MAGUIRE PROPERTIES INC
EX-10.4
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>9
<FILENAME>a92206exv10w4.txt
<DESCRIPTION>EX-10.4
<TEXT>
<PAGE>

                                                                    EXHIBIT 10.4

                 AMENDED AND RESTATED 2003 INCENTIVE AWARD PLAN
                                       OF
                            MAGUIRE PROPERTIES, INC.,
                      MAGUIRE PROPERTIES SERVICES, INC. AND
                            MAGUIRE PROPERTIES, L.P.

                  Maguire Properties, Inc., a Maryland corporation (the
"Company"), Maguire Properties Services, Inc., a Maryland corporation (the
"Services Company "), and Maguire Properties, L.P., a Maryland limited
partnership (the "Partnership"), have adopted the Amended and Restated 2003
Incentive Award Plan of Maguire Properties, Inc., Maguire Properties Services,
Inc. and Maguire Properties, L.P. (the "Plan"), effective as of June 27, 2003,
for the benefit of their eligible employees, consultants and directors and those
of their subsidiaries. This Plan amends and restates in its entirety the 2003
Incentive Award Plan of Maguire Properties, Inc., Maguire Properties Services,
Inc. and Maguire Properties, L.P.

                  The purposes of the Plan are as follows:

                  (1)      To provide an additional incentive for directors, key
employees and consultants of the Company, the Services Company and their
subsidiaries and employees and consultants of the Partnership and its
subsidiaries to further the growth, development and financial success of the
Company by personally benefiting through the ownership of Company stock and
rights which recognize such growth, development and financial success.

                  (2)      To enable the Company, the Services Company, the
Partnership and their subsidiaries, to obtain and retain the services of
directors, key employees and consultants considered essential to the long range
success of the Company by offering them an opportunity to own stock in the
Company and rights which will reflect the growth, development and financial
success of the Company.

                                   ARTICLE I.
                                  DEFINITIONS

                  Wherever the following terms are used in the Plan they shall
have the meanings specified below, unless the context clearly indicates
otherwise. The singular pronoun shall include the plural where the context so
indicates.

                  1.1.     "Administrator" shall mean the entity that conducts
the general administration of the Plan as provided herein. With reference to the
administration of the Plan with respect to Awards granted to Independent
Directors, the term "Administrator" shall refer to the Board. With reference to
the administration of the Plan with respect to any other Award, the term
"Administrator" shall refer to the Committee unless the Board has assumed the
authority for administration of the Plan generally as provided in Section 10.1.

                  1.2.     "Award" shall mean an Option, a Restricted Stock
award, a Performance Award, a Dividend Equivalents award, a Deferred Stock
award, a Stock Payment award or a

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Stock Appreciation Right which may be awarded or granted under the Plan
(collectively, "Awards").

                  1.3.     "Award Agreement" shall mean a written agreement
executed by an authorized officer of the Company and the Holder which shall
contain such terms and conditions with respect to an Award as the Administrator
shall determine, consistent with the Plan.

                  1.4.     "Award Limit" shall mean one million (1,000,000)
shares of Common Stock, as adjusted pursuant to Section 11.3; provided, however,
that solely with respect to Performance Awards granted pursuant to Section
8.2(b) and Dividend Equivalents granted pursuant to Section 8.3, Award Limit
shall mean $2,000,000.

                  1.5.     "Board" shall mean the Board of Directors of the
Company.

                  1.6.     "Change in Control" shall mean the occurrence of any
of the following events:

                           (i)      the acquisition, directly or indirectly, by
         any "person" or "group" (as those terms are defined in Sections
         3(a)(9), 13(d), and 14(d) of the Exchange Act and the rules thereunder)
         of "beneficial ownership" (as determined pursuant to Rule 13d-3 under
         the Exchange Act) of securities entitled to vote generally in the
         election of directors ("voting securities") of the Company that
         represent 35% or more of the combined voting power of the Company's
         then outstanding voting securities, other than

                                    (A)      an acquisition of securities by a
                  trustee or other fiduciary holding securities under any
                  employee benefit plan (or related trust) sponsored or
                  maintained by the Company or any person controlled by the
                  Company or by any employee benefit plan (or related trust)
                  sponsored or maintained by the Company or any person
                  controlled by the Company, or

                                    (B)      an acquisition of securities by the
                  Company or a corporation owned, directly or indirectly, by the
                  stockholders of the Company in substantially the same
                  proportions as their ownership of the stock of the Company, or

                                    (C)      an acquisition of securities
                  pursuant to a transaction described in clause (iii) below that
                  would not be a Change in Control under clause (iii), or

                                    (D)      any direct or indirect acquisition
                  of securities by Robert F. Maguire III or his family, or any
                  entity controlled thereby;

                           Notwithstanding the foregoing, the following event
         shall not constitute an "acquisition" by any person or group for
         purposes of this clause (i): an acquisition of the Company's securities
         by the Company which causes the Company's voting securities
         beneficially owned by a person or group to represent 35% or more of the
         combined voting power of the Company's then outstanding voting
         securities; provided, however, that if a person or group shall become
         the beneficial owner of 35% or more of the

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         combined voting power of the Company's then outstanding voting
         securities by reason of share acquisitions by the Company as described
         above and shall, after such share acquisitions by the Company, become
         the beneficial owner of any additional voting securities of the
         Company, then such acquisition shall constitute a Change in Control;

                           (ii)     individuals who, as of the date of the
         closing of the initial public offering of the Common Stock, constitute
         the Board (the "Incumbent Board") cease for any reason to constitute at
         least a majority of the Board; provided, however, that any individual
         becoming a director subsequent to the date hereof whose election by the
         Company's shareholders, or nomination for election by the Board, was
         approved by a vote of at least a majority of the directors then
         comprising the Incumbent Board shall be considered as though such
         individual were a member of the Incumbent Board, but excluding, for
         this purpose, any such individual whose initial assumption of office
         occurs as a result of an actual or threatened election contest with
         respect to the election or removal of directors or other actual or
         threatened solicitation of proxies or consents by or on behalf of a
         person other than the Board;

                           (iii)    the consummation by the Company (whether
         directly involving the Company or indirectly involving the Company
         through one or more intermediaries) of (x) a merger, consolidation,
         reorganization, or business combination or (y) a sale or other
         disposition of all or substantially all of the Company's assets or (z)
         the acquisition of assets or stock of another entity, in each case,
         other than a transaction

                                    (A)      which results in the Company's
                  voting securities outstanding immediately before the
                  transaction continuing to represent (either by remaining
                  outstanding or by being converted into voting securities of
                  the Company or the person that, as a result of the
                  transaction, controls, directly or indirectly, the Company or
                  owns, directly or indirectly, all or substantially all of the
                  Company's assets or otherwise succeeds to the business of the
                  Company (the Company or such person, the "Successor Entity"))
                  directly or indirectly, at least 50% of the combined voting
                  power of the Successor Entity's outstanding voting securities
                  immediately after the transaction, and

                                    (B)      after which no person or group
                  beneficially owns voting securities representing 35% or more
                  of the combined voting power of the Successor Entity;
                  provided, however, that no person or group shall be treated
                  for purposes of this clause (B) as beneficially owning 35% or
                  more of combined voting power of the Successor Entity solely
                  as a result of the voting power held in the Company prior to
                  the consummation of the transaction; or

                           (iv)     approval by the Company's shareholders of a
         liquidation or dissolution of the Company.

                  For purposes of clause (i) above, the calculation of voting
power shall be made as if the date of the acquisition were a record date for a
vote of the Company's shareholders, and for purposes of clause (iii) above, the
calculation of voting power shall be made as if the date of the consummation of
the transaction were a record date for a vote of the Company's shareholders.

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                  1.7.     "Code" shall mean the Internal Revenue Code of 1986,
as amended.

                  1.8.     "Committee" shall mean the Compensation Committee of
the Board, or another committee or subcommittee of the Board, appointed as
provided in Section 10.1.

                  1.9.     "Common Stock" shall mean the common stock of the
Company, par value $0.01 per share.

                  1.10.    "Company" shall mean Maguire Properties, Inc., a
Maryland corporation.

                  1.11.    "Company Consultant" shall mean any consultant or
adviser if: (i) the consultant or adviser renders bona fide services to the
Company or any Company Subsidiary; (ii) the services rendered by the consultant
or adviser are not in connection with the offer or sale of securities in a
capital raising transaction and do not directly or indirectly promote or
maintain a market for the Company's securities; and (iii) the consultant or
adviser is a natural person who has contracted directly with the Company or any
Company Subsidiary to render such services.

                  1.12.    "Company Employee" shall mean any officer or other
employee (as defined in accordance with Section 340l(c) of the Code) of the
Company or of any Company Subsidiary.

                  1.13.    "Company Subsidiary" shall mean (i) a corporation,
association or other business entity of which 50% or more of the total combined
voting power of all classes of capital stock is owned, directly or indirectly,
by the Company or by one or more Company Subsidiaries or by the Company and one
or more Company Subsidiaries, (ii) any partnership or limited liability company
of which 50% or more of the capital and profits interests is owned, directly or
indirectly, by the Company or by one or more Company Subsidiaries or by the
Company and one or more Company Subsidiaries, and (iii) any other entity not
described in clauses (i) or (ii) above of which 50% or more of the ownership and
the power, pursuant to a written contract or agreement, to direct the policies
and management or the financial and the other affairs thereof, are owned or
controlled by the Company or by one or more other Company Subsidiaries or by the
Company and one or more Company Subsidiaries; provided, however, that "Company
Subsidiary" shall not include the Services Company, any Services Company
Subsidiary, the Partnership, or any Partnership Subsidiary.

                  1.14.    "Consultant" shall mean any Company Consultant,
Services Company Consultant or Partnership Consultant.

                  1.15.    "Deferred Stock" shall mean Common Stock awarded
under Article VIII of the Plan.

                  1.16.    "Director" shall mean a member of the Board or a
Services Company Director.

                  1.17.    "Dividend Equivalent" shall mean a right to receive
the equivalent value (in cash or Common Stock) of dividends paid on Common
Stock, awarded under Article VIII of the Plan.

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                  1.18.    "DRO" shall mean a domestic relations order as
defined by the Code or Title I of the Employee Retirement Income Security Act of
1974, as amended, or the rules thereunder.

                  1.19.    "Employee" shall mean any Company Employee, Services
Company Employee or Partnership Employee.

                  1.20.    "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.

                  1.21.    "Fair Market Value" of a share of Common Stock as of
a given date shall be (a) the closing price of a share of Common Stock on the
principal exchange on which shares of Common Stock are then trading, if any (or
as reported on any composite index which includes such principal exchange), on
the trading day previous to such date, or if shares were not traded on the
trading day previous to such date, then on the next preceding date on which a
trade occurred, or (b) if Common Stock is not traded on an exchange but is
quoted on Nasdaq or a successor quotation system, the mean between the closing
representative bid and asked prices for the Common Stock on the trading day
previous to such date as reported by Nasdaq or such successor quotation system,
or (c) if Common Stock is not publicly traded on an exchange and not quoted on
Nasdaq or a successor quotation system, the Fair Market Value of a share of
Common Stock as established by the Administrator acting in good faith.

                  1.22.    "Holder" shall mean a person who has been granted or
awarded an Award.

                  1.23.    "Incentive Stock Option" shall mean an option which
conforms to the applicable provisions of Section 422 of the Code and which is
designated as an Incentive Stock Option by the Administrator.

                  1.24.    "Independent Director" shall mean a member of the
Board who is not an Employee.

                  1.25.    "Non-Qualified Stock Option" shall mean an Option
which is not designated as an Incentive Stock Option by the Administrator or
which is designated as an "Incentive Stock Option" but does not conform to the
applicable provisions of Section 422 of the Code.

                  1.26.    "Option" shall mean a stock option granted under
Article IV of the Plan. An Option granted under the Plan shall, as determined by
the Administrator, be either a Non-Qualified Stock Option or an Incentive Stock
Option; provided, however, that Options granted to individuals other than
Company Employees shall be Non-Qualified Stock Options.

                  1.27.    "Partnership" shall mean Maguire Properties, L.P., a
Maryland limited partnership.

                  1.28.    "Partnership Agreement" shall mean the Amended and
Restated Agreement of Limited Partnership of Maguire Properties, L.P., dated as
of_______________, 200__, as the same may be amended, modified or restated from
time to time.

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                  1.29.    "Partnership Consultant" shall mean any consultant or
adviser if: (i) the consultant or adviser renders bona fide services to the
Partnership or any Partnership Subsidiary; (ii) the services rendered by the
consultant or adviser are not in connection with the offer or sale of securities
in a capital raising transaction and do not directly or indirectly promote or
maintain a market for the Company's securities; and (iii) the consultant or
adviser is a natural person who has contracted directly with the Partnership or
any Partnership Subsidiary to render such services.

                  1.30.    "Partnership Employee" shall mean any employee (as
defined in accordance with Section 3401(c) of the Code) of the Partnership or
any entity which is then a Partnership Subsidiary.

                  1.31.    "Partnership Holder Purchased Shares" shall have the
meaning set forth in Section 6.4.

                  1.32.    "Partnership Purchase Price" shall have the meaning
set forth in Section 6.4.

                  1.33.    "Partnership Purchased Shares" shall have the meaning
set forth in Section 6.4.

                  1.34.    "Partnership Subsidiary" shall mean (i) a
corporation, association or other business entity of which 50% or more of the
total combined voting power of all classes of capital stock is owned, directly
or indirectly, by the Partnership or by one or more Partnership Subsidiaries or
by the Partnership and one or more Partnership Subsidiaries, (ii) any
partnership or limited liability company of which 50% or more of the capital and
profits interests is owned, directly or indirectly, by the Partnership or by one
or more Partnership Subsidiaries or by the Partnership and one or more
Partnership Subsidiaries, and (iii) any other entity not described in clauses
(i) or (ii) above of which 50% or more of the ownership and the power, pursuant
to a written contract or agreement, to direct the policies and management or the
financial and the other affairs thereof, are owned or controlled by the
Partnership or by one or more other Partnership Subsidiaries or by the
Partnership and one or more Partnership Subsidiaries; provided, however, that
"Partnership Subsidiary" shall not include the Services Company or any Services
Company Subsidiary.

                  1.35.    "Performance Award" shall mean a cash bonus, stock
bonus or other performance or incentive award that is paid in cash, Common Stock
or a combination of both, awarded under Article VIII of the Plan.

                  1.36.    "Performance Criteria" shall mean the following
business criteria with respect to the Company, the Services Company, the
Partnership, any Subsidiary or any division or operating unit thereof: (a) net
income, (b) pre-tax income, (c) operating income, (d) cash flow, (e) earnings
per share, (f) return on equity, (g) return on invested capital or assets, (h)
cost reductions or savings, (i) funds from operations, (j) appreciation in the
Fair Market Value of Common Stock, (k) operating profit, (1) working capital and
(m) earnings before any one or more of the following items: interest, taxes,
depreciation or amortization; provided that each of the business criteria
described in subsections (a) through (m) shall be determined in accordance with

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generally accepted accounting principles ("GAAP"). For each fiscal year of the
Company, the Committee may provide for objectively determinable adjustments, as
determined in accordance with GAAP, to any of the business criteria described in
subsections (a) through (m) for one or more of the items of gain, loss, profit
or expense: (i) determined to be extraordinary or unusual in nature or
infrequent in occurrence, (ii) related to the disposal of a segment of a
business, (iii) related to a change in accounting principal under GAAP, (iv)
related to discontinued operations that do not qualify as a segment of a
business under GAAP, and (v) attributable to the business operations of any
entity acquired by the Company, the Services Company or the Partnership during
the fiscal year.

                  1.37.    "Plan" shall mean the Amended and Restated 2003
Incentive Award Plan of Maguire Properties, Inc., Maguire Properties Services,
Inc. and Maguire Properties, L.P.

                  1.38.    "Public Trading Date" shall mean the first date upon
which Common Stock of the Company is listed (or approved for listing) upon
notice of issuance on any securities exchange or designated (or approved for
designation) upon notice of issuance as a national market security on an
interdealer quotation system.

                  1.39.    "REIT" shall mean a real estate investment trust
within the meaning of Sections 856 through 860 of the Code.

                  1.40.    "Restricted Stock" shall mean Common Stock awarded
under Article VII of the Plan.

                  1.41.    "Rule 16b-3" shall mean Rule 16b-3 promulgated under
the Exchange Act, as such Rule may be amended from time to time.

                  1.42.    "Section 162(m) Participant" shall mean any key
Employee designated by the Administrator as a key Employee whose compensation
for the fiscal year in which the key Employee is so designated or a future
fiscal year may be subject to the limit on deductible compensation imposed by
Section 162(m) of the Code.

                  1.43.    "Securities Act" shall mean the Securities Act of
1933, as amended.

                  1.44.    "Services Company" shall mean Maguire Properties
Services, Inc., a Maryland corporation.

                  1.45.    "Services Company Consultant" shall mean any
consultant or adviser if: (i) the consultant or adviser renders bona fide
services to the Services Company or any Services Company Subsidiary; (ii) the
services rendered by the consultant or adviser are not in connection with the
offer or sale of securities in a capital raising transaction and do not directly
or indirectly promote or maintain a market for the Company's securities; and
(iii) the consultant or adviser is a natural person who has contracted directly
with the Services Company or any Services Company Subsidiary to render such
services.

                  1.46.    "Services Company Director" shall mean a member of
the Board of Directors of the Services Company who is not (i) an employee,
officer or affiliate of the Company, the Services Company or a subsidiary or
division of the foregoing, or a relative of a

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principal executive officer, and who is not an individual member of an
organization acting as an advisor, consultant or legal counsel receiving
compensation on a continuing basis from the Company or the Services Company in
addition to directors' fees, or (b) an Independent Director.

                  1.47.    "Services Company Employee" shall mean any officer or
other employee (as defined in accordance with Section 3401(c) of the Code) of
the Services Company or any corporation, partnership or limited liability
company which is then a Services Company Subsidiary.

                  1.48.    "Services Company Holder Purchased Shares" shall have
the meaning set forth in Section 6.5.

                  1.49.    "Services Company Purchase Price" shall have the
meaning set forth in Section 6.5.

                  1.50.    "Services Company Purchased Shares" shall have the
meaning set forth in Section 6.5.

                  1.51.    "Services Company Subsidiary" shall mean (i) a
corporation, association or other business of which 50% or more of the total
combined voting power of all classes of capital stock is owned, directly or
indirectly, by the Services Company or by one or more Services Company
Subsidiaries or by the Services Company and one or more Services Company
Subsidiaries, (ii) any partnership or limited liability company of which 50% or
more of the capital and profits interests is owned, directly or indirectly, by
the Services Company or by one or more Services Company Subsidiaries or by the
Services Company and one or more Services Company Subsidiaries, and (iii) any
other entity not described in clauses (i) or (ii) above of which 50% or more of
the ownership and the power, pursuant to a written contract or agreement, to
direct the policies and management or the financial and the other affairs
thereof, are owned or controlled by the Services Company or by one or more
Services Company Subsidiaries or by the Services Company and one or more
Services Company Subsidiaries.

                  1.52.    "Stock Appreciation Right" shall mean a stock
appreciation right granted under Article IX of the Plan.

                  1.53.    "Stock Payment" shall mean (a) a payment in the form
of shares of Common Stock, or (b) an option or other right to purchase shares of
Common Stock, as part of a deferred compensation arrangement, made in lieu of
all or any portion of the compensation, including without limitation, salary,
bonuses and commissions, that would otherwise become payable to a key Employee
or Consultant in cash, awarded under Article VIII of the Plan.

                  1.54.    "Subsidiary" shall mean any Company Subsidiary,
Services Company Subsidiary or Partnership Subsidiary.

                  1.55.    "Substitute Award" shall mean an Option granted under
the Plan upon the assumption of, or in substitution for, outstanding equity
awards previously granted by a company or other entity in connection with a
corporate transaction, such as a merger, combination, consolidation or
acquisition of property or stock; provided, however, that in no event shall the

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term "Substitute Award" be construed to refer to an award made in connection
with the cancellation and repricing of an Option.

                  1.56.    "Termination of Consultancy" shall mean the time when
the engagement of a Holder as a Consultant to the Company, a Company Subsidiary,
the Services Company, a Services Company Subsidiary, the Partnership or a
Partnership Subsidiary is terminated for any reason, with or without cause,
including, but not by way of limitation, by resignation, discharge, death or
retirement, but excluding terminations where there is a simultaneous
commencement of employment with the Company, a Company Subsidiary, the Services
Company, a Services Company Subsidiary, the Partnership or a Partnership
Subsidiary. The Administrator, in its absolute discretion, shall determine the
effect of all matters and questions relating to Termination of Consultancy,
including, but not by way of limitation, the question of whether a Termination
of Consultancy resulted from a discharge for good cause, and all questions of
whether a particular leave of absence constitutes a Termination of Consultancy.
Notwithstanding any other provision of the Plan, the Company, a Company
Subsidiary, the Services Company, a Services Company Subsidiary, the Partnership
or a Partnership Subsidiary has an absolute and unrestricted right to terminate
a Consultant's service at any time for any reason whatsoever, with or without
cause, except to the extent expressly provided otherwise in writing.

                  1.57.    "Termination of Directorship" shall mean the time
when a Holder who is an Independent Director or a Services Company Director
ceases to be a Director for any reason, including, but not by way of limitation,
a termination by resignation, failure to be elected, death or retirement. The
Board, in its sole and absolute discretion, shall determine the effect of all
matters and questions relating to Termination of Directorship with respect to
Independent Directors and Services Company Directors.

                  1.58.    "Termination of Employment" shall mean the time when
the employee-employer relationship between a Holder and the Company, a Company
Subsidiary, the Services Company, a Services Company Subsidiary, the Partnership
or a Partnership Subsidiary is terminated for any reason, with or without cause,
including, but not by way of limitation, a termination by resignation,
discharge, death, disability or retirement; but excluding (a) terminations where
there is a simultaneous reemployment or continuing employment of a Holder by the
Company, a Company Subsidiary, the Services Company, a Services Company
Subsidiary, the Partnership or a Partnership Subsidiary, (b) at the discretion
of the Administrator, terminations which result in a temporary severance of the
employee-employer relationship, and (c) at the discretion of the Administrator,
terminations which are followed by the simultaneous establishment of a
consulting relationship by the Company, a Company Subsidiary, the Services
Company, a Services Company Subsidiary, the Partnership or a Partnership
Subsidiary with the former employee. The Administrator, in its absolute
discretion, shall determine the effect of all matters and questions relating to
Termination of Employment, including, but not by way of limitation, the question
of whether a Termination of Employment resulted from a discharge for good cause,
and all questions of whether a particular leave of absence constitutes a
Termination of Employment; provided, however, that, with respect to Incentive
Stock Options, unless otherwise determined by the Administrator in its
discretion, a leave of absence, change in status from an employee to an
independent contractor or other change in the employee-employer relationship
shall constitute a Termination of Employment if, and to the extent that, such
leave of

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absence, change in status or other change interrupts employment for the purposes
of Section 422(a)(2) of the Code and the then applicable regulations and revenue
rulings under said Section.

                                   ARTICLE II.

                             SHARES SUBJECT TO PLAN

                  2.1.     Shares Subject to Plan.

                           (a)      The shares of stock subject to Awards shall
         be Common Stock, initially shares of the Company's Common Stock.
         Subject to adjustment as provided in Section 11.3, the aggregate number
         of such shares which may be issued upon exercise of such Options or
         rights or upon any such Awards under the Plan shall not exceed
         4,816,861. The shares of Common Stock issuable upon exercise of such
         Options or rights or upon any such awards may be either previously
         authorized but unissued shares or treasury shares.

                           (b)      The maximum number of shares which may be
         subject to Awards granted under the Plan to any individual in any
         calendar year shall not exceed the Award Limit; provided, however, that
         the foregoing limitation shall not apply prior to the Public Trading
         Date and, following the Public Trading Date, the foregoing limitation
         shall not apply until the earliest of: (i) the first material
         modification of the Plan (within the meaning of Section 162(m) of the
         Code and the regulations issued thereunder); (ii) the issuance of all
         of the shares of Common Stock reserved for issuance under the Plan;
         (iii) the expiration of the Plan; (iv) the first meeting of
         stockholders at which Directors are to be elected that occurs after the
         close of the third calendar year following the calendar year in which
         occurred the first registration of an equity security of the Company
         under Section 12 of the Exchange Act; or (v) such other date required
         by Section 162(m) of the Code and the rules and regulations promulgated
         thereunder. To the extent required by Section 162(m) of the Code,
         shares subject to Options which are canceled continue to be counted
         against the Award Limit.

                  2.2.     Add-back of Options and Other Rights. If any Option,
or other right to acquire shares of Common Stock under any other Award under the
Plan, expires or is canceled without having been fully exercised, or is
exercised in whole or in part for cash as permitted by the Plan, the number of
shares subject to such Option or other right but as to which such Option or
other right was not exercised prior to its expiration, cancellation or exercise
may again be optioned, granted or awarded hereunder, subject to the limitations
of Section 2.1. Furthermore, any shares subject to Awards which are adjusted
pursuant to Section 11.3 and become exercisable with respect to shares of stock
of another corporation shall be considered canceled and may again be optioned,
granted or awarded hereunder, subject to the limitations of Section 2.1. Shares
of Common Stock which are delivered by the Holder or withheld by the Company,
the Partnership or the Services Company (or any Subsidiary) upon the exercise of
any Award under the Plan, in payment of the exercise price thereof or tax
withholding thereon, may again be optioned, granted or awarded hereunder,
subject to the limitations of Section 2.1. If any shares of Restricted Stock are
surrendered by the Holder or repurchased by the Company, the Partnership or the
Services Company (or any Subsidiary) pursuant to Section 7.4 or 7.5 hereof,

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such shares may again be optioned, granted or awarded hereunder, subject to the
limitations of Section 2.1. Notwithstanding the provisions of this Section 2.2,
no shares of Common Stock may again be optioned, granted or awarded if such
action would cause an Incentive Stock Option to fail to qualify as an incentive
stock option under Section 422 of the Code.

                                   ARTICLE III

                               GRANTING OF AWARDS

                  3.1.     Award Agreement. Each Award shall be evidenced by an
Award Agreement. Award Agreements evidencing Awards intended to qualify as
performance-based compensation as described in Section 162(m)(4)(C) of the Code
shall contain such terms and conditions as may be necessary to meet the
applicable provisions of Section 162(m) of the Code. Award Agreements evidencing
Incentive Stock Options shall contain such terms and conditions as may be
necessary to meet the applicable provisions of Section 422 of the Code.

                  3.2.     Provisions Applicable to Section 162(m) Participants.

                           (a)      The Committee, in its discretion, may
         determine whether an Award is to qualify as performance-based
         compensation as described in Section 162(m)(4)(C)of the Code.

                           (b)      Notwithstanding anything in the Plan to the
         contrary, the Committee may grant any Award to a Section 162(m)
         Participant, including Restricted Stock the restrictions with respect
         to which lapse upon the attainment of performance goals which are
         related to one or more of the Performance Criteria and any performance
         or incentive award described in Article VIII that vests or becomes
         exercisable or payable upon the attainment of performance goals which
         are related to one or more of the Performance Criteria.

                           (c)      To the extent necessary to comply with the
         performance-based compensation requirements of Section 162(m)(4)(C) of
         the Code, with respect to any Award granted under Articles VII and VIII
         which may be granted to one or more Section 162(m) Participants, no
         later than ninety (90) days following the commencement of any fiscal
         year in question or any other designated fiscal period or period of
         service (or such other time as may be required or permitted by Section
         162(m) of the Code), the Committee shall, in writing, (i) designate one
         or more Section 162(m) Participants, (ii) select the Performance
         Criteria applicable to the fiscal year or other designated fiscal
         period or period of service, (iii) establish the various performance
         targets, in terms of an objective formula or standard, and amounts of
         such Awards, as applicable, which may be earned for such fiscal year or
         other designated fiscal period or period of service, and (iv) specify
         the relationship between Performance Criteria and the performance
         targets and the amounts of such Awards, as applicable, to be earned by
         each Section 162(m) Participant for such fiscal year or other
         designated fiscal period or period of service. Following the completion
         of each fiscal year or other designated fiscal period or period of
         service, the Committee shall certify in writing whether the applicable
         performance targets have been achieved for such fiscal year or other
         designated fiscal period or period of

                                       11

<PAGE>


         service. In determining the amount earned by a Section 162(m)
         Participant, the Committee shall have the right to reduce (but not to
         increase) the amount payable at a given level of performance to take
         into account additional factors that the Committee may deem relevant to
         the assessment of individual or corporate performance for the fiscal
         year or other designated fiscal period or period of service.

                           (d)      Furthermore, notwithstanding any other
         provision of the Plan or any Award which is granted to a Section 162(m)
         Participant and is intended to qualify as performance-based
         compensation as described in Section 162(m)(4)(C) of the Code shall be
         subject to any additional limitations set forth in Section 162(m) of
         the Code (including any amendment to Section 162(m) of the Code) or any
         regulations or rulings issued thereunder that are requirements for
         qualification as performance-based compensation as described in Section
         162(m)(4)(C) of the Code, and the Plan shall be deemed amended to the
         extent necessary to conform to such requirements.

                  3.3.     Limitations Applicable to Section 16 Persons.
Notwithstanding any other provision of the Plan, the Plan, and any Award granted
or awarded to any individual who is then subject to Section 16 of the Exchange
Act, shall be subject to any additional limitations set forth in any applicable
exemptive rule under Section 16 of the Exchange Act (including any amendment to
Rule 16b-3 of the Exchange Act) that are requirements for the application of
such exemptive rule. To the extent permitted by applicable law, the Plan and
Awards granted or awarded hereunder shall be deemed amended to the extent
necessary to conform to such applicable exemptive rule.

                  3.4.     Consideration. In consideration of the granting of an
Award under the Plan, the Holder shall agree, in the Award Agreement, to remain
in the employ of (or to consult for or to serve as a Director of, as applicable)
the Company, a Company Subsidiary, the Services Company, a Services Company
Subsidiary, the Partnership or a Partnership Subsidiary for a period of at least
one year (or such shorter period as may be fixed in the Award Agreement or by
action of the Administrator following grant of the Award) after the Award is
granted (or, in the case of a Director, until the next annual meeting of
stockholders of the Company or the next election of Services Company Directors,
as applicable).

                  3.5.     At-Will Employment. Nothing in the Plan or in any
Award Agreement hereunder shall confer upon any Holder any right to continue in
the employ of, or as a Consultant for, or as a director of, the Company, a
Company Subsidiary, the Services Company, a Services Company Subsidiary, the
Partnership or a Partnership Subsidiary, or shall interfere with or restrict in
any way the rights of any such entity, which are hereby expressly reserved, to
discharge any Holder at any tune for any reason whatsoever, with or without
cause, except to the extent expressly provided otherwise in a written employment
agreement between the Holder and such entity.

                                       12
<PAGE>

                                   ARTICLE IV.

                  GRANTING OF OPTIONS TO EMPLOYEES, CONSULTANTS
                                  AND DIRECTORS

                  4.1.     Eligibility. Any Employee, Consultant or Services
Company Director selected by the Committee pursuant to Section 4.4(a)(i) shall
be eligible to be granted an Option. Each Independent Director of the Company
shall be eligible to be granted Options at the times and in the manner set forth
in Section 4.5.

                  4.2.     Disqualification for Stock Ownership. No person may
be granted an Incentive Stock Option under the Plan if such person, at the time
the Incentive Stock Option is granted, owns stock possessing more than 10% of
the total combined voting power of all classes of stock of the Company or any
then existing "subsidiary corporation" or "parent corporation" (each within the
meaning of Section 424 of the Code) unless such Incentive Stock Option conforms
to the applicable provisions of Section 422 of the Code.

                  4.3.     Qualification of Incentive Stock Options. No
Incentive Stock Option shall be granted to any person who is not a Company
Employee, or to any Employee of a Subsidiary which does not constitute a
"subsidiary corporation" within Section 424(f) of the Code.

                  4.4.     Granting of Options to Employees. Consultants and
Directors.

                           (a)      The Committee shall from time to time, in
         its absolute discretion, and subject to applicable limitations of the
         Plan:

                                    (i)      Determine which Employees are key
                  Employees and select from among the key Employees, Consultants
                  and Services Company Directors (including Employees,
                  Consultants and Services Company Directors who have previously
                  received Awards under the Plan) such of them as in its opinion
                  should be granted Options;

                                    (ii)     Subject to the Award Limit,
                  determine the number of shares to be subject to such Options
                  granted to the selected key Employees, Consultants and
                  Services Company Directors;

                                    (iii)    Subject to Section 4.3, determine
                  whether such Options are to be Incentive Stock Options or
                  Non-Qualified Stock Options and whether such Options are to
                  qualify as performance-based compensation as described in
                  Section 162(m)(4)(C) of the Code; and

                                    (iv)     Determine the terms and conditions
                  of such Options, consistent with the Plan; provided, however,
                  that the terms and conditions of Options intended to qualify
                  as performance-based compensation as described in Section
                  162(m)(4)(C) of the Code shall include, but not be limited to,
                  such terms and conditions as may be necessary to meet the
                  applicable provisions of Section 162(m)of the Code.

                                       13

<PAGE>

                           (b)      Upon the selection of a key Employee,
         Consultant or Services Company Director to be granted an Option, the
         Committee shall instruct the Secretary of the Company to issue the
         Option and may impose such conditions on the grant of the Option as it
         deems appropriate.

                           (c)      Any Incentive Stock Option granted under the
         Plan may be modified by the Committee, with the consent of the Holder,
         to disqualify such Option from treatment as an "incentive stock option"
         under Section 422 of the Code.

                  4.5.     Granting of Options to Independent Directors. During
the term of the Plan, each person who is an Independent Director as of the
Public Trading Date automatically shall be granted (a) an Option to purchase
7,500 shares of Common Stock (subject to adjustment as provided in Section 11.3)
on the Public Trading Date, and (b) an Option to purchase 5,000 shares of Common
Stock (subject to adjustment as provided in Section 11.3) on the date of each
annual meeting of stockholders after the Public Trading Date at which the
Independent Director is reelected to the Board. During the term of the Plan, a
person who is initially elected to the Board after the Public Trading Date and
who is an Independent Director at the time of such initial election
automatically shall be granted (x) an Option to purchase 7,500 shares of Common
Stock (subject to adjustment as provided in Section 11.3) on the date of such
initial election, and (y) an Option to purchase 5,000 shares of Common Stock
(subject to adjustment as provided in Section 11.3) on the date of each annual
meeting of stockholders after such initial election at which the Independent
Director is reelected to the Board. Members of the Board who are employees of
the Company who subsequently retire from the Company and remain on the Board
will not receive an initial Option grant pursuant to clause (x) of the preceding
sentence, but to the extent that they are otherwise eligible, will receive,
after retirement from employment with the Company, Options as described in
clause (y) of the preceding sentence. All the foregoing Option grants authorized
by this Section 4.5 are subject to stockholder approval of the Plan.

                  4.6.     Options in Lieu of Cash Compensation. Options may be
granted under the Plan to Employees and Consultants in lieu of cash bonuses
which would otherwise be payable to such Employees and Consultants and to
Independent Directors and Services Company Directors in lieu of directors' fees
which would otherwise be payable to such Independent Directors and Services
Company Directors, pursuant to such policies which may be adopted by the
Administrator from time to time.

                                   ARTICLE V.

                                TERMS OF OPTIONS

                  5.1.     Option Price. The price per share of the shares
subject to each Option granted to Employees, Consultants and Services Company
Directors shall be set by the Committee; provided, however, that such price
shall be no less than 85% of the Fair Market Value of a share of Common Stock on
the date the Option is granted, and:

                           (a)      In the case of Options intended to qualify
         as performance-based compensation as described in Section 162(m)(4)(C)
         of the Code, such price shall not be

                                       14

<PAGE>

         less than 100% of the Fair Market Value of a share of Common Stock on
         the date the Option is granted;

                           (b)      In the case of Incentive Stock Options such
         price shall not be less than 100% of the Fair Market Value of a share
         of Common Stock on the date the Option is granted (or the date the
         Option is modified, extended or renewed for purposes of Section 424(h)
         of the Code);

                           (c)      In the case of Incentive Stock Options
         granted to an individual then owning (within the meaning of Section
         424(d) of the Code) more than 10% of the total combined voting power of
         all classes of stock of the Company or any "subsidiary corporation" or
         "parent corporation" thereof (each within the meaning of Section 424 of
         the Code), such price shall not be less than 110% of the Fair Market
         Value of a share of Common Stock on the date the Option is granted (or
         the date the Option is modified, extended or renewed for purposes of
         Section 424(h) of the Code).

                  5.2.     Option Term. The term of an Option granted to an
Employee, Consultant or Services Company Director shall be set by the Committee
in its discretion; provided, however. that, in the case of Incentive Stock
Options, the term shall not be more than 10 years from the date the Incentive
Stock Option is granted, or five years from the date the Incentive Stock Option
is granted if the Incentive Stock Option is granted to an individual then owning
(within the meaning of Section 424(d) of the Code) more than 10% of the total
combined voting power of all classes of stock of the Company or any "subsidiary
corporation" or "parent corporation" thereof (each within the meaning of Section
424 of the Code). Except as limited by requirements of Section 422 of the Code
and regulations and rulings thereunder applicable to Incentive Stock Options,
the Committee may extend the term of any outstanding Option in connection with
any Termination of Employment or Termination of Consultancy of the Holder or
Termination of Directorship of the Services Company Director, or amend any other
term or condition of such Option relating to such a termination.

                  5.3.     Option Vesting.

                           (a)      The period during which the right to
         exercise, in whole or in part, an Option granted to an Employee,
         Consultant or Services Company Director vests in the Holder shall be
         set by the Committee and the Committee may determine that an Option may
         not be exercised in whole or in part for a specified period after it is
         granted; provided, however, that, unless the Committee otherwise
         provides in the terms of the Award Agreement or otherwise, no Option
         shall be exercisable by any Holder who is then subject to Section 16 of
         the Exchange Act within the period ending six months and one day after
         the date the Option is granted. At any time after grant of an Option,
         the Committee may, in its sole and absolute discretion and subject to
         whatever terms and conditions it selects, accelerate the period during
         which such Option vests.

                           (b)      No portion of an Option granted to an
         Employee, Consultant or Services Company Director which is
         unexercisable at Termination of Employment, Termination of Consultancy
         or Termination of Directorship, as applicable, shall thereafter become
         exercisable, except as may be otherwise provided by the Committee

                                       15

<PAGE>

         either in the Award Agreement or by action of the Committee following
         the grant of the Option.

                           (c)      To the extent that the aggregate Fair Market
         Value of stock with respect to which "incentive stock options" (within
         the meaning of Section 422 of the Code, but without regard to Section
         422(d) of the Code) are exercisable for the first time by a Holder
         during any calendar year (under the Plan and all other incentive stock
         option plans of the Company and any parent or subsidiary corporation,
         within the meaning of Section 422 of the Code) of the Company, exceeds
         $100,000, such Options shall be treated as Non-Qualified Stock Options
         to the extent required by Section 422 of the Code. The rule set forth
         in the preceding sentence shall be applied by taking Options into
         account in the order in which they were granted. For purposes of this
         Section 5.3(c), the Fair Market Value of stock shall be determined as
         of the time the Option with respect to such stock is granted.

                  5.4.     Terms of Options Granted to Independent Directors.
The price per share of the shares subject to each Option granted to an
Independent Director shall equal 100% of the Fair Market Value of a share of
Common Stock on the date the Option is granted; provided, however, that the
price of each share subject to each Option granted to Independent Directors on
the Public Trading Date shall equal the initial public offering price per share
of Common Stock. Options granted to Independent Directors shall become
exercisable in cumulative annual installments of 33 1/3% on each of the first,
second and third anniversaries of the date of Option grant and, subject to
Section 6.9, the term of each Option granted to an Independent Director shall be
10 years from the date the Option is granted, except that any Option granted to
an Independent Director may by its terms become immediately exercisable in full
upon the retirement of the Independent Director in accordance with the Company's
retirement policy applicable to directors. No portion of an Option which is
unexercisable at Termination of Directorship shall thereafter become
exercisable.

                  5.5.     Substitute Awards. Notwithstanding the foregoing
provisions of this Article V to the contrary, in the case of an Option that is a
Substitute Award, the price per share of the shares subject to such Option may
be less than the Fair Market Value per share on the date of grant, provided,
that the excess of:

                           (a)      The aggregate Fair Market Value (as of the
         date such Substitute Award is granted) of the shares subject to the
         Substitute Award; over

                           (b)      The aggregate exercise price thereof; does
         not exceed the excess of:

                           (c)      The aggregate fair market value (as of the
         time immediately preceding the transaction giving rise to the
         Substitute Award, such fair market value to be determined by the
         Committee) of the shares of the predecessor entity that were subject to
         the grant assumed or substituted for by the Company; over

                           (d)      The aggregate exercise price of such shares.

                                       16

<PAGE>

                                   ARTICLE VI.

                               EXERCISE OF OPTIONS

                  6.1.     Partial Exercise. An exercisable Option may be
exercised in whole or in part. However, an Option shall not be exercisable with
respect to fractional shares and the Administrator may require that, by the
terms of the Option, a partial exercise be with respect to a minimum number of
shares.

                  6.2.     Manner of Exercise. All or a portion of an
exercisable Option shall be deemed exercised upon delivery of all of the
following to the Secretary of the Company or his or her office:

                           (a)      A written notice complying with the
         applicable rules established by the Administrator stating that the
         Option, or a portion thereof, is exercised. The notice shall be signed
         by the Holder or other person then entitled to exercise the Option or
         such portion of the Option;

                           (b)      Such representations and documents as the
         Administrator, in its absolute discretion, deems necessary or advisable
         to effect compliance with all applicable provisions of the Securities
         Act and any other federal or state securities laws or regulations. The
         Administrator may, in its absolute discretion, also take whatever
         additional actions it deems appropriate to effect such compliance,
         including without limitation, placing legends on share certificates and
         issuing stop-transfer notices to agents and registrars;

                           (c)      In the event that the Option shall be
         exercised pursuant to Section 11.1 by any person or persons other than
         the Holder, appropriate proof of the right of such person or persons to
         exercise the Option; and

                           (d)      Full payment (in cash or by check) to the
         Secretary of the Company for the shares with respect to which the
         Option, or portion thereof, is exercised. However, the Administrator
         may, in its discretion, (i) allow payment, in whole or in part, through
         the delivery of shares of Common Stock which have been owned by the
         Holder for at least six months, duly endorsed for transfer to the
         Company with a Fair Market Value on the date of delivery equal to the
         aggregate exercise price of the Option or exercised portion thereof;
         (ii) allow payment, in whole or in part, through the surrender of
         shares of Common Stock then issuable upon exercise of the Option having
         a Fair Market Value on the date of Option exercise equal to the
         aggregate exercise price of the Option or exercised portion thereof;
         (iii) allow payment, in whole or in part, through the delivery of
         property of any kind which constitutes good and valuable consideration;
         (iv) allow payment, in whole or in part, through the delivery of a full
         recourse promissory note bearing interest (at no less than such rate as
         shall then preclude the imputation of interest under the Code) and
         payable upon such terms as may be prescribed by the Administrator; (v)
         allow payment, in whole or in part, through the delivery of a notice
         that the Holder has placed a market sell order with a broker with
         respect to shares of Common Stock then issuable upon exercise of the
         Option, and that the broker has been

                                       17

<PAGE>

         directed to pay a sufficient portion of the net proceeds of the sale to
         the Company in satisfaction of the Option exercise price, provided that
         payment of such proceeds is then made to the Company upon settlement of
         such sale; or (vi) allow payment through any combination of the
         consideration provided in the foregoing subparagraphs (i), (ii), (iii),
         (iv) and (v). In the case of a promissory note, the Administrator may
         also prescribe the form of such note and the security to be given for
         such note. The Option may not be exercised, however, by delivery of a
         promissory note or by a loan from the Company, the Services Company,
         the Partnership or any Subsidiary when or where such loan or other
         extension of credit is prohibited by law. Notwithstanding the
         foregoing, (i) in no event shall any loan that is prohibited by the
         Sarbanes-Oxley Act of 2002 or that is inconsistent with the Company's
         qualification as a REIT be permitted under the Plan and (ii) any loan
         that is made hereunder at any time which is then not prohibited by the
         Sarbanes-Oxley Act of 2002 shall become due and payable in full
         immediately before the loan would be prohibited by the Sarbanes-Oxley
         Act of 2002.

                  6.3.     Transfer of Shares to a Company Employee. Consultant
or Independent Director. As soon as practicable after receipt by the Company,
pursuant to Section 6.2(d), of payment for the shares with respect to which an
Option (which in the case of a Company Employee, Company Consultant or
Independent Director was issued to and is held by such Holder in such capacity),
or portion thereof, is exercised by a Holder who is a Company Employee,
Independent Director or Company Consultant, then, with respect to each such
exercise, the Company shall transfer to the Holder the number of shares equal to

                           (a)      The amount of the payment made by the Holder
         to the Company pursuant to Section 6.2(d), divided by

                           (b)      The price per share of the shares subject to
         the Option as determined pursuant to Section 5.1.

                  6.4.     Transfer of Shares to a Partnership Employee or
Consultant. As soon as practicable after receipt by the Company, pursuant to
Section 6.2(d), of payment for the shares with respect to which an Option (which
was issued to and is held by a Partnership Employee or Partnership Consultant in
such capacity), or portion thereof, is exercised by a Holder who is a
Partnership Employee or Partnership Consultant, then, with respect to each such
exercise:

                           (a)      the Company shall transfer to the Holder the
         number of shares equal to (A) the amount of the payment made by the
         Holder to the Company pursuant to Section 6.2(d) divided by (B) the
         Fair Market Value of a share of Common Stock at the time of exercise
         (the "Partnership Holder Purchased Shares"):

                           (b)      the Company shall sell to the Partnership
         the number of shares (the "Partnership Purchased Shares") equal to the
         excess of (i) the amount obtained by dividing (A) the amount of the
         payment made by the Holder to the Company pursuant to Section 6.2(d) by
         (B) the price per share of the shares subject to the Option as
         determined pursuant to Section 5.1, over (ii) the Partnership Holder
         Purchased Shares. The price to be paid by the Partnership to

                                       18

<PAGE>

         the Company for the Partnership Purchased Shares (the "Partnership
         Purchase Price") shall be an amount equal to the product of (x) the
         number of Partnership Purchased Shares multiplied by (y) the Fair
         Market Value of a share of Common Stock at the time of the exercise;
         and

                           (c)      as soon as practicable after receipt of the
         Partnership Purchased Shares by the Partnership, the Partnership shall
         transfer such shares to the Holder at no additional cost, as additional
         compensation.

                  6.5.     Transfer of Shares to a Services Company Employee,
Consultant or Director. As soon as practicable after receipt by the Company,
pursuant to Section 6.2(d), of payment for the shares with respect to which an
Option (which was issued to and is held by a Services Company Employee, Services
Company Director or Services Company Consultant in such capacity), or portion
thereof, is exercised by a Holder who is a Services Company Employee, Services
Company Director or Services Company Consultant, then, with respect to each such
exercise:

                           (a)      the Company shall transfer to the Holder the
         number of shares equal to (A) the amount of the payment made by the
         Holder to the Company pursuant to Section 6.2(d) divided by (B) the
         Fair Market Value of a share of Common Stock at the time of exercise
         (the "Services Company Holder Purchased Shares"):

                           (b)      the Company shall sell to the Services
         Company the number of shares (the "Services Company Purchased Shares")
         equal to the excess of (i) the amount obtained by dividing (A) the
         amount of the payment made by the Holder to the Company pursuant to
         Section 6.2(d) by (B) the price per share of the shares subject to the
         Option as determined pursuant to Section 5.1, over (ii) the Services
         Company Holder Purchased Shares. The price to be paid by the Services
         Company to the Company for the Services Company Purchased Shares (the
         "Services Company Purchase Price") shall be an amount equal to the
         product of (x) the number of Services Company Purchased Shares
         multiplied by (y) the Fair Market Value of a share of Common Stock at
         the time of the exercise; and

                           (c)      as soon as practicable after receipt of the
         Services Company Purchased Shares by the Services Company, the Services
         Company shall transfer such shares to the Holder at no additional cost,
         as additional compensation.

                  6.6.     Transfer of Payment to the Partnership. As soon as
practicable after receipt by the Company of the amounts described in Sections
6.2(d), 6.4(b) and 6.5(b), the Company shall contribute to the Partnership an
amount of cash equal to such payments and the Partnership shall issue an
additional interest in the Partnership on the terms set forth in the Partnership
Agreement.

                  6.7.     Conditions to Issuance of Stock Certificates. None of
the Company, the Partnership or the Services Company shall be required to issue
or deliver any certificate or

                                       19

<PAGE>

certificates for shares of stock purchased upon the exercise of any Option or
portion thereof prior to fulfillment of all of the following conditions:

                           (a)      The admission of such shares to listing on
         all stock exchanges on which such class of stock is then listed;

                           (b)      The completion of any registration or other
         qualification of such shares under any state or federal law, or under
         the rulings or regulations of the Securities and Exchange Commission or
         any other governmental regulatory body which the Administrator shall,
         in its absolute discretion, deem necessary or advisable;

                           (c)      The obtaining of any approval or other
         clearance from any state or federal governmental agency which the
         Administrator shall, in its absolute discretion, determine to be
         necessary or advisable;

                           (d)      The lapse of such reasonable period of time
         following the exercise of the Option as the Administrator may establish
         from time to tune for reasons of administrative convenience; and

                           (e)      The receipt by the Company, the Services
         Company or the Partnership of full payment for such shares, including
         payment of any applicable withholding tax, which in the discretion of
         the Administrator may be in the form of consideration used by the
         Holder to pay for such shares under Section 6.2(d).

                  6.8.     Rights as Stockholders. Holders shall not be, nor
have any of the rights or privileges of, stockholders of the Company in respect
of any shares purchasable upon the exercise of any part of an Option unless and
until certificates representing such shares have been issued by the Company, the
Partnership or the Services Company, as applicable, to such Holders.

                  6.9.     Exercise, Ownership and Transfer Restrictions. The
Administrator, in its absolute discretion, may impose such restrictions on the
exercise of an Option and the ownership and transferability of the shares
purchasable upon the exercise of an Option as it deems appropriate. Any such
restriction shall be set forth in the respective Award Agreement and may be
referred to on the certificates evidencing such shares. The Holder shall give
the Company prompt notice of any disposition of shares of Common Stock acquired
by exercise of an Incentive Stock Option within (a) two years from the date of
granting (including the date the Option is modified, extended or renewed for
purposes of Section 424(h) of the Code) such Option to such Holder, or (b) one
year after the transfer of such shares to such Holder.

                  6.10.    Limitations on Exercise of Options Granted to
Independent Directors. No Option granted to an Independent Director may be
exercised to any extent by anyone after the first to occur of the following
events:

                           (a)      The expiration of 12 months from the date of

         the Holder's death;

                           (b)      The expiration of 12 months from the date of
         the Holder's Termination of Directorship by reason of his or her
         permanent and total disability (within the meaning of Section 22(e)(3)
         of the Code);

                                       20

<PAGE>

                           (c)      The expiration of six months from the date
         of the Holder's Termination of Directorship for any reason other than
         such Holder's death or his or her permanent and total disability,
         unless the Holder dies within said six-month period; or

                           (d)      The expiration of 10 years from the date the
         Option was granted.

                  6.11.    Additional Limitations on Exercise of Options.
Holders may be required to comply with any timing or other restrictions with
respect to the settlement or exercise of an Option, including a window-period
limitation, as may be imposed in the discretion of the Administrator.

                                  ARTICLE VII.

                            AWARD OF RESTRICTED STOCK

                  7.1.     Eligibility. Subject to the Award Limit, Restricted
Stock may be awarded to any Employee, Director or Consultant whom the
Administrator determines should receive such an Award.

                  7.2.     Award of Restricted Stock.

                           (a)      The Administrator may from time to time, in
         its absolute discretion:

                                    (i)      Determine which Employees are key
                  Employees and select from among the key Employees, Directors
                  or Consultants (including Employees, Directors or Consultants
                  who have previously received other awards under the Plan) such
                  of them as in its opinion should be awarded Restricted Stock;
                  and

                                    (ii)     Determine the purchase price, if
                  any, and other terms and conditions (including, without
                  limitation, in the case of awards to Employees, Consultants or
                  Directors of the Services Company, any Services Company
                  Subsidiary, the Partnership or any Partnership Subsidiary, the
                  mechanism for the transfer of the Restricted Stock and payment
                  therefor, and any surrender of such Restricted Stock pursuant
                  to Section 7.4) applicable to such Restricted Stock,
                  consistent with the Plan.

                           (b)      The Administrator shall establish the
         purchase price, if any, and form of payment for Restricted Stock;
         provided, however, that such purchase price, if any, shall be no less
         than the par value of the Common Stock to be purchased, unless
         otherwise permitted by applicable state law. In all cases, legal
         consideration shall be required for each issuance of Restricted Stock.

                           (c)      Upon the selection of a key Employee,
         Director or Consultant to be awarded Restricted Stock, the
         Administrator shall instruct the Secretary of the Company to issue such
         Restricted Stock and may impose such conditions on the issuance of such
         Restricted Stock as it deems appropriate.

                                       21

<PAGE>

                  7.3.     Rights as Stockholders. Subject to Section 7.4, upon
delivery of the shares of Restricted Stock to the escrow holder pursuant to
Section 7.6, the Holder shall have, unless otherwise provided by the
Administrator, all the rights of a stockholder with respect to said shares,
subject to the restrictions in his or her Award Agreement, including the right
to receive all dividends and other distributions paid or made with respect to
the shares; provided, however, that in the discretion of the Administrator, any
extraordinary distributions with respect to the Common Stock shall be subject to
the restrictions set forth in Section 7.4.

                  7.4.     Restriction. All shares of Restricted Stock issued
under the Plan (including any shares received by holders thereof with respect to
shares of Restricted Stock as a result of stock dividends, stock splits or any
other form of recapitalization) shall, in the terms of each individual Award
Agreement, be subject to such restrictions as the Administrator shall provide,
which restrictions may include, without limitation, restrictions concerning
voting rights and transferability and restrictions based on duration of
employment or service with the Company, the Partnership, the Services Company or
a Subsidiary, performance of the Company, the Partnership, the Services Company
or a Subsidiary and individual performance; provided, however, that, unless the
Administrator otherwise provides in the terms of the Award Agreement or
otherwise, no share of Restricted Stock granted to a person subject to Section
16 of the Exchange Act shall be sold, assigned or otherwise transferred until at
least six months and one day have elapsed from the date on which the Restricted
Stock was issued; and provided, further. that, except with respect to shares of
Restricted Stock granted to Section 162(m) Participants, by action taken after
the Restricted Stock is issued, the Administrator may, on such terms and
conditions as it may determine to be appropriate, remove any or all of the
restrictions imposed by the terms of the Award Agreement. Restricted Stock may
not be sold or encumbered until all restrictions are terminated or expire. If no
cash consideration was paid by the Holder upon issuance, a Holder's rights in
unvested Restricted Stock shall lapse, and such Restricted Stock shall be
surrendered to the Company, the Partnership or the Services Company, as
applicable, without consideration, upon a Termination of Employment, Termination
of Directorship or Termination of Consultancy.

                  7.5.     Repurchase of Restricted Stock. The Administrator
shall provide in the terms of each individual Award Agreement that the Company,
the Partnership, the Services Company or their Subsidiaries shall have the right
to repurchase from the Holder the Restricted Stock then subject to restrictions
under the Award Agreement immediately upon a Termination of Employment,
Termination of Directorship or Termination of Consultancy, at a cash price per
share equal to the price paid by the Holder for such Restricted Stock.

                  7.6.     Escrow. The Secretary of the Company or such other
escrow holder as the Administrator may appoint shall retain physical custody of
each certificate representing Restricted Stock until all of the restrictions
imposed under the Award Agreement with respect to the shares evidenced by such
certificate expire or shall have been removed.

                  7.7.     Legend. In order to enforce the restrictions imposed
upon shares of Restricted Stock hereunder, the Administrator shall cause a
legend or legends to be placed on certificates representing all shares of
Restricted Stock that are still subject to restrictions under Award Agreements,
which legend or legends shall make appropriate reference to the conditions
imposed thereby.

                                       22

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                                  ARTICLE VIII.

                    PERFORMANCE AWARDS, DIVIDEND EQUIVALENTS,
                         DEFERRED STOCK, STOCK PAYMENTS

                  8.1.     Eligibility. Subject to the Award Limit, one or more
Performance Awards, Dividend Equivalents, awards of Deferred Stock and/or Stock
Payments may be granted to any Employee whom the Administrator determines is a
key Employee or any Director or Consultant whom the Administrator determines
should receive such an Award.

                  8.2.     Performance Awards.

                           (a)      Any key Employee, Director or Consultant
         selected by the Administrator may be granted one or more Performance
         Awards. The value of such Performance Awards may be linked to any one
         or more of the Performance Criteria or other specific performance
         criteria determined appropriate by the Administrator, in each case on a
         specified date or dates or over any period or periods determined by the
         Administrator. In making such determinations, the Administrator shall
         consider (among such other factors as it deems relevant in light of the
         specific type of award) the contributions, responsibilities and other
         compensation of the particular key Employee, Director or Consultant.

                           (b)      Without limiting Section 8.2(a), the
         Administrator may grant Performance Awards to any 162(m) Participant in
         the form of a cash bonus payable upon the attainment of objective
         performance goals which are established by the Administrator and relate
         to one or more of the Performance Criteria, in each case on a specified
         date or dates or over any period or periods determined by the
         Administrator. Any such bonuses paid to 162(m) Participants shall be
         based upon objectively determinable bonus formulas established in
         accordance with the provisions of Section 3.2. The maximum amount of
         any Performance Award payable to a 162(m) Participant under this
         Section 8.2(b) shall not exceed the Award Limit with respect to any
         calendar year. Unless otherwise specified by the Administrator at the
         time of grant, the Performance Criteria with respect to a Performance
         Award payable to a 162(m) Participant shall be determined on the basis
         of generally accepted accounting principles.

                  8.3.     Dividend Equivalents.

                           (a)      Any key Employee, Director or Consultant
         selected by the Administrator may be granted Dividend Equivalents based
         on the dividends declared on Common Stock, to be credited as of
         dividend payment dates, during the period between the date a Stock
         Appreciation Right, Deferred Stock or Performance Award is granted, and
         the date such Stock Appreciation Right, Deferred Stock or Performance
         Award is exercised, vests or expires, as determined by the
         Administrator. Such Dividend Equivalents shall be converted to cash or
         additional shares of Common Stock by such formula and at such time and
         subject to such limitations as may be determined by the Administrator.

                                       23

<PAGE>

                           (b)      Any Holder of an Option who is an Employee
         or Consultant selected by the Committee may be granted Dividend
         Equivalents based on the dividends declared on Common Stock, to be
         credited as of dividend payment dates, during the period between the
         date an Option is granted, and the date such Option is exercised, vests
         or expires, as determined by the Committee. Such Dividend Equivalents
         shall be converted to cash or additional shares of Common Stock by such
         formula and at such time and subject to such limitations as may be
         determined by the Committee.

                           (c)      Any Holder of an Option who is an
         Independent Director selected by the Board may be granted Dividend
         Equivalents based on the dividends declared on Common Stock, to be
         credited as of dividend payment dates, during the period between the
         date an Option is granted and the date such Option is exercised, vests
         or expires, as determined by the Board. Such Dividend Equivalents shall
         be converted to cash or additional shares of Common Stock by such
         formula and at such time and subject to such limitations as may be
         determined by the Board.

                           (d)      Dividend Equivalents granted with respect to
         Options intended to be qualified performance-based compensation for
         purposes of Section 162(m) of the Code shall be payable, with respect
         to pre-exercise periods, regardless of whether such Option is
         subsequently exercised.

                  8.4.     Stock Payments. Any key Employee, Director or
Consultant selected by the Administrator may receive Stock Payments in the
manner determined from time to time by the Administrator. The number of shares
shall be determined by the Administrator and may be based upon the Performance
Criteria or other specific performance criteria determined appropriate by the
Administrator, determined on the date such Stock Payment is made or on any date
thereafter.

                  8.5.     Deferred Stock. Any key Employee, Director or
Consultant selected by the Administrator may be granted an award of Deferred
Stock in the manner determined from time to time by the Administrator. The
number of shares of Deferred Stock shall be determined by the Administrator and
may be linked to the Performance Criteria or other specific performance criteria
determined to be appropriate by the Administrator, in each case on a specified
date or dates or over any period or periods determined by the Administrator.
Common Stock underlying a Deferred Stock award will not be issued until the
Deferred Stock award has vested, pursuant to a vesting schedule or performance
criteria set by the Administrator. Unless otherwise provided by the
Administrator, a Holder of Deferred Stock shall have no rights as a Company
stockholder with respect to such Deferred Stock until such time as the Award has
vested and the Common Stock underlying the Award has been issued.

                  8.6.     Term. The term of a Performance Award, Dividend
Equivalent, award of Deferred Stock and/or Stock Payment shall be set by the
Administrator in its discretion.

                  8.7.     Exercise or Purchase Price. The Administrator may
establish the exercise or purchase price of a Performance Award, shares of
Deferred Stock or shares received as a Stock Payment; provided, however, that
such price shall not be less than the par value of a share of Common Stock,
unless otherwise permitted by applicable state law.

                                       24

<PAGE>

                  8.8.     Exercise Upon Termination of Employment, Termination
of Consultancy or Termination of Directorship. A Performance Award, Dividend
Equivalent, award of Deferred Stock and/or Stock Payment is exercisable or
payable only while the Holder is an Employee, Consultant or Director, as
applicable; provided, however, that, except with respect to Performance Awards
granted to Section 162(m) Participants, the Administrator in its sole and
absolute discretion may provide that the Performance Award, Dividend Equivalent,
award of Deferred Stock and/or Stock Payment may be exercised or paid subsequent
to a Termination of Employment, Termination of Directorship or Termination of
Consultancy without cause, or following a Change in Control of the Company, or
because of the Holder's retirement, death or disability, or otherwise.

                  8.9.     Form of Payment. Payment of the amount determined
under Section 8.2 or 8.3 above shall be in cash, in Common Stock or a
combination of both, as determined by the Administrator. To the extent any
payment under this Article VIII is effected in Common Stock, it shall be made
subject to satisfaction of all provisions of Section 6.7.

                                   ARTICLE IX.

                            STOCK APPRECIATION RIGHTS

                  9.1.     Grant of Stock Appreciation Rights. A Stock
Appreciation Right may be granted to any key Employee, Director or Consultant
selected by the Administrator. A Stock Appreciation Right may be granted (a) in
connection and simultaneously with the grant of an Option, (b) with respect to a
previously granted Option, or (c) independent of an Option. A Stock Appreciation
Right shall be subject to such terms and conditions (including, without
limitation, in the case of awards to Employees, Directors or Consultants of the
Services Company, any Services Company Subsidiary, the Partnership or any
Partnership Subsidiary, the mechanism for the transfer or rights under such
awards) not inconsistent with the Plan as the Administrator shall impose and
shall be evidenced by an Award Agreement.

                  9.2.     Coupled Stock Appreciation Rights.

                           (a)      A Coupled Stock Appreciation Right ("CSAR")
         shall be related to a particular Option and shall be exercisable only
         when and to the extent the related Option is exercisable.

                           (b)      A CSAR may be granted to the Holder for no
         more than the number of shares subject to the simultaneously or
         previously granted Option to which it is coupled.

                           (c)      A CSAR shall entitle the Holder (or other
         person entitled to exercise the Option pursuant to the Plan) to
         surrender to the Company unexercised a portion of the Option to which
         the CSAR relates (to the extent then exercisable pursuant to its terms)
         and to receive from the Company in exchange therefor an amount
         determined by multiplying the difference obtained by subtracting the
         Option exercise price from the Fair Market Value of a share of Common
         Stock on the date of exercise of the CSAR by the number of shares of
         Common Stock with respect to which the CSAR

                                       25

<PAGE>

         shall have been exercised, subject to any limitations the Committee may
         impose.

                  9.3.     Independent Stock Appreciation Rights.

                           (a)      An Independent Stock Appreciation Right
         ("ISAR") shall be unrelated to any Option and shall have a term set by
         the Administrator. An ISAR shall be exercisable in such installments as
         the Administrator may determine. An ISAR shall cover such number of
         shares of Common Stock as the Administrator may determine; provided,
         however, that unless the Administrator otherwise provides hi the terms
         of the ISAR or otherwise, no ISAR granted to a person subject to
         Section 16 of the Exchange Act shall be exercisable until at least six
         months have elapsed from (but excluding) the date on which the Option
         was granted. The exercise price per share of Common Stock subject to
         each ISAR shall be set by the Administrator. An ISAR is exercisable
         only while the Holder is an Employee, Director or Consultant; provided,
         that the Administrator may determine that the ISAR may be exercised
         subsequent to Termination of Employment, Termination of Directorship or
         Termination of Consultancy without cause, or following a Change in
         Control of the Company, or because of the Holder's retirement, death or
         disability, or otherwise.

                           (b)      An ISAR shall entitle the Holder (or other
         person entitled to exercise the ISAR pursuant to the Plan) to exercise
         all or a specified portion of the ISAR (to the extent then exercisable
         pursuant to its terms) and to receive from the Company an amount
         determined by multiplying the difference obtained by subtracting the
         exercise price per share of the ISAR from the Fair Market Value of a
         share of Common Stock on the date of exercise of the ISAR by the number
         of shares of Common Stock with respect to which the ISAR shall have
         been exercised, subject to any limitations the Administrator may
         impose.

                  9.4.     Payment and Limitations on Exercise.

                           (a)      Payment of the amounts determined under
         Section 9.2(c) and 9.3(b) above shall be in cash, in Common Stock
         (based on its Fair Market Value as of the date the Stock Appreciation
         Right is exercised) or a combination of both, as determined by the
         Administrator. To the extent such payment is effected in Common Stock
         it shall be made subject to satisfaction of all provisions of Section
         6.7 above pertaining to Options.

                           (b)      Holders of Stock Appreciation Rights may be
         required to comply with any timing or other restrictions with respect
         to the settlement or exercise of a Stock Appreciation Right, including
         a window-period limitation, as may be imposed in the discretion of the
         Administrator.

                                       26

<PAGE>

                                   ARTICLE X.

                                 ADMINISTRATION

                  10.1.    Compensation Committee. Prior to the Public Trading
Date, the Compensation Committee shall consist of the entire Board. Following
the Public Trading Date, the Compensation Committee (or another committee or a
subcommittee of the Board assuming the functions of the Committee under the
Plan) shall consist solely of two or more Independent Directors appointed by and
holding office at the pleasure of the Board, each of whom is both a
"non-employee director" as defined by Rule 16b-3 and an "outside director" for
purposes of Section 162(m) of the Code. Appointment of Committee members shall
be effective upon acceptance of appointment. Committee members may resign at any
time by delivering written notice to the Board. Vacancies in the Committee may
be filled by the Board.

                  10.2.    Duties and Powers of Committee. It shall be the duty
of the Committee to conduct the general administration of the Plan in accordance
with its provisions. The Committee shall have the power to interpret the Plan
and the Award Agreements, and to adopt such rules for the administration,
interpretation and application of the Plan as are consistent therewith, to
interpret, amend or revoke any such rules. Interpretations and rules with
respect to Incentive Stock Options shall be consistent with the provisions of
Section 422 of the Code. The Committee shall have the power to amend any Award
Agreement provided that the rights or obligations of the Holder of the Award
that is the subject of any such Award Agreement are not affected adversely;
provided, however, that without the approval of the stockholders of the Company,
neither the Committee nor the Board shall authorize the amendment of any
outstanding Option or Stock Appreciation Right to reduce its exercise price.
Notwithstanding anything contained herein, no Option or Stock Appreciation Right
shall be canceled and replaced with the grant of an Option or Stock Appreciation
Right having a lower exercise price without the approval of the stockholders of
the Company. Grants or Awards under the Plan need not be the same with respect
to each Holder. In its absolute discretion, the Board may at any time and from
time to time exercise any and all rights and duties of the Committee under the
Plan except with respect to matters which under Rule 16b-3 or Section 162(m) of
the Code, or any regulations or rules issued thereunder, are required to be
determined in the sole discretion of the Committee. Notwithstanding the
foregoing, the full Board, acting by a majority of its members in office, shall
conduct the general administration of the Plan with respect to Awards granted to
Independent Directors.

                  10.3.    Majority Rule; Unanimous Written Consent. The
Committee shall act by a majority of its members in attendance at a meeting at
which a quorum is present or by a memorandum or other written instrument signed
by all members of the Committee.

                  10.4.    Compensation; Professional Assistance; Good Faith
Actions. Members of the Committee shall receive such compensation, if any, for
their services as members as may be determined by the Board. All expenses and
liabilities which members of the Committee incur in connection with the
administration of the Plan shall be borne by the Company. The Committee may,
with the approval of the Board, employ attorneys, consultants, accountants,
appraisers, brokers, or other persons. The Committee, the Company and the
Company's officers and Directors shall be entitled to rely upon the advice,
opinions or valuations of any such persons.

                                       27

<PAGE>

All actions taken and all interpretations and determinations made by the
Committee or the Board in good faith shall be final and binding upon all
Holders, the Company and all other interested persons. No members of the
Committee or Board shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or Awards, and all
members of the Committee and the Board shall be fully protected by the Company
in respect of any such action, determination or interpretation.

                  10.5.    Delegation of Authority to Grant Awards. The
Committee may, but need not, delegate from time to time some or all of its
authority to grant Awards under the Plan to a committee consisting of one or
more members of the Committee or of one or more officers of the Company;
provided, however, that the Committee may not delegate its authority to grant
Awards to individuals (a) who are subject on the date of the grant to the
reporting rules under Section 16(a) of the Exchange Act, (b) who are Section
162(m) Participants, or (c) who are officers of the Company who are delegated
authority by the Committee hereunder. Any delegation hereunder shall be subject
to the restrictions and limits that the Committee specifies at the time of such
delegation of authority and may be rescinded at any time by the Committee. At
all times, any committee appointed under this Section 10.5 shall serve in such
capacity at the pleasure of the Committee.

                                   ARTICLE XI.

                            MISCELLANEOUS PROVISIONS

                  11.1.    Transferability of Awards.

                           (a)      Except as otherwise provided in Section 11.1
         (b):

                                    (i)      No Award under the Plan may be
                  sold, pledged, assigned or transferred in any manner other
                  than by will or the laws of descent and distribution or,
                  subject to the consent of the Administrator, pursuant to a
                  DRO, unless and until such Award has been exercised, or the
                  shares underlying such Award have been issued, and all
                  restrictions applicable to such shares have lapsed;

                                    (ii)     No Award or interest or right
                  therein shall be liable for the debts, contracts or
                  engagements of the Holder or his or her 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, except to the extent that such
                  disposition is permitted by the preceding sentence; and

                                    (iii)    During the lifetime of the Holders,
                  only he or she may exercise an Option or other Award (or any
                  portion thereof) granted to him or her under the Plan, unless
                  it has been disposed of pursuant to a DRO; after the death of
                  the Holder, any exercisable portion of an Option or other
                  Award may, prior to the time when such portion becomes
                  unexercisable under the Plan or the applicable Award
                  Agreement, be exercised by his or her personal representative

                                       28

<PAGE>

                  or by any person empowered to do so under the deceased
                  Holder's will or under the then applicable laws of descent and
                  distribution.

                           (b)      Notwithstanding Section 11.1 (a), the
         Administrator, in its sole discretion, may determine to permit a Holder
         to transfer a Non-Qualified Stock Option to any one or more Permitted
         Transferees (as defined below), subject to the following terms and
         conditions: (i) a Non-Qualified Stock Option transferred to a Permitted
         Transferee shall not be assignable or transferable by the Permitted
         Transferee other than by will or the laws of descent and distribution;
         (ii) any Non-Qualified Stock Option which is transferred to a Permitted
         Transferee shall continue to be subject to all the terms and conditions
         of the Non-Qualified Stock Option as applicable to the original Holder
         (other than the ability to further transfer the Non-Qualified Stock
         Option); and (iii) the Holder and the Permitted Transferee shall
         execute any and all documents requested by the Administrator,
         including, without limitation documents to (A) confirm the status of
         the transferee as a Permitted Transferee, (B) satisfy any requirements
         for an exemption for the transfer under applicable federal and state
         securities laws and (C) evidence the transfer. For purposes of this
         Section 11.1(b), "Permitted Transferee" shall mean, with respect to a
         Holder, any child, stepchild, grandchild, parent, stepparent,
         grandparent, spouse, former spouse, sibling, niece, nephew,
         mother-in-law, father-in-law, son-in-law, daughter-in-law,
         brother-in-law, or sister-in-law, including adoptive relationships, any
         person sharing the Holder's household (other than a tenant or
         employee), a trust hi which these persons (or the Holder) control the
         management of assets, and any other entity in which these persons (or
         the Holder) own more than fifty percent of the voting interests, or any
         other transferee specifically approved by the Administrator after
         taking into account any state or federal tax or securities laws
         applicable to transferable Non-Qualified Stock Options.

                  11.2.    Amendment, Suspension or Termination of the Plan.
Except as otherwise provided in this Section 11.2, the Plan may be wholly or
partially amended or otherwise modified, suspended or terminated at any time or
from time to time by the Administrator. However, without approval of the
Company's stockholders given within 12 months before or after the action by the
Administrator, no action of the Administrator may, except as provided in Section
11.3, increase the limits imposed in Section 2.1 on the maximum number of shares
which may be issued under the Plan, and no action of the Administrator may be
taken that would otherwise require stockholder approval as a matter of
applicable law, regulation or rule. No amendment, suspension or termination of
the Plan shall, without the consent of the Holder, alter or impair any rights or
obligations under any Award theretofore granted or awarded, unless the Award
itself otherwise expressly so provides. No Awards may be granted or awarded
during any period of suspension or after termination of the Plan, and in no
event may any Incentive Stock Option be granted under the Plan after the first
to occur of the following events:

                           (a)      The expiration of 10 years from the date the
         Plan is adopted by the Board; or

                           (b)      The expiration of 10 years from the date the
         Plan is approved by the Company's stockholders under Section 11.4.

                                       29

<PAGE>


                  11.3.    Changes in Common Stock or Assets of the Company.
Acquisition or Liquidation of the Company and Other Corporate Events.

                           (a)      Subject to Section 11.3(e), in the event
         that the Administrator determines that any dividend or other
         distribution (whether in the form of cash, Common Stock, other
         securities, or other property), recapitalization, reclassification,
         stock split, reverse stock split, reorganization, merger,
         consolidation, split-up, spin-off, combination, repurchase,
         liquidation, dissolution, or sale, transfer, exchange or other
         disposition of all or substantially all of the assets of the Company,
         or exchange of Common Stock or other securities of the Company,
         issuance of warrants or other rights to purchase Common Stock or other
         securities of the Company, or other similar corporate transaction or
         event, in the Administrator's sole discretion, affects the Common Stock
         such that an adjustment is determined by the Administrator to be
         appropriate in order to prevent dilution or enlargement of the benefits
         or potential benefits intended to be made available under the Plan or
         with respect to an Award, then the Administrator shall, in such manner
         as it may deem equitable, adjust any or all of

                                    (i)      The number and kind of shares of
                  Common Stock (or other securities or property) with respect to
                  which Awards may be granted or awarded (including, but not
                  limited to, adjustments of the limitations in Section 2.1 on
                  the maximum number and kind of shares which may be issued and
                  adjustments of the Award Limit);

                                    (ii)     The number and kind of shares of
                  Common Stock (or other securities or property) subject to
                  outstanding Awards; and

                                    (iii)    The grant or exercise price with
                  respect to any Award.

                           (b)      Subject to Sections 11.3(c) and 11.3(e), in
         the event of any transaction or event described in Section 11.3(a) or
         any unusual or nonrecurring transactions or events affecting the
         Company, any affiliate of the Company, or the financial statements of
         the Company or any affiliate, or of changes in applicable laws,
         regulations, or accounting principles, the Administrator in its sole
         and absolute discretion, and on such terms and conditions as it deems
         appropriate, either by the terms of the Award or by action taken prior
         to the occurrence of such transaction or event and either automatically
         or upon the Holder's request, is hereby authorized to take any one or
         more of the following actions whenever the Administrator determines
         that such action is appropriate in order to prevent dilution or
         enlargement of the benefits or potential benefits intended to be made
         available under the Plan or with respect to any Award under the Plan,
         to facilitate such transactions or events or to give effect to such
         changes in laws, regulations or principles:

                                    (i)      To provide for either the purchase
                  of any such Award for an amount of cash equal to the amount
                  that could have been attained upon the exercise of such Award
                  or realization of the Holder's rights had such Award been
                  currently exercisable or payable or fully vested or the
                  replacement of such Award with other rights or property
                  selected by the Administrator in its sole discretion;

                                       30

<PAGE>

                                    (ii)     To provide that the Award cannot
                  vest, be exercised or become payable after such event;

                                    (iii)    To provide that such Award shall be
                  exercisable as to all shares covered thereby, notwithstanding
                  anything to the contrary in Section 5.3 or 5.4 or the
                  provisions of such Award;

                                    (iv)     To provide that such Award be
                  assumed by the successor or survivor corporation, or a parent
                  or subsidiary thereof, or shall be substituted for by similar
                  options, rights or awards covering the stock of the successor
                  or survivor corporation, or a parent or subsidiary thereof,
                  with appropriate adjustments as to the number and kind of
                  shares and prices;

                                    (v)      To make adjustments in the number
                  and type of shares of Common Stock (or other securities or
                  property) subject to outstanding Awards, and in the number and
                  kind of outstanding Restricted Stock or Deferred Stock and/or
                  in the terms and conditions of (including the grant or
                  exercise price), and the criteria included in, outstanding
                  options, rights and awards and options, rights and awards
                  which may be granted in the future; and

                                    (vi)     To provide that, for a specified
                  period of time prior to such event, the restrictions imposed
                  under an Award Agreement upon some or all shares of Restricted
                  Stock or Deferred Stock may be terminated, and, in the case of
                  Restricted Stock, some or all shares of such Restricted Stock
                  may cease to be subject to repurchase under Section 7.5 or
                  forfeiture under Section 7.4 after such event.

                           (c)      Notwithstanding any other provision of the
         Plan, in the event of a merger of the Company with or into another
         corporation, the sale of substantially all of the assets of the Company
         or a Change in Control of the Company, each outstanding Option shall be
         assumed or an equivalent option substituted by the successor
         corporation or a parent or subsidiary of the successor corporation. In
         the event that the successor corporation refuses to assume or
         substitute for the Option, the optionee shall have the right to
         exercise the Option as to all of the optioned stock, including shares
         as to which it would not otherwise be exercisable. If an Option is
         exercisable in lieu of assumption or substitution in the event of a
         merger or sale of assets, the Administrator shall notify the optionee
         that the Option shall be fully exercisable for a period of 15 days from
         the date of such notice, and the Option shall terminate upon the
         expiration of such period. For the purposes of this Section 11.3(c),
         the Option shall be considered assumed if, following the merger or sale
         of assets, the option confers the right to purchase or receive, for
         each share of optioned stock subject to the Option immediately prior to
         the merger or sale of assets, the consideration (whether stock, cash,
         or other securities or property) received in the merger or sale of
         assets by holders of Common Stock for each share held on the effective
         date of the transaction (and if holders were offered a choice of
         consideration, the type of consideration chosen by the holders of a
         majority of the outstanding shares); provided, however, that if such
         consideration received in the merger or sale of assets was not solely
         common stock of the successor corporation or its parent, the
         Administrator may, with the

                                       31

<PAGE>

         consent of the successor corporation, provide for the consideration to
         be received upon the exercise of the Option, for each share of optioned
         stock subject to the Option, to be solely common stock of the successor
         corporation or its parent equal in fair market value to the per share
         consideration received by holders of Common Stock in the merger or sale
         of assets.

                           (d)      Subject to Sections 3.2, 3.3 and 11.3(e),
         the Administrator may, in its discretion, include such further
         provisions and limitations in any Award, agreement or certificate, as
         it may deem equitable and in the best interests of the Company.

                           (e)      With respect to Awards which are granted to
         Section 162(m) Participants and are intended to qualify as
         performance-based compensation under Section 162(m)(4)(C), no
         adjustment or action described in this Section 11.3 or in any other
         provision of the Plan shall be authorized to the extent that such
         adjustment or action would cause such Award to fail to so qualify under
         Section 162(m)(4)(C), or any successor provisions thereto. No
         adjustment or action described in this Section 11.3 or in any other
         provision of the Plan shall be authorized to the extent that such
         adjustment or action would cause the Plan to violate Section 422(b)(l)
         of the Code. Furthermore, no such adjustment or action shall be
         authorized to the extent such adjustment or action would result in
         short-swing profits liability under Section 16 or violate the exemptive
         conditions of Rule 16b-3 unless the Administrator determines that the
         Award is not to comply with such exemptive conditions. The number of
         shares of Common Stock subject to any Award shall always be rounded to
         the next whole number.

                           (f)      The existence of the Plan, the Award
         Agreement and the Awards granted hereunder shall not affect or restrict
         in any way the right or power of the Company or the shareholders of the
         Company to make or authorize any adjustment, recapitalization,
         reorganization or other change in the Company's capital structure or
         its business, any merger or consolidation of the Company, any issue of
         stock Or of options, warrants or rights to purchase stock or of bonds,
         debentures, preferred or prior preference stocks whose rights are
         superior to or affect the Common Stock or the rights thereof or which
         are convertible into or exchangeable for Common Stock, or the
         dissolution or liquidation of the company, or any sale or transfer of
         all or any part of its assets or business, or any other corporate act
         or proceeding, whether of a similar character or otherwise.

                  11.4.    Approval of Plan by Stockholders. The Plan will be
submitted for the approval of the Company's stockholders within 12 months after
the date of the Board's initial adoption of the Plan, and any amendment to the
Plan increasing the aggregate number of shares of Common Stock issuable under
the Plan will be submitted for the approval of the Company's stockholders after
the date of the Board's adoption of such amendment. Awards may be granted or
awarded prior to such stockholder approval, provided that such Awards shall not
be exercisable nor shall such Awards vest prior to the time when the Plan is
approved by the stockholders, and provided further that if such approval is not
obtained, all Awards previously granted or awarded under the Plan shall
thereupon be canceled and become null and void. In addition, if the Board
determines that Awards other than Options or Stock Appreciation Rights which may
be granted to Section 162(m) Participants should continue to be eligible to
qualify as

                                       32

<PAGE>

performance based compensation under Section 162(m)(4)(C) of the Code, the
Performance Criteria must be disclosed to and approved by the Company's
stockholders no later than the first stockholder meeting that occurs in the
fifth year following the year in which the Company's stockholders previously
approved the Performance Criteria.

                  11.5.    Tax Withholding. The Company, the Operating
Partnership or the Services Company, as applicable, shall be entitled to require
payment in cash or deduction from other compensation payable to each Holder of
any sums required by federal, state or local tax law to be withheld with respect
to the issuance, vesting, exercise or payment of any Award. The Administrator
may in its discretion and in satisfaction of the foregoing requirement allow
such Holder to elect to have the Company, the Operating Partnership or the
Services Company, as applicable, withhold shares of Common Stock otherwise
issuable under such Award (or allow the return of shares of Common Stock) having
a Fair Market Value equal to the sums required to be withheld. Notwithstanding
any other provision of the Plan, the number of shares of Common Stock which may
be withheld with respect to the issuance, vesting, exercise or payment of any
Award (or which may be repurchased from the Holder of such Award within six
months after such shares of Common Stock were acquired by the Holder from the
Company) in order to satisfy the Holder's federal and state income and payroll
tax liabilities with respect to the issuance, vesting, exercise or payment of
the Award shall be limited to the number of shares which have a Fair Market
Value on the date of withholding or repurchase equal to the aggregate amount of
such liabilities based on the minimum statutory withholding rates for federal
and state tax income and payroll tax purposes that are applicable to such
supplemental taxable income.

                  11.6.    Loans. The Committee may, in its discretion, extend
one or more loans to Employees in connection with the exercise or receipt of an
Award granted or awarded under the Plan, or the issuance of Restricted Stock or
Deferred Stock awarded under the Plan. The terms and conditions of any such loan
shall be set by the Committee. Notwithstanding the foregoing, (i) in no event
shall any loan that is prohibited by the Sarbanes-Oxley Act of 2002 or that is
inconsistent with the Company's qualification as a REFT be permitted under the
Plan and (ii) any loan that is made hereunder at any time which is then not
prohibited by the Sarbanes-Oxley Act of 2002 shall become due and payable in
full immediately before the loan would be prohibited by the Sarbanes-Oxley Act
of 2002.

                  11.7.    Forfeiture Provisions. Pursuant to its general
authority to determine the terms and conditions applicable to Awards under the
Plan, the Administrator shall, to the extent permitted by applicable law, have
the right to provide, in the terms of Awards made under the Plan, or to require
a Holder to agree by separate written instrument, that (a)(i) any proceeds,
gains or other economic benefit actually or constructively received by the
Holder upon any receipt or exercise of the Award, or upon the receipt or resale
of any Common Stock underlying the Award, must be paid to the Company, the
Partnership, the Services Company or a Subsidiary and (ii) the Award shall
terminate and any unexercised portion of the Award (whether or not vested) shall
be forfeited, if (b)(i) a Termination of Employment, Termination of Consultancy
or Termination of Directorship occurs prior to a specified date, or within a
specified time period following receipt or exercise of the Award, or (ii) the
Holder at any time, or during a specified time period, engages in any activity
in competition with the Company, the Partnership, the Services Company or a
Subsidiary or which is inimical, contrary or harmful to the interests of the
Company, the Partnership, the Services Company or a Subsidiary as further
defined by the

                                       33
<PAGE>

Administrator or (iii) the Holder incurs a Termination of Employment,
Termination of Consultancy or Termination of Directorship for cause.

                  11.8.    Effect of Plan Upon Options and Compensation Plans.
The adoption of the Plan shall not affect any other compensation or incentive
plans in effect for the Company, the Partnership, the Services Company or any
Subsidiary. Nothing in the Plan shall be construed to limit the right of the
Company (a) to establish any other forms of incentives or compensation for
Employees, Directors or Consultants of the Company, the Services Company, the
Partnership or any Subsidiary or (b) to grant or assume options or other rights
or awards otherwise than under the Plan in connection with any proper corporate
purpose including but not by way of limitation, the grant or assumption of
options in connection with the acquisition by purchase, lease, merger,
consolidation or otherwise, of the business, stock or assets of any corporation,
partnership, limited liability company, firm or association.

                  11.9.    Section 83(b) Election Prohibited. No Holder may make
an election under Section 83(b) of the Code with respect to any award or grant
under the Plan without the consent of the Company, which the Company may grant
or withhold in its sole discretion.

                  11.10    Grant of Awards to Certain Employees or Consultants.
The Company and the Partnership, the Services Company or any Subsidiary may
provide through the establishment of a formal written policy or otherwise for
the method by which shares of Common Stock and/or payment therefor may be
exchanged or contributed between the Company and such other party, or may be
returned to the Company upon any forfeiture of Common Stock by the Holder, for
the purpose of ensuring that the relationship between the Company and the
Partnership, the Services Company or such Subsidiary remains at arm's-length.

                  11.11    Restrictions on Awards. This Plan shall be
interpreted and construed in a manner consistent with the Company's status as a
REIT. No Award shall be granted or awarded, and with respect to an Option
already granted under the Plan, such Option shall not be exercisable:

                           (a)      to the extent such Award or Option exercise
         could cause the Holder to be in violation of the Ownership Limit; or

                           (b)      if, in the discretion of the Administrator,
         such Award or Option exercise could impair the Company's status as a
         REIT.

                  11.12.   Compliance with Laws. The Plan, the granting and
vesting of Awards under the Plan and the issuance and delivery of shares of
Common Stock and the payment of money under the Plan or under Awards granted or
awarded hereunder are subject to compliance with all applicable federal and
state laws, rules and regulations (including but not limited to state and
federal securities law and federal margin requirements) and to such approvals by
any listing, regulatory or governmental authority as may, in the opinion of
counsel for the Company, be necessary or advisable in connection therewith. Any
securities delivered under the Plan shall be subject to such restrictions, and
the person acquiring such securities shall, if requested by the Company, provide
such assurances and representations to the Company as the Company may deem
necessary or desirable to assure compliance with all applicable legal
requirements. To the

                                       34

<PAGE>

extent permitted by applicable law, the Plan and Awards granted or awarded
hereunder shall be deemed amended to the extent necessary to conform to such
laws, rules and regulations.

                  11.13.   Titles. Titles are provided herein for convenience
only and are not to serve as a basis for interpretation or construction of the
Plan.

                  11.14.   Governing Law. This Plan and any agreements hereunder
shall be administered, interpreted and enforced under the internal laws of the
State of California without regard to conflicts of laws thereof.

                  11.15.   Conflicts with Company's Articles of Incorporation.
Notwithstanding any other provision of the Plan, no Holder shall acquire or have
any right to acquire any Common Stock, and shall not have other rights under the
Plan, which are prohibited under the Company's Articles of Incorporation, as
amended from time to time.

                                       35

<PAGE>

                  IN WITNESS WHEREOF, the parties below have caused the
foregoing Plan to be approved by their officers duly authorized on the date and
year first set forth above.

                                MAGUIRE PROPERTIES, INC.
                                a Maryland corporation

                                By: /s/ Richard I. Gilchrist
                                    --------------------------------------------
                                    Richard I. Gilchrist
                                    President and Co-Chief Executive Officer

                                MAGUIRE PROPERTIES SERVICES, INC.
                                a Maryland corporation

                                By: /s/ Richard I. Gilchrist
                                    --------------------------------------------
                                    Richard I. Gilchrist
                                    President

                                MAGUIRE PROPERTIES, L.P.
                                a Maryland limited partnership

                                By: Maguire Properties, Inc.
                                    a Maryland corporation
                                    Its General Partner

                                    By: /s/ Richard I. Gilchrist
                                        ----------------------------------------
                                        Richard I. Gilchrist
                                        President and Co-Chief Executive Officer

                                       36

<PAGE>

                  I hereby certify that the foregoing Plan was duly adopted by
the Board of Directors of Maguire Properties, Inc. on June 2,2003.

                  Executed on this____*th day of June, 2003.

                                 By: /s/ Mark T. Lammas
                                     ------------------------------------------
                                     Mark T. Lammas
                                     Secretary

                                * * * * * * * * *

                  I hereby certify that the foregoing Plan was duly adopted by
the stockholders of Maguire Properties, Inc. on June 2,2003.

                  Executed on this ___*th day of June, 2003.

                                 By: /s/ Mark T. Lammas
                                     ------------------------------------------
                                     Mark T. Lammas
                                     Secretary

                                       37

</TEXT>
</DOCUMENT>
