Exhibit 10.7

 

ALEXANDRIA REAL ESTATE EQUITIES, INC.

 

2000 DEFERRED COMPENSATION PLAN

 

 

ORIGINAL EFFECTIVE DATE: DECEMBER 1, 2000

 

AMENDED AND RESTATED EFFECTIVE: JANUARY 1, 2005

 

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TABLE OF CONTENTS

 

 

 

PAGE

 

 

 

ARTICLE I

      INTRODUCTION AND PURPOSE

1

 

 

 

ARTICLE II

      DEFINITIONS

1

 

 

 

2.1

Definitions

1

 

 

 

2.2

Terms

5

 

 

 

ARTICLE III

      PARTICIPATION

5

 

 

 

3.1

Commencement of Participation

5

 

 

 

3.2

Continuation of Participation

5

 

 

 

ARTICLE IV

      CONTRIBUTIONS AND ELECTIONS

6

 

 

 

4.1

Compensation Deferrals

6

 

 

 

4.2

Matching Contributions

7

 

 

 

4.3

Company Contribution

7

 

 

 

4.4

Time and Form of Contributions to Trust

7

 

 

 

ARTICLE V

      VESTING

8

 

 

 

5.1

Vesting

8

 

 

 

ARTICLE VI

      ACCOUNTS

8

 

 

 

6.1

Accounts

8

 

 

 

6.2

Benchmark Investment Elections for DCP Amounts

9

 

 

 

6.3

Deemed Investment of VIP Amounts

9

 

 

 

6.4

Valuation

10

 

 

 

6.5

Forfeitures

10

 

 

 

ARTICLE VII

      DISTRIBUTIONS

11

 

 

 

7.1

Distribution Election

11

 

 

 

7.2

Payment Options

11

 

 

 

7.3

Commencement of Payment

11

 

 

 

7.4

Early Distribution of Section 409A Grandfathered Amounts

13

 

 

 

7.5

Change in Service Capacity

13

 

 

 

ARTICLE VIII

      BENEFICIARIES

14

 

 

 

8.1

Beneficiaries

14

 

 

 

8.2

Lost Participants and Beneficiaries

15

 

 

 

8.3

Enforceability of Beneficiary Designations

15

 

i.

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TABLE OF CONTENTS

(CONTINUED)

 

 

 

PAGE

 

 

 

ARTICLE IX

      FUNDING

15

 

 

 

9.1

Prohibition Against Funding

15

 

 

 

9.2

Deposits in Trust

15

 

 

 

ARTICLE X

      ADMINISTRATION

16

 

 

 

    10.1

Plan Administration

16

 

 

 

    10.2

Administrator

16

 

 

 

    10.3

Claims Procedures

17

 

 

 

ARTICLE XI

      GENERAL PROVISIONS

19

 

 

 

    11.1

No Assignment

19

 

 

 

    11.2

No Employment Rights

19

 

 

 

    11.3

Incompetence

19

 

 

 

    11.4

Identity

19

 

 

 

    11.5

Other Benefits

20

 

 

 

    11.6

No Liability

20

 

 

 

    11.7

Expenses

20

 

 

 

    11.8

Amendment and Termination

20

 

 

 

    11.9

Company Determinations

20

 

 

 

    11.10

Arbitration

21

 

 

 

    11.11

Debt Offsets

21

 

 

 

    11.12

Construction

21

 

 

 

    11.13

Governing Law

21

 

 

 

    11.14

Severability

21

 

 

 

    11.15

Headings

21

 

ii.

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ALEXANDRIA REAL ESTATE EQUITIES, INC.

 

2000 DEFERRED COMPENSATION PLAN

 

 

ARTICLE I

 

INTRODUCTION AND PURPOSE

 

This Plan was originally adopted by the Company effective as of December 1,
2000.  The Plan was amended and restated effective as of January 1, 2005.  As
part of such amendment and restatement, certain provisions of the Company’s 2000
Venture Investment Deferred Compensation Plan (the “VIP”) were incorporated into
the provisions of this Plan.  Any amounts deferred under the VIP prior to
January 1, 2005, plus any gains credited with respect to such amounts as a
result of their deemed investment in the applicable Venture Investments, shall
not be subject to Section 409A of the Code and shall be governed solely by the
terms of the VIP (as in effect on such date); provided, however, that to the
extent covered by the definition of Section 409A Grandfathered Amounts under
this Plan, such amounts also may be subject to the provisions of this Plan
regarding Section 409A Grandfathered Amounts.  Any amounts deferred under the
VIP on or after January 1, 2005 shall be considered to have been deferred under
this Plan.

 

The purpose of the Plan is to provide key Employees supplemental retirement and
tax benefits through the deferral of compensation.  The Plan is intended to be a
“plan which is unfunded and is maintained by an employer primarily for the
purpose of providing deferred compensation for a select group of management or
highly compensated employees” within the meaning of Sections 201(2),
301(a)(3) and 401(a)(1) of ERISA, and shall be interpreted and administered to
the extent possible in a manner consistent with that intent.  The Plan is
intended to be administered in compliance with Section 409A of the Code with
respect to all Section 409A Non-Grandfathered Amounts, and the provisions of the
Plan regarding Section 409A Grandfathered Amounts are intended to be
administered so as not to subject such amounts to Section 409A of the Code.

 

ARTICLE II

 

DEFINITIONS

 

2.1                            Definitions.  The following terms have the
meanings set forth herein, unless the context otherwise requires:

 

Account.  The bookkeeping account established for each Participant as provided
in Section 6.1.  The term includes Fixed Date Accounts (which may include a DCP
Fixed Date Subaccount and VIP Fixed Date Subaccount) and Retirement Accounts
(which may include a DCP Retirement Subaccount and VIP Retirement Subaccount),
unless the context otherwise requires.

 

1.

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Administrator.  The Chief Executive Officer and the Chief Financial Officer of
the Company, each of whom may act as the Administrator individually; provided,
however, that each may not act as the Administrator in making decisions with
respect to his or her own Account.

 

Affiliate.  Any firm, partnership, limited liability partnership, corporation or
limited liability corporation that (i) directly or indirectly through one or
more intermediaries controls, is controlled by, or is under common control with
the Company or (ii) is otherwise authorized by the Company’s Board of Directors
to be considered the Company for purposes of the Plan.

 

Benchmark Investment Fund.  The investment fund or funds selected by the
Administrator from time to time.

 

Benchmark Return.  The amount of any increase or decrease in the balance of a
Participant’s Account reflecting the gain or loss, net of any expenses, on the
assets deemed invested in each Benchmark Investment Fund by the Participant from
time to time.

 

Change of Control.  The occurrence of any of the following events:

 

(a)                               Any Person (as such term is used in section
3(a)(9) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
as modified and used in sections 13(d) and 14(d) thereof, except that such term
shall not include (A) the Company or any of its subsidiaries, (B) a trustee or
other fiduciary holding securities under an employee benefit plan of the Company
or any of its affiliates, (C) an underwriter temporarily holding securities
pursuant to an offering of such securities, or (D) a corporation owned, directly
or indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company) becomes the Beneficial
Owner, as such term is defined in Rule 13d-3 under the Exchange Act, directly or
indirectly, of securities of the Company (not including in the securities
beneficially owned by such Person any securities acquired directly from the
Company or its affiliates other than in connection with the acquisition by the
Company or its affiliates of a business) representing twenty-five percent (25%)
or more of the combined voting power of the Company’s then outstanding
securities; or

 

(b)                              The following individuals cease for any reason
to constitute a majority of the number of directors then serving: individuals
who, on the date hereof, constitute the Board of Directors of the Company and
any new director (other than a director whose initial assumption of office is in
connection with an actual or threatened election contest, including but not
limited to a consent solicitation, relating to the election of directors of the
Company) whose appointment or election by the Board or nomination for election
by the Company’s stockholders was approved or recommended by a vote of at least
two-thirds (2/3) of the directors then still in office who either were directors
on the date hereof or whose appointment, election or nomination for election was
previously so approved or recommended; or

 

(c)                               There is consummated a merger or consolidation
of the Company with any other corporation, other than (A) a merger or
consolidation in which the stockholders of the Company immediately prior to such
merger or consolidation, continue to own, in combination

 

2.

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with the ownership of any trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any subsidiary of the Company, at least
seventy-five percent (75%) of the combined voting power of the securities of the
Company (or the surviving entity or any parent thereof) outstanding immediately
after such merger or consolidation in substantially the same proportions as
their ownership of the Company immediately prior to such merger or
consolidation, or (B) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no Person is
or becomes the Beneficial Owner, directly or indirectly, of securities of the
Company (not including in the securities beneficially owned by such Person any
securities acquired directly from the Company or its affiliates other than in
connection with the acquisition by the Company or its affiliates of a business)
representing twenty-five percent (25%) or more of the combined voting power of
the Company’s then outstanding securities; or

 

(d)                              The stockholders of the Company approve a plan
of complete liquidation or dissolution of the Company or there is consummated an
agreement for the sale or disposition by the Company of all or substantially all
of the Company’s assets, other than a sale or disposition by the Company of all
or substantially all of the Company’s assets to an entity, at least seventy-five
(75%) of the combined voting power of the voting securities of which are owned
by stockholders of the Company in substantially the same proportions as their
ownership of the Company immediately prior to such sale.

 

Code.  The Internal Revenue Code of 1986, as amended from time to time, and the
regulations and other applicable guidance promulgated thereunder.

 

Company.  Alexandria Real Estate Equities, Inc., a Maryland corporation.

 

Company Contribution.  A discretionary contribution that is credited to one or
more of a Participant’s Accounts in accordance with the terms of Section 4.3.

 

Compensation.  A Participant’s annual base salary and bonuses from the Company. 
For purposes of the Plan, Compensation will be determined before giving effect
to Compensation Deferrals and other salary reduction amounts which are not
included in the Participant’s gross income under Sections 125, 401(k), 402(h) or
403(b) of the Code.

 

Compensation Deferrals.  The portion of Compensation that a Participant elects
to defer in accordance with Section 4.1.

 

DCP Amounts.  The aggregate amount of Compensation Deferrals credited to a
Participant’s DCP Fixed Date Subaccount and DCP Retirement Subaccount.

 

Effective Date.  December 1, 2000.

 

Eligible Employee.  An Employee of the Company who satisfies the following
requirements on any date when a determination of Eligible Employees is made for
purposes of the Plan: (i) the Employee is selected and designated as an Eligible
Employee in writing by the Company, in its sole discretion; (ii) the Employee
has a base salary equal to or exceeding $200,000 for Plan Years commencing on or
after January 1, 2008; and (iii) the Employee is an accredited investor for
purposes of Regulation D promulgated under the Securities Act of 1933,

 

3.

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as amended (the “Securities Act”).  The Administrator shall have sole and
absolute discretion in determining whether or not an Employee is, at any time,
an accredited investor for purposes of Regulation D promulgated under the
Securities Act, based on a completed accredited investor questionnaire and such
other information as the Administrator considers to be relevant.

 

Employee.  Any person employed by the Company.

 

ERISA.  Employee Retirement Income Security Act of 1974, as amended.

 

Fixed Date Account.  An Account established for a Participant with distributions
to be made on a date certain, which is specified by the Participant in a
Participation Election Form.

 

Matching Contribution.  A contribution that is credited to one or more of a
Participant’s Accounts in accordance with the terms of Section 4.2.

 

Participant.  An Eligible Employee who has submitted a Participation Election
Form agreeing to participate in the Plan and whose Account has not been fully
paid out.

 

Participation Election Form.  The separate written agreement, submitted to the
Administrator, by which an Eligible Employee agrees to participate in the Plan
and indicates all necessary information to establish the Account(s) for such
Eligible Employee as a Participant under the Plan, including, but not limited
to, the amount of Compensation Deferrals and the designation of his or her
Account(s) as Retirement or Fixed Date.

 

Plan.  The Alexandria Real Estate Equities, Inc. 2000 Deferred Compensation
Plan.

 

Plan Year.  The calendar year.

 

Retirement Account.  An Account established for a Participant from which
distributions are to be made following termination of employment with the
Company.

 

Section 409A Grandfathered Amount.  Any (i) Compensation Deferrals and Matching
Contributions, plus any related Benchmark Returns on such amounts, that were
credited to a Participant’s Account(s) under the Plan prior to January 1, 2005
and (ii) amounts deferred under the VIP prior to January 1, 2005, plus any gains
credited with respect to such amounts as a result of their deemed investment in
Venture Investments (as defined under the VIP), that were or become further
deferred under this Plan following a Distribution Event (as defined under the
VIP), pursuant to the terms of the VIP at the time of initial deferral.

 

Section 409A Non-Grandfathered Amount.  Any Compensation Deferrals and Matching
Contributions that were credited to a Participant’s Account on or after
January 1, 2005, plus any related Benchmark Returns or gains with respect to
Venture Investments for such amounts.

 

Total and Permanent Disability.  Any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous

 

4.

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period of not less than twelve (12) months and results in a Participant
(i) being unable to engage in any substantial gainful activity or (ii) receiving
income replacement benefits for a period of not less than three (3) months under
an accident and health plan covering employees of the Company.

 

Trust.  The grantor trust established by agreement between the Company and the
Trustee under which the assets with respect to Accounts under the Plan are held,
administered and managed, as provided in ARTICLE IX..

 

Trustee.  The Trustee designated in the Trust, including any and all successor
trustees to the Trust.

 

Unforeseeable Emergency.  Defined in Section 7.3(b).

 

Venture Investment.  A direct equity investment by the Company or an Affiliate
in a private life science company with which the Company does business or is
otherwise familiar; provided, however, that such investments shall not include
warrants in such companies that the Company may receive from time to time.

 

VIP.  The Alexandria Real Estate Equities, Inc. 2000 Venture Investment Deferred
Compensation Plan.

 

VIP Amounts.  The aggregate amount of Compensation Deferrals credited to a
Participant’s VIP Fixed Date Subaccount or VIP Retirement Subaccount.

 

VIP Event.  A transaction by which the Company receives cash or freely tradable
stock in connection with the initial public offering of stock of a company in
which a Venture Investment is made, the acquisition of such company for publicly
traded stock or cash, or another transaction pursuant to which the Company
receives cash or freely tradable stock in respect of the equity of a Venture
Investment.  Each Venture Investment is expected to have a VIP Event that is
separate from the VIP Events of other Venture Investments.

 

Years of Service.  Defined in Section 5.1(a).

 

2.2                            Terms.  Capitalized terms shall have meanings as
defined herein.  Singular nouns shall be read as plural, and masculine pronouns
shall be read as feminine, and vice versa, where appropriate.

 

ARTICLE III

 

PARTICIPATION

 

3.1                            Commencement of Participation.  Each Eligible
Employee shall become a Participant at the earlier of the date on which his or
her Participation Election Form first becomes effective or the date on which a
Company Contribution is first credited to his or her Account.

 

3.2                            Continuation of Participation.  Each Eligible
Employee shall remain a Participant hereunder until all amounts credited to his
or her Account are distributed in full.  No

 

5.

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Compensation Deferrals are permitted in any Plan Year in which an Employee no
longer satisfies the requirements set forth in the definition of an Eligible
Employee.

 

ARTICLE IV

 

CONTRIBUTIONS AND ELECTIONS

 

4.1                            Compensation Deferrals.

 

(a)                              With respect to each Plan Year, a Participant
may elect to defer up to seventy percent (70%) of the Participant’s annual base
salary and one hundred percent (100%) of the Participant’s annual bonus as
Compensation Deferrals; provided, however, that (i) the minimum deferral amount
of any bonus shall be $10,000, and (ii) the aggregate minimum deferral amount of
any salary and bonus shall be $10,000.  Compensation Deferrals attributable to a
Participant’s salary shall be credited to the Participant’s DCP Fixed Date
Subaccount or DCP Retirement Subaccount, as designated by the Participant. 
Compensation Deferrals attributable to a Participant’s bonus shall be credited
to the Participant’s DCP Fixed Date Subaccount, DCP Retirement Subaccount, VIP
Fixed Date Subaccount or VIP Retirement Subaccount, as designated by the
Participant.  Such amounts shall not be made available to such Participant,
except as provided in ARTICLE VII, and, as Compensation Deferrals, shall reduce
such Participant’s Compensation from the Company in accordance with the
provisions of the applicable Participation Election Form; provided, however,
that all such amounts credited to such Subaccounts shall be subject to the
rights of the general creditors of the Company as provided in ARTICLE IX.

 

(b)                              With respect to each Plan Year, each Eligible
Employee shall deliver a Participation Election Form to the Company before any
Compensation Deferrals may become effective.  Such Participation Election
Form shall be void with respect to any Compensation Deferrals unless submitted
before the beginning of the calendar year during which the amount to be deferred
will be earned.  Notwithstanding the foregoing, with respect to each Plan Year,
(i) if an Employee first becomes eligible to participate in the Plan during the
Plan Year, such Participation Election Form shall be filed within thirty (30)
days following the date on which the Employee is first eligible to participate,
with respect to Compensation earned during the remainder of the Plan Year, and
(ii) if permitted by the Company, with respect to any bonus that meets the
requirements of performance-based compensation under Section 409A of the Code,
as determined by the Company in its sole discretion, such Participation Election
Form shall be filed by the earlier of (1) June 30th of the Plan Year or (2) the
date on which such performance-based compensation has become readily
ascertainable, as determined in accordance with Section 409A of the Code,
provided that with respect to any Employee who first becomes eligible to
participate in the Plan during the Plan Year, the maximum amount of any such
bonus which shall be deemed to be earned during the portion of the Plan Year
subsequent to such election shall be the total amount of any such bonus earned
with respect to the Plan Year multiplied by the ratio of the number of days
remaining in the Plan Year after the Participation Election Form is filed over
the total number of days in the Plan Year.

 

(c)                               The Participation Election Form shall, subject
to the limitations set forth in this Section 4.1, designate the amount of
Compensation deferred by each Participant, the

 

6.

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beneficiary or beneficiaries of the Participant, the date(s) of distribution of
any amounts in the Participant’s Fixed Date Account, and such other items as the
Administrator may prescribe.  Such designations shall remain effective unless
amended as provided in subsection (d), below.

 

(d)                              With respect to Section 409A Grandfathered
Amounts, a Participant may amend his or her Participation Election Form from
time to time; provided, however, that any amendment of a Participation Election
Form shall comply with the provisions of Section 7.1(b).  With respect to
Section 409A Non-Grandfathered Amounts, a Participant’s Participation Election
Form shall be irrevocable; provided, however, that a Participant may (i) cancel
such Participation Election Form due to an Unforeseeable Emergency (as defined
in Section 7.3(b)) or a hardship distribution pursuant to
Section 1.401(k)-1(d)(3) of the Treasury Regulations or (ii) elect to further
defer the date for distribution of Section 409A Non-Grandfathered Amounts in the
Participant’s Account pursuant to Section 7.1(b).

 

4.2                            Matching Contributions.  If the Company
determines to make Matching Contributions under the Plan, the Company shall
credit such Matching Contributions to the Account of each Participant who makes
Compensation Deferrals.  The amount of any Matching Contribution shall be equal
to a percentage of each Participant’s Compensation Deferrals determined annually
by the Company, in its sole discretion.

 

4.3                            Company Contribution.  The Company may from time
to time credit a discretionary contribution to the Account of a Participant. 
The Company shall contribute to the Trust, if applicable, for the Participant’s
benefit the amount of such Company Contributions in accordance with the Plan.

 

4.4                            Time and Form of Contributions to Trust. 
Compensation Deferrals and Matching Contributions that are deemed to be invested
in Benchmark Investment Funds shall be transferred to the Trust, if applicable,
as soon as administratively feasible for the Company following the close of each
payroll period.  The Company shall also transmit to the Trustee at that time any
necessary instructions regarding the allocation of such amounts among the
Accounts of Participants.

 

Company Contributions shall be transferred to the Trust, if applicable, at such
time as the Company shall determine.  The Company shall also transmit to the
Trustee at that time any necessary instructions regarding the allocation of such
amounts among the Accounts of Participants.

 

All Compensation Deferrals, Matching Contributions and Company Contributions to
the Trust shall be made in the form of cash, cash equivalents of U.S. currency
or other property acceptable to the Trustee.

 

7.

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ARTICLE V

 

VESTING

 

5.1                            Vesting.

 

(a)                              Except as otherwise provided herein and subject
to the rights of the general creditors of the Company as provided in ARTICLE IX,
(i) a Participant shall have a fully vested right to the portion of his or her
Account attributable to Compensation Deferrals, any Benchmark Returns on such
Compensation Deferrals and any gains credited with respect to any such
Compensation Deferrals deemed to be invested in Venture Investments, and
(ii) Matching Contributions and Company Contributions, and any amounts
attributable to Benchmark Returns on such contributions, shall vest in
accordance with the following schedule:

 

Years of Service

 

Cumulative Vested Percentage

 

 

 

 

  1   but less than   2  

 

 

  20  %

  2   but less than   3  

 

 

  40  %

  3   but less than   4  

 

 

  60  %

  4   but less than   5  

 

 

  80  %

  5   or more

 

 

 100 %

 

For purposes of this ARTICLE V, a Participant’s “Years of Service” shall be
determined on the basis of the Participant’s date of hire and anniversaries
thereof.

 

(b)                              Any amounts credited to a Participant’s Account
that are not vested at the time of his or her termination of employment with the
Company shall be forfeited in accordance with Section 6.5.

 

ARTICLE VI

 

ACCOUNTS

 

6.1                            Accounts.

 

(a)                              The Administrator shall establish and maintain
a bookkeeping Account in the name of each Participant.  The Administrator may
also establish any subaccounts that may be appropriate.  The establishment of an
Account constitutes only a method, by bookkeeping entry, of determining the
amount of deferred benefits to be distributed under the Plan.  The Company shall
be under no obligation to acquire or hold any securities or specific assets by
reason of the credits made to the Accounts hereunder.

 

(b)                              Each Participant’s Account shall be credited
with Compensation Deferrals, any Matching Contributions allocable thereto, any
Company Contributions, any amounts attributable to Benchmark Returns and any
gains with respect to Compensation Deferrals deemed to be invested in Venture
Investments.  Each Participant’s Account shall be reduced by any gross amounts
distributed from the Account pursuant to ARTICLE VII and any

 

8.

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other appropriate adjustments.  Such adjustments shall be made as frequently as
is administratively feasible.

 

6.2                            Benchmark Investment Elections for DCP Amounts.

 

(a)                              The Administrator shall from time to time
select types of Benchmark Investment Funds and specific Benchmark Investment
Funds for deemed investment designation by Participants with respect to DCP
Amounts.  The Administrator shall notify the Participants of the types of
Benchmark Investment Funds and the specific Benchmark Investment Funds selected
from time to time.  On the Participation Election Form, the Participant shall
designate the specific Benchmark Investment Funds in which the Account of the
Participant for DCP Amounts will be deemed to be invested for purposes of
determining the Benchmark Return to be credited to the Account.  In making such
designation, the Participant may specify that all or any percentage of such
Account be deemed to be invested in one or more of the available types of
Benchmark Investment Funds.  The Administrator from time to time will determine
the minimum percentage allocation per investment fund and the frequency with
which allocations may be changed.

 

(b)                              Trust assets shall be invested as provided in
the Trust Agreement; provided, however, that the Trustee may consider a
Participant’s selection of a Benchmark Investment Fund when investing Trust
assets.

 

6.3                            Deemed Investment of VIP Amounts.

 

(a)                              All VIP Amounts shall be deemed to be invested
in one or more Venture Investments determined by the Company, in its sole
discretion, for each Plan Year.  Participants who elect to have a portion of
their Compensation Deferrals credited to a VIP Fixed Date Subaccount or VIP
Retirement Subaccount for a Plan Year will be deemed to have such Compensation
Deferrals invested in Venture Investments in an aggregate amount that shall be
limited to fifteen percent (15%) of the aggregate cost basis of the Company’s
Venture Investments for such Plan Year.  Whether or not the Company chooses to
invest in one or more Venture Investments for a Plan Year shall be determined by
the Company in its sole and absolute discretion.  If no Venture Investments are
made for a Plan Year or if the aggregate amount of Participants’ Compensation
Deferrals credited to Participants’ VIP Fixed Date Subaccounts and VIP
Retirement Subaccounts for a Plan Year exceeds fifteen percent (15%) of the
aggregate cost basis of the Company’s Venture Investments for such Plan Year,
(i) the allocation of deemed investments will be in proportion to the applicable
Compensation Deferrals, and (ii) the Compensation Deferrals not deemed to be
invested in Venture Investments for such Plan Year shall continue to be deferred
under the Plan, provided that (A) any such Compensation Deferrals that a
Participant elected to have credited to the Participant’s VIP Fixed Date
Subaccount shall instead be credited to the Participant’s DCP Fixed Date
Subaccount and (B) any such Compensation Deferrals that a Participant elected to
have credited to the Participant’s VIP Retirement Subaccount shall instead be
credited to the Participant’s DCP Retirement Subaccount.

 

Compensation Deferrals credited to a Participant’s VIP Fixed Date Subaccount or
VIP Retirement Subaccount for a Plan Year shall be deemed to be invested on a
pro rata basis in

 

9.

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Venture Investments in accordance with (i) the Company’s cost basis in each
Venture Investment and (ii) the ratio of (A) the individual Participant’s
Compensation Deferrals credited to the Participant’s VIP Fixed Date Subaccount
and VIP Retirement Subaccount for the Plan Year to (B) the Compensation
Deferrals credited to all Participants’ VIP Fixed Date Subaccounts and VIP
Retirement Subaccounts (in the aggregate) for such Plan Year.  The Company shall
not, and shall not be obligated to, invest amounts credited to Participants’
Accounts in any Venture Investments; deemed Venture Investments are simply a
measure of the value of a Participant’s VIP Amounts.

 

For purposes of the Plan, Compensation Deferrals credited to a Participant’s VIP
Fixed Date Subaccount or VIP Retirement Subaccount shall be “for” a Plan Year
based on the Plan Year during which the performance required to earn the
applicable bonus is measured, not based on the Plan Year during which such bonus
otherwise would be paid.  If performance is measured over more than one Plan
Year, then any deferral of such bonus shall be for the final Plan Year during
which performance is measured.  For purposes of the Plan, a Venture Investment
shall be “for” a Plan Year based on the Plan Year during which the Company makes
the applicable investment.

 

(b)                              Upon the occurrence of a VIP Event for a
Venture Investment (or as soon as administratively practicable thereafter), any
VIP Amounts deemed to be invested in such Venture Investment that are credited
to a Participant’s VIP Fixed Date Subaccount or VIP Retirement Subaccount (or a
portion of such VIP Amounts, as determined by the Company in its sole
discretion, in the event that such VIP Event does not result in the disposition
of the entire amount of such Venture Investment), as adjusted for any gains and
losses of such Venture Investment, automatically shall be credited to the
Participant’s DCP Fixed Date Subaccount or DCP Retirement Subaccount,
respectively, and deemed to be invested in the Benchmark Investment Funds that
the Participant has designated for deemed investment of such Subaccounts.

 

6.4                            Valuation.

 

(a)                              DCP Amounts.  Any DCP Amounts credited to a
Participant’s Account shall be valued daily based on the Benchmark Investment
Funds that the Participant has designated for deemed investment of such
amounts.  Such valuation shall be communicated in writing to each Participant on
a periodic basis.

 

(b)                              VIP Amounts.  Any VIP Amounts credited to a
Participant’s Account shall be valued annually based on the Company’s cost basis
of the Venture Investments in which the Participant’s Account is deemed
invested.  Such valuation shall be communicated in writing to each Participant
not later than April 15th following each Plan Year.

 

6.5                            Forfeitures.  Any forfeitures from a
Participant’s Account may be used to reduce succeeding Matching Contributions,
Company Contributions or, if applicable, administrative expenses and Trustee
fees and expenses, until such forfeitures have been entirely so applied.

 

10.

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ARTICLE VII

 

DISTRIBUTIONS

 

7.1                            Distribution Election.

 

(a)                              By designation of a Fixed Date Account or a
Retirement Account, each Participant shall specify, in his or her Participation
Election Form for a Plan Year, the date on which payment of amounts credited to
the Participant’s Account with respect to such Plan Year (and any gains on such
amounts) shall begin, as provided in Section 7.3.  Such designation shall apply
to all amounts distributed from such Participant’s Account with respect to such
Plan Year.

 

(b)                              A Participant may modify the election made
under Section 7.1(a) by submitting to the Administrator a completed and executed
form provided for such purpose; provided, however, that:

 

(i)                                  With respect to Section 409A Grandfathered
Amounts, such change shall not be given any effect unless a full calendar year
passes between the calendar year in which such election form is submitted and
the calendar year in which the distribution date designated in such form occurs;
and

 

(ii)                              With respect to Section 409A Non-Grandfathered
Amounts, such change (A) shall not take effect until at least twelve (12) months
after the date on which the change is made, (B) must be made more than twelve
(12) months prior to the date payment otherwise would have been made and
(C) must designate a new date for distribution that is at least five (5) years
following the date payment otherwise would have been made.

 

7.2                            Payment Options.

 

Unless otherwise provided in Section 7.3, benefits shall be payable in a lump
sum payment in the form of cash.

 

7.3                            Commencement of Payment.

 

(a)                              Except as otherwise provided herein, payment of
the amounts in a Participant’s Account, to the extent vested, shall be made as
follows:

 

(i)                                  Payment of the amounts in a Participant’s
Fixed Date Account with respect to a Plan Year (including any amounts in the
Participant’s VIP Fixed Date Subaccount in accordance with Section 7.3(a)(iii)),
to the extent vested, shall be made in a lump sum as soon as administratively
feasible after the earlier of (A) the date designated by the Participant in the
Participant’s Participation Election Form for such Plan Year and (B) the
Participant’s termination of employment with the Company; provided, however,
that with respect to Section 409A Non-Grandfathered Amounts, if a Change of
Control occurs prior to any such designated date or termination, payment of such
amounts shall be made in a lump sum as soon as administratively feasible after
the effective date of the Change of Control, provided that the Change of Control
constitutes a change in the ownership or effective control of the Company, or

 

11.

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in the ownership of a substantial portion of the assets of the Company, as
determined in accordance with Section 1.409A-3(i)(5) of the Treasury
Regulations.

 

(ii)                              Payment of the amounts in a Participant’s
Retirement Account (including any amounts in the Participant’s VIP Retirement
Subaccount in accordance with Section 7.3(a)(iii)), to the extent vested, shall
be made in a lump sum as soon as administratively feasible after the
Participant’s termination of employment with the Company; provided, however,
that with respect to Section 409A Non-Grandfathered Amounts, if a Change of
Control occurs prior to such termination, payment of such amounts shall be made
in a lump sum as soon as administratively feasible after the effective date of
the Change of Control, provided that the Change of 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, as determined in accordance
with Section 1.409A-3(i)(5) of the Treasury Regulations.

 

(iii)                          In the event that a Participant’s Account at the
time of distribution is credited with any VIP Amounts that are deemed to be
invested in a Venture Investment(s) for which there has been no VIP Event by the
time of distribution, the value of such Venture Investment(s) will be determined
to be (i) with respect to a Venture Investment in a public company, the lower of
the Company’s cost of such Venture Investment or the fair market value or
(ii) with respect to a Venture Investment in a private company, the Company’s
cost of such Venture Investment less any write-downs or impairments.

 

Notwithstanding the foregoing, any Section 409A Non-Grandfathered Amounts that
become payable as a result of the Participant’s separation from service (as such
term is defined in Section 1.409A-1(h) of the Treasury Regulations) with the
Company, except due to the Participant’s death or Total and Permanent
Disability, shall not be distributed to the Participant until the date that is
six (6) months and one (1) day after such separation from service (or as soon as
administratively feasible thereafter).

 

(b)                              Upon application by a Participant, the
Administrator, in its sole discretion, may permit an early distribution of part
or all of the vested amounts credited to a Participant’s Account in the event
the Participant experiences an Unforeseeable Emergency.  Any such application
must set forth the circumstances constituting such Unforeseeable Emergency.  The
determination as to whether an Unforeseeable Emergency exists and as to the
amount distributable under the Plan as a result of such Unforeseeable Emergency
shall be made by the Administrator in its sole discretion.

 

For purposes of the Plan, an Unforeseeable Emergency shall mean any severe
financial hardship to the Participant resulting from (i) a sudden and unexpected
illness or accident of the Participant or a dependent (as defined in
Section 152(a) of the Code) of the Participant, (ii) loss of the Participant’s
property due to casualty, or (iii) other similar extraordinary and unforeseen
circumstances arising as a result of events beyond the control of the
Participant.  Any distribution pursuant to this provision is limited to the
amount necessary to meet the Unforeseeable Emergency, and any amounts necessary
to pay any federal, state or local income taxes or penalties reasonably
anticipated to result from such distribution.  The distribution may not exceed
the then vested portion of the Participant’s Account.  The circumstances that
will constitute an Unforeseeable Emergency will depend upon the facts of

 

12.

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each case, but, in any case, payment may not be made to the extent that such
emergency is or may be relieved (i) through reimbursement or compensation by
insurance or otherwise; (ii) by liquidation of the Participant’s assets, to the
extent the liquidation of such assets would not itself cause severe financial
hardship; or (iii) by cessation of deferrals under the Plan.  Furthermore,
examples of events that would not be considered Unforeseeable Emergencies
include the need to send a Participant’s child to college or the desire to
purchase a home.

 

7.4                            Early Distribution of Section 409A Grandfathered
Amounts.  A Participant may elect to receive a distribution of all or any
portion of the amount of vested Section 409A Grandfathered Amounts in his or her
Account on a date prior to that established under the Plan or the Participant’s
Participation Election Form, provided that (i) the amount distributed shall be
equal to ninety percent (90%) of the amount elected by the Participant, and
(ii) the remaining ten percent (10%) of the amount elected by the Participant
shall be treated as forfeited by the Participant.  A Participant may not receive
any early distributions of any Section 409A Non-Grandfathered Amounts pursuant
to this Section 7.4.

 

7.5         Change in Service Capacity.  Notwithstanding anything in the Plan to
the contrary, for purposes of this ARTICLE VII, the determination of whether a
termination of employment has occurred for purposes of the Plan shall be made as
set forth in Section 7.5(a) or (b), as applicable; provided, however, that (i) a
Participant shall not be eligible to defer any additional Compensation or
receive any Matching or Company Contributions after the Participant has
terminated service with the Company as an Employee, and (ii) the Participant
shall forfeit any amounts credited to the Participant’s Account that are not
vested at the time of his or her termination of service with the Company as an
Employee pursuant to Section 5.1(b).

 

(a)          Section 409A Grandfathered Amounts. The following shall apply with
respect to any Section 409A Grandfathered Amounts:

 

(i)                                  A change in the capacity in which a
Participant renders service to the Company or one of its affiliates, whether as
an Employee, independent contractor or director, or a change in the entity for
which the Participant renders such service, provided that there is no
interruption or termination of the Participant’s service with the Company or
affiliate, shall not be deemed to be a termination of employment.

 

(ii)                              The Board of Directors of the Company or the
Chief Executive Officer of the Company, in that party’s sole discretion, may
determine whether a termination of employment has occurred in the case of any
leave of absence approved by that party, including sick leave, military leave or
any other personal leave.  Notwithstanding the foregoing, for purposes of
vesting under Section 5.1, employment shall not be considered terminated in the
case of a leave of absence only to such extent as may be provided in the
Company’s leave of absence policy or in the written terms of the Participant’s
leave of absence.

 

(b)          Section 409A Non-Grandfathered Amounts.  The following shall apply
with respect to any Section 409A Non-Grandfathered Amounts:

 

(i)                                  A Participant’s employment will be deemed
to have terminated only at the time that the Participant has incurred a
“separation from service” in accordance with

 

13.

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Section 1.409A-1(h) of the Treasury Regulations; provided, however, that for
purposes of such determination, the Participant shall be deemed to have incurred
a separation from service if the Company and the Participant reasonably
anticipate that the level of bona fide services, if any, that the Participant
would perform after such termination of employment would permanently decrease to
forty-nine percent (49%) or less of the average level of bona fide services
performed by the Participant during the thirty-six (36) month period immediately
preceding the date of termination (or the full period of services if the
Participant has been providing services for less than thirty-six (36) months).

 

(ii)                              In accordance with
Section 1.409A-1(h)(1)(i) of the Treasury Regulations, a Participant’s
employment shall be treated as continuing intact while the Participant is on
military leave, sick leave, or other bona fide leave of absence if the period of
such leave does not exceed six (6) months, or if longer, so long as the
Participant retains a right to reemployment with the Company under an applicable
statute or by contract.  If the period of leave exceeds six (6) months and the
Participant does not retain a right to reemployment under an applicable statute
or by contract, the Participant shall be deemed to terminate employment on the
first day immediately following such six-month period.  Notwithstanding the
foregoing, where a leave of absence is due to any medically determinable
physical or mental impairment that can be expected to result in death or can be
expected to last for a continuous period of not less than six (6) months, where
such impairment causes the Participant to be unable to perform the duties of his
or her position of employment or any substantially similar position of
employment, the Administrator may determine, on or prior to the beginning of the
leave of absence, to substitute a 29-month period of absence for such six-month
period.

 

ARTICLE VIII

 

BENEFICIARIES

 

8.1                            Beneficiaries.  Each Participant may from time to
time designate one or more persons (who may be any one or more members of such
person’s family or other persons, administrators, trusts, foundations or other
entities) as his or her beneficiary under the Plan.  Such designation shall be
made on a form prescribed by the Administrator.  Each Participant may at any
time and from time to time, change any previous beneficiary designation, without
notice to or consent of any previously designated beneficiary, by amending his
or her previous designation on a form prescribed by the Administrator.  If the
beneficiary does not survive the Participant (or is otherwise unavailable to
receive payment) or if no beneficiary is validly designated, then the amounts
payable under this Plan shall be paid to the Participant’s surviving spouse, if
any, and, if none, to his or her surviving issue per stirpes, if any, and, if
none, to his or her estate and such person shall be deemed to be a beneficiary
hereunder.  (For purposes of this Section 8.1, a per stirpes distribution to
surviving issue means a distribution to such issue as representatives of the
branches of the descendants of such Employee; equal shares are allotted for each
living child and for the descendants as a group of each deceased child of the
deceased Employee).  If more than one person is the beneficiary of a
Participant, each such person shall receive a pro rata share of any
distributions payable unless otherwise designated on the applicable form.  If a
beneficiary who is eligible to receive benefits dies, all benefits that were
payable to such beneficiary shall then be payable to the estate of that
beneficiary.

 

14.

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8.2                            Lost Participants and Beneficiaries.

 

(a)                              All Participants and beneficiaries shall have
the obligation to keep the Administrator informed of their current address until
such time as all benefits due have been paid.

 

(b)                              If a Participant or beneficiary cannot be
located by the Administrator exercising due diligence, then, in its sole
discretion, the Administrator may presume that the Participant or beneficiary is
deceased for purposes of the Plan and all unpaid amounts owed to the Participant
or beneficiary shall be paid accordingly or, if a beneficiary cannot be so
located, then such amounts may be forfeited in accordance with Section 6.5.  Any
such presumption of death shall be final, conclusive and binding on all parties.

 

8.3                            Enforceability of Beneficiary Designations.  Any
beneficiary designation form is only a generalized, suggested form.  At the time
of the Participant’s death and under the laws of the jurisdiction applicable to
the Participant at the time of death, the form may not be considered legally
effective to transfer the amounts from the Participant’s Account(s) to the
beneficiary so designated.

 

ARTICLE IX

 

FUNDING

 

9.1                            Prohibition Against Funding.  Should any
investment be acquired in connection with the liabilities assumed by the Company
under this Plan, it is expressly understood and agreed that the Participants and
beneficiaries shall not have any right with respect to, or claim against, such
assets nor shall any such purchase be construed to create a trust of any kind or
a fiduciary relationship between the Company and the Participants, their
beneficiaries or any other person.  Any such assets (including any amounts
deferred by a Participant or contributed by the Company pursuant to ARTICLE IV)
shall be and remain a part of the general, unpledged, unrestricted assets of the
Company, subject to the claims of its general creditors.  Each Participant and
beneficiary shall be required to look to the provisions of this Plan and to the
Company itself for enforcement of any and all benefits due under this Plan, and
to the extent any such person acquires a right to receive payment under this
Plan, such right shall be no greater than the right of any unsecured general
creditor of the Company.  The Company (or the Trust, if any) shall be designated
owner and beneficiary of investments acquired in connection with the Company’s
obligations under this Plan.  Notwithstanding the foregoing, the Company may
establish a grantor (“rabbi”) trust, the assets of which shall be used
exclusively and irrevocably to provide benefits under the Plan (subject,
however, to the claims of the general creditors of the Company); provided,
however, that the establishment of such a trust will not render the Plan other
than “unfunded” as that term is used in Sections 201(2), 301(a)(3) and
401(a)(1) of ERISA with respect to unfunded plans maintained primarily for the
purpose of providing deferred compensation to a select group of management or
highly compensated employees.

 

9.2                            Deposits in Trust.  Subject to Section 9.1, and
notwithstanding any other provision of this Plan to the contrary, the Company
may deposit into the Trust any amounts it deems appropriate to pay the benefits
under this Plan.  The amounts so deposited may include all

 

15.

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Compensation Deferrals made pursuant to a Participation Election Form by a
Participant, any Company Contributions and any Matching Contributions. 
Notwithstanding the deposit of assets into a Trust, the Company reserves the
right at any time and from time to time to pay benefits to Plan Participants or
their beneficiaries in whole or in part from sources other than the Trust, in
which event the Company shall be entitled to receive from the Trust a
corresponding distribution equal to the amount of benefits so paid.

 

ARTICLE X

 

ADMINISTRATION

 

10.1                    Plan Administration.  The Administrator shall have
complete control and authority to determine the rights and benefits and all
claims arising under the Plan of any Participant, beneficiary, deceased
Participant, or other person claiming to have any interest under the Plan.  When
making a determination or calculation, the Administrator shall be entitled to
rely on information furnished by a Participant, a beneficiary, the Company or
the Trustee, if applicable.  The Administrator shall have the responsibility for
complying with any applicable reporting and disclosure requirements of ERISA.

 

10.2                    Administrator.

 

(a)                              The Administrator is expressly empowered and
shall be vested with sole discretionary authority to (i) limit the amount of
Compensation that may be deferred; (ii) deposit amounts into the Trust in
accordance with Section 9.2; (iii) construe and interpret the Plan and a
Participant’s Participation Election Form (collectively referred to as
“Documents”), their terms, and any rules and regulations promulgated thereunder,
including, but not limited to, resolving ambiguities, inconsistencies and
omissions; (iv) construe and interpret the Federal and state laws and
regulations that relate to the Documents; (v) decide all factual and other
questions arising in connection with the Documents, including, but not limited
to, determinations of eligibility, entitlement to benefits, and vesting;
(vi) interpret the Plan and determine all questions arising in the
administration, interpretation and application of the Plan; (vii) employ
actuaries, accountants, counsel, and other persons it deems necessary in
connection with the administration of the Plan; and (viii) take all other
necessary and proper actions to fulfill its duties as Administrator.  All
findings of the Administrator shall be final and shall be binding and conclusive
upon all persons having any interest in the Plan.

 

(b)                              The Administrator shall not be liable for any
actions by it hereunder, unless due to its own negligence, willful misconduct or
lack of good faith.

 

(c)                               The Administrator shall be indemnified and
held harmless by the Company from and against all personal liability to which it
may be subject by reason of any act done or omitted to be done in its official
capacity as Administrator in good faith in the administration of the Plan,
including all expenses reasonably incurred in its defense in the event the
Company fails to provide such defense upon the request of the Administrator. 
The Administrator is relieved of all responsibility in connection with its
duties hereunder to the fullest extent permitted by law.

 

16.

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10.3                    Claims Procedures.

 

(a)                              Applications for Benefits and Inquiries.  Any
application for benefits, inquiries about the Plan or inquiries about present or
future rights under the Plan must be submitted to the Administrator in writing
by an applicant (or his or her authorized representative) and shall be addressed
to:

 

Alexandria Real Estate Equities, Inc.

Attention:  Chief Executive Officer/Chief Financial Officer

385 E. Colorado Boulevard, Suite 299

Pasadena, CA 91101

 

(b)                              Denial of Claims.  In the event that any
application for benefits is denied in whole or in part, the Administrator must
provide the applicant with written or electronic notice of the denial of the
application, and of the applicant’s right to review the denial.  Any electronic
notice will comply with the regulations of the U.S. Department of Labor.  The
notice of denial will be set forth in a manner designed to be understood by the
applicant and will include the following:

 

(i)                                  the specific reason or reasons for the
denial;

 

(ii)                              references to the specific Plan provisions
upon which the denial is based;

 

(iii)                          a description of any additional information or
material that the Administrator needs to complete the review and an explanation
of why such information or material is necessary; and

 

(iv)                          an explanation of the Plan’s review procedures and
the time limits applicable to such procedures, including a statement of the
applicant’s right to bring a civil action under Section 502(a) of ERISA
following a denial on review of the claim, as described in
Section 10.3(d) below.

 

This notice of denial will be given to the applicant within ninety (90) days
after the Administrator receives the application, unless special circumstances
require an extension of time, in which case, the Administrator has up to an
additional ninety (90) days for processing the application.  If an extension of
time for processing is required, written notice of the extension will be
furnished to the applicant before the end of the initial ninety (90) day period.

 

This notice of extension will describe the special circumstances necessitating
the additional time and the date by which the Administrator is to render its
decision on the application.

 

(c)                               Request for a Review.  Any person (or that
person’s authorized representative) for whom an application for benefits is
denied, in whole or in part, may appeal the denial by submitting a request for a
review to the Administrator within sixty (60) days after the application is
denied.  A request for a review shall be in writing and shall be addressed to:

 

17.

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Alexandria Real Estate Equities, Inc.

Attention:  Chief Executive Officer/Chief Financial Officer

385 E. Colorado Boulevard, Suite 299

Pasadena, CA 91101

 

A request for review must set forth all of the grounds on which it is based, all
facts in support of the request and any other matters that the applicant feels
are pertinent.  The applicant (or his or her representative) shall have the
opportunity to submit (or the Administrator may require the applicant to submit)
written comments, documents, records, and other information relating to his or
her claim.  The applicant (or his or her representative) shall be provided, upon
request and free of charge, reasonable access to, and copies of, all documents,
records and other information relevant to his or her claim.  The review shall
take into account all comments, documents, records and other information
submitted by the applicant (or his or her representative) relating to the claim,
without regard to whether such information was submitted or considered in the
initial benefit determination.

 

(d)                              Decision on Review.  The Administrator will act
on each request for review within sixty (60) days after receipt of the request,
unless special circumstances require an extension of time (not to exceed an
additional sixty (60) days), for processing the request for a review.  If an
extension for review is required, written notice of the extension will be
furnished to the applicant within the initial sixty (60) day period.  This
notice of extension will describe the special circumstances necessitating the
additional time and the date by which the Administrator is to render its
decision on the review.  The Administrator will give prompt, written or
electronic notice of its decision to the applicant.  Any electronic notice will
comply with the regulations of the U.S. Department of Labor.  In the event that
the Administrator confirms the denial of the application for benefits in whole
or in part, the notice will set forth, in a manner calculated to be understood
by the applicant, the following:

 

(i)                                  the specific reason or reasons for the
denial;

 

(ii)                              references to the specific Plan provisions
upon which the denial is based;

 

(iii)                          a statement that the applicant is entitled to
receive, upon request and free of charge, reasonable access to, and copies of,
all documents, records and other information relevant to his or her claim; and

 

(iv)                          a statement of the applicant’s right to bring a
civil action under Section 502(a) of ERISA.

 

(e)                              Rules and Procedures.  The Administrator will
establish rules and procedures, consistent with the Plan and with ERISA, as
necessary and appropriate in carrying out its responsibilities in reviewing
benefit claims.  The Administrator may require an applicant who wishes to submit
additional information in connection with an appeal from the denial of benefits
to do so at the applicant’s own expense.

 

(f)                                 Exhaustion of Remedies.  No legal action for
benefits under the Plan may be brought until the claimant (i) has submitted a
written application for benefits in accordance

 

18.

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with the procedures described by Section 10.3(a) above, (ii) has been notified
by the Administrator that the application is denied, (iii) has filed a written
request for a review of the application in accordance with the appeal procedure
described in Section 10.3(c) above, and (iv) has been notified that the
Administrator has denied the appeal.  Notwithstanding the foregoing, if the
Administrator does not respond to a Participant’s claim or appeal within the
relevant time limits specified in this Section 10.3, the Participant may bring
legal action for benefits under the Plan pursuant to Section 502(a) of ERISA.

 

ARTICLE XI

 

GENERAL PROVISIONS

 

11.1                    No Assignment.  Benefits or payments under this Plan
shall not be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment, garnishment or charge, whether
voluntary or involuntary, and any attempt to so anticipate, alienate, sell,
transfer, assign, pledge, encumber or charge the same shall not be valid, nor
shall any such benefit or payment be in any way liable for or subject to the
debts, contracts, liabilities, engagement or torts of any Participant or
beneficiary, or any other person entitled to such benefit or payment pursuant to
the terms of this Plan, except to such extent as may be required by law.  If any
Participant or beneficiary or any other person entitled to a benefit or payment
pursuant to the terms of this Plan becomes bankrupt or attempts to anticipate,
alienate, sell, transfer, assign, pledge, encumber or charge any benefit or
payment under this Plan, in whole or in part, or if any attempt is made to
subject any such benefit or payment, in whole or in part, to the debts,
contracts, liabilities, engagements or torts of the Participant or beneficiary
or any other person entitled to any such benefit or payment pursuant to the
terms of this Plan, then such benefit or payment, in the discretion of the
Administrator, shall cease and terminate with respect to such Participant or
beneficiary, or any other such person.

 

11.2                    No Employment Rights.  Participation in this Plan shall
not be construed to confer upon any Participant the legal right to be retained
in the employ of the Company, or give a Participant or beneficiary, or any other
person, any right to any payment whatsoever, except to the extent of the
benefits provided for hereunder.  Each Participant shall remain subject to
discharge to the same extent as if this Plan had never been adopted.

 

11.3                    Incompetence.  If the Administrator determines that any
person to whom a benefit is payable under this Plan is incompetent by reason of
physical or mental disability, the Administrator shall have the power to cause
the payments becoming due to such person to be made to another for his or her
benefit without responsibility of the Administrator or the Company to see to the
application of such payments.  Any payment made pursuant to such power shall, as
to such payment, operate as a complete discharge of the liabilities of the
Company, the Administrator and the Trustee.

 

11.4                    Identity.  If, at any time, any doubt exists as to the
identity of any person entitled to any payment hereunder or the amount or time
of such payment, the Administrator shall be entitled to hold such sum until such
identity or amount or time is determined or until an order of a court of
competent jurisdiction is obtained.  The Administrator shall also be entitled to
pay such sum into the court in accordance with the appropriate rules of law. Any
expenses incurred

 

19.

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by the Company, the Administrator, and the Trust incident to such proceeding or
litigation will be deemed a distribution from the Account pursuant to ARTICLE
VII and will be deducted from the balance in the Account of the affected
Participant.

 

11.5                    Other Benefits.  The benefits of each Participant or
beneficiary hereunder shall be in addition to any benefits paid or payable to or
on account of the Participant or beneficiary under any other pension,
disability, annuity or retirement plan or policy whatsoever.

 

11.6                    No Liability.  No liability shall attach to or be
incurred by the Company, the Trustee or any Administrator under or by reason of
the terms, conditions and provisions contained in this Plan, or for the acts or
decisions taken or made thereunder or in connection therewith; and as a
condition precedent to the establishment of this Plan or the receipt of benefits
thereunder, or both, such liability, if any, is expressly waived and released by
each Participant and by any and all persons claiming under or through any
Participant or any other person.  Such waiver and release shall be conclusively
evidenced by any act or participation in or the acceptance of benefits or the
making of any election under this Plan.

 

11.7                    Expenses.  Except as otherwise provided herein, all
expenses incurred in the administration of the Plan, whether incurred by the
Company or the Plan, shall be paid by the Company from the Trust. 
Notwithstanding the foregoing, (i) any investment-related expenses for DCP
Amounts shall be charged directly to the Account for which such investments were
made, and (ii) any commissions on the sales of securities in respect of VIP
Events shall be charged directly on pro rata basis to the Account of each
affected Participant at the time of such VIP Event, based on the Participant’s
Account balance in respect of the relevant Venture Investment at the time of
such VIP Event.  The Trustee’s fees and expenses shall be paid by the Company.

 

11.8                    Amendment and Termination.

 

(a)                              The Administrator shall have the sole authority
to modify, amend or terminate this Plan; provided, however, that any
modification, amendment or termination of this Plan shall not reduce, alter or
impair, without the consent of a Participant, a Participant’s right to any
amounts already credited to his or her Account on the day before the effective
date of such modification, amendment or termination.  In the event the Plan is
terminated, any vested amounts credited to a Participant’s Account shall be
distributed to the Participant in accordance with Section 7.3, and any unvested
amounts credited to the Participant’s Account shall continue to vest in
accordance with the terms of Section 5.1 and, upon becoming vested, shall be
distributed to the Participant in accordance with Section 7.3.

 

(b)                              The Administrator reserves the right to make
any modification or amendment to the Plan that it deems necessary to comply with
any requirements of law or to insure favorable tax treatment under the Plan.

 

11.9                    Company Determinations.  Any determinations, actions or
decisions of the Company (including, but not limited to, Plan amendments and
Plan termination) shall be made by the Administrator in accordance with its
established procedures or by such other individuals,

 

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groups or organizations that have been properly appointed by the board of
directors to make such determination or decision.

 

11.10            Arbitration.  All disputes, claims, or causes of action arising
from or relating to this Plan shall be resolved to the fullest extent permitted
by law by final, binding and confidential arbitration, by a single arbitrator,
in Los Angeles, California, conducted by JAMS under the then applicable JAMS
rules.  All Participants and the Company shall be deemed to have waived the
right to resolve any such dispute through a trial by jury or judge or
administrative proceeding.  The arbitrator shall: (a) have the authority to
compel adequate discovery for the resolution of the dispute and to award such
relief as would otherwise be permitted by law; and (b) issue a written
arbitration decision, to include the arbitrator’s essential findings and
conclusions and a statement of the award.  The arbitrator shall be authorized to
award any or all remedies that the parties would be entitled to seek in a court
of law.  The Company shall pay all JAMS’ arbitration fees in excess of the
amount of court fees that would be required if the dispute were decided in a
court of law.  Nothing in this Plan is intended to prevent either the Company or
a Participant from obtaining injunctive relief in court to prevent irreparable
harm pending the conclusion of any such arbitration.

 

11.11            Debt Offsets.  If a Participant becomes entitled to a
distribution of benefits under the Plan, and if at such time the Participant has
outstanding any debt, obligation, or other liability representing an amount
owing to the Company, then the Company may offset such amount owed to it against
the amount of benefits otherwise distributable.  Such determination shall be
made by the Administrator.

 

11.12            Construction.  All questions of interpretation, construction or
application arising under or concerning the terms of this Plan shall be decided
by the Administrator, in its sole and final discretion, whose decision shall be
final, binding and conclusive upon all persons.

 

11.13            Governing Law.  This Plan shall be governed by, construed and
administered in accordance with the applicable provisions of ERISA, and any
other applicable federal law; provided, however, that to the extent not
preempted by federal law, this Plan shall be governed by construed and
administered under the laws of the state of California, other than its laws
respecting choice of law.

 

11.14            Severability.  If any provision of this Plan is held invalid or
unenforceable, its invalidity or unenforceability shall not affect any other
provision of this Plan and this Plan shall be construed and enforced as if such
provision had not been included therein.  If the inclusion of any Employee (or
Employees) as a Participant under this Plan would cause the Plan to fail to
comply with the requirements of Sections 201(2), 301(a)(3) and 401(a)(1) of
ERISA, then the Plan shall be severed with respect to such Employee or
Employees, who shall be considered to be participating in a separate
arrangement.

 

11.15            Headings.  The ARTICLE and Section headings contained herein
are inserted only as a matter of convenience and for reference and in no way
define, limit, enlarge or describe the scope or intent of this Plan nor in any
way shall they affect this Plan or the construction of any provision thereof.

 

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