exv4w1



 






Exhibit 4.1




PS BUSINESS PARKS, INC. 




RETIREMENT PLAN FOR NON-EMPLOYEE DIRECTORS



1.  PURPOSE.




     The Plan is intended to promote the best interests of the Corporation by enhancing the
Corporation’s ability to attract and retain highly qualified non-employee directors and by
rewarding the Corporation’s current non-employee directors for their services to the Corporation.


2.  DEFINITIONS.




     Whenever the following terms are used in this Plan, they shall have the meaning specified
below:




	 	(a)	 	“Act” means the Securities Act of 1933, as amended.
	 
	 	(b)	 	“Administrator” means the Board or the Committee, whichever shall be administering
the Plan from time to time in the discretion of the Board, as described in Section 4(a)
of the Plan.
	 
	 	(c)	 	“Board” means the Board of Directors of the Corporation.
	 
	 	(d)	 	“Code” means the Internal Revenue Code of 1986, as amended.
	 
	 	(e)	 	“Committee” means the committee appointed by the Board in accordance with Section
4(a) of the Plan.
	 
	 	(f)	 	“Common Stock” means the common stock, par value $.01 per share, of the Corporation.
	 
	 	(g)	 	“Corporation” means PS Business Parks, Inc., a California corporation.
	 
	 	(h)	 	“Directors” means, collectively, all non-employee directors, duly elected to the
Board by the Corporation’s stockholders or otherwise in accordance with the
Corporation’s Bylaws.
	 
	 	(i)	 	“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
	 
	 	(j)	 	“Fair Market Value” shall mean the value of one (1) Share of Common
Stock, determined as follows, without regard to any restriction other than a
restriction which, by its terms, will never lapse:






	 	(i)	 	If the Shares are traded on an exchange,
the closing price per Share on the principal
exchange on which Shares are listed on the date
of valuation or, if no sales occurred on that
date, then the average of the highest bid and
lowest asked prices on such exchange at the end
of the day on such date;
	 
	 	(ii)	 	If the Shares are not traded on an exchange
but are otherwise traded over-the-counter, the
average of the highest bid and lowest asked
prices quoted in the National Association of
Securities Dealers, Inc. Automated Quotation
System (“NASDAQ”) as of the close of 




 









 






	 	 	 	business on
the date of valuation, or, if on such day such
security is not quoted in the NASDAQ system, the
average of the representative bid and asked
prices on such date in the domestic
over-the-counter market as reported by the
National Quotation Bureau, Inc., or any similar
successor organization; and
	 
	 	(iii)	 	If neither (i) nor (ii) applies, the fair
market value as determined by the Administrator
in good faith. Such determination shall be
conclusive and binding on all persons.






	 	(k)	 	“Grant” means any stock award granted pursuant to the Plan.
	 
	 	(l)	 	“Grantee” means a Director who has received a Grant pursuant to Section 4 hereof.
	 
	 	(m)	 	“Non-employee Director” for purposes of eligibility for Grants under this Plan means
a director who is not employed as an officer, employee or consultant of the
corporation while serving as a Director.
	 
	 	(n)	 	“Plan” means the PS Business Parks, Inc. Retirement Plan for Non-Employee
Directors as it may be amended from time to time.
	 
	 	(o)	 	“Retirement” means a Director’s retirement from the Board, provided that no Director
removed for cause from the Board shall be deemed to have retired from the Board.
	 
	 	(p)	 	“Service” means service as a non-employee director of the Corporation, including
service prior to the adoption of the Plan.
	 
	 	(q)	 	“Share” means one (1) share of Common Stock, adjusted in accordance with Section
7 of the Plan (if applicable).




3.  EFFECTIVE DATE.




     The Plan was adopted by the Board and subsequently approved by stockholders of the Corporation
on May 4, 2004 and is effective as of such date (the “Effective Date”). The Plan has no
termination date.


4.  ADMINISTRATION AND ELIGIBILITY.





	 	(a)	 	Administrator. The Plan shall be
administered, in the discretion of the Board from
time to time, by the Board or by the
Nominating/Corporate Governance Committee or such
other committee appointed by the Board that shall
consist of not less than two (2) members of the
Board each of whom is a “non-employee director”
within the meaning of Rule 16b-3 under the
Exchange Act and an “outside director” within the
meaning of Rule 162m of the Code. Subject to the
express provisions of the Plan, the Administrator
shall have the authority to construe and interpret
the Plan and to define the terms used in the Plan,
to prescribe, amend and rescind rules and
regulations relating to the administration of the
Plan, and to make all other determinations
necessary or advisable for the administration of
the Plan. The interpretation and construction by
the Administrator of any provisions of the Plan
and all other decisions of the Administrator shall
be made in the Administrator’s sole discretion and
shall be final and binding on all persons having
or claiming any interest in the Plan or in any
Grant. No director or person acting pursuant to
authority delegated by the Board shall be liable
for any action or determination relating to or
under the Plan or any Grant made in good faith.





 









 





	 	(b)	 	Participation. The Grantees shall consist
exclusively of non-employee Directors of the
Corporation. Provided a Director otherwise meets
the Service requirements for a Grant under the
Plan, prior service as an employee of the
Corporation shall not disqualify such Director
from receiving a Grant under the Plan.




5.  STOCK.




     The stock subject to Grants awarded under the Plan shall be Shares of the Corporation’s
authorized but unissued or reacquired Common Stock. The aggregate number of Shares which may be
issued upon exercise of Grants under the Plan shall be seventy thousand (70,000), subject to any
adjustment pursuant to Section 7 hereof. The number of Shares subject to additional Grants at any
time shall not exceed the number of Shares remaining available for issuance under the Plan.


6.  TERMS AND CONDITIONS OF GRANTS.





	 	(a)	 	Stock Grant Awards. Upon Retirement, each
Director shall be awarded a Grant of 1,000 Shares
of Common Stock of the Corporation for each
completed full year of Service, up to a maximum
Grant to each Director of 5,000 Shares, subject to
the availability of Shares as specified in Section
5 of the Plan. Each of the (i) Grant level of
1,000 Shares per year of Service, (ii) the maximum
Grant level of 5,000 Shares upon Retirement, and
(iii) the securities to be issued under this Plan,
shall be subject to adjustment in accordance with
the provisions of Section 7 of the Plan.
	 
	 	(b)	 	Payment of Taxes; Related Matters. In the
event the Corporation determines it is required to
withhold state, local or Federal income tax as a
result of the grant of a Grant, the Corporation
may require a Grantee to make arrangements
satisfactory to the Corporation to enable it to
satisfy such withholding requirements. Payment of
such withholding requirements may be made, in the
discretion of the Administrator, (i) in cash, (ii)
by delivery of Shares registered in the name of
the Grantee, or by the Corporation not issuing
such number of Shares subject to the Grant having
a Fair Market Value at the effective date of the
Grant or the date of such vesting equal to the
amount to be withheld, or (iii) any combination of
(i) and (ii) above. An election under the
preceding sentence may only be made during the
period beginning on the third business day
following the date of release of quarterly and
annual summary statements of sales and earnings
and ending on the twelfth business day following
such date and only if such period occurs before
the date the Corporation requires payment of the
withholding tax. The election need not be made
during such trading window if (a) it is made at
least six (6) months prior to the date of the
Grant or (b) counsel to the Corporation determines
that compliance with such requirement is
unnecessary. In addition, counsel to the
Corporation may impose additional restrictions on
the Grantee’s ability to satisfy tax withholding
with Shares if counsel determines such
restrictions are in the best interests of the
Corporation.




7. EFFECT OF CHANGES IN CAPITALIZATION.




     7.1 Changes in Stock. If the number of outstanding Shares of Common Stock is increased
or decreased or the Shares of Common Stock are changed into or exchanged for a different number or
kind of shares or other securities of the Company on account of any recapitalization,
reclassification, stock split, reverse stock split, combination of shares, exchange of shares,
stock dividend or other distribution payable in capital stock, or other increase or decrease in
such shares effected without receipt of consideration by the Company occurring after the Effective
Date, the number and class of securities for which Grants may be
made under the Plan, and the maximum Grant level upon Retirement, shall be appropriately adjusted
by the Administrator to the extent determined by the Administrator. In the event of a spin-off by
the Company of the shares of a subsidiary, a stock dividend for which the Company will claim a
dividends paid deduction under Section 561 of the Code (or any successor provision), a pro rata
distribution to all shareholders of other assets of the Company, or any distribution to holders of
Shares other than an ordinary cash dividend, the Administrator may, but shall not be required to,
make appropriate adjustments to the number and class of securities for which Grants shall be
awarded and the maximum Grant level upon Retirement.



 









 





     7.2 Reorganization, Sale of Assets or Sale of Stock Which Involves a Change of
Control. Subject to the exceptions set forth in the last sentence of this Section 7.2, upon the
occurrence of a “Change of Control” (as defined below), the Administrator may in its sole
discretion make Grants of securities of a successor corporation, or a parent, subsidiary or
affiliate thereof, with appropriate adjustments as to the number and class of securities, and the
maximum Grant level upon Retirement, to the extent determined by the Administrator. For purposes of
this Section 7.2, a “Change of Control” shall be deemed to occur upon (i) the dissolution or
liquidation of the Company or upon a merger, consolidation, or reorganization of the Company with
one or more other entities in which the Company is not the surviving entity, (ii) a sale of
substantially all of the assets of the Company to another entity, or (iii) any transaction
(including without limitation a merger or reorganization in which the Company is the surviving
corporation) which results in any person or entity (other than B. Wayne Hughes and members of his
family and their affiliates) owning 50% or more of the combined voting power of all classes of
stock of the Company. This Section 7.2 shall not apply to any Change of Control to the extent that
(A) provision is made in writing in connection with such Change of Control for the continuation of
the Plan and Grants or (B) a majority of the full Board determines that such Change of Control
shall not trigger application of the provisions of this Section 7.2.



     7.3 Adjustments. Adjustments under this Section 7 related to shares of Stock or
securities of the Company shall be made by the Administrator, whose determination in that respect
shall be final, binding and conclusive. No fractional shares or other securities shall be issued
pursuant to any such adjustment, and any fractions resulting from any such adjustment shall be
eliminated in each case by rounding downward to the nearest whole share.



     7.4 No Limitations on Company. The making of Grants pursuant to the Plan shall not
affect or limit in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations, or changes of its capital or business structure or to merge,
consolidate, dissolve, or liquidate, or to sell or transfer all or any part of its business or
assets.


8. SECURITIES LAW REQUIREMENTS.





	 	(a)	 	Legality of Issuance. No Shares shall be
issued upon the award of any Grant unless and
until the Corporation has determined that:






	 	(i)	 	it and the Grantee have taken all actions
required to register the award of the Shares under
the Act, or to perfect an exemption from the
registration requirements thereof;
	 
	 	(ii)	 	any applicable listing requirement of any
stock exchange on which the Common Stock is
listed has been satisfied; and
	 
	 	(iii)	 	any other applicable provision of state or Federal law has been satisfied.






	 	(b)	 	Restrictions on Transfer; Representations of
Grantee; Legends. Regardless of whether the award
of Shares under the Plan has been registered under
the Act or has been registered or qualified under
the securities laws of any state, the Corporation
may impose restrictions upon the sale, pledge or
other transfer of such Shares (including the
placement of appropriate legends on stock
certificates) if, in the judgment of the
Corporation and its counsel, such restrictions are
necessary or desirable in order to achieve
compliance with the provisions of the Act, the
securities laws of any state or any other law. In
the event that the award of Shares under the Plan
is not registered under the Act but an exemption
is available which requires an investment
representation or other representation, each
Grantee shall be required to represent that such
Shares are being acquired for investment, and not
with a view to the sale or distribution thereof,
and to make such other 




 









 






	 	 	 	representations as are
deemed necessary or appropriate by the Corporation
and its counsel. Stock certificates evidencing
Shares acquired under the Plan pursuant to an
unregistered transaction shall bear the following
restrictive legend (or similar legend in the
discretion of the Administrator) and such other
restrictive legends as are required or deemed
advisable under the provisions of any applicable
law:




“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION AND
MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933 OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY IN FORM AND CONTENT TO THE ISSUER THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER SUCH ACT.”




     Any determination by the Corporation and its counsel in connection with any of the matters set
forth in this Section shall be conclusive and binding on all persons.




	 	(c)	 	Registration or Qualification of Securities.
The Corporation may, but shall not be obligated
to, register or qualify the award of Shares
pursuant to the Plan under the Act or any other
applicable law. The Corporation shall not be
obligated to take any affirmative action in order
to cause the award of Shares under the Plan to
comply with any law.
	 
	 	(d)	 	Exchange of Certificates. If, in the opinion
of the Corporation and its counsel, any legend
placed on a stock certificate representing Shares
awarded under the Plan is no longer required, the
holder of such certificate shall be entitled to
exchange such certificate for a certificate
representing the same number of Shares but without
such legend.




9. RIGHTS IN EVENT OF DEATH.




     If the director ceases to be a member of the Board because of his or her death, the executor
or administrator of the director’s estate, or the person or persons to whom rights with respect to
a Grant have passed by bequest or inheritance, as the case may be, shall be entitled to receive a
Grant for the number of Shares the Director would have received had the Director elected Retirement
from the Board effective as of such date.


10.  AMENDMENT OF THE PLAN.




     The Board may, from time to time, with respect to any Shares at the time not subject to
Grants, suspend or discontinue the Plan or revise or amend it in any respect whatsoever,
provided that no amendment or revision shall adversely affect, without the affected
Grantee’s written consent, the rights of any Grantee who has vested Shares in the Plan with respect
to such vested Shares.


11. GOVERNING LAW.




     The validity and construction of this Plan and Grants hereunder shall be governed by the laws
of the State of California.



12.  APPROVAL OF STOCKHOLDERS.




     The Plan shall be subject to approval by the affirmative vote of the holders of a majority of
the outstanding shares present or represented and entitled to vote at the 2004 annual meeting of
stockholders of the Corporation.



 









 




13.  EXECUTION.




     After adoption and approval by the Board, the Corporation has caused its authorized officer to
affix the corporate name and seal hereto as of May 4, 2004, the date such plan has been approved by
the stockholders of the Corporation.



	 	 	 	 	 
	 	PS BUSINESS PARKS, INC. 

 	 
	 	By:  	/s/ Joseph D. Russell, Jr.
 	 
	 	 	Name:  	Joseph D. Russell, Jr.      	 
	 	 	Title:  	President & Chief Executive Officer