Exhibit
10.8


 


ALEXANDRIA REAL ESTATE EQUITIES, INC.


 


DEFERRED COMPENSATION PLAN


FOR DIRECTORS


 


 


ORIGINAL EFFECTIVE DATE: JANUARY 1, 2002


 


AMENDED
AND RESTATED EFFECTIVE: JANUARY 1, 2005


 













 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  
	
  1.

  	
  INTRODUCTION AND PURPOSE

  	
  1

  
	
   

  	
   

  	
   

  
	
  2.

  	
  DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  
	
   

  	
  2.1

  	
  “Annual Retainer”

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.2

  	
  “Beneficiary”

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.3

  	
  “Board”

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.4

  	
  “Cause”

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.5

  	
  “Change of Control”

  	
  2

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.6

  	
  “Code”

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.7

  	
  “Company”

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.8

  	
  “Compensation”

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.9

  	
  “Deferred Compensation”

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.10

  	
  “Disability”

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.11

  	
  “Effective Date”

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.12

  	
  “Election”

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.13

  	
  “Exchange Act”

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.14

  	
  “Incentive Plan”

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.15

  	
  “Market Value”

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.16

  	
  “Meeting Fee”

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.17

  	
  “Non-Employee Director”

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.18

  	
  “Nonrestricted Units”

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.19

  	
  “Participant”

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.20

  	
  “Phantom Stock Unit”

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.21

  	
  “Phantom Stock Unit Account”

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.22

  	
  “Plan”

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.23

  	
  “Plan Year”

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.24

  	
  “Restricted Period”

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.25

  	
  “Restricted Stock Award”

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.26

  	
  “Restricted Unit”

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.27

  	
  “Retirement”

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.28

  	
  “Section 409A Grandfathered Amount”

  	
  4

  



 


i.

















 


TABLE OF CONTENTS


(CONTINUED)


 


	
   

  	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.29

  	
  “Section 409A
  Non-Grandfathered Amount”

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.30

  	
  “Stock”

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.31

  	
  “Tax Gross-Up Payment”

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.32

  	
  “Unforeseeable
  Emergency”

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.33

  	
  “Vesting Commencement
  Date”

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  PARTICIPATION
  IN THE PLAN

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  DEFERRED COMPENSATION ELECTIONS;
  ELECTION TO FOREGO RESTRICTED STOCK AWARD

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.1

  	
  Election to Defer Annual Retainer and Meeting Fees

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.2

  	
  Election to Forego Restricted Stock Award

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.3

  	
  Election to Defer Tax Gross-Up Payment

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.4

  	
  Manner of Elections

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  PHANTOM
  STOCK UNIT ACCOUNT

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.1

  	
  Establishment of Phantom Stock Unit Account

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.2

  	
  Unsecured Creditors; Unfunded Plan

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.3

  	
  Timing of Credits

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.4

  	
  Amount of Credits; Vesting

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.5

  	
  Restricted Units

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  DISTRIBUTION
  OF PLAN BENEFITS

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.1

  	
  Form of Benefit

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.2

  	
  Distribution Elections

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.3

  	
  Termination of Service
  on the Board or Change of Control

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.4

  	
  Early Distribution of
  Section 409A Grandfathered Amounts

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.5

  	
  Unforeseeable Emergency

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.6

  	
  No Assignment or
  Alienation

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  ADMINISTRATION

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.1

  	
  Plan Administrator

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.2

  	
  Account Statements

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.3

  	
  Claims, Inquiries and
  Appeals

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  BENEFICIARY
  DESIGNATION

  	
  14

  



 


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TABLE OF CONTENTS


(CONTINUED)


 


	
   

  	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  MISCELLANEOUS

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.1

  	
  Effective Date;
  Amendment and Termination

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.2

  	
  No Employment or
  Service Rights

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.3

  	
  Arbitration

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.4

  	
  Governing Law

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.5

  	
  Severability

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.6

  	
  Notice

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.7

  	
  Successors

  	
  15

  



 


iii

















 


ALEXANDRIA REAL ESTATE EQUITIES, INC.


 


DEFERRED COMPENSATION PLAN


FOR DIRECTORS


 


1.                                    INTRODUCTION AND PURPOSE


 


This Plan was originally adopted by the Company
effective as of January 1, 2002. 
The Plan was amended and restated effective as of January 1, 2005.


 


The purpose of the Plan is to provide supplemental
retirement (and related tax) benefits to Non-Employee Directors of Alexandria
Real Estate Equities, Inc.  The Plan
is intended to be administered in compliance with Section 409A of the Code
with respect to all Section 409A Non-Grandfathered Amounts, and the
provisions of the Plan regarding Section 409A Grandfathered Amounts are
intended to be administered so as not to subject such amounts to Section 409A
of the Code.


 


2.                                    DEFINITIONS


 


2.1                            “Annual Retainer” means the annual fees payable to a
Non-Employee Director in arrears on the last day of each calendar quarter for
his or her service as a Director, but shall exclude expense reimbursements, all
Meeting Fees, and any remuneration or other payments paid to the Non-Employee
Director for services or otherwise in any capacity other than as a Non-Employee
Director.


 


2.2                            “Beneficiary” means the person or persons so
designated by a Participant in accordance with Section 8 hereof.


 


2.3                            “Board” means the Board of Directors of
Alexandria Real Estate Equities, Inc.


 


2.4                            “Cause” means the following:


 


(a)                              The Participant’s (i) material breach,
repudiation or failure to comply with or perform any of the Participant’s
duties or any of the Company’s policies or procedures (including, without
limitation, any such policies or procedures relating to conflicts of interest
or standard business conduct) or (ii) deliberate interference with the
compliance by any other member of the Board or any employee of the Company with
any of the foregoing;


 


(b)                              The conviction of the Participant for, or
pleading by the Participant of no contest or a guilty plea (or similar plea)
to, fraud, embezzlement, misappropriation of assets, malicious mischief, or any
felony, other than a crime for which vicarious liability is imposed upon the
Participant solely by reason of the Participant’s position with the Company and
not by reason of the Participant’s conduct; or


 


1.

















 


(c)                               Any other act, omission, event or
condition constituting cause for the discharge of any employee or other service
provider under applicable law.


 


2.5                            “Change of Control” means the occurrence of any of the
following events:


 


(a)                              Any Person (as such term is used in
section 3(a)(9) of the Exchange Act, as modified and used in sections 13(d) and
14(d) thereof, except that such term shall not include (A) the Company
or any of its subsidiaries, (B) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any of its
affiliates, (C) an underwriter temporarily holding securities pursuant to
an offering of such securities, or (D) a corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company) becomes the Beneficial
Owner, as such term is defined in Rule 13d-3 under the Exchange Act, directly
or indirectly, of securities of the Company (not including in the securities
beneficially owned by such Person any securities acquired directly from the
Company or its affiliates other than in connection with the acquisition by the
Company or its affiliates of a business) representing twenty-five percent (25%)
or more of the combined voting power of the Company’s then outstanding
securities; or


 


(b)                              The following individuals cease for any
reason to constitute a majority of the number of directors then serving:  individuals who, on the date hereof,
constitute the Board and any new director (other than a director whose initial
assumption of office is in connection with an actual or threatened election
contest, including but not limited to a consent solicitation, relating to the
election of directors of the Company) whose appointment or election by the
Board or nomination for election by the Company’s stockholders was approved or
recommended by a vote of at least two-thirds (2/3) of the directors then still
in office who either were directors on the date hereof or whose appointment,
election or nomination for election was previously so approved or recommended;
or


 


(c)                               There is consummated a merger or
consolidation of the Company with any other corporation, other than (A) a
merger or consolidation in which the stockholders of the Company immediately
prior to such merger or consolidation, continue to own, in combination with the
ownership of any trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any subsidiary of the Company, at least
seventy-five percent (75%) of the combined voting power of the securities of
the Company (or the surviving entity or any parent thereof) outstanding
immediately after such merger or consolidation in substantially the same
proportions as their ownership of the Company immediately prior to such merger
or consolidation, or (B) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no Person is
or becomes the Beneficial Owner, directly or indirectly, of securities of the
Company (not including in the securities beneficially owned by such Person any
securities acquired directly from the Company or its affiliates other than in
connection with the acquisition by the Company or its affiliates of a business)
representing twenty-five percent (25%) or more of the combined voting power of
the Company’s then outstanding securities; or


 


2.

















 


(d)                              The stockholders of the Company approve a
plan of complete liquidation or dissolution of the Company or there is
consummated an agreement for the sale or disposition by the Company of all or
substantially all of the Company’s assets, other than a sale or disposition by
the Company of all or substantially all of the Company’s assets to an entity,
at least seventy-five (75%) of the combined voting power of the voting
securities of which are owned by stockholders of the Company in substantially
the same proportions as their ownership of the Company immediately prior to
such sale.


 


2.6                            “Code” means the Internal Revenue Code of 1986, as amended
from time to time, and the regulations and other applicable guidance
promulgated thereunder.


 


2.7                            “Company” means Alexandria Real Estate Equities, Inc.


 


2.8                            “Compensation” means the Annual Retainer and Meeting
Fees paid to a Non-Employee Director by the Company in connection with his or
her service as a Director of the Company.


 


2.9                            “Deferred Compensation” means the amount of Compensation that a
Participant elects to defer, any Restricted Stock Award that a Participant
elects to forego and any Tax Gross-Up Payment that a Participant elects to
defer pursuant to his or her Election.


 


2.10                    “Disability” (i) prior to May 22, 2008,
means the inability of a Participant to work by reason of disability for one
hundred eighty (180) days during any three hundred sixty-five (365) day period,
and (ii) on and after May 22, 2008, has the meaning set forth in Section 2.10
of the Incentive Plan, or any successor provision.


 


2.11                    “Effective Date” means January 1, 2002.


 


2.12                    “Election” means the election of a Participant
pursuant to the terms of the Plan to defer Compensation, forego a Restricted
Stock Award or defer a Tax Gross-Up Payment, which election shall be made on
such form or forms as the Company may prescribe from time to time.


 


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


 


2.14                    “Incentive Plan” means the Alexandria Real Estate
Equities, Inc. Amended and Restated 1997 Stock Award and Incentive Plan,
and any successor plan thereto.


 


2.15                    “Market Value” means the closing sales price per share
of Stock on the national securities exchange on which the Stock is principally
traded on the date upon which such Market Value is to be determined for the
purpose of crediting a Participant’s Phantom Stock Unit Account or making a
distribution to a Participant therefrom.


 


2.16                    “Meeting Fee” means any meeting attendance fee paid to
a Non-Employee Director for his or her attendance at a meeting of the Board,
but shall exclude expense reimbursements, the Annual Retainer and any
remuneration or other payments paid to the 


 


3.

















 


Non- Employee Director for services or otherwise in any
capacity other than as a Non-Employee Director.


 


2.17                    “Non-Employee Director” means a member of the Board who is not
currently an employee or officer of the Company.


 


2.18                    “Nonrestricted Units” has the meaning set forth in Section 5.4.


 


2.19                    “Participant” means each Non-Employee Director who
elects to participate in the Plan.


 


2.20                    “Phantom Stock Unit” means a single unit of value granted
under the Plan, which when redeemed shall be a right to receive a share of
Stock from the Company.


 


2.21                    “Phantom Stock Unit Account” means an account maintained by the
Company on its books for a Participant, to which shall be credited the
Participant’s Deferred Compensation, which credited amounts shall be recorded
as Phantom Stock Units and thus treated as if they had been used to purchase
shares of Stock of the Company on the date on which the Participant’s Deferred
Compensation is credited to such account, as adjusted for dividends, cash
distributions, stock splits and similar adjustments determined under Section 5
and reduced by any distributions under the Plan made to a Participant or
Beneficiary.


 


2.22                    “Plan” means this Deferred Compensation Plan
for Directors.


 


2.23                    “Plan Year” means the calendar year.


 


2.24                    “Restricted Period” has the meaning set forth in Section 5.5(a).


 


2.25                    “Restricted Stock Award” means an award of shares of Stock
pursuant to Section 6.4 of the Incentive Plan as in effect on the
Effective Date, or any successor provision.


 


2.26                    “Restricted Unit” has the meaning set forth in Section 5.4.


 


2.27                    “Retirement” has the meaning set forth in Section 2.21
of the Incentive Plan, or any successor provision.


 


2.28                    “Section 409A Grandfathered
Amount”  means any Deferred Compensation that was
credited to a Participant’s Phantom Stock Unit Account under the Plan prior to January 1,
2005, plus any amounts credited to such Phantom Stock Unit Account with respect
to such Deferred Compensation pursuant to Section 5.4(a).


 


2.29                    “Section 409A
Non-Grandfathered Amount”  means any
Deferred Compensation that was credited to a Participant’s Phantom Stock Unit
Account under the Plan on or after January 1, 2005, plus any amounts
credited to such Phantom Stock Unit Account with respect to such Deferred
Compensation pursuant to Section 5.4(a).


 


4.

















 


2.30                    “Stock” means common stock, par value $.01 per
share, of the Company.


 


2.31                    “Tax Gross-Up Payment”  means a cash amount approved by the Company as
a tax gross-up payment in respect of a Restricted Stock Award.


 


2.32                    “Unforeseeable Emergency” has the meaning set forth in Section 6.5.


 


2.33                    “Vesting Commencement Date” has the meaning set forth in Section 5.5(b).


 


3.                                    PARTICIPATION IN THE PLAN


 


Eligibility for participation in the Plan shall be
limited to Non-Employee Directors.


 


4.            DEFERRED COMPENSATION ELECTIONS;
ELECTION TO FOREGO RESTRICTED STOCK AWARD


 


4.1                            Election to Defer Annual Retainer
and Meeting Fees.


 


(a)                              Prior to the beginning of each Plan Year,
each Non-Employee Director may elect to defer one hundred percent (100%) of his
or her Annual Retainer and/or Meeting Fees payable with respect to such Plan
Year.  The amount of Annual Retainer
and/or Meeting Fees deferred shall be subject to the provisions of Section 4.1(c).  In order to defer his or her Annual Retainer
and/or Meeting Fees, a Non-Employee Director must complete and return an
executed Election to the Company prior to the time announced by the Company,
which in any event shall be prior to the beginning of the Plan Year to which
such Election relates.  Notwithstanding the
foregoing, with respect to each Plan Year, if a Non-Employee Director first
becomes eligible to participate in the Plan during such Plan Year, such
Election shall be filed within thirty (30) days following the date on which the
Non-Employee Director is first eligible to participate and shall apply to
Annual Retainer and/or Meeting Fees payable in respect of services to be
rendered during the portion of such Plan Year following such Election.


 


(b)                              A Non-Employee Director’s Election to
defer his or her Annual Retainer and/or Meeting Fees for a Plan Year shall
apply only for such Plan Year and shall be irrevocable; provided,
however, that a Non-Employee Director may (i) cancel such
Election due to an Unforeseeable Emergency (as defined in Section 6.5) or
a hardship distribution pursuant to Section 1.401(k)-1(d)(3) of the
Treasury Regulations or (ii) amend such Election in accordance with Section 6.2(b).  In order to defer his or her Annual Retainer
and/or Meeting Fees for a subsequent Plan Year, a Non-Employee Director must
make a new Election in accordance with Section 4.1(a).


 


(c)                               The amount of Annual Retainer and/or
Meeting Fees deferred shall be withheld and deducted from the Participant’s
Compensation without reduction for any income or employment tax withholding
(except to the extent required by law) and shall be credited to a Phantom Stock
Unit Account for the Participant as provided in Sections 5.3 and 5.4.


 


5.

















 


4.2                            Election to Forego Restricted
Stock Award.


 


(a)                              Prior to the beginning of each Plan Year,
each Non-Employee Director may elect to forgo his or her right to receive
Restricted Stock Award(s) that may be granted in such Plan Year.  In order to elect to forego a Restricted
Stock Award, a Non-Employee Director must complete and return an executed
Election to the Company prior to the time announced by the Company, which in
any event shall be prior to the beginning of the Plan Year to which such
Election relates.  Notwithstanding the
foregoing, with respect to each Plan Year, if a Non-Employee Director first
becomes eligible to participate in the Plan during such Plan Year, such
Election shall be filed within thirty (30) days following the date on which the
Non-Employee Director is first eligible to participate and shall apply to
Restricted Stock Award(s) that may be granted during the portion of such
Plan Year following such Election.


 


(b)                              A Non-Employee Director’s Election to
forego a Restricted Stock Award for a Plan Year shall apply only for such Plan
Year and shall be irrevocable; provided, however,
that a Non-Employee Director may (i) cancel such Election due to an
Unforeseeable Emergency (as defined in Section 6.5) or a hardship
distribution pursuant to Section 1.401(k)-1(d)(3) of the Treasury
Regulations or (ii) amend such Election in accordance with Section 6.2(b).  In order to forego a Restricted Stock Award
for a subsequent Plan Year, a Non-Employee Director must make a new Election in
accordance with Section 4.2(a).


 


(c)                               Each forgone Restricted Stock Award,
without reduction for any income or employment tax withholding (except to the
extent required by law), shall result in credits to a Phantom Stock Unit
Account for the Participant as provided in Sections 5.3 and 5.4.


 


4.3                            Election to Defer Tax Gross-Up
Payment.


 


(a)                              Prior to the beginning of each Plan Year,
each Non-Employee Director may elect to defer one hundred percent (100%) of any
Tax Gross-Up Payment that he or she may be eligible to receive in the Plan Year
following such Plan Year.  In order to
defer such Tax Gross-Up Payment, a Non-Employee Director must complete and
return an executed Election to the Company prior to the time announced by the
Company, which in any event shall be more than one (1) year prior to the
beginning of the Plan Year in which such Tax Gross-Up Payment otherwise would
have been received by the Non-Employee Director.  Notwithstanding the foregoing, if a
Non-Employee Director first becomes eligible to participate in the Plan during
the Plan Year, such Election shall be filed within thirty (30) days following
the date on which the Non-Employee Director is first eligible to participate
and shall apply to any Tax Gross-Up Payment payable during the following Plan
Year.


 


(b)                              A Non-Employee Director’s Election to
defer his or her Tax Gross-Up Payment for a Plan Year shall apply only for such
Plan Year and shall be irrevocable; provided, however,
that a Non-Employee Director may (i) cancel such Election due to an
Unforeseeable Emergency (as defined in Section 6.5) or a hardship
distribution pursuant to Section 1.401(k)-1(d)(3) of the Treasury
Regulations or (ii) amend such Election in accordance with Section


 


6.
















 


6.2(b).  In
order to defer his or her Tax Gross-Up Payment for a subsequent Plan Year, a
Non-Employee Director must make a new Election in accordance with Section 4.3(a).


 


(c)                               Each deferred Tax Gross-Up Payment,
without reduction for any income or employment tax withholding (except to the
extent required by law), shall be credited to a Phantom Stock Unit Account for
the Participant as provided in Sections 5.3 and 5.4.


 


4.4                            Manner of Elections. 
The Company may establish rules and procedures, and from time to
time modify or change such rules and procedures, governing the manner of
Elections to defer Compensation or Tax Gross-Up Payments or forego Restricted
Stock Awards under the Plan, as it may determine in its sole discretion,
including (but not limited to) establishing and changing any minimum or maximum
amounts of Compensation, or percentages of any component of Compensation, that
may be deferred hereunder.


 


5.                                    PHANTOM STOCK UNIT ACCOUNT


 


5.1                            Establishment of Phantom Stock
Unit Account.  The Company shall establish a Phantom Stock
Unit Account with respect to Deferred Compensation for each Participant.  The establishment of a Phantom Stock Unit
Account constitutes only a method, by bookkeeping entry, of determining the
amount of deferred benefits to be distributed under the Plan.  The Company shall be under no obligation to
acquire or hold any Stock or any other securities or specific assets by reason
of the credits made to the Phantom Stock Unit Accounts hereunder.


 


5.2                            Unsecured Creditors; Unfunded
Plan.  A Participant’s or Beneficiary’s rights to
receive distributions under this Plan are those of an unsecured general
creditor of the Company.  Such rights
constitute a promise by the Company to make distributions to Participants and
their Beneficiaries in the future.  All
amounts under the Plan, including a Participant’s Phantom Stock Unit Account,
shall remain (until paid to the Participant or Beneficiary) the property of the
Company and shall be subject to the claims of the Company’s creditors in the
event of the Company’s bankruptcy or insolvency.  The Plan shall be unfunded for federal tax
purposes.  The obligation of the Company
may, in its sole discretion, be satisfied from any source of funds, including,
but not limited to, payment from a trust or trusts established by the Company
which permit such payments to be made therefrom; provided,
however, that such trust or trusts constitute unfunded arrangements
subject to the claims of the Company’s creditors in the event of its bankruptcy
or insolvency.  No Participant or
Beneficiary shall have any secured or beneficial interest in any property,
rights or investments held by the Company, whether or not held in connection
with the Plan, including but not limited to any assets held in any trust
established by the Company in connection with the Plan.


 


5.3                            Timing of Credits.  A Participant’s Deferred Compensation shall be
credited to a Phantom Stock Unit Account as soon as practicable following the
time at which such amounts would have been paid or transferred to the
Participant in the absence of an Election; provided, however,
that one-fourth (1⁄4) of the full amount elected to be deferred from a
Participant’s Annual Retainer for a Plan Year and/or all of the Meeting Fees
payable for the applicable calendar quarter shall be credited to the Phantom
Stock Unit Account on the last day of each 


 


7.

















 


calendar quarter on which Stock is traded on the New
York Stock Exchange, except that no such amount shall be credited for any
quarter of the Plan Year that begins after the Participant has ceased service
as a Non-Employee Director.  A
Participant’s foregone Restricted Stock Award shall be credited to a Phantom
Stock Unit Account as of the date on which such Restricted Stock Award would
have been awarded to the Participant in the absence of an Election to forego
such Restricted Stock Award.


 


5.4                            Amount of Credits; Vesting.  Deferred Compensation (excluding foregone Restricted
Stock Award(s) credited to a Phantom Stock Unit Account) shall be
converted into Phantom Stock Units, the number of which shall be equal to such
Deferred Compensation to be credited to the Phantom Stock Unit Account divided
by the Market Value of a share of Stock on the date of such credit, and such
Phantom Stock Units shall be fully vested and nonforfeitable at all times.  The number of Phantom Stock Units to be
credited as Deferred Compensation by reason of an election to forego a
Restricted Stock Award shall be equal to the number of shares of Stock subject
to the foregone Restricted Stock Award, and such Phantom Stock Units shall be
subject to (i) the same vesting and forfeiture restrictions to which the
foregone Restricted Stock Award would have been subject and (ii) the
vesting restrictions set forth in Section 6.6 of the Incentive Plan.  Phantom Stock Units subject to vesting or
forfeiture restrictions are referred to in this Plan as “Restricted Units,” and
fully vested and nonforfeitable Phantom Stock Units are referred to in this
Plan as “Nonrestricted Units.”  Phantom
Stock Unit Accounts shall be adjusted on account of dividends, cash
distributions, stock splits and similar events as follows:


 


(a)                              As of the date when any cash dividend or
other cash distribution is payable with respect to the Stock, there shall be
credited to the Phantom Stock Unit Account an amount equal to the value which
would have been payable with respect to shares of Stock equal in number to the
number of Phantom Stock Units then credited to the Phantom Stock Unit Account.  Such amount shall then be converted into a
number of Phantom Stock Units based upon the amount to be credited divided by
the Market Value of a share of Stock on the date of the credit.  All Phantom Stock Units credited under this Section 5.4(a) shall
be Nonrestricted Units, without regard to whether the Phantom Stock Units from
which they are derived are Restricted Units or Nonrestricted Units.


 


(b)                              In the event of any change in the number
of shares of outstanding Stock by reason of any stock split, stock dividend,
recapitalization, or the like, whereby the outstanding shares of Stock are
adjusted, the number of Phantom Stock Units credited to the Phantom Stock Unit
Account shall be equitably adjusted to reflect such change.  Any adjustments provided in this Section 5.4(b) with
respect to Nonrestricted Units shall be in the form of Nonrestricted
Units.  Any adjustments provided in this Section 5.4(b) with
respect to Restricted Units shall be in the form of Restricted Units, which
shall be subject to the same vesting and forfeiture terms and conditions
applicable to the original Restricted Units from which they are derived.


 


5.5                            Restricted Units.


 


(a)                              Restricted Units shall be subject to the
terms and conditions set forth in Section 5.5(b) until the end of the
specified restricted period applicable to such Restricted Units 


 


8.

















 


(the “Restricted Period”).  Restricted Units not previously forfeited
shall vest and become nonforfeitable during the applicable Restricted Period
and shall thereafter be Nonrestricted Units.


 


(b)                              The “Vesting Commencement Date” for
Restricted Units credited to a Participant’s Phantom Stock Unit Account in
respect of a foregone Restricted Stock Award shall be the date on which such
Restricted Stock Award would have been received by the Participant in the
absence of an Election to forego such Restricted Stock Award.  The Restricted Period for such Restricted
Units credited to a Participant’s Phantom Stock Unit Account shall be
determined by the Company and communicated to the Participant in advance of the
time the Participant must make his or her Election for a Plan Year.


 


(c)                               During the applicable Restricted Period,
if a Participant is removed from the Board for Cause or if the Participant
voluntarily terminates his or her service with the Board, any Phantom Stock
Units credited to such Participant that remain Restricted Units shall be
forfeited, and all rights of the Participant to receive any benefits under the
Plan attributable to such forfeited Restricted Units shall terminate.  Prior to May 22, 2008, in the event of a
Change of Control or if a Participant’s service on the Board is involuntarily
terminated for any reason other than Cause, including the Participant’s death
or Disability, then the Restricted Period shall terminate as to all Restricted
Units, and any Phantom Stock Units that are then Restricted Units shall
immediately become Nonrestricted Units. 
Effective on and following May 22, 2008, in the event of a Change
of Control or if a Participant’s service on the Board is terminated due to
Retirement, death or Disability, the Restricted Period shall terminate as to
all Restricted Units and any Phantom Stock Units that are then Restricted Units
shall immediately become Nonrestricted Units; provided,
however, that the Committee (as defined in the Incentive Plan) may
determine, pursuant to and subject to the limitations of Section 6.6 of
the Incentive Plan, that such acceleration shall also occur upon the
involuntary termination of a Participant’s service for any other reason, other
than for Cause.


 


6.                                    DISTRIBUTION OF PLAN BENEFITS


 


6.1                            Form of Benefit.  All benefits paid under this Plan shall be paid in a
single sum in the form of whole shares of Stock under the Incentive Plan, with
any fractional shares of Stock being paid in a single sum in the form of cash
based on the Market Value of a share of Stock on the date of the payment.  The portion of such shares paid in respect of
any deferred Annual Retainer, Meeting Fees and Tax Gross-Up Payment shall be
paid pursuant to Section 6.5 of the Incentive Plan and the portion of such
shares paid in respect of any foregone Restricted Stock Award shall be paid
pursuant to Section 6.6 of the Incentive Plan.


 


6.2                            Distribution Elections.


 


(a)                              At the time of each Election pursuant to
Sections 4.1, 4.2 or 4.3 to defer receipt of Compensation, forego receipt of a
Restricted Stock Award or defer receipt of a Tax Gross-Up Payment, a
Participant also shall elect, on such form as the Company prescribes, the date
of distribution of the portion of his or her Phantom Stock Unit Account
attributable to the amount of Deferred Compensation specified in such Election;
provided, however, that if the 


 


9.

















 


Participant elects to forego receipt of a Restricted
Stock Award pursuant to such Election, the Participant must elect a date of
distribution for the entire portion of his or her Phantom Stock Unit Account
attributable to the amount of Deferred Compensation specified in such Election
that is on or after the end of the applicable Restricted Period for the
foregone Restricted Stock Award.


 


(b)                              A Participant may change his or her
distribution election in accordance with procedures determined by the Company, provided, however, that:


 


(i)                                  With respect to Section 409A Grandfathered
Amounts, any changed election shall not be effective unless a full calendar
year passes between the calendar year in which such changed election is
submitted and the calendar year in which the distribution date designated in
such change election occurs; and


 


(ii)                              With respect to Section 409A Non-Grandfathered
Amounts, any changed election (A) shall not take effect until at least
twelve (12) months after the date on which the change is made, (B) must be
made more than twelve (12) months prior to the date distribution otherwise
would have been made and (C) must designate a new date for distribution
that is at least five (5) years following the date distribution otherwise
would have been made.


 


(c)                               No elections under this Section 6.2
may be made or changed as to distributions from a Participant’s Phantom Stock
Unit Account unless the Board has approved in advance such election or change
of election in a manner, if any, that satisfies the requirements for exemption
of Phantom Stock Unit Account transactions pursuant to Rule 16b-3
promulgated under the Exchange Act.


 


6.3                            Termination of Service on the
Board or Change of Control.  As soon as
administratively practicable following the termination of a Participant’s service
on the Board, and notwithstanding any election that the Participant has made
under the Plan pursuant to Section 6.2, the Company shall pay to such
Participant or to the Participant’s Beneficiary in a lump sum all amounts then
credited to the Participant’s Phantom Stock Unit Account as Nonrestricted Units
(including formerly Restricted Units which become Nonrestricted Units on
account of such termination in accordance with Section 5.5(c)), and any
Restricted Units shall be forfeited; provided, however,
that with respect to Section 409A Non-Grandfathered Amounts, if a Change
of Control occurs prior to any such elected date of distribution pursuant to Section 6.2
or termination of service, payment of such amounts shall be made in a lump sum
as soon as administratively feasible after the effective date of the Change of
Control, provided that the Change of Control constitutes a change in the
ownership or effective control of the Company, or in the ownership of a
substantial portion of the assets of the Company, as determined in accordance
with Section 1.409A-3(i)(5) of the Treasury Regulations.


 


6.4                            Early Distribution of Section 409A
Grandfathered Amounts.  A Participant may elect to
receive a distribution of all or any portion of the amount of Section 409A
Grandfathered Amounts then credited to the Participant’s Phantom Stock Unit
Account as Nonrestricted Units on a date prior to that established under the
Plan, including the Participant’s 


 


10.

















 


distribution election under Section 6.2; provided, however, that (i) the amount distributed
shall be equal to ninety percent (90%) of the amount elected by the
Participant, and (ii) the remaining ten percent (10%) of the amount
elected by the Participant shall be treated as forfeited by the
Participant.  A Participant may not
receive any early distributions of any Section 409A Non-Grandfathered
Amounts pursuant to this Section 6.4.


 


6.5                            Unforeseeable Emergency. 
Upon application by a Participant, the Company may direct the distribution
in a lump sum of all or a portion of the remaining amount credited to the
Participant’s Phantom Stock Unit Account as Nonrestricted Units in the event of
an Unforeseeable Emergency.  Any such
application must set forth the circumstances constituting such Unforeseeable
Emergency.  The determination as to
whether an Unforeseeable Emergency exists and as to the amount distributable
under the Plan as a result of such Unforeseeable Emergency shall be made by the
Company in its sole discretion.


 


For purposes of the Plan, an “Unforeseeable Emergency”
shall mean any severe financial hardship to the Participant resulting from (i) a
sudden and unexpected illness or accident of the Participant or a dependent (as
defined in Section 152(a) of the Code) of the Participant, (ii) loss
of the Participant’s property due to casualty, or (iii) other similar
extraordinary and unforeseen circumstances arising as a result of events beyond
the control of the Participant.  Any
distribution pursuant to this provision is limited to the amount necessary to
meet the Unforeseeable Emergency, and any amounts necessary to pay any federal,
state or local income taxes or penalties reasonably anticipated to result from
such distribution.  The distribution may
not exceed the then vested portion of the Participant’s Account.  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 emergency is or may be
relieved (i) through reimbursement or compensation by insurance or
otherwise; (ii) by liquidation of the Participant’s assets, to the extent
the liquidation of such assets would not itself cause severe financial
hardship; or (iii) by cessation of deferrals under the Plan.  Furthermore, examples of events that would
not be considered Unforeseeable Emergencies include the need to send a
Participant’s child to college or the desire to purchase a home.


 


6.6                            No Assignment or Alienation. 
The right to receive a distribution under this Plan shall not be subject
to anticipation, alienation, sale, assignment, pledge, encumbrance or charge,
and any attempt to anticipate, alienate, sell, assign, pledge, encumber, or
charge such right shall be void.  No
distribution or right to distribution shall in any manner be liable for or
subject to debts, contracts, liabilities or torts of the Participant or the
Participant’s Beneficiary.


 


7.                                    ADMINISTRATION


 


7.1                            Plan Administrator.  The Company shall be the sole administrator of the
Plan and will administer the Plan and interpret, construe and apply its
provisions in accordance with its terms. The Company shall further establish,
adopt or revise such rules and regulations as it may deem necessary or
advisable for the administration of the Plan. 
All determinations and interpretations made by the Company in good faith
shall not be subject to review by any person and shall be final, binding and
conclusive on all persons.


 


11.

















 


7.2                            Account Statements.  Each Participant will receive an annual statement in
such form as the Company deems desirable setting forth the balance standing to
the credit of the Participant’s Phantom Stock Unit Account.


 


7.3                            Claims, Inquiries and Appeals.


 


(a)                              Applications for
Benefits and Inquiries.  Any application for benefits,
inquiries about the Plan or inquiries about present or future rights under the
Plan must be submitted to the Company in writing by an applicant (or his or her
authorized representative) to the following address:


 


Alexandria Real Estate
Equities, Inc.


Attention:  Chief Executive Officer/Chief Financial
Officer


385 E. Colorado Boulevard, Suite 299


Pasadena, CA 91101


 


(b)                              Denial of Claims. 
In the event that any application for benefits is denied in whole or in
part, the Company must provide the applicant with written or electronic notice
of the denial of the application, and of the applicant’s right to review the
denial.  The notice of denial will be set
forth in a manner designed to be understood by the applicant and will include
the following:


 


(i)                                  the specific reason or reasons for the
denial;


 


(ii)                              references to the specific Plan
provisions upon which the denial is based;


 


(iii)                          a description of any additional
information or material that the Company needs to complete the review and an
explanation of why such information or material is necessary; and


 


(iv)                          an explanation of the Plan’s review
procedures and the time limits applicable to such procedures.


 


This
notice of denial will be given to the applicant within ninety (90) days after
the Company receives the application, unless special circumstances require an
extension of time, in which case, the Company has up to an additional ninety
(90) days for processing the application. 
If an extension of time for processing is required, written notice of
the extension will be furnished to the applicant before the end of the initial
ninety (90) day period.


 


This
notice of extension will describe the special circumstances necessitating the
additional time and the date by which the Company is to render its decision on
the application.


 


(c)                               Request for a Review. 
Any person (or that person’s authorized representative) for whom an
application for benefits is denied, in whole or in part, may appeal 


 


12.

















 


the denial by submitting a request for a review to the
Company within sixty (60) days after the application is denied.  A request for a review shall be in writing
and shall be addressed to:


 


Alexandria Real Estate
Equities, Inc.


Attention:  Chief Executive Officer/Chief Financial
Officer


385 E. Colorado Boulevard, Suite 299


Pasadena, CA 91101


 


A
request for review must set forth all of the grounds on which it is based, all
facts in support of the request and any other matters that the applicant feels
are pertinent.  The applicant (or his or
her representative) shall have the opportunity to submit (or the Company may
require the applicant to submit) written comments, documents, records, and other
information relating to his or her claim. 
The applicant (or his or her representative) shall be provided, upon
request and free of charge, reasonable access to, and copies of, all documents,
records and other information relevant to his or her claim.  The review shall take into account all comments,
documents, records and other information submitted by the applicant (or his or
her representative) relating to the claim, without regard to whether such
information was submitted or considered in the initial benefit determination.


 


(d)                              Decision on Review.  The Company will act on each request for review within
sixty (60) days after receipt of the request, unless special circumstances
require an extension of time (not to exceed an additional sixty (60) days), for
processing the request for a review.  If
an extension for review is required, written notice of the extension will be
furnished to the applicant within the initial sixty (60) day period.  This notice of extension will describe the
special circumstances necessitating the additional time and the date by which
the Company is to render its decision on the review.  The Company will give prompt, written or
electronic notice of its decision to the applicant.  In the event that the Company confirms the
denial of the application for benefits in whole or in part, the notice will set
forth, in a manner calculated to be understood by the applicant, the following:


 


(i)                                  the specific reason or reasons for the
denial;


 


(ii)                              references to the specific Plan
provisions upon which the denial is based; and


 


(iii)                          a statement that the applicant is
entitled to receive, upon request and free of charge, reasonable access to, and
copies of, all documents, records and other information relevant to his or her
claim.


 


(e)                              Rules and
Procedures.  The Company will establish rules and
procedures, consistent with the Plan, as necessary and appropriate in carrying
out its responsibilities in reviewing benefit claims.  The Company may require an applicant who
wishes to submit additional information in connection with an appeal from the
denial of benefits to do so at the applicant’s own expense.


 


13.

















 


(f)                                 Exhaustion of Remedies. 
No legal action for benefits under the Plan may be brought until the
claimant (i) has submitted a written application for benefits in
accordance with the procedures described by Section 7.3(a) above, (ii) has
been notified by the Company that the application is denied, (iii) has
filed a written request for a review of the application in accordance with the
appeal procedure described in Section 7.3(c) above, and (iv) has
been notified that the Company has denied the appeal.  Notwithstanding the foregoing, if the Company
does not respond to a Participant’s claim or appeal within the relevant time
limits specified in this Section 7.3, the Participant may bring legal
action for benefits under the Plan.


 


8.                                    BENEFICIARY DESIGNATION


 


Each Participant shall have the right, at any time, to
designate any person or persons as Beneficiary or Beneficiaries (both primary
as well as contingent) to whom distributions under this Plan shall be made in
the event of the Participant’s death prior to complete distribution to the
Participant of the benefits due the Participant under the Plan.  Each Beneficiary designation shall become effective
only when filed in writing with the Company during the Participant’s lifetime
on a form prescribed by the Company.  The
filing of a new Beneficiary designation form will cancel all Beneficiary
designations previously filed.  The
spouse of a married Participant domiciled in a community property jurisdiction
shall join in any designation of Beneficiary or Beneficiaries other than the
spouse.  If a Participant fails to
designate a Beneficiary as provided above, or if all designated Beneficiaries
predecease the Participant or die prior to complete distribution of the
Participant’s benefits, then the Company shall direct the distribution of such
benefits to the Participant’s estate.


 


9.                                    MISCELLANEOUS


 


9.1                            Effective Date; Amendment and
Termination.  This Plan shall be effective January 1,
2002, with continuation thereafter contemplated, subject to review of its
operation.  However, this Plan shall at
all times remain subject to amendment, modification or termination by action of
the Company or the Board; provided, however,
in the event of termination of the Plan, any Nonrestricted Units held in a
Participant’s Phantom Stock Unit Account shall be distributed to the
Participant in accordance with Section 6 hereof, and any Restricted Units
shall continue to vest in accordance with the terms of their vesting schedules
and, upon becoming Nonrestricted Units, shall be distributed to the Participant
in accordance with Section 6 hereof.


 


9.2                            No Employment or Service
Rights.  This Plan shall not be deemed to constitute a contract
of employment or service between the Company and any Participant.  Nothing contained in this Plan shall be
deemed to give any Participant the right to be retained in the service of the
Company or to interfere with the right of the Company or the Board to discharge
any Participant at any time regardless of the effect which such discharge shall
have upon such individual as a Participant in the Plan.


 


9.3                            Arbitration.  All disputes, claims, or causes of action arising from
or relating to this Plan shall be resolved to the fullest extent permitted by
law by final, binding and confidential arbitration, by a single arbitrator, in
Los Angeles, California, conducted by JAMS 


 


14.

















 


under the then applicable JAMS rules.  All
Participants and the Company shall be deemed to have waived the right to
resolve any such dispute through a trial by jury or judge or administrative
proceeding.  The arbitrator
shall: (a) have the authority to compel adequate discovery for the
resolution of the dispute and to award such relief as would otherwise be
permitted by law; and (b) issue a written arbitration decision, to include
the arbitrator’s essential findings and conclusions and a statement of the
award.  The arbitrator shall be
authorized to award any or all remedies that the parties would be entitled to
seek in a court of law.  The Company
shall pay all JAMS’ arbitration fees in excess of the amount of court fees that
would be required if the dispute were decided in a court of law.  Nothing in this Plan is intended to prevent
either the Company or a Participant from obtaining injunctive relief in court
to prevent irreparable harm pending the conclusion of any such arbitration.


 


9.4                            Governing Law.  This Plan shall be construed in accordance with and
governed by the laws of the State of California.


 


9.5                            Severability.  In the event any provision of this Plan is held
invalid, void or unenforceable, the same shall not affect, in any respect
whatsoever, the validity of any other provisions of this Plan.


 


9.6                            Notice.  Any notice of filing required or permitted to be given
to the Company under the Plan shall be sufficient if in writing and hand
delivered, or sent by registered or certified mail, to the principal office of
the Company, directed to the attention of the Chief Financial Officer for the
Company.  Such notice shall be deemed
given as of the date of delivery or, the postmark on the receipt for
registration or certification.


 


9.7                            Successors.  This Plan shall be binding upon the Company and its
successors and assigns.


 


15.