Exhibit 10.3
WILSHIRE REAL ESTATE INVESTMENT TRUST INC.
1998 STOCK OPTION PLAN
ARTICLE I. PURPOSE................................................... 1
ARTICLE II. DEFINITIONS............................................... 1
ARTICLE III. ADMINISTRATION............................................ 4
ARTICLE IV. SHARES AND OTHER LIMITATIONS.............................. 7
ARTICLE V. ELIGIBILITY............................................... 9
ARTICLE VI. STOCK OPTIONS............................................. 9
ARTICLE VII. STOCK APPRECIATION RIGHTS................................. 11
ARTICLE VIII. RESTRICTED STOCK.......................................... 13
ARTICLE IX. INDEPENDENT DIRECTOR AND NON-EMPLOYEE DIRECTOR
STOCK OPTIONS............................................. 15
ARTICLE X. NON-TRANSFERABILITY....................................... 16
ARTICLE XI. TERMINATION PROVISIONS.................................... 16
ARTICLE XII. CHANGE IN CONTROL......................................... 17
ARTICLE XIII. TERMINATION OR AMENDMENT OF PLAN.......................... 19
ARTICLE XIV. UNFUNDED PLAN............................................. 20
ARTICLE XV. GENERAL PROVISIONS........................................ 20
ARTICLE XVI. EFFECTIVE DATE OF PLAN.................................... 23
ARTICLE XVII. TERM OF PLAN.............................................. 23
ARTICLE XVIII. NAME OF PLAN.............................................. 23
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Wilshire Real Estate Investment Trust Inc.
1998 Stock Option Plan
ARTICLE I.
PURPOSE
The purpose of the Wilshire Real Estate Investment Trust Inc. 1998 Stock
Option Plan (the "Plan") is to enhance the profitability and value of Wilshire
Real Estate Investment Trust Inc. (the "Company") for the benefit of its
stockholders by enabling the Company: (i) to offer stock based incentives and
other equity interests to Independent Directors, Non-Employee Directors and/or
Managers of the Company thereby attracting, retaining and rewarding such
Independent Directors, Non-Employee Directors and Managers and strengthening the
mutuality of interests between such individuals and the Company's stockholders
and (ii) to make automatic grants of Stock Options to Independent Directors and
Non-Employee Directors, thereby attracting, retaining and rewarding such
individuals and strengthening the mutuality of interests between such
individuals and the Company's stockholders.
ARTICLE II.
DEFINITIONS
For purposes of the Plan, the following terms shall have the following
meanings:
2.1. "Affiliate" shall mean: (i) any person directly or indirectly
owning, controlling, or holding, with power to vote ten percent (10%) or
more of the outstanding voting securities of such other person, (ii) any
person ten percent (10%) or more of whose outstanding voting securities are
directly or indirectly owned, controlled, or held, with power to vote, by
such other person, (iii) any person directly or indirectly controlling,
controlled by, or under common control with such other person, (iv) any
executive officer, director, trustee or general partner of such other
person, and (v) any legal entity for which such person acts as an executive
officer, director, trustee or general partner. For purposes of this
definition, the term "person" means and includes any natural person,
corporation, partnership, association, limited liability company or any
other legal entity. For purposes of this definition, an indirect
relationship shall include circumstances in which a person's spouse,
children, parents, siblings or mothers-, fathers-, sisters- or brothers-in-
law is or has been associated with a person.
2.2. "Award" shall mean any award under the Plan of any Stock Option,
Restricted Stock or Stock Appreciation Right. All Awards shall be
confirmed by, and subject to the terms of, a written agreement executed by
the Company and the Participant.
2.3. "Board" shall mean the Board of Directors of the Company.
2.4. "Cause" shall mean, with respect to a Participant's Termination
of Directorship, an act or failure to act that constitutes "cause" for
removal of a director under applicable Maryland law.
2.5. "Change in Control" shall have the meaning set forth in Article
XII.
2.6. "Code" shall mean the Internal Revenue Code of 1986, as
amended. Any reference to any section of the Code shall also be a reference
to any successor provision.
2.7. "Common Stock" shall mean the common stock, par value $0.0001
per share, of the Company.
2.8. "Company" shall mean Wilshire Real Estate Investment Trust
Inc., a Maryland corporation, and its successors and assigns.
2.9. "Disability" shall mean a total and permanent disability, as
defined in Section 22(e)(3) of the Code.
2.10. "Effective Date" shall mean the effective date of the Plan as
defined in Article XV.
2.11. "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
2.12. "Fair Market Value" for purposes of the Plan, unless otherwise
required by any applicable provision of the Code or any regulations issued
thereunder, shall mean, as of any date, the last sales price reported for
the Common Stock on the applicable date: (i) as reported on the principal
national securities exchange on which it is then traded or the Nasdaq Stock
Market, Inc., or (ii) if not traded on any such national securities
exchange or the Nasdaq Stock Market, Inc., as quoted on an automated
quotation system sponsored by the National Association of Securities
Dealers. If the Common Stock is not readily tradable on a national
securities exchange, the Nasdaq Stock Market, Inc., or any automated
quotation system sponsored by the National Association of Securities
Dealers, its Fair Market Value shall be set in good faith by the Board. For
purposes of the grant of any Stock Option, the applicable date shall be the
date on which the Option is granted or, if the sale of the Common Stock
shall not have been reported or quoted on such date, on the first day prior
thereto on which the sale of the Common Stock was reported or quoted. For
purposes of the exercise of any Stock Appreciation Right the applicable
date shall be the date a notice of exercise is received by the Board or, if
not a day on which the applicable market is open, the next day that it is
open.
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2.13. "Independent Director" shall mean a director who within the
last two years, has not (i) been employed by WFSG or any of its Affiliates,
(ii) been an officer or director of WFSG or any of its Affiliates, (iii) or
whose business or employer within the last two years has not performed
services for WFSG or any of its Affiliates that annually exceeded the
lesser of (a) the dollar amount provided in Item 404(a) of Regulation S-K
or (b) 10% of the gross revenue of the entity that provided such services,
or (iv) had any material business or professional relationship with WFSG or
any of its Affiliates.
2.14. "Manager" shall mean WRSC, or any other person or entity that
the Board determines, in its sole discretion, to be a manager of the
Company.
2.15. "Non-Employee Director" shall mean any director of the Company
who is neither an employee of the Company nor an Independent Director.
2.16. "Non-Tandem Stock Appreciation Right" shall mean a Stock
Appreciation Right entitling the holder to receive an amount in cash or
stock equal to the excess of: (i) the Fair Market Value of a share of
Common Stock as of the date such right is exercised, over (ii) the
aggregate exercise price of such right, otherwise than on surrender of a
Stock Option.
2.17. "Participant" shall mean any Independent Director, Non-Employee
Director or Manager to whom an Award has been made under the Plan.
2.18. "Reference Stock Option" shall have the meaning set forth in
Section 7.2.
2.19. "Restricted Stock" shall mean an award of shares of Common
Stock under the Plan to any Independent Director, Non-Employee Director or
Manager that is subject to restrictions under Article VIII.
2.20. "Restriction Period" shall have the meaning set forth in
Subsection 8.3(a) with respect to Restricted Stock.
2.21. "Rule 16b-3" shall mean Rule 16b-3 under Section 16(b) of the
Exchange Act as then in effect or any successor provisions.
2.22. "Stock Appreciation Right" shall mean the right pursuant to an
Award granted under Article VII.
2.23. "Stock Option" or "Option" shall mean any Option to purchase
shares of Common Stock granted to any Independent Director, Non-Employee
Director or Manager pursuant to Article VI or to any Independent Director
or Non-Employee Director pursuant to Article IX.
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2.24. "Tandem Stock Appreciation Right" shall mean a Stock
Appreciation Right entitling the holder to surrender to the Company all (or
a portion) of a Stock Option in exchange for an amount in cash or stock
equal to the excess of: (i) the Fair Market Value, on the date such Stock
Option (or such portion thereof) is surrendered, of the Common Stock
covered by such Stock Option (or such portion thereof), over (ii) the
aggregate exercise price of such Stock Option (or such portion thereof).
2.25. "Termination of Directorship" shall mean, with respect to an
Independent Director or Non-Employee Director, that the Independent
Director or Non-Employee Director has ceased to be a director of the
Company.
2.26. "Termination as a Manager" shall mean, with respect to a
Manager, that the Manager has ceased to be a Manager of the Company.
2.27. "Transfer" or "Transferred" shall mean anticipate, alienate,
attach, sell, assign, pledge, encumber, charge or otherwise transfer.
2.28. "WFSG" shall mean the Wilshire Financial Services Group Inc.
2.29. "WRSC" shall mean the Wilshire Realty Services Corporation.
ARTICLE III.
ADMINISTRATION
3.1. The Board. The Plan shall be administered and interpreted by the
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Board.
3.2. Awards. The Board shall have full authority to grant, pursuant to the
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terms of the Plan (including Article V hereof), Stock Options, Restricted Stock
and Stock Appreciation Rights to any Independent Director, Non-Employee Director
or Manager and to otherwise administer the Plan. In particular, the Board
shall, except with regard to awards of Stock Options to Independent Directors
and Non-Employee Directors pursuant to Article IX, have the authority:
(a) to select the Independent Directors, Non-Employee Directors and
Managers to whom Stock Options, Restricted Stock and Stock Appreciation
Rights may from time to time be granted hereunder;
(b) to determine whether and to what extent Stock Options, Restricted
Stock and Stock Appreciation Rights are to be granted hereunder to one or
more Independent Directors, Non-Employee Directors and Managers;
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(c) to determine, in accordance with the terms of the Plan, the
number of shares of Common Stock to be covered by each such Award granted
to an Independent Director, Non-Employee Director or Manager;
(d) to determine the terms and conditions, not inconsistent with the
terms of the Plan, of any Award granted hereunder to an Independent
Director, Non-Employee Director or Manager (including, but not limited to,
the exercise or purchase price (if any), any restriction or limitation, any
vesting schedule or acceleration thereof, or any forfeiture restrictions or
waiver thereof, regarding any Award, and the shares of Common Stock
relating thereto, based on such factors, if any, as the Board shall
determine, in its sole discretion);
(e) to determine whether and under what circumstances a Stock Option
may be settled in cash and/or Common Stock under Section 6.3(d)(iii);
(f) to determine whether, to what extent and under what circumstances
to provide loans (which may be on a recourse basis and shall bear interest
at the rate the Board shall provide) to Independent Directors, Non-Employee
Directors and Managers in order to purchase shares of Common Stock under
the Plan;
(g) to determine whether a Stock Appreciation Right shall be a Tandem
Stock Appreciation Right or a Non-Tandem Stock Appreciation Right;
(h) to modify, extend or renew an Award, subject to Article XIII
hereof, provided, however, that if an Award is modified, extended or
renewed and thereby deemed to be the issuance of a new Award under the Code
or the applicable accounting rules, the exercise price of such Award may
continue to be the original exercise price even if less than the Fair
Market Value of the Common Stock at the time of such modification,
extension or renewal; and
(i) to offer to buy out an Award previously granted, based on such
terms and conditions as the Board shall establish and communicate to the
Participant at the time such offer is made.
3.3. Guidelines. Subject to Article XIII hereof, the Board shall have the
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authority to adopt, alter and repeal such administrative rules, guidelines and
practices governing the Plan and perform all acts, including the delegation of
its administrative responsibilities, as it shall, from time to time, deem
advisable; to construe and interpret the terms and provisions of the Plan and
any Award issued under the Plan (and any agreements relating thereto); and to
otherwise supervise the administration of the Plan. The Board may correct any
defect, supply any omission or reconcile any inconsistency in the Plan or in any
agreement relating thereto in the manner and to the extent it shall deem
necessary to carry the Plan into effect, but only to the extent any such action
would be permitted under the applicable provisions of Rule 16b-3. The Board may
adopt special guidelines and provisions for persons who are residing in, or
subject to, the taxes of,
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countries other than the United States to comply with applicable tax and
securities laws. To the extent applicable, the Plan is intended to comply with
the applicable requirements of Rule 16b-3 and shall be limited, construed and
interpreted in a manner so as to comply therewith.
3.4. Decisions Final. Any decision, interpretation or other action made or
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taken in good faith by or at the direction of the Company or the Board (or any
of its members) arising out of or in connection with the Plan shall be within
the absolute discretion of the Company or the Board, as the case may be, and
shall be final, binding and conclusive on the Company and all employees and
Participants and their respective heirs, executors, administrators, successors
and assigns.
3.5. Reliance on Counsel. The Company or the Board may consult with legal
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counsel, who may be counsel for the Company or other counsel, with respect to
its obligations or duties hereunder, or with respect to any action or proceeding
or any question of law, and shall not be liable with respect to any action taken
or omitted by it in good faith pursuant to the advice of such counsel.
3.6. Designation of Consultants/Liability.
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(a) The Board may designate employees of the Company and
professional advisors to assist the Board in the administration of the Plan
and may grant authority to employees to execute agreements or other
documents on behalf of the Board.
(b) The Board may employ such legal counsel, consultants and agents
as it may deem desirable for the administration of the Plan and may rely
upon any opinion received from any such counsel or consultant and any
computation received from any such consultant or agent. Expenses incurred
by the Board in the engagement of any such counsel, consultant or agent
shall be paid by the Company. The Board, its members and any person
designated pursuant to paragraph (a) above shall not be liable for any
action or determination made in good faith with respect to the Plan. To
the maximum extent permitted by applicable law, no officer of the Company
or member or former member of the Board shall be liable for any action or
determination made in good faith with respect to the Plan or any Awards
granted under it. To the maximum extent permitted by applicable law and
the Certificate of Incorporation and By-Laws of the Company and to the
extent not covered by insurance, each officer and member or former member
of the Board shall be indemnified and held harmless by the Company against
any cost or expense (including reasonable fees of counsel reasonably
acceptable to the Company) or liability (including any sum paid in
settlement of a claim with the approval of the Company), and advanced
amounts necessary to pay the foregoing at the earliest time and to the
fullest extent permitted, arising out of any act or omission to act in
connection with the Plan, except to the extent arising out of such
officer's, member's or former member's own fraud or bad faith. Such
indemnification shall be in addition to any rights of indemnification the
officers, directors or members or former officers, directors or members may
have under applicable law or under the Certificate of Incorporation or By-
Laws of the Company. Notwithstanding anything else herein, this
indemnification will not apply to the actions or
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determinations made by an individual with regard to Awards granted to him
under the Plan.
ARTICLE IV.
SHARES AND OTHER LIMITATIONS
4.1. Shares.
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(a) The aggregate number of shares of Common Stock which may be
issued under the Plan shall not exceed 3,500,000 shares (of which 500,000
shares are being reserved for Independent and Non-Employee Directors)
(subject to any increase or decrease pursuant to Section 4.2), which may be
either authorized and unissued Common Stock or Common Stock held in or
acquired for the treasury of the Company or both. If any Stock Option or
Stock Appreciation Right granted under the Plan expires, terminates or is
cancelled for any reason without having been exercised in full, the number
of shares of Common Stock underlying the unexercised Stock Option or Stock
Appreciation Right shall again be available for the purposes of Awards
under the Plan. If any shares of Restricted Stock awarded under the Plan
to a Participant are forfeited or repurchased by the Company for any
reason, the number of forfeited or repurchased shares of Restricted Stock
shall again be available for the purposes of Awards under the Plan. If a
Tandem Stock Appreciation Right granted in tandem with an Option is granted
under the Plan, such grant shall only apply once against the maximum number
of shares of Common Stock which may be issued under the Plan. In
determining the number of shares of Common Stock available for Awards, if
Common Stock has been exchanged by a Participant as full or partial payment
to the Company, or for withholding, in connection with the exercise of an
Award or the number shares of Common Stock otherwise deliverable has been
reduced for withholding, the number of shares of Common Stock exchanged as
payment in connection with the exercise or for withholding or reduced shall
again be available under the Plan. Any shares of Common Stock that are
issued by the Company for, and any awards that are granted through the
assumption of or in substitution for, outstanding awards previously granted
by an acquired entity shall not be counted against the shares of Common
Stock available for issuance under the Plan.
4.2. Changes.
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(a) The existence of the Plan and the Awards granted hereunder shall
not affect in any way the right or power of the Board or the stockholders
of the Company to make or authorize any adjustment, recapitalization,
reorganization or other change in the Company's capital structure or its
business, any merger or consolidation of the Company, any issue of bonds,
debentures, preferred or prior preference stock ahead of or affecting
Common Stock, the authorization or issuance of additional shares of Common
Stock, the
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dissolution or liquidation of the Company, any sale or transfer of all or
part of its assets or business or any other corporate act or proceeding.
(b) In the event of any change in the capital structure or business
of the Company by reason of any stock dividend or extraordinary dividend,
stock split or reverse stock split, recapitalization, reorganization,
merger, consolidation, split-up, combination or exchange of shares, non-
cash distributions with respect to its outstanding Common Stock or capital
stock other than Common Stock, reclassification of its capital stock, any
sale or transfer of all or part of the Company's assets or business, or any
similar change affecting the Company's capital structure or business and
the Board determines in good faith that an adjustment is necessary or
appropriate under the Plan to prevent substantial dilution or enlargement
of the rights granted to, or available for, Participants under the Plan or
as otherwise necessary to reflect the change, then the aggregate number and
kind of shares which thereafter may be issued under the Plan, the number
and kind of shares or other property (including cash) to be issued upon
exercise of an outstanding Option or other Award granted under the Plan and
the purchase or exercise price thereof 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 the Plan or as otherwise necessary to
reflect the change, 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) Fractional shares of Common Stock resulting from any adjustment
in an Award pursuant to Section 4.2(a) or (b) shall be aggregated until,
and eliminated at, the time of exercise. No fractional shares of Common
Stock shall be issued under the Plan. The Board may, in its sole
discretion, pay cash in lieu of any fractional shares of Common Stock in
settlement of awards under the Plan. Notice of any adjustment shall be
given by the Board to each Participant whose Award has been adjusted and
such adjustment (whether or not such notice is given) shall be effective
and binding for all purposes of the Plan.
(d) In the event of a merger or consolidation in which the Company
is not the surviving entity or in the event of any transaction that results
in the acquisition of all or substantially all of the Company's outstanding
Common Stock by a single person or entity or by a group of persons and/or
entities acting in concert, or in the event of the sale or transfer of all
or substantially all of the Company's assets (all of the foregoing being
referred to as "Acquisition Events"), then the Board may, in its sole
discretion, terminate all outstanding Options and Stock Appreciation Rights
of Independent Directors, Non-Employee Directors and Managers, effective as
of the date of the Acquisition Event, by delivering notice of termination
to each such Participant at least twenty (20) days prior to the date of
consummation of the Acquisition Event; provided, that during the period
from the date on which such notice of termination is delivered to the
consummation of the Acquisition Event, each such Participant shall have the
right to exercise in full all of his
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Options and Stock Appreciation Rights that are then outstanding (whether
vested or not vested and without regard to any limitations on
exercisability otherwise contained in the Option) but contingent on the
occurrence of the Acquisition Event, and, provided that, if the Acquisition
Event does not take place within a specified period after giving such
notice for any reason whatsoever, the notice and exercise shall be null and
void. If an Acquisition Event occurs, to the extent the Board does not
terminate the outstanding Options and Stock Appreciation Rights pursuant to
this Section 4.2(d), then the provisions of Section 4.2(b) shall apply.
4.3. Purchase Price. Notwithstanding any provision of the Plan to the
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contrary, if authorized but previously unissued shares of Common Stock are
issued under the Plan, such shares shall not be issued for a consideration which
is less than as permitted under applicable law.
ARTICLE V.
ELIGIBILITY
5.1. Discretionary Awards. Independent Directors, Non-Employee Directors
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and Managers of the Company are eligible to be granted Stock Options, Restricted
Stock and Stock Appreciation Rights under the Plan. Eligibility under the Plan
will be determined by the Board in its sole discretion.
5.2. Automatic Awards. Independent Directors and Non-Employee Directors
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will automatically be granted Stock Options in accordance with Article IX of the
Plan.
ARTICLE VI.
STOCK OPTIONS
6.1. Options. Stock Options granted hereunder shall be non-qualified stock
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options.
6.2. Grants. The Board shall have the authority to grant any Independent
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Director, Non-Employee Director or Manager one or more Stock Options under the
Plan (with or without Stock Appreciation Rights).
6.3. Terms of Options. Options granted under the Plan shall be subject to
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the following terms and conditions, and shall be in such form and contain such
additional terms and conditions, not inconsistent with the terms of the Plan, as
the Board shall deem desirable:
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(a) Exercise Price. The exercise price per share of Common Stock
subject to a Stock Option shall be determined by the Board at the time of
grant, but shall not be less than 100% of the Fair Market Value of a share
of Common Stock at the time of grant.
(b) Option Term. The term of each Stock Option shall be fixed by the
Board, but no Stock Option shall be exercisable more than ten (10) years
after the date the Option is granted.
(c) Exercisability. Stock Options shall be exercisable at such time
or times and subject to such terms and conditions as shall be determined by
the Board at grant. If the Board provides, in its discretion, that any
Stock Option is exercisable subject to certain limitations (including,
without limitation, that it is exercisable only in installments or within
certain time periods), the Board may waive such limitations on the
exercisability at any time at or after grant in whole or in part
(including, without limitation, that the Board may waive the installment
exercise provisions or accelerate the time at which Options may be
exercised), based on such factors, if any, as the Board shall determine, in
its sole discretion.
(d) Method of Exercise. Subject to whatever installment exercise and
waiting period provisions apply under subsection (c) above, Stock Options
may be exercised in whole or in part at any time during the Option term, by
giving written notice of exercise to the Company specifying the number of
shares to be purchased, accompanied by payment in full of the exercise
price. Common Stock purchased pursuant to the exercise of a Stock Option
shall be paid for at the time of exercise as follows: (i) in cash or by
check, bank draft or money order payable to the order of Company; (ii) if
the Common Stock is traded on a national securities exchange, the Nasdaq
Stock Market, Inc., or quoted on a national quotation system sponsored by
the National Association of Securities Dealers, through the delivery of
irrevocable instructions to a broker to deliver promptly to the Company an
amount equal to the purchase price; or (iii) on such other terms and
conditions as may be acceptable to the Board (which may include payment in
full or part in the form of Common Stock owned by the Participant for a
period of at least six (6) months (and for which the Participant has good
title free and clear of any liens and encumbrances) based on the Fair
Market Value of the Common Stock on the payment date as determined by the
Board or the surrender of vested Options owned by the Participant). No
shares of Common Stock shall be issued until payment therefor, as provided
herein, has been made or provided for.
(e) Form, Modification, Extension and Renewal of Options. Subject to
the terms and conditions and within the limitations of the Plan, an Option
shall be evidenced by such form of Stock Option agreement as is approved by
the Board, and the Board may modify, extend or renew outstanding Options
granted under the Plan, or accept the surrender of outstanding Options (up
to the extent not theretofore exercised) and authorize the granting of new
Options in substitution therefor (to the extent not theretofore exercised).
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(f) Other Terms and Conditions. Options may contain such other
provisions, which shall not be inconsistent with any of the foregoing terms
of the Plan, as the Board shall deem appropriate.
ARTICLE VII.
STOCK APPRECIATION RIGHTS
7.1. Stock Appreciation Rights. The Board may, in its sole discretion,
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grant Stock Appreciation Rights to any Independent Director, Non-Employee
Director or Manager.
7.2. Tandem Stock Appreciation Rights. A Tandem Stock Appreciation Right
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may be granted in conjunction with all or part of any Stock Option (a "Reference
Stock Option") granted under Article VI of the Plan either at or after the time
of the grant of such Reference Stock Option.
7.3. Terms and Conditions of Tandem Stock Appreciation Rights. Tandem
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Stock Appreciation Rights shall be subject to such terms and conditions, not
inconsistent with the provisions of the Plan, as shall be determined from time
to time by the Board, including Article X and Article XI and the following:
(a) Term. A Tandem Stock Appreciation Right or applicable portion
thereof granted with respect to a Reference Stock Option shall terminate
and no longer be exercisable upon the termination or exercise of the
Reference Stock Option, except that, unless otherwise determined by the
Board, in its sole discretion, at the time of grant, a Tandem Stock
Appreciation Right granted with respect to less than the full number of
shares covered by the Reference Stock Option shall not be reduced until and
then only to the extent the exercise or termination of the Reference Stock
Option causes the number of shares covered by the Tandem Stock Appreciation
Right to exceed the number of shares remaining available and unexercised
under the Reference Stock Option.
(b) Exercisability. Tandem Stock Appreciation Rights shall be
exercisable only at such time or times and to the extent that the Reference
Stock Options to which they relate shall be exercisable in accordance with
the provisions of Article VI and this Article VII.
(c) Method of Exercise. A Tandem Stock Appreciation Right may be
exercised by an optionee by surrendering the applicable portion of the
Reference Stock Option. Upon such exercise and surrender, the Participant
shall be entitled to receive an amount determined in the manner prescribed
in this Section 7.3 and the Reference Stock Option or part thereof to which
such Stock Appreciation Right is related shall be deemed to have been
exercised for the purpose of the limitation set forth in Article IV of the
Plan on the number of shares of Common Stock to be issued under the Plan.
The Stock Options which
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have been so surrendered, in whole or in part, shall no longer be
exercisable to the extent the related Tandem Stock Appreciation Rights have
been exercised.
(d) Payment. Upon the exercise of a Tandem Stock Appreciation Right
a Participant shall be entitled to receive an amount in cash and/or Common
Stock (as chosen by the Board in its sole discretion) equal in value to the
excess of the Fair Market Value of one share of Common Stock over the
exercise price per share specified in the Reference Stock Option multiplied
by the number of shares in respect of which the Tandem Stock Appreciation
Right shall have been exercised, with the Board having the right to
determine the form of payment.
7.4. Non-Tandem Stock Appreciation Rights. Non-Tandem Stock Appreciation
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Rights may also be granted without reference to any Stock Options granted under
Article VI of the Plan.
7.5. Terms and Conditions of Non-Tandem Stock Appreciation Rights. Non-
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Tandem Stock Appreciation Rights shall be subject to such terms and conditions,
not inconsistent with the provisions of the Plan, as shall be determined from
time to time by the Board, including Article X and Article XI and the following:
(a) Term. The term of each Non-Tandem Stock Appreciation Right
shall be fixed by the Board, but shall not be greater than ten (10) years
after the date the right is granted.
(b) Exercisability. Non-Tandem Stock Appreciation Rights shall be
exercisable at such time or times and subject to such terms and conditions
as shall be determined by the Board at grant. If the Board provides, in
its discretion, that any such right is exercisable subject to certain
limitations (including, without limitation, that it is exercisable only in
installments or within certain time periods), the Board may waive such
limitation on the exercisability at any time at or after grant in whole or
in part (including, without limitation, that the Board may waive the
installment exercise provisions or accelerate the time at which rights may
be exercised), based on such factors, if any, as the Board shall determine,
in its sole discretion.
(c) Method of Exercise. Subject to whatever installment exercise
and waiting period provisions apply under subsection (b) above, Non-Tandem
Stock Appreciation Rights may be exercised in whole or in part at any time
during its term, by giving written notice of exercise to the Company
specifying the number of Non-Tandem Stock Appreciation Rights to be
exercised.
(d) Payment. Upon the exercise of a Non-Tandem Stock Appreciation
Right a Participant shall be entitled to receive, for each right exercised,
an amount in cash and/or Common Stock (as chosen by the Board in its sole
discretion) equal in value to the excess of the Fair Market Value of one
share of Common Stock on the date the right is exercised over the Fair
Market Value of one share of Common Stock on the date the right was awarded
to the Participant.
12
ARTICLE VIII.
RESTRICTED STOCK
8.1. Awards of Restricted Stock. The Board shall have the authority to
--------------------------
grant shares of Restricted Stock to any Independent Director, Non-Employee
Director or Manager which may be issued either alone or in addition to other
Awards granted under the Plan. The Board shall, subject to the provisions of
Article V and Section 8.4 below, determine the eligible Independent Directors,
Non-Employee Directors and Managers to whom, and the time or times at which,
grants of Restricted Stock will be made, the number of shares to be awarded, the
price (if any) to be paid by the recipient (subject to Section 8.2), the time or
times within which such Awards may be subject to forfeiture, the vesting
schedule and rights to acceleration thereof, and all other terms and conditions
of the Awards. The Board may condition the grant of Restricted Stock upon the
attainment of specified performance goals or such other factors as the Board may
determine, in its sole discretion.
8.2. Awards and Certificates. The prospective Participant selected to
-----------------------
receive a Restricted Stock Award shall not have any rights with respect to such
Award, unless and until such Participant has delivered a fully executed copy of
the agreement evidencing the Award to the Company and has otherwise complied
with the applicable terms and conditions of such Award. Further, such Award
shall be subject to the following conditions:
(a) Purchase Price. The purchase price of Restricted Stock shall be
fixed by the Board. Subject to Section 4.3, the purchase price for shares
of Restricted Stock may be zero to the extent permitted by applicable law,
and, to the extent not so permitted, such purchase price may not be less
than par value.
(b) Acceptance. Awards of Restricted Stock must be accepted within
a period of sixty (60) days (or such shorter period as the Board may
specify at grant) after the Award date, by executing a Restricted Stock
Award agreement and by paying whatever price (if any) the Board has
designated thereunder.
(c) Legend. Each Participant receiving a Restricted Stock Award
shall be issued a stock certificate in respect of such shares of Restricted
Stock. Such certificate shall be registered in the name of such
Participant, and shall bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such Award, substantially in the
following form:
"The anticipation, alienation, attachment, sale, transfer,
assignment, pledge, encumbrance or charge of the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) of the Wilshire Real Estate Investment Trust Inc. 1998 Stock
Option Plan and an Agreement entered into between the registered owner and
the
13
Company dated ___________________________. Copies of such Plan and
Agreement are on file at the principal office of the Company."
(d) Custody. The Board shall require that the stock certificates
evidencing such shares be held in custody by the Company until the
restrictions thereon shall have lapsed, and that, as a condition of any
Restricted Stock Award, the Participant shall have delivered a duly signed
stock power, endorsed in blank, relating to the Common Stock covered by
such Award.
8.3. Restrictions and Conditions on Restricted Stock Awards. The shares
------------------------------------------------------
of Restricted Stock awarded pursuant to the Plan shall be subject to Article XII
and the following restrictions and conditions:
(a) Restriction Period; Vesting and Acceleration of Vesting. The
Participant shall not be permitted to Transfer shares of Restricted Stock
awarded under the Plan during a period set by the Board commencing with the
date of such Award (the "Restriction Period"), as set forth in the Award
agreement and such Award agreement shall set forth a vesting schedule and
any events which would accelerate vesting of the shares of Restricted
Stock. Within these limits, based on service, performance and/or such other
factors or criteria as the Board may determine in its sole discretion, the
Board may provide for the lapse of such restrictions in installments in
whole or in part, or may accelerate the vesting of all or any part of any
Restricted Stock Award and/or waive the deferral limitations for all or any
part of such Award.
(b) Rights as Stockholder. Except as provided in this subsection
(b) and subsection (a) above, the Participant shall have, with respect to
the shares of Restricted Stock, all of the rights of a holder of shares of
Common Stock of the Company including, without limitation, the right to
receive any dividends and the right to vote or tender such shares. The
Board, in its sole discretion, as determined at the time of Award, may
permit or require the payment of dividends to be deferred.
(c) Lapse of Restrictions. If and when the Restriction Period
expires without a prior forfeiture of the Restricted Stock subject to such
Restriction Period, the certificates for such shares shall be delivered to
the Participant. All legends shall be removed from said certificates at
the time of delivery to the Participant.
8.4. Termination of Directorship or Termination as a Manager. Subject to
-------------------------------------------------------
the applicable provisions of the Award agreement and the Plan, upon a
Participant's Termination of Directorship or Termination as a Manger, as
applicable, for any reason during the relevant Restriction Period, all
Restricted Stock still subject to restriction will vest or be forfeited in
accordance with the terms and conditions established by the Board at grant or
thereafter.
14
ARTICLE IX.
INDEPENDENT DIRECTOR AND NON-EMPLOYEE DIRECTOR STOCK OPTIONS
9.1. Options. This Article IX shall apply only to Stock Options granted to
-------
Independent Directors and Non-Employee Directors pursuant to this Article IX.
9.2. Non-Qualified Stock Options. Stock Options granted hereunder shall be
---------------------------
non-qualified stock options.
9.3. Awards. Without further action by the Board or the stockholders of
------
the Company, each Independent Director or Non-Employee Director shall, subject
to the terms of the Plan, be granted:
(a) Stock Options to purchase 1,500 shares of Common Stock on the
last trading date of each calendar quarter of the Company.
(b) Stock Options to purchase 5,000 shares of Common Stock on: (i)
the date of the closing of the initial public offering of the Common Stock;
or (ii) if later, the date on which the Independent Director or Non-
Employee Director commences service as an Independent Director or Non-
Employee Director.
9.4. Terms of Options. Options granted under this Article shall be subject
----------------
to the following terms and conditions and shall be in such form and contain such
additional terms and conditions, not inconsistent with terms of the Plan, as the
Board shall deem desirable:
(a) Exercise Price. The exercise price per share of Common Stock
subject to an Option granted pursuant to Section 9.3(a) shall be equal to
one hundred ten percent (110%) of the Fair Market Value of the Common Stock
at the time of grant. The exercise price per share of Common Stock subject
to an Option granted pursuant to Section 9.3(b)(i) shall be equal to the
initial offering price of the Common Stock. The exercise price per share
of Common Stock subject to an Option granted pursuant to Section 9.3(b)(ii)
shall be equal to the Fair Market Value at the time of grant.
(b) Exercisability. Except as otherwise provided herein, one-third
(1/3) of the Stock Options granted pursuant to Section 9.3(a) shall vest
and become exercisable on each anniversary of the date of grant, provided
that the Participant has not incurred a Termination of Directorship prior
to the applicable dates. Stock Options granted pursuant to Section 9.3(b)
shall be fully vested and exercisable at the time of grant. Notwithstanding
the foregoing, Options granted pursuant to this Article IX shall fully vest
and become exercisable upon the occurrence of a Charge in Control.
(c) Method of Exercise. Subject to whatever installment exercise
and waiting period provisions apply under Article IX, Stock Options may be
exercised in whole or in part at any time during the Option term, by giving
written notice of exercise to the Company specifying the number of shares
to be purchased, accompanied by payment in
15
full of the exercise price. Common Stock purchased pursuant to the exercise
of a Stock Option shall be paid for at the time of exercise in cash or by
check, bank draft or money order payable to the order of Company or by
delivery of Common Stock owned by the Participant for a period of at least
six (6) months (and for which the Participant has good title free and clear
of any liens and encumbrances) or by such other method approved by the
Board. No shares of Common Stock shall be issued until payment therefor, as
provided herein, has been made or provided for.
(d) Term. Except as otherwise provided herein, if not previously
exercised each Option shall expire upon the tenth anniversary of the date
of the grant thereof.
ARTICLE X.
NON-TRANSFERABILITY
10.1. Non-Transferability. Except as provided in the last sentence of
-------------------
this Section 10.1, no Award shall be Transferred by the Participant otherwise
than by will or by the laws of descent and distribution. All Stock Options and
Stock Appreciation Rights shall be exercisable, during the Participant's
lifetime, only by the Participant. Shares of Restricted Stock under Article VIII
may not be Transferred prior to the date on which such shares are issued, or, if
later, the date on which any applicable restriction, performance or deferral
period lapses. No Award shall, except as otherwise specifically provided by law
or herein, be Transferred in any manner, and any attempt to Transfer any such
Award shall be void, and no such Award shall in any manner be used for the
payment of, subject to, or otherwise encumbered by or hypothecated for the
debts, contracts, liabilities, engagements or torts of any person who shall be
entitled to such Award, nor shall it be subject to attachment or legal process
for or against such person. Notwithstanding the foregoing, the Board may
determine at the time of grant or thereafter, that a Stock Option (other than a
Stock Option granted pursuant to Article IX) that is otherwise not transferable
pursuant to this Article X is transferable in whole or part and in such
circumstances, and under such conditions, as specified by the Board.
ARTICLE XI.
TERMINATION PROVISIONS
11.1. Termination of Directorship. The following rules apply with regard
---------------------------
to Stock Options granted under Article VI and Article IX and Stock Appreciation
Rights granted under Article VII upon the Termination of Directorship of a
Participant:
(a) Termination by Reason of Death or Disability. If a
Participant's Termination of Directorship is by reason of death or
Disability, any Stock Option or Stock Appreciation Right held by such
Participant may be exercised, to the extent exercisable at the
16
Participant's Termination of Directorship, by the Participant or the legal
representative of the estate at any time within a period of two (2) years
from the date of such Termination of Directorship, but in no event beyond
the expiration of the stated term of such Stock Option or Stock
Appreciation Right.
(b) Otherwise Ceasing to be an Independent Director or Non-Employee
Director other than for Cause. Except as otherwise provided herein, upon
the Termination of Directorship, on account of resignation, failure to
stand for reelection or failure to be reelected or otherwise other than as
set forth in (a) above or (c) below, all outstanding Stock Options and
Stock Appreciation Rights then exercisable and not exercised by the
Participant prior to such Termination of Directorship shall remain
exercisable, to the extent exercisable at the Termination of Directorship,
at any time within a period of one (1) year from the date of such
Termination of Directorship, but in no event beyond the expiration of the
stated term of such Stock Option or Stock Appreciation Right.
(c) Cause. Upon removal, failure to stand for reelection or
failure to be renominated for Cause, or if the Company obtains or discovers
information after Termination of Directorship that such Participant had
engaged in conduct that would have justified a removal for Cause during
such directorship, all outstanding Stock Options and Stock Appreciation
Rights of such Participant shall immediately terminate and shall be null
and void.
(d) Cancellation of Stock Options. No Stock Options or Stock
Appreciation Rights that were not exercisable during the period such person
serves as an Independent Director or Non-Employee Director shall thereafter
become exercisable upon a Termination of Directorship for any reason or no
reason whatsoever, and such Stock Options and Stock Appreciation Rights
shall terminate and become null and void upon a Termination of
Directorship.
11.2. Termination as a Manager. Subject to the applicable provisions of
------------------------
the Award agreement and the Plan, upon a Participant's Termination as a Manager,
for any reason, all Stock Options and Stock Appreciation Rights will vest or be
forfeited in accordance with the terms and conditions established by the Board
at grant or thereafter.
ARTICLE XII.
CHANGE IN CONTROL
12.1. Benefits. In the event of a Change in Control of the Company (as
--------
defined below), except as otherwise provided by the Board upon the grant of an
Award (other than an Award granted pursuant to Article IX hereof), Restricted
Stock or Stock Appreciation Right or, if no rights of the Participant are
reduced, thereafter, the Participant shall be entitled to the following
benefits:
17
(a) All outstanding Stock Options and Stock Appreciation Rights
granted prior to the Change in Control shall be fully vested and
immediately exercisable in their entirety. The Board, in its sole
discretion, may provide for the purchase of any such Stock Options and
Stock Appreciation Rights by the Company for an amount of cash equal to the
excess of the Change in Control Price (as defined below) of the shares of
Common Stock covered by such Stock Options and Stock Appreciation Rights,
over the aggregate exercise price of such Stock Options and Stock
Appreciation Rights. For purposes of this Section 12.1, Change in Control
Price shall mean the higher of (i) the highest price per share of Common
Stock paid in any transaction related to a Change in Control of the
Company, or (ii) the highest Fair Market Value per share of Common Stock at
any time during the sixty (60) day period preceding a Change in Control.
(b) The restrictions to which any shares of Restricted Stock of
such Participant granted prior to the Change in Control are subject shall
lapse as if the applicable Restriction Period had ended upon such Change in
Control.
12.2. Change in Control. For purposes of the Plan, a "Change in Control"
-----------------
shall be deemed to have occurred:
(a) upon any person (as defined in Section 3(a)(9) of the Exchange
Act and as used in Sections 13(d) and 14(d) thereof) excluding the Company
or any employee benefit plan sponsored or maintained by the Company
(including any trustee of any such plan acting in his capacity as trustee),
becoming the beneficial owner (as defined in Rule 13(d)-3 under the
Exchange Act), directly or indirectly, of securities of the Company having
at least twenty-five percent (25%) of the total number of votes that may be
cast for the election of directors of the Company;
(b) during any period of two (2) consecutive years, individuals who
at the beginning of such period constitute the Board, and any new director
(other than a director designated by a person who has entered into an
agreement with the Company to effect a transaction described in paragraph
(a), (c), or (d) of this section) or a director whose initial assumption of
office occurs as a result of either an actual or threatened election
contest (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a person other than
the Board whose election by the Board or nomination for election by the
Company's stockholders was approved by a vote of at least two-thirds (2/3)
of the directors then still in office who either were directors at the
beginning of the two (2) year period or whose election or nomination for
election was previously so approved, cease for any reason to constitute at
least a majority of the Board;
(c) upon the merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity)
18
more than fifty percent (50%) of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately
after such merger or consolidation, provided, however, that a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no person acquires more than fifty percent
(50%) of the combined voting power of the Company's then outstanding
securities shall not constitute a Change in Control of the Company; or
(d) upon the stockholder's of the Company approval of a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's
assets other than the sale of all or substantially all of the assets of the
Company to a person or persons who beneficially own, directly or
indirectly, at least fifty percent (50%) or more of the combined voting
power of the outstanding voting securities of the Company at the time of
the sale.
Notwithstanding anything herein to the contrary, the initial public offering of
the Common Stock will not constitute a Change in Control.
ARTICLE XIII.
TERMINATION OR AMENDMENT OF PLAN
13.1. Termination or Amendment. Notwithstanding any other provision of the
------------------------
Plan, the Board may at any time, and from time to time, amend, in whole or in
part, any or all of the provisions of the Plan (including any amendment deemed
necessary to ensure that the Company may comply with any regulatory requirement
referred to in this Article XIII), or suspend or terminate it entirely,
retroactively or otherwise; provided, however, that, unless otherwise required
by law or specifically provided herein, the rights of a Participant with respect
to Awards granted prior to such amendment, suspension or termination, may not be
impaired without the consent of such Participant and, provided further, that the
Plan may not be amended without the approval of the stockholders of the Company
in accordance with the laws of the State of Maryland and the applicable
provisions of Rule 16b-3, to: (i) increase the aggregate number of shares of
Common Stock that may be issued under the Plan (subject to Section 4.2); (ii)
decrease the minimum Option price of any Award; (iii) increase the maximum
number of shares of Common Stock that may be issued to any person; (iv) change
the class of persons eligible to receive Awards under the Plan; (v) modify the
period within which Awards may be granted; (vi) modify the period within which
Awards may be exercised; (vii) modify the terms upon which Awards may be
exercised; (viii) increase the material benefits accruing to the Participants
under the Plan; or (ix) make any other amendment that would require stockholder
approval under the rules of any exchange or system on which the Company's
securities are then listed or traded.
Except with regard to Awards under Article IX, the Board may amend the
terms of any Awards theretofore granted, prospectively or retroactively, but,
subject to Article IV above or as
19
otherwise specifically provided herein, no such amendment or other action by the
Board shall impair the rights of any Option holder without the Option holder's
consent.
ARTICLE XIV.
UNFUNDED PLAN
14.1. Unfunded Status of Plan. The Plan is intended to constitute an
-----------------------
"unfunded" plan for incentive and deferred compensation. With respect to any
payments as to which a Participant has a fixed and vested interest but which are
not yet made to a Participant by the Company, nothing contained herein shall
give any such Participant any rights that are greater than those of a general
creditor of the Company.
ARTICLE XV.
GENERAL PROVISIONS
15.1. Legend. The Board may require each person receiving shares of
------
Common Stock pursuant to the exercise of an Award under the Plan to represent to
and agree with the Company in writing that the Participant is acquiring the
shares of Common Stock without a view to distribution thereof. In addition to
any legend required by the Plan, the certificates for such shares of Common
Stock may include any legend which the Board deems appropriate to reflect any
restrictions on Transfer.
All certificates for shares of Common Stock delivered under the Plan shall
be subject to such stock transfer orders and other restrictions as the Board may
deem advisable under the rules, regulations and other requirements of the
Securities and Exchange Commission, any stock exchange upon which the Common
Stock is then listed or any national securities association system upon whose
system the Common Stock is then quoted, any applicable Federal or state
securities law, and any applicable corporate law, and the Board may cause a
legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.
15.2. Other Plans. Nothing contained in the Plan shall prevent the Board
-----------
from adopting other or additional compensation arrangements, subject to
stockholder approval if such approval is required; and such arrangements may be
either generally applicable or applicable only in specific cases.
15.3. No Right to Serve as an Independent Director, Non-Employee Director
--------------------------------------------------------------------
or Manager. Neither the Plan nor the grant or exercise of any Awards hereunder
- ----------
shall impose any obligations on the Company to retain any Participant as an
Independent Director, Non-Employee Director or as a Manager nor shall it impose
on the part of any Participant any obligation to continue to serve as an
Independent Director, Non-Employee Director or as a Manager of the Company.
20
15.4. Withholding of Taxes. 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 of Common Stock or the payment of any
cash hereunder, payment by the Participant of, any Federal, state or local taxes
required by law to be withheld.
The Board may permit any such withholding obligation with regard to any
Participant to be satisfied by reducing the number of shares of Common Stock
otherwise deliverable or by delivering shares of Common Stock already owned.
Any fraction of a share of Common Stock required to satisfy such tax obligations
shall be disregarded and the amount due shall be paid instead in cash by the
Participant.
15.5. Listing and Other Conditions.
----------------------------
(a) Unless otherwise determined by the Board, as long as the Common
Stock is listed on a national securities exchange or system sponsored by a
national securities association, the issue of any shares of Common Stock
pursuant to the exercise of an Award shall be conditioned upon such shares
being listed on such exchange or system. Notwithstanding the foregoing, the
grant of an Award hereunder is not intended to be conditional and the
Company shall have no obligation to issue such shares unless and until such
shares are so listed; provided, however, that any delay in the issuance of
such shares shall be based solely on a reasonable business decision and the
right to exercise any Award with respect to such shares shall be suspended
until such listing has been effected.
(b) If at any time counsel to the Company shall be of the opinion
that any sale or delivery of shares of Common Stock pursuant to the
exercise of an Award is or may in the circumstances be unlawful or result
in the imposition of excise taxes on the Company under the statutes, rules
or regulations of any applicable jurisdiction, the Company shall have no
obligation to make such sale or delivery, or to make any application or to
effect or to maintain any qualification or registration under the
Securities Act of 1933, as amended, or otherwise with respect to shares of
Common Stock or Awards, and the right to exercise any Option shall be
suspended until, in the opinion of said counsel, such sale or delivery
shall be lawful or will not result in the imposition of excise taxes on the
Company.
(c) Upon termination of any period of suspension under this Section
15.5, any Award affected by such suspension which shall not then have
expired or terminated shall be reinstated as to all shares available before
such suspension and as to shares which would otherwise have become
available during the period of such suspension, but no such suspension
shall extend the term of any Awards.
(d) A Participant shall be required to supply the Company with any
certificates, representations and information that the Company requests and
otherwise cooperate with the Company in obtaining any listing,
registration, qualification, exemption, consent or approval the Company
deems necessary or appropriate.
21
(e) If any sale or delivery of shares of Common Stock pursuant to
an Award is or may cause the Company to not qualify as a real estate
investment trust within the meaning of Sections 856 through 860 of the
Code, the Company shall have no obligation to make such sale or delivery
until such sale or delivery will no longer cause such disqualification.
15.6. Governing Law. The 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 Maryland principles of conflict of
laws).
15.7. Construction. Wherever any words are used in the Plan in the
------------
masculine gender they shall be construed as though they were also used in the
feminine gender in all cases where they would so apply, and wherever any words
are used herein in the singular form they shall be construed as though they were
also used in the plural form in all cases where they would so apply.
To the extent applicable, the Plan shall be limited, construed and
interpreted in a manner so as to comply with the applicable requirements of Rule
16b-3; however, noncompliance with Rule 16b-3 shall have no impact on the
effectiveness of an Award under the Plan.
15.8. Other Benefits. No Award granted or exercised under the Plan shall
--------------
be deemed compensation for purposes of computing benefits under any retirement
plan of the Company nor affect any benefits under any other benefit plan now or
subsequently in effect under which the availability or amount of benefits is
related to the level of compensation.
15.9. Costs. The Company shall bear all expenses included in
-----
administering the Plan, including expenses of issuing Common Stock pursuant to
the exercise of any Awards hereunder.
15.10. No Right to Same Benefits. The provisions and terms of Awards need
-------------------------
not be the same with respect to each Participant, and the Awards granted to
individual Participants need not be the same in subsequent years.
15.11. Death/Disability. The Board may in its discretion require the
----------------
transferee of a Participant's Awards to supply it with written notice of the
Participant's death or Disability and to supply it with a copy of the will (in
the case of the Participant's death) or such other evidence as the Board deems
necessary to establish the validity of the Transfer of an Award. The Board may
also require the agreement of the transferee to be bound by all of the terms and
conditions of the Plan.
15.12. Severability of Provisions. If any provision of the Plan shall be
--------------------------
held invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provisions hereof, and the Plan shall be construed and enforced
as if such provisions had not been included.
15.13. Headings and Captions. The headings and captions herein are
---------------------
provided for reference and convenience only, shall not be considered
part of the Plan, and shall not be employed in the construction of the Plan.
22
ARTICLE XVI.
EFFECTIVE DATE OF PLAN
The Plan has been adopted by the Board effective as of March 31, 1998,
subject to and conditioned upon the approval of the Plan by the stockholders of
the Company in accordance with the laws of the State of Maryland and the
requirements of any applicable national securities exchange or automated
quotation system.
ARTICLE XVII.
TERM OF PLAN
No Award shall be granted pursuant to the Plan on or after the tenth
anniversary of the earlier of the Effective Date or the date of stockholder
approval, but such Awards granted prior to such date may extend beyond that
date.
ARTICLE XVIII.
NAME OF PLAN
The Plan shall be known as the "Wilshire Real Estate Investment Trust Inc.
1998 Stock Option Plan."
23