date of grant.

	 	(ii)	 	The Option shall be exercisable only during the time that the
Outside Director remains a Director and, with respect to Optioned Shares
vested on the last day of service as a Director for the six (6) month period
following the date of the Optionee’s cessation of service as a Director,
provided, however, that the Option cannot be exercised after the expiration of
the term of the Option. If, at the time of Optionee’s cessation of service as
a Director, the Optionee is not vested as to his or her entire Option, the
Option shall immediately terminate as to the Optioned Shares covered by the
unvested portion of the Option, and those Optioned Shares shall immediately
revert to the Plan. To the extent the Option is not, within the
post-termination time period specified in the Option Agreement, exercised for
the Optioned Shares in which the Optionee is vested at the time of his or her
cessation of Director status, the Option shall terminate with respect to those
vested Optioned Shares, and those Optioned Shares shall revert to the Plan.

	 	(iii)	 	The exercise price per Share shall be 100% of the Fair
Market Value per Share on the date of grant of the Option.

	 	(iv)	 	The First Option shall vest and become exercisable as to 33%
of the Optioned Shares on each of the first three anniversaries of its date of
grant, provided that the Optionee continues to serve as a Director on such
dates.

	 	(v)	 	The Subsequent Option shall vest and become exercisable as to
100% of the Optioned Shares on the earlier of (i) the one year anniversary of
the date of grant of the Option and (ii) the date immediately preceding the
date of the annual meeting of the Company’s stockholders for the year
following the year of grant of the Option, provided that the Optionee
continues to serve as a Director on such date.

	 	(vi)	 	If an Outside Director dies or ceases to serve as a Director
as a result of the Outside Director’s Disability while holding any outstanding
Option under this Section 11, then that Option may be exercised within six (6)
months following his or her death or termination, or such longer period of
time as specified in the Option Agreement, to the extent that the Option is
vested on the date of death or termination (but in no event later than the
expiration of the term of such Option as set forth in the Option Agreement) by
the Outside Director or the Outside Director’s designated beneficiary,
provided such beneficiary has been designated prior to his or her death in a
form acceptable to the Administrator. If no such beneficiary has been
designated by the Outside Director, then such Option may be exercised by the
personal representative of his or her estate or by the person(s) to whom the
Option is transferred pursuant to his or her will or in accordance with the
laws of descent and distribution. If, at the time of death or termination as
a result of Disability, the Outside Director is not vested as to his or her
entire Option, the Option shall immediately terminate as to the Optioned
Shares covered by the unvested portion of the Option, and those Optioned
Shares shall immediately revert to the Plan. To the extent the Option is not,
within the post-termination time period specified in the Option Agreement,
exercised for the Optioned Shares in which the Outside Director is vested at
the time of death or termination as a result of Disability, the Option shall
terminate with respect to those vested Optioned Shares, and those Optioned
Shares shall revert to the Plan.

	 	(vii)	 	In the event of a Corporate Transaction, all Options granted
pursuant to this Section II shall be subject to the terms and conditions of
Section 17(c); provided that in the event that the successor corporation does
not assume or substitute for each First Option and Subsequent Option, the
Optionee shall fully vest in and have the right to exercise the Option as to
all of the Optioned Shares, including Shares as to which it would not
otherwise be vested or exercisable.

	 	(e)	 	The Board shall have sole and exclusive authority to establish, maintain,
amend, suspend, and terminate any program by which Outside Directors are automatically
granted Nonstatutory Stock Options pursuant to this Section 11.

12. Limited Transferability of Options. An Option generally may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws
of descent or distribution and may be exercised, during the lifetime of the Optionee, only by the
Optionee; provided however that Nonstatutory Stock Options may be transferred by instrument to an
inter vivos or testamentary trust in which the Nonstatutory Stock Options are to be passed to
beneficiaries upon the death of the trustor (settlor) or by gift or pursuant to domestic relations
orders to “Immediate Family Members” (as defined below) of the Optionee. “Immediate Family” means
any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling,
niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law (including adoptive relationships), a trust in which these persons have more than
fifty percent of the beneficial interest, a foundation in which these persons (or the Optionee)
control the management of assets, and any other entity in which these persons (or the Optionee) own
more than fifty percent of the voting interests. The Optionee may designate one or more persons as
the beneficiary or beneficiaries of his or her outstanding Options, and those Options shall, in
accordance with such designation, automatically be transferred to such beneficiary or beneficiaries
upon the Optionee’s death while holding those Options. Such beneficiary or beneficiaries shall
take the transferred Options subject to all the terms and conditions of the applicable agreement
evidencing each such transferred Option, including (without limitation) the limited time period
during which the Option may be exercised following the Optionee’s death.

13. Stock Grants and Stock Unit Awards. Each Stock Award Agreement reflecting the issuance of
a Stock Grant or Stock Unit shall be in such form and shall contain such terms and conditions as
the Administrator shall deem appropriate. The terms and conditions of such agreements may change
from time to time, and the terms and conditions of separate agreements need not be identical, but
each such agreement shall include (through incorporation of provisions hereof by reference in the
agreement or otherwise) the substance of each of the following provisions:

	 	(a)	 	Consideration. A Stock Grant or Stock Unit may be awarded in consideration
for such property or services as is permitted under Applicable Law, including for past
services actually rendered to the Company or a Subsidiary for its benefit.

	 	(b)	 	Vesting. Shares of Common Stock awarded under an agreement reflecting a
Stock Grant and a Stock Unit award may, but need not, be subject to a share repurchase
option, forfeiture restriction or other conditions in favor of the Company in
accordance with a vesting or lapse schedule to be determined by the Administrator.

	 	(c)	 	Termination of Participant’s Relationship as a Service Provider. In the
event a Participant’s relationship as a Service Provider terminates, the Company may
reacquire any or all of the Shares held by the Participant which have not vested or
which are otherwise subject to forfeiture or other conditions as of the date of
termination under the terms of the agreement.

	 	(d)	 	Transferability. Except as determined by the Board, no rights to acquire
Shares under a Stock Grant or a Stock Unit shall be assignable or otherwise
transferable by the Participant except by will or by the laws of descent and
distribution.

14. Stock Appreciation Rights.

	 	(a)	 	General. Stock Appreciation Rights may be granted either alone, in addition
to, or in tandem with other Awards granted under the Plan. The Administrator may
grant Stock Appreciation Rights to eligible Participants subject to terms and
conditions not inconsistent with this Plan and determined by the Administrator. The
specific terms and conditions applicable to the Participant shall be provided for in
the Stock Award Agreement. Stock Appreciation Rights shall be exercisable, in whole
or in part, at such times as the Administrator shall specify in the Stock Award
Agreement.

	 	(b)	 	Exercise of Stock Appreciation Right. Upon the exercise of a Stock
Appreciation Right, in whole or in part, the Participant shall be entitled to a
payment in an amount equal to the excess of the Fair Market Value on the date of
exercise of a fixed number of Shares covered by the exercised portion of the Stock
Appreciation Right, over the Fair Market Value on the grant date of the Shares covered
by the exercised portion of the Stock Appreciation Right (or such other amount
calculated with respect to Shares subject to the award as the Administrator may
determine). The amount due to the Participant upon the exercise of a Stock
Appreciation Right shall be paid in such form of consideration as determined by the
Administrator and may be in cash, Shares or a combination thereof, over the period or
periods specified in the Stock Award Agreement. A Stock Award Agreement may place
limits on the amount that may be paid over any specified period or periods upon the
exercise of a Stock Appreciation Right, on an aggregate basis or as to any
Participant. A Stock Appreciation Right shall be considered exercised when the
Company receives written notice of exercise in accordance with the terms of the Stock
Award Agreement from the person entitled to exercise the Stock Appreciation Right.

	 	(c)	 	Transferability. Except as determined by the Board, no Stock Appreciation
Rights shall be assignable or otherwise transferable by the Participant except by will
or by the laws of descent and distribution.

15. Cash Awards. Each Cash Award will confer upon the Participant the opportunity to earn a
future payment tied to the level of achievement with respect to one or more performance criteria
established for a performance period of not less than one (1) year.

	 	(a)	 	Cash Award. Each Cash Award shall contain provisions regarding (i) the
target and maximum amount payable to the Participant as a Cash Award, (ii) the
Qualifying Performance Criteria and level of achievement versus these criteria which
shall determine the amount of such payment, (iii) the period as to which performance
shall be measured for establishing the amount of any payment, (iv) the timing of any
payment earned by virtue of performance, (v) restrictions on the alienation or
transfer of the Cash Award prior to actual payment, (vi) forfeiture provisions, and
(vii) such further terms and conditions, in each case not inconsistent with the Plan,
as may be determined from time to time by the Administrator. The maximum amount
payable as a Cash Award may be a multiple of the target amount payable, but the
maximum amount payable pursuant to that portion of a Cash Award granted under this
Plan for any fiscal year to any Participant shall not exceed U.S. $1,000,000.

	 	(b)	 	Performance Criteria. The Administrator shall establish the Qualifying
Performance Criteria and level of achievement versus these criteria which shall
determine the target and the minimum and maximum amount payable under a Cash Award.
The Administrator may specify the percentage of the target Cash Award that is intended
to satisfy the requirements for “performance-based compensation” under Section 162(m)
of the Code. Notwithstanding anything to the contrary herein, the performance
criteria for any portion of a Cash Award that is intended to satisfy the requirements
for “performance-based compensation” under Section 162(m) of the Code shall be a
measure established by the Administrator based on one or more Qualifying Performance
Criteria selected by the Administrator and specified in writing not later than 90 days
after the commencement of the period of service to which the performance goals
relates, provided that the outcome is substantially uncertain at that time (or in such
other manner that complies with Section 162(m)).

	 	(c)	 	Timing and Form of Payment. The Administrator shall determine the timing of
payment of any Cash Award. The Administrator may provide for or, subject to such
terms and conditions as the Administrator may specify and Applicable Laws, may permit
a Participant to elect for the payment of any Cash Award to be deferred to a specified
date or event. The Administrator may specify the form of payment of Cash Awards,
which may be cash or other property, or may provide for a Participant to have the
option for his or her Cash Award, or such portion thereof as the Administrator may
specify, to be paid in whole or in part in cash or other property.

	 	(d)	 	Termination of Relationship as a Service Provider. The Administrator shall
have the discretion to determine the effect of a termination as a Service Provider due
to (i) Disability, (ii) death or (iii) otherwise shall have on any Cash Award.

16. Section 162(m) Compliance. Any Stock Award (other than an Option or any other Stock Award
having a purchase price equal to 100% of the Fair Market Value on the date such award is made) or
Cash Award that is intended as “qualified performance-based compensation” within the meaning of
Section 162(m) of the Code must vest or become exercisable or payable contingent on the achievement
of one or more Qualifying Performance Criteria. Notwithstanding anything to the contrary herein,
the Committee shall have the discretion to determine the time and manner of compliance with Section
162 (m) of the Code as required under applicable regulations and to conform the procedures related
to the Award to the requirements of Section 162(m) and may in its discretion reduce the number of
Shares granted or amount of cash or other property to which a Participant may otherwise have been
entitled with respect to an Award designed to qualify as performance-based compensation under
Section 162(m).

17. Adjustments Upon Changes in Capitalization, Dissolution or Corporate Transaction.

	 	(a)	 	Changes in Capitalization. Subject to any required action by the
stockholders of the Company, (i) the number of Shares which have been authorized for
issuance under the Plan but as to which no Awards have yet been granted or which have
been returned to the Plan upon cancellation or expiration of an Award, (ii) the number
of Shares that may be added annually to the Plan pursuant to Section 3(b)(i) hereof,
(iii) the number of Optioned Shares granted under First Options and Subsequent Options
under Section 11 hereof, (iv) the maximum numbers of Shares that may be granted under
Awards to any Service Provider within any fiscal year as set forth in Section 6(c) and
(v) the number of Shares as well as the price per Share subject to each outstanding
Award, shall be proportionately adjusted for any increase or decrease in the number of
issued Shares resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or decrease
in the number of issued Shares effected without receipt of consideration by the
Company; provided, however, that conversion of any convertible securities of the
Company shall not be deemed to have been “effected without receipt of consideration.”
Such adjustment shall be made by the Administrator, whose determination in that
respect shall be final, binding and conclusive. Except as expressly provided herein,
no issuance by the Company of shares of stock of any class, or securities convertible
into shares of stock of any class, shall affect, and no adjustment by reason thereof
shall be made with respect to, the number or price of Shares.

	 	(b)	 	Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Administrator shall notify each Participant as soon as
practicable prior to the effective date of such proposed transaction. The
Administrator in its discretion may (but need not) provide for a Participant to have
the right to exercise his or her Option or Stock Award until ten (10) days prior to
such transaction as to all of the Shares covered thereby, including Shares as to which
the Option or Stock Award would not otherwise be exercisable. In addition, the
Administrator may (but need not) provide that any Company repurchase option applicable
to any unvested Shares purchased upon exercise of an Option or issued under a Stock
Award shall lapse as to all such Shares, provided the proposed dissolution or
liquidation takes place at the time and in the manner contemplated. To the extent it
has not been previously exercised, an Award will terminate immediately prior to the
consummation of such proposed action.

	 	(c)	 	Corporate Transaction.

	 	(i)	 	In the event of a Corporate Transaction, as determined by the
Board or a Committee, the Board or Committee may, in its discretion, (i)
provide for the assumption or substitution of, or adjustment to, each
outstanding Award; (ii) accelerate the vesting of Options and terminate any
restrictions on Cash Awards or Stock Awards; and/or (iii) provide for
termination of Awards as a result of the Corporate Transaction on such terms
and conditions as it deems appropriate, including providing for the
cancellation of Awards for a cash payment to the Participant. For the
purposes of this paragraph, the Award shall be considered assumed if,
following the Corporate Transaction, the Award confers the right to purchase
or receive, for each Share or amount of cash covered by the Award immediately
prior to the Corporate Transaction, the consideration (whether stock, cash, or
other securities or property) received in the Corporate Transaction by holders
of Common Stock for each Share held on the effective date of the Corporate
Transaction (and if holders were offered a choice of consideration, the type
of consideration chosen by the holders of a majority of the outstanding
Shares); provided, however, that if such consideration received in the
Corporate Transaction is not solely common stock of the successor corporation
or its Parent, the Administrator may, with the consent of the successor
corporation, provide for the consideration to be received upon the exercise of
the Award, for each Share covered by the Award, to be solely common stock of
the successor corporation or its Parent equal in fair market value to the per
share consideration received by holders of Shares in the Corporate
Transaction.

	 	(ii)	 	Each Option or Stock Award which is assumed pursuant to this
Section 17(c) shall be appropriately adjusted, immediately after such
Corporate Transaction, to apply to the number and class of securities which
would have been issuable to the Participant in consummation of such Corporate
Transaction had the Option or Stock Award been exercised immediately prior to
such Corporate Transaction. Appropriate adjustments to reflect such Corporate
Transaction shall also be made to (A) the exercise or purchase price payable
per share under each outstanding Option or Stock Award, provided the aggregate
exercise or purchase price payable for such securities shall remain the same,
(B) the maximum number and/or class of securities available for issuance over
the remaining term of the Plan, (C) the maximum number and/or class of
securities for which any one person may be granted Options or Stock Awards
under the Plan per year, (D) the maximum number and/or class of securities by
which the share reserve is to increase automatically each year and (E) the
number and/or class of securities subject to the Options granted under Section
11.

18. Date of Grant. The date of grant of a First Option or Subsequent Option shall be the date
on which it was automatically granted pursuant to Section 11 hereof. The date of grant of any
other Award shall be, for all purposes, the date on which the Administrator grants such Award.
Notice of the grant shall be provided to each Participant within a reasonable time after the date
of such grant.

19. Amendment and Termination of the Plan. The Board may at any time amend, alter, suspend or
terminate the Plan. However, the Company shall obtain stockholder approval of any Plan amendment
to the extent necessary and desirable to comply with Applicable Laws. In addition, no amendment,
alteration, suspension or termination of the Plan shall impair the rights of any Participant under
any grant theretofore made, unless mutually agreed otherwise between the Participant and the
Administrator, which agreement must be in writing and signed by the Participant and the Company.
Termination of the Plan shall not affect the Administrator’s ability to exercise the powers granted
to it hereunder with respect to Awards granted under the Plan prior to the date of such
termination. In addition, unless approved by the stockholders of the Company, no amendment shall
be made that would result in a repricing of Options by (x) reducing the exercise price of
outstanding Options or (y) canceling an outstanding Option held by a Participant and re-granting to
the Participant a new Option with a lower exercise price, in either case other than in connection
with a change in the Company’s capitalization pursuant to Section 17(a) of the Plan.

20. Conditions Upon Issuance of Shares.

	 	(a)	 	Awards shall not be granted and Shares shall not be issued pursuant to the
exercise of an Award unless the grant of the Award, the exercise or settlement of such
Award and the issuance and delivery of such Shares shall comply with Applicable Laws
and shall be further subject to the approval of counsel for the Company with respect
to such compliance.

	 	(b)	 	No Shares or other assets shall be issued or delivered under the Plan unless
and until there shall have been compliance with all applicable requirements of Federal
and state securities laws, including the filing and effectiveness of the Form S-8
registration statement for the Shares, and all applicable listing requirements of any
stock exchange (or the Nasdaq National Market, if applicable) on which Common Stock is
then listed for trading.

21. Inability to Obtain Authority. The inability of the Company to obtain authority from any
regulatory body having jurisdiction (including under Section 20), which authority is deemed by the
Company’s counsel to be necessary to the lawful grant of Awards and issuance and sale of any Shares
hereunder, shall relieve the Company of any liability in respect of the failure to grant such
Awards or issue or sell such Shares as to which such requisite authority shall not have been
obtained.

22. Reservation of Shares. The Company, during the term of this Plan, will at all times
reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements
of the Plan.

23. Stockholder Approval. If required by Applicable Laws, continuance of the Plan shall be
subject to approval by the stockholders of the Company within twelve (12) months after the date the
Plan is adopted or after any amendment requiring stockholder approval is made. Such stockholder
approval shall be obtained in the manner and to the degree required under Applicable Laws.EX-10.1

Execution Copy

The St. Joe Company

Third Amendment

Dated as of July 30, 2007

to

Note Purchase Agreements

Dated as of February 7, 2002

Re: $15,000,000 7.02% Senior Secured Notes, Series C, due February 7, 2009

$75,000,000 7.37% Senior Secured Notes, Series D, due February 7, 2012

1

Third Amendment to Note Purchase Agreements

This Third Amendment dated as of July 30, 2007 (the or this “Third Amendment”) to the
Note Purchase Agreements each dated as of February 7, 2002 is between The St. Joe Company,
a Florida corporation (the “Company”), and each of the institutions which is a signatory to this
Third Amendment (collectively, the “Noteholders”).

Recitals:

A. The Company and each of the Noteholders, together with the other purchasers listed in
Schedule A to the hereinafter defined Note Agreements, have heretofore entered into separate and
several Note Purchase Agreements each dated as of February 7, 2002, as amended by the First
Amendment to Note Purchase Agreements dated as of June 8, 2004 and the Second Amendment to Note
Purchase Agreements dated as of July 28, 2006 (collectively, as amended, the “Note Agreements”).
The Company has heretofore issued (a) $18,000,000 in aggregate principal amount of its 5.64% Senior
Secured Notes, Series A, due February 7, 2005, (b) $67,000,000 in aggregate principal amount of its
6.66% Senior Secured Notes, Series B, due February 7, 2007, (c) $15,000,000 in aggregate principal
amount of its 7.02% Senior Secured Notes, Series C, due February 7, 2009 and (d) $75,000,000 in
aggregate principal amount of its 7.37% Senior Secured Notes, Series D, due February 7, 2012
(collectively, the “Notes”) pursuant to the Note Agreements. The Noteholders who are signatories
hereto are the holders of more than 51% of the outstanding principal amount of the Notes.

B. The Company and the Noteholders now desire to amend the Note Agreements in the respects,
but only in the respects, hereinafter set forth.

C. Capitalized terms used herein shall have the respective meanings ascribed thereto in the
Note Agreements, as amended hereby, unless herein defined or the context shall otherwise require.

D. All requirements of law have been fully complied with and all other acts and things
necessary to make this Third Amendment a valid, legal and binding instrument according to its terms
for the purposes herein expressed have been done or performed.

Now, therefore, upon the full and complete satisfaction of the conditions precedent
to the effectiveness of this Third Amendment set forth in Section 3.1 hereof, and in consideration
of good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the
Company and the Noteholders do hereby agree as follows:

2

	 	 	Section 1. Amendments. 

Section 1.1. Section 10.1 of the Note Agreements shall be and is hereby amended in its
entirety to read as follows:

“Section 10.1. Consolidated Adjusted Net Worth. The Company
and its Subsidiaries will at all times keep and maintain
Consolidated Adjusted Net Worth at an amount not less than
(a) $735,000,000 plus (b) an amount equal to one hundred percent
(100%) of net proceeds from any issuance by the Company of shares of
its Capital Stock or other equity interest occurring after the
Closing. Without limiting the foregoing, the exercise by a present
or former employee, officer or director of any stock option or
equity based compensation issued pursuant to a stock incentive plan,
stock option plan or other equity based compensation plan or
arrangement shall in no event be deemed or construed to constitute
the issuance of shares of the Capital Stock of the Company, with any
determination of Consolidated Adjusted Net Worth pursuant to this
Section 10.1 to exclude (x) Indebtedness attributable to Qualified
Senior Notes and (y) Qualified Installment Sale Notes.”

Section 1.2. Section 10.2 of the Note Agreements shall be and is hereby amended in its
entirety to read as follows:

“Section 10.2. Leverage Ratio. The Company and its
Subsidiaries will not as at the end of each fiscal quarter permit
the ratio of Consolidated Indebtedness to Consolidated Total Assets
to exceed 0.55 to 1.00, with any determination of Consolidated
Indebtedness and Consolidated Total Assets pursuant to this
Section 10.2 to exclude (x) Indebtedness attributable to Qualified
Senior Notes and (y) Qualified Installment Sale Notes.”

Section 1.3. Section 10.3 of the Note Agreements shall be and is hereby amended in its
entirety to read as follows:

“Section 10.3. Unencumbered Assets Ratio. The Company and its
Subsidiaries will not permit as at the end of each fiscal quarter
the ratio of Unsecured Indebtedness to Unencumbered Assets to exceed
0.55 to 1.00, with any determination of Unsecured Indebtedness and
Unencumbered Assets pursuant to this Section 10.3 to exclude
(x) Indebtedness attributable to Qualified Senior Notes and
(y) Qualified Installment Sale Notes.”

Section 1.4. Section 10.4 of the Note Agreements shall be and is hereby amended in its
entirety to read as follows:

“Section 10.4. Fixed Charges Coverage Ratio. The Company and
its Subsidiaries will not permit as at the end of each fiscal
quarter the ratio of Consolidated Net Earnings Available for Fixed
Charges for the four immediately preceding fiscal quarters (taken as
a single accounting period) to Consolidated Fixed Charges for such
four fiscal quarter periods to be less than 2.5 to 1.0, with any
determination of Consolidated Net Earnings Available for Fixed
Charges pursuant to this Section 10.4 to exclude (x) Indebtedness
attributable to Qualified Senior Notes (and any Interest Expense
thereon) and (y) any interest income attributable to Qualified
Installment Sale Notes.”

Section 1.5. Section 10.5(a)(iv) of the Note Agreements shall be and is hereby amended in its
entirety to read as follows:

“(iv) additional Indebtedness of the Company and its
Subsidiaries; provided that at the time of creation, issuance,
assumption, guarantee or incurrence thereof and after giving effect
thereto and to the application of the proceeds thereof:

(1) the ratio of Consolidated Indebtedness to Consolidated
Total Assets as at such date shall not exceed 0.55 to 1.00, with any
determination of Consolidated Indebtedness and Consolidated Total
Assets pursuant to this Section 10.5(a)(iv) to exclude
(x) Indebtedness attributable to Qualified Senior Notes and
(y) Qualified Installment Sale Notes; and

(2) in the case of the issuance of any Indebtedness of the
Company or its Subsidiaries secured by Liens permitted by
Section 10.6(i) and any Indebtedness of a Subsidiary (other than
(A) Qualified Subsidiary Indebtedness and (B) Indebtedness of any
Subsidiary described on Schedule 5.15 and any renewal, extension,
refinancing, replacement or refunding of such Indebtedness), the sum
of (A) the aggregate amount of all Indebtedness secured by Liens
permitted by Section 10.6(i) plus (B) the aggregate amount of all
Indebtedness of Subsidiaries (other than (A) Qualified Subsidiary
Indebtedness and (B) Indebtedness of any Subsidiary described on
Schedule 5.15 and any renewal, extension, refinancing, replacement
or refunding of such Indebtedness), shall not exceed 33% of
Consolidated Total Assets as at such date, with any determination of
Consolidated Total Assets pursuant to this Section 10.5(a)(iv) to
exclude Qualified Installment Sale Notes and any determination of
Indebtedness secured by Liens and Indebtedness of any Subsidiary to
exclude Qualified Senior Notes; and”

Section 1.6. Section 10.5(a)(vi) of the Note Agreements shall be and is hereby amended by
replacing the “.” with “; and”.

Section 1.7. Section 10.5(a) of the Note Agreements shall be and is hereby further amended by
adding a new clause (a)(vii) at the end thereof to read as follows:

“(vii) Indebtedness evidenced by the Qualified Senior Notes.”

Section 1.8. Section 10.6(i) of the Note Agreements shall be and is hereby amended by
replacing the “.” with “; and”.

Section 1.9. Section 10.6 of the Note Agreements shall be and is hereby further amended by
adding at the end thereof a new paragraph (j) to read as follows:

“(j) Liens on the Qualified Installment Sale Note and the
Qualified Letter of Credit created or incurred in connection with
the Qualified Installment Sale Transaction to secure the Qualified
Senior Notes.”

Section 1.10. Section 10.8(b)(i) of the Note Agreements shall be and is hereby amended in its
entirety to read as follows:

“(i) such assets (valued, in the case of Timberland, at $750
per acre or, otherwise, at net book value) do not, together with all
other assets of the Company and its Subsidiaries previously disposed
of during the same fiscal year (other than (A) any sale in the
ordinary course of business and (B) any sale within the limitations
of clause (a) of this Section 10.8), exceed 15% of Consolidated
Total Assets, determined as of the end of the immediately preceding
fiscal quarter with any determination of Consolidated Total Assets
pursuant to this Section 10.8(b)(i) to exclude Qualified Installment
Sale Notes;”

Section 1.11. Section 10.8 of the Note Agreements shall be and is hereby amended by adding at
the end thereof a new paragraph (c) to read as follows:

“(c) the sale of assets constituting the Disposed Property, the
Building Portfolio Sale and the Saussy Burbank Sale to a Person or
Persons if all of the following conditions are met:

(i) in the opinion of the Company’s Board of Directors,
the sale is for fair value and is in the best interests of
the Company;

(ii) immediately after the consummation of the
transaction and after giving effect thereto, (A) no Default
or Event of Default would exist, and (B) the Company would be
permitted by the provisions of Section 10.5(a)(iv)(1) to
incur at least $1.00 of additional Indebtedness;

(iii) the net after tax cash proceeds of such assets are
applied on or before September 30, 2008 to the prepayment at
any applicable prepayment premium of Senior Indebtedness of
the Company in an amount equal to such net after tax cash
proceeds. It is understood and agreed by the Company that
any such proceeds paid and applied to the prepayment of the
Notes shall be prepaid as and to the extent provided in
Section 8.2; and

(iv) upon the prepayment of such net after tax cash
proceeds the Company shall deliver a certificate of Senior
Financial Officer to each holder of the Notes setting forth
the amount, nature and description of the Senior Indebtedness
so prepaid.

For the avoidance of doubt, the assets constituting the
Disposed Property, the Building Portfolio Sale and the Saussy
Burbank Sale shall be included in any calculations made
pursuant to Section10.8(b)(i) during the same fiscal year.”

Section 1.12. Section 10.9 of the Note Agreements shall be and is hereby amended in its
entirety to read as follows:

“Section 10.9. Transactions with Affiliates. The Company will
not, and will not permit any Subsidiary to, enter into or be a party
to any transaction or arrangement with any Affiliate (including,
without limitation, the purchase from, sale to or exchange of
property with, or the rendering of any service by or for, any
Affiliate), except in the ordinary course of and pursuant to the
reasonable requirements of the Company’s or such Subsidiary’s
business and upon fair and reasonable terms no less favorable to the
Company or such Subsidiary than would be obtainable in a comparable
arm’s-length transaction with a Person other than an Affiliate;
provided, however, the Qualified Installment Sale Transaction shall
not be subject to the requirement that it be in the ordinary course
of the Company’s business.”

Section 1.13. Section 11(f) of the Note Agreements shall be and is hereby amended in its
entirety to read as follows:

“(f) (i) the Company or any Subsidiary is in default (as
principal or as guarantor or other surety) in the payment of any
principal of or premium or make-whole amount or interest on any
Indebtedness (other than Indebtedness evidenced by the Qualified
Senior Notes) that is outstanding in an aggregate principal amount
of at least $10,000,000 beyond any period of grace provided with
respect thereto, or (ii) the Company is in default in the
performance of or compliance with any term of the 2004 Notes, the
2004 Note Purchase Agreements or any Additional Note Purchase
Agreement and as a consequence of such default or condition such
Indebtedness has become, or has been declared (or one or more
Persons are entitled to declare such Indebtedness to be), due and
payable before its stated maturity or before its regularly scheduled
dates of payment, or (iii) the Company or any Subsidiary is in
default in the performance of or compliance with any term of any
evidence of any Indebtedness in an aggregate outstanding principal
amount of at least $10,000,000 or of any mortgage, indenture or
other agreement relating thereto or any other condition exists, and
as a consequence of such default or condition such Indebtedness has
become, or has been declared, due and payable before its stated
maturity or before its regularly scheduled dates of payment, or
(iv) as a consequence of the occurrence or continuation of any event
or condition (other than the passage of time or the right of the
holder of Indebtedness to convert such Indebtedness into equity
interests), (1) the Company or any Subsidiary has become obligated
to purchase or repay Indebtedness before its regular maturity or
before its regularly scheduled dates of payment in an aggregate
outstanding principal amount of at least $10,000,000, or (2) one or
more Persons have the right to require the Company or any Subsidiary
so to purchase or repay such Indebtedness; or”

Section 1.14. The following definitions shall be added in alphabetical order to Schedule B to
the Note Agreements:

“Building Portfolio Sale” means the sale by the Company of
seventeen buildings described in Exhibit A to the Third Amendment
with approximately 2.3 million net rentable square feet for a cash
purchase price of $377.5 million. The closing of the sale of
fifteen buildings occurred on June 20, 2007 for a purchase price of
$277.5 million. The remaining two buildings are expected to close
in the third quarter of 2007 for a purchase price of $100 million.

“Disposed Property” means approximately 33,035 acres of real
property located in Chattahoochee and Stewart Counties, Georgia
conveyed to Timbervest Partners Stewart I, LLC and Timbervest
Partners Stewart II, LLC on June 1, 2007.

“Qualified Installment Sale Notes” means those certain
promissory notes due to Timberland Company issued by Timbervest
Partners I SPV, LLC and Timbervest Partners II SPV, LLC having a
term of fifteen years in payment of the purchase price for the
Disposed Property sold in the Qualified Installment Sale
Transaction, which promissory notes are secured by the Qualified
Letters of Credit.

“Qualified Installment Sale Transaction” means the sale of the
Disposed Property in exchange for the Qualified Installment Sale
Notes, which Qualified Installment Sale Notes were assigned,
together with the Qualified Letters of Credit, for cash to the
Qualified SPE which in turn issued its Qualified Senior Notes to a
trustee acting on behalf of Persons acquiring interests in such
Qualified Senior Notes in a private placement.

“Qualified Letters of Credit” means those certain standby
letters of credit issued by Wachovia Bank, National Association, in
its capacity as Letter of Credit Issuer and in a stated amount equal
to the face amount of the Qualified Installment Sale Notes plus 210
days of accrued and unpaid interest.

“Qualified Senior Notes” means the senior promissory notes
issued by the Qualified SPE to a trustee acting on behalf of Persons
acquiring interests in such notes in an institutional private
placement in connection with the Qualified Installment Sale
Transaction and secured solely by the Qualified Installment Sale
Notes and the Qualified Letters of Credit held by such Qualified SPE
without recourse to the Company or any other Subsidiary.

“Qualified SPE” means Georgia Timber Finance I, LLC, a
wholly-owned Subsidiary of Timberland Company, formed as a special
purpose entity in connection with the Qualified Installment Sale
Transaction for the sole purpose of (a) owning and holding the
Qualified Installment Sale Notes issued in connection with such
Qualified Installment Sale Transaction, together with the Qualified
Letters of Credit securing such Qualified Installment Sale Notes,
(b) issuing the Qualified Senior Notes to be secured solely by such
Qualified Installment Sale Notes and the Qualified Letters of Credit
and (c) engaging in other activities incidental to the foregoing.

“Saussy Burbank Sale” means the sale by the Company on May 3,
2007, of its North Carolina and South Carolina home building
operations, consisting of Mid-Atlantic Homes, LLC, Saussy Burbank,
LLC, McNeill-Burbank Homes, LLC, and Monteith Holdings, LLC for an
aggregate purchase price of approximately $74.3 million.

“Third Amendment” means that certain Third Amendment to Note
Purchase Agreements dated as of July 30, 2007 among the Company and
the holders of the Notes.

“Timberland Company” means St. Joe Timberland Company of
Delaware, LLC, a Subsidiary of the Company.

Section 1.16. The definition of “Bank Credit Agreement” in Schedule B shall be and is hereby
amended in its entirety to read as follows:

““Bank Credit Agreement” means that certain Third Amended and
Restated Credit Agreement dated July 22, 2005 among the Company, the
lenders named therein and Wachovia Bank, National Association, as
Administrative Agent, as amended by that certain First Amendment
dated February 26, 2007 and that certain Second Amendment dated
June 28, 2007, as the same may from time to time be further amended,
supplemented, modified, refinanced, renewed or replaced.”

	 	 	Section 2. Representations and Warranties of the Company.

Section 2.1. To induce the Noteholders to execute and deliver this Third Amendment (which
representations shall survive the execution and delivery of this Third Amendment), the Company
represents and warrants to the Noteholders that:

(a) this Third Amendment has been duly authorized, executed and delivered by it and
this Third Amendment constitutes the legal, valid and binding obligation, contract and
agreement of the Company enforceable against it in accordance with its terms, except as
enforcement may be limited by (a) applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors’ rights generally
and (b) general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law);

(b) the Note Agreements, as amended by this Third Amendment, constitute the legal,
valid and binding obligations, contracts and agreements of the Company enforceable against
it in accordance with their respective terms, except as enforcement may be limited by
(a) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors’ rights generally and (b) general principles of
equity (regardless of whether such enforceability is considered in a proceeding in equity or
at law);

(c) the execution, delivery and performance by the Company of this Third Amendment
(i) does not require the consent or approval of any governmental or regulatory body or
agency, and (ii) will not (A) violate (1) any provision of applicable law, statute, rule or
regulation or its certificate of incorporation or bylaws, (2) any order of any court or any
rule, regulation or order of any other agency or government binding upon it, or (3) any
provision of any material indenture, agreement or other instrument to which it is a party or
by which its properties or assets are or may be bound, including, without limitation, the
Bank Credit Agreement, or (B) result in a breach or constitute (alone or with due notice or
lapse of time or both) a default under any indenture, agreement or other instrument referred
to in clause (ii)(A)(3) of this Section 2.1(c);

(d) as of the date hereof and after giving effect to this Third Amendment, no Default
or Event of Default has occurred which is continuing; and

(e) all the representations and warranties contained in Section 5 of the Note
Agreements are true and correct in all material respects with the same force and effect as
if made by the Company on and as of the date hereof, except the representations and
warranties set forth in Sections 5.3 and 5.4, in the final two sentences of Section 5.9 and
in the first sentence of Section 5.15 which are true and correct as of the date of the
issuance of the Notes.

	 	 	Section 3. Conditions to Effectiveness of This Third Amendment.

Section 3.1. This Third Amendment shall not become effective until, and shall become effective
when, each and every one of the following conditions shall have been satisfied (the “Effective
Date”):

(a) executed counterparts of this Third Amendment, duly executed by the Company and the
holders of at least 51% of the outstanding principal of the Notes, shall have been delivered
to the Noteholders;

(b) the Noteholders shall have received a copy of the resolutions of the Board of
Directors of the Company authorizing the execution, delivery and performance by the Company
of this Third Amendment, certified by its Secretary or an Assistant Secretary;

(c) the Noteholders shall have received a copy of the Second Amendment to Bank Credit
Agreement;

(d) the representations and warranties of the Company set forth in Section 2 hereof are
true and correct on and with respect to the date hereof and the execution and delivery by
the Company of this Third Amendment shall constitute certification of the same;

(e) the Noteholders shall have received the favorable opinion of counsel to the Company
as to the matters set forth in Sections 2.1(a), 2.1(b) and 2.1(c) hereof, which opinion
shall be in form and substance satisfactory to the Noteholders; and

(f) each holder of a Note shall have received a non-refundable fee equal to 0.10% of
the aggregate outstanding principal amount of the Notes held by such holder.

	 	 	 
	Upon receipt of all of the foregoing, this Third Amendment shall become effective.

	Section 4.

	 	Payment of Noteholders’ Counsel Fees and Expenses.

Section 4.1. The Company agrees to pay upon demand, the reasonable fees and expenses of
Chapman and Cutler LLP, counsel to the Noteholders, in connection with the negotiation,
preparation, approval, execution and delivery of this Third Amendment.

	 	 	Section 5. Miscellaneous.

Section 5.1. This Third Amendment shall be construed in connection with and as part of each of
the Note Agreements, and except as modified and expressly amended by this Third Amendment, all
terms, conditions and covenants contained in the Note Agreements and the Notes are hereby ratified
and shall be and remain in full force and effect.

Section 5.2. Any and all notices, requests, certificates and other instruments executed and
delivered after the execution and delivery of this Third Amendment may refer to the Note Agreements
without making specific reference to this Third Amendment but nevertheless all such references
shall include this Third Amendment unless the context otherwise requires.

Section 5.3. The descriptive headings of the various Sections or parts of this Third Amendment
are for convenience only and shall not affect the meaning or construction of any of the provisions
hereof.

Section 5.4. This Third Amendment shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of New York, excluding
choice-of-law principles of the law of such State that would require the application of the laws of
a jurisdiction other than such State.

Section 5.5. The execution hereof by you shall constitute a contract between us for the uses
and purposes hereinabove set forth, and this Third Amendment may be executed in any number of
counterparts, each executed counterpart constituting an original, but all together only one
agreement.

[Remainder of Page Intentionally Blank]

3

	 	 	 	The St. Joe Company

	 	 	 	By
 /s/ Stephen W. Solomon

	 	 	Stephen W. Solomon

Senior Vice President and Treasurer

Accepted and Agreed to:

	 	 	 	Thrivent Financial for Lutherans (f/k/a
Aid Association for Lutherans)

	 	 	 	By

Name:

Title:

	 	 	 	Allstate Life Insurance Company

	 	 	 	By
 /s/ Robert B. Bodett

	 	 	Name: Robert B. Bodett

	 	 	 	By
 /s/ David Walsh

	 	 	Name: David Walsh

Authorized Signatories

	 	 	 	Nationwide Life Insurance Company of America
(f/k/a Provident Mutual Life
Insurance Company)

	 	 	 	By

Name:

Title:

	 	 	 	Nationwide Life and Annuity Company of
America (f/k/a ProvidentMutual
Life and Annuity Company of America)

	 	 	 	By

Name:

Title:

	 	 	 	Teachers Insurance and Annuity Association of
America

	 	 	 	By
 /s/ Lisa M. Ferraro

	 	 	Name: Lisa M. Ferraro

Title: Director

4

Each of the undersigned hereby confirms its continued guaranty of the obligations of the
Company under the Note Agreements, as amended hereby, pursuant to the terms of the Subsidiary
Guaranty Agreement dated as of February 7, 2002, on this 30th day of July, 2007.

	 
	280 Interstate North, L.L.C.

(Manager)

	5660 NND, L.L.C.

(Manager)

	Apalachicola Northern Railroad Company

(Senior Vice President)

	Arvida Housing L.P., Inc.

(Senior Vice President)

	Crooked Creek Real Estate Company

(Senior Vice President)

	Crooked Creek Utility Company

(Senior Vice President)

	Deer Point I & II, LLC

(Manager)

	Georgia Wind I, LLC

(Manager)

	Georgia Wind II, LLC

(Manager)

	Georgia Wind III, LLC

(Manager)

	Millenia Park One, L.L.C.

(Manager)

	Overlook I & II, LLC

(Manager)

	Paradise Pointe, LLC

(Senior Vice President)

	Park Point Land, LLC

(Manager)

	PSJ Waterfront, LLC

(Manager)

	Riverside Corporate Center, L.L.C.

(Manager)

	Southhall Center, L.L.C.

(Manager)

	St. James Island Utility Company

(Senior Vice President)

	St. Joe Central Florida Contracting, Inc.

(Senior Vice President)

	St. Joe Community Sales, Inc.

(Senior Vice President)

	St. Joe Development, Inc.

(Senior Vice President)

	St. Joe Finance Company

(Senior Vice President)

	St. Joe Home Building, L.P.

By: St. Joe West Florida Contracting, Inc.,

General Partner

(Senior Vice President)

	St. Joe Northeast Florida Contracting, Inc.

(Senior Vice President)

	St. Joe Residential Acquisitions, Inc.

(Senior Vice President)

	St. Joe Timberland Company of Delaware, L.L.C.

(Senior Vice President)

	St. Joe Towns & Resorts, L.P.

By: St. Joe/Arvida Company, Inc.,

General Partner

(Senior Vice President)

	St. Joe Utilities Company

(Senior Vice President)

	St. Joe West Florida Contracting, Inc.

(Senior Vice President)

	St. Joe-Southwood Properties, Inc.

(Senior Vice President)

	St. Joe/Arvida Company, Inc.

(Senior Vice President)

	Sunshine State Cypress, Inc.

(Senior Vice President)

	Talisman Sugar Company

(Senior Vice President)

	The Port St. Joe Marina, Inc.

(Senior Vice President)

By: /s/ Stephen W. Solomon

Stephen W. Solomon, as its Manager or Senior Vice

President, as the case may be

	 
	St. Joe Capital I, Inc. 

By: /s/ David F. Childers, III

	 

	David F. Childers, III

President

	Residential Community Title Company 

By: /s/ Christine M. Martin

	 

	Christine M. Martin

Vice President

5

Exhibit A

Building Portfolio Sale

The portfolio of 17 office buildings described in that certain Purchase and Sale Agreement
attached as Exhibit 10.1 to the Borrower’s Current Report on Form 8-K filed with the SEC on May 3,
2007.

6

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