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EXHIBIT 10.48
 
THE SECOND AMENDED AND RESTATED
1996 STOCK OPTION AND INCENTIVE PLAN
OF ARDEN REALTY, INC.
AND ARDEN REALTY LIMITED PARTNERSHIP
 
          Arden Realty, Inc., a Maryland corporation, and Arden Realty Limited
Partnership, a Maryland limited partnership, adopted The 1996 Stock Option and
Incentive Plan of Arden Realty, Inc. and Arden Realty Limited Partnership (the
“Plan”), effective September 27, 1996, for the benefit of their eligible
employees, consultants and directors which was amended and restated effective as
of May 23, 2000 and again as of September 20, 2001. The Plan consists of two
plans, one for the benefit of the employees, consultants and directors of Arden
Realty, Inc. and one for the benefit of the employees and consultants of Arden
Realty Limited Partnership.
 
          The purposes of this Plan are as follows:
 
          (1)  To provide an additional incentive for directors, key Employees
and consultants to further the growth, development and financial success of the
Company by personally benefiting through the ownership of Company stock and/or
rights which recognize such growth, development and financial success.
 
          (2)  To enable the Company and the Partnership to obtain and retain
the services of directors, key Employees and consultants considered essential to
the long range success of the Company by offering them an opportunity to own
stock in the Company and/or rights which will reflect the growth, development
and financial success of the Company.
 
ARTICLE I.
 
DEFINITIONS
 
          1.1    General.    Wherever the following terms are used in this Plan
they shall have the meaning specified below, unless the context clearly
indicates otherwise.
 
          1.2    Award Limit.    “Award Limit” shall mean 425,000 shares of
Common Stock.
 
          1.3    Beneficiary.    “Beneficiary” shall mean the person or persons
properly designated by the Optionee, including his spouse or heirs at law, to
exercise such Optionee’s rights under this Plan in the event of the Optionee’s
death, or if the Optionee has not designated such person or persons, or such
person or persons shall all have pre-deceased the Optionee, the executor or
administrator of the Optionee’s estate. Designation, revocation and
redesignation of Beneficiaries must be made in writing in accordance with rules
established by the Committee and shall be effective upon delivery to the
Committee.
 
          1.4    Board.    “Board” shall mean the Board of Directors of the
Company.
 
          1.5    Capital Stock.    “Capital Stock” shall mean all classes or
series of stock of the Company.
 
          1.6    Change in Control.    “Change in Control” shall mean the
occurrence of any of the following events:
 

 
          (a)  the individuals constituting the Board as of the Effective Date
(the “Incumbent Board”) cease for any reason to constitute at least two-thirds
( 2/3rds) of the Board; provided, however, that if the election, or nomination
for election by the Company’s stockholders, of any new director was approved by
a vote of at least two-thirds ( 2/3rds) of the Incumbent Board, such new
director shall be considered a member of the Incumbent Board;

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          (b)  an acquisition of any voting securities of the Company (the
“Voting Securities”) by any “person” (as the term “person” is used for purposes
of Section 13(d) or Section 14(d) of the Securities Exchange Act of 1934, as
amended (the “1934 Act”)) immediately after which such person has “beneficial
ownership” (within the meaning of Rule 13d–3 promulgated under the 1934 Act)
(“Beneficial Ownership”) of 20% or more of the combined voting power of the
Company’s then outstanding Voting Securities;

 

 
          (c)  approval by the stockholders of the Company of:

 

 
          (i)  a merger, consolidation, share exchange or reorganization
involving the Company, unless

 

 
          (A)  the stockholders of the Company, immediately before such merger,
consolidation, share exchange or reorganization, own, directly or indirectly
immediately following such merger, consolidation, share exchange or
reorganization, at least 80% of the combined voting power of the outstanding
voting securities of the corporation that is the successor in such merger,
consolidation, share exchange or reorganization (the “Surviving Company”) in
substantially the same proportion as their ownership of the Voting Securities
immediately before such merger, consolidation, share exchange or reorganization;
and

 

 
          (B)  the individuals who were members of the Incumbent Board
immediately prior to the execution of the agreement providing for such merger,
consolidation, share exchange or reorganization constitute at least two-thirds
( 2/3rds) of the members of the board of directors of the Surviving Company;

 

 
          (ii)  a complete liquidation or dissolution of the Company; or

 

 
          (iii)  an agreement for the sale or other disposition of all or
substantially all of the assets of the Company; or

 

 
          (d)  any person is or becomes the Beneficial Owner of securities of
the Company representing ten percent (10%) or more of the combined voting power
of the Company’s then outstanding securities and (A) the identity of the Chief
Executive Officer of the Company is changed during the period beginning sixty
(60) days before the attainment of the ten percent (10%) beneficial ownership
and ending two (2) years thereafter, or (B) individuals constituting at least
one-third (1/3) of the members of the Board at the beginning of such period
shall leave the Board during the period beginning sixty (60) days before the
attainment of the ten percent (10%) beneficial ownership and ending two (2)
years thereafter.

 
          1.8    Code.    “Code” shall mean the Internal Revenue Code of 1986,
as amended.
 
          1.9    Committee.    “Committee” shall mean the Compensation Committee
of the Board, or another committee, or a subcommittee of the Board, appointed as
provided in Section 9.1.
 
          1.10    Common Stock.    “Common Stock” shall mean the common stock of
the Company, par value $.01 per share, and any equity security of the Company
issued or authorized to be issued in the future, but excluding any preferred
stock and any warrants, options or other rights to purchase Common Stock. Debt
securities of the Company convertible into Common Stock shall be deemed equity
securities of the Company.
 
          1.11    Company.    “Company” shall mean Arden Realty, Inc., a
Maryland corporation.
 
          1.12    Company Employee.    “Company Employee” shall mean any officer
or other employee (as defined in accordance with Section 3401(c) of the Code) of
the Company, or of any corporation which is then a Company Subsidiary.
 
          1.13    Company Subsidiary.    “Company Subsidiary” shall mean any
corporation in an unbroken chain of corporations beginning with the Company if
each of the corporations other than the last corporation in the unbroken chain
then owns stock possessing 50 percent or more of the total combined voting power
of all classes

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of stock in one of the other corporations in such chain. Except with respect to
Incentive Stock Options, “Company Subsidiary” shall also mean any partnership in
which the Company and/or any Company Subsidiary owns more than 50 percent of the
capital or profits interests; provided, however, that “Company Subsidiary” shall
not include the Partnership nor any Partnership Subsidiary.
 
          1.14    Deferred Stock.    “Deferred Stock” shall mean Common Stock
awarded under Article VII of this Plan.
 
          1.15    Director.    “Director” shall mean a member of the Board.
 
          1.16    Dividend Equivalent.    “Dividend Equivalent” shall mean a
right to receive the equivalent value (in cash or Common Stock) of dividends
paid on Common Stock, awarded under Article VII of this Plan.
 
          1.17    Employee.    “Employee” shall mean any Company Employee or
Partnership Employee.
 
          1.18    Exchange Act.    “Exchange Act” shall mean the Securities
Exchange Act of 1934, as amended.
 
          1.19    Fair Market Value.    “Fair Market Value” of a share of Common
Stock as of a given date shall be (i) the closing price of a share of Common
Stock on the principal exchange on which shares of Common Stock are then
trading, if any (or as reported on any composite index which includes such
principal exchange), on the trading day previous to such date, or if shares were
not traded on the trading day previous to such date, then on the next preceding
date on which a trade occurred, or (ii) if Common Stock is not traded on an
exchange but is quoted on NASDAQ or a successor quotation system, the mean
between the closing representative bid and asked prices for the Common Stock on
the trading day previous to such date as reported by NASDAQ or such successor
quotation system; or (iii) if Common Stock is not publicly traded on an exchange
and not quoted on NASDAQ or a successor quotation system, the Fair Market Value
of a share of Common Stock as established by the Committee (or the Board, in the
case of Options granted to Independent Directors) acting in good faith.
 
          1.20    General Partner Interest.    “General Partner Interest” shall
mean an ownership interest in the Partnership that is a general partner interest
and includes any and all benefits to which the holder of such an interest may be
entitled as provided in the Agreement of Limited Partnership of Arden Realty
Limited Partnership, as amended, together with all obligations of such holder to
comply with the terms and provisions of such agreement.
 
          1.21    Grantee.    “Grantee” shall mean an Employee or consultant
granted a Performance Award, Dividend Equivalent, Stock Payment or Stock
Appreciation Right, or an award of Deferred Stock, under this Plan.
 
          1.22    Incentive Stock Option.    “Incentive Stock Option” shall mean
an option which conforms to the applicable provisions of Section 422 of the Code
and which is designated as an Incentive Stock Option by the Committee.
 
          1.23    Independent Director.    “Independent Director” shall mean a
member of the Board who is not a Company Employee or a Partnership Employee.
 
          1.24    Non-Qualified Stock Option.    “Non-Qualified Stock Option”
shall mean an Option which is not designated as an Incentive Stock Option by the
Committee.
 
          1.25    Option.    “Option” shall mean a stock option granted under
Article III of this Plan. An Option granted under this Plan shall, as determined
by the Committee, be either a Non-Qualified Stock Option or an Incentive Stock
Option; PROVIDED, HOWEVER, that Options granted to Partnership Employees,
Independent Directors and consultants shall be Non-Qualified Stock Options.

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          1.26    Optionee.    “Optionee” shall mean an Employee, consultant or
Independent Director granted an Option under this Plan.
 
          1.27    Partnership.    “Partnership” shall mean Arden Realty Limited
Partnership, a Maryland limited partnership.
 
          1.28    Partnership Agreement.    “Partnership Agreement” shall mean
the amended and restated agreement of limited partnership of the Partnership
dated as of October 9, 1996, as the same may be amended, modified or restated
from time to time.
 
          1.29    Partnership Employee.    “Partnership Employee” shall mean any
officer, other employee (as defined in accordance with Section 3401(c) of the
Code) or any self-employed partner of the Partnership, or any entity which is
then a Partnership Subsidiary.
 
          1.30    Partnership Optionee Purchased Shares.    “Partnership
Optionee Purchased Shares” shall have the meaning set forth in Section 5.4.
 
          1.31    Partnership Purchase Price.    “Partnership Purchase Price”
shall have the meaning set forth in Section 5.4.
 
          1.32    Partnership Purchased Shares.    “Partnership Purchased
Shares” shall have the meaning set forth in Section 5.4.
 
          1.33    Partnership Subsidiary.    “Partnership Subsidiary” shall mean
any partnership in an unbroken chain of partnerships beginning with the
Partnership if each of the partnerships other than the last partnership in the
unbroken chain then owns more than 50 percent of the capital or profits
interests in one of the other partnerships. “Partnership Subsidiary” shall also
mean any corporation in which the Partnership and/or any Partnership Subsidiary
owns stock possessing 50 percent or more of the total combined voting power of
all classes of stock.
 
          1.34    Performance Award.    “Performance Award” shall mean a cash
bonus, stock bonus or other performance or incentive award that is paid in cash,
Common Stock or a combination of both, awarded under Article VII of this Plan.
 
          1.35    Plan.    “Plan” shall mean The Second Amended and Restated
1996 Stock Option and Incentive Plan of Arden Realty, Inc. and Arden Realty
Limited Partnership.
 
          1.36    QDRO.    “QDRO” shall mean a qualified domestic relations
order as defined by the Code or Title I of the Employee Retirement Income
Security Act of 1974, as amended, or the rules thereunder.
 
          1.37    Restricted Stock.    “Restricted Stock” shall mean Common
Stock awarded under Article VI of this Plan.
 
          1.38    Restricted Stockholder.    “Restricted Stockholder” shall mean
an Employee, consultant or Independent Director granted an award of Restricted
Stock under Article VI of this Plan.
 
          1.39    Rule 16b-3.    “Rule 16b-3” shall mean that certain Rule 16b-3
under the Exchange Act, as such Rule may be amended from time to time.
 
          1.40    Stock Appreciation Right.    “Stock Appreciation Right” shall
mean a stock appreciation right granted under Article VIII of this Plan.

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          1.41    Stock Ownership Limit.    “Stock Ownership Limit” shall mean
(i) the restrictions on ownership and transfer of Common Stock provided in
Article VII of the Company’s Articles of Amendment and Restatement (the
“Restated Articles”); and (ii) any other restrictions on ownership or transfer
set forth in the Restated Articles.
 
          1.42    Stock Payment.    “Stock Payment” shall mean (i) a payment in
the form of shares of Common Stock, or (ii) an option or other right to purchase
shares of Common Stock, as part of a deferred compensation arrangement, made in
lieu of all or any portion of the compensation, including without limitation,
salary, bonuses and commissions, that would otherwise become payable to a key
Employee or consultant in cash, awarded under Article VII of this Plan.
 
          1.43    Subsidiary.    “Subsidiary” shall mean any Company Subsidiary
or Partnership Subsidiary.
 
          1.44    Termination of Consultancy.    “Termination of Consultancy”
shall mean the time when the engagement of an Optionee, Grantee or Restricted
Stockholder as a consultant to the Company, a Company Subsidiary, the
Partnership or a Partnership Subsidiary is terminated for any reason, with or
without cause, including, but not by way of limitation, by resignation,
discharge, death or retirement; but excluding terminations where there is a
simultaneous commencement of employment with the Company, any Company
Subsidiary, the Partnership or any Partnership Subsidiary. The Committee, in its
absolute discretion, shall determine the effect of all matters and questions
relating to Termination of Consultancy, including, but not by way of limitation,
the question of whether a Termination of Consultancy resulted from a discharge
for good cause, and all questions of whether particular leaves of absence
constitute Terminations of Consultancy. Notwithstanding any other provision of
this Plan, the Company, any Company Subsidiary, the Partnership or any
Partnership Subsidiary has an absolute and unrestricted right to terminate a
consultant’s service at any time for any reason whatsoever, with or without
cause, except to the extent expressly provided otherwise in writing.
 
          1.45    Termination of Directorship.    “Termination of Directorship”
shall mean the time when an Optionee or Restricted Stockholder who is an
Independent Director ceases to be a Director for any reason, including, but not
by way of limitation, a termination by resignation, failure to be elected, death
or retirement. The Board, in its sole and absolute discretion, shall determine
the effect of all matters and questions relating to Termination of Directorship
with respect to Independent Directors.
 
          1.46    Termination of Employment.    “Termination of Employment”
shall mean the time when the employee-employer relationship between an Optionee,
Grantee or Restricted Stockholder and the Company, a Company Subsidiary, the
Partnership or a Partnership Subsidiary is terminated for any reason, with or
without cause, including, but not by way of limitation, a termination by
resignation, discharge, death, disability or retirement; but excluding (i)
terminations where there is a simultaneous reemployment or continuing employment
of an Optionee, Grantee or Restricted Stockholder by the Company, any Company
Subsidiary, the Partnership or any Partnership Subsidiary, (ii) at the
discretion of the Committee, terminations which result in a temporary severance
of the employee-employer relationship, and (iii) at the discretion of the
Committee, terminations which are followed by the simultaneous establishment of
a consulting relationship by the Company, a Company Subsidiary the Partnership
or a Partnership Subsidiary with the former employee. The Committee, in its
absolute discretion, shall determine the effect of all matters and questions
relating to Termination of Employment, including, but not by way of limitation,
the question of whether a Termination of Employment resulted from a discharge
for good cause, and all questions of whether particular leaves of absence
constitute Terminations of Employment; PROVIDED, HOWEVER, that, with respect to
Incentive Stock Options, a leave of absence, change in status from an employee
to an independent contractor or other change in the employee-employer
relationship shall constitute a Termination of Employment if, and to the extent
that, such leave of absence, change in status or other change interrupts
employment for the purposes of Section 422(a)(2) of the Code and the then
applicable regulations and revenue rulings under said Section. Notwithstanding
any other provision of this Plan, the Company, any Company Subsidiary, the
Partnership or any Partnership Subsidiary has an absolute and unrestricted right
to terminate an Employee’s employment at any time for any reason whatsoever,
with or without cause, except to the extent expressly provided otherwise in
writing.

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ARTICLE II.
 
SHARES SUBJECT TO PLAN
 
          2.1    Shares Subject to Plan.
 

 
          (a)  The shares of stock subject to Options, awards of Restricted
Stock, Performance Awards, Dividend Equivalents, awards of Deferred Stock, Stock
Payments or Stock Appreciation Rights shall be Common Stock, initially shares of
the Company’s Common Stock, par value $.01 per share. The aggregate number of
such shares which may be issued upon exercise of such options or rights or upon
any such awards under the Plan shall not exceed six million five hundred
thousand (6,500,000). The shares of Common Stock issuable upon exercise of such
options or rights or upon any such awards may be either previously authorized
but unissued shares or treasury shares.

 

 
          (b)  The maximum number of shares which may be subject to options or
Stock Appreciation Rights granted under the Plan to any individual in any fiscal
year shall not exceed the Award Limit. To the extent required by Section 162(m)
of the Code, shares subject to Options which are canceled continue to be counted
against the Award Limit.

 
          2.2    Add-back of Options and Other Rights.    If any Option, or
other right to acquire shares of Common Stock under any other award under this
Plan, expires or is canceled without having been fully exercised, or is
exercised in whole or in part for cash as permitted by this Plan, the number of
shares subject to such Option or other right but as to which such Option or
other right was not exercised prior to its expiration, cancellation or exercise
may again be optioned, granted or awarded hereunder, subject to the limitations
of Section 2.1. Shares of Common Stock which are delivered by the Optionee or
Grantee or withheld by the Company upon the exercise of any Option or other
award under this Plan, in payment of the exercise price thereof, may again be
optioned, granted or awarded hereunder, subject to the limitations of Section
2.1; PROVIDED, HOWEVER, that, no shares of Common Stock delivered or withheld
upon the exercise of an Incentive Stock Option, in payment of the exercise
thereof, may again be optioned, granted or awarded if such action would cause
the Option to fail to qualify as an Incentive Stock Option under Section 422 of
the Code. If any share of Restricted Stock is forfeited by the Grantee or
repurchased by the Company pursuant to Section 6.6 hereof, such share may again
be optioned, granted or awarded hereunder, subject to the limitations of Section
2.1.
 
ARTICLE III.
 
GRANTING OF OPTIONS
 
          3.1    Eligibility.    Any Employee or consultant selected by the
Committee pursuant to Section 3.4(a)(i) shall be eligible to be granted an
Option. Each Independent Director of the Company shall be eligible to be granted
Options at the times and in the manner set forth in Sections 3.4(d) and (e).
 
          3.2    Disqualification For Stock Ownership.    No person may be
granted an Incentive Stock Option under this Plan if such person, at the time
the Incentive Stock Option is granted, owns stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or any then existing Company Subsidiary unless such Incentive Stock
Option conforms to the applicable provisions of Section 422 of the Code.
 
          3.3    Qualification of Incentive Stock Options.    No Incentive Stock
Option shall be granted unless such Option, when granted, qualifies as an
“incentive stock option” under Section 422 of the Code. No Incentive Stock
Option shall be granted to any person who is not an employee as defined in
Section 3401(c) of the Code.

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          3.4    Granting of Options.
 

 
          (a)  The Committee shall from time to time, in its absolute
discretion, and subject to applicable limitations of this Plan:

 

 
          (i)  Determine which Employees are key Employees and select from among
the key Employees or consultants (including Employees or consultants who have
previously received Options or other awards under this Plan) such of them as in
its opinion should be granted Options;

 

 
          (ii)  Subject to the Award Limit and the Stock Ownership Limit,
determine the number of shares to be subject to such Options granted to the
selected key Employees or consultants;

 

 
          (iii)  Determine whether such Options are to be Incentive Stock
Options or Non-Qualified Stock Options and whether such Options are to qualify
as performance-based compensation as described in Section 162(m)(4)(C) of the
Code; and

 

 
          (iv)  Determine the terms and conditions of such Options, consistent
with this Plan; PROVIDED, HOWEVER, that the terms and conditions of Options
intended to qualify as performance-based compensation as described in Section
162(m)(4)(C) of the Code shall include, but not be limited to, such terms and
conditions as may be necessary to meet the applicable provisions of Section
162(m) of the Code.

 

 
          (b)  Upon the selection of a key Employee or consultant to be granted
an Option, the Committee shall instruct the Secretary of the Company to issue
the Option and may impose such conditions on the grant of the Option as it deems
appropriate. Without limiting the generality of the preceding sentence, the
Committee may, in its discretion and on such terms as it deems appropriate,
require as a condition on the grant of an Option to an Employee or consultant
that the Employee or consultant surrender for cancellation some or all of the
unexercised Options, awards of Restricted Stock or Deferred Stock, Performance
Awards, Stock Appreciation Rights, Dividend Equivalents or Stock Payments or
other rights which have been previously granted to him under this Plan or
otherwise. An Option, the grant of which is conditioned upon such surrender, may
have an option price that is higher (but not lower) than the exercise price of
such surrendered Option or other award, may cover the same (or a lesser or
greater) number of shares as such surrendered Option or other award, may contain
such other terms as the Committee deems appropriate, subject to the Plan, and
shall be exercisable in accordance with its terms, without regard to the number
of shares, price, exercise period or any other term or condition of such
surrendered Option or other award.

 

 
          (c)  Any Incentive Stock Option granted under this Plan may be
modified by the Committee to disqualify such option from treatment as an
“incentive stock option” under Section 422 of the Code.

 

 
          (d)  The Board shall from time to time, in its absolute discretion,
and subject to applicable limitations of the Plan:

 

 
          (i)  Select from among the Independent Directors (including
Independent Directors who have previously received Options under the Plan) such
of them as in its opinion should be granted Options;

 

 
          (ii)  subject to the Award Limit, determine the number of shares to be
subject to such Options granted to the selected Independent Directors;

 

 
          (iii)  Subject to the provisions of Article 4 determine the terms and
conditions of such Options, consistent with the Plan.

 

 
          (e)  Notwithstanding subsection (d), during the term of the Plan and
subject to the Stock Ownership Limit, each person who is an Independent Director
as of the date of the consummation of the initial public offering of Common
Stock automatically shall be granted (i) an Option to purchase ten thousand
(10,000) shares of Common Stock (subject to adjustment as provided in Section
10.3) on the date of such initial public offering. During the term of the Plan,
a person who is initially elected to the Board after the consummation of the
initial public offering of Common Stock and who is an Independent Director at
the time of such initial election automatically shall be granted (i) an Option
to purchase ten thousand

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(10,000) shares of Common Stock (subject to adjustment as provided in Section
10.3) on the date of such initial election. Members of the Board who are
employees of the Company who subsequently retire from the Company and remain on
the Board will not receive an initial Option grant pursuant to clause (i) of the
preceding sentence, but to the extent that they are otherwise eligible, will
receive, after retirement from employment with the Company, Options as described
in clause (ii) of the preceding sentence. All the foregoing Option grants
authorized by this Section 3.4(e) are subject to stockholder approval of the
Plan.

 
ARTICLE IV.
 
TERMS OF OPTIONS
 
          4.1    Option Agreement.    Each Option shall be evidenced by a
written Stock Option Agreement, which shall be executed by the Optionee and an
authorized officer of the Company and which shall contain such terms and
conditions as the Committee (or the Board, in the case of Options granted to
Independent Directors) shall determine, consistent with this Plan. Stock Option
Agreements evidencing Options intended to qualify as performance-based
compensation as described in Section 162(m)(4)(C) of the Code shall contain such
terms and conditions as may be necessary to meet the applicable provisions of
Section 162(m) of the Code. Stock Option Agreements evidencing Incentive Stock
Options shall contain such terms and conditions as may be necessary to meet the
applicable provisions of Section 422 of the Code.
 
          4.2    Option Price.    The price per share of the shares subject to
each Option shall be set by the Committee; PROVIDED, HOWEVER, that such price
shall be no less than the par value of a share of Common Stock unless otherwise
permitted by applicable state law, and (i) in the case of Incentive Stock
Options and Options intended to qualify as performance-based compensation as
described in Section 162(m)(4)(C) of the Code, such price shall not be less than
100% of the Fair Market Value of a share of Common Stock on the date the Option
is granted; (ii) in the case of Incentive Stock Options granted to an individual
then owning (within the meaning of Section 424(d) of the Code) more than 10% of
the total combined voting power of all classes of stock of the Company or any
Company Subsidiary such price shall not be less than 110% of the Fair Market
Value of a share of Common Stock on the date the Option is granted; and (iii) in
the case of Options granted to Independent Directors, such price shall equal
100% of the Fair Market Value of a share of Common Stock on the date the Option
is granted; PROVIDED, HOWEVER, that the price of each share subject to each
Option granted to Independent Directors on the date of the initial public
offering of Common Stock shall equal the initial public offering price (net of
underwriting discounts and commissions) per share of Common Stock.
 
          4.3    Option Term.    The term of an Option shall be set by the
Committee in its discretion; PROVIDED, HOWEVER, that, (i) in the case of Options
granted to Independent Directors, the term shall be ten (10) years from the date
the Option is granted, without variation or acceleration hereunder, and (ii) in
the case of Incentive Stock Options, the term shall not be more than ten (10)
years from the date the Incentive Stock Option is granted, or five (5) years
from such date if the Incentive Stock Option is granted to an individual then
owning (within the meaning of Section 424(d) of the Code) more than 10% of the
total combined voting power of all classes of stock of the Company or any
Company Subsidiary. Except as limited by requirements of Section 422 of the Code
and regulations and rulings thereunder applicable to Incentive Stock Options,
the Committee may extend the term of any outstanding Option in connection with
any Termination of Employment or Termination of Consultancy of the Optionee, or
amend any other term or condition of such Option relating to such a termination.
 
          4.4    Option Vesting.
 

 
          (a)  The period during which the right to exercise an Option in whole
or in part vests in the Optionee shall be set by the Committee (or the Board, in
the case of options granted to Independent Directors) and the Committee (or the
Board, in the case of options granted to Independent Directors) may determine
that an Option may not be exercised in whole or in part for a specified period
after it is granted; PROVIDED, HOWEVER, that, unless the Committee (or the
Board, in the case of options granted to Independent

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Directors) otherwise provides in the terms of the Option or otherwise, no Option
shall be exercisable by any Optionee who is then subject to Section 16 of the
Exchange Act within the period ending six months and one day after the date the
Option is granted. At any time after grant of an Option, the Committee (or the
Board, in the case of options granted to Independent Directors) may, in its sole
and absolute discretion and subject to whatever terms and conditions it selects,
accelerate the period during which an Option vests.

 

 
          (b)  No portion of an Option which is unexercisable at Termination of
Employment, Termination of Directorship or Termination of Consultancy, as
applicable, shall thereafter become exercisable, except as may be otherwise
provided by the Committee in the case of Options granted to Employees or
consultants (or the Board, in the case of options granted to Independent
Directors) either in the Stock Option Agreement or by action of the Committee
(or the Board, in the case of options granted to Independent Directors)
following the grant of the Option.

 

 
          (c)  To the extent that the aggregate Fair Market Value of stock with
respect to which “incentive stock options” (within the meaning of Section 422 of
the Code, but without regard to Section 422(d) of the Code) are exercisable for
the first time by an Optionee during any calendar year (under the Plan and all
other incentive stock option plans of the Company and any Company Subsidiary)
exceeds $100,000, such Options shall be treated as Non-Qualified Options to the
extent required by Section 422 of the Code. The rule set forth in the preceding
sentence shall be applied by taking Options into account in the order in which
they were granted. For purposes of this Section 4.4(c), the Fair Market Value of
stock shall be determined as of the time the Option with respect to such stock
is granted.

 
          4.5    No Right to Continue as Employee, Director or
Consultant.    Nothing in this Plan or in any Stock Option Agreement hereunder
shall confer upon any Optionee any right to continue in the employ of, or as a
consultant for, the Company, any Company Subsidiary, the Partnership or any
Partnership Subsidiary, or as a director of the Company, or shall interfere with
or restrict in any way the rights of the Company, any Company Subsidiary, the
Partnership and any Partnership Subsidiary, which are hereby expressly reserved,
to discharge any Optionee at any time for any reason whatsoever, with or without
good cause.
 
          4.6    Exercise of Option After Termination of Employment or
Directorship.
 

 
          (a)  An Option granted to an Employee is exercisable by an Optionee
only while the Optionee is an Employee. The preceding notwithstanding, the
Committee may determine that an Option granted to an Employee may be exercised
subsequent to an Optionee’s Termination of Employment, subject to the following
limitations:

 

 
          (i)  If the Optionee dies while an Option is exercisable under the
terms of this Plan, the Optionee’s Beneficiary may exercise such rights, to the
extent the Optionee could have done so immediately preceding his death. Any such
Option must be exercised within twelve (12) months after the Optionee’s death
and the Committee may in its sole and absolute discretion extend such period to
accommodate such exercise; or

 

 
          (ii)  If the Optionee’s Termination of Employment is due to the
Optionee’s permanent and total disability, as defined in Section 22(e)(3) of the
Code, the Optionee may exercise his Option, to the extent exercisable as of the
Optionee’s Termination of Employment, within twelve (12) months after
termination; or

 

 
          (iii)  If the Optionee’s employment is terminated for any reason other
than those set forth in subsections (i) or (ii) above, the Optionee may exercise
his Option, to the extent exercisable as of his Termination of Employment,
within three (3) months after Termination of Employment, unless the Employee
dies within said three-month period.

 

 
          (iv)  Notwithstanding (i) through (iii) above, an Option may not be
exercised later than the Option’s Expiration Date.

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          (b)  No Option granted to an Independent Director may be exercised to
any extent by anyone after the first to occur of the following events:

 

 
          (i)  The expiration of twelve (12) months from the date of the
Optionee’s death; or

 

 
          (ii)  The expiration of twelve (12) months from the date of the
Optionee’s Termination of Directorship by reason of his permanent and total
disability (within the meaning of Section 22(e)(3) of the Code); or

 

 
          (iii)  The expiration of three (3) months from the date of the
Optionee’s Termination of Directorship for any reason other than such Optionee’s
death or his permanent and total disability, unless the Optionee dies within
said three-month period.

 

 
          (iv)  Notwithstanding (i) through (iii) above, an Option may not be
exercised later than the Option’s Expiration Date.

 
          4.7    Consideration.    In consideration of the granting of a
Non-Qualified Stock Option, the Optionee shall agree, in the written Stock
Option Agreement, to remain in the employ of the Company, a Company Subsidiary,
the Partnership or a Partnership Subsidiary (or to serve as an Independent
Director of the Company) for a period of at least one year after the
Non-Qualified Stock Option is granted (or until the next annual meeting of the
stockholders of the Company, in the case of an Independent Director). In
consideration of the granting of an Incentive Stock Option, the Optionee shall
agree, in the written Stock Option Agreement, to remain in the employ of the
Company or a Company Subsidiary for a period of at least one year after the
Incentive Stock Option is granted. Nothing in this Plan or in any Stock Option
Agreement hereunder shall confer upon any Optionee any right to continue in the
employ of the Company, any Company Subsidiary, the Partnership or any
Partnership Subsidiary or as a director of the Company.
 
ARTICLE V.
 
EXERCISE OF OPTIONS
 
          5.1    Partial Exercise.    An exercisable Option may be exercised in
whole or in part. However, an Option shall not be exercisable with respect to
fractional shares and the Committee (or the Board, in the case of Options
granted to Independent Directors) may require that, by the terms of the Option,
a partial exercise be with respect to a minimum number of shares.
 
          5.2    Manner of Exercise.    All or a portion of an exercisable
Option shall be deemed exercised upon delivery of all of the following to the
Secretary of the Company or his office:
 

 
          (a)  A written notice complying with the applicable rules established
by the Committee (or the Board in the case of Options granted to Independent
Directors), the Company or the Partnership stating that the Option, or a portion
thereof, is exercised. The notice shall be signed by the Optionee or other
person then entitled to exercise the Option or such portion;

 

 
          (b)  Such representations and documents as the Committee (or the
Board, in the case of Options granted to Independent Directors), in its absolute
discretion, deems necessary or advisable to effect compliance with all
applicable provisions of the Securities Act of 1933, as amended, and any other
federal or state securities laws or regulations. The Committee or Board may, in
its absolute discretion, also take whatever additional actions it deems
appropriate to effect such compliance including, without limitation, placing
legends on share certificates and issuing stop-transfer notices to agents and
registrars;

 

 
          (c)  In the event that the Option shall be exercised pursuant to
Section 10.1 by any person or persons other than the Optionee, appropriate proof
of the right of such person or persons to exercise the Option; and

10

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          (d)  Full cash payment to (i) the Secretary of the Company for the
shares with respect to which the Option, or portion thereof, is exercised.
However, the Committee (or the Board, in the case of Options granted to
Independent Directors), may in its discretion (i) allow a delay in payment up to
thirty (30) days from the date the Option, or portion thereof, is exercised;
(ii) allow payment, in whole or in part, through the delivery of shares of
Common Stock owned by the Optionee, duly endorsed for transfer to the Company
with a Fair Market Value on the date of delivery equal to the aggregate exercise
price of the Option or exercised portion thereof; (iii) allow payment, in whole
or in part, through the surrender of shares of Common Stock then issuable upon
exercise of the Option having a Fair Market Value on the date of Option exercise
equal to the aggregate exercise price of the Option or exercised portion
thereof; (iv) allow payment, in whole or in part, through the delivery of
property of any kind which constitutes good and valuable consideration; (v)
allow payment, in whole or in part, through the delivery of a full recourse
promissory note bearing interest (at no less than such rate as shall then
preclude the imputation of interest under the Code) and payable upon such terms
as may be prescribed by the Committee or the Board; (vi) allow payment, in whole
or in part, through the delivery of a notice that the Optionee has placed a
market sell order with a broker with respect to shares of Common Stock then
issuable upon exercise of the Option, and that the broker has been directed to
pay a sufficient portion of the net proceeds of the sale to the Company in
satisfaction of the Option exercise price; or (vii) allow payment through any
combination of the consideration provided in the foregoing subparagraphs (ii),
(iii), (iv), (v) and (vi). In the case of a promissory note, the Committee (or
the Board, in the case of Options granted to Independent Directors) may also
prescribe the form of such note and the security to be given for such note. The
Option may not be exercised, however, by delivery of a promissory note or by a
loan from the Company when or where such loan or other extension of credit is
prohibited by law.

 
          5.3    Transfer of Shares to a Company Employee or Independent
Director.    As soon as practicable after receipt by the Company, pursuant to
Section 5.2(d), of payment for the shares with respect to which an Option (which
in the case of a Company Employee was issued to and is held by such Company
Employee in his or her capacity as a Company Employee), or portion thereof, is
exercised by an Optionee who is a Company Employee or Independent Director, with
respect to each such exercise, the Company shall transfer to the Optionee the
number of shares equal to:
 

 
          (a)  the amount of the payment made by the Optionee to the Company
pursuant to Section 5.2(d), DIVIDED BY

 

 
          (b)  the price per share of the shares subject to the Option as
determined pursuant to Section 4.2.

 
          5.4    Transfer of Shares to a Partnership Employee.    As soon as
practicable after receipt by the Company, pursuant to Section 5.2(d), of payment
for the shares with respect to which an Option (which was issued to and is held
by a Partnership Employee in his or her capacity as a Partnership Employee), or
portion thereof, is exercised by an Optionee who is a Partnership Employee, with
respect to each such exercise:
 

 
          (a)  the Company shall transfer to the Optionee the number of shares
equal to (A) the amount of the payment made by the Optionee to the Company
pursuant to Section 5.2(d) DIVIDED BY (B) the Fair Market Value of a share of
Common Stock at the time of exercise (the “Partnership Optionee Purchased
Shares”); and

 

 
          (b)  the Company shall sell to the Partnership the number of shares
(the “Partnership Purchased Shares”) equal to the excess of (A) the amount
obtained by dividing (i) the amount of the payment made by the Optionee to the
Company pursuant to Section 5.2(d) by (ii) the price per share of the shares
subject to the Option as determined pursuant to Section 4.2., over (B) the
Partnership Optionee Purchased Shares; The price to be paid by the Partnership
to the Company for the Partnership Purchased Shares (the “Partnership Purchase
Price”) shall be an amount equal to the product of (A) the number of Partnership
Purchased Shares MULTIPLIED BY (B) the Fair Market Value of a share of Common
Stock at the time of the exercise;

 

 
          (c)  As soon as practicable after receipt of the Partnership Purchased
Shares by the Partnership, the Partnership shall transfer such shares to the
Optionee at no additional cost, as additional compensation.

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          5.5    Transfer of Payment to the Partnership.    As soon as
practicable after receipt by the Company (i) of the amount described in Section
5.2(d) and (ii) the Partnership Purchase Price described in Section 5.4, the
Company shall contribute to the Partnership an amount of cash equal to such
payment and the Partnership shall issue an additional General Partner Interest
to the Company on the terms set forth in the Partnership Agreement.
 
          5.6    Conditions to Issuance of Stock Certificates.    The Company or
the Partnership shall not be required to issue or deliver any certificate or
certificates for shares of stock purchased upon the exercise of any Option or
portion thereof prior to fulfillment of all of the following conditions:
 

 
          (a)  The admission of such shares to listing on all stock exchanges on
which such class of stock is then listed;

 

 
          (b)  The completion of any registration or other qualification of such
shares under any state or federal law, or under the rulings or regulations of
the Securities and Exchange Commission or any other governmental regulatory body
which the Committee or Board shall, in its absolute discretion, deem necessary
or advisable;

 

 
          (c)  The obtaining of any approval or other clearance from any state
or federal governmental agency which the Committee or Board shall, in its
absolute discretion, determine to be necessary or advisable;

 

 
          (d)  The lapse of such reasonable period of time following the
exercise of the Option as the Committee or Board may establish from time to time
for reasons of administrative convenience; and

 

 
          (e)  The receipt by the Company or the Partnership of full payment for
such shares, including payment of any applicable withholding tax.

 
          5.7    Rights as Stockholders.    The holders of Options shall not be,
nor have any of the rights or privileges of, stockholders of the Company in
respect of any shares purchasable upon the exercise of any part of an Option
unless and until certificates representing such shares have been issued by the
Company to such holders.
 
          5.8    Ownership and Transfer Restrictions.    Shares acquired through
the exercise of an Option shall be subject to the restrictions on ownership and
transfer set forth in the Company’s Amended and Restated Charter. The Committee
(or the Board, in the case of Options granted to Independent Directors), in its
absolute discretion, may impose such additional restrictions on the ownership
and transferability of the shares purchasable upon the exercise of an Option as
it deems appropriate. Any such restriction shall be set forth in the respective
Stock Option Agreement and may be referred to on the certificates evidencing
such shares. The Committee may require the Employee to give the Company prompt
notice of any disposition of shares of Common Stock acquired by exercise of an
Incentive Stock Option within (i) two years from the date of granting such
Option to such Employee or (ii) one year after the transfer of such shares to
such Employee. The Committee (or the Board, in the case of Options granted to
Independent Directors) may direct that the certificates evidencing shares
acquired by exercise of an Option refer to such requirement to give prompt
notice of disposition.
 
          5.9    Restrictions on Exercise of Option.    An Option is not
exercisable if in the sole and absolute discretion of the Committee the exercise
of such Option would likely result in any of the following:
 

 
          (a)  the Optionee’s or any other person’s ownership of Capital Stock
being in violation of the Stock Ownership Limit;

 

 
          (b)  income to the Company that could impair the Company’s status as a
real estate investment trust, within the meaning of Sections 856 through 860 of
the Code; or

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ARTICLE VI.
 
AWARD OF RESTRICTED STOCK
 
          6.1    Award of Restricted Stock.
 

 
          (a)  The Committee (or the Board in the case of Independent Directors)
may from time to time, in its absolute discretion:

 

 
          (i)  Select from among the key Employees, Independent Directors or
consultants (including Employees, Independent Directors or consultants who have
previously received other awards under this Plan) such of them as in its opinion
should be awarded Restricted Stock; and

 

 
          (ii)  Determine the purchase price, if any, and other terms and
conditions applicable to such Restricted Stock, consistent with this Plan.

 

 
          (b)  The Committee (or the Board in the case of Independent Directors)
shall establish the purchase price, if any, and form of payment for Restricted
Stock; PROVIDED, HOWEVER, that such purchase price shall be no less than the par
value of the Common Stock to be purchased unless otherwise permitted by
applicable state law. In all cases, legal consideration shall be required for
each issuance of Restricted Stock.

 

 
          (c)  Upon the selection of a key Employee, Independent Director or
consultant to be awarded Restricted Stock, the Committee (or the Board in the
case of an Independent Director) shall instruct the Secretary of the Company to
issue such Restricted Stock and may impose such conditions on the issuance of
such Restricted Stock as it deems appropriate.

 
          6.2    Restricted Stock Agreement.    Restricted Stock shall be issued
only pursuant to a written Restricted Stock Agreement, which shall be executed
by the selected key Employee, Independent Director or consultant and an
authorized officer of the Company and which shall contain such terms and
conditions as the Committee (or the Board in the case of an Independent
Director) shall determine, consistent with this Plan.
 
          6.3    Consideration.    As consideration for the issuance of
Restricted Stock, in addition to payment of any purchase price, the Restricted
Stockholder shall agree, in the written Restricted Stock Agreement, to remain in
the employ of, to be a Director of or to consult for, the Company, a Company
Subsidiary, the Partnership or a Partnership Subsidiary (whichever is
applicable) for a period of at least one year after the Restricted Stock is
issued (or until the next annual meeting of the stockholders of the Company, in
the case of an Independent Director) (or such shorter period as may be fixed in
the Restricted Stock Agreement or by action of the Committee (or the Board in
the case of an Independent Director) following grant of the Restricted Stock).
Nothing in this Plan or in any Restricted Stock Agreement hereunder shall confer
on any Restricted Stockholder any right to continue in the employ of, as a
Director of, or as a consultant for, the Company, any Company Subsidiary, the
Partnership or any Partnership Subsidiary or shall interfere with or restrict in
any way the rights of the Company, any Company Subsidiary, the Partnership or
any Partnership Subsidiary, which are hereby expressly reserved, to discharge
any Restricted Stockholder at any time for any reason whatsoever, with or
without good cause.
 
          6.4    Rights as Stockholders.    Upon delivery of the shares of
Restricted Stock to the escrow holder pursuant to Section 6.7, the Restricted
Stockholder shall have, unless otherwise provided by the Committee (or the Board
in the case of an Independent Director), all the rights of a stockholder with
respect to said shares, subject to the restrictions in his Restricted Stock
Agreement, including the right to receive all dividends and other distributions
paid or made with respect to the shares; PROVIDED, HOWEVER, that in the
discretion of the Committee (or the Board in the case of an Independent
Director), any extraordinary distributions with respect to the Common Stock
shall be subject to the restrictions set forth in Section 6.5.
 
          6.5    Restriction.    All shares of Restricted Stock issued under
this Plan (including any shares received by holders thereof with respect to
shares of Restricted Stock as a result of stock dividends, stock splits or any
other

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form of recapitalization) shall, in the terms of each individual Restricted
Stock Agreement, be subject to such restrictions as the Committee (or the Board
in the case of an Independent Director) shall provide, which restrictions may
include, without limitation, restrictions concerning voting rights and
transferability and restrictions based on duration of employment with the
Company, Company performance and individual performance; PROVIDED, HOWEVER,
that, unless the Committee (or the Board in the case of an Independent Director)
otherwise provides in the terms of the Restricted Stock Agreement or otherwise,
no share of Restricted Stock granted to a person subject to Section 16 of the
Exchange Act shall be sold, assigned or otherwise transferred until at least six
months have elapsed from (but excluding) the date on which the Restricted Stock
was issued, and PROVIDED, FURTHER, that by action taken after the Restricted
Stock is issued, the Committee (or the Board in the case of an Independent
Director) may, on such terms and conditions as it may determine to be
appropriate, remove any or all of the restrictions imposed by the terms of the
Restricted Stock Agreement. Restricted Stock may not be sold or encumbered until
all restrictions are terminated or expire. Unless provided otherwise by the
Committee (or the Board in the case of an Independent Director), if no
consideration was paid by the Restricted Stockholder upon issuance, a Restricted
Stockholder’s rights in unvested Restricted Stock shall lapse upon Termination
of Employment or, if applicable, upon Termination of Consultancy with the
Company or the Partnership.
 
          6.6    Repurchase of Restricted Stock.    The Committee (or the Board
in the case of an Independent Director) shall provide in the terms of each
individual Restricted Stock Agreement that the Company shall have the right to
repurchase from the Restricted Stockholder the Restricted Stock then subject to
restrictions under the Restricted Stock Agreement immediately upon a Termination
of Employment or, if applicable, upon a Termination of Consultancy between the
Restricted Stockholder and the Company, at a cash price per share equal to the
price paid by the Restricted Stockholder for such Restricted Stock; PROVIDED,
HOWEVER, that provision may be made that no such right of repurchase shall exist
in the event of a Termination of Employment or Termination of Consultancy
without cause, or following a change in control of the Company or the
Partnership, or because of the Restricted Stockholder’s retirement, death or
Disability, or otherwise.
 
          6.7    Escrow.    The Secretary of the Company or such other escrow
holder as the Committee may appoint shall retain physical custody of each
certificate representing Restricted Stock until all of the restrictions imposed
under the Restricted Stock Agreement with respect to the shares evidenced by
such certificate expire or shall have been removed.
 
          6.8    Legend.    In order to enforce the restrictions imposed upon
shares of Restricted Stock hereunder, the Committee (or the Board in the case of
an Independent Director) shall cause a legend or legends to be placed on
certificates representing all shares of Restricted Stock that are still subject
to restrictions under Restricted Stock Agreements, which legend or legends shall
make appropriate reference to the conditions imposed thereby.
 
ARTICLE VII.
 
PERFORMANCE AWARDS, DIVIDEND EQUIVALENTS,
DEFERRED STOCK, STOCK PAYMENTS
 
          7.1    Performance Awards.    Any key Employee or consultant selected
by the Committee may be granted one or more Performance Awards. The value of
such Performance Awards may be linked to the market value, book value, net
profits or other measure of the value of Common Stock or other specific
performance criteria determined appropriate by the Committee, in each case on a
specified date or dates or over any period or periods determined by the
Committee, or may be based upon the appreciation in the market value, book
value, net profits or other measure of the value of a specified number of shares
of Common Stock over a fixed period or periods determined by the Committee. In
making such determinations, the Committee shall consider (among such other
factors as it deems relevant in light of the specific type of award) the
contributions, responsibilities and other compensation of the particular key
Employee or consultant.

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          7.2    Dividend Equivalents.    Any key Employee or consultant
selected by the Committee may be granted Dividend Equivalents based on the
dividends declared on Common Stock, to be credited as of dividend payment dates,
during the period between the date an Option, Stock Appreciation Right, Deferred
Stock or Performance Award is granted, and the date such Option, Stock
Appreciation Right, Deferred Stock or Performance Award is exercised, vests or
expires, as determined by the Committee. Such Dividend Equivalents shall be
converted to cash or additional shares of Common Stock by such formula and at
such time and subject to such limitations as may be determined by the Committee.
With respect to Dividend Equivalents granted with respect to Options intended to
be qualified performance-based compensation for purposes of Section 162(m), such
Dividend Equivalents shall be payable regardless of whether such Option is
exercised.
 
          7.3    Stock Payments.    Any key Employee or consultant selected by
the Committee may receive Stock Payments in the manner determined from time to
time by the Committee. The number of shares shall be determined by the Committee
and may be based upon the Fair Market Value, book value, net profits or other
measure of the value of Common Stock or other specific performance criteria
determined appropriate by the Committee, determined on the date such Stock
Payment is made or on any date thereafter.
 
          7.4    Deferred Stock.    Any key Employee or consultant selected by
the Committee may be granted an award of Deferred Stock in the manner determined
from time to time by the Committee. The number of shares of Deferred Stock shall
be determined by the Committee and may be linked to the market value, book
value, net profits or other measure of the value of Common Stock or other
specific performance criteria determined to be appropriate by the Committee, in
each case on a specified date or dates or over any period or periods determined
by the Committee. Common Stock underlying a Deferred Stock award will not be
issued until the Deferred Stock award has vested, pursuant to a vesting schedule
or performance criteria set by the Committee. Unless otherwise provided by the
Committee, a Grantee of Deferred Stock shall have no rights as a Company
stockholder with respect to such Deferred Stock until such time as the award has
vested and the Common Stock underlying the award has been issued.
 
          7.5    Performance Award Agreement, Dividend Equivalent Agreement,
Deferred Stock Agreement, Stock Payment Agreement.    Each Performance Award,
Dividend Equivalent, award of Deferred Stock and/or Stock Payment shall be
evidenced by a written agreement, which shall be executed by the Grantee and an
authorized Officer of the Company and which shall contain such terms and
conditions as the Committee shall determine, consistent with this Plan.
 
          7.6    Term.    The term of a Performance Award, Dividend Equivalent,
award of Deferred Stock and/or Stock Payment shall be set by the Committee in
its discretion.
 
          7.7    Exercise Upon Termination of Employment.    A Performance
Award, Dividend Equivalent, award of Deferred Stock and/or Stock Payment is
exercisable or payable only while the Grantee is an Employee or consultant;
provided that the Committee may determine that the Performance Award, Dividend
Equivalent, award of Deferred Stock and/or Stock Payment may be exercised or
paid subsequent to Termination of Employment or Termination of Consultancy
without cause, or following a change in control of the Company or the
Partnership, or because of the Grantee’s retirement, death or Disability, or
otherwise.
 
          7.8    Payment on Exercise.    Payment of the amount determined under
Section 7.1 or 7.2 above shall be in cash, in Common Stock or a combination of
both, as determined by the Committee. To the extent any payment under this
Article VII is effected in Common Stock, it shall be made subject to
satisfaction of all provisions of Section 5.6 and 5.8.
 
          7.9    Consideration.    In consideration of the granting of a
Performance Award, Dividend Equivalent, award of Deferred Stock and/or Stock
Payment, the Grantee shall agree, in a written agreement, to remain in the
employ of, or to consult for, the Company or any Subsidiary for a period of at
least one year after such Performance Award, Dividend Equivalent, award of
Deferred Stock and/or Stock Payment is granted (or such shorter period as may be
fixed in such agreement or by action of the Committee following such grant).

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ARTICLE VIII.
 
STOCK APPRECIATION RIGHTS
 
          8.1    Grant Of Stock Appreciation Rights.    A Stock Appreciation
Right may be granted to any key Employee or consultant selected by the
Committee. A Stock Appreciation Right may be granted (i) in connection and
simultaneously with the grant of an Option, (ii) with respect to a previously
granted Option, or (iii) independent of an Option. A Stock Appreciation Right
shall be subject to such terms and conditions not inconsistent with this Plan as
the Committee shall impose and shall be evidenced by a written Stock
Appreciation Right Agreement, which shall be executed by the Grantee and an
authorized officer of the Company. The Committee, in its discretion, may
determine whether a Stock Appreciation Right is to qualify as performance-based
compensation as described in Section 162(m)(4)(C) of the Code and Stock
Appreciation Right Agreements evidencing Stock Appreciation Rights intended to
so qualify shall contain such terms and conditions as may be necessary to meet
the applicable provisions of Section 162(m) of the Code. Without limiting the
generality of the foregoing, the Committee may, in its discretion and on such
terms as it deems appropriate, require as a condition of the grant of a Stock
Appreciation Right to an Employee or consultant that the Employee or consultant
surrender for cancellation some or all of the unexercised Options, awards of
Restricted Stock or Deferred Stock, Performance Awards, Stock Appreciation
Rights, Dividend Equivalents or Stock Payments, or other rights which have been
previously granted to him under this Plan or otherwise. A Stock Appreciation
Right, the grant of which is conditioned upon such surrender, may have an
exercise price that is higher (but not lower) than the exercise price of the
surrendered Option or other award, may cover the same (or a lesser or greater)
number of shares as such surrendered Option or other award, may contain such
other terms as the Committee deems appropriate subject to the Plan, and shall be
exercisable in accordance with its terms, without regard to the number of
shares, price, exercise period or any other term or condition of such
surrendered Option or other award.
 
          8.2     Coupled Stock Appreciation Rights.
 

 
          (a)  A Coupled Stock Appreciation Right (“CSAR”) shall be related to a
particular Option and shall be exercisable only when and to the extent the
related Option is exercisable.

 

 
          (b)  A CSAR may be granted to the Grantee for no more than the number
of shares subject to the simultaneously or previously granted Option to which it
is coupled.

 

 
          (c)  A CSAR shall entitle the Grantee (or other person entitled to
exercise the Option pursuant to this Plan) to surrender to the Company
unexercised a portion of the Option to which the CSAR relates (to the extent
then exercisable pursuant to its terms) and to receive from the Company or the
Partnership, as provided in the CSAR agreement, in exchange therefor an amount
determined by multiplying the difference obtained by subtracting the Option
exercise price from the Fair Market Value of a share of Common Stock on the date
of exercise of the CSAR by the number of shares of Common Stock with respect to
which the CSAR shall have been exercised, subject to any limitations the
Committee may impose.

 
          8.3    Independent Stock Appreciation Rights.
 

 
          (a)  An Independent Stock Appreciation Right (“ISAR”) shall be
unrelated to any Option and shall have a term set by the Committee. An ISAR
shall be exercisable in such installments as the Committee may determine. An
ISAR shall cover such number of shares of Common Stock as the Committee may
determine; provided, however, that unless the Committee otherwise provides in
the terms of the ISAR or otherwise, no ISAR granted to a person subject to
Section 16 of the Exchange Act shall be exercisable until at least six months
have elapsed from (but excluding) the date on which the Option was granted. The
exercise price per share of Common Stock subject to each ISAR shall be set by
the Committee. An ISAR is exercisable only while the Grantee is an Employee or
consultant; provided that the Committee may determine that the ISAR may be
exercised subsequent to Termination of Employment or Termination of Consultancy
without cause, or following a change in control of the Company or the
Partnership, or because of the Grantee’s retirement, death or Disability, or
otherwise.

16

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          (b)  An ISAR shall entitle the Grantee (or other person entitled to
exercise the ISAR pursuant to this Plan) to exercise all or a specified portion
of the ISAR (to the extent then exercisable pursuant to its terms) and to
receive from the Company or the Partnership, as provided in the ISAR agreement,
an amount determined by multiplying the difference obtained by subtracting the
exercise price per share of the ISAR from the Fair Market Value of a share of
Common Stock on the date of exercise of the ISAR by the number of shares of
Common Stock with respect to which the ISAR shall have been exercised, subject
to any limitations the Committee may impose.

 
          8.4    Payment and Limitations on Exercise.
 

 
          (a)  Payment of the amount determined under Section 8.2(c) and 8.3(b)
above shall be in cash, in Common Stock (based on its Fair Market Value as of
the date the Stock Appreciation Right is exercised) or a combination of both, as
determined by the Committee. To the extent such payment is effected in Common
Stock it shall be made subject to satisfaction of all provisions of Section 5.6
and Section 5.8 hereinabove pertaining to Options.

 

 
          (b)  Grantees of Stock Appreciation Rights may be required to comply
with any timing or other restrictions with respect to the settlement or exercise
of a Stock Appreciation Right, including a window-period limitation, as may be
imposed in the discretion of the Board or Committee.

 
          8.5      Consideration.    In consideration of the granting of a Stock
Appreciation Right, the Grantee shall agree, in the written Stock Appreciation
Right Agreement, to remain in the employ of, or to consult for, the Company or
any Subsidiary for a period of at least one year after the Stock Appreciation
Right is granted (or such shorter period as may be fixed in the Stock
appreciation Right Agreement or by action of the Committee following grant of
the Restricted Stock).
 
ARTICLE IX.
 
ADMINISTRATION
 
          9.1    Compensation Committee.    Prior to the Company’s initial
registration of Common Stock under Section 12 of the Exchange Act, the
Compensation Committee shall consist of the entire Board. Following such
registration, the Compensation Committee (or another committee or a subcommittee
of the Board assuming the functions of the Committee under this Plan) shall
consist solely of two or more Independent Directors appointed by and holding
office at the pleasure of the Board, each of whom is both a “non-employee
director” as defined by Rule 16b-3 and an “outside director” for purposes of
Section 162(m) of the Code. Appointment of Committee members shall be effective
upon acceptance of appointment. Committee members may resign at any time by
delivering written notice to the Board. Vacancies in the Committee may be filled
by the Board.
 
          9.2    Duties and Powers of Committee.    It shall be the duty of the
Committee to conduct the general administration of this Plan in accordance with
its provisions. The Committee shall have the power to interpret this Plan and
the agreements pursuant to which Options, awards of Restricted Stock or Deferred
Stock, Performance Awards, Stock Appreciation Rights, Dividend Equivalents or
Stock Payments are granted or awarded, and to adopt such rules for the
administration, interpretation, and application of this Plan as are consistent
therewith and to interpret, amend or revoke any such rules. Notwithstanding the
foregoing, the full Board, acting by a majority of its members in office, shall
conduct the general administration of the Plan with respect to Options granted
to Independent Directors. Any such grant or award under this Plan need not be
the same with respect to each Optionee, Grantee or Restricted Stockholder. Any
such interpretations and rules with respect to Incentive Stock Options shall be
consistent with the provisions of Section 422 of the Code. In its absolute
discretion, the Board may at any time and from time to time exercise any and all
rights and duties of the Committee under this Plan except with respect to
matters which under Rule 16b-3 or Section 162(m) of the Code, or any regulations
or rules issued thereunder, are required to be determined in the sole discretion
of the Committee.

17

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          9.3    Majority Rule; Unanimous Written Consent.    The Committee
shall act by a majority of its members in attendance at a meeting at which a
quorum is present or by a memorandum or other written instrument signed by all
members of the Committee.
 
          9.4    Compensation; Professional Assistance; Good Faith
Actions.    Members of the Committee shall receive such compensation for their
services as members as may be determined by the Board. All expenses and
liabilities which members of the Committee incur in connection with the
administration of this Plan shall be borne by the Company. The Committee may,
with the approval of the Board, employ attorneys, consultants, accountants,
appraisers, brokers, or other persons. The Committee, the Company and the
Company’s officers and Directors shall be entitled to rely upon the advice,
opinions or valuations of any such persons. All actions taken and all
interpretations and determinations made by the Committee or the Board in good
faith shall be final and binding upon all Optionees, Grantees, Restricted
Stockholders, the Company, the Partnership and all other interested persons. No
members of the Committee or Board shall be personally liable for any action,
determination or interpretation made in good faith with respect to this Plan,
Options, awards of Restricted Stock or Deferred Stock, Performance Awards, Stock
Appreciation Rights, Dividend Equivalents or Stock Payments, and all members of
the Committee and the Board shall be fully protected by the Company in respect
of any such action, determination or interpretation.
 
          9.5    Delegation of Authority.    The Committee may in its sole and
absolute discretion delegate to the Chief Financial Officer of the Company or
the Secretary of the Company, or both, any or all of the administrative duties
and authority of the Committee under this Plan, other than the authority to make
grants or awards under this Plan to Employees who are officers of the Company
within the meaning of Rule 16(a)-1(b) of the Exchange Act or whose total
compensation is required to be reported to the Company’s stockholders under the
Exchange Act, to determine the price, timing or amount of such grants or awards
or to determine any other matter required by Rule 16b-3 or Code Section 162(m)
to be determined in the sole and absolute discretion of the Committee.
 
          9.6    No Liability.    No member of the Board or the Committee, or
director, officer or employee of the Company, any Company Subsidiary, the
Partnership or any Partnership Subsidiary shall be liable, responsible or
accountable in damages or otherwise for any determination made or other action
taken or any failure to act by such person so long as such person is not
determined to be guilty by a final adjudication of willful misconduct with
respect to such determination, action or failure to act.
 
          9.7    Indemnification.    To the fullest extent permitted by law,
each of the members of the Board and the Committee and each of the directors,
officers and employees of the Company, any Company Subsidiary, the Partnership
and any Partnership Subsidiary shall be held harmless and be indemnified by the
Company for any liability, loss (including amounts paid in settlement), damages
or expenses (including reasonable attorneys’ fees) suffered by virtue of any
determinations, acts or failures to act, or alleged acts or failures to act, in
connection with the administration of this Plan so long as such person is not
determined by a final adjudication to be guilty of willful misconduct with
respect to such determination, action or failure to act.
 
ARTICLE X.
 
MISCELLANEOUS PROVISIONS
 
          10.1    Not Transferable.    Options, Restricted Stock awards,
Deferred Stock awards, Performance Awards, Stock Appreciation Rights, Dividend
Equivalents or Stock Payments under this Plan may not be sold, pledged,
assigned, or transferred in any manner other than by will or the laws of descent
and distribution or pursuant to a QDRO, unless and until such rights or awards
have been exercised, or the shares underlying such rights or awards have been
issued, and all restrictions applicable to such shares have lapsed; PROVIDED,
HOWEVER, that Non-Qualified Stock Options, Restricted Stock, Deferred Stock
awards, Performance Awards, Stock Appreciation Rights, Dividend Equivalents and
Stock Payments shall be transferable with the prior written

18

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consent of the Compensation Committee (or the Board, with respect to
Non-Qualified Stock Options and Restricted Stock granted to Independent
Directors), in which case the transferee shall receive and hold the Option or
other award so transferred subject to the provisions of this Plan and the
agreement governing such Option or other award. No Option, Restricted Stock
award, Deferred Stock award, Performance Award, Stock Appreciation Right,
Dividend Equivalent or Stock Payment or interest or right therein shall be
liable for the debts, contracts or engagements of the Optionee, Grantee or
Restricted Stockholder or his successors in interest or shall be subject to
disposition by transfer, alienation, anticipation, pledge, encumbrance,
assignment or any other means whether such disposition be voluntary or
involuntary or by operation of law by judgment, levy, attachment, garnishment or
any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect, except to
the extent that such disposition is permitted by the preceding sentence.
 
          During the lifetime of the Optionee or Grantee, only he may exercise
an Option or other right or award (or any portion thereof) granted to him under
the Plan, unless it has been disposed of pursuant to a QDRO; PROVIDED, HOWEVER,
that if the Compensation Committee (or the Board, with respect to Non-Qualified
Stock Options and Restricted Stock granted to Independent Directors) has
permitted an award to be transferred, the option may be exercised by such
transferee. After the death of the Optionee or Grantee, any exercisable portion
of an Option or other right or award may, prior to the time when such portion
becomes unexercisable under the Plan or the applicable Stock Option Agreement or
other agreement, be exercised by his personal representative or by any person
empowered to do so under the deceased Optionee’s or Grantee’s will or under the
then applicable laws of descent and distribution.
 
          10.2    Amendment, Suspension or Termination of This Plan.    Except
as otherwise provided in this Section 10.2, this Plan may be wholly or partially
amended or otherwise modified, suspended or terminated at any time or from time
to time by the Board or the Committee. However, without approval of the
Company’s stockholders given within twelve months before or after the action by
the Board or the Committee, no action of the Board or the Committee may, except
as provided in Section 10.3, increase the limits imposed in Section 2.1 on the
maximum number of shares which may be issued under this Plan or modify the Award
Limit, and no action of the Committee may be taken that would otherwise require
stockholder approval as a matter of applicable law, regulation or rule. No
amendment, suspension or termination of this Plan shall, without the consent of
the holder of Options, Restricted Stock awards, Deferred Stock awards,
Performance Awards, Stock Appreciation Rights, Dividend Equivalents or Stock
Payments, alter or impair any rights or obligations under any Options,
Restricted Stock awards, Deferred Stock awards, Performance Awards, Stock
Appreciation Rights, Dividend Equivalents or Stock Payments theretofore granted
or awarded, unless the award itself otherwise expressly so provides. No Options,
Restricted Stock, Deferred Stock, Performance Awards, Stock Appreciation Rights,
Dividend Equivalents or Stock Payments may be granted or awarded during any
period of suspension or after termination of this Plan, and in no event may any
Incentive Stock Option be granted under this Plan after September 27, 2006.
 
          10.2A    Repricing Prohibited.    Notwithstanding any provision in
this Plan to the contrary, no Option or Stock Appreciation right may be amended
to reduce the price per share of the shares subject to such Option or the
exercise price of such Stock Appreciation right, as applicable, below the option
price or exercise price as of the date the Option or Stock Appreciation Right is
granted. In addition, as described in Sections 3.4(b)and 8.1, no Option or Stock
Appreciation Right may be granted in exchange for, or in connection with, the
cancellation or surrender of an Option, Stock Appreciation Right or other award
having a higher option or exercise price.
 
          10.3    Changes in Common Stock or Assets of the Company, Acquisition
or Liquidation of the Company and Other Corporate Events.
 

 
          (a)  Subject to Section 10.3(e), in the event that the Committee (or
the Board, in the case of Options granted to Independent Directors) determines
that any dividend or other distribution (whether in the form of cash, Common
Stock, other securities, or other property), recapitalization, reclassification,
stock split, reverse stock split, reorganization, merger, consolidation,
split-up, spin-off, combination, repurchase,

19

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liquidation, dissolution, or sale, transfer, exchange or other disposition of
all or substantially all of the assets of the Company (including, but not
limited to, a Change of Control), or exchange of Common Stock or other
securities of the Company, issuance of warrants or other rights to purchase
Common Stock or other securities of the Company, or other similar corporate
transaction or event, in the Committee’s sole discretion (or in the case of
Options granted to Independent Directors, the Board’s sole discretion), affects
the Common Stock such that an adjustment is determined by the Committee to be
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan or with respect
to an Option, Restricted Stock award, Performance Award, Stock Appreciation
Right, Dividend Equivalent, Deferred Stock award or Stock Payment, then the
Committee (or the Board, in the case of Options granted to Independent
Directors) shall, in such manner as it may deem equitable, adjust any or all of

 

 
          (i)  the number and kind of shares of Common Stock (or other
securities or property) with respect to which Options, Performance Awards, Stock
Appreciation Rights, Dividend Equivalents or Stock Payments may be granted under
the Plan, or which may be granted as Restricted Stock or Deferred Stock
(including, but not limited to, adjustments of the limitations in Section 2.1 on
the maximum number and kind of shares which may be issued and adjustments of the
Award Limit),

 

 
          (ii)  the number and kind of shares of Common Stock (or other
securities or property) subject to outstanding Options, Performance Awards,
Stock Appreciation Rights, Dividend Equivalents, or Stock Payments, and in the
number and kind of shares of outstanding Restricted Stock or Deferred Stock, and

 

 
          (iii)  the grant or exercise price with respect to any Option,
Performance Award, Stock Appreciation Right, Dividend Equivalent or Stock
Payment.

 

 
          (b)  Subject to Section 10.3(e), in the event of any corporate
transaction or other transaction or event described in Section 10.3(a) which
results in shares of Common Stock being exchanged for or converted into cash,
securities (including securities of another corporation) or other property, the
Committee will have the right to terminate this Plan as of the date of the event
or transaction, in which case all options, rights and other awards granted under
this Plan shall become the right to receive such cash, securities or other
property, net of any applicable exercise price.

 

 
          (c)  Subject to Sections 10.3(c)(vii) and 10.3(e), in the event of any
Change of Control or other transaction or event described in Section 10.3(a) or
any unusual or nonrecurring transactions or events affecting the Company, any
affiliate of the Company, or the financial statements of the Company or any
affiliate, or of changes in applicable laws, regulations, or accounting
principles, the Committee (or the Board, in the case of Options granted to
Independent Directors) in its discretion is hereby authorized to take any one or
more of the following actions whenever the Committee (or the Board, in the case
of Options granted to Independent Directors) determines that such action is
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan or with respect
to any option, right or other award under this Plan, to facilitate such
transactions or events or to give effect to such changes in laws, regulations or
principles:

 

 
          (i)  In its sole and absolute discretion, and on such terms and
conditions as it deems appropriate, the Committee (or the Board, in the case of
Options granted to Independent Directors) may provide, either by the terms of
the agreement or by action taken prior to the occurrence of such transaction or
event and either automatically or upon the optionee’s request, for either the
purchase of any such Option, Performance Award, Stock Appreciation Right,
Dividend Equivalent, or Stock Payment, or any Restricted Stock or Deferred Stock
for an amount of cash equal to the amount that could have been attained upon the
exercise of such option, right or award or realization of the optionee’s rights
had such option, right or award been currently exercisable or payable or fully
vested as the replacement of such option, right or award with other rights or
property selected by the Committee (or the Board, in the case of Options granted
to Independent Directors) in its sole discretion;

20

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          (ii)  In its sole and absolute discretion, the Committee (or the
Board, in the case of Options granted to Independent Directors) may provide,
either by the terms of such Option, Performance Award, Stock Appreciation Right,
Dividend Equivalent, or Stock Payment, or Restricted Stock or Deferred Stock or
by action taken prior to the occurrence of such transaction or event that it
cannot be exercised after such event;

 

 
          (iii)  In its sole and absolute discretion, and on such terms and
conditions as it deems appropriate, the Committee (or the Board, in the case of
Options granted to Independent Directors) may provide, either by the terms of
such Option, Performance Award, Stock Appreciation Right, Dividend Equivalent,
or Stock Payment, or Restricted Stock or Deferred Stock or by action taken prior
to the occurrence of such transaction or event, that for a specified period of
time prior to such transaction or event, such option, right or award shall be
exercisable as to all shares covered thereby, notwithstanding anything to the
contrary in (i) Section 4.4 or (ii) the provisions of such Option, Performance
Award, Stock Appreciation Right, Dividend Equivalent, or Stock Payment, or
Restricted Stock or Deferred Stock;

 

 
          (iv)  In its sole and absolute discretion, and on such terms and
conditions as it deems appropriate, the Committee (or the Board, in the case of
Options granted to Independent Directors) may provide, either by the terms of
such Option, Performance Award, Stock Appreciation Right, Dividend Equivalent,
or Stock Payment, or Restricted Stock or Deferred Stock or by action taken prior
to the occurrence of such transaction or event, that upon such event, such
option, right or award be assumed by the successor or survivor corporation, or a
parent or subsidiary thereof, or shall be substituted for by similar options,
rights or awards covering the stock of the successor or survivor corporation, or
a parent or subsidiary thereof, with appropriate adjustments as to the number
and kind of shares and prices;

 

 
          (v)  In its sole and absolute discretion, and on such terms and
conditions as it deems appropriate, the Committee (or the Board, in the case of
Options granted to Independent Directors) may make adjustments in the number and
type of shares of Common Stock (or other securities or property) subject to
outstanding Options, Performance Awards, Stock Appreciation Rights, Dividend
Equivalents, or Stock Payments, and in the number and kind of outstanding
Restricted Stock or Deferred Stock and/or in the terms and conditions of
(including the grant or exercise price), and the criteria included in,
outstanding options, rights and awards and options, rights and awards which may
be granted in the future;

 

 
          (vi)  In its sole and absolute discretion, and on such terms and
conditions as it deems appropriate, the Committee may provide either by the
terms of a Restricted Stock award or Deferred Stock award or by action taken
prior to the occurrence of such event that, for a specified period of time prior
to such event, the restrictions imposed under a Restricted Stock Agreement or a
Deferred Stock Agreement upon some or all shares of Restricted Stock or Deferred
Stock may be terminated, and, in the case of Restricted Stock, some or all
shares of such Restricted Stock may cease to be subject to repurchase under
Section 6.6 or forfeiture under Section 6.5 after such event; and

 

 
          (vii)  None of the foregoing discretionary terms of this Section
10.3(c) shall be permitted with respect to Options granted under Sections 3.4(d)
and (e) to Independent Directors to the extent that such discretion would be
inconsistent with the applicable exemptive conditions of Rule 16b-3.

 

 
          (d)  Subject to Section 10.3(e) and 10.8, the Committee (or the Board,
in the case of Options granted to Independent Directors) may, in its discretion,
include such further provisions and limitations in any Option, Performance
Award, Stock Appreciation Right, Dividend Equivalent, or Stock Payment, or
Restricted Stock or Deferred Stock agreement or certificate, as it may deem
equitable and in the best interests of the Company.

 

 
          (e)  With respect to Incentive Stock Options and Options and Stock
Appreciation Rights intended to qualify as performance-based compensation under
Section 162(m), no adjustment or action described in this Section 10.3 or in any
other provision of the Plan shall be authorized to the extent that such
adjustment or

21

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action would cause the Plan to violate Section 422(b)(1) of the Code or would
cause such option or stock appreciation right to fail to so qualify under
Section 162(m), as the case may be, or any successor provisions thereto.
Furthermore, no such adjustment or action shall be authorized to the extent such
adjustment or action would result in short-swing profits liability under Section
16 or violate the exemptive conditions of Rule 16b-3 unless the Committee (or
the Board, in the case of Options granted to Independent Directors) determines
that the option or other award is not to comply with such exemptive conditions.
The number of shares of Common Stock subject to any option, right or award shall
always be rounded to the next whole number.

 
          10.4    Approval of Plan by Stockholders.    This Plan will be
submitted for the approval of the Company’s stockholders within twelve months
after the date of the Board’s initial adoption of this Plan. Options,
Performance Awards, Stock Appreciation Rights, Dividend Equivalents or Stock
Payments may be granted and Restricted Stock or Deferred Stock may be awarded
prior to such stockholder approval, provided that such Options, Performance
Awards, Stock Appreciation Rights, Dividend Equivalents or Stock Payments shall
not be exercisable and such Restricted Stock or Deferred Stock shall not vest
prior to the time when this Plan is approved by the stockholders, and provided
further that if such approval has not been obtained at the end of said
twelve-month period, all Options, Performance Awards, Stock Appreciation Rights,
Dividend Equivalents or Stock Payments previously granted and all Restricted
Stock or Deferred Stock previously awarded under this Plan shall thereupon be
canceled and become null and void.
 
          10.5    Tax Withholding.    The Company and the Partnership shall be
entitled to require payment in cash or deduction from other compensation payable
to each Optionee, Grantee or Restricted Stockholder of any sums required by
federal, state or local tax law to be withheld with respect to the issuance,
vesting or exercise of any Option, Restricted Stock, Deferred Stock, Performance
Award, Stock Appreciation Right, Dividend Equivalent or Stock Payment. The
Committee (or the Board, in the case of Options granted to Independent
Directors) may in its discretion and in satisfaction of the foregoing
requirement allow such Optionee, Grantee or Restricted Stockholder to elect to
have the Company withhold shares of Common Stock otherwise issuable under such
Option or other award (or allow the return of shares of Common Stock) having a
Fair Market Value equal to the sums required to be withheld.
 
          10.6    Loans.    The Committee may, in its discretion, extend one or
more loans to key Employees in connection with the exercise or receipt of an
Option, Performance Award, Stock Appreciation Right, Dividend Equivalent or
Stock Payment granted under this Plan, or the issuance of Restricted Stock or
Deferred Stock awarded under this Plan. The terms and conditions of any such
loan shall be set by the Committee.
 
          10.7    Forfeiture Provisions.    Pursuant to its general authority to
determine the terms and conditions applicable to awards under the Plan, the
Committee (or the Board, in the case of Options granted to Independent
Directors) shall have the right (to the extent consistent with the applicable
exemptive conditions of Rule 16b-3) to provide, in the terms of Options or other
awards made under the Plan, or to require the recipient to agree by separate
written instrument, that (i) any proceeds, gains or other economic benefit
actually or constructively received by the recipient upon any receipt or
exercise of the award, or upon the receipt or resale of any Common Stock
underlying such award, must be paid to the Company, and (ii) the award shall
terminate and any unexercised portion of such award (whether or not vested)
shall be forfeited, if (a) a Termination of Employment, Termination of
Consultancy or Termination of Directorship occurs prior to a specified date, or
within a specified time period following receipt or exercise of the award, or
(b) the recipient at any time, or during a specified time period, engages in any
activity in competition with the Company, or which is inimical, contrary or
harmful to the interests of the Company, as further defined by the Committee (or
the Board, as applicable).
 
          10.8    Limitations Applicable to Section 16 Persons and
Performance-Based Compensation. Notwithstanding any other provision of this
Plan, this Plan, and any Option, Performance Award, Stock Appreciation Right,
Dividend Equivalent or Stock Payment granted, or Restricted Stock or Deferred
Stock awarded, to any individual who is then subject to Section 16 of the
Exchange Act, shall be subject to any

22

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additional limitations set forth in any applicable exemptive rule under Section
16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange
Act) that are requirements for the application of such exemptive rule. To the
extent permitted by applicable law, the Plan, Options, Performance Awards, Stock
Appreciation Rights, Dividend Equivalents, Stock Payments, Restricted Stock and
Deferred Stock granted or awarded hereunder shall be deemed amended to the
extent necessary to conform to such applicable exemptive rule. Furthermore,
notwithstanding any other provision of this Plan, any Option or Stock
Appreciation Right intended to qualify as performance-based compensation as
described in Section 162(m)(4)(C) of the Code shall be subject to any additional
limitations set forth in Section 162(m) of the Code (including any amendment to
Section 162(m) of the Code) or any regulations or rulings issued thereunder that
are requirements for qualification as performance-based compensation as
described in Section 162(m)(4)(C) of the Code, and this Plan shall be deemed
amended to the extent necessary to conform to such requirements.
 
          10.9    Effect of Plan Upon Options and Compensation Plans.    The
adoption of this Plan shall not affect any other compensation or incentive plans
in effect for the Company, any Company Subsidiary, the Partnership or any
Partnership Subsidiary. Nothing in this Plan shall be construed to limit the
right of the Company or the Partnership (i) to establish any other forms of
incentives or compensation for Employees, Directors or Consultants of the
Company, any Company Subsidiary, the Partnership or any Partnership Subsidiary
or (ii) to grant or assume options or other rights otherwise than under this
Plan in connection with any proper corporate purpose including but not by way of
limitation, the grant or assumption of options in connection with the
acquisition by purchase, lease, merger, consolidation or otherwise, of the
business, stock or assets of any corporation, partnership, firm or association.
 
          10.10    Section 83(b) Election Prohibited.    No Grantee, Optionee or
Restricted Stockholder may make an election under Section 83(b) of the Code with
respect to any award or grant under this Plan.
 
          10.11    Compliance with Laws.    This Plan, the granting and vesting
of Options, Restricted Stock awards, Deferred Stock awards, Performance Awards,
Stock Appreciation Rights, Dividend Equivalents or Stock Payments under this
Plan and the issuance and delivery of shares of Common Stock and the payment of
money under this Plan or under Options, Performance Awards, Stock Appreciation
Rights, Dividend Equivalents or Stock Payments granted or Restricted Stock or
Deferred Stock awarded hereunder are subject to compliance with all applicable
federal and state laws, rules and regulations (including but not limited to
state and federal securities law and federal margin requirements) and to such
approvals by any listing, regulatory or governmental authority as may, in the
opinion of counsel for the Company, be necessary or advisable in connection
therewith. Any securities delivered under this Plan shall be subject to such
restrictions, and the person acquiring such securities shall, if requested by
the Company, provide such assurances and representations to the Company as the
Company may deem necessary or desirable to assure compliance with all applicable
legal requirements. To the extent permitted by applicable law, the Plan,
Options, Restricted Stock awards, Deferred Stock awards, Performance Awards,
Stock Appreciation Rights, Dividend Equivalents or Stock Payments granted or
awarded hereunder shall be deemed amended to the extent necessary to conform to
such laws, rules and regulations.
 
          10.12    Titles.    Titles are provided herein for convenience only
and are not to serve as a basis for interpretation or construction of this Plan.
 
          10.13    Governing Law.    This Plan and any agreements hereunder
shall be administered, interpreted and enforced under the internal laws of the
State of Maryland without regard to conflicts of laws thereof.
 
          10.14    Conflicts with Company’s Restated
Articles.    Notwithstanding any other provision of this Plan, the Optionee
shall not acquire or have any right to acquire any Common Stock, and shall have
no other rights under this Plan, which are prohibited under the Company’s
Restated Articles.

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          IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers duly authorized on this 20th day of September,
2001.
 

 
Ar
den Realty, Inc., a Maryland corporation.

 

 
/s/  
  RICHARD S. ZIMAN        

 
By
:                                                                               
                 

 
Ric
hard S. Ziman

 
Ch
ief Executive Officer

 
Att
est:

 
/s/  
  DAVID A. SWARTZ

                                                                               
                              
 

Da
vid A. Swartz

Sec
retary

 

 
Ar
den Realty Limited Partnership, a Maryland limited partnership.

 

 
/s/  
  RICHARD S. ZIMAN

 
By
:                                                                               
                 

 
Ric
hard S. Ziman

 
Ch
ief Executive Officer

 
On
 Behalf of Arden Realty, Inc., a Maryland corporation, in its capacity as
General Partner

 
Att
est:

 
s/    DAVID A. SWARTZ
                                                                               
                              
 

Da
vid A. Swartz

Sec
retary

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