Attached files
file | filename |
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10-K - 10-K - Safehold Inc. | safe-12312017x10k.htm |
EX-32.0 - EXHIBIT 32.0 - Safehold Inc. | safe-12312017xex320.htm |
EX-31.0 - EXHIBIT 31.0 - Safehold Inc. | safe-12312017xex310.htm |
EX-23.1 - EXHIBIT 23.1 - Safehold Inc. | safeexhibit23112312017.htm |
EX-21.1 - EXHIBIT 21.1 - Safehold Inc. | safe-12312017xex211.htm |
EX-14.1 - EXHIBIT 14.1 - Safehold Inc. | safetygovernancecodeofco.htm |
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SAFETY, INCOME AND GROWTH, INC.
SAFETY INCOME AND GROWTH OPERATING PARTNERSHIP
2017 EQUITY INCENTIVE PLAN
Section 1. Purpose. The purpose of the Plan is to assist the Company and the
Partnership in attracting, retaining, motivating, and rewarding certain officers, directors, and
consultants of the Company, the Partnership and their respective Affiliates and SFTY Manager
LLC (the "Manager") and its managers, members, officers and key employees, and promoting the
creation of long-term value for stockholders of the Company by closely aligning the interests of
such individuals with those of such stockholders. The Plan authorizes the award of equity-based
incentives to Eligible Persons to encourage such persons to expend maximum effort in the creation
of stockholder and partner value.
Section 2. Definitions. For purposes of the Plan, the following terms shall be defined
as set forth below:
(a) "Affiliate" means, with respect to any Person, any other Person that, directly or
indirectly through one or more intermediaries, controls, is controlled by, or is under common
control with, such Person.
(b) "Award" means any Option, Restricted Stock, Restricted Stock Unit, Stock
Appreciation Right, Performance Award, Dividend Equivalent Right, LTIP Unit or other equity-
based award granted under the Plan.
(c) "Award Agreement" means an Option Agreement, a Restricted Stock Agreement,
an RSU Agreement, an SAR Agreement, a Performance Award Agreement, an LTIP Unit Award
Agreement or an agreement governing the grant of any Dividend Equivalent Right or other equity-
based Award granted under the Plan.
(d) "Board" means the Board of Directors of the Company.
(e) "Cause" means, with respect to any Participant and in the absence of an Award
Agreement or Participant Agreement otherwise defining Cause, (1) the Participant's conviction of
or indictment for any crime (whether or not involving the Company or its Affiliates)
(i) constituting a felony or (ii) that has, or could reasonably be expected to result in, an adverse
impact on the performance of the Participant's duties to the Service Recipient, or otherwise has, or
could reasonably be expected to result in, an adverse impact on the business or reputation of the
Company or its Affiliates, (2) conduct of the Participant, in connection with his employment or
service, that has resulted, or could reasonably be expected to result, in material injury to the
business or reputation of the Company or its Affiliates, (3) any material violation of the policies
of the Company or its Affiliates, including but not limited to those relating to sexual harassment
or the disclosure or misuse of confidential information, or those set forth in the manuals or
statements of policy of the Company or its Affiliates, or (4) willful neglect in the performance of
the Participant's duties for the Service Recipient or willful or repeated failure or refusal to perform
such duties. In the event that there is an Award Agreement or Participant Agreement defining
Cause, "Cause" shall have the meaning provided in such agreement, and a Termination by the
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Service Recipient for Cause hereunder shall not be deemed to have occurred unless all applicable
notice and cure periods in such Award Agreement or Participant Agreement are complied with.
(f) "Change in Control" means:
(1) a change in ownership or control of the Company effected through a
transaction or series of transactions (other than an offering of Stock to the general public through
a registration statement filed with the Securities and Exchange Commission or pursuant to a Non-
Control Transaction) whereby any "person" (as defined in Section 3(a)(9) of the Exchange Act) or
any two or more persons deemed to be one "person" (as used in Sections 13(d)(3) and 14(d)(2) of
the Exchange Act), other than the Company or any of its Affiliates, an employee benefit plan
sponsored or maintained by the Company or any of its Affiliates (or its related trust), or any
underwriter temporarily holding securities pursuant to an offering of such securities, directly or
indirectly acquire "beneficial ownership" (within the meaning of Rule 13d-3 under the Exchange
Act) of securities of the Company possessing more than fifty percent (50%) of the total combined
voting power of the Company's securities eligible to vote in the election of the Board
(the "Company Voting Securities");
(2) the date, within any consecutive twenty-four (24) month period
commencing on or after the Effective Date, upon which individuals who constitute the Board as
of the Effective Date (the "Incumbent Board") cease for any reason (other than by reason of death)
to constitute at least a majority of the Board; provided, however, that any individual who becomes
a director subsequent to the Effective Date whose election or nomination for election by the
Company's stockholders was approved by a vote of at least a majority of the directors then
constituting the Incumbent Board (either by a specific vote or by approval of the proxy statement
of the Company in which such individual is named as a nominee for director, without objection to
such nomination) shall be considered as though such individual were a member of the Incumbent
Board, but excluding, for this purpose, any such individual whose initial assumption of office
occurs as a result of an actual or threatened election contest (including but not limited to a consent
solicitation) with respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a person other than the Board;
(3) the consummation of a merger, consolidation, share exchange, or similar
form of corporate transaction involving the Company or any of its Affiliates that requires the
approval of the Company's stockholders (whether for such transaction or the issuance of securities
in the transaction or otherwise) (a "Reorganization"), unless immediately following such
Reorganization (i) more than fifty percent (50%) of the total voting power of (A) the corporation
resulting from such Reorganization (the "Surviving Company") or (B) if applicable, the ultimate
parent corporation that has, directly or indirectly, beneficial ownership of one hundred percent
(100%) of the voting securities of the Surviving Company (the "Parent Company"), is
represented by Company Voting Securities that were outstanding immediately prior to such
Reorganization (or, if applicable, is represented by shares into which such Company Voting
Securities were converted pursuant to such Reorganization), and such voting power among the
holders thereof is in substantially the same proportion as the voting power of such Company
Voting Securities among holders thereof immediately prior to the Reorganization, (ii) no Person,
other than an employee benefit plan sponsored or maintained by the Surviving Company or the
Parent Company (or its related trust), is or becomes the beneficial owner, directly or indirectly, of
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fifty percent (50%) or more of the total voting power of the outstanding voting securities eligible
to elect directors of the Parent Company, or if there is no Parent Company, the Surviving Company,
and (iii) at least a majority of the members of the board of directors of the Parent Company, or if
there is no Parent Company, the Surviving Company, following the consummation of the
Reorganization are members of the Incumbent Board at the time of the Board's approval of the
execution of the initial agreement providing for such Reorganization (any Reorganization which
satisfies all of the criteria specified in (i), (ii), and (iii) above shall be a "Non-Control
Transaction");
(4) the sale or disposition, in one or a series of related transactions, of all or
substantially all of the assets of the Company to any "person" (as defined in Section 3(a)(9) of the
Exchange Act) or to any two or more persons deemed to be one "person" (as used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act) other than the Company's Affiliates; or
(5) a termination of the Management Agreement.
Notwithstanding the foregoing, (x) a Change in Control shall not be deemed to occur solely
because any person acquires beneficial ownership of fifty percent (50%) or more of the Company
Voting Securities as a result of an acquisition of Company Voting Securities by the Company that
reduces the number of Company Voting Securities outstanding; provided that if after such
acquisition by the Company such person becomes the beneficial owner of additional Company
Voting Securities that increases the percentage of outstanding Company Voting Securities
beneficially owned by such person, a Change in Control shall then occur, and (y) with respect to
the payment of any amount that constitutes a deferral of compensation subject to Section 409A of
the Code payable upon a Change in Control, a Change in Control shall not be deemed to have
occurred, unless the Change in Control constitutes a change in the ownership or effective control
of the Company or in the ownership of a substantial portion of the assets of the Company under
Section 409A(a)(2)(A)(v) of the Code.
(g) "Code" means the Internal Revenue Code of 1986, as amended from time to time,
including regulations thereunder and successor provisions and regulations thereto.
(h) "Committee" means the Board or such other committee consisting of two or more
individuals appointed by the Board to administer the Plan and each other individual or committee
of individuals designated to exercise authority under the Plan.
(i) "Company" means Safety, Income and Growth, Inc., a Maryland corporation, and
its successors by operation of law.
(j) "Company Voting Securities" has the meaning set forth in Section 2(f)(1) hereof.
(k) "Corporate Event" has the meaning set forth in Section 12(b) hereof.
(l) "Data" has the meaning set forth in Section 22(c) hereof.
(m) "Disability" means, in the absence of an Award Agreement or Participant
Agreement otherwise defining Disability, the permanent and total disability of such Participant
within the meaning of Section 22(e)(3) of the Code. In the event that there is an Award Agreement
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or Participant Agreement defining Disability, "Disability" shall have the meaning provided in such
Award Agreement or Participant Agreement.
(n) "Disqualifying Disposition" means any disposition (including any sale) of Stock
acquired upon the exercise of an Incentive Stock Option made within the period that ends either
(i) two years after the date on which the Participant was granted the Incentive Stock Option or
(ii) one year after the date upon which the Participant acquired the Stock.
(o) "Dividend Equivalent Right" means a right granted to a Participant under
Section 10 hereof, to receive cash, Stock or other property equal in value to all or some portion of
the regular cash dividends that are or would be payable with respect to shares of Stock subject to
an Award.
(p) "Effective Date" means June 27, 2017.
(q) "Eligible Person" means (1) each officer of the Company, the Partnership or any
of their respective Affiliates, including each such officer who may also be a director of the
Company, the Partnership or any of their respective Affiliates, (2) each non-employee director of
the Company or any of its Affiliates, (3) the Manager and each of its managers, members, officers
and employees, (4) each other natural person who provides substantial services to the Company,
the Partnership, the Manager or any of their respective Affiliates as a consultant or advisor and
who is designated as eligible by the Committee, and (5) each natural person who has been offered
employment by the Manager; provided that such prospective employee may not receive any Award
until such person has commenced employment or service with the Company or its Affiliates;
provided further, however, that (i) with respect to any Award that is intended to qualify as a "stock
right" that does not provide for a "deferral of compensation" within the meaning of Section 409A
of the Code, the term Affiliate as used in this Section 2(q) shall include only those corporations or
other entities in the unbroken chain of corporations or other entities beginning with the Company
where each of the corporations in the unbroken chain other than the last corporation owns stock
possessing at least fifty percent (50%) or more of the total combined voting power of all classes
of stock in one of the other corporations in the chain, and (ii) with respect to any Award that is
intended to qualify as an Incentive Stock Option, the term "Affiliate" as used in this Section 2(q)
shall include only those entities that qualify as a "subsidiary corporation" with respect to the
Company within the meaning of Code Section 424(f). An employee on an approved leave of
absence may be considered as still in the employ of the Company, the Partnership, the Manager or
any of their respective Affiliates for purposes of eligibility for participation in the Plan.
(r) "Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, including rules and regulations thereunder and successor provisions and rules and
regulations thereto.
(s) "Expiration Date" means the date upon which the term of an Option or Stock
Appreciation Right expires, as determined under Section 5(b) or 8(b) hereof, as applicable.
(t) "Fair Market Value" means, as of any date when the Stock is listed on one or more
national securities exchanges, the closing price reported on the principal national securities
exchange on which such Stock is listed and traded on the date of determination, or if the closing
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price is not reported on such date of determination, the closing price on the most recent date on
which such closing price is reported. If the Stock is not listed on a national securities exchange,
the Fair Market Value shall mean the amount determined by the Board in good faith, and in a
manner consistent with Section 409A of the Code, to be the fair market value per share of Stock.
(u) "Incentive Stock Option" means an Option intended to qualify as an incentive
stock option within the meaning of Section 422 of the Code.
(v) "Incumbent Board" shall have the meaning set forth in Section 2(f)(ii) hereof.
(w) "Initial Public Offering" means the Company's first underwritten public offering
of its Stock to the public pursuant to an effective registration statement under the Securities Act.
(x) "LTIP Unit" means an "LTIP Unit" as defined in the Partnership Agreement. An
LTIP Unit granted under this Plan represents the right to receive the benefits, payments or other
rights in respect of an LTIP Unit set forth in the Partnership Agreement, subject to the terms and
conditions of the applicable Award Agreement and the Partnership Agreement.
(y) "LTIP Unit Award Agreement" means a written agreement (including an
electronic writing to the extent permitted by applicable law) between the Company and a
Participant evidencing the terms and conditions of an individual Performance Award grant.
(z) "Manager" means SFTY Manager, LLC, a Delaware limited liability company.
(aa) "Management Agreement" means the Management Agreement among the
Company, the Partnership and the Manager as it may be amended, supplemented or restated from
time to time.
(bb) "Non-Control Transaction" has the meaning set forth in Section 2(f)(3) hereof.
(cc) "Nonqualified Stock Option" means an Option not intended to qualify as an
Incentive Stock Option.
(dd) "Option" means a conditional right, granted to a Participant under Section 5 hereof,
to purchase Stock at a specified price during a specified time period.
(ee) "Option Agreement" means a written agreement (including an electronic writing
to the extent permitted by applicable law) between the Company and a Participant evidencing the
terms and conditions of an individual Option grant.
(ff) "OP Unit" means an "OP Unit" as defined in the Partnership Agreement.
(gg) "Parent Company" has the meaning set forth in Section 2(f)(3) hereof.
(hh) "Participant" means an Eligible Person who has been granted an Award under the
Plan, or if applicable, such other Person who holds an Award.
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(ii) "Participant Agreement" means an employment or other services agreement or a
severance or change in control agreement between a Participant and the Service Recipient and is
effective as of the date of determination.
(jj) "Partnership" means Safety Income and Growth Operating Partnership, a
Delaware limited partnership.
(kk) "Partnership Agreement" means the First Amended and Restated Agreement of
Limited Partnership of Safety Income and Growth Operating Partnership, dated June 27, 2017, as
it may be amended, supplemented or restated from time to time in accordance with its terms.
(ll) "Performance Award" means an Award granted to a Participant under Section 9
hereof, which Award is subject to the achievement of Performance Objectives during a
Performance Period. A Performance Award shall be designated as a "Performance Share" or a
"Performance Unit" at the time of grant.
(mm) "Performance Award Agreement" means a written agreement (including an
electronic writing to the extent permitted by applicable law) between the Company and a
Participant evidencing the terms and conditions of an individual Performance Award grant.
(nn) "Performance Objectives" means the performance objectives established pursuant
to this Plan for Participants who have received Performance Awards.
(oo) "Performance Period" means the period designated for the achievement of
Performance Objectives.
(pp) "Person" means any individual, corporation, partnership, firm, joint venture,
association, joint-stock company, trust, unincorporated organization, or other entity.
(qq) "Plan" means this Safety, Income and Growth, Inc., and Safety Income and Growth
Operating Partnership 2017 Equity Incentive Plan, as amended from time to time.
(rr) "Qualified Member" means a member of the Committee who is a "Non-Employee
Director" within the meaning of Rule 16b-3 under the Exchange Act and an "outside director"
within the meaning of Treasury Regulation Section 1.162-27(c) under Section 162(m) of the Code.
(ss) "Qualified Performance-Based Award" means an Option, Stock Appreciation
Right, LTIP Unit Award or Performance Award that is intended to qualify as "qualified
performance-based compensation" within the meaning of Section 162(m) of the Code.
(tt) "Qualifying Committee" has the meaning set forth in Section 3(b) hereof.
(uu) "Reorganization" has the meaning set forth in Section 2(f)(3) hereof.
(vv) "Restricted Stock" means Stock granted to a Participant under Section 6 hereof
that is subject to certain restrictions and to a risk of forfeiture.
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(ww) "Restricted Stock Agreement" means a written agreement (including an electronic
writing to the extent permitted by applicable law) between the Company and a Participant
evidencing the terms and conditions of an individual Restricted Stock grant.
(xx) "Restricted Stock Unit" means a notional unit representing the right to receive one
share of Stock (or the cash value of one share of Stock, if so determined by the Committee) on a
specified settlement date.
(yy) "RSU Agreement" means a written agreement (including an electronic writing to
the extent permitted by applicable law) between the Company and a Participant evidencing the
terms and conditions of an individual grant of Restricted Stock Units.
(zz) "SAR Agreement" means a written agreement (including an electronic writing to
the extent permitted by applicable law) between the Company and a Participant evidencing the
terms and conditions of an individual grant of Stock Appreciation Rights.
(aaa) "Securities Act" means the Securities Act of 1933, as amended from time to time,
including rules and regulations thereunder and successor provisions and rules and regulations
thereto.
(bbb) "Service Recipient" means, with respect to a Participant holding a given Award,
either the Company, the Partnership, the Manager or any of their respective Affiliates by which
the original recipient of such Award is, or following a Termination was most recently, principally
employed or to which such original recipient provides, or following a Termination was most
recently providing, services, as applicable.
(ccc) "Stock" means the Company's common stock, par value $0.01 per share, and such
other securities as may be substituted for such stock pursuant to Section 12 hereof.
(ddd) "Stock Appreciation Right" means a conditional right to receive an amount equal
to the value of the appreciation in the Stock over a specified period. Except in the event of
extraordinary circumstances, as determined in the sole discretion of the Committee, or pursuant to
Section 12(b) hereof, Stock Appreciation Rights shall be settled in Stock.
(eee) "Surviving Company" has the meaning set forth in Section 2(f)(3) hereof.
(fff) "Termination" means the termination of a Participant's employment or service, as
applicable, with the Service Recipient; provided, however, that, if so determined by the
Committee at the time of any change in status in relation to the Service Recipient (e.g., a Participant
ceases to be an employee and begins providing services as a consultant, or vice versa), such change
in status will not be deemed a Termination hereunder. Unless otherwise determined by the
Committee, in the event that any Service Recipient ceases to be an Affiliate of the Company (by
reason of sale, divestiture, spin-off, or other similar transaction), unless a Participant's employment
or service is transferred to another entity that would constitute a Service Recipient immediately
following such transaction, such Participant shall be deemed to have suffered a Termination
hereunder as of the date of the consummation of such transaction. Notwithstanding anything
herein to the contrary, a Participant's change in status in relation to the Service Recipient (for
example, a change from employee to consultant) shall not be deemed a Termination hereunder
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with respect to any Awards constituting nonqualified deferred compensation subject to
Section 409A of the Code that are payable upon a Termination unless such change in status
constitutes a "separation from service" within the meaning of Section 409A of the Code. Any
payments in respect of an Award constituting nonqualified deferred compensation subject to
Section 409A of the Code that are payable upon a Termination shall be delayed for such period as
may be necessary to meet the requirements of Section 409A(a)(2)(B)(i) of the Code. On the first
business day following the expiration of such period, the Participant shall be paid, in a single lump
sum without interest, an amount equal to the aggregate amount of all payments delayed pursuant
to the preceding sentence, and any remaining payments not so delayed shall continue to be paid
pursuant to the payment schedule applicable to such Award.
(ggg) Underwriters" means the underwriters in the Initial Public Offering.
(hhh) "Underwriters Option" means the Underwriters option to purchase up to an
additional 1,537,500 shares of Stock in connection with the Initial Public Offering.
Section 3. Administration.
(a) Authority of the Committee. Except as otherwise provided below, the Plan shall
be administered by the Committee. The Committee shall have full and final authority, in each case
subject to and consistent with the provisions of the Plan, to (1) select Eligible Persons to become
Participants, (2) grant Awards, (3) determine the type, number of shares of Stock or other equity
interests (including, without limitation, LTIP Units) subject to, other terms and conditions of, and
all other matters relating to, Awards, (4) prescribe Award Agreements (which need not be identical
for each Participant) and rules and regulations for the administration of the Plan, (5) accelerate
the vesting of any Award, (6) construe and interpret the Plan and Award Agreements and correct
defects, supply omissions, and reconcile inconsistencies therein, (7) suspend the right to exercise
Awards during any period that the Committee deems appropriate to comply with applicable
securities laws, and thereafter extend the exercise period of an Award by an equivalent period of
time, and (8) make all other decisions and determinations as the Committee may deem necessary
or advisable for the administration of the Plan. Any action of the Committee shall be final,
conclusive, and binding on all persons, including, without limitation, the Company, its Affiliates,
the Manager, Eligible Persons, Participants, and beneficiaries of Participants. For the avoidance
of doubt, the Board shall have the authority to take all actions under the Plan that the Committee
is permitted to take.
(b) Manner of Exercise of Committee Authority. At any time that a member of the
Committee is not a Qualified Member, any action of the Committee relating to a Qualified
Performance-Based Award or relating to an Award granted or to be granted to a Participant who
is then subject to Section 16 of the Exchange Act in respect of the Company, must be taken by a
subcommittee, designated by the Committee or the Board, composed solely of two or more
Qualified Members (a "Qualifying Committee"). Any action authorized by such a Qualifying
Committee shall be deemed the action of the Committee for purposes of the Plan. The express
grant of any specific power to the Qualifying Committee, and the taking of any action by the
Qualifying Committee, shall not be construed as limiting any power or authority of the Committee.
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(c) Delegation. To the extent permitted by applicable law, the Committee may
delegate to officers or employees of the Company or any of its Affiliates, or committees thereof,
the authority, subject to such terms as the Committee shall determine, to perform such functions
under the Plan, including, but not limited to, administrative functions, as the Committee may
determine appropriate. The Committee may appoint agents to assist it in administering the Plan.
Notwithstanding the foregoing or any other provision of the Plan to the contrary, any Award
granted under the Plan to any Eligible Person who is not an employee of the Company or any of
its Affiliates (including any non-employee director of the Company or any Affiliate) or to any
Eligible Person who is subject to Section 16 of the Exchange Act or is to be granted a Qualified
Performance-Based Award must be expressly approved by the Committee or Qualifying
Committee in accordance with subsection (b) above.
(d) Section 409A. All Awards made under the Plan that are intended to be "deferred
compensation" subject to Section 409A shall be interpreted, administered and construed to comply
with Section 409A, and all Awards made under the Plan that are intended to be exempt from
Section 409A shall be interpreted, administered and construed to comply with and preserve such
exemption. The Committee shall have full authority to give effect to the intent of the foregoing
sentence. To the extent necessary to give effect to this intent, in the case of any conflict or potential
inconsistency between the Plan and a provision of any Award or Award Agreement with respect
to an Award, the Plan shall govern. Notwithstanding the foregoing, neither the Company nor the
Committee shall have any liability to any person in the event Section 409A applies to any Award
in a manner that results in adverse tax consequences for the Participant or any of his beneficiaries
or transferees.
Section 4. Shares Available Under the Plan.
(a) Number of Shares Available for Delivery. Subject to adjustment as provided in
Section 12 hereof, the total number of shares of Stock reserved and available for delivery in
connection with Awards under the Plan shall not exceed 5% of issued and outstanding shares of
Stock as of the later of the Initial Public Offering or the last closing date of any shares of Stock
sold pursuant to the Underwriters exercise of the Underwriters Option (on a fully diluted basis
(assuming, if applicable, the exercise of all outstanding stock options, the conversion of all
warrants and convertible securities into shares of Stock and the exchange of all outstanding
interests in the Partnership that may be convertible into shares of Stock) and including shares of
Stock sold pursuant to the Underwriters exercise of the Underwriters Option, but excluding any
shares of Stock issued or issuable under the Plan). Shares of Stock delivered under the Plan shall
consist of authorized and unissued shares or previously issued shares of Stock reacquired by the
Company on the open market or by private purchase. Notwithstanding the foregoing, the number
of shares of Stock available for issuance hereunder shall not be reduced by shares issued pursuant
to Awards issued or assumed in connection with a merger or acquisition as contemplated by, as
applicable, NASDAQ Listing Rule 5635(c) and IM-5635-1, NYSE Listed Company Manual
Section 303A.08, AMEX Company Guide Section 711, or other applicable stock exchange rules,
and their respective successor rules and listing exchange promulgations.
(b) Share Counting Rules. The Committee may adopt reasonable counting
procedures to ensure appropriate counting, avoid double-counting (as, for example, in the case of
tandem or substitute awards) and make adjustments if the number of shares of Stock actually
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delivered differs from the number of shares previously counted in connection with an Award.
Other equity-based Awards that are LTIP Units shall reduce the total number of shares of Stock
available for delivery under the Plan on a one-for-one basis, i.e., each LTIP Unit shall be treated
as an award of a single share of Stock. Shares of Stock into which LTIP Units are converted shall
be deemed to be issued under the Plan but shall not reduce the total number of shares of Stock
available for delivery under the Plan. To the extent that an Award expires or is canceled, forfeited,
or otherwise terminated without a delivery to the Participant of the full number of shares of Stock
(or LTIP Units) to which the Award related, the undelivered shares of Stock (or LTIP Units) will
again be available for grant. Shares of Stock withheld in payment of the exercise price or taxes
relating to an Award and shares equal to the number surrendered in payment of any exercise price
or taxes relating to an Award shall be deemed to constitute shares delivered to the Participant and
shall not again be available for Awards under the Plan.
(c) 162(m) Limitation; Incentive Stock Options.
(1) Notwithstanding anything to the contrary herein, during any time that the
Company is subject to Section 162(m) of the Code, the maximum number of shares of Stock with
respect to which (i) Options and Stock Appreciation Rights may be granted to any individual in
any one calendar year shall not exceed 225,000, and (ii) Performance Awards intended to qualify
as a Qualified Performance-Based Award may be granted to any individual in any one calendar
year shall not exceed 500,000. The maximum value of the aggregate payment that any individual
may receive with respect to a Qualified Performance-Based Award that is valued in dollars in
respect of any annual Performance Period is $10.0 million, and for any Performance Period in
excess of one (1) year, such amount multiplied by a fraction, the numerator of which is the number
of months in the Performance Period and the denominator of which is twelve (12). No Qualified
Performance-Based Awards may be granted hereunder following the first (1st) meeting of the
Company's stockholder that occurs in the fifth (5th) year following the year in which the
Company's stockholders most recently approved the terms of the Plan for purposes of satisfying
the "qualified performance-based compensation" exemption under Section 162(m)(4)(C) of the
Code. For purposes of the Plan, the Company shall not be treated as being subject to
Section 162(m) of the Code during the period Awards granted hereunder are exempt from the
limitation on tax deductibility under Section 162(m) of the Code by reason of the post-initial public
offering transition relief set forth in Treasury Regulation Section 1.162-27(f).
(2) No more than 907,500 shares of Stock reserved for issuance hereunder may
be issued or transferred upon exercise or settlement of Incentive Stock Options.
Section 5. Options.
(a) General. Certain Options granted under the Plan are intended to qualify as
Incentive Stock Options. Options may be granted to Eligible Persons in such form and having
such terms and conditions as the Committee shall deem appropriate; provided, however, that
Incentive Stock Options may be granted only to Eligible Persons who are employees of the
Company or a parent or subsidiary corporation as permitted under Section 422(a)(2) of the Code.
The provisions of separate Options shall be set forth in separate Option Agreements, which
agreements need not be identical.
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(b) Term. The term of each Option shall be set by the Committee at the time of grant;
provided, however, that no Option granted hereunder shall be exercisable after the expiration of
ten (10) years from the date it was granted.
(c) Exercise Price. The exercise price per share of Stock for each Option shall be set
by the Committee at the time of grant; provided, however, that if an Option is intended to qualify
as either (1) a "stock right" that does not provide for a "deferral of compensation" within the
meaning of Section 409A of the Code, (2) a Qualified Performance-Based Award, or (3) an
Incentive Stock Option, then in each case the applicable exercise price shall not be less than the
Fair Market Value on the date of grant, subject to subsection (g) below in the case of any Incentive
Stock Option.
(d) Payment for Stock. Payment for shares of Stock acquired pursuant to Options
granted hereunder shall be made in full upon exercise of an Option (1) in immediately available
funds in United States dollars, or by certified or bank cashier's check, (2) by delivery of shares of
Stock having a value equal to the exercise price, (3) by a broker-assisted cashless exercise in
accordance with procedures approved by the Committee, whereby payment of the Option exercise
price or tax withholding obligations may be satisfied, in whole or in part, with shares of Stock
subject to the Option by delivery of an irrevocable direction to a securities broker (on a form
prescribed by the Committee) to sell shares of Stock and to deliver all or part of the sale proceeds
to the Company in payment of the aggregate exercise price and, if applicable, the amount necessary
to satisfy the Company's withholding obligations, or (4) by any other means approved by the
Committee (including, by delivery of a notice of "net exercise" to the Company, pursuant to which
the Participant shall receive the number of shares of Stock underlying the Option so exercised
reduced by the number of shares of Stock equal to the aggregate exercise price of the Option
divided by the Fair Market Value on the date of exercise). Anything herein to the contrary
notwithstanding, if the Committee determines that any form of payment available hereunder would
be in violation of Section 402 of the Sarbanes-Oxley Act of 2002, such form of payment shall not
be available.
(e) Vesting. Options shall vest and become exercisable in such manner, on such date
or dates, or upon the achievement of performance or other conditions, in each case as may be
determined by the Committee and set forth in an Option Agreement. Unless otherwise specifically
determined by the Committee, the vesting of an Option shall occur only while the Participant is
employed by or rendering services to the Service Recipient, and all vesting shall cease upon a
Participant's Termination for any reason. If an Option is exercisable in installments, such
installments or portions thereof that become exercisable shall remain exercisable until the Option
expires.
(f) Termination of Employment or Service. Except as provided by the Committee
in an Option Agreement, Participant Agreement or otherwise:
(1) In the event of a Participant's Termination for any reason other than (i) by
the Service Recipient for Cause, or (ii) by reason of the Participant's death or Disability, (A) all
vesting with respect to such Participant's outstanding Options shall cease, (B) each of such
Participant's outstanding unvested Options shall expire as of the date of such Termination, and
(C) each of such Participant's outstanding vested Options shall remain exercisable until the earlier
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of the applicable Expiration Date and the date that is ninety (90) days after the date of such
Termination.
(2) In the event of a Participant's Termination by reason of such Participant's
death or Disability, (i) all vesting with respect to such Participant's outstanding Options shall cease,
(ii) each of such Participant's outstanding unvested Options shall expire as of the date of such
Termination, and (iii) each of such Participant's outstanding vested Options shall remain
exercisable until the earlier of the applicable Expiration Date and the date that is twelve
(12) months after the date of such Termination. In the event of a Participant's death, such
Participant's Options shall remain exercisable by the person or persons to whom a Participant's
rights under the Options pass by will or by the applicable laws of descent and distribution until
their expiration, but only to the extent that the Options were vested by such Participant at the time
of such Termination.
(3) In the event of a Participant's Termination by the Service Recipient for
Cause, all of such Participant's outstanding Options (whether or not vested) shall immediately
expire as of the date of such Termination.
(g) Special Provisions Applicable to Incentive Stock Options.
(1) No Incentive Stock Option may be granted to any Eligible Person who, at
the time the Option is granted, owns directly, or indirectly within the meaning of Section 424(d)
of the Code, stock possessing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or of any parent or subsidiary thereof, unless such Incentive
Stock Option (i) has an exercise price of at least one hundred ten percent (110%) of the Fair Market
Value on the date of the grant of such Option and (ii) cannot be exercised more than five (5) years
after the date it is granted.
(2) To the extent that the aggregate Fair Market Value (determined as of the
date of grant) of Stock for which Incentive Stock Options are exercisable for the first time by any
Participant during any calendar year (under all plans of the Company and its Affiliates) exceeds
$100,000, such excess Incentive Stock Options shall be treated as Nonqualified Stock Options.
(3) Each Participant who receives an Incentive Stock Option must agree to
notify the Company in writing immediately after the Participant makes a Disqualifying Disposition
of any Stock acquired pursuant to the exercise of an Incentive Stock Option.
Section 6. Restricted Stock.
(a) General. Restricted Stock may be granted to Eligible Persons in such form and
having such terms and conditions as the Committee shall deem appropriate. The provisions of
separate Awards of Restricted Stock shall be set forth in separate Restricted Stock Agreements,
which agreements need not be identical. Subject to the restrictions set forth in Section 6(b), and
except as otherwise set forth in the applicable Restricted Stock Agreement, the Participant shall
generally have the rights and privileges of a stockholder as to such Restricted Stock, including the
right to vote such Restricted Stock. Unless otherwise set forth in a Participant's Restricted Stock
Agreement (1) cash dividends and stock dividends, if any, with respect to Restricted Stock subject
to performance-based vesting shall be withheld by the Company for the Participant's account, and
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shall be subject to forfeiture to the same degree as the shares of Restricted Stock to which such
dividends relate and (2) cash dividends and stock dividends, if any, with respect to all other
Restricted Stock shall be paid to Participants at the same time as such dividends are paid to
stockholders. Except as otherwise determined by the Committee, no interest will accrue or be paid
on the amount of any cash dividends withheld.
(b) Vesting and Restrictions on Transfer. Restricted Stock shall vest in such manner,
on such date or dates, or upon the achievement of performance or other conditions, in each case as
may be determined by the Committee and set forth in a Restricted Stock Agreement. Unless
otherwise specifically determined by the Committee, the vesting of an Award of Restricted Stock
shall occur only while the Participant is employed by or rendering services to the Service Recipient,
and all vesting shall cease upon a Participant's Termination for any reason. In addition to any other
restrictions set forth in a Participant's Restricted Stock Agreement, until such time as the Restricted
Stock has vested pursuant to the terms of the Restricted Stock Agreement, the Participant shall not
be permitted to sell, transfer, pledge, or otherwise encumber the Restricted Stock.
(c) Termination of Employment or Service. Except as provided by the Committee
in a Restricted Stock Agreement, Participant Agreement or otherwise, in the event of a Participant's
Termination for any reason prior to the time that such Participant's Restricted Stock has vested, all
vesting with respect to such Participant's Restricted Stock shall cease, and all unvested shares of
Restricted Stock shall be forfeited to the Company by the Participant for no consideration as of the
date of such Termination.
Section 7. Restricted Stock Units.
(a) General. Restricted Stock Units may be granted to Eligible Persons in such form
and having such terms and conditions as the Committee shall deem appropriate. The provisions
of separate Restricted Stock Units shall be set forth in separate RSU Agreements, which
agreements need not be identical.
(b) Vesting. Restricted Stock Units shall vest in such manner, on such date or dates,
or upon the achievement of performance or other conditions, in each case as may be determined
by the Committee and set forth in an RSU Agreement. Unless otherwise specifically determined
by the Committee, the vesting of a Restricted Stock Unit shall occur only while the Participant is
employed by or rendering services to the Service Recipient, and all vesting shall cease upon a
Participant's Termination for any reason.
(c) Settlement. Restricted Stock Units shall be settled in Stock, cash, or property, as
determined by the Committee, in its sole discretion, on the date or dates determined by the
Committee and set forth in an RSU Agreement. Unless otherwise set forth in a Participant's RSU
Agreement, a Participant shall not be entitled to dividends, if any, with respect to Restricted Stock
Units prior to the actual delivery of shares of Stock (or cash or other property in settlement of the
award).
(d) Termination of Employment or Service. Except as provided by the Committee
in an RSU Agreement, Participant Agreement or otherwise, in the event of a Participant's
Termination for any reason prior to the time that such Participant's Restricted Stock Units have
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been settled, (1) all vesting with respect to such Participant's Restricted Stock Units shall cease,
(2) each of such Participant's outstanding unvested Restricted Stock Units shall be forfeited for no
consideration as of the date of such Termination, and (3) any shares (or cash or other property)
remaining undelivered with respect to vested Restricted Stock Units then held by such Participant
shall be delivered on the delivery date or dates specified in the RSU Agreement.
Section 8. Stock Appreciation Rights.
(a) General. Stock Appreciation Rights may be granted to Eligible Persons in such
form and having such terms and conditions as the Committee shall deem appropriate. The
provisions of separate Stock Appreciation Rights shall be set forth in separate SAR Agreements,
which agreements need not be identical.
(b) Term. The term of each Stock Appreciation Right shall be set by the Committee
at the time of grant; provided, however, that no Stock Appreciation Right granted hereunder shall
be exercisable after the expiration of ten (10) years from the date it was granted.
(c) Base Price. The base price per share of Stock for each Stock Appreciation Right
shall be set by the Committee at the time of grant; provided, however, that if a Stock Appreciation
Right is intended to qualify as either (1) a "stock right" that does not provide for a "deferral of
compensation" within the meaning of Section 409A of the Code or (2) a Qualified Performance-
Based Award, then in each case the applicable base price shall not be less than the Fair Market
Value on the date of grant.
(d) Vesting. Stock Appreciation Rights shall vest and become exercisable in such
manner, on such date or dates, or upon the achievement of performance or other conditions, in
each case as may be determined by the Committee and set forth in a SAR Agreement. Unless
otherwise specifically determined by the Committee, the vesting of a Stock Appreciation Right
shall occur only while the Participant is employed by or rendering services to the Service Recipient,
and all vesting shall cease upon a Participant's Termination for any reason. If a Stock Appreciation
Right is exercisable in installments, such installments or portions thereof that become exercisable
shall remain exercisable until the Stock Appreciation Right expires.
(e) Payment upon Exercise. Payment upon exercise of a Stock Appreciation Right
may be made in cash, Stock, or property as specified in the SAR Agreement or determined by the
Committee, in each case having a value in respect of each share of Stock underlying the portion of
the Stock Appreciation Right so exercised, equal to the difference between the base price of such
Stock Appreciation Right and the Fair Market Value of one (1) share of Stock on the exercise date.
For purposes of clarity, each share of Stock to be issued in settlement of a Stock Appreciation
Right is deemed to have a value equal to the Fair Market Value of one (1) share of Stock on the
exercise date. In no event shall fractional shares be issuable upon the exercise of a Stock
Appreciation Right, and in the event that fractional shares would otherwise be issuable, the number
of shares issuable will be rounded down to the next lower whole number of shares, and the
Participant will be entitled to receive a cash payment equal to the value of such fractional share.
(f) Termination of Employment or Service. Except as provided by the Committee
in a SAR Agreement, Participant Agreement or otherwise:
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(1) In the event of a Participant's Termination for any reason other than (i) by
the Service Recipient for Cause, or (ii) by reason of the Participant's death or Disability, (A) all
vesting with respect to such Participant's outstanding Stock Appreciation Rights shall cease,
(B) each of such Participant's outstanding unvested Stock Appreciation Rights shall expire as of
the date of such Termination, and (C) each of such Participant's outstanding vested Stock
Appreciation Rights shall remain exercisable until the earlier of the applicable Expiration Date and
the date that is ninety (90) days after the date of such Termination.
(2) In the event of a Participant's Termination by reason of such Participant's
death or Disability, (i) all vesting with respect to such Participant's outstanding Stock Appreciation
Rights shall cease, (ii) each of such Participant's outstanding unvested Stock Appreciation Rights
shall expire as of the date of such Termination, and (iii) each of such Participant's outstanding
vested Stock Appreciation Rights shall remain exercisable until the earlier of the applicable
Expiration Date and the date that is twelve (12) months after the date of such Termination. In the
event of a Participant's death, such Participant's Stock Appreciation Rights shall remain
exercisable by the person or persons to whom a Participant's rights under the Stock Appreciation
Rights pass by will or by the applicable laws of descent and distribution until their expiration, but
only to the extent that the Stock Appreciation Rights were vested by such Participant at the time
of such Termination.
(3) In the event of a Participant's Termination by the Service Recipient for
Cause, all of such Participant's outstanding Stock Appreciation Rights (whether or not vested) shall
immediately expire as of the date of such Termination.
Section 9. Performance Awards.
(a) General. Performance Awards may be granted to Eligible Persons in such form
and having such terms and conditions as the Committee shall deem appropriate. The provisions
of separate Performance Awards, including the determination of the Committee with respect to the
form of payout of Performance Awards, shall be set forth in separate Performance Award
Agreements, which agreements need not be identical.
(b) Value of Performance Units and Performance Shares. Each Performance Unit
shall have an initial value that is established by the Committee at the time of grant. Each
Performance Share shall have an initial value equal to the Fair Market Value of the Stock on the
date of grant. In addition to any other non-performance terms included in the Performance Award
Agreement, the Committee shall set the applicable Performance Objectives in its discretion, which
objectives, depending on the extent to which they are met, will determine the value and number of
Performance Units or Performance Shares, as the case may be, that will be paid out to the
Participant. With respect to Qualified Performance-Based Awards, the Committee shall establish
the applicable Performance Objectives in writing not later than ninety (90) days after the
commencement of the Performance Period or, if earlier, the date as of which twenty-five percent
(25%) of the Performance Period has elapsed.
(c) Earning of Performance Units and Performance Shares. Upon the expiration
of the applicable Performance Period or other non-performance-based vesting period, if longer,
the holder of Performance Units or Performance Shares, as the case may be, shall be entitled to
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receive payout on the value and number of the applicable Performance Units or Performance
Shares earned by the Participant over the Performance Period, to be determined as a function of
the extent to which the corresponding Performance Objectives have been achieved and any other
non-performance-based terms met. No payment shall be made with respect to a Qualified
Performance-Based Award prior to certification by the Committee that the Performance Objectives
have been attained.
(d) Form and Timing of Payment of Performance Units and Performance Shares.
Payment of earned Performance Units and Performance Shares shall be as determined by the
Committee and as evidenced in the Performance Award Agreement. Subject to the terms of the
Plan, the Committee, in its sole discretion, may pay earned Performance Units and Performance
Shares in the form of cash, Stock, or other Awards (or in a combination thereof) equal to the value
of the earned Performance Units or Performance Shares, as the case may be, at the close of the
applicable Performance Period, or as soon as practicable after the end of the Performance Period.
Any cash, Stock, or other Awards issued in connection with a Performance Award may be issued
subject to any restrictions deemed appropriate by the Committee.
(e) Termination of Employment or Service. Except as provided by the Committee
in a Performance Award Agreement, Participant Agreement or otherwise, if, prior to the time that
the applicable Performance Period has expired, a Participant undergoes a Termination for any
reason, all of such Participant's Performance Awards shall be forfeited by the Participant to the
Company for no consideration.
(f) Performance Objectives.
(1) Each Performance Award shall specify the Performance Objectives that
must be achieved before such Award shall become earned. The Company may also specify a
minimum acceptable level of achievement below which no payment will be made and may set
forth a formula for determining the amount of any payment to be made if performance is at or
above such minimum acceptable level but falls short of the maximum achievement of the specified
Performance Objectives.
(2) Performance Objectives may be described in terms of Company-wide
objectives or objectives that are related to the performance of an individual Participant, the specific
Service Recipient, or a division, department, or function within the Company or the Service
Recipient. Performance Objectives may be measured on an absolute or relative basis. Relative
performance may be measured by comparison to a group of peer companies or to a financial market
index. With respect to Qualified Performance-Based Awards, Performance Objectives shall be
limited to specified levels of or increases in one or more of the following: (i) earnings, including
net earnings, total earnings, operating earnings, earnings growth, operating income, earnings
before or after taxes, earnings before or after interest, depreciation, amortization, or extraordinary
or special items or book value per share (which may exclude nonrecurring items); (ii) Funds From
Operations (FFO); adjusted FFO (AFFO); adjusted income; EBITDA, adjusted EBITDA; FFO,
AFFO, adjusted income EBITDA or adjusted EBITDA growth; FFO, AFFO, adjusted income
EBITDA or adjusted EBITDA per share or per share growth (basic or diluted); (iii) earnings per
share or earnings per share growth (basic or diluted); (iv) operating profit; (v) revenue, revenue
growth, or rate of revenue growth; (vi) return on assets (gross or net), return on investment, return
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on capital, return on equity, financial return ratios, or internal rates of return; (vii) returns on sales
or revenues; (viii) operating expenses; (ix) stock price appreciation; (x) cash flow (including, but
not limited to, operating cash flow and free cash flow), cash flow return on investment (discounted
or otherwise), net cash provided by operations or cash flow in excess of cost of capital, working
capital turnover; (xi) implementation or completion of critical projects or processes;
(xii) economic value created; (xiii) balance sheet measurements; (xiv) cumulative earnings, FFO,
AFFO or adjusted income per share growth; (xv) operating margin, profit margin, or gross margin;
(xvi) stock price or total stockholder return; (xvii) cost or expense targets, reductions and savings,
productivity and efficiencies; (xviii) sales or sales growth; (xix) strategic business criteria,
consisting of one or more objectives based on meeting specified market penetration, market share,
portfolio growth, geographic business expansion, customer satisfaction, employee satisfaction,
human resources management, supervision of litigation, information technology, and goals
relating to acquisitions, divestitures, joint ventures, and similar transactions, and budget
comparisons; and (xx) personal professional objectives, including any of the foregoing
performance goals, the implementation of policies and plans, the negotiation of transactions, the
development of long term business goals, the formation of joint ventures, research or development
collaborations, and the completion of other corporate transactions.
(3) The Committee shall adjust Performance Objectives and the related
minimum acceptable level of achievement if, in the sole judgment of the Committee, events or
transactions have occurred after the applicable date of grant of a Performance Award that are
unrelated to the performance of the Company or Participant and result in a distortion of the
Performance Objectives or the related minimum acceptable level of achievement. Potential
transactions or events giving rise to adjustment include, but are not limited to, (i) restructurings,
discontinued operations, extraordinary items or events, and other unusual or nonrecurring charges;
(ii) an event either not directly related to the operations of the Company or not within the
reasonable control of the Company's management; and (iii) a change in tax law or accounting
standards required by generally accepted accounting principles.
Section 10. Dividend Equivalents. The Committee may include in the Award
Agreement with respect to any Award (other than an Option or Stock Appreciation Right) a
Dividend Equivalent Right in such form and having such terms and conditions as the Committee
shall deem appropriate. A Dividend Equivalent Right (if such right is a "dividend equivalent"
within the meaning of Treasury Regulation Section 1.409A-3(e)) shall be treated separately from
the right to other amounts under the Award for purposes of Section 409A of the Code. In the event
such a provision is included in an Award Agreement, the Committee will determine whether such
payments will be made in cash, in shares of Stock or in another form of property, whether they
will be conditioned upon the exercise of the Award to which they relate, the time or times at which
they will be made, and such other terms and conditions as the Committee will deem appropriate.
Notwithstanding the foregoing, unless otherwise provided in an Award Agreement, a Participant's
right under an Award Agreement to dividend equivalent payments in the case of an Award that is
subject to vesting conditions shall be treated as unvested so long as such Award remains unvested,
and any such dividend equivalent payments that would otherwise have been paid during the vesting
period shall instead be accumulated (and, if not paid in cash, reinvested in additional shares of
Stock based on the Fair Market Value of the Stock on the date of reinvestment) and paid within
thirty (30) days following the date on which such Award is determined by the Company to have
vested; provided, however, that in the case of an Award that is subject to performance vesting
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conditions, dividend equivalent payments shall be treated as unvested so long as the Award
remains unvested.
Section 11. Other Equity-Based Awards. The Committee is authorized, subject to
limitations under applicable law, to grant to Participants such other Awards that may be
denominated or payable in, valued in whole or in part by reference to, or otherwise based upon or
related to Stock or other equity interests of the Company or the Partnership (including, without
limitation, LTIP Units), as deemed by the Committee to be consistent with the purposes of the
Plan. The grant of LTIP Units must satisfy the requirements of the Partnership Agreement. The
Committee may also grant Stock or other equity interests of the Company or the Partnership
(including, without limitation, LTIP Units) as a bonus (whether or not subject to any vesting
requirements or other restrictions on transfer), and may grant other awards in lieu of obligations
of the Company or an Affiliate to pay cash or deliver other property under this Plan or under other
plans or compensatory arrangements, subject to such terms as shall be determined by the
Committee. The terms and conditions applicable to such Awards shall be determined by the
Committee and evidenced by Award Agreements, which agreements need not be identical.
Section 12. Adjustment for Recapitalization, Merger, etc.
(a) Capitalization Adjustments. The aggregate number of shares of Stock that may
be granted or purchased pursuant to Awards (as set forth in Section 4 hereof), the number of shares
of Stock or other equity interests (including, without limitation, LTIP Units) covered by each
outstanding Award, and the exercise or base price per share of Stock or other equity interest
(including, without limitation, LTIP Units) underlying each such Award shall be equitably and
proportionally adjusted or substituted, as determined by the Committee, as to the number, price,
or kind of a share of Stock or other equity interest (including, without limitation, LTIP Units) or
other consideration subject to such Awards (1) in the event of changes in the outstanding Stock or
in the capital structure of the Company by reason of stock splits, reverse stock splits,
recapitalizations, reorganizations, mergers, amalgamations, consolidations, combinations,
exchanges, or other relevant changes in capitalization occurring after the date of grant of any such
Award (including any Corporate Event); (2) in connection with any extraordinary dividend (as
determined by the Committee in its sole discretion) declared and paid in respect of shares of Stock,
whether payable in the form of cash, stock, or any other form of consideration; or (3) in the event
of any change in applicable laws or circumstances that results in or could result in, in either case,
as determined by the Committee in its sole discretion, any substantial dilution or enlargement of
the rights intended to be granted to, or available for, Participants in the Plan.
(b) Corporate Events. Notwithstanding the foregoing, except as provided by the
Committee in an Award Agreement or otherwise, in connection with (i) a merger, amalgamation,
or consolidation involving the Company in which the Company is not the surviving corporation,
(ii) a merger, amalgamation, or consolidation involving the Company in which the Company is
the surviving corporation but the holders of shares of Stock receive securities of another
corporation or other property or cash, (iii) a Change in Control, or (iv) the reorganization,
dissolution or liquidation of the Company (each, a "Corporate Event"), the Committee may, in
its discretion, so long as it determines there is no adverse economic impact on the Participants as
of the date any action is taken under this Section 12(b), provide for any one or more of the
following:
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(1) The assumption or substitution of any or all Awards in connection with such
Corporate Event, in which case the Awards shall be subject to the adjustment set forth in subsection
(a) above, and to the extent that such Awards are Performance Awards or other Awards that vest
subject to the achievement of Performance Objectives or similar performance criteria, such
Performance Objectives or similar performance criteria shall be adjusted appropriately to reflect
the Corporate Event;
(2) The acceleration of vesting of any or all Awards, subject to the
consummation of such Corporate Event, with any Performance Awards or other Awards that vest
subject to the achievement of Performance Objectives or similar performance criteria deemed
earned (i) based on actual performance through the date of the Corporate Event, or (ii) at the target
level (or if no target is specified, the maximum level), in the event actual performance cannot be
measured through the date of the Corporate Event, in each case, with respect to all unexpired
Performance Periods;
(3) The cancellation of any or all Awards (whether vested or unvested) as of
the consummation of such Corporate Event, together with the payment to the Participants holding
vested Awards (including any Awards that would vest upon the Corporate Event but for such
cancellation) so canceled of an amount in respect of cancellation based upon the per-share
consideration being paid for the Stock in connection with such Corporate Event, less, in the case
of Options, Stock Appreciation Rights, and other Awards subject to exercise, the applicable
exercise or base price; provided, however, that holders of Options, Stock Appreciation Rights, and
other Awards subject to exercise shall be entitled to consideration in respect of cancellation of
such Awards only if the per-share consideration less the applicable exercise or base price is greater
than zero dollars ($0), and to the extent that the per-share consideration is less than or equal to the
applicable exercise or base price, such Awards shall be canceled for no consideration; and
(4) The replacement of any or all Awards (other than Awards that are intended
to qualify as "stock rights" that do not provide for a "deferral of compensation" within the meaning
of Section 409A of the Code) with a cash incentive program that preserves the value of the Awards
so replaced (determined as of the consummation of the Corporate Event), with subsequent payment
of cash incentives subject to the same vesting conditions as applicable to the Awards so replaced
and payment to be made within thirty (30) days of the applicable vesting date.
Payments to holders pursuant to paragraph (3) above shall be made in cash or, in the sole
discretion of the Committee, in the form of such other consideration necessary for a Participant to
receive property, cash, or securities (or a combination thereof) as such Participant would have been
entitled to receive upon the occurrence of the transaction if the Participant had been, immediately
prior to such transaction, the holder of the number of shares of Stock covered by the Award at such
time (less any applicable exercise or base price). In addition, in connection with any Corporate
Event, prior to any payment or adjustment contemplated under this subsection (b), the Committee
may require a Participant to (A) represent and warrant as to the unencumbered title to his Awards,
(B) bear such Participant's pro-rata share of any post-closing indemnity obligations, and be subject
to the same post-closing purchase price adjustments, escrow terms, offset rights, holdback terms,
and similar conditions as the other holders of Stock, and (C) deliver customary transfer
documentation as reasonably determined by the Committee.
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(c) Fractional Shares. Any adjustment provided under this Section 12 may, in the
Committee's discretion, provide for the elimination of any fractional share that might otherwise
become subject to an Award.
Section 13. Use of Proceeds. The proceeds received from the sale of Stock pursuant to
the Plan shall be used for general corporate purposes.
Section 14. Rights and Privileges as a Stockholder. Except as otherwise specifically
provided in the Plan, no person shall be entitled to the rights and privileges of Stock ownership in
respect of shares of Stock that are subject to Awards hereunder until such shares have been issued
to that person.
Section 15. Transferability of Awards. Awards may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated, other than by will or by the applicable laws of
descent and distribution, and to the extent subject to exercise, Awards may not be exercised during
the lifetime of the grantee other than by the grantee. Notwithstanding the foregoing, except with
respect to Incentive Stock Options, Awards and a Participant's rights under the Plan shall be
transferable for no value to the extent provided in an Award Agreement or otherwise determined
at any time by the Committee.
Section 16. Employment or Service Rights. No individual shall have any claim or
right to be granted an Award under the Plan or, having been selected for the grant of an Award, to
be selected for the grant of any other Award. Neither the Plan nor any action taken hereunder shall
be construed as giving any individual any right to be retained in the employ or service of the
Company or an Affiliate of the Company.
Section 17. Compliance with Laws. The obligation of the Company to deliver Stock
upon vesting, exercise, or settlement of any Award shall be subject to all applicable laws, rules,
and regulations, and to such approvals by governmental agencies as may be required.
Notwithstanding any terms or conditions of any Award to the contrary, the Company shall be under
no obligation to offer to sell or to sell, and shall be prohibited from offering to sell or selling, any
shares of Stock pursuant to an Award unless such shares have been properly registered for sale
with the Securities and Exchange Commission pursuant to the Securities Act or unless the
Company has received an opinion of counsel, satisfactory to the Company, that such shares may
be offered or sold without such registration pursuant to an available exemption therefrom and the
terms and conditions of such exemption have been fully complied with. The Company shall be
under no obligation to register for sale or resale under the Securities Act any of the shares of Stock
to be offered or sold under the Plan or any shares of Stock to be issued upon exercise or settlement
of Awards. If the shares of Stock offered for sale or sold under the Plan are offered or sold pursuant
to an exemption from registration under the Securities Act, the Company may restrict the transfer
of such shares and may legend the Stock certificates representing such shares in such manner as it
deems advisable to ensure the availability of any such exemption.
Section 18. Withholding Obligations. As a condition to the vesting, exercise, or
settlement of any Award (or upon the making of an election under Section 83(b) of the Code), the
Committee may require that a Participant satisfy, through deduction or withholding from any
payment of any kind otherwise due to the Participant, or through such other arrangements as are
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satisfactory to the Committee, the minimum amount of all federal, state, and local income and
other taxes of any kind required or permitted to be withheld in connection with such vesting,
exercise, or settlement (or election). A Participant may elect to have such tax withholding satisfied,
in whole or in part, by (i) authorizing the Company to withhold a number of shares of Stock to be
issued pursuant to an Award with a Fair Market Value as of the vesting, exercise or settlement date
of the Award, as applicable equal to the amount of the required withholding tax, (ii) transferring
to the Company shares of Stock owned by the Participant with a Fair Market Value as of the
vesting, exercise or settlement date of the Award, as applicable, equal to the amount of the required
withholding tax, or (iii) in the case of a Participant who is an employee of the Company at the time
such withholding is effected, by withholding from the cash compensation payable to such
Participant as of such date, equal to the amount of the required withholding tax; provided,
however, that the aggregate Fair Market Value of the number of shares of Stock that may be used
to satisfy tax withholding requirements may not exceed the minimum statutorily required
withholding amount with respect to such Award.
Section 19. Amendment of the Plan or Awards.
(a) Amendment of Plan. The Board or the Committee may amend the Plan at any
time and from time to time.
(b) Amendment of Awards. The Board or the Committee may amend the terms of
any one or more Awards at any time and from time to time.
(c) Stockholder Approval; No Material Impairment. Notwithstanding anything
herein to the contrary, no amendment to the Plan or any Award shall be effective without
stockholder approval if such amendment would cause the Plan to fail to comply with any
applicable legal requirement or applicable rules of any national securities exchange on which the
Stock or OP Units are listed or similar requirement. Additionally, no amendment to the Plan or
any Award shall materially impair a Participant's rights under any Award unless the Participant
consents in writing (it being understood that no action taken by the Board or the Committee that
is expressly permitted under the Plan, including, without limitation, any actions described in
Section 12 hereof, shall constitute an amendment to the Plan or an Award for such purpose).
Notwithstanding the foregoing, subject to the limitations of applicable law, if any, and without an
affected Participant's consent, the Board or the Committee may amend the terms of the Plan or any
one or more Awards from time to time as necessary to bring such Awards into compliance with
applicable law, including, without limitation, Section 409A of the Code.
(d) No Repricing of Awards Without Stockholder Approval. Notwithstanding
subsection (a) or (b) above, or any other provision of the Plan, the repricing of Awards shall not
be permitted without stockholder approval. For this purpose, a "repricing" means any of the
following (or any other action that has the same effect as any of the following): (1) changing the
terms of an Award to lower its exercise or base price (other than on account of capital adjustments
resulting from share splits, etc., as described in Section 12(a) hereof), (2) any other action that is
treated as a repricing under generally accepted accounting principles, and (3) repurchasing for cash
or canceling an Award in exchange for another Award at a time when its exercise or base price is
greater than the Fair Market Value of the underlying Stock, unless the cancellation and exchange
occurs in connection with an event set forth in Section 12(b) hereof.
761158-4-47-v0.7 - 22 - 80-40637264
Section 20. Termination or Suspension of the Plan. The Board or the Committee may
suspend or terminate the Plan at any time. Unless sooner terminated, the Plan shall terminate on
the day before the tenth (10th) anniversary of the earlier of (i) the date the Plan is adopted by the
Board or (ii) the date the stockholders of the Company approve the Plan. No Awards may be
granted under the Plan while the Plan is suspended or after it is terminated; provided, however,
that following any suspension or termination of the Plan, the Plan shall remain in effect for the
purpose of governing all Awards then outstanding hereunder until such time as all Awards under
the Plan have been terminated, forfeited, or otherwise canceled, or earned, exercised, settled, or
otherwise paid out, in accordance with their terms.
Section 21. Effective Date of the Plan. The Plan is effective as of the Effective Date,
subject to stockholder approval.
Section 22. Miscellaneous.
(a) Certificates. Stock acquired pursuant to Awards granted under the Plan may be
evidenced in such a manner as the Committee shall determine. If certificates representing Stock
are registered in the name of the Participant, the Committee may require that (1) such certificates
bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such
Stock, (2) the Company retain physical possession of the certificates, and (3) the Participant
deliver a stock power to the Company, endorsed in blank, relating to the Stock. Notwithstanding
the foregoing, the Committee may determine, in its sole discretion, that the Stock shall be held in
book-entry form rather than delivered to the Participant pending the release of any applicable
restrictions.
(b) Clawback/Recoupment Policy. Notwithstanding anything contained herein to the
contrary, all Awards granted under the Plan shall be and remain subject to any incentive
compensation clawback or recoupment policy currently in effect or as may be adopted by the
Board and, in each case, as may be amended from time to time. No such policy adoption or
amendment shall in any event require the prior consent of any Participant.
(c) Data Privacy. As a condition of receipt of any Award, each Participant explicitly
and unambiguously consents to the collection, use, and transfer, in electronic or other form, of
personal data as described in this section by and among, as applicable, the Company and its
Affiliates for the exclusive purpose of implementing, administering, and managing the Plan and
Awards and the Participant's participation in the Plan. In furtherance of such implementation,
administration, and management, the Company and its Affiliates may hold certain personal
information about a Participant, including, but not limited to, the Participant's name, home address,
telephone number, date of birth, social security or insurance number or other identification number,
salary, nationality, job title(s), information regarding any securities of the Company or any of its
Affiliates, and details of all Awards (the "Data"). In addition to transferring the Data amongst
themselves as necessary for the purpose of implementation, administration, and management of
the Plan and Awards and the Participant's participation in the Plan, the Company and its Affiliates
may each transfer the Data to any third parties assisting the Company in the implementation,
administration, and management of the Plan and Awards and the Participant's participation in the
Plan. Recipients of the Data may be located in the Participant's country or elsewhere, and the
Participant's country and any given recipient's country may have different data privacy laws and
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protections. By accepting an Award, each Participant authorizes such recipients to receive, possess,
use, retain, and transfer the Data, in electronic or other form, for the purposes of assisting the
Company in the implementation, administration, and management of the Plan and Awards and the
Participant's participation in the Plan, including any requisite transfer of such Data as may be
required to a broker or other third party with whom the Company or the Participant may elect to
deposit any shares of Stock. The Data related to a Participant will be held only as long as is
necessary to implement, administer, and manage the Plan and Awards and the Participant's
participation in the Plan. A Participant may, at any time, view the Data held by the Company with
respect to such Participant, request additional information about the storage and processing of the
Data with respect to such Participant, recommend any necessary corrections to the Data with
respect to the Participant, or refuse or withdraw the consents herein in writing, in any case without
cost, by contacting his local human resources representative. The Company may cancel the
Participant's eligibility to participate in the Plan, and in the Committee's discretion, the Participant
may forfeit any outstanding Awards if the Participant refuses or withdraws the consents described
herein. For more information on the consequences of refusal to consent or withdrawal of consent,
Participants may contact their local human resources representative.
(d) Participants Outside of the United States. The Committee may modify the terms
of any Award under the Plan made to or held by a Participant who is then a resident, or is primarily
employed or providing services, outside of the United States in any manner deemed by the
Committee to be necessary or appropriate in order that such Award shall conform to laws,
regulations, and customs of the country in which the Participant is then a resident or primarily
employed or providing services, or so that the value and other benefits of the Award to the
Participant, as affected by non–United States tax laws and other restrictions applicable as a result
of the Participant's residence, employment, or providing services abroad, shall be comparable to
the value of such Award to a Participant who is a resident, or is primarily employed or providing
services, in the United States. An Award may be modified under this Section 22(d) in a manner
that is inconsistent with the express terms of the Plan, so long as such modifications will not
contravene any applicable law or regulation or result in actual liability under Section 16(b) of the
Exchange Act for the Participant whose Award is modified. Additionally, the Committee may
adopt such procedures and sub-plans as are necessary or appropriate to permit participation in the
Plan by Eligible Persons who are non–United States nationals or are primarily employed or
providing services outside the United States.
(e) No Liability of Committee Members. Neither any member of the Committee nor
any of the Committee's permitted delegates shall be liable personally by reason of any contract or
other instrument executed by such member or on his behalf in his capacity as a member of the
Committee or for any mistake of judgment made in good faith, and the Company shall indemnify
and hold harmless each member of the Committee and each other employee, officer, or director of
the Company to whom any duty or power relating to the administration or interpretation of the
Plan may be allocated or delegated, against all costs and expenses (including counsel fees) and
liabilities (including sums paid in settlement of a claim) arising out of any act or omission to act
in connection with the Plan, unless arising out of such person's own fraud or willful misconduct;
provided, however, that approval of the Board shall be required for the payment of any amount
in settlement of a claim against any such person. The foregoing right of indemnification shall not
be exclusive of any other rights of indemnification to which such persons may be entitled under
the Company's certificate or articles of incorporation or bylaws, each as may be amended from
761158-4-47-v0.7 - 24 - 80-40637264
time to time, as a matter of law, or otherwise, or any power that the Company may have to
indemnify them or hold them harmless.
(f) Payments Following Accidents or Illness. If the Committee shall find that any
person to whom any amount is payable under the Plan is unable to care for his affairs because of
illness or accident, or is a minor, or has died, then any payment due to such person or his estate
(unless a prior claim therefor has been made by a duly appointed legal representative) may, if the
Committee so directs the Company, be paid to his spouse, child, relative, an institution maintaining
or having custody of such person, or any other person deemed by the Committee to be a proper
recipient on behalf of such person otherwise entitled to payment. Any such payment shall be a
complete discharge of the liability of the Committee and the Company therefor.
(g) Governing Law. The Plan shall be governed by and construed in accordance with
the internal laws of the State of Maryland without reference to the principles of conflicts of laws
thereof.
(h) Funding. No provision of the Plan shall require the Company, for the purpose of
satisfying any obligations under the Plan, to purchase assets or place any assets in a trust or other
entity to which contributions are made or otherwise to segregate any assets, nor shall the Company
be required to maintain separate bank accounts, books, records, or other evidence of the existence
of a segregated or separately maintained or administered fund for such purposes. Participants shall
have no rights under the Plan other than as unsecured general creditors of the Company, except
that insofar as they may have become entitled to payment of additional compensation by
performance of services, they shall have the same rights as other employees and service providers
under general law.
(i) Reliance on Reports. Each member of the Committee and each member of the
Board shall be fully justified in relying, acting, or failing to act, and shall not be liable for having
so relied, acted, or failed to act in good faith, upon any report made by the independent public
accountant of the Company and its Affiliates and upon any other information furnished in
connection with the Plan by any Person or Persons other than such member.
(j) Titles and Headings. The titles and headings of the sections in the Plan are for
convenience of reference only, and in the event of any conflict, the text of the Plan, rather than
such titles or headings, shall control.