EX-10.3:



 






Exhibit 10.3




COGDELL SPENCER INC.




2005 LONG TERM INCENTIVE COMPENSATION PLAN




 









 








TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page
	1.

	 	DEFINITIONS
	 	 	1	 
	 
	 	 	 	 	 	 
	2.

	 	EFFECTIVE DATE AND TERMINATION OF PLAN
	 	 	5	 
	 
	 	 	 	 	 	 
	3.

	 	ADMINISTRATION OF PLAN
	 	 	5	 
	 
	 	 	 	 	 	 
	4.

	 	SHARES AND UNITS SUBJECT TO THE PLAN
	 	 	6	 
	 
	 	 	 	 	 	 
	5.

	 	PROVISIONS APPLICABLE TO STOCK OPTIONS
	 	 	7	 
	 
	 	 	 	 	 	 
	6.

	 	PROVISIONS APPLICABLE TO RESTRICTED STOCK
	 	 	11	 
	 
	 	 	 	 	 	 
	7.

	 	PROVISIONS APPLICABLE TO PHANTOM SHARES
	 	 	13	 
	 
	 	 	 	 	 	 
	8.

	 	PROVISIONS APPLICABLE TO DIVIDEND EQUIVALENT RIGHTS
	 	 	16	 
	 
	 	 	 	 	 	 
	9.

	 	OTHER STOCK-BASED AWARDS
	 	 	17	 
	 
	 	 	 	 	 	 
	10.

	 	PERFORMANCE GOALS
	 	 	17	 
	 
	 	 	 	 	 	 
	11.

	 	TAX WITHHOLDING
	 	 	17	 
	 
	 	 	 	 	 	 
	12.

	 	REGULATIONS AND APPROVALS
	 	 	18	 
	 
	 	 	 	 	 	 
	13.

	 	INTERPRETATION AND AMENDMENTS; OTHER RULES
	 	 	19	 
	 
	 	 	 	 	 	 
	14.

	 	CHANGES IN CAPITAL STRUCTURE
	 	 	19	 
	 
	 	 	 	 	 	 
	15.

	 	MISCELLANEOUS
	 	 	20	 






 - i -





 









 








COGDELL SPENCER INC.




2005 LONG TERM INCENTIVE COMPENSATION PLAN




     Cogdell Spencer Inc., a Maryland corporation, wishes to attract employees, Directors and
consultants to the Company and its Subsidiaries and induce employees, Directors and consultants to
remain with the Company and its Subsidiaries, and encourage them to increase their efforts to make
the Company’s business more successful whether directly or through its Subsidiaries or other
affiliates. In furtherance thereof, the Cogdell Spencer Inc. 2005 Long Term Incentive Compensation
Plan is designed to provide equity-based incentives to employees, Directors and consultants of the
Company and its Subsidiaries. Awards under the Plan may be made to selected employees, Directors
and consultants of the Company and its Subsidiaries in the form of Options, Restricted Stock,
Phantom Shares, Dividend Equivalent Rights and other forms of equity-based compensation.



1. DEFINITIONS.




     Whenever used herein, the following terms shall have the meanings set forth below:



     “Articles of Amendment and Restatement” means the Amended and Restated Cogdell Spencer Inc.
Articles of Incorporation.



     “Award,” except where referring to a particular category of grant under the Plan, shall
include Incentive Stock Options, Non-Qualified Stock Options, Restricted Stock, Phantom Shares,
Dividend Equivalent Rights and other equity-based Awards as contemplated herein.



     “Award Agreement” means a written agreement in a form approved by the Committee as provided in
Section 3.



     “Beneficial Ownership” means ownership of Capital Stock by a Person who is or would be stated
as an owner of such Capital Stock either actually or constructively through the application of
Section 544 of the Code, as modified by Sections 856(h)(1)(B) and 856(h)(3) of the Code. The terms
“Beneficially Own” and “Beneficially Owns” shall have the correlative meanings.



     “Board” means the Board of Directors of the Company.



     “Capital Stock” means the Common Stock and preferred stock that may be issued pursuant to
Article V of the Articles of Amendment and Restatement.



     “Capital Stock Ownership Limit” means 7.75% (by value or by number of shares, whichever is
more restrictive) of the outstanding Capital Stock of the Company, excluding any such outstanding
Capital Stock which is not treated as stock for federal income tax purposes. The number and value
of shares of outstanding Capital Stock of the Company shall be determined by the Board in good
faith, which determination shall be conclusive for all purposes hereof.



     “Cause” means, unless otherwise provided in the Participant’s Award Agreement, (i) engaging in
(A) willful or gross misconduct or (B) willful or gross neglect, (ii) repeatedly failing to adhere
to the directions of superiors or the Board or the written policies and practices of the Company or
its Subsidiaries or its affiliates, (iii) the commission of a felony or a crime of moral turpitude,
or any crime involving the Company or its Subsidiaries, or any affiliate thereof, (iv) fraud,
misappropriation or



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embezzlement, (v) a material breach of the Participant’s employment agreement (if any) with
the Company or its Subsidiaries or its affiliates, or (vi) any illegal act detrimental to the
Company or its Subsidiaries or its affiliates; provided, however, that, if at any particular time
the Participant is subject to an effective employment agreement with the Company, then, in lieu of
the foregoing definition, “Cause” shall at that time have such meaning as may be specified in such
employment agreement.




     “Change in Control” means, unless otherwise provided in an Award Agreement, the happening of
any of the following:




	 	(i)	 	any “person,” including a “group” (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act, but excluding the Company, any entity controlling,
controlled by or under common control with the Company, any trustee, fiduciary or other
person or entity holding securities under any employee benefit plan or trust of the
Company or any such entity, and with respect to any particular Participant, the
Participant and any “group” (as such term is used in Section 13(d)(3) of the Exchange
Act) of which the Participant is a member, is or becomes the “beneficial owner” (as
defined in Rule 13(d)(3) under the Exchange Act), directly or indirectly, of securities
of the Company representing 50% or more of either (A) the combined voting power of the
Company’s then outstanding securities or (B) the then outstanding Shares (in either
such case other than as a result of an acquisition of securities directly from the
Company); provided, however, that, in no event shall a Change in Control be deemed to
have occurred upon an initial public offering of the Common Stock under the Securities
Act; or
	 
	 	(ii)	 	any consolidation or merger of the Company where the shareholders of the
Company, immediately prior to the consolidation or merger, would not, immediately after
the consolidation or merger, beneficially own (as such term is defined in Rule 13d-3
under the Exchange Act), directly or indirectly, shares representing in the aggregate
50% or more of the combined voting power of the securities of the corporation issuing
cash or securities in the consolidation or merger (or of its ultimate parent
corporation, if any); or
	 
	 	(iii)	 	there shall occur (A) any sale, lease, exchange or other transfer (in one
transaction or a series of transactions contemplated or arranged by any party as a
single plan) of all or substantially all of the assets of the Company, other than a
sale or disposition by the Company of all or substantially all of the Company’s assets
to an entity, at least 50% of the combined voting power of the voting securities of
which are owned by “persons” (as defined above) in substantially the same proportion as
their ownership of the Company immediately prior to such sale or (B) the approval by
shareholders of the Company of any plan or proposal for the liquidation or dissolution
of the Company; or
	 
	 	(iv)	 	the members of the Board at the beginning of any consecutive 24-calendar-month
period (the “Incumbent Directors”) cease for any reason other than due to death to
constitute at least a majority of the members of the Board; provided that any director
whose election, or nomination for election by the Company’s shareholders, was approved
or ratified by a vote of at least a majority of the members of the Board then still in
office who were members of the Board at the beginning of such 24-calendar-month period,
shall be deemed to be an Incumbent Director.




Notwithstanding the foregoing, no event or condition shall constitute a Change in Control to the
extent that, if it were, a 20% tax would be imposed under Section 409A of the Code; provided that,
in such a case, the event or condition shall continue to constitute a Change in Control to the
maximum extent




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possible (e.g., if applicable, in respect of vesting without an acceleration of distribution)
without causing the imposition of such 20% tax.




     “Code” means the Internal Revenue Code of 1986, as amended.



     “Committee” means the Compensation Committee appointed by the Board under Section 3.



     “Common Stock” means the Company’s Common Stock, par value $.01 per share, either currently
existing or authorized hereafter.



     “Common Stock Ownership Limit” means 9.8% (by value or by number of shares, whichever is more
restrictive) of the outstanding Common Stock. The number and value of shares of outstanding Common
Stock shall be determined by the Board in good faith, which determination shall be conclusive for
all purposes hereof.



     “Company” means the Cogdell Spencer Inc., a Maryland corporation.



     “Constructive Ownership” means ownership of any Capital Stock by a Person who is or would be
treated as an owner of such Capital Stock either actually or constructively through the application
of Section 318 of the Code, modified by Section 856(d)(5) of the Code. The terms “Constructively
Own” and “Constructively Owns” shall have the correlative meanings.



     “Director” means a non-employee director of the Company or its Subsidiaries.



     “Disability” means the occurrence of an event which would entitle an employee of the Company
to the payment of disability income under one of the Company’s approved long-term disability income
plans or, in the absence of such a plan, unless otherwise provided by the Committee in the
Participant’s Employment Agreement, a disability which renders the Participant incapable of
performing all of his or her material duties for a period of at least 180 consecutive or
non-consecutive days during any consecutive twelve-month period. Notwithstanding the foregoing, no
circumstances or condition shall constitute a Disability to the extent that, if it were, a 20% tax
would be imposed under Section 409A of the Code; provided that, in such a case, the event or
condition shall continue to constitute a Disability to the maximum extent possible (e.g., if
applicable, in regard of vesting without an acceleration of distribution) without causing the
imposition of such 20% tax.



     “Dividend Equivalent Right” means a right awarded under Section 8 of the Plan to receive (or
have credited) the equivalent value of dividends paid on Common Stock.



     “Excepted Holder” means any shareholder of the Company for whom an Excepted Holder Ownership
Limit is created by the Articles of Amendment and Restatement or by the Board.



     “Excepted Holder Ownership Limit” means, with respect to any Excepted Holder, the percentage
limit established by the Board pursuant to the Articles of Amendment and Restatement, or as other
wise established by the Board in its discretion, subject in all cases to the requirements,
limitations and adjustment provisions set forth in the Articles of Amendment and Restatement.



     “Exchange Act” means the Securities Exchange Act of 1934, as amended.



     “Fair Market Value” per Share as of a particular date means (i) if Shares are then listed on a
national stock exchange, the closing sales price per Share on the exchange for the last preceding
date on which there was a sale of Shares on such exchange, as determined by the Committee, (ii) if
Shares are not



3









 




then listed on a national stock exchange but are then traded on an over-the-counter market,
the average of the closing bid and asked prices for the Shares in such over-the-counter market for
the last preceding date on which there was a sale of such Shares in such market, as determined by
the Committee, or (iii) if Shares are not then listed on a national stock exchange or traded on an
over-the-counter market, such value as the Committee in its discretion may in good faith determine;
provided that, where the Shares are so listed or traded, the Committee may make such discretionary
determinations where the Shares have not been traded for 10 trading days.




     “Grantee” means an employee, Director or consultant granted Restricted Stock, Phantom Shares
or Dividend Equivalent Rights or such other equity-based Awards (other than an Option) as may be
granted pursuant to Section 9 hereunder.



     “Incentive Stock Option” means an “incentive stock option” within the meaning of Section
422(b) of the Code.



     “IPO” means the initial public offering of the Company’s Common Stock.



     “Non-Qualified Stock Option” means an Option which is not an Incentive Stock Option.



     “Option” means the right to purchase, at a price and for the term fixed by the Committee in
accordance with the Plan, and subject to such other limitations and restrictions in the Plan and
the applicable Award Agreement, a number of Shares determined by the Committee.



     “Optionee” means an employee or Director of, or consultant to, the Company to whom an Option
is granted, or the Successors of the Optionee, as the context so requires.



     “Option Price” means the price per Share, determined by the Board or the Committee, at which
an Option may be exercised.



     “Participant” means a Grantee or Optionee.



     “Partnership Units” means any OP Units, Preferred Units, Junior Units or any other fractional
share of the Partnership Interests as defined in, and authorized pursuant to, the Agreement of
Limited Partnership of Cogdell Spencer LP, as amended from time to time, by and among its general
partner, CS Business Trust I, a Maryland business trust, and its limited partner, CS Business Trust
II, a Maryland business trust.



     “Person” means an individual, corporation, partnership, limited liability company, estate,
trust (including trust qualified under Section 401(a) or 501(c)(17) of the Code), a portion of a
trust permanently set aside for or to be used exclusively for the purposes described in Section
642(c) of the Code, association, private foundation within the meaning of Section 509(a) of the
Code, joint stock company or other entity; but does not include an underwriter acting in a capacity
as such in a public offering of shares of Capital Stock provided that the ownership of such shares
of Capital Stock by such underwriter would not result in the Company being “closely held” within
the meaning of Section 856(h) of the Code, or otherwise result in the Company failing to qualify as
a REIT.



     “Phantom Share” means a right, pursuant to the Plan, of the Grantee to payment of the Phantom
Share Value.



     “Phantom Share Value,” per Phantom Share, means the Fair Market Value of a Share of Common
Stock or, if so provided by the Committee, such Fair Market Value to the extent in excess of a base
value



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established by the Committee at the time of grant (which base value may not be less than the
Fair Market Value of the underlying Shares at the date of grant).




     “Plan” means the Company’s 2005 Long Term Incentive Compensation Plan, as set forth herein and
as the same may from time to time be amended.



     “REIT” shall mean a real estate investment trust under Sections 856 through 860 of the Code.



     “Restricted Stock” means an award of Shares that are subject to restrictions hereunder.



     “Retirement” means the Termination of Service of a Participant with the Company under
circumstances which would entitle an employee of the Company to an immediate pension under one of
the Company’s approved retirement plans, or, in the absence of such a plan, unless otherwise
provided by the Committee in the Participant’s Award Agreement, the Termination of Service (other
than for Cause) of a Participant on or after the Participant’s attainment of age 65 or on or after
the Participant’s attainment of age 55 with five consecutive years of service with the Company or
any Subsidiaries or affiliates.



     “Securities Act” means the Securities Act of 1933, as amended.



     “Settlement Date” means the date determined under Section 7.4(c).



     “Shares” means shares of Common Stock of the Company.



     “Subsidiary” means any corporation (other than the Company), partnership or other entity at
least 50% of the economic interest in the equity of which is owned by the Company or by another
subsidiary.



     “Successor of the Optionee” means the legal representative of the estate of a deceased
Optionee or the person or persons who shall acquire the right to exercise an Option by bequest or
inheritance or by reason of the death of the Optionee.



     “Termination of Service” means a Participant’s termination of employment or other service, as
applicable, with the Company, its Subsidiaries and, as applicable, affiliates. Cessation of
service as an officer, or employee, Director and consultant shall not be treated as a Termination
of Service if the Participant continues without interruption to serve thereafter in another one (or
more) of such other capacities.



2. EFFECTIVE DATE AND TERMINATION OF PLAN.




     The effective date of the Plan is [November 1, 2005]; provided, however, that the Plan shall
not become effective unless and until it is approved by the requisite percentage of the
shareholders of the Company. The Plan shall terminate on, and no Award shall be granted hereunder
on or after, the 10-year anniversary of the earlier of the approval of the Plan by (i) the Board or
(ii) the shareholders of the Company; provided, however, that the Board may at any time prior to
that date terminate the Plan.



3. ADMINISTRATION OF PLAN.




     (a) The Plan shall be administered by the Committee appointed by the Board. The Committee,
upon and after such time as it is covered in Section 16 of the Exchange Act, shall consist of at
least two individuals each of whom shall be a “nonemployee director” as defined in Rule 16b-3 as
promulgated by the Securities and Exchange Commission (“Rule 16b-3”) under the Exchange Act and
shall, at such times as the Company is subject to Section 162(m) of the Code (to the extent relief
from the limitation of



5









 




Section 162(m) of the Code is sought with respect to Awards), qualify as “outside directors”
for purposes of Section 162(m) of the Code; provided that no action taken by the Committee
(including without limitation grants) shall be invalidated because any or all of the members of the
Committee fails to satisfy the foregoing requirements of this sentence. The acts of a majority of
the members present at any meeting of the Committee at which a quorum is present, or acts approved
in writing by a majority of the entire Committee, shall be the acts of the Committee for purposes
of the Plan. If and to the extent applicable, no member of the Committee may act as to matters
under the Plan specifically relating to such member. Notwithstanding the other foregoing provisions
of this Section 3(a), any Award under the Plan to a person who is a member of the Committee shall
be made and administered by the Board. If no Committee is designated by the Board to act for these
purposes, the Board shall have the rights and responsibilities of the Committee hereunder and under
the Award Agreements.




     (b) Subject to the provisions of the Plan, the Committee shall in its discretion as reflected
by the terms of the Award Agreements (i) authorize the granting of Awards to employees, Directors
and consultants of the Company and its Subsidiaries; and (ii) determine the eligibility of an
employee, Director or consultant to receive an Award, as well as determine the number of Shares to
be covered under any Award Agreement, considering the position and responsibilities of the
employee, Director or consultant, the nature and value to the Company of the employee’s, Director’s
or consultant’s present and potential contribution to the success of the Company whether directly
or through its Subsidiaries or affiliates and such other factors as the Committee may deem
relevant.



     (c) The Award Agreement shall contain such other terms, provisions and conditions not
inconsistent herewith as shall be determined by the Committee. In the event that any Award
Agreement or other agreement hereunder provides (without regard to this sentence) for the
obligation of the Company or any Subsidiary or affiliate thereof to purchase or repurchase Shares
from a Participant or any other person, then, notwithstanding the provisions of the Award Agreement
or such other agreement, such obligation shall not apply to the extent that the purchase or
repurchase would not be permitted under governing state law. The Participant shall take whatever
additional actions and execute whatever additional documents the Committee may in its reasonable
judgment deem necessary or advisable in order to carry out or effect one or more of the obligations
or restrictions imposed on the Participant pursuant to the express provisions of the Plan and the
Award Agreement.



4. SHARES AND UNITS SUBJECT TO THE PLAN.




     4.1 In General.



     (a) Subject to Section 4.2, and subject to adjustments as provided in Section 14, the total
number of Shares subject to Options or other equity-based Awards granted under the Plan, Shares of
Restricted Stock and Phantom Shares granted under the Plan, in the aggregate, may not exceed
1,000,000 shares. Shares distributed under the Plan may be treasury Shares or authorized but
unissued Shares. Any Shares that have been granted as Restricted Stock or that have been reserved
for distribution in payment for Options, Phantom Shares or other equity-based Awards under Section
9 but are later forfeited or for any other reason are not payable under the Plan may again be made
the subject of Awards under the Plan.



     (b) Shares subject to Dividend Equivalent Rights, other than Dividend Equivalent Rights based
directly on the dividends payable with respect to Shares subject to Options or the dividends
payable on a number of Shares corresponding to the number of Phantom Shares awarded, shall be
subject to the limitation of Section 4.1(a). If any Phantom Shares, Dividend Equivalent Rights or
other equity-based Awards under Section 9 are paid out in cash, then, notwithstanding the first
sentence of Section 4.1(a) above, the underlying Shares may again be made the subject of Awards
under the Plan.



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     (c) The certificates for Shares issued hereunder may include any legend which the Committee
deems appropriate to reflect any restrictions on transfer hereunder or under the Award Agreement,
or as the Committee may otherwise deem appropriate.



     4.2 Options.



     Subject to adjustments pursuant to Section 14, and subject to the last sentence of Section
4.1(a), Incentive Stock Options with respect to an aggregate of no more than 1,000,000. Shares may
be granted under the Plan. Subject to adjustments pursuant to Section 14, in no event may any
Optionee receive Options for more than ___Shares in any one year. The aggregate Fair Market
Value, determined as of the date an Option is granted, of the Common Stock for which any Optionee
may be awarded Incentive Stock Options which are first exercisable by the Optionee during any
calendar year under the Plan (or any other stock option plan required to be taken into account
under Section 422(d) of the Code) shall not exceed $___.



     4.3 Participation Limitation



     (a) Limitation of Ownership. No Award shall be issued under the Plan to any person who
assuming exercise of all options and payment of all awards held by such person, would Beneficially
or Constructively Own Capital Stock of the Company in excess of the Common Stock Ownership Limit or
the Capital Stock Ownership Limit, unless the foregoing restriction is expressly and specifically
waived by action of the independent Directors of the Board; provided, however, that an Excepted
Holder would be permitted to Beneficially or Constructively Own Shares in excess of such limits
provided that such Shares are not in excess of the Excepted Holder Ownership Limit for such
Excepted Holder.



     (b) No award shall be issued under the Plan to any person who after such Award would
Beneficially or Constructively Own Shares in the Company that would result in the Company being
“closely held” within the meaning of Section 856(h) of the Code, or otherwise failing to qualify as
a REIT (including but not limited to ownership that would result in the Company owning (actually or
Constructively) an interest in a tenant that is described in Section 856(d)(2)(B) of the Code if
the income derived by the Company (either directly or indirectly through its Subsidiaries) from
such tenant would cause the Company to fail to satisfy any of the gross income requirements of
Section 856(c) of the Code).



5. PROVISIONS APPLICABLE TO STOCK OPTIONS.




     5.1 Grant of Option.



     Subject to the other terms of the Plan, the Committee shall, in its discretion as reflected by
the terms of the applicable Award Agreement: (i) determine and designate from time to time those
employees, Directors or consultants of the Company and its Subsidiaries to whom Options are to be
granted and the number of Shares to be optioned to each employee, Director or consultant; (ii)
determine whether to grant Options intended to be Incentive Stock Options, or to grant
Non-Qualified Stock Options, or both (to the extent that any Option does not qualify as an
Incentive Stock Option, it shall constitute a separate Non-Qualified Stock Option); provided that
Incentive Stock Options may only be granted to employees of the Company or its Subsidiaries; (iii)
determine the time or times when and the manner and condition in which each Option shall be
exercisable and the duration of the exercise period; (iv) designate each Option as one intended to
be an Incentive Stock Option or as a Non-Qualified Stock Option; and (v) determine or impose other
conditions to the grant or exercise of Options under the Plan as it may deem appropriate.



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     5.2 Option Price.



     The Option Price shall be determined by the Committee on the date the Option is granted and
reflected in the Award Agreement, as the same may be amended from time to time. Any particular
Award Agreement may provide for different Option Prices for specified amounts of Shares subject to
the Option. The Option Price with respect to each Incentive Stock Option, or other Option intended
to qualify for relief from the restrictions of Sections 162(m) and
409A of the Code, shall not be less than
100% (or, for Incentive Stock Options, 110%, in the case of an individual described in Section
422(b)(6) of the Code (relating to certain more than 10% owners)) of the Fair Market Value of a
Share on the day the Option is granted.



     5.3 Period of Option and Vesting.



     (a) Unless earlier expired, forfeited or otherwise terminated, each Option shall expire in its
entirety upon the 10th anniversary of the date of grant or shall have such other term
(which may be shorter, but not longer, in the case of Incentive Stock Options) as is set forth in
the applicable Award Agreement (except that, in the case of an individual described in Section
422(b)(6) of the Code (relating to certain more than 10% owners) who is granted an Incentive Stock
Option, the term of such Option shall be no more than five years from the date of grant). The
Option shall also expire, be forfeited and terminate at such times and in such circumstances as
otherwise provided hereunder or under the Award Agreement.



     (b) Each Option, to the extent that the Optionee has not had a Termination of Service and the
Option has not otherwise lapsed, expired, terminated or been forfeited, shall first become
exercisable according to the terms and conditions set forth in the Award Agreement, as determined
by the Committee at the time of grant. Unless otherwise determined by the Committee at the time of
grant, such stock options shall vest ratably, in annual installments, over a four-year period
beginning on the date of grant. Unless otherwise provided in the Award Agreement, no Option (or
portion thereof) shall ever be exercisable if the Optionee has a Termination of Service before the
time at which such Option (or portion thereof) would otherwise have become exercisable, and any
Option that would otherwise become exercisable after such Termination of Service shall not become
exercisable and shall be forfeited upon such termination. Notwithstanding the foregoing provisions
of this Section 5.3(b), Options exercisable pursuant to the schedule set forth by the Committee at
the time of grant may be fully or more rapidly exercisable or otherwise vested at any time in the
discretion of the Committee. Upon and after the death of an Optionee, such Optionee’s Options, if
and to the extent otherwise exercisable hereunder or under the applicable Award Agreement after the
Optionee’s death, may be exercised by the Successors of the Optionee.



     5.4 Exercisability Upon and After Termination of Optionee.



     (a) Subject to provisions of the Award Agreement, in the event the Optionee has a Termination
of Service other than by the Company or its Subsidiaries for Cause, or other than by reason of death, Retirement or Disability, no exercise of an Option
may occur after the expiration of the three-month period to follow the termination, or if earlier,
the expiration of the term of the Option as provided under Section 5.3(a); provided that, if the
Optionee should die after the Termination of Service, such termination being for a reason other
than Disability or Retirement, but while the Option is still in effect, the Option (if and to the
extent otherwise exercisable by the Optionee at the time of death) may be exercised until the
earlier of (i) one year from the date of the Termination of Service of the Optionee, or (ii) the
date on which the term of the Option expires in accordance with Section 5.3(a).



8









 





     (b) Subject to provisions of the Award Agreement, in the event the Optionee has a Termination
of Service on account of death, Retirement or Disability, the Option (whether or not otherwise
exercisable) may be exercised until the earlier of (i) one year from the date of the Termination of
Service of the Optionee, or (ii) the date on which the term of the Option expires in accordance
with Section 5.3.



     (c) Notwithstanding any other provision hereof, unless otherwise provided in the Award
Agreement, if (i) the Optionee has a Termination of Service by the Company, a Subsidiary or
affiliate for Cause or (ii) the Optionee terminates employment with the Company, its Subsidiaries
or affiliates for any reason (other than on account of death, Retirement or Disability) the
Optionee’s Options, to the extent then unexercised, shall thereupon cease to be exercisable and
shall be forfeited forthwith (whether or not the Options were exercisable previously).



     5.5 Exercise of Options.



     (a) Subject to vesting, restrictions on exercisability and other restrictions provided for
hereunder or otherwise imposed in accordance herewith, an Option may be exercised, and payment in
full of the aggregate Option Price made, by an Optionee only by written notice (in the form
prescribed by the Committee) to the Company or its designee specifying the number of Shares to be
purchased.



     (b) Without limiting the scope of the Committee’s discretion hereunder, the Committee may
impose such other restrictions on the exercise of Options (whether or not in the nature of the
foregoing restrictions) as it may deem necessary or appropriate.



     (c) If Shares acquired upon exercise of an Incentive Stock Option are disposed of in a
disqualifying disposition within the meaning of Section 422 of the Code by an Optionee prior to the
expiration of either two years from the date of grant of such Option or one year from the transfer
of Shares to the Optionee pursuant to the exercise of such Option, or in any other disqualifying
disposition within the meaning of Section 422 of the Code, such Optionee shall notify the Company
in writing as soon as practicable thereafter of the date and terms of such disposition and, if the
Company (or any affiliate thereof) thereupon has a tax-withholding obligation, shall pay to the
Company (or such affiliate) an amount equal to any withholding tax the Company (or affiliate) is
required to pay as a result of the disqualifying disposition.



     5.6 Payment.



     (a) The aggregate Option Price shall be paid in full upon the exercise of the Option. Payment
must be made by one of the following methods:




     (i) a certified or bank cashier’s check;




     (ii) subject to Section 12(e), the proceeds of a Company loan program or third-party
sale program or a notice acceptable to the Committee given as consideration under such a
program, in each case if permitted by the Committee in its discretion, if such a program has
been established and the Optionee is eligible to participate therein;




     (iii) if approved by the Committee in its discretion, Shares of previously owned Common
Stock, which have been previously owned for more than six months, having an aggregate Fair
Market Value on the date of exercise equal to the aggregate Option Price;




     (iv) other than as prohibited under Section 13(k) of the Exchange Act, if approved by
the Committee in its discretion, through the written election of the Optionee to have Shares



9









 







withheld by the Company from the Shares otherwise to be received, with such withheld
Shares having an aggregate Fair Market Value on the date of exercise equal to the aggregate
Option Price; or




     (v) by any combination of such methods of payment or any other method acceptable to the
Committee in its discretion.



     (b) Except in the case of Options exercised by certified or bank cashier’s check, the
Committee may impose limitations and prohibitions on the exercise of Options as it deems
appropriate, including, without limitation, any limitation or prohibition designed to avoid
accounting consequences which may result from the use of Common Stock as payment upon exercise of
an Option.



     (c) The Committee shall provide in the Award Agreement the extent (if any) to which an Option
may be exercised with respect to any fractional Share, including whether any fractional Shares
resulting from an Optionee’s exercise may be paid in cash.



     5.7 Stock Appreciation Rights.



     The Committee, in its discretion, may also permit (taking into account, without limitation,
the application of Section 409A of the Code, as the Committee may deem appropriate) the Optionee to
elect to receive upon the exercise of an Option a combination of Shares and cash, or, in the
discretion of the Committee, either Shares or cash, with an aggregate Fair Market Value (or, to the
extent of payment in cash, in an amount) equal to the excess of the Fair Market Value of the Shares
with respect to which the Option is being exercised over the aggregate Option Price, as determined
as of the day the Option is exercised.



     5.8 Exercise by Successors.



     An Option may be exercised, and payment in full of the aggregate Option Price made, by the
Successors of the Optionee only by written notice (as may be prescribed by the Committee) to the
Company specifying the number of Shares to be purchased. Such notice shall state that the
aggregate Option Price will be paid in full, or that the Option will be exercised as otherwise
provided hereunder, in the discretion of the Company or the Committee, if and as applicable.



     5.9 Nontransferability of Option.



     Except if otherwise provided in the applicable Award Agreement, each Option granted under the
Plan shall be nontransferable by the Optionee except by will or the laws of descent and
distribution of the state wherein the Optionee is domiciled at the time of his death; provided,
however, that the Committee may (but need not) permit other transfers, where the Committee
concludes that such transferability (i) does not result in accelerated U.S. federal income
taxation, (ii) does not cause any Option intended to be an Incentive Stock Option to fail to be
described in Section 422(b) of the Code, (iii) complies with applicable law, including securities
laws, and (iv) is otherwise appropriate and desirable.



     5.10 Deferral.



     The Committee (taking into account, without limitation, the possible application of Section
409A of the Code, as the Committee may deem appropriate) may establish a program under which
Participants will have Phantom Shares subject to Section 7 credited upon their exercise of Options,
rather than receiving Shares at that time.



10









 





6. PROVISIONS APPLICABLE TO RESTRICTED STOCK.




6.1 Grant of Restricted Stock.




     (a) In connection with the grant of Restricted Stock, whether or not performance goals (as
provided for under Section 10) apply thereto, the Committee shall establish one or more vesting
periods with respect to the shares of Restricted Stock granted, the length of which shall be
determined in the discretion of the Committee. Subject to the provisions of this Section 6, the
applicable Award Agreement and the other provisions of the Plan, restrictions on Restricted Stock
shall lapse if the Grantee satisfies all applicable employment or other service requirements
through the end of the applicable vesting period.



     (b) Subject to the other terms of the Plan, the Committee may, in its discretion as reflected
by the terms of the applicable Award Agreement: (i) authorize the granting of Restricted Stock to
employees, Directors and consultants of the Company and its Subsidiaries; (ii) provide a specified
purchase price for the Restricted Stock (whether or not the payment of a purchase price is required
by any state law applicable to the Company); (iii) determine the restrictions applicable to
Restricted Stock and (iv) determine or impose other conditions, including any applicable
performance goals, to the grant of Restricted Stock under the Plan as it may deem appropriate.



     6.2 Certificates.



     (a) In the discretion of the Committee, each Grantee of Restricted Stock may be issued a stock
certificate in respect of Shares of Restricted Stock awarded under the Plan. A “book entry” (by
computerized or manual entry) shall be made in the records of the Company to evidence an award of
Restricted Stock, where no certificate is issued in the name of the Grantee. Each certificate, if
any, shall be registered in the name of the Grantee and may include any legend which the Committee
deems appropriate to reflect any restrictions on transfer hereunder or under the Award Agreement,
or as the Committee may otherwise deem appropriate, and, without limiting the generality of the
foregoing, shall bear a legend referring to the terms, conditions, and restrictions applicable to
such Award, substantially in the following form:




THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF STOCK
REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS
(INCLUDING FORFEITURE) OF THE COGDELL SPENCER INC. 2005 LONG TERM
INCENTIVE COMPENSATION PLAN AND AN AWARD AGREEMENT ENTERED INTO
BETWEEN THE REGISTERED OWNER AND COGDELL SPENCER INC. COPIES OF
SUCH PLAN AND AWARD AGREEMENT ARE ON FILE IN THE OFFICES OF COGDELL
SPENCER INC. AT 4401 BARCLAY DOWNS DRIVE, SUITE 300, CHARLOTTE, NC
28209-4670.



     (b) The Committee shall require that any stock certificates evidencing such Shares be held in
custody by the Company until the restrictions thereon shall have lapsed, and may in its discretion
require that, as a condition of any Restricted Stock award, the Grantee shall have delivered to the
Company a stock power, endorsed in blank, relating to the stock covered by such Restricted Stock
award. If and when such restrictions so lapse, any stock certificates shall be delivered by the
Company to the Grantee or his or her designee as provided in Section 6.3 (and the stock power shall
be so delivered or shall be discarded).



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6.3 Restrictions and Conditions.




     Unless otherwise provided by the Committee, the Shares of Restricted Stock awarded pursuant to
the Plan shall be subject to the following restrictions and conditions:




     (i) Subject to the provisions of the Plan and the Award Agreements, during a period
commencing with the date of such Award and ending on the date the period of forfeiture with
respect to such Shares lapses, the Grantee shall not be permitted voluntarily or
involuntarily to sell, transfer, pledge, anticipate, alienate, encumber or assign Shares of
Restricted Stock awarded under the Plan (or have such Shares attached or garnished).
Subject to the provisions of the Award Agreements and clauses (iii) and (iv) below, the
period of forfeiture with respect to Shares granted hereunder shall lapse as provided in the
applicable Award Agreement. Notwithstanding the foregoing, unless otherwise expressly
provided by the Committee, the period of forfeiture with respect to such Shares shall only
lapse as to whole Shares.




     (ii) Except as provided in the foregoing clause (i), below in this clause (ii), in
Section 14, or as otherwise provided in the applicable Award Agreement, the Grantee shall
have, in respect of the Shares of Restricted Stock, all of the rights of a shareholder of
the Company, including the right to vote the Shares, and, except as provided below, the
right to receive any cash dividends. The Committee may provide in the Award Agreement that
cash dividends on such Shares shall be held by the Company (unsegregated as a part of its
general assets) until the period of forfeiture lapses (and forfeited if the underlying
Shares are forfeited), and paid over to the Grantee as soon as practicable after such period
lapses (if not forfeited), or alternatively may provide for other treatment of such
dividends (including without limitation the crediting of Phantom Shares in respect of
dividends or other deferral provisions). Certificates for Shares (not subject to
restrictions hereunder) shall be delivered to the Grantee or his or her designee promptly
after, and only after, the period of forfeiture shall lapse without forfeiture in respect of
such Shares of Restricted Stock.




     (iii) Unless otherwise provided in the applicable employment agreement or Award
Agreement, and subject to clause (iv) below, if the Grantee has a Termination of Service by
the Company or its Subsidiaries (or, if applicable, its affiliates) for Cause, or if the
Grantee terminates his or her employment without Good Reason (as defined in the applicable
employment agreement) or by the Grantee for any reason other than his or her death,
Retirement or Disability, during the applicable period of forfeiture, then (A) all
Restricted Stock still subject to restriction shall thereupon, and with no further action,
be forfeited by the Grantee, and (B) the Company shall pay to the Grantee as soon as
practicable (and in no event more than 30 days) after such termination an amount, if any,
equal to the lesser of (x) the amount paid by the Grantee for such forfeited Restricted
Stock as contemplated by Section 6.1, and (y) the Fair Market Value on the date of
termination of the forfeited Restricted Stock.




     (iv) Unless otherwise provided in the applicable employment agreement or Award
Agreement, in the event the Grantee has a Termination of Service on account of his or her
death, Disability or Retirement, or the Grantee has a Termination of Service by the Company
or its Subsidiaries for any reason other than Cause, or if the Grantee terminates his or her
employment without Good Reason (as defined in the applicable employment agreement), or in
the event of a Change in Control (regardless of whether a termination follows thereafter),
during the applicable period of forfeiture, then restrictions under the Plan will
immediately lapse on all Restricted Stock granted to the applicable Grantee.



12









 





7. PROVISIONS APPLICABLE TO PHANTOM SHARES.




     7.1 Grant of Phantom Shares.



     Subject to the other terms of the Plan, the Committee shall, in its discretion as reflected by
the terms of the applicable Award Agreement: (i) authorize the granting of Phantom Shares to
employees, Directors and consultants of the Company and its Subsidiaries and (ii) determine or
impose other conditions to the grant of Phantom Shares under the Plan as it may deem appropriate.



     7.2 Term.



     The Committee may provide in an Award Agreement that any particular Phantom Share shall expire
at the end of a specified term.



     7.3 Vesting.



     Phantom Shares shall vest as provided in the applicable Award Agreement.



     7.4 Settlement of Phantom Shares.



     (a) Each vested and outstanding Phantom Share shall be settled by the transfer to the Grantee
of one Share; provided that, the Committee at the time of grant may provide that a Phantom Share
may be settled (i) in cash at the applicable Phantom Share Value, (ii) in cash or by transfer of
Shares as elected by the Grantee in accordance with procedures established by the Committee or
(iii) in cash or by transfer of Shares as elected by the Company.



     (b) Each Phantom Share shall be settled with a single-sum payment or distribution by the
Company; provided that, with respect to Phantom Shares of a Grantee which have a common Settlement
Date, the Committee (taking into account, without limitation, Section 409A of the Code, as the
Committee may deem appropriate) may permit the Grantee to elect in accordance with procedures
established by the Committee to receive installment payments over a period not to exceed 10 years.



     (c) (i) Unless otherwise provided in the applicable Award Agreement, the “Settlement Date”
with respect to a Grantee is the first day of the month to follow the Grantee’s Termination of
Service, provided that a Grantee may elect, in accordance with procedures to be established by the
Committee, that such Settlement Date will be deferred as elected by the Grantee to a time permitted
by the Committee under procedures to be established by the Committee. Unless otherwise determined
by the Committee, elections under this Section 7.4(c)(i) must (A) be effective at least one year
after they are made, or, in the case of payments to commence at a specific time, be made at least
one year before the first scheduled payment and (B) defer distributions (in a manner permitted by
the Committee, taking into account, without limitation, the requirements of Section 409A of the
Code) for at least five years.



     (ii) Notwithstanding Section 7.4(c)(i), the Committee may provide that distributions of
Phantom Shares can be elected at any time in those cases in which the Phantom Share Value is
determined by reference to Fair Market Value to the extent in excess of a base value, rather than
by reference to unreduced Fair Market Value.



     (iii) Notwithstanding the foregoing, the Settlement Date, if not earlier pursuant to this
Section 7.4(c), is the date of the Grantee’s death.



13









 





     (d) Notwithstanding the other provisions of this Section 7, in the event of a Change in
Control, the Settlement Date shall be the date of such Change in Control and all amounts due with
respect to Phantom Shares to a Grantee hereunder shall be paid as soon as practicable (but in no
event more than 30 days) after such Change in Control, unless such Grantee elects otherwise in
accordance with procedures established by the Committee.



     (e) Notwithstanding any other provision of the Plan, a Grantee may receive any amounts to be
paid in installments as provided in Section 7.4(b) or deferred by the Grantee as provided in
Section 7.4(c) in the event of an “Unforeseeable Emergency.” For these purposes, an “Unforeseeable
Emergency,” as determined by the Committee in its sole discretion, is a severe financial hardship
to the Grantee resulting from a sudden and unexpected illness or accident of the Grantee or
“dependent,” as defined in Section 152(a) of the Code, of the Grantee, loss of the Grantee’s
property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as
a result of events beyond the control of the Grantee. The circumstances that will constitute an
Unforeseeable Emergency will depend upon the facts of each case, but, in any case, payment may not
be made to the extent that such hardship is or may be relieved:




     (i) through reimbursement or compensation by insurance or otherwise,




     (ii) by liquidation of the Grantee’s assets, to the extent the liquidation of such
assets would not itself cause severe financial hardship, or




     (iii) by future cessation of the making of additional deferrals under Section 7.4(b)
and (c).


Without limitation, the need to send a Grantee’s child to college or the desire to purchase a home
shall not constitute an Unforeseeable Emergency. Distributions of amounts because of an
Unforeseeable Emergency shall be permitted to the extent reasonably needed to satisfy the emergency
need.




     7.5 Other Phantom Share Provisions.



     (a) Rights to payments with respect to Phantom Shares granted under the Plan shall not be
subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment, garnishment, levy, execution, or other legal or equitable process, either voluntary or
involuntary; and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber,
attach or garnish, or levy or execute on any right to payments or other benefits payable hereunder,
shall be void.



     (b) A Grantee may designate in writing, on forms to be prescribed by the Committee, a
beneficiary or beneficiaries to receive any payments payable after his or her death and may amend
or revoke such designation at any time. If no beneficiary designation is in effect at the time of
a Grantee’s death, payments hereunder shall be made to the Grantee’s estate. If a Grantee with a
vested Phantom Share dies, such Phantom Share shall be settled and the Phantom Share Value in
respect of such Phantom Shares paid, and any payments deferred pursuant to an election under
Section 7.4(c) shall be accelerated and paid, as soon as practicable (but no later than 60 days)
after the date of death to such Grantee’s beneficiary or estate, as applicable.



     (c) The Committee may establish a program under which distributions with respect to Phantom
Shares may be deferred for periods in addition to those otherwise contemplated by foregoing
provisions of this Section 7. Such program may include, without limitation, provisions for the
crediting of earnings and losses on unpaid amounts, and, if permitted by the Committee, provisions
under which Participants



14









 




may select from among hypothetical investment alternatives for such deferred amounts in
accordance with procedures established by the Committee.




     (d) Phantom Shares (including for purposes of this Section 7.5(d) any accounts established to
facilitate the implementation of Section 7.4(c)), are solely a device for the measurement and
determination of the amounts to be paid to a Grantee under the Plan. Each Grantee’s right in the
Phantom Shares is limited to the right to receive payment, if any, as may herein be provided. The
Phantom Shares do not constitute Common Stock and shall not be treated as (or as giving rise to)
property or as a trust fund of any kind; provided, however, that the Company may establish a mere
bookkeeping reserve to meet its obligations hereunder or a trust or other funding vehicle that
would not cause the Plan to be deemed to be funded for tax purposes or for purposes of Title I of
the Employee Retirement Income Security Act of 1974, as amended. The right of any Grantee of
Phantom Shares to receive payments by virtue of participation in the Plan shall be no greater than
the right of any unsecured general creditor of the Company.



     (e) Notwithstanding any other provision of this Section 7, any fractional Phantom Share will
be paid out in cash at the Phantom Share Value as of the Settlement Date.



     (f) No Phantom Share shall be construed to give any Grantee any rights with respect to Shares
or any ownership interest in the Company. Except as may be provided in accordance with Section 8,
no provision of the Plan shall be interpreted to confer upon any Grantee any voting, dividend or
derivative or other similar rights with respect to any Phantom Share.



     7.6 Claims Procedures.



     (a) To the extent that the Plan is determined by the Committee to be subject to the Employee
Retirement Income Security Act of 1974, as amended, the Grantee, or his beneficiary hereunder or
authorized representative, may file a claim for benefits with respect to Phantom Shares under the
Plan by written communication to the Committee or its designee. A claim is not considered filed
until such communication is actually received. Within 90 days (or, if special circumstances
require an extension of time for processing, 180 days, in which case notice of such special
circumstances should be provided within the initial 90-day period) after the filing of the claim,
the Committee will either:




     (i) approve the claim and take appropriate steps for satisfaction of the claim; or




     (ii) if the claim is wholly or partially denied, advise the claimant of such denial by
furnishing to him a written notice of such denial setting forth (A) the specific reason or
reasons for the denial; (B) specific reference to pertinent provisions of the Plan on which
the denial is based and, if the denial is based in whole or in part on any rule of
construction or interpretation adopted by the Committee, a reference to such rule, a copy of
which shall be provided to the claimant; (C) a description of any additional material or
information necessary for the claimant to perfect the claim and an explanation of the
reasons why such material or information is necessary; and (D) a reference to this Section
7.6 as the provision setting forth the claims procedure under the Plan.



     (b) The claimant may request a review of any denial of his claim by written application to the
Committee within 60 days after receipt of the notice of denial of such claim. Within 60 days (or,
if special circumstances require an extension of time for processing, 120 days, in which case
notice of such special circumstances should be provided within the initial 60-day period) after
receipt of written application for review, the Committee will provide the claimant with its
decision in writing, including, if



15









 




the claimant’s claim is not approved, specific reasons for the decision and specific
references to the Plan provisions on which the decision is based.




8. PROVISIONS APPLICABLE TO DIVIDEND EQUIVALENT RIGHTS.




     8.1 Grant of Dividend Equivalent Rights.



     Subject to the other terms of the Plan, the Committee shall, in its discretion as reflected by
the terms of the Award Agreements, authorize the granting of Dividend Equivalent Rights to
employees, Directors and consultants of the Company and its Subsidiaries based on the regular cash
dividends declared on Common Stock, to be credited as of the dividend payment dates, during the
period between the date an Award is granted, and the date such Award is exercised, vests or
expires, as determined by the Committee. Such Dividend Equivalent Rights shall be converted to
cash or additional Shares by such formula and at such time and subject to such limitation as may be
determined by the Committee. With respect to Dividend Equivalent Rights granted with respect to
Options intended to be qualified performance-based compensation for purposes of Section 162(m) of
the Code, such Dividend Equivalent Rights shall be payable regardless of whether such Option is
exercised. If a Dividend Equivalent Right is granted in respect of another Award hereunder, then,
unless otherwise stated in the Award Agreement, in no event shall the Dividend Equivalent Right be
in effect for a period beyond the time during which the applicable portion of the underlying Award
is in effect.



     8.2 Certain Terms.



     (a) The term of a Dividend Equivalent Right shall be set by the Committee in its discretion.



     (b) Unless otherwise determined by the Committee, except as contemplated by Section 8.4, a
Dividend Equivalent Right is exercisable or payable only while the Participant is an employee,
Director or consultant.



     (c) Payment of the amount determined in accordance with Section 8.1 shall be in cash, in
Common Stock or a combination of both, as determined by the Committee.



     (d) The Committee may impose such employment-related conditions on the grant of a Dividend
Equivalent Right as it deems appropriate in its discretion.



     8.3 Other Types of Dividend Equivalent Rights.



     The Committee may establish a program under which Dividend Equivalent Rights of a type whether
or not described in the foregoing provisions of this Section 8 may be granted to Participants. For
example, and without limitation, the Committee may grant a dividend equivalent right in respect of
each Share subject to an Option or with respect to a Phantom Share, which right would consist of
the right (subject to Section 8.4) to receive a cash payment in an amount equal to the dividend
distributions paid on a Share from time to time.



     8.4 Deferral.



     The Committee may establish a program (taking into account, without limitation, the possible
application of Section 409A of the Code, as the Committee may deem appropriate) under which
Participants (i) will have Phantom Shares credited, subject to the terms of Sections 7.4 and 7.5 as
though directly applicable with respect thereto, upon the granting of Dividend Equivalent Rights,
or (ii) will have payments with respect to Dividend Equivalent Rights deferred. In the case of the
foregoing clause (ii),



16









 




such program may include, without limitation, provisions for the crediting of earnings and
losses on unpaid amounts, and, if permitted by the Committee, provisions under which Participants
may select from among hypothetical investment alternatives for such deferred amounts in accordance
with procedures established by the Committee.




9. OTHER EQUITY-BASED AWARDS.




     The Committee shall have the right (i) to grant other Awards based upon the Common Stock
having such terms and conditions as the Committee may determine, including, without limitation, the
grant of shares based upon certain conditions, the grant of Partnership Units based upon certain
conditions and the grant of stock appreciation rights and (ii) to grant interests (which may be
expressed as units or otherwise) in Cogdell Spencer OP.



10. PERFORMANCE GOALS.




     The Committee, in its discretion, (i) may establish one or more performance goals as a
precondition to the issuance or vesting of Awards, and (ii) provide, in connection with the
establishment of the performance goals, for predetermined Awards to those Participants (who
continue to meet all applicable eligibility requirements) with respect to whom the applicable
performance goals are satisfied.



11. TAX WITHHOLDING.




     11.1 In General.



     The Company shall be entitled to withhold from any payments or deemed payments any amount of
tax withholding determined by the Committee to be required by law. Without limiting the generality
of the foregoing, the Committee may, in its discretion, require the Participant to pay to the
Company at such time as the Committee determines the amount that the Committee deems necessary to
satisfy the Company’s obligation to withhold federal, state or local income or other taxes incurred
by reason of (i) the exercise of any Option, (ii) the lapsing of any restrictions applicable to any
Restricted Stock, (iii) the receipt of a distribution in respect of Phantom Shares or Dividend
Equivalent Rights or (iv) any other applicable income-recognition event (for example, an election
under Section 83(b) of the Code).



     11.2 Share Withholding.



     (a) Upon exercise of an Option, the Optionee may, if approved by the Committee in its
discretion, make a written election to have Shares then issued withheld by the Company from the
Shares otherwise to be received, or to deliver previously owned Shares, in order to satisfy the
liability for such withholding taxes. In the event that the Optionee makes, and the Committee
permits, such an election, the number of Shares so withheld or delivered shall have an aggregate
Fair Market Value on the date of exercise sufficient to satisfy the applicable withholding taxes.
Where the exercise of an Option does not give rise to an obligation by the Company to withhold
federal, state or local income or other taxes on the date of exercise, but may give rise to such an
obligation in the future, the Committee may, in its discretion, make such arrangements and impose
such requirements as it deems necessary or appropriate.



     (b) Upon lapsing of restrictions on Restricted Stock (or other income-recognition event), the
Grantee may, if approved by the Committee in its discretion, make a written election to have Shares
withheld by the Company from the Shares otherwise to be released from restriction, or to deliver
previously owned Shares (not subject to restrictions hereunder), in order to satisfy the liability
for such withholding taxes. In the event that the Grantee makes, and the Committee permits, such
an election, the



17









 




number of Shares so withheld or delivered shall have an aggregate Fair Market Value on the
date of exercise sufficient to satisfy the applicable withholding taxes.




     (c) Upon the making of a distribution in respect of Phantom Shares or Dividend Equivalent
Rights, the Grantee may, if approved by the Committee in its discretion, make a written election to
have amounts (which may include Shares) withheld by the Company from the distribution otherwise to
be made, or to deliver previously owned Shares (not subject to restrictions hereunder), in order to
satisfy the liability for such withholding taxes. In the event that the Grantee makes, and the
Committee permits, such an election, any Shares so withheld or delivered shall have an aggregate
Fair Market Value on the date of exercise sufficient to satisfy the applicable withholding taxes.



     11.3 Withholding Required.



     Notwithstanding anything contained in the Plan or the Award Agreement to the contrary, the
Participant’s satisfaction of any tax-withholding requirements imposed by the Committee shall be a
condition precedent to the Company’s obligation as may otherwise be provided hereunder to provide
Shares to the Participant and to the release of any restrictions as may otherwise be provided
hereunder, as applicable; and the applicable Option, Restricted Stock, Phantom Shares or Dividend
Equivalent Rights shall be forfeited upon the failure of the Participant to satisfy such
requirements with respect to, as applicable, (i) the exercise of the Option, (ii) the lapsing of
restrictions on the Restricted Stock (or other income-recognition event) or (iii) distributions in
respect of any Phantom Share or Dividend Equivalent Right.



12. REGULATIONS AND APPROVALS.




     (a) The obligation of the Company to sell Shares with respect to an Award granted under the
Plan shall be subject to all applicable laws, rules and regulations, including all applicable
federal and state securities laws, and the obtaining of all such approvals by governmental agencies
as may be deemed necessary or appropriate by the Committee.



     (b) The Committee may make such changes to the Plan as may be necessary or appropriate to
comply with the rules and regulations of any government authority or to obtain tax benefits
applicable to an Award.



     (c) Each grant of Options, Restricted Stock, Phantom Shares (or issuance of Shares in respect
thereof) or Dividend Equivalent Rights (or issuance of Shares in respect thereof), or other Award
under Section 9 (or issuance of Shares in respect thereof), is subject to the requirement that, if
at any time the Committee determines, in its discretion, that the listing, registration or
qualification of Shares issuable pursuant to the Plan is required by any securities exchange or
under any state or federal law, or the consent or approval of any governmental regulatory body is
necessary or desirable as a condition of, or in connection with, the issuance of Options, Shares of
Restricted Stock, Phantom Shares, Dividend Equivalent Rights, other Awards or other Shares, no
payment shall be made, or Phantom Shares or Shares issued or grant of Restricted Stock or other
Award made, in whole or in part, unless listing, registration, qualification, consent or approval
has been effected or obtained free of any conditions in a manner acceptable to the Committee.



     (d) In the event that the disposition of stock acquired pursuant to the Plan is not covered by
a then current registration statement under the Securities Act, and is not otherwise exempt from
such registration, such Shares shall be restricted against transfer to the extent required under
the Securities Act, and the Committee may require any individual receiving Shares pursuant to the
Plan, as a condition precedent to receipt of such Shares, to represent to the Company in writing
that such Shares are acquired



18









 




for investment only and not with a view to distribution and that such Shares will be disposed
of only if registered for sale under the Securities Act or if there is an available exemption for
such disposition.




     (e) Notwithstanding any other provision of the Plan, the Company shall not be required to take
or permit any action under the Plan or any Award Agreement which, in the good-faith determination
of the Company, would result in a material risk of a violation by the Company of Section 13(k) of
the Exchange Act.



13. INTERPRETATION AND AMENDMENTS; OTHER RULES.




     The Committee may make such rules and regulations and establish such procedures for the
administration of the Plan as it deems appropriate. Without limiting the generality of the
foregoing, the Committee may (i) determine the extent, if any, to which Options, Phantom Shares or
Shares (whether or not Shares of Restricted Stock) or Dividend Equivalent Rights shall be forfeited
(whether or not such forfeiture is expressly contemplated hereunder); (ii) interpret the Plan and
the Award Agreements hereunder, with such interpretations to be conclusive and binding on all
persons and otherwise accorded the maximum deference permitted by law, provided that the
Committee’s interpretation shall not be entitled to deference on and after a Change in Control
except to the extent that such interpretations are made exclusively by members of the Committee who
are individuals who served as Committee members before the Change in Control; and (iii) take any
other actions and make any other determinations or decisions that it deems necessary or appropriate
in connection with the Plan or the administration or interpretation thereof. In the event of any
dispute or disagreement as to the interpretation of the Plan or of any rule, regulation or
procedure, or as to any question, right or obligation arising from or related to the Plan, the
decision of the Committee, except as provided in clause (ii) of the foregoing sentence, shall be
final and binding upon all persons. Unless otherwise expressly provided hereunder, the Committee,
with respect to any grant, may exercise its discretion hereunder at the time of the Award or
thereafter. No action which is otherwise permitted under or in connection with the Plan shall be
prohibited hereunder merely because it constitutes a repricing of an Award, and, in furtherance of
the foregoing, the Committee is expressly authorized and empowered, without limitation, to effect
repricings that are consistent with the terms of the Plan. Notwithstanding the foregoing, no
repricing of an Award shall be permitted. The Board may amend the Plan as it shall deem advisable,
except that no amendment may adversely affect a Participant with respect to an Award previously
granted unless such amendments are required in order to comply with applicable laws; provided that
the Board may not make any amendment in the Plan that would, if such amendment were not approved by
the holders of the Common Stock, cause the Plan to fail to comply with any requirement of
applicable law or regulation, unless and until the approval of the holders of such Common Stock is
obtained.



14. CHANGES IN CAPITAL STRUCTURE.




     (a) If (i) the Company or its Subsidiaries shall at any time be involved in a merger,
consolidation, dissolution, liquidation, reorganization, exchange of shares, sale of all or
substantially all of the assets or stock of the Company or its Subsidiaries or a transaction
similar thereto, (ii) any stock dividend, stock split, reverse stock split, stock combination,
reclassification, recapitalization or other similar change in the capital structure of the Company
or its Subsidiaries, or any distribution to holders of Common Stock other than cash dividends,
shall occur or (iii) any other event shall occur which in the judgment of the Committee
necessitates action by way of adjusting the terms of the outstanding Awards, then:




     (x) the maximum aggregate number of Shares which may be made subject to Options and
Dividend Equivalent Rights under the Plan, the maximum aggregate number and kind of Shares
of Restricted Stock that may be granted under the Plan, and the maximum



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aggregate number of Phantom Shares and other Awards which may be granted under the Plan
may be appropriately adjusted by the Committee in its discretion; and




     (y) the Committee shall take any such action as in its discretion shall be necessary to
maintain each Participants’ rights hereunder (including under their Award Agreements) with
respect to Options, Phantom Shares and Dividend Equivalent Rights (and, as appropriate,
other Awards under the Plan), so that they are substantially proportionate to the rights
existing in such Options, Phantom Shares and Dividend Equivalent Rights (and other Awards
under the Plan) prior to such event, including, without limitation, adjustments in (A) the
number of Options, Phantom Shares and Dividend Equivalent Rights (and other Awards under the
Plan) granted, (B) the number and kind of shares or other property to be distributed in
respect of Options, Phantom Shares and Dividend Equivalent Rights (and other Awards under
the Plan, as applicable), (C) the Option Price and Phantom Share Value, and (D)
performance-based criteria established in connection with Awards; provided that, in the
discretion of the Committee, the foregoing clause (D) may also be applied in the case of any
event relating to a Subsidiary if the event would have been covered under this Section 14(a)
had the event related to the Company.


To the extent that such action shall include an increase or decrease in the number of Shares (or
units of other property then available) subject to all outstanding Awards, the number of Shares (or
units) available under Section 4 shall be increased or decreased, as the case may be,
proportionately, as may be determined by the Committee in its discretion.




     (b) Any Shares or other securities distributed to a Grantee with respect to Restricted Stock
or otherwise issued in substitution of Restricted Stock shall be subject to the restrictions and
requirements imposed by Section 6, including depositing the certificates therefor with the Company
together with a stock power and bearing a legend as provided in Section 6.2(a).



     (c) If the Company shall be consolidated or merged with another corporation or other entity,
each Grantee who has received Restricted Stock that is then subject to restrictions imposed by
Section 6.3 may be required to deposit with the successor corporation the certificates, if any, for
the stock or securities or the other property that the Grantee is entitled to receive by reason of
ownership of Restricted Stock in a manner consistent with Section 6.2(b), and such stock,
securities or other property shall become subject to the restrictions and requirements imposed by
Section 6.3, and the certificates therefor or other evidence thereof shall bear a legend similar in
form and substance to the legend set forth in Section 6.2(a).



     (d) If a Change in Control shall occur, then the Committee, as constituted immediately before
the Change in Control, may make such adjustments as it, in its discretion, determines are necessary
or appropriate in light of the Change in Control, provided that the Committee determines that such
adjustments do not have an adverse economic impact on the Participant as determined at the time of
the adjustments.



     (e) The judgment of the Committee with respect to any matter referred to in this Section 14
shall be conclusive and binding upon each Participant without the need for any amendment to the
Plan.



15. MISCELLANEOUS.




     15.1 No Rights to Employment or Other Service.



     Nothing in the Plan or in any grant made pursuant to the Plan shall confer on any individual
any right to continue in the employ or other service of the Company or its Subsidiaries or
interfere in any way



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with the right of the Company or its Subsidiaries and its shareholders to terminate the
individual’s employment or other service at any time.




     15.2 No Fiduciary Relationship.



     Nothing contained in the Plan (including without limitation Sections 7.5(c) and 8.4, and no
action taken pursuant to the provisions of the Plan, shall create or shall be construed to create a
trust or any kind, or a fiduciary relationship between the Company or its Subsidiaries, or their
officers or the Committee, on the one hand, and the Participant, the Company, its Subsidiaries or
any other person or entity, on the other.



     15.3 Notices.



     All notices under the Plan shall be in writing, and if to the Company, shall be delivered to
the Committee or mailed to its principal office, addressed to the attention of the Committee; and
if to the Participant, shall be delivered personally, sent by facsimile transmission or mailed to
the Participant at the address appearing in the records of the Company. Such addresses may be
changed at any time by written notice to the other party given in accordance with this Section
15.3.



     15.4 Exculpation and Indemnification.



     The Company shall indemnify and hold harmless the members of the Board and the members of the
Committee from and against any and all liabilities, costs and expenses incurred by such persons as
a result of any act or omission to act in connection with the performance of such person’s duties,
responsibilities and obligations under the Plan, to the maximum extent permitted by law, other than
such liabilities, costs and expenses as may result from the gross negligence, bad faith, willful
misconduct or criminal acts of such persons.



     15.5 Captions.



     The use of captions in this Plan is for convenience. The captions are not intended to provide
substantive rights.



     15.6 Governing Law.



     THIS PLAN SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
MARYLAND WITHOUT REGARD TO ANY PRINCIPLES OF CONFLICTS OF LAW.




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