Exhibit 10.4

 

THOMAS PROPERTIES GROUP, INC.

 

2004 NON-EMPLOYEE DIRECTOR PLAN

 

1.    Purpose. The purpose of this Thomas Properties Group, Inc. 2004
Non-Employee Director Plan is to attract and retain qualified individuals who
are not employed by the Company or its Affiliates to serve as Directors.

 

2.    Definitions. As used in this Plan,

 

(a) “Affiliate” means any entity directly or indirectly controlling, controlled
by or under common control with the Company. Control of an entity or the Company
means the power to direct the management and policies of such entity or the
Company, directly or indirectly, whether through the ownership of Voting
Securities or other interests, by contract or otherwise, and the terms
“controlling” and “controlled” have meanings correlative to the foregoing.

 

(b) “Annual Grant” means a grant of Restricted Shares to a Non-Employee Director
in accordance with Section 5 of this Plan.

 

(c) “Annual Meeting” means the Company’s annual meeting of stockholders.

 

(d) “Award” means any award of an Initial Grant or Annual Grant under this Plan.

 

(e) “Award Agreement” means a written agreement between the Company and a
Non-Employee Director setting forth the terms, conditions and restrictions of
the Award granted to the Non-Employee Director.

 

(f) “Board” means the Board of Directors of the Company.

 

(g) “Change in Control” shall have the meaning provided in Section 6 of this
Plan.

 

(h) “Code” means the Internal Revenue Code of 1986, as amended from time to
time.

 

(i) “Common Shares” means the shares of common stock, par value $.01 per share,
of the Company or any security into which such Common Shares may be changed by
reason of any transaction or event of the type referred to in Section 3(b) of
this Plan.

 

(j) “Company” means Thomas Properties Group, Inc., a Delaware corporation.

 

(k) “Date of Grant” means (i) with respect to an Initial Grant, the close of
business on the date on which the Non-Employee Director is first elected or

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appointed to the Board, and (ii) with respect to an Annual Grant, the date on
which the Annual Meeting in any calendar year is first convened.

 

(l) “Director” means a member of the Board.

 

(m) “Effective Date” means July 8, 2004.

 

(n) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder, as such law, rules and regulations may be
amended from time to time.

 

(o) “Fair Market Value” means, as of any particular date, the closing sale price
per Common Share as reported on the principal exchange on which Common Shares
are then trading, or if there are no sales on such day, on the next preceding
trading day during which a sale occurred.

 

(p) “Initial Grant” means a grant of Restricted Shares to a Non-Employee
Director in accordance with Section 4 of this Plan.

 

(q) “Non-Employee Director” means each member of the Board from time to time who
is not an employee of the Company or any of its Affiliates.

 

(r) “Plan” means this Thomas Properties Group, Inc. 2004 Non-Employee Director
Plan.

 

(s) “Restricted Shares” means Common Shares as to which neither the substantial
risk of forfeiture nor the prohibition on transfers referred to in Section 4 or
Section 5 of this Plan has lapsed.

 

(t) “Total Disability” means the permanent or total disability of a Non-Employee
Director within the meaning of Section 22(e)(3) of the Code, as determined by
the Board in good faith.

 

(u) “Voting Power” means, at any time, (i) the combined voting power of the
Voting Securities in the case of the Company, or (ii) the combined voting power
of then-outstanding securities entitled to vote generally in the election of
members of the board of directors or similar body in the case of another entity.

 

(v) “Voting Securities” means, at any time, (i) the securities entitled to vote
generally in the election of Directors in the case of the Company, or (ii) the
securities entitled to vote generally in the election of members of the board of
directors or similar body in the case of another entity.

 

3.    Shares Available Under the Plan.

 

(a) Subject to adjustment as provided in Section 3(b) of this Plan, the number
of Common Shares that may be issued or transferred as Restricted Shares and
released from substantial risks of forfeiture thereof shall not exceed in the

 

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aggregate 60,000 Common Shares. Such shares may be authorized but unissued
shares or treasury shares or a combination of the foregoing.

 

(b) The number of shares available in Section 3(a) above shall be adjusted to
account for shares relating to Awards that are forfeited. The number and type of
shares available in Section 3(a) shall also automatically be adjusted to reflect
(a) any stock split, combination of shares, recapitalization or other change in
the capital structure of the Company, (b) any merger, consolidation, spin-off,
split-off, spin-out, split-up, reorganization, partial or complete liquidation
or other distribution of assets, issuance of rights or warrants to purchase
securities, or (c) any other corporate transaction or event having an effect
similar to any of the foregoing.

 

4.    Initial Grants.

 

(a) Without any further action of the Board, each person who is elected or
appointed for the first time to be a Non-Employee Director shall automatically
receive an Initial Grant determined by dividing $37,500 by the Fair Market Value
of a Common Share on the Date of Grant; provided, however, that the number of
Restricted Shares shall be rounded downward such that no fractional share shall
be issued.

 

(b) Each Initial Grant shall constitute an immediate transfer of the ownership
of Restricted Shares to the Non-Employee Director, entitling such Non-Employee
Director to voting, dividend and other ownership rights, but subject to the
substantial risk of forfeiture and restrictions on transfer set forth in this
Section 4.

 

(c) Each Initial Grant shall provide that the Restricted Shares covered by such
Initial Grant shall be subject to a “substantial risk of forfeiture” until the
Annual Meeting that occurs in the second calendar year following the Date of
Grant. Each Initial Grant shall provide that the Non-Employee Director shall
forfeit the Restricted Shares covered by such Initial Grant if such Non-Employee
Director terminates his or her service with the Company while such Restricted
Shares are subject to a substantial risk of forfeiture. Notwithstanding the
foregoing, each such Initial Grant shall provide for the immediate lapse of such
substantial risk of forfeiture in the event of (i) the Non-Employee Director’s
death or Total Disability, or (ii) upon a Change in Control.

 

(d) Each Initial Grant shall require that any or all dividends or other
distributions (other than cash dividends) declared or otherwise distributed
thereon be subject to the same restrictions as the underlying Initial Grant.

 

(e) Each Initial Grant shall provide that during the period for which such
substantial risk of forfeiture has not lapsed, the Restricted Shares shall not
be sold or otherwise transferred, other than by will or the laws of descent and
distribution.

 

(f) Notwithstanding the provisions of Section 4(a), upon the appointment of
initial Non-Employee Directors to the Board following the Company’s initial

 

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public offering of Common Shares, each such Non-Employee Director shall receive
an Initial Grant of 2,500 Restricted Shares in lieu of the Initial Grant
specified in Section 4(a).

 

(g) Each Initial Grant shall be evidenced by an Award Agreement, which shall
contain such terms and provisions not inconsistent with this Plan as the Board
may approve. Unless otherwise directed by the Board, all certificates
representing Restricted Shares shall be held in custody by the Company until all
restrictions thereon shall have lapsed, together with a stock power or powers
executed by the Non-Employee Director in whose name such certificates are
registered, endorsed in blank.

 

5.    Annual Grants.

 

(a) Commencing with the Annual Meeting in 2005, each person who is then a
Non-Employee Director, and who did not receive an Initial Grant within 90 days
prior to such Annual Meeting, without any further action of the Board, shall
automatically receive an Annual Grant determined by dividing $15,000 by the Fair
Market Value of a Common Share on the Date of Grant; provided, however, that the
number of Restricted Shares shall be rounded downward such that no fractional
share shall be issued.

 

(b) Each Annual Grant shall constitute an immediate transfer of the ownership of
Restricted Shares to the Non-Employee Director, entitling such Non-Employee
Director to voting, dividend and other ownership rights, but subject to the
substantial risk of forfeiture and restrictions on transfer set forth in this
Section 5.

 

(c) Each Annual Grant shall provide that the Restricted Shares covered by such
Annual Grant shall be subject to a “substantial risk of forfeiture” until the
Annual Meeting that occurs in the first calendar year following the Date of
Grant. Each Annual Grant shall provide that the Non-Employee Director shall
forfeit the Restricted Shares covered by such Annual Grant if such Non-Employee
Director terminates his or her service with the Company while such Restricted
Shares are subject to a substantial risk of forfeiture. Notwithstanding the
foregoing, each such Annual Grant shall provide for the immediate lapse of such
substantial risk of forfeiture in the event of (i) the Non-Employee Director’s
death or Total Disability, or (ii) upon a Change in Control.

 

(d) Each Annual Grant shall provide that during the period for which such
substantial risk of forfeiture has not lapsed, the Restricted Shares shall not
be sold or otherwise transferred, other than by will or the laws of descent and
distribution.

 

(e) Each Annual Grant shall require that any or all dividends or other
distributions (other than cash dividends) declared or otherwise distributed
thereon be subject to the same restrictions as the underlying Annual Grant.

 

(f) Each Annual Grant shall be evidenced by an Award Agreement, which shall
contain such terms and provisions not inconsistent with this Plan as the

 

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Board may approve. Unless otherwise directed by the Board, all certificates
representing Restricted Shares shall be held in custody by the Company until all
restrictions thereon shall have lapsed, together with a stock power or powers
executed by the Non-Employee Director in whose name such certificates are
registered, endorsed in blank.

 

6.    Change in Control. For purposes of this Plan, except as may be otherwise
prescribed by the Board in a Non-Employee Director’s Award Agreement, a “Change
in Control” shall mean the occurrence of any of the following events:

 

(a) Any transaction, whether effected directly or indirectly, resulting in any
“person” or “group” (as those terms are defined in Sections 3(a)(9), 13(d), and
14(d) of the Exchange Act and the rules thereunder) having “beneficial
ownership” (as determined pursuant to Rule 13d-3 under the Exchange Act) of the
Voting Securities of the Company that represent greater than 35% of the Voting
Power of the Company, other than: (1) any transaction or event resulting in the
beneficial ownership of such Voting Securities by a trustee or other fiduciary
holding securities under any employee benefit plan (or related trust) sponsored
or maintained by the Company or any person controlled by the Company by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any person controlled by the Company, (2) any transaction or event resulting
in the beneficial ownership of such Voting Securities by the Company or a
corporation owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of the stock of the
Company, or (3) any transaction or event resulting in the beneficial ownership
of such Voting Securities pursuant to a transaction described in Section 6(c)
below that would not be a Change in Control under Section 6(c);

 

(b) Individuals who, as of the Effective Date, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a Director subsequent to
the date hereof whose election by the Company’s stockholders, or nomination for
election by the Board, was approved by a vote of at least a majority of the
Directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an election contest with respect to the election or removal of
Directors or other solicitation of proxies or consents by or on behalf of a
person other than the Board;

 

(c) The consummation by the Company (whether directly involving the Company or
indirectly involving the Company through one or more intermediaries) of (i) a
merger, consolidation, reorganization, or business combination, or (ii) a sale
or other disposition of all or substantially all of the Company’s assets, or
(iii) the acquisition of assets or stock of another entity, in each case, other
than a transaction: (1) which results in the Company’s Voting Securities
outstanding immediately before the transaction continuing to represent

 

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(either by remaining outstanding or by being converted into Voting Securities of
the Company or the person that, as a result of the transaction, controls,
directly or indirectly, the Company or owns, directly or indirectly, all or
substantially all of the Company’s assets or otherwise succeeds to the business
of the Company (the Company or such person, the “Successor Entity”)) directly or
indirectly, greater than 50% of the Voting Power of the Successor Entity
immediately after the transaction, and (2) after which no person or group
beneficially owns Voting Securities representing greater than 50% of the Voting
Power of the Successor Entity; provided, however, that no person or group shall
be treated for purposes of this Section 6(c)(2) as beneficially owning Voting
Securities representing greater than 50% of the Voting Power of the Successor
Entity solely as a result of the Voting Securities held in the Company prior to
the consummation of the transaction; or

 

(d) the approval by the Company’s stockholders of a liquidation or dissolution
of the Company.

 

For purposes of Section 6(a) above, the calculation of Voting Securities shall
be made as if the date of the acquisition were a record date for a vote of the
Company’s stockholders, and for purposes of Section 6(c) above, the calculation
of Voting Securities shall be made as if the date of the consummation of the
transaction were a record date for a vote of the Company’s stockholders.

 

7.    Fractional Shares. The Company shall not be required to issue any
fractional Common Shares pursuant to this Plan.

 

8.    Administration of the Plan.

 

(a) This Plan shall be administered by the Board, which may from time to time
delegate all or any part of its authority under this Plan to a committee of the
Board (or a subcommittee thereof). To the extent of any such delegation,
references in this Plan to the Board shall be deemed to be references to such
committee or subcommittee.

 

(b) The interpretation and construction by the Board of any provision of this
Plan or of any Award Agreement, and any determination by the Board pursuant to
any provision of this Plan or of any such Award Agreement, shall be final and
conclusive. No member of the Board shall be liable for any such action or
determination made in good faith.

 

9.    Amendment and Termination of Plan. The Board may from time to time and at
any time amend or terminate the Plan in whole or in part; provided, however,
that any amendment (i) which must be approved by the stockholders of the Company
in order to comply with applicable law or the rules of the principal exchange on
which the Common Shares are traded or quoted, or (ii) which would increase the
benefits accruing to Non-Employee Directors, increase the aggregate number of
Common Shares that may be issued under the Plan or materially modify the
eligibility requirements for participating in

 

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the Plan, shall not be effective unless and until the stockholders of the
Company have approved such amendment. Notwithstanding anything to the contrary
set forth in this Plan, in the event the common stock of the Company is no
longer listed for trading with a national securities exchange or the Nasdaq
National Market, then all further grants under this Plan shall be suspended
until the Board shall take further action with respect thereto.

 

10.    Governing Law. All issues concerning construction, validity and
interpretation of this Plan and all Awards granted hereunder shall be governed
by the law of the State of Delaware, without regard to such state’s conflict of
laws rules.

 

11.    General Provisions.

 

(a) Nothing in the Plan shall be deemed to create any obligation on the part of
the Board to nominate any Director for reelection by the Company’s stockholders
or to limit the rights of the stockholders to remove any Director.

 

(b) All notices under this Plan shall be in writing, and if to the Company,
shall be delivered to the Secretary of the Company or mailed to its principal
office, ARCO Plaza, 515 South Flower Street, Los Angeles, California 90071,
addressed to the attention of the Secretary; and if to a Non-Employee Director,
shall be delivered personally or mailed to the Non-Employee Director at the
address appearing on the records of the Company. Such addresses may be changed
at any time by written notice to the other party.

 

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