Document:

Form of Restricted Stock Agreement - Jeffrey S. Stauffer

 Exhibit 10.3 
  
 RESTRICTED STOCK AGREEMENT 
  
 THIS AGREEMENT is made between Jeffrey S. Stauffer (the “Employee”) and Pan Pacific Retail Properties, Inc. (the “Company”) as of July
30, 2003. 
  
 RECITALS 
  
 (1) Pursuant to the Company’s 2000 Stock Incentive Plan, the Company has
granted to Employee an award of 20,000 shares of common stock of the Company (the “Shares”) effective as of July 30, 2003 (the “Effective Date”). 
  
 (2) As a condition to Employee’s grant of the Shares, Employee must execute this Restricted Stock Agreement (this
“Agreement”), which sets forth the rights and obligations of the parties with respect to the Shares. 
  
 1. Forfeiture; Vesting. 
  
 (a) If Employee’s employment or consulting relationship with the Company is terminated for any reason other than (i) by the Company
without “cause” (as defined in the Employment Agreement between Employee and the Company, dated as of October 29, 2001 (the “Employment Agreement”)), or (ii) by Employee for “good reason” (as defined in the Employment
Agreement), including, but not limited to, for cause, death, or disability, all unvested Shares as of the date of such termination shall immediately be forfeited and shall be transferred to the Company; provided that as to Shares that would have
vested at the subsequent Vesting Date (as hereinafter defined), such Shares shall vest on a prorated basis based on the number of days elapsed from the prior Vesting Date through the date of termination and rounding down to the nearest Share,
provided that the Company has met the requisite Performance Goal (as hereinafter defined). 
  
 (b) Subject to Subsections 1(c), (d) and (e), the Shares issued hereunder shall become vested over five vesting periods in twenty percent
installments on each of March 10, 2004, 2005, 2006, 2007 and 2008 (each such date, a “Vesting Date” and the periods between the Effective Date and the first Vesting Date and the twelve-month period between Vesting Dates are each a
“Vesting Period”), conditioned upon (i) Employee’s continued employment as of each such Vesting Date and (ii) the Company achieving its Performance Goal (as hereinafter defined). 
  
 (c) Notwithstanding Subsection 1(b), upon the attainment of
the Performance Goal for a particular Vesting Date, twenty percent of the Shares (assuming Employee’s continued employment as of such Vesting Date) shall become vested. 
  
 (d) Any unvested Shares subject to vesting on a prior Vesting Date shall become vested on a subsequent
Vesting Date if the Company has met the Performance Goal, measured on a cumulative average basis, for each of the prior Vesting Dates. 
  
 For example, if on the first and second Vesting Dates, the Performance Goal for each of these Vesting Dates is not met, the Shares subject to vesting on
each of these Vesting Dates (20% of the Shares per Vesting Date) will remain unvested. If, on the third 

 
Vesting Date, the Performance Goal for this Vesting Date is met, the Shares subject to vesting on this Vesting Date (20% of the Shares) will vest. In
addition, if on the third Vesting Date (i) the Company’s cumulative average increase in Funds From Operations (“FFO”) growth per share for the three prior Vesting Periods is in the top 1/3 of the cumulative average increase in FFO
growth per share for the three prior Vesting Periods of the companies listed on Schedule A, or (ii) the Company’s cumulative average Total Return (as hereinafter defined) for the three prior Vesting Periods is in the top 1/3 of the
cumulative average Total Return for the three prior Vesting Periods of the companies listed on Schedule A, the unvested Shares subject to Vesting on the first and second Vesting Dates will become vested. The performance for the Company for a
Vesting Period shall be based on the results for the fiscal year ended nearest the relevant Vesting Date. For example, for the first Vesting Date of March 10, 2004, the relevant performance measuring period shall be for the fiscal year ending
December 31, 2003. 
  
 “Performance Goal” shall mean
the achievement by the Company for a Vesting Period of (a) placement in the top 1/3 of the companies listed on Schedule A hereto with respect to the percentage increase in FFO growth per share over the Vesting Period, or (b) placement in the
top 1/3 of the companies listed on Schedule A hereto with respect to Total Return for the Vesting Period. 
  
 “Total Return” for a specified period shall mean (a) the amount of appreciation of Company common stock and dividends paid on Company common
stock during such period divided by (b) the closing price on the day prior to the beginning of the current Vesting Period. 
  
 Notwithstanding Subsections 1(b) and (c), in the event any portion of the Shares remain unvested on March 10, 2008, such unvested Shares will become
vested on such date (assuming Employee’s continued employment as of such date). 
  
 (e) Notwithstanding Subsections 1(b), (c) and (d), in the case of a “Change in Control” (as hereinafter defined), if
Employee’s employment or consulting relationship with the Company is terminated within one year following a Change in Control for any reason other than by the Company for “cause” (as defined in the Employment Agreement), the Shares
shall become fully vested and shall cease to be subject to forfeiture under Subsection 1(a) after such event. For purposes of this Agreement, “Change in Control” shall mean the occurrence of any of the following events: 
  
 (i) the individuals constituting the Board as of the date of
the initial public offering of common stock of the Company (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that if the election, or nomination for election by the
Company’s stockholders, of any new director was approved by a vote of at least a majority of the Incumbent Board, such new director shall be considered a member of the Incumbent Board; 
  
 (ii) an acquisition of any voting securities of the Company
(the “Voting Securities”) by any “person” (as the term “person” is used for purposes of Section 13(d) or Section 14(d) of the Securities Exchange Act of 1934, as amended (the “1934 Act”)), immediately after
which such person has “beneficial 

  

 2 

 
ownership” (within the meaning of Rule 13d-3 promulgated under the 1934 Act) of 20% or more of the combined voting power of the Company’s then
outstanding Voting Securities; or 
  
 (iii)
approval by the stockholders of the Company of: 
  
 (A) a merger, consolidation, share exchange or reorganization of the Company, unless the stock holders of the Company, immediately before such merger, consolidation, share exchange or reorganization, own, directly or indirectly immediately
following such merger, consolidation, share exchange or reorganization, at least 80% of the combined voting power of the outstanding voting securities of the corporation that is the successor in such merger, consolidation, share exchange or
reorganization (the “Surviving Company”) in substantially the same proportion as their ownership of the Voting Securities immediately before such merger, consolidation, share exchange or reorganization; provided, however, that a merger,
consolidation, share exchange or reorganization of the Company shall not constitute a “Change in Control” if such merger, consolidation, share exchange or reorganization of the Company is approved by the Board and is recommended by the
Chief Executive Officer of the Company to the Board for its approval; or 
  
 (B) a complete liquidation or dissolution of the Company; or 
  
 (iv) an agreement for the sale or other disposition of all or substantially all of the assets of the Company. 
  
 2. Transferability of the Shares; Escrow. 
  
 (a) With the exception of Shares which have been forfeited
and required to be transferred to the Company pursuant to this Agreement, no unvested Shares nor any interest or right therein or part thereof shall be liable for the debts, contracts or engagements of Employee or his successors in interest 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. Employee hereby authorizes and directs the secretary of the Company, or such other person designated by the
Company, to transfer the unvested Shares that have been forfeited to the Company pursuant to this Agreement. 
  
 (b) To insure the availability for delivery of Employee’s unvested Shares upon forfeiture to the Company, Employee hereby appoints
the secretary of the Company, or any other person designated by the Company as escrow agent, as his attorney-in-fact to assign and transfer unto the Company, such unvested Shares, if any, forfeited to the Company pursuant to Section 1 and shall,
upon execution of this Agreement, deliver and deposit with the secretary of the Company, or such other person 

  

 3 

 
designated by the Company, the Share certificates representing the unvested Shares, together with the stock assignment duly endorsed in blank, attached
hereto as Exhibit 1. The unvested Shares and stock assignment shall be held by the secretary in escrow, pursuant to the Joint Escrow Instructions of the Company and Employee attached as Exhibit 2 hereto, until such unvested Shares are
vested, or until such time as this Agreement no longer is in effect. As a further condition to the Company’s obligations under this Agreement, the spouse of the Employee, if any, shall execute and deliver to the Company the Consent of Spouse
attached hereto as Exhibit 3. Upon vesting of the unvested Shares, the escrow agent shall promptly deliver to the Employee the certificate or certificates representing such Shares in the escrow agent’s possession belonging to the
Employee, and the escrow agent shall be discharged of all further obligations hereunder; provided, however, that the escrow agent shall nevertheless retain such certificate or certificates as escrow agent if so required pursuant to other
restrictions imposed pursuant to this Agreement. 
  
 (c) The Company, or its designee, shall not be liable for any act it may do or omit to do with respect to holding the Shares in escrow and while acting in good faith and in the exercise of its judgment. 
  
 (d) Transfer or sale of the Shares is subject to
restrictions on transfer imposed by any applicable state and federal securities laws. Any transferee shall hold such Shares subject to all the provisions hereof and shall acknowledge the same by signing a copy of this Agreement. 
  
 3. Termination. This Agreement shall terminate upon the later of (i)
an event of forfeiture, as described in Subsection 1(a) herein, or (ii) March 10, 2008. 
  
 4. Ownership, Voting Rights, Duties. This Agreement shall not affect in any way the ownership, voting rights or other rights or duties of Employee, except as specifically provided herein. Employee shall have
the rights and privileges of a stockholder of the Company in respect of the Shares (including any dividends paid on shares of Company common stock), until termination of this Agreement. The grant to Employee of the Shares shall be subject to the
restrictions on ownership and transfer set forth in the Company’s Amended and Restated Articles of Incorporation. 
  
 5. Legends. The Share certificate evidencing the Shares issued hereunder shall be endorsed with the following legend (in addition to any legend
required under applicable federal and state securities laws and the Company’s charter): 
  
 THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS UPON TRANSFER AND FORFEITURE AS SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE HOLDER OF THE SHARES, A COPY OF WHICH IS ON FILE
WITH THE SECRETARY OF THE COMPANY. 
  

 4 

 6. Adjustment for Stock Split. All references to the number of Shares in this Agreement shall be
appropriately adjusted to reflect any stock split, stock dividend or other change in the Shares which may be made by the Company after the date of this Agreement. 
  
 7. Notices. Notices required hereunder shall be given in person or by registered mail to the address of Employee
shown on the records of the Company, and to the Company at its principal executive office. 
  
 8. Survival of Terms. This Agreement shall apply to and bind Employee and the Company and their respective permitted assignees and transferees, heirs, legatees, executors, administrators and legal successors.

  
 9. No Section 83(b) Elections. Because such election
could have an impact on the Company’s ability to continue as a real estate investment trust under the Internal Revenue Code of 1986, as amended (the “Code”), Employee agrees that Employee will not file an election under Section 83(b)
of the Code with respect to the Shares. If Employee does file a Section 83(b) election then such election shall cause the immediate forfeiture of all of the Shares, without proration (notwithstanding anything in Section 1 to the contrary).

  
 10. Representations. Employee has reviewed with his own
tax advisors the federal, state, local and foreign tax consequences of the grant to him of the Shares and the transactions contemplated by this Agreement. Employee is relying solely on such advisors and not on any statements or representations of
the Company or any of its agents. Employee understands that he (and not the Company) shall be responsible for his own tax liability that may arise as a result of the grant of the Shares or the transactions contemplated by this Agreement. 

 
 11. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with California law. 
  
 12.
Resolution of Disputes. It is understood and agreed between the Employee and the Company that, any and all claims, grievances, demands, controversies, causes of actions or disputes of any nature whatsoever (including but not limited to
interpretation of this Agreement or any provision contained herein) (hereinafter “Disputes”), arising out of, in connection with, or in relation to the arbitrability of any Disputes under this Agreement shall be resolved in accordance with
a two-step dispute resolution process administered by the San Diego, California office of Judicial Administration & Mediation Services, Inc. (“JAMS”) involving, first, mediation before a retired judge from the JAMS panel, followed, if
necessary by final and binding arbitration before the same, or if requested by either the Employee or the Company, another JAMS panelist. Such dispute resolution process shall be confidential and shall be conducted in accordance with California
Evidence Code Section 1119. In the event the Dispute is resolved through mediation, the parties shall bear their respective costs incurred in connection with the mediation procedures, except that the parties shall equally share the fees and expenses
of the mediator and the costs of the facility for the hearing. In the event the Dispute is resolved through arbitration, the costs incurred in connection with the arbitration procedures, including the costs incurred by the prevailing party
(including reasonable attorneys’ fees) will be borne by the non-prevailing party. The arbitrator will determine which party is the non-prevailing party for purposes of this Section 12. 
  

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 Employee represents that he has read this Agreement and is familiar with its terms and provisions.

  
 IN WITNESS WHEREOF, this Agreement is deemed made as of the
date first set forth above. 
  

	 “COMPANY”

	
	 PAN PACIFIC RETAIL PROPERTIES, INC.

		
	 By:
	 	  

		
	 Title:
	 	  

	
	 “EMPLOYEE”

	
	  

	 Jeffrey S. Stauffer

	
	 Address:

	 1631-B South Melrose Drive

	 Vista, California 92083

  

 6 

 SCHEDULE A 
  

		
	1.	  	Kimco Realty Corporation
		
	2.	  	Developers Diversified Realty
		
	3.	  	Regency Realty Corporation
		
	4.	  	Equity One, Inc.
		
	5.	  	Weingarten Realty Investors
		
	6.	  	Ramco-Gershenson Properties Trust
		
	7.	  	Realty Income Corporation
		
	8.	  	Federal Realty Investment Trust
		
	9.	  	New Plan Excel Realty Trust
		
	10.	  	Heritage Property Investment Trust, Inc.
		
	11.	  	Kramont Realty Trust

 EXHIBIT 1 
  

ASSIGNMENT SEPARATE FROM CERTIFICATE 
  
 FOR VALUE RECEIVED I, Jeffrey S. Stauffer, hereby sell, assign and transfer unto
                                        
                 (                    ) Shares of the
Common Stock of Pan Pacific Retail Properties, Inc. standing in my name on the books of said corporation represented by Certificate No.
                     herewith and do hereby irrevocably constitute and appoint
                     to transfer the said stock on the books of the within named corporation with full power of substitution in the premises.

  
 This Stock Assignment may be used only in accordance with the
Restricted Stock Agreement between Pan Pacific Retail Properties, Inc. and the undersigned dated                  , 2003. 
  

	 Dated:             
    , 2003
	 	 Signature:
	 	  

	 	 	 	 	 Jeffrey S. Stauffer

  
 INSTRUCTIONS: Please do not fill in
any blanks other than the signature line. The purpose of this assignment is to enable the Company to transfer the Shares upon forfeiture as set forth in the Agreement, without requiring additional signatures on the part of the Employee. 

 EXHIBIT 2 
  

JOINT ESCROW INSTRUCTIONS 
  
 July 30, 2003 
  
 Controller 
 Pan Pacific Retail Properties, Inc. 
 1631-B South Melrose Drive 
 Vista, California 92083 
  
 Dear Controller: 
  
 As Escrow Agent for both Pan Pacific Retail Properties, Inc. (the “Company”), and the undersigned employee of the Company (the
“Employee”), you are hereby authorized and directed to hold the documents delivered to you pursuant to the terms of that certain Restricted Stock Agreement (“Agreement”) between the Company and the undersigned, in accordance with
the following instructions: 
  
 1. In the event the Company and
the Employee jointly advise you that a forfeiture has occurred as set forth in the Agreement (a “Forfeiture”), the Company shall give to Employee and you a written notice specifying the number of Shares to be transferred to the Company. In
the event the Company and Employee are in disagreement as to whether a Forfeiture has occurred, you shall retain in escrow the Shares subject to such disagreement, pending the results of the mediation or arbitration proceedings provided for in
Section 12 of the Agreement. Upon resolution of such disagreement pursuant to Section 12 of the Agreement, the Company shall provide you with a copy of any written decision or order by the mediator or arbitrator. Employee and the Company hereby
irrevocably authorize and direct you to effect the transfer contemplated by such notice, written decision or order. 
  
 2. Upon receipt of such notice, written decision or order you are directed (a) to date the stock assignments necessary for the transfer in question, (b)
to fill in the number of Shares being transferred, and (c) to deliver the same, together with the certificate evidencing the Shares of stock to be transferred to the Company. 
  
 3. Employee irrevocably authorizes the Company to deposit with you any certificates evidencing Shares of stock to be held by
you hereunder and any additions and substitutions to said Shares as defined in the Agreement. Employee does hereby irrevocably constitute and appoint you as Employee’s attorney-in-fact and agent for the term of this escrow to execute with
respect to such securities all documents necessary or appropriate to make such securities negotiable and to complete any transfer herein contemplated, including but not limited to the filing with any applicable state blue sky authority of any
required applications for consent to, or notice of transfer of, the securities. Subject to the provisions of this paragraph 3, Employee shall exercise all rights and privileges of a stockholder of the Company while the stock is held by you.

 4. Upon written request of the Employee, on any vesting date as of which the Company has attained the
performance goals set forth in the Agreement, you will deliver to Employee a certificate or certificates representing so many Shares of stock as are not then subject to forfeiture. Within 120 days after cessation of Employee’s continuous
employment by or services to the Company, or any parent or subsidiary of the Company, you will deliver to Employee a certificate or certificates representing the aggregate number of Shares held or issued pursuant to the Agreement and not forfeited
to the Company. 
  
 5. If at the time of termination of this
escrow you should have in your possession any documents, securities, or other property belonging to Employee, you shall deliver all of the same to Employee and shall be discharged of all further obligations hereunder. 
  
 6. Your duties hereunder may be altered, amended, modified or revoked only by
a writing signed by all of the parties hereto. 
  
 7. You shall be
obligated only for the performance of such duties as are specifically set forth herein and may rely and shall be protected in relying or refraining from acting on any instrument reasonably believed by you to be genuine and to have been signed or
presented by the proper party or parties. You shall not be personally liable for any act you may do or omit to do hereunder as Escrow Agent or as attorney-in-fact for Employee while acting in good faith, and any act done or omitted by you pursuant
to the advice of your own attorneys shall be conclusive evidence of such good faith. 
  
 8. You are hereby expressly authorized to disregard any and all warnings given by any of the parties hereto or by any other person or corporation, accepting only orders or process of courts of law or of any mediator
or arbitrator provided for in Section 12 of the Agreement, and are hereby expressly authorized to comply with and obey orders, judgments or decrees of any court or such mediator or arbitrator. In case you obey or comply with any such order, judgment
or decree, you shall not be liable to any of the parties hereto or to any other person, firm or corporation by reason of such compliance, notwithstanding any such order, judgment or decree being subsequently reversed, modified, annulled, set aside,
vacated or found to have been entered without jurisdiction. 
  
 9.
You shall not be liable in any respect on account of the identity, authorities or rights of the parties executing or delivering or purporting to execute or deliver the Agreement or any documents or papers deposited or called for hereunder.

  
 10. You shall not be liable for the lapse or curtailment of
any rights relating to these Joint Escrow Instructions, the Shares of stock held by you hereunder or any documents deposited with you as a result of any applicable statute of limitations or similar provision of state or federal law. 
  
 11. You shall be entitled to employ such legal counsel and other experts as
you may deem necessary properly to advise you in connection with your obligations hereunder, may rely upon the advice of such counsel, and may pay such counsel reasonable compensation therefor. 
  

 2 

 12. Your responsibilities as Escrow Agent hereunder shall terminate upon the earlier of (i) an event of
forfeiture or (ii) March 10, 2008, or such later date as extended by mediation or arbitration as provided for in Section 12 of the Agreement, or the date upon which you shall cease to be an officer or agent of the Company or upon which you shall
resign by written notice to each party. In the event of the latter, the Company shall appoint a successor Escrow Agent. 
  
 13. If you reasonably require other or further instruments in connection with these Joint Escrow Instructions or obligations in respect hereto, the
necessary parties hereto shall join in furnishing such instruments. 
  
 14. It is understood and agreed that should any dispute arise with respect to the delivery and/or ownership or right of possession of the securities held by you hereunder, you are authorized and directed to retain in your possession without
liability to anyone all or any part of said securities until such disputes shall have been settled either by mutual written agreement of the parties concerned or by a final order, decree or judgment of a mediator or arbitrator as provided for in
Section 12 of the Agreement, or a court of competent jurisdiction after the time for appeal has expired and no appeal has been perfected, but you shall be under no duty whatsoever to institute or defend any such proceedings. 
  
 15. Any notice required or permitted hereunder shall be given in writing and
shall be deemed effectively given upon personal delivery or upon deposit in the United States Post Office, by registered or certified mail with postage and fees prepaid, addressed to each of the other parties thereunto entitled at the following
addresses or at such other addresses as a party may designate by ten days’ advance written notice to each of the other parties hereto. 
  

	COMPANY:	  	Pan Pacific Retail Properties, Inc.
	 	  	1631-B South Melrose
	 	  	Vista, California 92083
	 	  	Attn: President
		
	EMPLOYEE:	  	Jeffrey S. Stauffer
	 	  	1641-B South Melrose
	 	  	Vista, California 92083
		
	ESCROW AGENT:	  	Controller
	 	  	Pan Pacific Retail Properties, Inc.
	 	  	1631-B South Melrose
	 	  	Vista, California 92083

  
 16. By signing these
Joint Escrow Instructions, you become a party hereto only for the purpose of said Joint Escrow Instructions; you do not become a party to the Agreement. 
  
 17. This instrument shall be binding upon and inure to the benefit of the parties hereto, and their respective successors and permitted assigns.

  

 3 

 18. These Joint Escrow Instructions shall be governed by, and construed and enforced in accordance with,
the laws of the State of California. 
  

	 PAN PACIFIC RETAIL PROPERTIES, INC.

		
	 By:
	 	  

		
	 Title:
	 	  

	
	 EMPLOYEE:

	
	

	 Jeffrey S. Stauffer

	
	 ESCROW AGENT:

	
	

	 Controller

  

 4 

 EXHIBIT 3 
  

CONSENT OF SPOUSE 
  
 I,                     , spouse of Jeffrey S.
Stauffer, have read and approve the foregoing Restricted Stock Agreement. In consideration of granting of the Shares to my spouse, set forth in the Restricted Stock Agreement, I hereby appoint my spouse as my attorney-in-fact in respect to the
exercise of any rights under the Restricted Stock Agreement and agree to be bound by the provisions of the Restricted Stock Agreement insofar as I may have any rights in said Restricted Stock Agreement or any Shares issued pursuant thereto under the
community property laws or similar laws relating to marital property in effect in the state of our residence as of the date of the signing of the foregoing Restricted Stock Agreement. 
  

	 Dated: July 30, 2003FORM OF GLOBAL SECURITY REPRESENTING 6.25% CONVERTIBLE SENIOR NOTES DUE 2008

 EXHIBIT 4.2 
  

[FORM OF FACE OF GLOBAL SECURITY] 
  
 UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN. 
  
 TRANSFERS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS TO NOMINEES OF THE DEPOSITORY TRUST COMPANY, OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH
THE RESTRICTIONS SET FORTH IN ARTICLE TWO OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF. 
  
 THE SECURITY EVIDENCED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD EXCEPT AS
SET FORTH IN THE FOLLOWING SENTENCE, BY ACQUISITION HEREOF, THE HOLDER: 
  

	 	(1)	 	REPRESENTS THAT IT IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT; 

  

	 	(2)	 	AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON
CONVERSION OF SUCH SECURITY EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) TO A NON-U.S. PERSON OUTSIDE THE UNITED STATES IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT, IF AVAILABLE, (E) TO AN INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(a)(1),
(2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, IF AVAILABLE, OR (F) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT AND
WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER; AND 

  

	 	(3)	 	AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(F) ABOVE) A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. 

  
 The foregoing legend may
be removed from this Security on satisfaction of the conditions specified in the Indenture. 

 INDEVUS PHARMACEUTICALS, INC. 
  
 6.25% Convertible Senior Notes due 2008 
  

	 No.:                          
	 	 CUSIP:  454072 AA 7

	 Issue Date: July 16, 2003
	 	 ISIN:  US454072AA75
 Principal Amount:  $                                
    

  
 INDEVUS
PHARMACEUTICALS, INC., a Delaware corporation, promises to pay to Cede & Co. or registered assigns, the principal amount of
[                     dollars ($            )] on July 15, 2008.

  
 Interest Payment Dates:  January 15 and July 15,
commencing January 15, 2004. 
  
 Record Dates:  January
1 and July 1. 
  
 Reference is hereby made to the further
provisions of this Security set forth on the reverse side of this Security, which further provisions shall for all purposes have the same effect as if set forth at this place. 
  
 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal. 
  

	 Dated:             ,
200    
	 	 INDEVUS PHARMACEUTICALS, INC.

			
	 	 	 By:
	 	  

	 	 	 Title:
	 	

  
 TRUSTEE’S CERTIFICATE OF
AUTHENTICATION 
  
 THE BANK OF NEW YORK, 
 as Trustee, certifies that this is one 
 of the Securities referred to in the

 within-mentioned Indenture. 
  

	 By
	 	  

	Authorized Signatory
	
	 Dated:             , 200    

 [FORM OF REVERSE OF GLOBAL SECURITY] 
  
 6.25% Convertible Senior Notes due 2008 
  
 This Security is one of a duly authorized issue of the 6.25% Convertible Senior Notes due 2008 (the “Securities”)
of Indevus Pharmaceuticals, Inc., a Delaware corporation (including any successor corporation under the Indenture hereinafter referred to, the “Company”), issued under an Indenture, dated as of July 16, 2003 (the “Indenture”),
between the Company and The Bank of New York, as trustee (the “Trustee”). The terms of the Security include those stated in the Indenture, those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended
(“TIA”), and those set forth in this Security. This Security is subject to all such terms, and Holders are referred to the Indenture and the TIA for a statement of all such terms. To the extent permitted by applicable law, in the event of
any inconsistency between the terms of this Security and the terms of the Indenture, the terms of the Indenture shall control. Capitalized terms used but not defined herein have the meanings assigned to them in the Indenture referred to below unless
otherwise indicated. 
  
 1.    Interest 
  
 The
Company promises to pay Interest on the principal amount of the Securities at the interest rate of 6.25% (the “Interest Rate”) from the date of issuance until repayment in full at July 15, 2008, or until an earlier conversion, redemption
or repurchase. The Company will pay Interest on this Security semi-annually in arrears on January 15 and July 15 of each year (each, an “interest payment date”), commencing January 15, 2004. 
  
 The Securities shall bear interest from July 16, 2003 until the principal
amount thereof is paid or made available for payment, or until such date on which the Securities are converted, redeemed or purchased as provided herein at a rate of 6.25% per annum. 
  
 Interest on the Securities shall be computed (i) for any full semi-annual period for which a particular Interest Rate is
applicable, on the basis of a 360-day year of twelve 30-day months and (ii) for any period for which a particular Interest Rate is applicable for less than a full semiannual period for which Interest is calculated, on the basis of a 30-day month
and, for such periods of less than a month, the actual number of days elapsed over a 30-day month. 
  
 If this Security is redeemed or repurchased by the Company on a date that is after the record date and prior to the corresponding interest payment date,
interest and Additional Amounts, if any, accrued and unpaid hereon to but not including the applicable Redemption Date or Change of Control Purchase Date, as the case may be, will be paid to the same Holder to whom the Company pays the principal of
this Security. 
  
 Interest on Securities converted after a record
date but prior to the corresponding interest payment date will be paid to the Holder of the Securities on the record date but, upon conversion, the Holder must pay the Company the interest and Additional Amounts, if any, which have accrued and will
be paid on such interest payment date; provided, that no such payment need be made with respect to Securities which will be redeemed by the Company after a record date and prior to the third Business Day after the corresponding interest
payment date. 
  
 If the principal amount hereof or any portion of
such principal amount or any interest, including Additional Amounts, if any, on any Security is not paid when due (whether upon acceleration pursuant to Section 6.2 of the Indenture, upon the date set for payment of the Redemption Price pursuant to
Section 5 hereof or the Change of Control Purchase Price pursuant to Section 6 hereof or upon the Stated Maturity of this Security), then in each such case the overdue amount shall, to the extent permitted by law, bear interest at the Interest Rate,
compounded semi-annually, which interest shall accrue from the date on which such overdue amount was originally due to the date of payment of such amount, including interest thereon, has been made or duly provided for. All such interest shall be
payable on demand. 
  
 2.    Method of Payment. 
  
 Except as provided below, interest will be paid (i) on the Global Securities to The Depository Trust Company (“DTC”) or its nominee in immediately available funds, (ii) on any definitive Securities having an 

 
aggregate principal amount of $5,000,000 or less, by check mailed to the Holders of such Securities; and (iii) on any definitive Securities having an
aggregate principal amount of more than $5,000,000, by wire transfer in immediately available funds at the election of the Holders of such Securities. 
  
 At Stated Maturity the Company will pay interest on definitive Securities at the Company’s office or agency in New York City, which initially will be
the Corporate Trust Office of the Trustee in New York City. 
  
 Principal on Global Securities will be paid to DTC or its nominee in immediately available funds. Principal on definitive Securities will be payable, upon Stated Maturity or when due, at the office or agency of the Company in New York City,
maintained for such purpose, initially the Corporate Trust Office of the Trustee in New York City. 
  
 Subject to the terms and conditions of the Indenture, the Company will make payments in cash in respect of Redemption Prices, Change of Control Purchase
Prices and at Stated Maturity to Holders who surrender Securities to a Paying Agent to collect such payments in respect of the Securities. The Company will pay cash amounts in money of the United States that at the time of payment is legal tender
for payment of public and private debts. However, the Company may make such cash payments by check payable in such money. 
  
 3.    Paying Agent, Conversion Agent and Registrar. 
  
 Initially, The Bank of New York (the “Trustee”) will act as Paying
Agent, Conversion Agent and Registrar. The Company may appoint and change any Paying Agent, Conversion Agent or Registrar without notice, other than notice to the Trustee; provided that the Company will maintain at least one Paying Agent in the
State of New York, City of New York, Borough of Manhattan, which shall initially be an office or agency of the Trustee. The Company or any of its Subsidiaries or any of their Affiliates may act as Paying Agent, Conversion Agent or Registrar.

  
 4.    Indenture.

  
 The Securities are senior unsecured obligations of the
Company limited to $60,000,000 aggregate principal amount (up to $72,000,000 aggregate principal amount if the Initial Purchasers exercise their option to purchase up to $12,000,000 aggregate principal amount of additional Securities). The Indenture
does not limit other indebtedness of the Company, secured or unsecured. 
  
 5.    Redemption at the Option of the Company. 
  
 No sinking fund is provided for the Securities. The Securities are not redeemable by the Company prior to July 20, 2006. The Securities are redeemable for
cash at the option of the Company, in whole or in part, at any time or from time to time, on or after July 20, 2006 upon not less than 30 nor more than 60 days’ notice (the “Redemption Notice”) by mail for a redemption price equal to
the principal amount of those Securities plus accrued and unpaid interest, including Additional Amounts, if any, up to the Redemption Date (the “Redemption Price”); provided, that the Current Market Value for the Common Stock equals or
exceeds 150% of the Conversion Price in then in effect for at least 20 Trading Days in any consecutive 30 Trading Day period ending on the Trading Day prior to the date of the mailing of the Redemption Notice by the Company. The term “Current
Market Value”, for any Trading Day, shall mean the Sale Price of the Common Stock, as reported on the Nasdaq Stock Market or the principal national securities exchange or inter-dealer quotation system on which the Common Stock is then listed,
on such Trading Day. 
  
 6.    Purchase By the Company at the Option of the Holder. 
  
 At the option of the Holder and subject to the terms and conditions of the Indenture, the Company shall become obligated to offer to purchase the
Securities held by such Holder within 30 days after the occurrence of a Change of Control of the Company for a Change of Control Purchase Price equal to the principal amount plus accrued and unpaid interest, including Additional Amounts, if any, of
such Security on the Change of Control Purchase Date. The Change of Control Purchase Date shall be within 30 days of the Company’s delivery of the notice described in the preceding sentence. The Change of Control Purchase Price shall be paid in
cash. 

 Holders have the right to withdraw any Change of Control Purchase Notice, as the case may be, by
delivering to the Paying Agent a written notice of withdrawal in accordance with the provisions of the Indenture. 
  
 If cash sufficient to pay the Change of Control Purchase Price of all Securities or portions thereof to be purchased as of the Change of Control Purchase
Date, is deposited with the Paying Agent, on the Business Day following the Change of Control Purchase Date, interest will cease to accrue on such Securities (or portions thereof) immediately after such Change of Control Purchase Date, and the
Holder thereof shall have no other rights as such other than the right to receive the Change of Control Purchase Price upon surrender of such Security. 
  
 7.    Notice of Redemption. 
  
 Notice of redemption pursuant to Section 5 of this Security will be mailed at least 30 days but not more than 60 days before
the Redemption Date to each Holder of Securities to be redeemed at the Holder’s registered address. If money sufficient to pay the Redemption Price of all Securities (or portions thereof) to be redeemed on the Redemption Date is deposited with
the Paying Agent prior to or on the Redemption Date, immediately after such Redemption Date interest ceases to accrue on such Securities or portions thereof. Securities in denominations larger than $1,000 of principal amount may be redeemed in part
but only in integral multiples of $1,000 of principal amount. 
  
 8.    Conversion. 
  
 Subject to and in compliance with the provisions of the Indenture, a Holder is entitled, at such Holder’s option, to convert the Holder’s Security (or any portion of the principal amount thereof that is
$1,000 or an integral multiple $1,000), into fully paid and nonassessable shares of Common Stock at the Conversion Price in effect at the time of conversion. 
  
 A Security in respect of which a Holder has delivered a Change of Control Purchase Notice, exercising the option of such Holder to require the Company to
purchase such Security, may be converted only if such Change of Control Purchase Notice is withdrawn in accordance with the terms of the Indenture. 
  
 The initial Conversion Price is $6.656, subject to adjustment in certain events described in the Indenture. A Holder that surrenders Securities for
conversion will receive cash or a check in lieu of any fractional share of Common Stock. 
  
 To surrender a Security for conversion, a Holder must (1) complete and manually sign the conversion notice below (or complete and manually sign a facsimile of such notice) and deliver such notice to the Conversion
Agent, (2) surrender the Security to the Conversion Agent, (3) furnish appropriate endorsements and transfer documents and (4) pay any transfer or similar tax, if required by the Indenture. 
  
 No fractional shares of Common Stock shall be issued upon conversion of any
Security. Instead of any fractional share of Common Stock that would otherwise be issued upon conversion of such Security, the Company shall pay a cash adjustment as provided in the Indenture. 
  
 If the Company (i) is a party to a consolidation, merger or binding share
exchange, (ii) reclassifies the Common Stock or (iii) conveys, transfers or leases its properties and assets substantially as an entirety to any Person, the right to convert a Security into shares of Common Stock may be changed into a right to
convert it into securities, cash or other assets of the Company or such other Person, in each case in accordance with the Indenture. 
  
 9.    Denominations; Transfer; Exchange. 
  
 The Securities are in fully registered form, without coupons, in denominations of $1,000 of principal amount and integral
multiples of $1,000. A Holder may transfer or exchange Securities in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and 

 
transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not transfer or exchange any Securities
selected for redemption (except, in the case of a Security to be redeemed in part, the portion of the Security not to be redeemed) or any Securities in respect of which a Purchase Notice or Change of Control Purchase Notice has been given and not
withdrawn (except, in the case of a Security to be purchased in part, the portion of the Security not to be purchased) or any Securities for a period of 15 days before the mailing of a notice of redemption of Securities to be redeemed. 

 
 10.    Persons Deemed Owners.

  
 The registered Holder of this Security may be treated as the
owner of this Security for all purposes. 
  
 11.    Unclaimed Money or Securities. 
  
 The Trustee and the Paying Agent shall return to the Company upon written request any money held by them for the payment of any amount with respect to the Securities that remains unclaimed for two years, subject to
applicable unclaimed property law. After return to the Company, Holders entitled to the money or securities must look to the Company for payment as general creditors unless an applicable abandoned property law designates another Person. 

 
 12.    Amendment; Waiver.

  
 Subject to certain exceptions set forth in the Indenture, (i)
the Indenture or the Securities may be amended with the written consent of the Holders of at least a majority in aggregate principal amount of the outstanding Securities and (ii) certain Defaults may be waived with the written consent of the Holders
of a majority in aggregate principal amount of the outstanding Securities. The Indenture and the Securities may also be amended by the Company and the Trustee, without the consent of any Holder, in certain circumstances set forth in the Indenture;
provided, that certain provisions of the Indenture and the Securities may not be amended without the consent of each affected Holder. 
  
 13.    Defaults and Remedies. 
  
 If any Event of Default with respect to Securities shall occur and be continuing, the principal of all the Securities may be
declared due and payable in the manner and with the effect provided in the Indenture. 
  
 14.    Trustee Dealings with the Company. 
  
 Subject to certain limitations imposed by the TIA, the Trustee under the Indenture, in its individual or any other capacity,
may become the owner or pledgee of Securities and may otherwise deal with and collect obligations owed to it by the Company or its Affiliates and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not
Trustee. 
  
 15.    No
Recourse Against Others. 
  
 A director, officer, employee or
shareholder, as such, of the Company shall not have any liability for any obligations of the Company under the Securities or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a
Security, each Securityholder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities. 
  
 16.    Authentication. 
  
 This Security shall not be valid until an authorized signatory of the Trustee manually signs the Trustee’s Certificate
of Authentication on the other side of this Security. 

 17.    Abbreviations. 
  
 Customary abbreviations may be used in the name of a Securityholder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with right of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act). 
  
 18.    GOVERNING LAW. 

 
 THIS SECURITY AND THE INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. 
  
 The
Company will furnish to any Securityholder upon written request and without charge a copy of the Indenture which has in it the text of this Security in larger type. Requests may be made to: 
  
 INDEVUS PHARMACEUTICALS, INC. 
 One Ledgemont Center 
 99 Hayden Avenue

 Lexington, MA 02421-7966 
 Attn:  Investor Relations 
 Facsimile No.:  (781) 861-8444 
  
 19.    Registration Rights.

  
 The Holders of the Securities are entitled to the benefits of
a Resale Registration Rights Agreement, dated as of July 16, 2003, between the Company, Lehman Brothers Inc., and Wachovia Capital Markets, LLC, including the receipt of Additional Amounts upon a registration default (as defined in such agreement).

			
	ASSIGNMENT FORM	 	 	 	CONVERSION NOTICE
	

	To assign this Security, fill in the form below:	 	 	 	To convert this Security into Common Stock of the Company, check the box   ̈
	

	 I or we assign and transfer this Security to
                                       
                                        
            
                                       
                                        
            
 (Insert assignee’s soc. sec. or tax ID no.)
                                       
                                        
            
                                       
                                        
            
                                       
                                        
            
 (Print or type assignee’s name, address and zip code)
  
 and irrevocably appoint
  
                                       
                                    agent to
 transfer this Security on the books of the Company. The agent may substitute another to act for him.
	 	 	 	 To convert only part of this Security, state the principal amount to be converted (which must be $1,000 or an integral multiple of
$1,000):
  
 $                                      
                                        
         
  
 If you want the stock
certificate made out in another person’s name fill in the form below:
                                       
                                        
            
                                       
                                        
            
 (Insert the other person’s soc. sec. tax ID no.)
  
                                       
                                        
            
                                       
                                        
            
                                       
                                        
            
                                       
                                        
            
                                       
                                        
            
 (Print or type other person’s name, address and zip
code)

  
  
 Date:                                     
       Your Signature
                                        
                                        
     
  
  

 (Sign exactly as your name appears on the other side of this Security) 
  
  
 Signature Guaranteed 
  

 Participant in a Recognized
Signature Guarantee Medallion Program 

				
	 By:
	 	  

	 	 	 	 
	 	 	 Authorized Signatory
	 	 	 	 

 SCHEDULE OF INCREASES AND DECREASES OF GLOBAL SECURITY 
  
 Initial Principal Amount of Global Security:
             ($            ). 
  

					
	Date	 	Amount of
Increase in
Principal
Amount of
Global Security	 	Amount of
Decrease in
Principal
Amount of
Global Security	 	Principal
Amount of
Global Security
After Increase or
Decrease	 	Notation by
Registrar or
Security
Custodian

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