**Exhibit10.6**

**PARKWAYPROPERTIES, INC.**

**2003 EQUITYINCENTIVE PLAN**

                1.                 Introduction.

            Parkway Properties, Inc. (the"Company") established the Parkway Properties, Inc. 2003 EquityIncentive Plan (the "Plan"), effective January 1, 2003.

                                    By the adoption of this document, the Companyrestates the Plan and amends it to conform to the requirements of section 409Aof the Internal Revenue Code for a nonqualified deferred compensation plan.

                2.                 Purposes.

                                    The purposes of this Plan are to providestrong incentive for management Employees to exert their best efforts on behalfof the Company, and to further identify and align the interests of Employees ofcertain Subsidiaries with those of the Company's shareholders.  Towards theseobjectives, the Plan provides for the grant of Options, Incentive RestrictedShares, and Deferred Incentive Share Units to Employees and for the grant ofOptions to certain Subsidiaries on the basis of Underlying Options issued bythe Subsidiaries to their Employees.

                3.                 Definitions.  

                                    As used in this Plan:

(a)               "Board of Directors" or "Board" shall mean the Boardof Directors of the Company.

(b)              "Committee" shall mean a committee of the Board of Directorsof the Company, which committee shall be composed of those members of theCompensation Committee of the Board of Directors who are non-employee directorswithin the meaning of Rule 16b-3 of the General Rules and Regulations under theSecurities Exchange Act of 1934 ("non-employee directors"), providedthat, should there be fewer than two members of the Compensation Committee whoare non-employee directors, the Committee shall be composed of two or moremembers of the Board of Directors who are non-employee directors, includinganyone who is a member of the Compensation Committee.

(c)               "Common Shares" shall mean the shares of common stock, $0.001par value, of the Company.

(d)              "Deferred Incentive Share Unit" or " Unit" shallmean a bookkeeping entry used by the Company to record and account for thegrant of an award that is the economic equivalent of a Common Share, until theaward is paid or forfeited.

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(e)               "Employee" shall mean an employee of the Company or aSubsidiary.

(f)                "Fair Market Value" of a Common Share shall mean, on any date,(i) if the Common Shares are traded in the over-the-counter market, the meanbetween the closing bid and asked prices of the Common Shares or the price ofCommon Shares quoted on that date, or, if no prices are so quoted on that date,on the next preceding date on which such prices are so quoted, or, (ii) if theCommon Shares are traded on a national securities exchange, the closing priceof the Common Shares as reported on such exchange or under any compositetransaction report of such exchange on that date, or, if no prices are soreported on that date, on the next preceding date on which such prices are soreported.

(g)               "Incentive Restricted Share" shall mean a Common Share grantedto an Employee pursuant to an Incentive Restricted Share agreement and subjectto the terms and conditions determined by the Committee.

(h)               "Internal Revenue Code" or "Code" shall mean theInternal Revenue Code of 1986, as amended from time to time.

(i)                 "Option" shall mean an option granted pursuant to the Plan topurchase a Common Share and may refer to an incentive stock option as definedin section 422 of the Internal Revenue Code, or a non-qualified stock option(that is, an option that is not an incentive stock option), or an optiongranted to a Subsidiary pursuant to Section 9.

(j)                "Permanent Disability" shall mean a medically determinablephysical or mental impairment that may be expected to result in death or tolast at least a year and that renders an Employee incapable of performing thatEmployee's duties with the Company.  A determination of disability shall bemade by the Committee in a uniform, nondiscriminatory manner on the basis ofmedical evidence.  Notwithstanding the foregoing, in the case of adetermination made with respect to a Deferred Incentive Share Unit, aParticipant shall be considered to have a "Permanent Disability" onlyif the Participant is "disabled" within the meaning of section 409Aof the Internal Revenue Code or the regulations issued under that section.

(k)              "Restricted Period" shall mean the period described in Section12(a)(i) or Section 14(a)(i).

(l)                 "Retirement" shall mean the termination of employment with theCompany and its Subsidiaries after the attainment of age 65 or after theattainment of age 55 and the completion of 6 years of service with the Companyor its Subsidiaries.

(m)             "Subsidiary" shall mean any present or future subsidiarycorporation of the Company as defined in section 424(f) of the Internal RevenueCode.  "Subsidiary" shall also mean Parkway Properties LP and ParkwayRealty Services, LLC.  

(n)               "Underlying Option" shall mean an option to purchase CommonShares granted by a Subsidiary, which option is the basis for the Subsidiary'sapplication to the Company for the grant of an Option pursuant to Section 9(c)of this Plan.

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                4.                 Administration.  

                                    The Committee shall administer the Plan.  TheCommittee shall have all the powers vested in it by the terms of the Plan.  TheCommittee shall have full authority to interpret the Plan and the Option,Incentive Restricted Share, and Deferred Incentive Share Unit agreements underthe Plan, to prescribe, amend, and rescind rules and regulations relating tothe Plan, and to make any determinations it believes necessary or advisable forthe administration of the Plan.  The Committee may correct any defect or supplyany omission or reconcile any inconsistency in the Plan or in any Option,Incentive Restricted Share or Deferred Incentive Share Unit agreement in themanner and to the extent the Committee deems desirable.  Any decision of theCommittee in the administration of the Plan shall be in its sole discretion andconclusive.  The Committee may act only by a majority of its members in office,except that the members of the Committee may authorize any one or more of itsmembers or any officer of the Company to execute and deliver documents onbehalf of the Committee.

                5.                 Common Shares Available.

            On January 1, 2003, there are 200,000 CommonShares available for grant under the Plan.  On July 1 of each year, beginningwith July 1, 2004, the number of Common Shares available for grant shall beautomatically increased by 0.25 percent of the number of Common Shares outstandingon that date, provided, however, that the total number of Common Sharesremaining available for grant under the Plan or otherwise available for grantor covered by outstanding grants as described in clauses (i) through (iv) belowshall not exceed 11.5 percent of the sum of the number of Common Sharesoutstanding (excluding Common Shares issued under Incentive Restricted Sharegrants with respect to which the Restricted Period has not expired), plus thenumber of Common Shares issuable on the conversion of outstanding convertibledebt or equity securities or the exercise of outstanding warrants or otherrights to purchase Common Shares.  The available Common Shares and outstandinggrants taken into account for the purposes of the 11.5 percent limit describedin the preceding sentence are:  (i) Common Shares remaining available for grantunder this Plan or the Company's 2001 Directors Stock Option Plan, (ii)outstanding options to purchase Common Shares granted to Employees or directorsunder this or any other plan of the Company or its Subsidiaries; (iii)Incentive Restricted Shares with respect to which the Restricted Period has notexpired; and (iv) Deferred Incentive Share Units with respect to which theRestricted Period has not yet expired.

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                                    The aggregate Common Shares made subject toOptions that are incentive stock options under the Plan shall not exceed100,000 of the number of Common Shares determined under the precedingsentence.  The aggregate number of Common Shares that may be purchased pursuantto Option shall not exceed the available number of Common Shares.  Upon theexpiration, termination, or forfeiture in whole or part of any unexercisedOption, any Incentive Restricted Shares, or any Deferred Incentive Share Units,the Common Shares subject to such Option or forfeited grant shall again beavailable for grant under the Plan.  Further, any Common Shares tendered (bysurrender or attestation) in payment of the purchase price under an Option orof the Company's tax withholding obligation, and any Common Shares retained bythe Company to satisfy its tax withholding obligation, shall again be availablefor grant under the Plan.  No Employee shall be granted Options under the Planthat, combined with all other Options and Underlying Options granted to thatEmployee under this Plan, will entitle that Employee to purchase more than100,000 Common Shares minus the number of Incentive Restricted Shares andDeferred Incentive Share Units granted to such Employee under this Plan.

                6.                 Grant of Options to Employees.

(a)               The Company may from time to time grant Options to Employees to purchaseCommon Shares under the Plan.

(b)              The Committee shall determine and designate the Employees to whomOptions are to be granted and shall determine when Options are to be grantedand the number of Common Shares to be subject to each Option.

                7.                 Terms of Options Granted to Employees.

            Each Optiongranted to an Employee pursuant to Section 6 of the Plan shall be evidenced byan agreement signed by the Employee to whom the Option is granted and by anexecutive officer of the Company.  The Option agreement shall set forth  suchterms and conditions as the Committee shall determine and as are consistentwith the provisions of the Plan, including the following:

(a)               The Committee shall determine the purchase price of each Common Sharesubject to an Option, which price shall not be less than the Fair Market Valueof a Common Share on the date the Option is granted.

(b)              An Option may be exercised in whole or in part from time to time duringsuch period as the Option shall specify, provided that no Option shall beexercisable within one year after, or more than ten years after, the date ofthe grant of the Option.

(c)               The purchase price of the Common Shares with respect to which an Optionis exercised shall be payable in full on the date the Option is exercised, incash or, to the extent authorized by the Committee at the time the Option isgranted, in Common Shares (by surrender or attestation to ownership) or in acombination of cash and Common Shares.  The value of a Common Share used inpayment of the purchase price shall be its Fair Market Value on the date theOption is exercised.  The Committee may allow for payment through cashlessexercise, subject to applicable law and regulation and any conditions theCommittee may impose, and may establish other methods for payment of thepurchase price, subject to applicable law and regulation.

(d)              An Option shall not be assignable or transferable by the Employee towhom granted except by will or the laws of descent and distribution and shallbe exercisable, during the Employee's lifetime, only by the Employee.

(e)               Unless the Committee shall specify otherwise, the right of an Optionholder to exercise an Option to purchase the number of Common Shares to whichthe Option initially related shall accrue on a cumulative basis as follows:

(i)                 Two years after the Option is granted: 1⁄3

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(ii)               Three years after the Option is granted: 1⁄3

(iii)              Four years after the option is granted: 1⁄3

(f)                Each agreement relating to an Option granted to an Employee shall statewhether any part of the Option is intended to be an incentive stock option.

(g)               Upon the termination of an Option holder's employment with the Companyand its Subsidiaries, whether by death or otherwise, no Common Shares maythereafter be purchased pursuant to the Option and the Option shall expire,except as follows:

(i)                 If the Option holder's employment is terminated by reason of PermanentDisability or death, the Option holder's right to exercise the Option in fullshall automatically be accelerated as of the date preceding the Option holder'sPermanent Disability or death.  The Option holder or, in the case of the Optionholder's death while in the employ of the Company or a Subsidiary, the Optionholder's estate or the person to whom the Option holder's rights under theOption are transferred by will or the law of descent and distribution may,within twelve months of the date of the Option holder's Permanent Disability ordeath, purchase all the of Common Shares remaining subject to the Option.

(ii)               If an Option holder's employment is terminated by reason of Retirement,the Option holder may, within twelve months of the date of his or herRetirement, purchase any Common Shares the Option holder was entitled topurchase under the Option on the date of his or her Retirement.  The Committeemay, in its discretion, determine to accelerate, in whole or in part, the rightof an Option holder to exercise the Option upon Retirement, in which case thenumber of Common Shares with respect to which the Option holder may exercisethe Option shall be adjusted accordingly.

(iii)              If an Option holder's employment is terminated for any reason other thanRetirement, Permanent Disability, or death, the Option holder may, within threemonths of the termination of his or her employment, purchase any Common Sharesthe Option holder was entitled to purchase under the Option on the date of thetermination of his or her employment.

(iv)             If the Option holder dies within the twelve month period following hisor her Retirement or Permanent Disability or within the three month periodfollowing the termination of his or her employment for any other reason, theOption holder's estate or the person to whom the Option holder's rights aretransferred by will or under the law of descent and distribution may, withinone year of the Option holder's death, purchase any Common Shares the Optionholder was entitled to purchase under the Option on the date of his or herdeath.

                        Nothing in this Section 7(g) shall authorize the exerciseof an Option after the expiration of the exercise period provided in theOption, nor later than ten years after the date of the grant of the Option.

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                8.                 Additional Terms of Incentive Stock Options.

            Each incentive stock option granted under thePlan shall be subject to the following terms and conditions in addition to theterms and conditions described in Section 7 above:

(a)               The purchase price of each Common Share subject to an incentive stockoption granted to an Employee who, at the time the Option is granted, owns(directly and within the meaning of section 424(d) of the Code) Common Sharespossessing more than 10 percent of the combined voting power of all classes ofCommon Shares of the Company shall not be less than 110 percent of the FairMarket Value of a Common Share on the date the Option is granted, and theOption shall not be exercisable more than five years after the date of grant.

(b)              To the extent the aggregate Fair Market Value (determined as of the datean Option is granted) of the Common Shares for which any Employee is grantedOptions designated incentive stock options first exercisable in any calendaryear (under this Plan and under all plans of the Company and its Subsidiaries)exceeds $100,000, the Option shall be treated as an Option that is not anincentive stock option.

(c)               If an Option holder disposes of Common Shares acquired pursuant to theexercise of an incentive stock option in a disqualifying disposition within thetime periods identified in section 422(a)(1) of the Code, the Option holdershall notify the Company of such disposition and provide the Company withinformation as to the date of disposition, sales price, number of Common Sharesinvolved, and any other information about the disposition that the Company mayreasonably request.

                9.                 Grant of Options to Certain Subsidiaries.

(a)               The Company may from time to time under circumstances described inSection 9(c) grant Options to the Subsidiaries identified in Section 9(b) topurchase Common Shares under the Plan.

(b)              The Subsidiaries to which the Company may grant Options pursuant thisPlan are Parkway Properties LP (the "Operating Partnership") andParkway Realty Services, LLC ("Realty Services").

(c)               The Operating Partnership adopted a plan under which it and RealtyServices or either of them may grant to their employees options to purchase CommonShares ("Underlying Options").  Upon the grant of such an option, theOperating Partnership or Realty Services may apply to the Company for a grantto the Operating Partnership or Realty Services of an Option to purchase anumber of Common Shares that is the same as the number of Common Shares forwhich the Underlying Option was granted.  The Committee shall determine whetherthe Company shall grant such an Option to the Operating Partnership or RealtyServices.

                

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                10.             Terms of Options Granted to a Subsidiary.

                                 Each Option granted to a Subsidiary pursuantto Section 9 of the Plan shall be evidenced by a notice to the Subsidiaryexecuted on behalf of the Company, in such form as the Committee shalldetermine and upon terms and conditions that reflect those of the UnderlyingOption, provided the terms and conditions are consistent with the provisions ofthe Plan, including the following:

(a)               The purchase price of each Common Share subject to an Option shall notbe less than the Fair Market Value of a Common Share on the date the Option isgranted.

(b)              An Option may be exercised in whole or in part from time to time duringsuch period as the Option shall specify, provided that no Option shall beexercisable within one year after, or more than ten years after, the date of thegrant of the Option, and further provided that no Option shall be exercisableexcept to the extent of the number of Common Shares for which the UnderlyingOption is exercised.

(c)               The purchase price of the Common Shares with respect to which an Optionis exercised shall be payable in full on the date the Option is exercised, incash or, to the extent authorized by the Committee, in Common Shares or in acombination of cash and Common Shares.  The value of a Common Share deliveredin payment of the purchase price shall be its Fair Market Value on the date theOption is exercised.

(d)              An Option shall not be assignable or transferable by the Subsidiary towhich it is granted.

                11.             Grant of Incentive Restricted Common Shares.

(a)               The Company may from time to time grant Incentive Restricted Shares toEmployees under the Plan.

(b)              The Committee shall determine and designate the Employees to whomIncentive Restricted Shares are to be granted and shall determine whenIncentive Restricted Shares are to be granted and the number of IncentiveRestricted Shares to be granted.

                12.             Terms of Incentive Restricted Shares.

(a)               The grant of Incentive Restricted Shares to an Employee pursuant toSection 11 shall be evidenced by an agreement signed by the Employee to whomthe Incentive Restricted Shares are granted and by an executive officer of theCompany.  The Incentive Restricted Share agreement shall set forth such terms,conditions, restrictions, and limits on the Incentive Restricted Shares as theCommittee shall determine and as are consistent with the provisions of thePlan, including the following:

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(i)                 During a period of time established by the Committee, the Employee'sinterest in the Incentive Restricted Shares shall be forfeitable, and theIncentive Restricted Shares shall not be assignable or otherwise transferable. The Committee may stipulate that these restrictions on the Incentive RestrictedShares shall lapse only upon the satisfaction of one or more, or alternative,prescribed conditions.  The conditions may relate to the Company's performance,the continuation of the Employee's employment with the Company or a Subsidiary,or other matters.  The Committee may establish a period of time by which orupon the expiration of which each condition shall have been satisfied, andshall specify the extent to which the restrictions shall then lapse.  Theperiod during which Incentive Restricted Shares remain subject to suchrestrictions and conditions shall be referred to as the "RestrictedPeriod."

(ii)               The Company may register a certificate in the Employee's name for thenumber of Common Shares subject to the grant of Incentive Restricted Shares,but the Company shall retain custody of any certificate during the RestrictedPeriod.

(iii)              Unless otherwise provided by the Committee in the Incentive RestrictedShare agreement, the Employee to whom Incentive Restricted Shares have beengranted shall be entitled, during the Restricted Period, to vote those CommonShares and to receive the dividends payable with respect to those CommonShares.

(iv)             Upon the expiration or termination of the Restricted Period with respectto specified Incentive Restricted Shares, either because of the satisfaction ofconditions prescribed by the Committee, or at the time and to the extentprovided by the Committee in accordance with Section 12(a)(v) (regarding deathor Permanent Disability), the restrictions applicable to those IncentiveRestricted Shares shall lapse and a certificate for those Common Shares shallbe delivered to the Employee or to the Employee's estate or the person to whomthe Employee's rights are transferred by will or under the laws of descent anddistribution, as the case may be, free of all restrictions, provided, however,that no Common Share shall be delivered before the Employee, the Employee'sestate, or such other person has provided, in the manner described in Section24, for satisfaction of any federal, state, and local income and employment taxwithholding obligation incurred by the Company in connection with the deliveryof the Common Shares, termination of the Restricted Period, or lapse of theconditions and restrictions on the Common Shares.

(v)               The Committee may provide that upon the termination of the Employee'semployment during the Restricted Period by reason of death or PermanentDisability, the conditions and restrictions on all or a portion of theIncentive Restricted Shares shall lapse and the Restricted Period with respectto those Common Shares shall expire.

(vi)             Except as provided by the Committee in accordance with Section 12(a)(v),the Employee shall forfeit all Incentive Restricted Shares upon (A)  thetermination of the Employee's employment with the Company and its Subsidiariesduring the Restricted Period or (B) the expiration of the Restricted Periodwithout the satisfaction of any conditions prescribed by the Committee.

                        Upon such a forfeiture, all of theEmployee's interest in the Incentive Restricted Shares shall automaticallyrevert to the Company.

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(vii)            The Committee may provide in the Incentive Restricted Share agreementthat the Employee shall receive, rather than the dividends payable with respectto Incentive Restricted Shares, a credit equivalent to the amount of suchdividends, which shall be payable to the Employee only if and at the time theIncentive Restricted Shares to which the dividend equivalents are attributableare delivered to the Employee; if the Employee forfeits Incentive RestrictedShares, the Employee shall simultaneously forfeit the dividend equivalentsattributable to such Incentive Restricted Shares.

(b)              Limitations on Incentive Restricted Shares.  The Company shallgrant no more than 75,000 Incentive Restricted Shares to any one individualunder this Plan.

(c)               Surrender of Incentive Restricted Shares or Election of DeferredIncentive Share Units.  At the discretion of the Committee, an Employee maysurrender Incentive Restricted Shares or elect that the Company grant DeferredIncentive Share Units in place of Incentive Restricted Shares that wouldotherwise be granted under Section 11.  If an Employee, with the consent of theCommittee, surrenders Incentive Restricted Shares or elects to be grantedDeferred Incentive Share Units:

(i)                 The Employee's election to surrender Incentive Restricted Shares, or tobe granted Deferred Incentive Share Units in place of Incentive RestrictedShares, shall be in writing and irrevocable.  The Committee shall establishprocedures for the form and timing of an Employee's election and all electionsshall conform to the Committee's procedures.  The Committee's procedures shallconform to the requirements of section 409A of the Internal Revenue Code forthe deferral (until payment) of the inclusion of compensation in gross income. The Employee shall have no further interest in the surrendered or forgoneIncentive Restricted Shares.

(ii)               The Company shall cancel any certificate registered in the Employee'sname for the number of Incentive Restricted Shares surrendered.  The Companyshall grant a Deferred Incentive Share Unit to the Employee for each IncentiveRestricted Share surrendered or forgone, and credit such Deferred IncentiveShare Units to a bookkeeping account maintained for the Employee under thePlan.

(iii)              A Deferred Incentive Share Unit shall be subject to the same RestrictedPeriod as the Incentive Restricted Share in exchange for which or in place ofwhich the Deferred Incentive Share Unit was granted.  The Employee shallforfeit his or her interest in a Deferred Incentive Share Unit if and at thetime the Employee would have forfeited the Incentive Restricted Share inexchange for which or in place of which it was granted.

(iv)             The Deferred Incentive Share Units credited to an Employee's accountunder this Section 12(c), and the account itself, shall be subject to theprovisions of Section 14 of this Plan, provided that upon an Employee'ssurrender of Incentive Restricted Shares pursuant to this Section 12(c), theCompany shall, at the time of the cancellation of the surrendered Common Sharesin accordance with Section 12(c)(ii), issue an equal number of Common Shares tothe trustee of the trust established pursuant to Section 14(c)(iii).

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                 13.             Grant of Deferred Incentive Share Units.

(a)               The Company may from time to time grant Deferred Incentive Share Unitsto Employees under the Plan.

(b)              The Committee shall determine and designate the Employees to whomDeferred Incentive Share Units are to be granted and shall determine whenDeferred Incentive Share Units are to be granted and the number of Units to begranted.

                14.             Terms of Deferred Incentive Share Units.

(a)               Grant Agreement.  The grant of Deferred Incentive Share Units toan Employee pursuant to Section 13 shall be evidenced by an agreement signed bythe Employee to whom the Units are granted and by an executive officer of theCompany.  The Deferred Incentive Share Units agreement shall set forth suchterms, conditions, restrictions, and limits on the Units as the Committee shalldetermine and as are consistent with the provisions of the Plan, including thefollowing:

(i)                 During a period of time established by the Committee, the Employee'sinterest in the Deferred Incentive Share Units shall be forfeitable, and theDeferred Incentive Share Units shall not be assignable or otherwisetransferable.  The Committee may stipulate that these restrictions on theDeferred Incentive Share Units shall lapse only upon the satisfaction of one ormore, or alternative, prescribed conditions.  The conditions may relate to theCompany's performance, the continuation of the Employee's employment with theCompany or a Subsidiary, or other matters.  The Committee may establish aperiod of time by which or upon the expiration of which each condition shallhave been satisfied, and shall specify the extent to which the restrictionsshall then lapse.  The period during which Deferred Incentive Share Unitsremain subject to such restrictions and conditions shall be referred to as the"Restricted Period."

(ii)               A Deferred Incentive Share Unit shall carry with it no voting ordividend or other rights associated with Common Share ownership.

(iii)              Upon the expiration or termination of the Restricted Period with respectto specified Deferred Incentive Share Units, either because of the satisfactionof conditions prescribed by the Committee, or at the time and to the extentprovided by the Committee in accordance with Section 14(a)(iv) (regarding deathor Permanent Disability), the restrictions applicable to those Units shalllapse.

(iv)             The Committee may provide that upon the termination of the Employee'semployment during the Restricted Period by reason of death or PermanentDisability, the conditions and restrictions on all or a portion of the DeferredIncentive Share Units shall lapse and the Restricted Period with respect tothose Units shall expire.

(v)               Except as provided by the Committee in accordance with Section14(a)(iv), the Employee shall forfeit all Deferred Incentive Share Units upon(A)  the termination of the Employee's employment with the Company and itsSubsidiaries during the Restricted Period or (B) the expiration of theRestricted Period without the satisfaction of any conditions prescribed by theCommittee.

                                                Upon such a forfeiture, all of theEmployee's interest in the Deferred Incentive Share Units shall automaticallyrevert to the Company.

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(vi)             Notwithstanding Section 14(a)(ii), the Committee may but need notprovide that an Employee's account shall be credited with an amount equivalentto the amount of dividends that would be payable with respect to a number ofCommon Shares equal to the number of Deferred Incentive Share Units credited tothe account.

(vii)            The Committee may provide for the crediting of interest on any dividendequivalents credited to an Employee's account or may provide that the dividendequivalent credit be adjusted for hypothetical investment experience in suchmanner as the Committee may determine.

(viii)          If the Employee forfeits his or her interest in a Deferred IncentiveShare Unit, the Employee shall simultaneously forfeit any dividend equivalents(as adjusted under Section 14(a)(vii) above) attributable to those DeferredIncentive Share Units.

(b)              Payment of Deferred Incentive Share Units.  Payment of theDeferred Incentive Share Units and other amounts credited to an Employee'saccount shall be made at such time or times after the expiration of theRestricted Period as the Committee may establish.  The Committee may but neednot provide that an Employee may elect to defer payment until such time ortimes as the Committee may allow.  The Committee may provide for payments inlump sums or installments or both.  The Committee shall establish proceduresfor its establishment of the time of payment and for the form and timing of anEmployee's deferral and payment elections.  All elections shall conform to theCommittee's procedures.  The Committee's procedures shall conform to therequirements of section 409A of the Internal Revenue Code for the deferral(until payment) of the inclusion of compensation in gross income.

                                                        The Committee may, in itsdiscretion, change the procedures for elections, change the time to whichpayment may be deferred, and change the availability of lump sum or installmentpayments.  The Committee may provide that such changes will apply to DeferredIncentive Share Units and other amounts already credited to an Employee'saccount, with respect to which an Employee may have already made deferral andpayment elections, but only to the extent such changes would not cause the Planto fail to conform to the requirements of section 409A of the Code for thedeferral (until payment) of the inclusion of compensation in gross income.

                        Payment of Deferred IncentiveShare Units shall be made in the form of Common Shares, one Common Share foreach Unit.  Payment of any dividend equivalents (as adjusted) shall be made incash.

(c)               Unsecured Rights; Grantor Trust.

(i)                 The Company shall not establish any special fund with respect to anEmployee's account.  Any credit entries made to an Employee's account shallconstitute a mere promise by the Company to make payments to the Employee,subject to and in accordance with the Plan, from the general assets of theCompany, when the payments become due.

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(ii)               To the extent that any person acquires a right to receive payments fromthe Company under this Plan, such right shall be no greater than the right ofany unsecured general creditor of the Company.

(iii)              The Company shall establish, in connection with this Plan, a trust ofwhich the Company is treated as the owner under Subpart E of Subchapter J,Chapter 1 of the Internal Revenue Code of 1986, as amended.  The trust shall bededicated to the payment of benefits owed by the Company under this Plan and,in the Company's discretion, other plans of deferred compensation, provided,however, that the assets held in trust shall be subject to the claims ofcreditors in the case of the insolvency of the Company.  Except as provided inSection 12(c)(iv), the Company shall not be obliged to fund the trust withrespect to this Plan.

                15.             No Alienation.  Except to the extent required by law, the rightof an Employee or beneficiary to payment under this Plan shall not be subjectin any manner to anticipation, alienation, sale, transfer, assignment, pledge,encumbrance, attachment, or garnishment by creditors of the Employee orbeneficiary.

                 16.             Recapitalization or Reorganization.

                                    The existence of the Plan and the grant ofOptions and Incentive Restricted Shares and Deferred Incentive Share Unitsunder the Plan shall not affect the right or power of the Board or theshareholders of the Company to make or authorize the adjustment,recapitalization, reorganization, or other change in the Company's capitalstructure or its business, any merger or consolidation of the Company, anyissue of bonds, debentures, preferred or prior preference stocks ahead of oraffecting Common Shares or the rights of Common Shares, the dissolution orliquidation of the Company or any sale or transfer of all or any part of itsassets or business, or any other corporate act or proceeding.

                                    Any Common Shares with respect to whichOptions and Incentive Restricted Shares and Deferred Incentive Share Units maybe granted are Common Shares as presently constituted, but if, and whenever,before the expiration of an Option or before the expiration of the RestrictedPeriod with respect to Incentive Restricted Shares or payment of DeferredIncentive Share Units, the Company shall effect a subdivision or consolidationof Common Shares or the payment of a Common Share dividend on Common Shareswithout receipt of consideration by the Company, the number of Common Sharessubject to the grant (i) in the event of an increase in the number ofoutstanding Common Shares shall be proportionately increased and (in the caseof an Option) the purchase price per Common Share shall be proportionatelyreduced, and (ii) in the event of a reduction in the number of outstandingCommon Shares shall be proportionately reduced and (in the case of an Option)the purchase price per Common Share shall be proportionately increased, and thenumber of Common Shares available under Section 5 for grant shall be adjustedaccordingly.

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                                    If the Company shall effect a recapitalizationor other change in its capital structure, the number of Common Shares subjectto an outstanding grant shall be the number and class of Common Shares to whichthe holder would have been entitled pursuant to the terms of suchrecapitalization if, immediately prior to such recapitalization, the holder hadbeen the holder of record of the number of Common Shares subject to the grant,and the number of Common Shares available under Section 5 for grant shall beadjusted accordingly.  If the Company is merged or consolidated with acorporation, the Committee shall make appropriate adjustments to outstandingOption and Incentive Restricted Share and Deferred Incentive Share Unit grantsto give effect to the merger or consolidation on an equitable basis in terms ofissuance of Common Shares of the corporation surviving the merger or theconsolidated corporation.

                                    Except as expressly provided in this Section,the issuance by the Company of Common Shares of any class or securitiesconvertible into Common Shares of any class, for cash, property, labor orservices, upon direct sale, upon the exercise of rights or warrants, or uponthe conversion of Common Shares or obligations of the Company convertible intosuch Common Shares or other securities, and in any case whether or not for fairvalue, shall not affect, and no adjustment shall be made with respect to, thenumber of Common Shares subject to Options previously granted or the purchaseprice per Common Share or the number of Incentive Restricted Common Shares orDeferred Incentive Share Units subject to a grant.

                17.             Change in Control.

                                  For purpose of this Plan, a "Change inControl" of the Company shall mean a change in control of a nature thatwould be required to be reported in response to Item 6(e) of Schedule 14A ofRegulation 14A promulgated under the Securities and Exchange Act of 1934, asamended (the "Exchange Act"), whether or not the Company is thensubject to such reporting requirements; provided that, without limitation, sucha Change in Control shall be deemed to have occurred if (a) any"person" (as such term is used in section 13(d) and 14(d) of theExchange Act) is or becomes "beneficial owner" (as defined in Rule13d-3 under the Exchange Act), directly or indirectly, of securities of theCompany representing 30 percent or more of the combined voting power of theCompany's then outstanding securities; or (B) during any period of twoconsecutive years, the following persons (the "Continuing Directors")cease for any reason to constitute a majority of the Board:  individuals who atthe beginning of such period constitute the Board and new Directors each ofwhose election to the Board or nomination for election to the Board by theCompany's security holders was approved by a vote of at least two-thirds of theDirectors then still in office who either were Directors at the beginning ofthe period or whose election or nomination for election was previously soapproved; or (C) the security holders of the Company approve a merger orconsolidation of the Company with any other corporation, other than (i) amerger or consolidation that would result in the voting securities of theCompany outstanding immediately before the merger or consolidation continuingto represent (either by remaining outstanding or by being converted into votingsecurities of such surviving entity) more than 50 percent of the combinedvoting power of the voting securities of the Company or of such survivingentity outstanding immediately after such merger or consolidation or (ii) amerger of consolidation that is approved by a Board having a majority of itsmembers persons who are Continuing Directors, of which Continuing Directors notless than two-thirds have approved the merger or consolidation; or (D) thesecurity holders of the Company approve a plan of complete liquidation of theCompany or an agreement for the sale or disposition by the Company of all orsubstantially all of the Company's assets.

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                                Notwithstanding any contrary provision of thisPlan, all outstanding Options shall become immediately exercisable in full upona Change in Control.  Similarly, upon a Change in Control all restrictionsotherwise applicable with respect to Incentive Restricted Shares shall lapse,the Restricted Period shall expire, and any prescribed conditions shall bedeemed to be satisfied, so that the Employee to whom the Incentive RestrictedShares were granted shall be entitled to the delivery of a certificate forCommon Shares, subject to satisfaction of the Company's tax withholdingobligation as described in Section 12(a)(iv).

                                Upon a Change in Control, the RestrictedPeriod with respect to Deferred Incentive Share Units shall expire, providedthat, unless the Change in Control is a change in the ownership or effectivecontrol or of ownership of a substantial portion of the assets of the Company(within the meaning of section 409A of the Internal Revenue Code), a Change inControl shall not accelerate the time at which Deferred Incentive Share Unitsand other amounts credited to the Participant's account shall be paid.

                                If the excise tax imposed by section 4999 ofthe Internal Revenue Code would apply with respect to any payments to which anEmployee is entitled, whether or not in connection with this Plan, and if theEmployee does not have an individual agreement with the Company dealing withsuch excise tax, and if limiting the effect of the provisions of the precedingparagraph would result in the Employee's realization of a net amount from suchpayments, after taking into account income taxes and such excise taxes, that isgreater than the net after-tax amount the Employee would realize from suchpayments if the provisions of the preceding paragraph were given full effect,then the provisions of the preceding paragraph shall be given effect to theextent, but only to the extent, required to maximize the net after-tax amountto be realized by the Employee.  All determinations required to be made for thepurposes of this paragraph, including determinations of the net after-taxamount realizable by the Employee, the result of giving full or limited effectto the provisions of the preceding paragraph, and whether, the extent to which,and how the effectiveness of the preceding paragraph shall be limited, shall bemade by tax counsel chosen as follows: the Employee and the Company may eachpropose a candidate; if the Employee and the Company do not agree on a choicewithin 10 days of the Change in Control, the proposed candidates shall choose athird party who shall act as tax counsel; if either the Company or the Employeefails to propose a candidate within 10 days of the Change in Control, thecandidate proposed by the other shall act as tax counsel.  All determinationsof the tax counsel so chosen shall be final and binding on the Company and theEmployee.  The Company shall pay all reasonable expenses of employing the taxcounsel.

                18.             Term of Plan; Approval of Shareholders.  The Plan shall takeeffect, subject to the approval of the shareholders of the Company, on January 1, 2003.  If shareholder approval is not obtained within twelve months of January 1, 2003, any Options, Incentive Restricted Shares, and Deferred Incentive ShareUnits granted under the Plan shall automatically be cancelled.  The Board ofDirectors may terminate the Plan at any time with respect to any Common Sharesfor which Options or Incentive Restricted Shares have not already been granted. Unless terminated earlier by the Board of Directors, the Plan shall terminateon December 31, 2012.

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                19.             Amendment of Grants.  The Committee may at any time unilaterallyamend any outstanding Option, Incentive Restricted Share, and DeferredIncentive Share Unit to the extent the Committee determines necessary ordesirable, provided, however, that an amendment that would be adverse to theinterests of the holder of the Option, Incentive Restricted Share, or DeferredIncentive Unit or, with respect to an Option that is an ISO, that would preventthe Option from qualifying as an ISO, shall not, except as provided in Section14(b), be effective without the holder's consent.  

                                Notwithstanding the preceding paragraph, andexcept as provided in Section 16 or as approved by the Company's shareholders,an Option may not be amended to reduce the purchase price and may not becancelled and replaced with another Option having a lower purchase price.

             20.             Amendment of Plan.  The Board may amend the Plan in any respect,provided, however, that without the approval of the shareholders of the Companythe Board may not (i) except as provided in Section 16, increase the maximumnumber of Common Shares that may be issued under the Plan as set forth inSection 5 or decrease the minimum purchase price of Common Shares subject to anOption; (ii) materially increase the benefits accruing to Employees under thePlan; (iii) extend the term of the Plan; (iv) change the classes ofEmployees to whom Options may be granted under the Plan; (v) provide for theadministration of the Plan otherwise than by a Committee composed entirely ofnon‐employee directors; or (vi) materially increase the cost of the Planto the Company.  An amendment that would be adverse to the interests of theholder of an outstanding Option, Incentive Restricted Share, or DeferredIncentive Share Unit or, with respect to an Option that is an ISO, that wouldprevent the Option from qualifying as an ISO, shall not, except as provided inSection 14(b), be effective with respect to that Option, Incentive RestrictedShare, or Deferred Incentive Share Unit without the holder's consent.

                21.             No Right to Continued Employment.

                                  Nothing in the Plan or in any Option orIncentive Restricted Share or Deferred Incentive Share Unit grant pursuant tothe Plan shall confer upon any Employee the right to continue in the employ ofthe Company or restrict the right of the Company to terminate the employment ofany Employee.

                22.             Restrictions on Issuance of Common Shares; Rights as Shareholders.

                                  Should the Board of Directors determine thatthe listing, registration, or qualification of Common Shares upon anysecurities exchange or under any state or federal law or the consent orapproval of any governmental regulatory body is necessary or desirable as a conditionto or in connection with the issuance or delivery of Common Shares under thePlan, no such Common Shares shall be issued or delivered unless such listing,registration, qualification, consent, or approval has been effected or obtainedfree of any conditions not acceptable to the Board of Directors.

                                The certificates representing Common Sharesissued by the Company under the Plan may bear a legend describing anyrestrictions on resale of such Common Shares under applicable securities laws,and stop transfer orders with respect to such certificates may be entered onthe Company's stock transfer records.

                                An Option holder shall have no rights as ashareholder of the Company with respect to any Common Shares to be issued inconnection with the exercise of an Option until the date of issuance of suchCommon Shares.  No adjustment shall be made for dividends or other rights forwhich the record date precedes the date the certificate is issued.

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                23.             Construction.

                                   The Plan shallbe construed in accordance with the law of the State of Maryland.  With respectto any Options granted under the Plan that are intended to qualify as incentivestock options as defined in section 422 of the Code, the terms of the Plan andof each incentive stock option granted pursuant to the Plan shall be construedto give effect to such intention.

                24.             Satisfaction of Tax Liabilities.

                                  The Company shall have the right to deduct orwithhold an amount sufficient to satisfy federal, state, and local withholdingtax requirements determined by the Company to be applicable with respect to anytaxable event arising under the Plan.

                                   Whenever under the Plan Common Shares are tobe issued or delivered upon the exercise of Options, the grant of IncentiveRestricted Shares, the lapse of restrictions on Incentive Restricted Shares, orpayment with respect to Deferred Incentive Share Units, the Company shall havethe right to require the holder of the Option or Incentive Restricted Share orDeferred Incentive Share Unit grant to remit to the Company an amountsufficient to satisfy federal, state, and local withholding tax requirementsdetermined by the Company to be applicable before the issuance of or deliveryof any certificate for such Common Shares.  In the holder's discretion, suchrequirements shall be satisfied through the retention of Common Sharesotherwise issuable or by the delivery of Common Shares to the Company by theholder (by surrender or attestation to ownership), under such terms as theCommittee finds appropriate.  The value of a Common Share used to satisfywithholding requirements shall be its Fair Market Value on the date thewithholding obligation is calculated.  The Committee may also provide thatprovision for the tax withholding obligation may be made, in connection withthe exercise of an Option, in any manner provided pursuant to Section 7(d) forthe payment of the purchase price.

826981

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