2003 STOCK OPTION PLAN
WELLS REAL ESTATE INVESTMENT TRUST II, INC.
WELLS REAL ESTATE INVESTMENT TRUST II, INC., a Maryland corporation (the “Company”) adopted this 2003 Stock Option Plan (the “Plan”), effective September , 2003, the date of approval of the Plan by the Board of Directors and shareholders of the Company, for the benefit of the eligible employees of WELLS CAPITAL, INC., a Georgia corporation (“Wells Capital”) and WELLS MANAGEMENT COMPANY, INC., a Georgia corporation (“Wells Management”).
1.1 GENERAL. The purpose of the 2003 Stock Option Plan (the “Plan”) is to enable Wells Capital and Wells Management to obtain and retain the services of Employees considered essential to the long range success of the Company, Wells Capital, Wells Management, and their Affiliates by offering employees an opportunity to participate in the Company’s growth through the ownership of stock in the Company.
EFFECTIVE TERM OF PLAN
2.1 EFFECTIVE DATE. The Plan became effective as of September , 2003, the date upon it was approved by both the Board and the shareholders of the Company.
2.2 TERMINATION OF PLAN. The Plan shall terminate on the tenth anniversary of the Effective Date. The termination of the Plan on such date shall not affect the validity of any Option outstanding on the date of termination.
3.1 DEFINITIONS. When a word or phrase appears in this Plan with the initial letter capitalized, and the word or phrase does not commence a sentence, the word or phrase shall generally be given the meaning ascribed to it in this Section or in Section 1.1 unless a clearly different meaning is required by the context. The following words and phrases shall have the following meanings:
(a) “Affiliate” of another person or entity (a “Person”) includes only the following: (i) any Person directly or indirectly controlling, controlled by, or under common control with such other Person; (ii) any Person directly or
indirectly owning, controlling, or holding with the power to vote 10% or more of the outstanding voting securities of such other Person; (iii) any legal entity for which such Person acts as an executive officer, director, trustee, or general partner; (iv) any Person 10% or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held, with power to vote, by such other Person; and (v) any executive officer, director, trustee, or general partner of such other Person. An entity shall not be deemed to control or be under common control with a Wells-sponsored program unless (i) it owns 10% or more of the voting equity interests of such program or (ii) a majority of the board (or equivalent governing body) of such program is comprised of Affiliates of such entity.
(b) “Board” means the Board of Directors of the Company.
(c) “Code” means the Internal Revenue Code of 1986, as amended from time to time.
(d) “Committee” means the committee of the Board described in Article 4.
(e) “Company” means Wells Real Estate Investment Trust II, Inc., a Maryland corporation.
(f) “Continuous Status as a Participant” means the absence of any interruption or termination of service as an employee, officer, consultant or director of the Company, Wells Capital, Wells Management, or any Affiliate, as applicable. Continuous Status as a Participant shall continue to the extent provided in a written severance, consulting, or employment agreement during any period for which severance compensation payments are made to an employee, officer, consultant or director and shall not be considered interrupted in the case of any leave of absence authorized in writing by the Company or, if the Participant is employed by Wells Capital or Wells Management, the Participant’s employer, prior to its commencement.
(g) “Effective Date” has the meaning assigned such term in Section 2.1.
(h) “Eligible Participant” means an employee, officer, consultant or director of the Company, Wells Capital, Wells Management, or any Affiliate.
(i) “Exchange” means the Nasdaq National Market or any national securities exchange on which the Stock may from time to time be listed or traded.
(j) “Fair Market Value”, on any date, means (i) if the Stock is listed on a securities exchange or is traded over the Nasdaq National Market, the closing sales price on the immediately preceding date on which sales were reported, or (ii)