Document:

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                                                                     EXHIBIT 4.1

                        PRINCETON NATIONAL BANCORP, INC.
                              AMENDED AND RESTATED
                          EMPLOYEE STOCK PURCHASE PLAN

     WHEREAS, Princeton National Bancorp, Inc., a Delaware corporation (the
"Company"), desires to establish the Princeton National Bancorp, Inc. Employee
Stock Purchase Plan (the "Plan") to provide a convenient and economical way for
certain employees of the Company or its subsidiaries to commence or increase
their ownership of the Company's common stock;

     NOW, THEREFORE, the Company hereby establishes the Plan, effective January
1, 1995, the terms of which shall be as follows:

     1.   DEFINITIONS. Wherever used herein, the following words and phrases
          shall have the meanings stated below unless a different meaning is
          plainly required by the content:

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

          (b)  "COMMON STOCK" means shares of the common stock of the Company,
               $5.00 par value per share.

          (c)  "ELIGIBLE DIRECTOR" means each person who is not employed by the
               Company or a Subsidiary, who from time to time serves on the
               Board or on the board of directors of a Subsidiary, and who has
               been designated by the Board as eligible to purchase Common Stock
               under the Plan.

          (d)  "ELIGIBLE EMPLOYEE" means each person who is employed by the
               Company or a Subsidiary and who has been designated by the Board
               as eligible to purchase Common Stock under the Plan.

          (e)  "INVESTMENT DATE" means the last business day of each quarter
               (i.e., March 31, June 30, September 30 and December 31).

          (f)  "PARTICIPANT" means an Eligible Director or an Eligible Employee
               who has elected to participate in the Plan by completing an
               Authorization Card and making a lump-sum contribution or
               authorizing payroll deductions pursuant to Sections 5 and 6 of
               the Plan.

          (g)  "SUBSIDIARY" or "SUBSIDIARIES" means a corporation or
               corporations that, with the Company, is a member of a controlled
               group of corporations (as defined in Section 1563 of the Internal
               Revenue Code).

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     2. PURPOSE. The purpose of the Plan is to give Eligible Directors and
Eligible Employees of the Company and its Subsidiaries an opportunity to acquire
shares of Common Stock, and to promote the best interests of the Company and
enhance its long-term performance. Once an Eligible Director or Eligible
Employee is a Participant in the Plan, his lump-sum contributions and/or payroll
deductions will be used to purchase Common Stock under the terms of the Plan
during the period of time that such Eligible Director or Eligible Employee is a
Participant. Participants shall pay no brokerage commissions or service charges
for purchases made under the Plan. The Plan is not subject to the provisions of
the Employee Retirement Income Security Act of 1974.

     3. ADMINISTRATION. The Plan shall be administered by the Company, which, in
its discretion and by action of the Board, may delegate its powers with respect
to the administration of the Plan to any person or entity. Under the Plan, the
Company shall make purchases of Common Stock as agent for the Participants. If
an Eligible Director or an Eligible Employee elects to participate in the Plan,
the Company will keep a continuous record of his participation and send him a
semi-annual statement of his account under the Plan. The Company will also hold
and act as custodian of shares of Common Stock purchased under the Plan. This
will relieve Participants of the responsibility for the safekeeping of multiple
certificates for shares purchased and protect against loss, theft or destruction
of stock certificates. Normally, certificates for shares of Common Stock
purchased under the Plan will not be issued to Participants. The number of
shares of Common Stock credited to a Participant's account under the Plan will
be shown on his statement of account. However, certificates for any number of
whole shares of Common Stock credited to a Participant's account under the Plan
will be issued to him upon his written request to the Company, delivered to the
Company's address. In addition, at the Company's option, any time that the
number of shares in a Participant's account exceeds 50, a certificate for 50
shares may be issued to him. In either case, any remaining shares will continue
to be credited to the Participant's account. Certificates for fractional share
interests will not be issued.

     The Company reserves the right to interpret and regulate the Plan. The
Company may establish such procedures and make such other provisions for the
administration and operation of the Plan as it deems appropriate to give effect
to its purpose.

     4. ELIGIBILITY. As of November 30th of each calendar year, the Board will
designate each director and employee of the Company and its Subsidiaries who
will be an Eligible Director or Eligible Employee during the next calendar year;
provided, however, that no director shall vote with respect to his own
designation as an Eligible Director. An "Eligible Employee" must, as of such
November 30 date, be age 18 or older and have completed at least one year of
service in the employment of the Company or a Subsidiary. For this purpose, one
year of service shall mean 1,000 hours of employment.

     5. ELECTION TO PARTICIPATE. An Eligible Director or Eligible Employee may
become a Participant in the Plan during any calendar year in which he is an
Eligible Director or Eligible Employee by either of the two following methods:
(1) an Eligible Employee will become a

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Participant during the payroll period following receipt by the Company of a
completed Authorization Card approving payroll deductions or (2) an Eligible
Director will become a Participant following receipt by the Company of a
completed Authorization Card accompanying a lump-sum contribution; provided,
however, that lump-sum contributions received by the Company at least five
business days before an Investment Date will be invested on such Investment Date
in accordance with Section 6 below, and lump-sum contributions made within five
days before an Investment Date will be invested on the next following Investment
Date in accordance with Section 6. An Eligible Director or Eligible Employee may
join the Plan at any time during any calendar year in which he is an Eligible
Director or Eligible Employee.

     6. PAYROLL DEDUCTIONS AND LUMP-SUM CONTRIBUTIONS. In order to purchase
Common Stock under the Plan by payroll deductions, an Eligible Employee must
complete an Authorization Card indicating the amount the Company is to withhold
each pay period from the Eligible Employee's paychecks during the applicable
calendar year and directing the Company to use such amounts to purchase shares
of Common Stock. Deductions may be authorized in even multiples of $5 from a
minimum of $20 per month to a maximum of $20,000 in any calendar year.

     After an Authorization Card has been received by the Company and the
authority for the payroll deductions has been noted on the Company's payroll
records, the Company will withhold from a Participant's paychecks the amount
authorized by the Participant. The withholding will be made each pay period from
the paycheck for such period. The amounts withheld from all Participants'
paychecks during each month, and any lump-sum contributions made to the Plan
within the time specified in Section 5 above, will be pooled and used to buy
shares of Common Stock for the accounts of all Participants under the Plan on
the Investment Date immediately following the date on which such payments are
made, or deemed made, to the Plan.

     The amount of a Participant's payroll deductions can be revised, changed or
terminated by the Participant at any time by written notice to the Company and
completion of a new Authorization Card. Commencement, revision or termination of
payroll deductions will become effective as soon as practicable after a
Participant's new Authorization Card is received by the Company.

     An Eligible Director may purchase Common Stock under the Plan by making a
lump-sum payment to the Plan and completing an Authorization Card, not more
frequently than once each quarter during a calendar year that he is an Eligible
Director. In no event may the aggregate amount of lump-sum contributions made to
the Plan by an Eligible Director exceed $20,000 in any calendar year.

     Authorization Cards are effective until the earliest to occur of (1) the
date the Eligible Employee or Eligible Director elects to cease participation in
the Plan, (2) the date an individual ceases to be an Eligible Employee or an
Eligible Director, or (3) the date of the termination of the Plan. No interest
will be paid on payroll deductions or lump-sum contributions made to the Plan
pending investment on an Investment Date.

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     7. PURCHASE PRICE. The price of the shares bought with a Participant's
payroll deductions and/or lump-sum contributions will be the bid price for the
Common Stock, as reported in the Midwest Edition of the WALL STREET JOURNAL or
as reported by ABN AMRO Chicago Corporation in the event that the WALL STREET
JOURNAL does not list such price, in each case for the Investment Date on which
the shares are purchased (or, the next preceding day if no trading occurs in the
Common Stock on the Investment Date).

     8. NUMBER OF SHARES PURCHASED. On each Investment Date, accumulated payroll
deductions and lump-sum contributions from all Participants will be pooled and
used to purchase shares of Common Stock for the accounts of the Participants.
The maximum number of whole shares shall be purchased with such deductions and
contributions. The Company shall then contribute to the Plan an amount
sufficient to supplement the total of (1) any payroll deductions and lump-sum
contributions remaining after purchase of such maximum number of whole shares in
accordance with the preceding sentence, less (2) the value of any fractional
shares remaining in the suspense account described below from the prior
Investment Date, so that an additional whole share of Common Stock can be
purchased on such Investment Date. Each Participant's account shall be credited
with his pro rata share (computed to four decimal places) of the shares of
Common Stock purchased on such Investment Date. The number of shares credited to
each Participant's account will depend on the amount of the Participant's
payroll deductions and lump-sum contributions, as the case may be, and price of
the shares determined as provided under the heading "Purchase Price." Any
fractional shares remaining after the purchase of Common Stock for Plan to
Participants shall be held in a suspense account for the benefit of the Company
and used to offset the number of shares of Common Stock needed to fill purchases
for Participants on the next Investment Date.

     9. FEES AND EXPENSES. Participants will incur no brokerage commissions or
service charges for purchases made under the Plan. Certain charges as described
under the heading "Withdrawal" may be incurred upon a Participant's withdrawal
from the Plan or upon termination of the Plan.

     10. WITHDRAWAL. A Participant may withdraw from the Plan at any time. To
withdraw from the Plan, a Participant must notify the Company in writing of his
withdrawal. In the event a Participant withdraws, or in the event of the
termination of the Plan, within a reasonable time following the withdrawal
request or the termination of the Plan, certificates for whole shares credited
to the account of the withdrawing Participant, or all Participants in the case
of a termination of the Plan, will be delivered by the Company and a cash
payment will be made for the sale price (less brokerage commission and transfer
taxes, if any) of any fractional share interest and any additional payroll
deductions or lump-sum contributions credited to the account of the withdrawing
Participant, or all Participants in the case of a termination of the Plan. The
Company may establish such equitable arrangements for the sale of fractional
share interests as it shall deem appropriate. As an alternative to receiving
certificates for whole shares, a Participant may request the Company to sell all
of the shares held in his account under the Plan. The proceeds from the sale
(less any brokerage commissions and any transfer taxes) will be remitted to him
as soon as reasonably practical after his withdrawal request is received. Sale
requests may be accumulated and sales transactions, if

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necessary, will occur at least every twenty-five business days.

     If a request to withdraw is received by the Company at least five business
days prior to any Investment Date, the amount of the Participant's payroll
deductions and/or lump-sum contributions which would otherwise have been
invested on such Investment Date will be repaid to him as soon as practicable.
If a request to withdraw is received by the Company within five business days
prior to any Investment Date, the amount of the payroll deductions and lump-sum
contributions scheduled to be invested on such Investment Date will be so
invested. In either event, no subsequent payroll deductions will be made from
the paychecks of the Participant, and no lump sum contributions will be accepted
from the Participant, unless he completes a new Authorization Card providing for
such deductions or contributions.

     11. TERMINATION OF EMPLOYMENT OR SERVICE AS A DIRECTOR. A Participant's
participation in the Plan shall cease immediately upon his termination of
employment with the Company and its Subsidiaries for any reason, or his
termination of service on the Board or on the board of directors of a Subsidiary
for any reason. Within 60 days of a Participant's termination of employment or
service, certificates for whole shares credited to his account will be delivered
to him by the Company and a cash payment will be made to him for the sale price
(less brokerage commission and transfer taxes, if any) of any fractional share
interest and any additional payroll deduction or lump-sum contributions credited
to his account. In the event of the death of a Participant prior to receipt of
all payments and distributions to be made to him under the Plan, payments and
distributions shall be made to his beneficiary last designated by written
instrument delivered to the Company. If the Participant has not designated a
beneficiary or if the designated beneficiary is not living at such time, then
such payments and distributions shall be made to the Participant's spouse, or if
none, to his lawful descendants, per stirpes, or if none, to the legally
appointed representative of his estate.

     12. VOTING OF SHARES. Each Participant will have the authority to direct
the Company in the manner of voting the number of shares held in his account.
The shares of Common Stock in the suspense account created pursuant to Section 8
shall be voted by the Company in its sole discretion.

     13. CASH DIVIDENDS. Cash dividends paid on shares of Common Stock credited
to a Participant's account will be paid to the Participant as soon as
practicable following the dividend payment date. Dividend amounts payable to
Participants will be rounded to the nearest whole cent in the case of fractional
share interests.

     14. STOCK DIVIDENDS, STOCK SPLITS, OR RIGHTS OFFERING. Any shares
distributed by the Company as a stock dividend on shares of Common Stock
credited to a Participant's account under the Plan, or upon any split of such
shares, will be credited to his account. In a rights offering, the Company will
sell the rights to which a Participant is entitled by virtue of the shares of
Common Stock allocated to his account under the Plan and the proceeds will be
credited to his account and applied to the purchase of shares on the next
Investment Date.

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     15. AUTHORIZED SHARES. The Company has reserved 80,000 shares of Common
Stock for issuance under the Plan. Unless terminated earlier by the Company, the
Plan will terminate when all such shares have been purchased by Participants. In
the event of any change in the outstanding Common Stock of the Company as a
result of a merger, reorganization, stock split, reverse stock split, stock
dividend, recapitalization, combination or reclassification appropriate
proportionate adjustments will be made in the aggregate number of shares
reserved under the Plan.

     16. AMENDMENT AND TERMINATION. Although the Company intends to continue the
Plan as long as Common Stock reserved for issuance under it remains, the Company
reserves the right to suspend, modify or terminate the Plan at any time. Any
such suspension, modification or termination shall not affect a Participant's
right to shares of Common Stock already purchased for him (except that the
Company may take any action necessary to comply with applicable law). Upon the
termination of the Plan, the Company shall return to Participants any
accumulated payroll deductions and lump-sum contributions that have not been
used to purchase Common Stock as soon as practicable. Any Common Stock held in
the suspense account created pursuant to Section 8 shall be distributed to the
Company.

     17. STATEMENTS. Each Participant will receive a semi-annual statement of
his account, reflecting all activity in the account over such period.
Participants will also receive communications sent to other stockholders,
including the Annual Report of the Company, and its Notice of Annual Meeting and
Proxy Statement. Participants will receive information necessary for reporting
income, if any, realized by them under the Plan to the Internal Revenue Service.

     18. WITHHOLDING. All taxes subject to withholding payable with respect to
the amount of each Participant's payroll deductions under the Plan will be
deducted from the Participant's salary and will not reduce the amounts to be
paid to the Company.

                                       11exv4w1

 

Exhibit 4.1

PS BUSINESS PARKS, INC. 

RETIREMENT PLAN FOR NON-EMPLOYEE DIRECTORS

1.  PURPOSE.

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

2.  DEFINITIONS.

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

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

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

 

 

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

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

3.  EFFECTIVE DATE.

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

4.  ADMINISTRATION AND ELIGIBILITY.

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

 

 

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

5.  STOCK.

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

6.  TERMS AND CONDITIONS OF GRANTS.

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

7. EFFECT OF CHANGES IN CAPITALIZATION.

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

 

 

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

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

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

8. SECURITIES LAW REQUIREMENTS.

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

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

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

 

 

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

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

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

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

9. RIGHTS IN EVENT OF DEATH.

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

10.  AMENDMENT OF THE PLAN.

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

11. GOVERNING LAW.

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

12.  APPROVAL OF STOCKHOLDERS.

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

 

 

13.  EXECUTION.

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

	 	 	 	 	 
	 	PS BUSINESS PARKS, INC. 

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

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