EMPLOYEE AND DIRECTOR
INCENTIVE RESTRICTED SHARE PLAN
AMERICAN REALTY TRUST, INC.
SECTION 1. PURPOSES OF THE PLAN AND DEFINITIONS
1.1 Purposes. The purposes of the Employee and Director Incentive Restricted Share Plan (this Plan)
of Empire American Realty Trust, Inc. (the Company) are to:
(1) provide incentives
to individuals chosen to receive share-based awards because of their ability to improve operations and increase profits;
(2) encourage selected persons to accept positions with or continue to provide services to the Company, the Advisor and Affiliates of the Company; and
(3) increase the interest of Directors in the Companys welfare through their participation in the growth in value of
the Companys Shares.
To accomplish these purposes, this Plan provides a means whereby employees of the Advisor and
Affiliates of the Company, officers of the Company, the Advisor and Affiliates of the Company, Directors and other enumerated persons may receive Awards.
1.2 Definitions. For purposes of this Plan, the following terms have the following meanings:
Advisor means the Person or Persons, if any, appointed, employed or contracted with by the Company to be responsible for directing or performing the day-to-day business affairs
of the Company, including any Person to whom the Advisor subcontracts substantially all of such functions. The initial Advisor is Empire American Advisors, LLC.
Affiliate means any Person (other than an Advisor), whose employees, directors or officers are eligible to receive Awards under this Plan. The determination of whether a Person
is an Affiliate shall be made by the Board acting in its sole and absolute discretion.
Laws means the requirements relating to the administration of Awards under state corporation laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Shares are listed or quoted and
the applicable laws of any foreign country or jurisdiction where Awards are, or will be, granted under this Plan.
Articles of Incorporation means the articles of incorporation of the Company as the same may be amended from
time to time.
Award means any award of Restricted Shares under this Plan.
Award Agreement means, with respect to each Award, the written
agreement executed by the Company and the Participant or other written document approved by the Board setting forth the terms and conditions of the Award.
Board means the Board of Directors of the Company.
Code means the Internal Revenue Code of 1986, as amended from time to time.
Shares means common shares of capital stock of the Company, $0.01 par value per share.
Company means Empire American Realty Trust, Inc.
Director means a person elected or appointed and serving as a member of the Board in accordance with the
Articles of Incorporation and the Maryland General Corporation Law.
Director Shares means Shares
issued under Section 6.
Effective Date has the meaning given it in
Employment Termination means that a Participant has ceased, for any reason
and with or without cause, to be an employee or Director of, or a consultant to, the Company, the Advisor or any Affiliate of the Company. However, the term Employment Termination shall not include a Non-Employee Directors ceasing
to be a Director or a transfer of a Participant from the Company to the Advisor or an Affiliate or vice versa, or from one Affiliate to another, or a leave of absence duly authorized by the Company unless the Board has provided otherwise.
Exchange Act means the Securities Exchange Act of 1934, as amended from time to time.
Fair Market Value means with respect to Shares:
(i) If the Shares are listed on any established stock exchange or a national market system, their Fair Market Value shall
be the closing sales price for the Shares, or the mean between the high bid and low asked prices if no sales were reported, as quoted on such system or exchange (or, if the Shares are listed on more than one exchange, then on the largest such
exchange) for the date the value is to be determined (or if there are no sales or bids for such date, then for the last preceding business day on which there were sales or bids), as reported in The Wall Street Journal.
(ii) If the Shares are regularly quoted by a recognized securities dealer but selling prices are not reported, or if there
is no secondary trading market for the Shares, their Fair Market Value shall be determined in good faith by the Board.
Grant Date has the meaning set forth in Section 5.1(c).
Non-Employee Director means a person who is a Director of the Company, but who is not also an employee or
officer of the Company.
Participant means an eligible person who is granted an Award.
Person means an individual, a corporation, partnership, trust, association, or any other entity.
Plan means this Employee and Director Incentive Restricted Share Plan.
Restricted Shares means an Award of Shares granted under Section 5.2 that are subject to the
restrictions on such Shares set forth in this Plan and in the applicable Award Agreement.
has the meaning given it in Section 6.1.
Rule 16b-3 means Rule 16b-3 adopted under
Section 16(b) or any successor rule, as it may be amended from time to time, and references to paragraphs or clauses of Rules 16b-3 refer to the corresponding paragraphs or clauses of Rule 16b-3 as it exists at the Effective Date or the
comparable paragraph or clause of Rule 16b-3 or successor rule, as that paragraph or clause may thereafter be amended.
Section 16(b) means Section 16(b) of the Exchange Act.
Section 409A of the Code
means the nonqualified deferred compensation rules under Section 409A of the Code and any applicable Treasury regulation or other official guidance promulgated thereunder.
Securities Act means the Securities Act of 1933, as amended from time to time.
SECTION 2. ELIGIBLE PERSONS
Every person who, at or as of the Grant Date, is
(a) a full-time employee of the Advisor, the Company or any Affiliate of the Company;
(b) an officer of the Company, the Advisor or any Affiliate of the Company;
a Director of the Company;
(d) a director of the Advisor or any Affiliate of the Company; or
(e) someone whom the Board designates as eligible for an Award because the person:
(i) performs bona fide consulting or advisory services for the Company, the Advisor or any Affiliate of the Company
pursuant to a written agreement (other than services in connection with the offer or sale of securities in a capital-raising transaction), and
(ii) has a direct and significant effect on the financial development of the Company or any Affiliate of the Company, shall be eligible to receive Awards hereunder.
Directors of the Company who are not full-time employees are only eligible to receive Director Shares under
SECTION 3. SHARES SUBJECT TO THIS PLAN
The total number of Shares that may be issued under Awards is a number of Shares equal to 1% of the Companys outstanding Shares on a fully diluted basis, with such number of Shares not to exceed
1,000,000. The number of Shares reserved for issuance under this Plan is subject to adjustment in accordance with the provisions for adjustment in Section 5.1. If any Shares awarded under this Plan are forfeited for any reason, the
number of forfeited Shares shall again be available for purposes of granting Awards under this Plan.
SECTION 4. ADMINISTRATION
4.1 Administration. This Plan shall be administered by the Board.
4.2 Boards Powers. Subject to the express provisions of this Plan, the Board shall have the authority, in its sole
(a) to adopt, amend and rescind administrative and interpretive rules and regulations relating to this Plan;
(b) to determine the eligible persons to whom, and the time or times at which, Awards shall be granted;
(c) to determine the number of Shares that shall be the subject of each Award;
(d) to determine the terms and provisions of each Award (which need not be identical) and any amendments thereto, including provisions
defining or otherwise relating to:
(i) the extent to which the transferability of Shares issued or transferred
pursuant to any Award is restricted;
(ii) the effect of Employment Termination on an Award;
(iii) the effect of approved leaves of absence;
(iv) to construe the respective Award Agreements and this Plan;
(v) to make determinations of the Fair Market Value of Shares;
(vi) to waive any provision, condition or limitation set forth in an Award Agreement;
(vii) to delegate its duties under this Plan to such agents as it may appoint from time to time; and
(viii) to make all other determinations, perform all other acts and exercise
all other powers and authority necessary or advisable for administering this Plan, including the delegation of those ministerial acts and responsibilities as the Board deems appropriate.
The Board may correct any defect, supply any omission or reconcile any inconsistency in this Plan, in any Award or in any Award Agreement
in the manner and to the extent it deems necessary or desirable to implement this Plan, and the Board shall be the sole and final judge of that necessity or desirability. The determinations of the Board on the matters referred to in this
Section 4.2 shall be final and conclusive. Notwithstanding any provision in this Plan to the contrary, Awards will be made to Non-Employee Directors only under Section 6.1 of this Plan. In addition, notwithstanding any
provision of this Plan to the contrary, the Board may not in any manner exercise discretion under this Plan with respect to any Awards made to Non-Employee Directors.
4.3 Term of Plan. No Awards shall be granted under this Plan after 10 years from the Effective Date of this Plan.
SECTION 5. CERTAIN TERMS AND CONDITIONS OF AWARDS
5.1 All Awards. All
Awards shall be subject to the following terms and conditions:
(a) Changes in Capital Structure. If the number of
outstanding Shares is increased by means of a share dividend payable in Shares, a share split or other subdivision or by a reclassification of Shares, then, from and after the record date for such dividend, subdivision or reclassification, the
number and class of Shares subject to this Plan shall be increased in proportion to such increase in outstanding Shares. If the number of outstanding Shares is decreased by means of a share split or other subdivision or by a reclassification of
Shares, then, from and after the record date for such split, subdivision or reclassification, the number and class of Shares subject to this Plan shall be decreased in proportion to such decrease in outstanding Shares.
(b) Certain Corporate Transactions. In the event of any change in the capital structure or business of the Company by reason of
any recapitalization, reorganization, merger, consolidation, split-up, combination, exchange of Shares or any similar change affecting the Companys capital structure or business, then the aggregate number and kind of Shares which thereafter
may be issued under this Plan shall be appropriately adjusted consistent with such change in such manner as the Board may deem equitable to prevent substantial dilution or enlargement of the rights granted to, or available for, Participants under
this Plan, and any such adjustment determined by the Board in good faith shall be binding and conclusive on the Company and all Participants and employees and their respective heirs, executors, administrators, successors and assigns.
(c) Grant Date. Each Award Agreement shall specify the date as of which it shall be effective (the Grant
(d) Vesting. Each Award shall vest, and any restrictions thereunder shall lapse, as the case may
be, at such times and in such amounts as may be specified by the Board in the applicable Award Agreement.
(e) Nonassignability of Rights. Awards shall not be transferable other than with the
consent of the Board or by will or the laws of descent and distribution.
(f) Termination of Employment from the Company,
the Advisor or any Affiliate of the Company. The Board shall establish, in respect of each Award when granted, the effect of an Employment Termination on the rights and benefits thereunder and in so doing may, but need not, make distinctions
based upon the cause of termination (such as retirement, death, disability or other factors) or which party effected the termination (the employer or the employee).
(g) Minimum Purchase Price. Notwithstanding any provision of this Plan to the contrary, if authorized but previously unissued Shares are issued under this Plan, such Shares shall not be issued for
a consideration which is less than as permitted under Applicable Law, and in no event, shall such consideration be less than the par value per Share multiplied by the number of Shares to be issued.
(h) Other Provisions. Each Award Agreement may contain such other terms, provisions and conditions not inconsistent with this
Plan, as may be determined by the Board.
5.2 Restricted Shares. Restricted Shares shall be subject to the following
terms and conditions:
(a) Grant. The Board may grant one or more Awards of Restricted Shares to any Participant. Each
Award of Restricted Shares shall specify the number of Shares to be issued to the Participant, the date of issuance and the restrictions imposed on the Shares including the conditions of release or lapse of such restrictions. Upon the issuance of
Restricted Shares, the Participant may be required to furnish such additional documentation or other assurances as the Board may require to enforce restrictions applicable thereto.
(b) Restrictions. Except as specifically provided elsewhere in this Plan or the Award Agreement regarding Restricted Shares,
Restricted Shares may not be sold, assigned, transferred, pledged or otherwise disposed of or encumbered, either voluntarily or involuntarily, until the restrictions have lapsed and the rights to the Shares have vested. The Board may in its sole
discretion provide for the lapse of such restrictions in installments and may accelerate or waive such restrictions, in whole or in part, based on service, performance or such other factors or criteria as the Board may determine.
(c) Dividends. Unless otherwise determined by the Board, cash dividends with respect to Restricted Shares shall be paid to the
recipient of the Award of Restricted Shares on the normal dividend payment dates, and dividends payable in Shares shall be paid in the form of Restricted Shares having the same terms as the Restricted Shares upon which such dividend is paid. Each
Award Agreement for Awards of Restricted Shares shall specify whether and, if so, the extent to which the Participant shall be obligated to return to the Company any cash dividends paid with respect to any Restricted Shares which are subsequently
(d) Forfeiture of Restricted Shares. Except to the extent otherwise provided in the applicable Award
Agreement, when a Participants Employment Termination occurs, the Participant shall automatically forfeit all Restricted Shares still subject to restriction.
SECTION 6. DIRECTOR SHARES
6.1 Annual Grant. The Company shall grant annually to each individual who is a Non-Employee Director an Award of Shares representing in the aggregate 3,000 Restricted Shares, on such date or
dates as shall be determined by the Company. The annual grant of a Non-Employee Director who becomes a member of the Board during a year shall be pro-rated based upon the number of full months during the calendar year that he or she serves as a
Non-Employee Director during such calendar year. Notwithstanding any other provision herein, and except to the extent otherwise provided in the applicable Award Agreement, an Award of Restricted Shares granted to a Non-Employee Director pursuant to
this Section 6.1 shall be automatically forfeited in the event the Non-Employee Director resigns prior to the end of the end of the period for which such grant is made.
6.2 Election. The Company shall pay to each individual who is a Non-Employee Director an annual fee in the amount set from time to
time by the Board (the Retainer). Each Non-Employee Director shall be entitled to receive his or her Retainer exclusively in cash, exclusively in unrestricted Shares (Directors Shares), or
any portion in cash and Director Shares. Following the approval of this Plan by the stockholders of the Company, each Non-Employee Director shall be given the opportunity, during the month in which the Non-Employee Director first becomes a
Non-Employee Director, and during each December thereafter, to elect among these choices for the balance of the calendar year (in the case of the election made during the month the Non-Employee Director first becomes a Non-Employee Director) and for
the ensuing calendar year (in the case of a subsequent election made during any December). If the Non-Employee Director chooses to receive at least some of his or her Retainer in Director Shares, the election shall also indicate the percentage of
the Retainer to be paid in Director Shares. If a Non-Employee Director makes no election during his or her first opportunity to make an election, the Non-Employee Director shall be assumed to have elected to receive his or her entire Retainer in
6.3 Issuance. The Company shall make the first issuance of Director Shares to electing Directors pursuant to
Section 6.2 on the first business day following the last day of the full calendar quarter following the approval of this Plan by the Companys stockholders. Subsequent issuances of Director Shares shall be made on the first business day of
each subsequent calendar quarter and shall be made to all persons who are Non-Employee Directors on that day except any Non-Employee Director whose Retainer is to be paid entirely in cash. The number of Shares issuable to those Non-Employee
Directors on the relevant date indicated above shall equal:
(% x R/4)/P, where:
% = the percentage of the Non-Employee Directors Retainer that the Non-Employee Director elected or is deemed to have elected to
receive in the form of Director Shares, expressed as a decimal;
R = the Non-Employee Directors Retainer for the year
during which the issuance occurs; and
P = the Fair Market Value.
Director Shares shall not include any fractional Shares. Fractions shall be rounded to the nearest whole Share (with one-half being
SECTION 7. SECURITIES LAWS
Nothing in this Plan or in any Award or Award Agreement shall require the Company to issue any Shares with respect to any Award if, in the opinion of counsel for the Company, that issuance could
constitute a violation of any Applicable Laws. As a condition to the grant of any Award, the Company may require the Participant (or, in the event of the Participants death, the Participants legal representatives, heirs, legatees or
distributees) to provide written representations concerning the Participants (or such other persons) intentions with regard to the retention or disposition of the Shares covered by the Award and written covenants as to the manner of
disposal of such Shares as may be necessary or useful to ensure that the grant or disposition thereof will not violate the Securities Act, any other law or any rule of any applicable securities exchange or securities association then in effect. The
Company shall not be required to register any Shares under the Securities Act or register or qualify any Shares under any state or other securities laws.
SECTION 8. EMPLOYMENT OR OTHER RELATIONSHIP
Nothing in this Plan or any Award
shall in any way interfere with or limit the right of the Company, the Advisor or any Affiliate of the Company to terminate any Participants employment or status as a consultant or Director at any time, nor confer upon any Participant any
right to continue in the employ of, or as a Director or consultant of, the Company, the Advisor or any Affiliate of the Company.
AMENDMENT, SUSPENSION AND TERMINATION OF THIS PLAN
The Board may at any time amend, suspend or discontinue this Plan provided
that such amendment, suspension or discontinuance meets the requirements of Applicable Laws, including without limitation, the requirements for stockholder approval. Notwithstanding the above, an amendment, alteration, suspension or discontinuation
shall not be made if it would impair the rights of any Participant under any Award previously granted, without the Participants consent, except to conform this Plan and Awards granted to the requirements of Applicable Laws. The provisions of
this Plan relating to Awards for Non-Employee Directors may not be amended more than once each six months. Notwithstanding any provision of the Plan to the contrary, in the event that the Board determines that any Award may be subject to
Section 409A of the Code, the Board may adopt such amendment to the Plan and the applicable Award Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other
actions that the Board determines are necessary or appropriate, without the consent of the Participant, to (1) exempt the Award from Section 409A of the Code and/or preserve the intended tax treatment of the benefits provided with respect
to the Award or (2) comply with the requirements of Section 409A of the Code.
SECTION 10. LIABILITY AND INDEMNIFICATION OF THE BOARD
No person constituting, or member of the group constituting, the Board shall be liable for any act or omission on such persons
part, including but not limited to the exercise of any power or discretion given to such member under this Plan, except for those acts or omissions resulting from such members gross negligence or willful misconduct. The Company shall indemnify
each present and future person constituting, or member of the group constituting, the Board against, and each person or member of the group constituting the Board shall be entitled without further act on his or her part to indemnity from the Company
for, all expenses (including the amount of judgments and the amount of approved settlements made with a view to the curtailment of costs of litigation) reasonably incurred by such person in connection with or arising out of any action, suit or
proceeding to the fullest extent permitted by law and by the Articles of Incorporation and Bylaws of the Company.
SECTION 11. SEVERABILITY
If any provision of this Plan is held to be illegal or invalid for any reason, that illegality or invalidity shall not affect
the remaining portions of this Plan, but such provision shall be fully severable and this Plan shall be construed and enforced as if the illegal or invalid provision had never been included in this Plan. Such an illegal or invalid provision shall be
replaced by a revised provision that most nearly comports to the substance of the illegal or invalid provision. If any of the terms or provisions of this Plan or any Award Agreement conflict with the requirements of Applicable Laws, those
conflicting terms or provisions shall be deemed inoperative to the extent they conflict with Applicable Law.
SECTION 12. SECTION 409A OF THE
Awards granted under the Plan are intended to be exempt from Section 409A of the Code. To the extent that the Plan
is not exempt from the requirements of Section 409A of the Code, the Plan is intended to comply with the requirements of Section 409A of the Code and shall be limited, construed and interpreted in accordance with such intent.
Notwithstanding the foregoing, in no event whatsoever shall the Company be liable for any additional tax, interest or penalty that may be imposed on a Participant by Section 409A of the Code or any damages for failing to comply with
Section 409A of the Code.
SECTION 13. WITHHOLDING
The Company shall have the right to deduct from any payment to be made to a Participant, or to otherwise require, prior to the issuance or delivery of any Shares or the payment of any cash hereunder,
payment by the Participant of, any federal, state or local taxes required by law to be withheld. Upon the vesting of Restricted Shares, or upon making an election under Section 83(b) of the Code, a Participant shall pay all required withholding
to the Company. The Board may permit any such statutory withholding obligation with regard to any Participant to be satisfied by reducing the number of Shares otherwise deliverable or by delivering Shares already owned.
SECTION 14. GOVERNING LAW
This Plan shall be governed and construed in accordance with the laws of the State of Maryland (regardless of the law that might otherwise govern under applicable principles of conflict of laws).
SECTION 15. EFFECTIVE DATE AND PROCEDURAL HISTORY
This Plan was originally approved by the Companys Board on January 12, 2010. It was approved in that form by the holders of the Companys voting Shares on January 21, 2010 (the