<PAGE>
                                                                    EXHIBIT 10.3

                                   ----------

                 WELLS TIMBER REAL ESTATE INVESTMENT TRUST, INC.
                          2005 LONG-TERM INCENTIVE PLAN

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<PAGE>

                 WELLS TIMBER REAL ESTATE INVESTMENT TRUST, INC.
                          2005 LONG-TERM INCENTIVE PLAN

<TABLE>
<S>                                                                           <C>
ARTICLE 1  PURPOSE.........................................................    1
   1.1     General.........................................................    1
ARTICLE 2  DEFINITIONS.....................................................    1
   2.1     Definitions.....................................................    1
ARTICLE 3  EFFECTIVE TERM OF PLAN..........................................    7
   3.1     Effective Date..................................................    7
   3.2     Term of Plan....................................................    8
ARTICLE 4  ADMINISTRATION..................................................    8
   4.1     Committee.......................................................    8
   4.2     Actions and Interpretations by the Committee....................    8
   4.3     Authority of Committee..........................................    8
   4.4     Award Certificates..............................................   10
ARTICLE 5  SHARES SUBJECT TO THE PLAN......................................   10
   5.1     Number of Shares................................................   10
   5.2     Share Counting..................................................   10
   5.3     Stock Distributed...............................................   11
ARTICLE 6  ELIGIBILITY.....................................................   11
   6.1     General.........................................................   11
ARTICLE 7  STOCK OPTIONS...................................................   11
   7.1     General.........................................................   11
   7.2     Incentive Stock Options.........................................   12
ARTICLE 8  STOCK APPRECIATION RIGHTS.......................................   13
   8.1     Grant of Stock Appreciation Rights..............................   13
ARTICLE 9  PERFORMANCE AWARDS..............................................   14
   9.1     Grant of Performance Awards.....................................   14
   9.2     Performance Goals...............................................   14
   9.3     Right to Payment................................................   14
   9.4     Other Terms.....................................................   14
ARTICLE 10 RESTRICTED STOCK AND RESTRICTED STOCK UNIT AWARDS...............   15
   10.1    Grant of Restricted Stock and Restricted Stock Units............   15
   10.2    Issuance and Restrictions.......................................   15
   10.3    Forfeiture......................................................   15
   10.4    Delivery of Restricted Stock....................................   15
ARTICLE 11 DEFERRED STOCK UNITS............................................   15
   11.1    Grant of Deferred Stock Units...................................   15
ARTICLE 12 DIVIDEND EQUIVALENTS............................................   16
   12.1    Grant of Dividend Equivalents...................................   16
ARTICLE 13 STOCK OR OTHER STOCK-BASED AWARDS...............................   16
</TABLE>

<PAGE>

<TABLE>
<S>                                                                           <C>
   13.1    Grant of Stock or Other Stock-Based Awards......................   16
ARTICLE 14 PROVISIONS APPLICABLE TO AWARDS.................................   17
   14.1    Stand-Alone and Tandem Awards...................................   17
   14.2    Term of Awards..................................................   17
   14.3    Form of Payment of Awards.......................................   17
   14.4    Limits on Transfer..............................................   17
   14.5    Beneficiaries...................................................   17
   14.6    Stock Certificates..............................................   18
   14.7    Acceleration Upon Death or Disability...........................   18
   14.8    Treatment upon a Change in Control..............................   18
   14.9    Acceleration For Any Reason.....................................   19
   14.10   Termination of Employment.......................................   20
   14.11   Forfeiture Events...............................................   20
   14.12   Substitute Awards...............................................   20
ARTICLE 15 CHANGES IN CAPITAL STRUCTURE....................................   20
   15.1    General.........................................................   20
ARTICLE 16 AMENDMENT, MODIFICATION AND TERMINATION.........................   21
   16.1    Amendment, Modification and Termination.........................   21
   16.2    Awards Previously Granted.......................................   21
ARTICLE 17 GENERAL PROVISIONS..............................................   22
   17.1    No Rights to Awards; Non-Uniform Determinations.................   22
   17.2    No Shareholder Rights...........................................   22
   17.3    Withholding.....................................................   22
   17.4    No Right to Continued Service...................................   23
   17.5    Unfunded Status of Awards.......................................   23
   17.6    Relationship to Other Benefits..................................   23
   17.7    Expenses........................................................   23
   17.8    Titles and Headings.............................................   23
   17.9    Gender and Number...............................................   23
   17.10   Fractional Shares...............................................   23
   17.11   Government and Other Regulations................................   24
   17.12   Governing Law...................................................   24
   17.13   Additional Provisions...........................................   24
   17.14   No Limitations on Rights of Company.............................   24
   17.15   Indemnification.................................................   25
</TABLE>


                                       ii

<PAGE>

                 WELLS TIMBER REAL ESTATE INVESTMENT TRUST, INC.
                          2005 LONG-TERM INCENTIVE PLAN

                                    ARTICLE 1
                                     PURPOSE

     1.1. GENERAL. The purpose of the Wells Timber Real Estate Investment Trust,
Inc. 2005 Long-Term Incentive Plan (the "PLAN") is to promote the success, and
enhance the value, of Wells Timber Real Estate Investment Trust, Inc. (the
"COMPANY"), by linking the personal interests of employees, officers, directors
and consultants of the Company or any Affiliate (as defined below) to those of
Company stockholders and by providing such persons with an incentive for
outstanding performance. The Plan is further intended to provide flexibility to
the Company in its ability to motivate, attract, and retain the services of
employees, officers, directors and consultants upon whose judgment, interest,
and special effort the successful conduct of the Company's operation is largely
dependent. Accordingly, the Plan permits the grant of incentive awards from time
to time to selected employees, officers, directors and consultants of the
Company and its Affiliates.

                                    ARTICLE 2
                                   DEFINITIONS

     2.1. DEFINITIONS. When a word or phrase appears in this Plan with the
initial letter capitalized, and the word or phrase does not commence a sentence,
the word or phrase shall generally be given the meaning ascribed to it in this
Section or in Section 1.1 unless a clearly different meaning is required by the
context. The following words and phrases shall have the following meanings:

          (a) "AFFILIATE" means (i) any Subsidiary or Parent, or (ii) an entity
     that directly or through one or more intermediaries controls, is controlled
     by or is under common control with, the Company, as determined by the
     Committee.

          (b) "AWARD" means any Option, Stock Appreciation Right, Restricted
     Stock Award, Restricted Stock Unit Award, Deferred Stock Unit Award,
     Performance Award, Dividend Equivalent Award, Other Stock-Based Award,
     Performance-Based Cash Awards, or any other right or interest relating to
     Stock or cash, granted to a Participant under the Plan.

          (c) "AWARD CERTIFICATE" means a written document, in such form as the
     Committee prescribes from time to time, setting forth the terms and
     conditions of an Award. Award Certificates may be in the form of individual
     award agreements or certificates or a program document describing the terms
     and provisions of an Awards or series of Awards under the Plan.

<PAGE>

          (d) "BOARD" means the Board of Directors of the Company.

          (e) "CAUSE" as a reason for a Participant's termination of employment
     shall have the meaning assigned such term in the employment, severance or
     similar agreement, if any, between such Participant and the Company or an
     Affiliate, provided, however that if there is no such employment, severance
     or similar agreement in which such term is defined, and unless otherwise
     defined in the applicable Award Certificate, "CAUSE" shall mean any of the
     following acts by the Participant, as determined by the Committee or the
     Board: (i) the willful and continued failure of the Participant to perform
     his or her required duties as an officer or employee of the Company or any
     Affiliate, (ii) any action by the Participant that involves willful
     misfeasance or gross negligence, (iii) the requirement of or direction by a
     federal or state regulatory agency that has jurisdiction over the Company
     or any Affiliate to terminate the employment of the Participant, (iv) the
     conviction of the Participant of the commission of any criminal offense
     that involves dishonesty or breach of trust, or (v) any intentional breach
     by the Participant of a material term, condition or covenant of any
     agreement between the Participant and the Company or any Affiliate.

          (f) "CHANGE IN CONTROL" means and includes the occurrence of any one
     of the following events but shall specifically exclude a Public Offering:

               (i) individuals who, on the Effective Date, constitute the Board
          (the "INCUMBENT DIRECTORS") cease for any reason to constitute at
          least a majority of such Board, provided that any person becoming a
          director after the Effective Date and whose election or nomination for
          election was approved by a vote of at least a majority of the
          Incumbent Directors then on the Board shall be an Incumbent Director;
          provided, however, that no individual initially elected or nominated
          as a director of the Company as a result of an actual or threatened
          election contest with respect to the election or removal of directors
          ("ELECTION CONTEST") or other actual or threatened solicitation of
          proxies or consents by or on behalf of any Person other than the Board
          ("PROXY CONTEST"), including by reason of any agreement intended to
          avoid or settle any Election Contest or Proxy Contest, shall be deemed
          an Incumbent Director; or

               (ii) any person becomes a "beneficial owner" (as defined in Rule
          13d-3 under the 1934 Act), directly or indirectly, of either (A) 25%
          or more of the then-outstanding shares of common stock of the Company
          ("COMPANY COMMON STOCK") or (B) securities of the Company representing
          25% or more of the combined voting power of the Company's then
          outstanding securities eligible to vote for the election of directors
          (the "COMPANY VOTING SECURITIES"); provided, however, that for
          purposes of this subsection (ii), the following acquisitions of
          Company Common Stock or Company Voting Securities shall not constitute
          a Change in Control: (w) an acquisition directly from the Company, (x)
          an acquisition by the Company or a Subsidiary of the Company, (y) an
          acquisition by any employee benefit plan (or related trust) sponsored
          or maintained by the


                                      -2-

<PAGE>

          Company or any Subsidiary of the Company, or (z) an acquisition
          pursuant to a Non-Qualifying Transaction (as defined in subsection
          (iii) below); or

               (iii) the consummation of a reorganization, merger,
          consolidation, statutory share exchange or similar form of corporate
          transaction involving the Company or a Subsidiary (a
          "REORGANIZATION"), or the sale or other disposition of all or
          substantially all of the Company's assets (a "SALE") or the
          acquisition of assets or stock of another corporation (an
          "Acquisition"), unless immediately following such Reorganization, Sale
          or Acquisition: (A) all or substantially all of the individuals and
          entities who were the beneficial owners, respectively, of the
          outstanding Company Common Stock and outstanding Company Voting
          Securities immediately prior to such Reorganization, Sale or
          Acquisition beneficially own, directly or indirectly, more than 50%
          of, respectively, the then outstanding shares of common stock and the
          combined voting power of the then outstanding voting securities
          entitled to vote generally in the election of directors, as the case
          may be, of the corporation resulting from such Reorganization, Sale or
          Acquisition (including, without limitation, a corporation which as a
          result of such transaction owns the Company or all or substantially
          all of the Company's assets or stock either directly or through one or
          more subsidiaries, the "SURVIVING CORPORATION") in substantially the
          same proportions as their ownership, immediately prior to such
          Reorganization, Sale or Acquisition, of the outstanding Company Common
          Stock and the outstanding Company Voting Securities, as the case may
          be, and (B) no person (other than (x) the Company or any Subsidiary of
          the Company, (y) the Surviving Corporation or its ultimate parent
          corporation, or (z) any employee benefit plan (or related trust)
          sponsored or maintained by any of the foregoing is the beneficial
          owner, directly or indirectly, of 25% or more of the total common
          stock or 25% or more of the total voting power of the outstanding
          voting securities eligible to elect directors of the Surviving
          Corporation, and (C) at least a majority of the members of the board
          of directors of the Surviving Corporation were Incumbent Directors at
          the time of the Board's approval of the execution of the initial
          agreement providing for such Reorganization, Sale or Acquisition (any
          Reorganization, Sale or Acquisition which satisfies all of the
          criteria specified in (A), (B) and (C) above shall be deemed to be a
          "NON-QUALIFYING TRANSACTION"); or

               (iv) approval by the stockholders of the Company of a complete
          liquidation or dissolution of the Company.

          Notwithstanding the foregoing, for any Awards that constitute a
          nonqualified deferred compensation plan within the meaning of Section
          409A(d) of the Code, Change in Control shall have the same meaning as
          set forth in any regulations, revenue procedure or revenue rulings
          issued by the Secretary of the United States Treasury applicable to
          such plans.


                                      -3-

<PAGE>

          (g) "CODE" means the Internal Revenue Code of 1986, as amended from
     time to time, and includes a reference to the underlying final regulations.

          (h) "COMMITTEE" means the committee of the Board described in Article
     4.

          (i) "COMPANY" means Wells Timber Real Estate Investment Trust, Inc., a
     Maryland corporation, or any successor corporation.

          (j) "CONTINUOUS STATUS AS A PARTICIPANT" means the absence of any
     interruption or termination of service as an employee, officer, consultant
     or director of the Company or any Affiliate, as applicable; provided,
     however, that for purposes of an Incentive Stock Option, or a Stock
     Appreciation Right issued in tandem with an Incentive Stock Option,
     "CONTINUOUS STATUS AS A PARTICIPANT" means the absence of any interruption
     or termination of service as an employee of the Company or any Parent or
     Subsidiary, as applicable, pursuant to applicable tax regulations.
     Continuous Status as a Participant shall continue to the extent provided in
     a written severance or employment agreement during any period for which
     severance compensation payments are made to an employee, officer,
     consultant or director and shall not be considered interrupted in the case
     of any short-term disability or leave of absence authorized in writing by
     the Company prior to its commencement; provided, however, that for purposes
     of Incentive Stock Options, no such leave may exceed 90 days, unless
     reemployment upon expiration of such leave is guaranteed by statute or
     contract. If reemployment upon expiration of a leave of absence approved by
     the Company is not so guaranteed, on the 91st day of such leave any
     Incentive Stock Option held by the Participant shall cease to be treated as
     an Incentive Stock Option and shall be treated for tax purposes as a
     Nonstatutory Stock Option. Notwithstanding the foregoing, for any Awards
     that constitute a nonqualified deferred compensation plan within the
     meaning of Section 409A(d) of the Code, Continuous Status as a Participant
     shall mean the absence of any "separation from service" or similar concept
     as set forth in any regulations, revenue procedure or revenue rulings
     issued by the Secretary of the United States Treasury applicable to such
     plans.

          (k) "DEFERRED STOCK UNIT" means a right granted to a Participant under
     Article 11.

          (l) "DISABILITY" or "DISABLED" has the same meaning as provided in the
     long-term disability plan or policy maintained by the Company or if
     applicable, most recently maintained, by the Company or if applicable, an
     Affiliate, for the Participant, whether or not such Participant actually
     receives disability benefits under such plan or policy. If no long-term
     disability plan or policy was ever maintained on behalf of Participant or
     if the determination of Disability relates to an Incentive Stock Option, or
     a Stock Appreciation Right issued in tandem with an Incentive Stock Option,
     Disability means Permanent and Total Disability as defined in Section
     22(e)(3) of the Code. In the event of a dispute, the determination whether
     a Participant is Disabled will be made by the Committee and may be
     supported by the advice of a physician competent in the area to which such
     Disability relates. Notwithstanding the foregoing, for any Awards that
     constitute a nonqualified


                                      -4-

<PAGE>

     deferred compensation plan within the meaning of Section 409A(d) of the
     Code, Disability shall have the same meaning as set forth in any
     regulations, revenue procedure or revenue rulings issued by the Secretary
     of the United States Treasury applicable to such plans.

          (m) "DIVIDEND EQUIVALENT" means a right granted to a Participant under
     Article 12.

          (n) "EFFECTIVE DATE" has the meaning assigned such term in Section
     3.1.

          (o) "ELIGIBLE PARTICIPANT" means an employee, officer, consultant or
     director of the Company or any Affiliate.

          (p) "FAIR MARKET VALUE", on any date, means(i) if the Stock is listed
     on a national securities exchange or is traded on a national market system,
     the closing sales price on such exchange or over such system on such date
     or, in the absence of reported sales on such date, the closing sales price
     on the immediately preceding date on which sales were reported, or (ii) if
     the Stock is not listed on a national securities exchange or traded on a
     national market system, the mean between the bid and offered prices as
     quoted by NASDAQ for such date, provided that if it is determined that the
     fair market value is not properly reflected by such NASDAQ quotations or
     bid and offered prices for the Shares are not quoted by NASDAQ, Fair Market
     Value will be determined by such other method as the Committee determines
     in good faith to be reasonable.

          (q) "FULL VALUE AWARD" means an Award other than in the form of an
     Option or SAR, and which is settled by the issuance of Stock.

          (r) "GRANT DATE" of an Award means the first date on which all
     necessary corporate action has been taken to approve the grant of the Award
     as provided in the Plan, or such later date as is determined and specified
     as part of that authorization process. Notice of the grant shall be
     provided to the grantee within a reasonable time after the Grant Date.

          (s) "INCENTIVE STOCK OPTION" means an Option that is intended to be an
     incentive stock option and meets the requirements of Section 422 of the
     Code or any successor provision thereto.

          (t) "INDEPENDENT DIRECTOR" means a director of the Company who is not
     a common law employee of the Company or an Affiliate.

          (u) "NONSTATUTORY STOCK OPTION" means an Option that is not an
     Incentive Stock Option.


                                      -5-

<PAGE>

          (v) "OPTION" means a right granted to a Participant under Article 7 of
     the Plan to purchase Stock at a specified price during specified time
     periods. An Option may be either an Incentive Stock Option or a
     Nonstatutory Stock Option.

          (w) "OTHER STOCK-BASED AWARD" means a right, granted to a Participant
     under Article 13, that relates to or is valued by reference to Stock or
     other Awards relating to Stock.

          (x) "PARENT" means a corporation, limited liability company,
     partnership or other entity which owns or beneficially owns a majority of
     the outstanding voting stock or voting power of the Company.
     Notwithstanding the above, with respect to an Incentive Stock Option,
     Parent shall have the meaning set forth in Section 424(e) of the Code.

          (y) "PARTICIPANT" means a person who, as an employee, officer,
     director or consultant of the Company or any Affiliate, has been granted an
     Award under the Plan; provided that in the case of the death of a
     Participant, the term "PARTICIPANT" refers to a beneficiary designated
     pursuant to Section 14.5 or the legal guardian or other legal
     representative acting in a fiduciary capacity on behalf of the Participant
     under applicable state law and court supervision.

          (z) "PERFORMANCE AWARD" means Performance Shares or Performance Units
     or Performance-Based Cash Awards granted pursuant to Article 9.

          (aa) "PERFORMANCE-BASED CASH AWARD" means a right granted to a
     Participant under Article 9 to a cash award to be paid upon achievement of
     such performance goals as the Committee establishes with regard to such
     Award.

          (bb) "PERFORMANCE SHARE" means any right granted to a Participant
     under Article 9 to a unit to be valued by reference to a designated number
     of Shares to be paid upon achievement of such performance goals as the
     Committee establishes with regard to such Performance Share.

          (cc) "PERFORMANCE UNIT" means a right granted to a Participant under
     Article 9 to a unit valued by reference to a designated amount of cash or
     property other than Shares to be paid to the Participant upon achievement
     of such performance goals as the Committee establishes with regard to such
     Performance Unit.

          (dd) "PERSON" means any individual, entity or group, within the
     meaning of Section 3(a)(9) of the 1934 Act and as used in Section 13(d)(3)
     or 14(d)(2) of the 1934 Act.

          (ee) "PLAN" means the Wells Timber Real Estate Investment Trust, Inc.
     2005 Long-Term Incentive Plan, as amended from time to time.


                                      -6-

<PAGE>

          (ff) "PUBLIC OFFERING" shall occur on the closing date of a firm
     commitment underwritten public offering of any class or series of the
     Company's equity securities pursuant to a registration statement filed by
     the Company under the 1933 Act.

          (gg) "RESTRICTED STOCK AWARD" means Stock granted to a Participant
     under Article 10 that is subject to certain restrictions and to risk of
     forfeiture.

          (hh) "RESTRICTED STOCK UNIT AWARD" means the right granted to a
     Participant under Article 10 to receive shares of Stock (or the equivalent
     value in cash or other property if the Committee so provides) in the
     future, which right is subject to certain restrictions and to risk of
     forfeiture.

          (ii) "SHARES" means shares of the Company's Stock. If there has been
     an adjustment or substitution pursuant to Section 15.1, the term "SHARES"
     shall also include any shares of stock or other securities that are
     substituted for Shares or into which Shares are adjusted pursuant to
     Section 15.1.

          (jj) "STOCK" means the $.01 par value common stock of the Company and
     such other securities of the Company as may be substituted for Stock
     pursuant to Article 15.

          (kk) "STOCK APPRECIATION RIGHT" or "SAR" means a right granted to a
     Participant under Article 8 to receive a payment equal to the difference
     between the Fair Market Value of a Share as of the date of exercise of the
     SAR over the grant price of the SAR, all as determined pursuant to Article
     8.

          (ll) "SUBSIDIARY" means any corporation, limited liability company,
     partnership or other entity of which a majority of the outstanding voting
     stock or voting power is beneficially owned directly or indirectly by the
     Company. Notwithstanding the above, with respect to an Incentive Stock
     Option, Subsidiary shall have the meaning set forth in Section 424(f) of
     the Code.

          (mm) "1933 ACT" means the Securities Act of 1933, as amended from time
     to time.

          (nn) "1934 ACT" means the Securities Exchange Act of 1934, as amended
     from time to time.

                                    ARTICLE 3
                             EFFECTIVE TERM OF PLAN

     3.1. EFFECTIVE DATE. The Plan shall be effective as of the date it is
approved by the stockholders of the Company (the "EFFECTIVE DATE").


                                      -7-

<PAGE>

     3.2. TERMINATION OF PLAN. The Plan shall terminate on the tenth anniversary
of the Effective Date unless earlier terminated as provided herein. The
termination of the Plan on such date shall not affect the validity of any Award
outstanding on the date of termination.

                                    ARTICLE 4
                                 ADMINISTRATION

     4.1. COMMITTEE. The Plan shall be administered by a Committee appointed by
the Board (which Committee shall consist of at least two directors) or, at the
discretion of the Board from time to time, the Plan may be administered by the
Board. It is intended that at least two of the directors appointed to serve on
the Committee shall be "non-employee directors" (within the meaning of Rule
16b-3 promulgated under the 1934 Act) and that any such members of the Committee
who do not so qualify shall abstain from participating in any decision to make
or administer Awards that are made to Eligible Participants who at the time of
consideration for such Award are persons subject to the short-swing profit rules
of Section 16 of the 1934 Act. However, the mere fact that a Committee member
shall fail to qualify under the foregoing requirement or shall fail to abstain
from such action shall not invalidate any Award made by the Committee which
Award is otherwise validly made under the Plan. The members of the Committee
shall be appointed by, and may be changed at any time and from time to time in
the discretion of, the Board. The Board may reserve to itself any or all of the
authority and responsibility of the Committee under the Plan or may act as
administrator of the Plan for any and all purposes. To the extent the Board has
reserved any authority and responsibility or during any time that the Board is
acting as administrator of the Plan, it shall have all the powers of the
Committee hereunder, and any reference herein to the Committee (other than in
this Section 4.1) shall include the Board. To the extent any action of the Board
under the Plan conflicts with actions taken by the Committee, the actions of the
Board shall control.

     4.2. ACTION AND INTERPRETATIONS BY THE COMMITTEE. For purposes of
administering the Plan, the Committee may from time to time adopt rules,
regulations, guidelines and procedures for carrying out the provisions and
purposes of the Plan and make such other determinations, not inconsistent with
the Plan, as the Committee may deem appropriate. The Committee's interpretation
of the Plan, any Awards granted under the Plan, any Award Certificate and all
decisions and determinations by the Committee with respect to the Plan are
final, binding, and conclusive on all parties. Each member of the Committee is
entitled to, in good faith, rely or act upon any report or other information
furnished to that member by any officer or other employee of the Company or any
Affiliate, the Company's or an Affiliate's independent certified public
accountants, Company counsel or any executive compensation consultant or other
professional retained by the Company to assist in the administration of the
Plan.

     4.3. AUTHORITY OF COMMITTEE. Except as provided below, the Committee has
the exclusive power, authority and discretion to:

          (a) Grant Awards;


                                      -8-

<PAGE>

          (b) Designate Participants;

          (c) Determine the type or types of Awards to be granted to each
     Participant;

          (d) Determine the number of Awards to be granted and the number of
     Shares or dollar amount to which an Award will relate;

          (e) Determine the terms and conditions of any Award, not inconsistent
     with the provisions of the Plan, granted under the Plan, including but not
     limited to, the exercise price, grant price, or purchase price, any
     restrictions or limitations on the Award, any schedule for lapse of
     forfeiture restrictions or restrictions on the exercisability of an Award,
     and accelerations or waivers thereof, based in each case on such
     considerations as the Committee in its sole discretion determines;

          (f) Determine whether, to what extent, and under what circumstances an
     Award may be settled in, or the exercise price of an Award may be paid in,
     cash, Stock, other Awards, or other property, or an Award may be canceled,
     forfeited, or surrendered;

          (g) Prescribe the form of each Award Certificate, which need not be
     identical for each Participant;

          (h) Decide all other matters that must be determined in connection
     with an Award;

          (i) Establish, adopt or revise any rules, regulations, guidelines or
     procedures as it may deem necessary or advisable to administer the Plan;

          (j) Make all other decisions and determinations that may be required
     under the Plan or as the Committee deems necessary or advisable to
     administer the Plan;

          (k) Amend the Plan or any Award Certificate as provided herein; and

          (l) Adopt such modifications, procedures, and subplans as may be
     necessary or desirable to comply with provisions of the laws of non-U.S.
     jurisdictions in which the Company or any Affiliate may operate, in order
     to assure the viability of the benefits of Awards granted to participants
     located in such other jurisdictions and to meet the objectives of the Plan.

     Notwithstanding the foregoing, grants of Awards to Independent Directors
hereunder shall be made only in accordance with the terms, conditions and
parameters of a plan, program or policy for the compensation of Independent
Directors as in effect from time to time, and the Committee may not make
discretionary grants hereunder to Independent Directors.

     Notwithstanding the above, the Board or the Committee may, by resolution,
expressly delegate to a special committee, consisting of one or more directors
who are also officers of the


                                      -9-

<PAGE>

Company, the authority, within specified parameters, to (i) designate officers,
employees and/or consultants of the Company or any of its Affiliates to be
recipients of Awards under the Plan, and (ii) to determine the number of such
Awards to be granted to any such Participants; provided that a limit on the
total number or dollar value of Awards to be granted to any such Participants
shall be approved in advance by the Board or the Committee and provided further
that such delegation of duties and responsibilities to such special committee
may not be made with respect to the grant of Awards to eligible participants who
are subject to Section 16(a) of the 1934 Act at the Grant Date. The acts of such
delegates shall be treated hereunder as acts of the Board and such delegates
shall report regularly to the Board and the Committee regarding the delegated
duties and responsibilities and any Awards so granted.

     4.4. AWARD CERTIFICATES. Each Award shall be evidenced by an Award
Certificate. Each Award Certificate shall include such provisions, not
inconsistent with the Plan, as may be specified by the Committee.

                                    ARTICLE 5
                           SHARES SUBJECT TO THE PLAN

     5.1. NUMBER OF SHARES. Subject to adjustment as provided in Sections 5.2
and 15.1, the aggregate number of Shares reserved and available for issuance
pursuant to Awards granted under the Plan shall be 500,000. The maximum number
of Shares that may be issued upon exercise of Incentive Stock Options granted
under the Plan shall be 500,000. The maximum number of Shares that may be issued
upon the exercise or grant of an Award granted under the Plan shall not exceed
in the aggregate an amount equal to 10% of the outstanding Shares on the Grant
Date.

     5.2. SHARE COUNTING.

          (a) To the extent that an Award is canceled, terminates, expires, is
     forfeited or lapses for any reason, any unissued Shares from such Award
     will again be available for issuance pursuant to Awards granted under the
     Plan.

          (b) Shares subject to Awards settled in cash will again be available
     for issuance pursuant to Awards granted under the Plan.

          (c) Shares withheld from an Award to satisfy minimum tax withholding
     requirements will again be available for issuance pursuant to Awards
     granted under the Plan, but Shares delivered by a Participant (by either
     actual delivery or attestation) to satisfy tax withholding requirements
     shall not be added back to the number of Shares available for issuance
     under the Plan.

          (d) If the exercise price of an Option is satisfied by delivering
     Shares to the Company (by either actual delivery or attestation), only the
     net number of Shares actually issued by the Company shall be considered for
     purposes of determining the number of Shares remaining available for
     issuance pursuant to Awards granted under the Plan.


                                      -10-

<PAGE>

          (e) To the extent that the full number of Shares subject to an Award
     is not issued for any reason, only the number of Shares issued and
     delivered shall be considered for purposes of determining the number of
     Shares remaining available for issuance pursuant to Awards granted under
     the Plan. Nothing in this subsection shall imply that any particular type
     of cashless exercise of an Option is permitted under the Plan, that
     decision being reserved to the Committee or other provisions of the Plan.

     5.3. STOCK DISTRIBUTED. Any Stock distributed pursuant to an Award may
consist, in whole or in part, of authorized and unissued Stock, treasury Stock
or Stock purchased on the open market.

                                    ARTICLE 6
                                   ELIGIBILITY

     6.1. GENERAL. Awards may be granted only to Eligible Participants; except
that Incentive Stock Options may be granted to only to Eligible Participants who
are employees of the Company or a Parent or Subsidiary as defined in Section
424(e) and (f) of the Code.

                                    ARTICLE 7
                                  STOCK OPTIONS

     7.1. GENERAL. The Committee is authorized to grant Options to Participants
subject to terms and conditions, not inconsistent with the provisions of the
Plan, as the Committee shall establish, including the following:

          (a) EXERCISE PRICE. The exercise price per Share under an Option shall
     be determined by the Committee; provided, however, that the exercise price
     of an Option shall not be less than the Fair Market Value as of the Grant
     Date.

          (b) TIME AND CONDITIONS OF EXERCISE. The Committee shall determine the
     time or times at which an Option may be exercised in whole or in part,
     subject to Section 7.1(d). The Committee shall also determine the
     performance or other conditions, if any, that must be satisfied before all
     or part of an Option may be exercised or vested. Except under certain
     circumstances contemplated by Section 14.8 or 14.9 or as may be set forth
     in an Award Certificate with respect to death or Disability of a
     Participant, Options will not be exercisable before the expiration of one
     year from the Grant Date.

          (c) PAYMENT. The Committee shall determine the methods by which the
     exercise price of an Option may be paid, the form of payment, including,
     without limitation, cash, Shares, or other property (including "cashless
     exercise" arrangements), and the methods by which Shares shall be delivered
     or deemed to be delivered to Participants; provided, however, that if
     Shares are used to pay the exercise price of an Option, such Shares must
     have been held by the Participant for at least such period of


                                      -11-

<PAGE>

     time, if any, as necessary to avoid the recognition of an expense under
     generally accepted accounting principles as a result of the exercise of the
     Option.

          (d) EXERCISE TERM. In no event may any Option be exercisable for more
     than ten years from the Grant Date.

     7.2. INCENTIVE STOCK OPTIONS. The terms of any Incentive Stock Options
granted under the Plan must comply with the following additional rules:

          (a) EXERCISE PRICE. The exercise price of an Incentive Stock Option
     shall not be less than the Fair Market Value as of the Grant Date.

          (b) LAPSE OF OPTION. Subject to any earlier termination provision
     contained in the Award Certificate, an Incentive Stock Option shall lapse
     upon the earliest of the following circumstances:

               (1) The expiration date set forth in the Award Certificate.

               (2) The tenth anniversary of the Grant Date.

               (3) Three months after termination of the Participant's
          Continuous Status as a Participant for any reason other than the
          Participant's Disability or death.

               (4) One year after the Participant's Continuous Status as a
          Participant by reason of the Participant's Disability.

               (5) Two years after the Participant's death if the Participant
          dies while employed, or during the three-month period described in
          paragraph (3) or during the one-year period described in paragraph (4)
          and before the Option otherwise lapses.

          Unless the exercisability of the Incentive Stock Option is accelerated
     as provided in Article 14, if a Participant exercises an Option after
     termination of employment, the Option may be exercised only with respect to
     the Shares that were otherwise vested on the Participant's termination of
     employment. Upon the Participant's death, any exercisable Incentive Stock
     Options may be exercised by the Participant's beneficiary, determined in
     accordance with Section 14.5.

          (c) INDIVIDUAL DOLLAR LIMITATION. The aggregate Fair Market Value
     (determined as of the Grant Date) of all Shares with respect to which
     Incentive Stock Options are first exercisable by a Participant in any
     calendar year may not exceed $100,000.00.


                                      -12-

<PAGE>

          (d) TEN PERCENT OWNERS. No Incentive Stock Option shall be granted to
     any individual who, at the Grant Date, owns stock possessing more than ten
     percent of the total combined voting power of all classes of stock of the
     Company or any Parent or Subsidiary unless the exercise price per share of
     such Option is at least 110% of the Fair Market Value per Share at the
     Grant Date and the Option expires no later than five years after the Grant
     Date.

          (e) EXPIRATION OF AUTHORITY TO GRANT INCENTIVE STOCK OPTIONS. No
     Incentive Stock Option may be granted pursuant to the Plan after the day
     immediately prior to the tenth anniversary of the Effective Date of the
     Plan, or the termination of the Plan, if earlier.

          (f) RIGHT TO EXERCISE. During a Participant's lifetime, an Incentive
     Stock Option may be exercised only by the Participant or, in the case of
     the Participant's Disability, by the Participant's guardian or legal
     representative.

          (g) ELIGIBLE GRANTEES. The Committee may not grant an Incentive Stock
     Option to a person who is not at the Grant Date an employee of the Company
     or a Parent or Subsidiary.

                                    ARTICLE 8
                            STOCK APPRECIATION RIGHTS

     8.1. GRANT OF Stock APPRECIATION RIGHTS. The Committee is authorized to
grant Stock Appreciation Rights to Participants on the following terms and
conditions:

          (a) RIGHT TO PAYMENT. Upon the exercise of a Stock Appreciation Right,
     the Participant to whom it is granted has the right to receive the excess,
     if any, of:

               (1) The Fair Market Value of one Share on the date of exercise;
          over

               (2) The base price of the Stock Appreciation Right as determined
          by the Committee, which shall not be less than the Fair Market Value
          of one Share on the Grant Date (unless the SAR is granted in tandem
          with an Option after the Grant Date of the Option, in which case, the
          base price of the SAR may equal the exercise price of the related
          Option even if less than the Fair Market Value of one Share on the
          Grant Date of the SAR).

          (b) OTHER TERMS. All awards of Stock Appreciation Rights shall be
     evidenced by an Award Certificate. The terms, methods of exercise, methods
     of settlement, form of consideration payable in settlement, and any other
     terms and conditions of any Stock Appreciation Right shall be determined by
     the Committee at the time of the grant of the Award and shall be reflected
     in the Award Certificate.


                                      -13-

<PAGE>

                                    ARTICLE 9
                               PERFORMANCE AWARDS

     9.1. GRANT OF PERFORMANCE AWARDS. The Committee is authorized to grant
Performance Shares, Performance Units or Performance-Based Cash Awards to
Participants on such terms and conditions as may be selected by the Committee.
The Committee shall have the complete discretion to determine the number of
Performance Awards granted to each Participant and to designate the provisions
of such Performance Awards as provided in Section 4.3. All Performance Awards
shall be evidenced by an Award Certificate or a written program established by
the Committee, pursuant to which Performance Awards are awarded under the Plan
under uniform terms, conditions and restrictions set forth in such written
program.

     9.2. PERFORMANCE GOALS. The Committee may establish performance goals for
Performance Awards which may be based on any performance criteria selected by
the Committee. Such performance criteria may be described in terms of
Company-wide objectives or in terms of objectives that relate to the performance
of the Participant, an Affiliate or a division, region, department or function
within the Company or an Affiliate. The length of a performance period shall be
determined by the Committee; provided, however, that a performance period shall
not be shorter than 12 months.

     9.3. RIGHT TO PAYMENT. The grant of a Performance Share to a Participant
will entitle the Participant to receive at a specified later time a specified
number of Shares, or the equivalent cash value, if the performance goals
established by the Committee are achieved and the other terms and conditions
thereof are satisfied. The grant of a Performance Unit to a Participant will
entitle the Participant to receive at a specified later time a specified dollar
value, which may be settled in cash or other property, including Shares,
variable under conditions specified in the Award, if the performance goals in
the Award are achieved and the other terms and conditions thereof are satisfied.
The grant of a Performance-Based Cash Award to a Participant will entitle the
Participant to receive at a specified later time a specified dollar value in
cash variable under conditions specified in the Award, if the performance goals
in the Award are achieved and the other terms and conditions thereof are
satisfied. The Committee shall set performance goals and other terms or
conditions to payment of the Performance Awards in its discretion which,
depending on the extent to which they are met, will determine the value of the
Performance Awards that will be paid to the Participant.

     9.4. OTHER TERMS. Performance Awards may be payable in cash, Stock or other
property, and have such other terms and conditions as determined by the
Committee and reflected in the Award Certificate. For purposes of determining
the number of Shares to be used in payment of a Performance Award denominated in
cash but payable in whole or in part in Shares or Restricted Stock, the number
of Shares to be so paid will be determined by dividing the cash value of the
Award to be so paid by the Fair Market Value of a Share on the date of
determination by the Committee of the amount of the payment under the Award, or,
if the Committee so directs, the date immediately preceding the date the Award
is paid.


                                      -14-

<PAGE>

                                   ARTICLE 10
                RESTRICTED STOCK AND RESTRICTED STOCK UNIT AWARDS

     10.1. GRANT OF RESTRICTED STOCK AND RESTRICTED STOCK UNITS. The Committee
is authorized to make Awards of Restricted Stock or Restricted Stock Units to
Participants in such amounts and subject to such terms and conditions as may be
selected by the Committee. An Award of Restricted Stock or Restricted Stock
Units shall be evidenced by an Award Certificate setting forth the terms,
conditions, and restrictions applicable to the Award.

     10.2. ISSUANCE AND RESTRICTIONS. Restricted Stock or Restricted Stock Units
shall be subject to such restrictions on transferability and other restrictions
as the Committee may impose (including, without limitation, limitations on the
right to vote Restricted Stock or the right to receive dividends on the
Restricted Stock or dividend equivalents on the Restricted Stock Units) covering
a period of time specified by the Committee (the "RESTRICTION PERIOD"). These
restrictions may lapse separately or in combination at such times, under such
circumstances, in such installments, upon the satisfaction of performance goals
or otherwise, as the Committee determines at the time of the grant of the Award
or thereafter. Except as otherwise provided in an Award Certificate or any
special Plan document governing an Award, the Participant shall have all of the
rights of a stockholder with respect to the Restricted Stock, and the
Participant shall have none of the rights of a stockholder with respect to
Restricted Stock Units until such time as Shares of Stock are paid in settlement
of the Restricted Stock Units.

     10.3. FORFEITURE. Except for certain limited situations (including the
death or Disability of the Participant or a Change in Control referred to in
Section 14.8), Restricted Stock Awards and Restricted Stock Unit Awards subject
solely to continued employment restrictions shall have a Restriction Period of
not less than three years from the Grant Date (but permitting pro-rata vesting
over such time). Except as otherwise determined by the Committee at the time of
the grant of the Award or thereafter, immediately after termination of
Continuous Status as a Participant during the applicable restriction period or
upon failure to satisfy a performance goal during the applicable restriction
period, Restricted Stock or Restricted Stock Units that are at that time subject
to restrictions shall be forfeited.

     10.4. DELIVERY OF RESTRICTED STOCK. Shares of Restricted Stock shall be
delivered to the Participant at the time of grant either by book-entry
registration or by delivering to the Participant, or a custodian or escrow agent
(including, without limitation, the Company or one or more of its employees)
designated by the Committee, a stock certificate or certificates registered in
the name of the Participant. If physical certificates representing shares of
Restricted Stock are registered in the name of the Participant, such
certificates must bear an appropriate legend referring to the terms, conditions,
and restrictions applicable to such Restricted Stock.

                                   ARTICLE 11
                              DEFERRED STOCK UNITS

     11.1. GRANT OF DEFERRED STOCK UNITS . The Committee is authorized to grant
Deferred Stock Units to Participants subject to such terms and conditions as may
be


                                      -15-

<PAGE>

selected by the Committee. Deferred Stock Units shall entitle the Participant to
receive Shares of Stock (or the equivalent value in cash or other property if so
determined by the Committee) at a future time as determined by the Committee, or
as determined by the Participant within guidelines established by the Committee
in the case of voluntary deferral elections. An Award of Deferred Stock Units
shall be evidenced by an Award Certificate setting forth the terms and
conditions applicable to the Award.

                                   ARTICLE 12
                              DIVIDEND EQUIVALENTS

     12.1. GRANT OF DIVIDEND EQUIVALENTS. The Committee is authorized to grant
Dividend Equivalents to Participants, in connection with other Awards or on a
freestanding basis, subject to such terms and conditions as may be selected by
the Committee. Dividend Equivalents shall entitle the Participant to receive
payments equal to dividends with respect to all or a portion of the number of
Shares subject to any Award, as determined by the Committee. The Committee may
provide that Dividend Equivalents be paid or distributed when accrued or be
deemed to have been reinvested in additional Shares or units equivalent to
Shares, or otherwise reinvested.

                                   ARTICLE 13
                        STOCK OR OTHER STOCK-BASED AWARDS

     13.1. GRANT OF STOCK OR OTHER STOCK-BASED AWARDS. The Committee is
authorized, subject to limitations under applicable law, to grant to
Participants such other Awards that are payable in, valued in whole or in part
by reference to, or otherwise based on or related to Shares or other property,
as deemed by the Committee to be consistent with the purposes of the Plan,
including without limitation Shares awarded purely as a "bonus" and not subject
to any restrictions or conditions, convertible or exchangeable debt securities,
other rights convertible or exchangeable into Shares, and Awards valued by
reference to book value of Shares or the value of securities of or the
performance of specified Parents or Affiliates ("OTHER STOCK-BASED AWARDS").
Such Other Stock-Based Awards shall also be available as a form of payment in
the settlement of other Awards granted under the Plan. The Committee shall
determine the terms and conditions of such Other Stock-Based Awards. Except for
certain limited situations (including the death or Disability of the Participant
or a Change in Control referred to in Section 14.8), Other Stock-Based Awards
subject solely to continued employment restrictions shall be subject to
restrictions imposed by the Committee for a period of not less than three years
from the Grant Date (but permitting pro-rata vesting over such time); provided
that such restrictions shall not be applicable to any substitute awards granted
under Section 14.12, grants of Other Stock-Based Awards in payment of
Performance Awards pursuant to Article 9, grants of Other Stock-Based Awards
granted in lieu of cash or other compensation, or grants of Other Stock-Based
Awards on a deferred basis.


                                      -16-

<PAGE>

                                   ARTICLE 14
                         PROVISIONS APPLICABLE TO AWARDS

     14.1. STAND-ALONE AND TANDEM AWARDS. Awards granted under the Plan may, in
the discretion of the Committee, be granted either alone or in addition to, in
tandem with, any other Award granted under the Plan. Subject to Section 16.2,
awards granted in addition to or in tandem with other Awards may be granted
either at the same time as or at a different time from the grant of such other
Awards.

     14.2. TERM OF AWARD. The term of each Award shall be for the period as
determined by the Committee, provided that in no event shall the term of any
Incentive Stock Option or a Stock Appreciation Right granted in tandem with the
Incentive Stock Option exceed a period of ten years from its Grant Date (or, if
Section 7.2(d) applies, five years from its Grant Date).

     14.3. FORM OF PAYMENT FOR AWARDS. Subject to the terms of the Plan and any
applicable law or Award Certificate, payments or transfers to be made by the
Company or an Affiliate on the grant or exercise of an Award may be made in such
form as the Committee determines at or after the Grant Date, including without
limitation, cash, Stock, other Awards, or other property, or any combination,
and may be made in a single payment or transfer, in installments, or on a
deferred basis, in each case determined in accordance with rules adopted by, and
at the discretion of, the Committee.

     14.4. LIMITS ON TRANSFER. No right or interest of a Participant in any
unexercised or restricted Award may be pledged, encumbered, or hypothecated to
or in favor of any party other than the Company or an Affiliate, or shall be
subject to any lien, obligation, or liability of such Participant to any other
party other than the Company or an Affiliate. No unexercised or restricted Award
shall be assignable or transferable by a Participant other than by will or the
laws of descent and distribution or, except in the case of an Incentive Stock
Option, pursuant to a domestic relations order that would satisfy Section
414(p)(1)(A) of the Code if such Section applied to an Award under the Plan;
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 taxation, (ii) does not cause any Option intended to be an Incentive
Stock Option to fail to be described in Code Section 422(b), and (iii) is
otherwise appropriate and desirable, taking into account any factors deemed
relevant, including without limitation, state or federal tax or securities laws
applicable to transferable Awards.

     14.5. BENEFICIARIES. Notwithstanding Section 14.4, a Participant may, in
the manner determined by the Committee, designate a beneficiary to exercise the
rights of the Participant and to receive any distribution with respect to any
Award upon the Participant's death. A beneficiary, legal guardian, legal
representative, or other person claiming any rights under the Plan is subject to
all terms and conditions of the Plan and any Award Certificate applicable to the
Participant, except to the extent the Plan and Award Certificate otherwise
provide, and to any additional restrictions deemed necessary or appropriate by
the Committee. If no beneficiary has been designated or survives the
Participant, payment shall be made to the


                                      -17-

<PAGE>

Participant's estate. Subject to the foregoing, a beneficiary designation may be
changed or revoked by a Participant at any time provided the change or
revocation is filed with the Company.

     14.6. STOCK CERTIFICATES. All Stock issuable under the Plan is subject to
any stop-transfer orders and other restrictions as the Committee deems necessary
or advisable to comply with federal or state securities laws, rules and
regulations and the rules of any national securities exchange or automated
quotation system on which the Stock is listed, quoted, or traded. The Committee
may place legends on any Stock certificate or issue instructions to the transfer
agent to reference restrictions applicable to the Stock.

     14.7. ACCELERATION UPON DEATH OR DISABILITY. Except as otherwise provided
in the Award Certificate or any special Plan document governing an Award, upon
the Participant' s death or Disability during his or her Continuous Status as a
Participant, (i) all of such Participant's outstanding Options, SARs, and other
Awards in the nature of rights that may be exercised shall become fully
exercisable, (ii) all time-based vesting restrictions on the Participant's
outstanding Awards shall lapse, and (iii) the target payout opportunities
attainable under all of such Participant's outstanding performance-based Awards
shall be deemed to have been fully earned as of the date of termination based
upon (A) an assumed achievement of all relevant performance goals at the
"target" level if the date of termination occurs during the first half of the
applicable performance period, or (B) the actual level of achievement of all
relevant performance goals against target, if the date of termination occurs
during the second half of the applicable performance period, and, in either such
case, there shall be a prorata payout to the Participant or his or her estate
within thirty (30) days following the date of termination based upon the length
of time within the performance period that has elapsed prior to the date of
termination. Any Awards shall thereafter continue or lapse in accordance with
the other provisions of the Plan and the Award Certificate. To the extent that
this provision causes Incentive Stock Options to exceed the dollar limitation
set forth in Section 7.2(c), the excess Options shall be deemed to be
Nonstatutory Stock Options.

     14.8. TREATMENT UPON A CHANGE IN CONTROL. The provisions of this Section
14.8 shall apply in the case of a Change in Control, unless otherwise provided
in the Award Certificate or any special Plan document or separate agreement with
a Participant governing an Award.

     (a) Awards not Assumed or Substituted by Surviving Entity. Upon the
occurrence of a Change in Control, and except with respect to any Awards assumed
by the Surviving Entity or otherwise equitably converted or substituted in
connection with the Change in Control in a manner approved by the Committee or
the Board: (i) outstanding Options, SARs, and other Awards in the nature of
rights that may be exercised shall become fully exercisable, (ii) time-based
vesting restrictions on outstanding Awards shall lapse, and (iii) the target
payout opportunities attainable under outstanding performance-based Awards shall
be deemed to have been fully earned as of the effective date of the Change in
Control based upon (A) an assumed achievement of all relevant performance goals
at the "target" level if the Change in Control occurs during the first half of
the applicable performance period, or (B) the actual level of


                                      -18-

<PAGE>

achievement of all relevant performance goals against target, if the Change in
Control occurs during the second half of the applicable performance period, and,
in either such case, there shall be prorata payout to Participants within thirty
(30) days following the Change in Control based upon the length of time within
the performance period that has elapsed prior to the Change in Control. Any
Awards shall thereafter continue or lapse in accordance with the other
provisions of the Plan and the Award Certificate. To the extent that this
provision causes Incentive Stock Options to exceed the dollar limitation set
forth in Section 7.2(b), the excess Options shall be deemed to be Nonstatutory
Stock Options.

     (b) Awards Assumed or Substituted by Surviving Entity. With respect to
Awards assumed by the Surviving Entity or otherwise equitably converted or
substituted in connection with a Change in Control: if within two years after
the effective date of the Change in Control, a Participant's employment is
terminated without Cause or the Participant resigns for Good Reason, then (i)
all of that Participant's outstanding Options, SARs and other Awards in the
nature of rights that may be exercised shall become fully exercisable, (ii) all
time-based vesting restrictions on the his or her outstanding Awards shall
lapse, and (iii) the target payout opportunities attainable under all
outstanding of that Participant's performance-based Awards shall be deemed to
have been fully earned as of the date of termination based upon (A) an assumed
achievement of all relevant performance goals at the "target" level if the date
of termination occurs during the first half of the applicable performance
period, or (B) the actual level of achievement of all relevant performance goals
against target, if the date of termination occurs during the second half of the
applicable performance period, and, in either such case, there shall be prorata
payout to such Participant within thirty (30) days following the date of
termination of employment based upon the length of time within the performance
period that has elapsed prior to the date of termination of employment. With
regard to each Award, a Participant shall not be considered to have resigned for
Good Reason unless either (i) the Award Certificate includes such provision or
(ii) the Participant is party to an employment, severance or similar agreement
with the Company or an Affiliate that includes provisions in which the
Participant is permitted to resign for Good Reason. Any Awards shall thereafter
continue or lapse in accordance with the other provisions of the Plan and the
Award Certificate. To the extent that this provision causes Incentive Stock
Options to exceed the dollar limitation set forth in Section 7.2(b), the excess
Options shall be deemed to be Nonstatutory Stock Options.

     14.9. ACCELERATION FOR ANY REASON. Regardless of whether an event has
occurred as described in Section 14.7 or 14.8 above, the Committee may in its
sole discretion at any time determine that all or a portion of a Participant's
Options, SARs, and other Awards in the nature of rights that may be exercised
shall become fully or partially exercisable, that all or a part of the
time-based vesting restrictions on all or a portion of the outstanding Awards
shall lapse, and/or that any performance-based criteria with respect to any
Awards shall be deemed to be wholly or partially satisfied, in each case, as of
such date as the Committee may, in its sole discretion, declare. The Committee
may discriminate among Participants and among Awards granted to a Participant in
exercising its discretion pursuant to this Section 14.9. Notwithstanding
anything in the Plan, including this Section 14.9, the Committee may not
accelerate the payment of any Award if such acceleration would violate Section
409A(a)(3) of the Code.


                                      -19-

<PAGE>

     14.10. TERMINATION OF EMPLOYMENT. Whether military, government or other
service or other leave of absence shall constitute a termination of employment
shall be determined in each case by the Committee at its discretion, and any
determination by the Committee shall be final and conclusive. A Participant's
Continuous Status as a Participant shall not be deemed to terminate (i) in a
circumstance in which a Participant transfers from the Company to an Affiliate,
transfers from an Affiliate to the Company, or transfers from one Affiliate to
another Affiliate, or (ii) in the discretion of the Committee as specified at or
prior to such occurrence, in the case of a spin-off, sale or disposition of the
Participant's employer from the Company or any Affiliate. To the extent that
this provision causes Incentive Stock Options to extend beyond three months from
the date a Participant is deemed to be an employee of the Company, a Parent or
Subsidiary for purposes of Sections 424(e) and 424(f) of the Code, the Options
held by such Participant shall be deemed to be Nonstatutory Stock Options.

     14.11. FORFEITURE EVENTS. The Committee may specify in an Award Certificate
that the Participant's rights, payments and benefits with respect to an Award
shall be subject to reduction, cancellation, forfeiture or recoupment upon the
occurrence of certain specified events, in addition to any otherwise applicable
vesting or performance conditions of an Award. Such events shall include, but
shall not be limited to, termination of employment for cause, violation of
material Company or Affiliate policies, breach of non-competition,
confidentiality or other restrictive covenants that may apply to the
Participant, or other conduct by the Participant that is detrimental to the
business or reputation of the Company or any Affiliate.

     14.12. SUBSTITUTE AWARDS. The Committee may grant Awards under the Plan in
substitution for stock and stock-based awards held by employees of another
entity who become employees of the Company or an Affiliate as a result of a
merger or consolidation of the former employing entity with the Company or an
Affiliate or the acquisition by the Company or an Affiliate of property or stock
of the former employing corporation. The Committee may direct that the
substitute awards be granted on such terms and conditions as the Committee
considers appropriate in the circumstances.

                                   ARTICLE 15
                          CHANGES IN CAPITAL STRUCTURE

     15.1. GENERAL. In the event of a corporate event or transaction involving
the Company (including, without limitation, any stock dividend, stock split,
extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination or exchange of shares), the
authorization limits under Section 5.1 shall be adjusted proportionately, and
the Committee shall adjust the Plan and Awards to preserve, but not increase,
the benefits or potential benefits of the Awards. Action by the Committee may
include: (i) adjustment of the number and kind of shares which may be delivered
under the Plan; (ii) adjustment of the number and kind of shares subject to
outstanding Awards; (iii) adjustment of the exercise price of outstanding Awards
or the measure to be used to determine the amount of the benefit payable on an
Award; and (iv) any other adjustments that the Committee determines to be
equitable. In addition, the Committee may, in its sole discretion, provide (i)
that Awards


                                      -20-

<PAGE>

will be settled in cash rather than Stock, (ii) that Awards will become
immediately vested and exercisable and will expire after a designated period of
time to the extent not then exercised, (iii) that Awards will be assumed by
another party to a transaction or otherwise be equitably converted or
substituted in connection with such transaction, (iv) that outstanding Awards
may be settled by payment in cash or cash equivalents equal to the excess of the
Fair Market Value of the underlying Stock, as of a specified date associated
with the transaction, over the exercise price of the Award, (v) that performance
targets and performance periods for Performance Awards will be modified, or (vi)
any combination of the foregoing. The Committee's determination need not be
uniform and may be different for different Participants whether or not such
Participants are similarly situated. Without limiting the foregoing, in the
event of a subdivision of the outstanding Stock (stock-split), a declaration of
a dividend payable in Shares, or a combination or consolidation of the
outstanding Stock into a lesser number of Shares, the authorization limits under
Section 5.1 shall automatically be adjusted proportionately, and the Shares then
subject to each Award shall automatically be adjusted proportionately without
any change in the aggregate purchase price therefor. To the extent that any
adjustments made pursuant to this Article 15 cause Incentive Stock Options to
cease to qualify as Incentive Stock Options, such Options shall be deemed to be
Nonstatutory Stock Options.

                                   ARTICLE 16
                     AMENDMENT, MODIFICATION AND TERMINATION

     16.1. AMENDMENT, MODIFICATION AND TERMINATION. The Board or the Committee
may, at any time and from time to time, amend, modify or terminate the Plan
without stockholder approval; provided, however, that if an amendment to the
Plan would, in the reasonable opinion of the Board or the Committee, either (i)
materially increase the number of Shares available under the Plan, (ii) expand
the types of awards under the Plan, (iii) materially expand the class of
participants eligible to participate in the Plan, (iv) materially extend the
term of the Plan, or (v) otherwise constitute a material change requiring
stockholder approval under applicable laws, policies or regulations or the
applicable listing or other requirements of an exchange, then such amendment
shall be subject to stockholder approval; and provided, further, that the Board
or Committee may condition any other amendment or modification on the approval
of stockholders of the Company for any reason, including by reason of such
approval being necessary or deemed advisable to (i) permit Awards made hereunder
to be exempt from liability under Section 16(b) of the 1934 Act, (ii) to comply
with the listing or other requirements of an exchange, or (iii) to satisfy any
other tax, securities or other applicable laws, policies or regulations.

     16.2. AWARDS PREVIOUSLY GRANTED. At any time and from time to time, the
Committee may amend, modify or terminate any outstanding Award without approval
of the Participant; provided, however:

          (a) Subject to the terms of the applicable Award Certificate, such
     amendment, modification or termination shall not, without the Participant's
     consent, reduce or diminish the value of such Award;


                                      -21-

<PAGE>

          (b) The original term of an Option may not be extended without the
     prior approval of the stockholders of the Company;

          (c) Except as otherwise provided in Article 15, the Committee shall
     not be permitted to (i) lower the exercise price per Share of an Option
     after it is granted, (b) cancel an Option when the exercise price per Share
     exceeds the Fair Market Value of the underlying Shares in exchange for
     another Award, or (c) take any other action with respect to an Option that
     may be treated as a repricing under the rules and regulations of an
     exchange, without the prior approval of the stockholders of the Company;
     and

          (d) No termination, amendment, or modification of the Plan shall
     adversely affect any Award previously granted under the Plan, without the
     written consent of the Participant affected thereby.

                                   ARTICLE 17
                               GENERAL PROVISIONS

     17.1. NO RIGHTS TO AWARDS; NON-UNIFORM DETERMINATIONS. No Participant or
any Eligible Participant shall have any claim to be granted any Award under the
Plan. Neither the Company, its Affiliates nor the Committee is obligated to
treat Participants or Eligible Participants uniformly, and determinations made
under the Plan may be made by the Committee selectively among Eligible
Participants who receive, or are eligible to receive, Awards (whether or not
such Eligible Participants are similarly situated).

     17.2. NO SHAREHOLDER RIGHTS. No Award gives a Participant any of the rights
of a stockholder of the Company unless and until Shares are in fact issued to
such person in connection with such Award.

     17.3. WITHHOLDING. The Company or any Affiliate shall have the authority
and the right to deduct or withhold, or require a Participant to remit to the
Company, an amount sufficient to satisfy federal, state, and local taxes
(including the Participant's FICA obligation) required by law to be withheld
with respect to any exercise, lapse of restriction or other taxable event
arising as a result of the Plan. If Shares are surrendered to the Company to
satisfy withholding obligations in excess of the minimum withholding obligation,
such Shares must have been held by the Participant as fully vested shares for
such period of time, if any, as necessary to avoid the recognition of an expense
under generally accepted accounting principles. The Company shall have the
authority to require a Participant to remit cash to the Company in lieu of the
surrender of Shares for tax withholding obligations if the surrender of Shares
in satisfaction of such withholding obligations would result in the Company's
recognition of expense under generally accepted accounting principles. With
respect to withholding required upon any taxable event under the Plan, the
Committee may, at the time the Award is granted or thereafter, require or permit
that any such withholding requirement be satisfied, in whole or in part, by
withholding from the Award Shares having a Fair Market Value on the date of
withholding equal to the minimum amount (and not any greater amount) required to
be withheld for tax purposes, all in accordance with such procedures as the
Committee establishes.


                                      -22-

<PAGE>

     17.4. NO RIGHT TO CONTINUED SERVICE. Nothing in the Plan, any Award
Certificate or any other document or statement made with respect to the Plan,
shall interfere with or limit in any way the right of the Company or any
Affiliate to terminate any Participant's employment or status as an officer,
director or consultant at any time, nor confer upon any Participant any right to
continue as an employee, officer, director or consultant of the Company or any
Affiliate, whether for the duration of a Participant's Award or otherwise.

     17.5. UNFUNDED STATUS OF AWARDS. The Plan is intended to be an "unfunded"
plan for incentive and deferred compensation. With respect to any payments not
yet made to a Participant pursuant to an Award, nothing contained in the Plan or
any Award Certificate shall give the Participant any rights that are greater
than those of a general creditor of the Company or any Affiliate. This Plan is
not intended to be subject to ERISA.

     17.6. RELATIONSHIP TO OTHER BENEFITS. No payment under the Plan shall be
taken into account in determining any benefits under any pension, retirement,
savings, profit sharing, group insurance, welfare or benefit plan of the Company
or any Affiliate unless provided otherwise in such other plan.

     17.7. EXPENSES. The expenses of administering the Plan shall be borne by
the Company and, if applicable, its Affiliates. The allocation of expenses among
the Company and its Affiliates shall be as agreed to by the Company and the
applicable Affiliates.

     17.8. TITLES AND HEADINGS. The titles and headings of the Sections in the
Plan are for convenience of reference only, and in the event of any conflict,
the text of the Plan, rather than such titles or headings, shall control.

     17.9. GENDER AND NUMBER. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.

     17.10. FRACTIONAL SHARES. No fractional Shares shall be issued and the
Committee shall determine, in its discretion, whether cash shall be given in
lieu of fractional Shares or whether such fractional Shares shall be eliminated
by rounding up or down.


                                      -23-

<PAGE>

     17.11. GOVERNMENT AND OTHER REGULATIONS.

          (a) Notwithstanding any other provision of the Plan, no Participant
     who acquires Shares pursuant to the Plan may, during any period of time
     that such Participant is an affiliate of the Company (within the meaning of
     the rules and regulations of the Securities and Exchange Commission under
     the 1933 Act), sell such Shares, unless such offer and sale is made (i)
     pursuant to an effective registration statement under the 1933 Act, which
     is current and includes the Shares to be sold, or (ii) pursuant to an
     appropriate exemption from the registration requirement of the 1933 Act,
     such as that set forth in Rule 144 promulgated under the 1933 Act.

          (b) Notwithstanding any other provision of the Plan, if at any time
     the Committee shall determine that the registration, listing or
     qualification of the Shares covered by an Award upon any exchange or under
     any foreign, federal, state or local law or practice, or the consent or
     approval of any governmental regulatory body, is necessary or desirable as
     a condition of, or in connection with, the granting of such Award or the
     purchase or receipt of Shares thereunder, no Shares may be purchased,
     delivered or received pursuant to such Award unless and until such
     registration, listing, qualification, consent or approval shall have been
     effected or obtained free of any condition not acceptable to the Committee.
     Any Participant receiving or purchasing Shares pursuant to an Award shall
     make such representations and agreements and furnish such information as
     the Committee may request to assure compliance with the foregoing or any
     other applicable legal requirements. The Company shall not be required to
     issue or deliver any certificate or certificates for Shares under the Plan
     prior to the Committee's determination that all related requirements have
     been fulfilled. The Company shall in no event be obligated to register any
     securities pursuant to the 1933 Act or applicable state or foreign law or
     to take any other action in order to cause the issuance and delivery of
     such certificates to comply with any such law, regulation or requirement.

     17.12. GOVERNING LAW. To the extent not governed by federal law, the Plan
and all Award Certificates shall be construed in accordance with and governed by
the laws of the State of Maryland.

     17.13. ADDITIONAL PROVISIONS. Each Award Certificate may contain such other
terms and conditions as the Committee may determine; provided that such other
terms and conditions are not inconsistent with the provisions of the Plan.

     17.14. NO LIMITATIONS ON RIGHTS OF COMPANY. The grant of any Award shall
not in any way affect the right or power of the Company to make adjustments,
reclassification or changes in its capital or business structure or to merge,
consolidate, dissolve, liquidate, sell or transfer all or any part of its
business or assets. The Plan shall not restrict the authority of the Company,
for proper corporate purposes, to draft or assume awards, other than under the
Plan, to or with respect to any person. If the Committee so directs, the Company
may issue or transfer Shares to an Affiliate, for such lawful consideration as
the Committee may specify, upon the condition or understanding that the
Affiliate will transfer such Shares to a Participant in


                                      -24-

<PAGE>

accordance with the terms of an Award granted to such Participant and specified
by the Committee pursuant to the provisions of the Plan.

     17.15. INDEMNIFICATION. Each person who is or shall have been a member of
the Committee, or of the Board, or an officer of the Company to whom authority
was delegated in accordance with Article 4 shall be indemnified and held
harmless by the Company against and from any loss, cost, liability, or expense
that may be imposed upon or reasonably incurred by him or her in connection with
or resulting from any claim, action, suit, or proceeding to which he or she may
be a party or in which he or she may be involved by reason of any action taken
or failure to act under the Plan and against and from any and all amounts paid
by him or her in settlement thereof, with the Company's approval, or paid by him
or her in satisfaction of any judgment in any such action, suit, or proceeding
against him or her, provided he or she shall give the Company an opportunity, at
its own expense, to handle and defend the same before he or she undertakes to
handle and defend it on his or her own behalf, unless such loss, cost,
liability, or expense is a result of his or her own willful misconduct or except
as expressly provided by statute. The foregoing right of indemnification shall
not be exclusive of any other rights of indemnification to which such persons
may be entitled under the Company's Articles of Incorporation or Bylaws, as a
matter of law, or otherwise, or any power that the Company may have to indemnify
them or hold them harmless.


                                      -25-

<PAGE>

     The foregoing is hereby acknowledged as being the Wells Timber Real Estate
Investment Trust, Inc. 2005 Long-Term Incentive Plan as adopted by the Board on
October 31, 2005 and by approved by the sole stockholder on October 31, 2005.

                                 WELLS TIMBER REAL ESTATE INVESTMENT TRUST, INC.


                                 By: /s/ Douglas P. Williams
                                     -------------------------------------------
                                 Name: Douglas P. Williams
                                 Title: Executive Vice President



                                      -26-

<PAGE>

                                   ----------

                 WELLS TIMBER REAL ESTATE INVESTMENT TRUST, INC.
                  2005 INDEPENDENT DIRECTORS COMPENSATION PLAN

                                   ----------


                                      -27-

<PAGE>

                 WELLS TIMBER REAL ESTATE INVESTMENT TRUST, INC.
                  2005 INDEPENDENT DIRECTORS COMPENSATION PLAN

<TABLE>
<S>                                                                            <C>
ARTICLE 1 PURPOSE...........................................................   1
   1.1    Purpose...........................................................   1
   1.2    Eligibility.......................................................   1
ARTICLE 2 DEFINITIONS.......................................................   1
   2.1    Definitions.......................................................   1
ARTICLE 3 ADMINISTRATION....................................................   2
   3.1    Administration....................................................   3
   3.2    Reliance..........................................................   3
   3.3    Indemnification...................................................   3
ARTICLE 4 SHARES............................................................   3
   4.1    Source of Shares for the Plan.....................................   3
ARTICLE 5 BASE RETAINER, MEETING FEES AND EXPENSES..........................   4
   5.1    Base Annual Retainer..............................................   4
   5.2    Meeting Fees......................................................   4
   5.3    Travel Expense Reimbursement......................................   4
ARTICLE 6 EQUITY COMPENSATION...............................................   4
   6.1    Initial Option Grant Reimbursement................................   4
   6.2    Subsequent Option Grant...........................................   5
   6.3    Terms and Conditions of Options...................................   5
   6.4    Restrictions on Transfer..........................................   5
ARTICLE 7 AMENDMENT, MODIFICATION AND TERMINATION...........................   5
   7.1    Amendment, Modification and Termination...........................   5
ARTICLE 8 GENERAL PROVISIONS................................................   6
   8.1    Adjustments.......................................................   6
   8.2    Duration of the Plan..............................................   6
   8.3    Expenses of the Plan..............................................   6
   8.4    Status of the Plan................................................   6
   8.5    Effective Date....................................................   6
</TABLE>

<PAGE>

                 WELLS TIMBER REAL ESTATE INVESTMENT TRUST, INC.
                  2005 INDEPENDENT DIRECTORS COMPENSATION PLAN

                                    ARTICLE 1
                                     PURPOSE

     1.1. PURPOSE. The purpose of the Wells Timber Real Estate Investment Trust,
Inc. 2005 Independent Directors Compensation Plan is to attract, retain and
compensate highly-qualified individuals who are not employees of Wells Timber
Real Estate Investment Trust, Inc. or any of its Affiliates for service as
members of the Board by providing them with competitive compensation and an
ownership interest in the Stock of the Company. The Company intends that the
Plan will benefit the Company and its stockholders by allowing Independent
Directors to have a personal financial stake in the Company through an ownership
interest in the Stock and will closely associate the interests of Independent
Directors with that of the Company's stockholders.

     1.2. ELIGIBILITY. Independent Directors of the Company who are Eligible
Participants, as defined below, shall automatically be participants in the Plan.

                                    ARTICLE 2
                                   DEFINITIONS

     2.1. DEFINITIONS. Unless the context clearly indicates otherwise, the
following terms shall have the following meanings:

     "AFFILIATE" has the meaning given such term in the Equity Incentive Plan.

     "BASE RETAINER" means the retainer (excluding meeting fees and expenses)
payable by the Company to an Independent Director pursuant to Section 5.1 hereof
for service as a director of the Company , as such amount may be changed from
time to time.

     "BOARD" means the Board of Directors of the Company.

     "CHANGE IN CONTROL" has the meaning given such term in the Equity Incentive
Plan.

     "CHARTER" means the articles of incorporation of the Company, as such
articles of incorporation may be amended from time to time.

     "CODE" means the Internal Revenue Code of 1986, as amended.

     "COMMITTEE" has the meaning given such term in the Equity Incentive Plan.

<PAGE>

     "COMPANY" means Wells Timber Real Estate Investment Trust, Inc., a Maryland
corporation.

     "DIRECTOR DISABILITY" means any illness or other physical or mental
condition of an Independent Director that renders him or her incapable of
performing as a director of the Company, or any medically determinable illness
or other physical or mental condition resulting from a bodily injury, disease or
mental disorder which, in the judgment of the Board, is permanent and continuous
in nature. Notwithstanding the foregoing, Disability shall have the same meaning
as set forth in any regulations, revenue procedure or revenue rulings issued by
the Secretary of the United States Treasury applicable to Section 409A(d) of the
Code. The Board may require such medical or other evidence as it deems necessary
to judge the nature and permanency of an Independent Director's condition.

     "EFFECTIVE DATE" of the Plan means the date on which the registration
statement relating to the initial public offering of the Company's Stock is
declared effective by the Securities and Exchange Commission.

     "ELIGIBLE PARTICIPANT" means any person who is an Independent Director on
the Effective Date or becomes an Independent Director while this Plan is in
effect; except that during any period a director is prohibited from
participating in the Plan by his or her employer or otherwise waives
participation in the Plan, such director shall not be an Eligible Participant.

     "EQUITY INCENTIVE PLAN" means the Wells Timber Real Estate Investment
Trust, Inc. 2005 Long-Term Incentive Plan, or any subsequent equity compensation
plan approved by the Company's stockholders and designated as the Equity
Incentive Plan for purposes of this Plan.

     "FAIR MARKET VALUE" has the meaning given such term in the Equity Incentive
Plan.

     "INDEPENDENT DIRECTOR" has the meaning given to such term in the Charter.

     "PLAN" means this Wells Timber Real Estate Investment Trust, Inc. 2005
Independent Directors Compensation Plan, as amended from time to time.

     "PLAN YEAR" means the approximate 12-month period beginning with the annual
stockholders meeting and ending at the next annual stockholders meeting;
provided that the first Plan Year shall begin on the Effective Date and extend
until the first annual stockholders meeting.

     "SHARES" has the meaning given such term in the Equity Incentive Plan.

     "STOCK" has the meaning given such term in the Equity Incentive Plan.

                                    ARTICLE 3
                                 ADMINISTRATION


                                      -2-

<PAGE>

     3.1. ADMINISTRATION. The Plan shall be administered by the Board. Subject
to the provisions of the Plan, the Board shall be authorized to interpret the
Plan, to establish, amend and rescind any rules and regulations relating to the
Plan, and to make all other determinations necessary or advisable for the
administration of the Plan. The Board's interpretation of the Plan, and all
actions taken and determinations made by the Board pursuant to the powers vested
in it hereunder, shall be conclusive and binding upon all parties concerned
including the Company, its stockholders and persons granted awards under the
Plan. The Board may appoint a plan administrator to carry out the ministerial
functions of the Plan, but the administrator shall have no other authority or
powers of the Board.

     3.2. RELIANCE. In administering the Plan, the Board may rely upon any
information furnished by the Company, its public accountants and other experts.
No individual will have personal liability by reason of anything done or omitted
to be done by the Company or the Board in connection with the Plan. This
limitation of liability shall not be exclusive of any other limitation of
liability to which any such person may be entitled under the Company's
certificate of incorporation or otherwise.

     3.3. INDEMNIFICATION. Each person who is or has been a member of the Board
or who otherwise participates in the administration or operation of this Plan
shall be indemnified by the Company against, and held harmless from, any loss,
cost, liability or expense that may be imposed upon or incurred by him or her in
connection with or resulting from any claim, action, suit or proceeding in which
such person may be involved by reason of any action taken or failure to act
under the Plan and shall be fully reimbursed by the Company for any and all
amounts paid by such person in satisfaction of judgment against him or her in
any such action, suit or proceeding, provided he or she will give the Company an
opportunity, by written notice to the Board, to defend the same at the Company's
own expense before he or she undertakes to defend it on his or her own behalf.
This right of indemnification shall not be exclusive of any other rights of
indemnification to which any such person may be entitled under the Company's
Charter, Bylaws, contract or Maryland law.

                                    ARTICLE 4
                                     SHARES

     4.1. SOURCE OF SHARES FOR THE PLAN. The Options or other equity awards that
may be issued pursuant to the Plan shall be issued under the Equity Incentive
Plan, subject to all of the terms and conditions of the Equity Incentive Plan.
The terms contained in the Equity Incentive Plan are incorporated into and made
a part of this Plan with respect to Options or other equity awards granted
pursuant hereto and any such awards shall be governed by and construed in
accordance with the Equity Incentive Plan. In the event of any actual or alleged
conflict between the provisions of the Equity Incentive Plan and the provisions
of this Plan, the provisions of the Equity Incentive Plan shall be controlling
and determinative. This Plan does not constitute a separate source of shares for
the grant of the equity awards described herein.


                                      -3-

<PAGE>

                                    ARTICLE 5
                    BASE RETAINER, MEETING FEES AND EXPENSES

     5.1. BASE RETAINER. Each Eligible Participant shall be paid a Base Retainer
for service as a director during each Plan Year. The amount of the Base Retainer
shall be established from time to time by the Board. Until changed by the Board,
the Base Retainer for a full Plan Year shall be $18,000. The Base Annual
Retainer shall be payable in approximately equal quarterly installments in
advance, beginning on the date of the annual shareholders meeting; provided,
however, that for the first Plan Year, the first installment shall begin on the
Effective Date and be prorated based on the number of full months in such
quarter after the Effective Date.

     Each person who first becomes an Eligible Participant on a date other than
the Effective Date or an annual meeting date shall be paid a retainer equal to
the quarterly installment of the Base Annual Retainer for the first quarter of
eligibility, based on the number of full months he or she serves as an
Independent Director during such quarter. Payment of such prorated Base Annual
Retainer shall begin on the date that the person first becomes an Eligible
Participant.

     5.2. MEETING FEES. Each Independent Director shall be paid a meeting fee
for each meeting of the Board he or she attends. The amount of the meeting fees
shall be established from time to time by the Board. Until changed by the Board,
the meeting fee for attending a meeting of the Board, or a committee thereof,
whether telephonically or in person, shall be as follows:

<TABLE>
<CAPTION>
MEETING TYPE                                  FEE
------------                                ------
<S>                                         <C>
Board Meeting, Non-Telephonic               $2,000
Committee Meeting, Non-Telephonic           $1,500
Board or Committee Meeting, Telephonic      $  250
Committee Chair, Non-Telephonic Committee   $  500
</TABLE>

No fee shall be paid for non-telephonic committee meetings held on the same day
as a non-telephonic meeting of the Board.

     5.3. TRAVEL EXPENSE REIMBURSEMENT. All Independent Directors shall be
reimbursed for reasonable travel expenses (including spouse's expenses to attend
events to which spouses are invited) in connection with attendance at meetings
of the Board and its committees, or other Company functions at which the Chair
of the Board or the Chief Executive Officer requests the Independent Director to
participate.

                                    ARTICLE 6
                               EQUITY COMPENSATION

     6.1. Initial Option Grant. Each Independent Director shall receive, on the
later of the Effective Date of the Plan or the first date he or she is initially
elected or appointed to the Board, an Option to purchase 2,500 shares of Stock.
Such Option shall be subject to the terms and restrictions described below in
this Article 6, shall be in addition to any otherwise applicable


                                      -4-

<PAGE>

annual grant of Options granted to such Independent Director under Section 6.2,
and shall be subject to share availability under the Equity Incentive Plan,

     6.2. Subsequent Option Grant. Subject to share availability under the
Equity Incentive Plan, upon subsequent re-election or re-appointment of the
Independent Director to the Board, such director shall receive an Option to
purchase 1,000 shares of Stock.

     6.3. Terms and Conditions of Options. Options granted under this Article 6
shall be evidenced by a written Award Certificate, and shall be subject to the
terms and conditions described below and of the Equity Incentive Plan.

          (i) Exercise Price. The exercise price per share under an Option shall
     be the Fair Market Value on the date of grant of the Option.

          (ii) Option Term. Subject to earlier termination as provided herein,
     the Option shall expire on the tenth anniversary of the date of grant.

          (iii) Vesting. Each Option granted pursuant to this Article 6 shall,
     unless earlier terminated as provided herein, vest and become exercisable
     as to one-third (1/3) of the shares on the Grant Date and as to one-third
     (1/3) of the shares on each of the first two (2) anniversaries of the date
     of grant. Notwithstanding the foregoing, all Options granted under this
     Article 6 shall become fully vested and exercisable on the earlier
     occurrence of (i) the termination of the optionee's service as a director
     of the Company due to his or her death, Director Disability or termination
     without Cause (as defined in the Equity Incentive Plan), or (ii) a Change
     in Control of the Company (as defined in the Equity Incentive Plan). If the
     optionee's service as a director of the Company (whether or not in an
     Independent Director capacity) terminates for Cause, then the optionee
     shall forfeit all of his or her right, title and interest in and to any
     unvested Options as of the date of such termination from the Board.

     (d). Restrictions on Transfer. The limitations on transfer provision of the
Equity Incentive Plan shall apply with respect to equity awards outstanding or
to be granted pursuant to this Plan.

                                    ARTICLE 7
                     AMENDMENT, MODIFICATION AND TERMINATION

     7.1. AMENDMENT, MODIFICATION AND TERMINATION. The Board may terminate or
suspend the Plan at any time, without stockholder approval. The Board may amend
the Plan at any time and for any reason without stockholder approval; provided,
however, that the Board may condition any amendment on the approval of
stockholders of the Company if such approval is necessary or deemed advisable
with respect to tax, securities or other applicable laws, policies or
regulations. No termination, modification or amendment of the Plan may, without
the consent of an Independent Director, adversely affect a Independent
Director's rights under an award granted prior thereto.


                                      -5-

<PAGE>

                                    ARTICLE 8
                               GENERAL PROVISIONS

     8.1. ADJUSTMENTS. The adjustment provisions of the Equity Incentive Plan
shall apply with respect to equity awards outstanding or to be granted pursuant
to this Plan.

     8.2. DURATION OF THE PLAN. The Plan shall remain in effect until the tenth
anniversary of the Effective Date, unless terminated earlier by the Board.

     8.3. EXPENSES OF THE PLAN. The expenses of administering the Plan shall be
borne by the Company.

     8.4. STATUS OF THE PLAN. The Plan is intended to be a nonqualified,
unfunded plan of deferred compensation under the Code. Plan benefits shall be
paid from the general assets of the Company or as otherwise directed by the
Company. A participant shall have the status of a general unsecured creditor of
the Company with respect to his or her right to receive Common Stock or other
payment upon settlement of equity awards under the Plan. No right or interest in
the Options shall be subject to the claims of creditors of the Independent
Director or to liability for the debts, contracts or engagements of the
Independent Director, or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect; provided, however, that nothing in this Plan
shall prevent transfers by will or by the applicable laws of descent and
distribution. To the extent that any participant acquires the right to receive
payments under the Plan (from whatever source), such right shall be no greater
than that of an unsecured general creditor of the Company. Participants and
their beneficiaries shall not have any preference or security interest in the
assets of the Company other than as a general unsecured creditor.

     8.5. EFFECTIVE DATE. The Plan was originally adopted by the Board on
October 31, 2005, and will become effective on the Effective Date.

                                        WELLS TIMBER REAL ESTATE INVESTMENT
                                        TRUST, INC.


                                        By: /s/ Douglas P. Williams
                                            ------------------------------------
                                        Name: Douglas P. Williams
                                        Title: Executive Vice President


                                      -6-