Exhibit 10.23
STORAGE EQUITIES, INC.
1990 STOCK OPTION PLAN
The Storage Equities, Inc. 1990 Stock Option Plan was adopted by the
Board of Directors on July 18, 1990 and amended by the Board of Directors on
August 14, 1991 and February 20, 1992. Effective August 31, 1992, the Board
of Directors amended the 1990 Stock Option Plan to divide the 1990 Stock
Option Plan into two sub-plans: the Non-Director Stock Option Sub-plan and
the Outside Director Stock Option Sub-plan.
STORAGE EQUITIES, INC.
1990 STOCK OPTION PLAN
I. NON-DIRECTOR STOCK OPTION SUB-PLAN
Section 1. THE NON-DIRECTOR SUB-PLAN
-------------------------------------
1.1 PURPOSE OF THE NON-DIRECTOR SUB-PLAN. This Non-Director
Stock Option Sub-plan, a sub-plan of the 1990 Stock Option Plan (the "Non-
Director Sub-plan"), is intended to permit the grant of stock options to
officers and employees of and other key service providers to Storage
Equities, Inc., a California corporation (the "Company") who are largely
responsible for the management, growth and financial success of the Company.
The Company's Board of Directors (the "Board") believes that recipients of
stock options will have a more direct interest in the future success of the
operations of the Company. The underlying objectives that the Non-Director
Sub-plan seeks to accomplish are the advancement of the Company's interests
in general, and an increase in the Company's earnings in particular, through
the efforts of these individuals.
1.2 THE OPTIONS. The options granted under this Non-Director
Sub-plan (the "Options" or individually, the "Option") are options to
purchase shares of the Company's common stock, $.10 par value (the "Common
Stock").
1.3 NONQUALIFIED OPTIONS. The Options granted under this Non-
Director Sub-plan are non-qualified options that will not be treated as
incentive stock options under Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"). Thus, upon exercise of an Option, each
holder of an Option (a "Holder"), will recognize taxable income equal to the
excess of the fair market value of the Common Stock received over the Option
Price.
Section 2. CERTAIN DEFINITIONS
-------------------------------
The following terms have the following meanings as used in this Non-
Director Sub-plan:
"Adviser" means Public Storage Advisers, Inc., a California
corporation, which acts as the adviser to the Company.
"Board" means the Company's Board of Directors.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means the Audit Committee of the Company's Board of
Directors.
"Common Stock" means shares of the Company's common stock, $.10 par
value.
"Effective Date" means the date on which the Non-Director Sub-plan
was adopted by the Board.
"Exercise Date" means the date on which the Company receives a
Holder's Notice of Exercise and payment in full of the Option Price.
"Fair Market Value" means the closing price of a share of Common
Stock as reported on the New York Stock Exchange (or other national
securities exchange on which the Common Stock is listed) on the date of
grant. If no closing price is reported, or if the Common Stock is not
listed on a national securities exchange on the date of grant, then Fair
Market Value shall mean the average of the high and low sale prices (or if
no sale prices are reported, the average of the high and low bid prices) as
reported by the principal regional stock exchange, or, if not so reported,
as reported by NASDAQ or a quotation system of general circulation to
brokers and dealers. If at any time shares of Common Stock are not traded
on an exchange or in the over-the-counter market, Fair Market Value shall be
the value determined by the Committee taking into consideration those
factors affecting or reflecting value that they deem appropriate.
"Holder" means an eligible person to whom an Option is granted.
"Notice of Exercise" means the written notice of a Holder's exercise
of an Option, specifying the number of shares of Common Stock as to which
the Option is so exercised.
"Option" means an option to purchase Common Stock of the Company
granted under the Non-Director Sub-plan.
"Option Agreement" means a written agreement between the Company and
a Holder offering an Option and setting forth the terms and conditions of
the Option, in such form as the Committee may from time to time adopt.
"Option Price" means the price to be paid upon exercise of an Option.
"Outside Director" means a director of the Company who is not
affiliated with the Adviser.
"Outside Director Sub-plan" means the Company's Outside Director
Stock Option Sub-plan, a sub-plan of the Company's 1990 Stock Option Plan,
which was adopted by the Board effective August 31, 1992.
"Prior Plan" means the Company's 1990 Stock Option Plan as then in
effect for options granted prior to August 31, 1992.
"Service Provider" means a consultant or adviser to the Company
(including the Adviser), a manager of the Company's properties or affairs
(including Public Storage Management, Inc.), a selling agent of the Company
(including PSI Securities Corporation), any person or entity with a
relationship to the Company similar to the foregoing, and employees of any
of the foregoing.
"Termination of Relationship" means (i) if a Holder is an employee of
the Company, a cessation of the employer/employee relationship between the
Company and the employee for any reason, including, but not limited to, a
termination by resignation, discharge, death, disability or retirement, but
excluding any such termination where there is a simultaneous reemployment of
the same person by the Company; and (ii) if a Holder is a Service Provider
to, but not an employee of, the Company, the earliest of (A) termination for
any reason of any consulting or other agreement pursuant to which the
Service Provider or his employer provides services to or on behalf of the
Company, (B) one month after services have last been provided by the Service
Provider or his employer to or on behalf of the Company under any service
arrangement between the Service Provider or his employer and the Company, or
(C) a cessation of the employer/employee relationship between the Service
Provider employer and the Service Provider employee for any reason,
including, but not limited to,
a termination by resignation, discharge, death, disability or retirement,
but excluding any such termination where there is a simultaneous
reemployment of the same person by the Service Provider employer.
"Total Disability" of a person means the person's physical or mental
incapacity, through illness or other cause, to perform the majority of his
or her duties for a period exceeding 90 days, based upon a certificate of
incapacity by, in the discretion of the Committee, either the person's
regularly attending physician or a duly-licensed physician selected by the
Committee. In making the determination as to a person's total disability,
the Committee shall consider the definition found in Section 422(c)(6) of
the Code.
Section 3. ADMINISTRATION OF THE NON-DIRECTOR SUB-PLAN
3.1 THE COMMITTEE. The Non-Director Sub-plan shall be
administered by the Audit Committee of the Board (the "Committee"). The
Committee shall be composed of not fewer than two persons who shall be
appointed by and serve at the pleasure of the Board.
3.2 GENERAL AUTHORITY OF THE COMMITTEE. The Committee is
authorized to adopt those rules and regulations and to take those actions
that it shall consider necessary or advisable for the proper administration
of the Non-Director Sub-plan and to construe, interpret and administer the
Non-Director Sub-plan and the Options. Decisions of the Committee shall be
final and binding upon the Company, the Holders and all other persons. No
member of the Committee shall incur any liability by reason of any action or
determination made in good faith with respect to the Non-Director Sub-plan,
an Option or an Option Agreement.
3.3 SPECIFIC AUTHORITY OF THE COMMITTEE. Subject to the
provisions of the Non-Director Sub-plan set forth elsewhere, the Committee
shall have the authority, in its sole discretion, to:
(a) Determine to which eligible persons Options shall be granted;
(b) Determine the terms of Options granted under the Non-Director
Sub-plan;
(c) Determine the number of shares of Common Stock for which
Options shall be granted and the times at which Options shall be granted;
(d) Determine the Option Price of the shares of Common Stock
subject to each Option;
(e) Determine the time or times when each Option shall become
exercisable and the duration of the exercise period; and
(f) Interpret the Non-Director Sub-plan and prescribe, amend and
rescind rules and regulations relating to it in accordance with Section 3.2.
3.4 QUORUM. A majority of the Committee shall constitute a
quorum. The acts of a majority of the members present at any meeting at
which a quorum is present or participating by the means described in the
last sentence of this Section 3.4, or acts approved in writing by a majority
of the Committee, shall be the acts of the Committee. The Committee shall
keep minutes of its meetings. One or more members of the Committee may
participate in a meeting of the Committee by means of conference telephone
or similar communications equipment so long as each member participating in
the meeting can hear each other.
Section 4. ELIGIBILITY FOR GRANTS
----------------------------------
The following persons shall be eligible to be granted Options under
this Non-Director Sub-plan: any person who is (i) an employee of the
Company, whether the person is so employed on the Effective Date or becomes
so employed after the Effective Date, unless the employee is also a
Director, or (ii) a Service Provider to the Company, although not an
employee. Directors shall not be eligible for and shall not be granted
Options under this Non-Director Sub-plan.
Section 5. STOCK SUBJECT TO THE NON-DIRECTOR SUB-PLAN
------------------------------------------------------
The Common Stock to be issued pursuant to the Non-Director Sub-plan
shall be shares of authorized but unissued Common Stock of the Company or
authorized and issued shares of Common Stock that have been reacquired by
the Company. The Company shall not be required under any circumstances to
issue fractional shares pursuant to the Non-Director Sub-plan. If an Option
lapses or expires or if an Option is surrendered, terminated or cancelled,
in whole or in part, for any reason, without having been fully vested or
exercised, the shares of Common Stock that are no longer subject to the
Option shall be available for future Options under the Non-Director Sub-
plan. At all times during the life of any outstanding Options, the Company
shall retain as authorized and unissued shares or treasury shares at least
the number of shares of Common Stock from time to time included in the
outstanding Options, or shall otherwise assure itself of its ability to
perform its obligations under the Non-Director Sub-plan. The total number
of shares of Common Stock that may be purchased pursuant to (a) Options
granted under this Non-Director Sub-plan, and (b) options granted (not
including options granted that lapse, expire, or are surrendered, terminated
or cancelled, in whole or in part, for any reason, without having been fully
vested or exercised) to participants other than Outside Directors under the
Prior Plan, shall not exceed 500,000 minus the sum of (x) the number of
shares of Common Stock for which Options have been granted (not including
Options granted that lapse, expire or are surrendered, terminated or
cancelled, in whole or in part, for any reason, without having been fully
vested or exercised) under the Outside Director Sub-plan, and (y) the number
of shares of Common Stock for which options have been granted (not including
options granted that lapse, expire or are surrendered, terminated or
cancelled, in whole or in part, for any reason, without having been fully
vested or exercised) to Outside Directors under the Prior Plan, except as
that number of shares may be adjusted from time to time after the Effective
Date in accordance with the provisions of Section 7 of this Non-Director
Sub-plan.
Section 6. OPTIONS
-------------------
6.1 SELECTION OF HOLDERS. The Committee shall from time to time
select from among persons eligible to be granted Options under Section 4
those persons to whom Options shall be granted.
6.2 OPTION AGREEMENTS. Each Option granted under the Non-
Director Sub-plan shall be evidenced by a separate, written agreement
between the Company and the person to whom the Option is granted (the
"Holder") in such form as the Committee may from time to time adopt (the
"Option Agreement"). The Committee shall specify with respect to each
Option the date of grant, and the Option Agreement shall be dated as of that
date. If the Holder fails to accept the Option within one hundred twenty
(120) days from the date of grant, the grant shall be deemed withdrawn and
the Option shall be deemed terminated.
6.3 TERMS AND CONDITIONS OF OPTIONS. All Options shall be
subject to the following terms and conditions:
(a) OPTION PRICE. The Option Price of a share of Common Stock
covered by an Option shall be fixed by the Committee and shall be equal to
100% of the Fair Market Value (as defined) of a share of Common Stock on the
date of grant. The Option Price shall not be less than $0.10 per share of
Common Stock.
(b) OPTION VESTING. Options shall vest in installments according
to the following schedule.
Years from Number of
Date of Grant Shares Vested
------------- -------------
Less than One Year 0
One Year but 33-1/3% of the total
Less than Two Years number of shares vested
Two Years but 66-2/3% of the total
Less than Three Years number of shares vested
Three Years or More 100% of the total
number of shares vested
(c) OPTION TERM. An Option may be exercised at any time during
the five-year period beginning on the date the Option first became
exercisable. An Option that has not been exercised shall expire on the
fifth anniversary of the date it vested. Thus, one-third of the Options
terminate six years from the date of grant, one-third of the Options
terminate seven years from the date of grant and one-third of the Options
terminate eight years from the date of grant. No Option shall be
exercisable after the eighth anniversary of the date of grant.
(d) EXERCISE OF OPTIONS. A Holder may exercise Options with
respect to all or a portion of the shares of Common Stock covered by Options
then subject to exercise, as follows:
(1) NOTICE OF EXERCISE. The Holder shall give written
notice of his exercise of an Option(the "Notice of Exercise") to the
Secretary of the Company, specifying the number of shares of Common
Stock as to which the Option is so exercised and providing the Holder's
correct mailing address. Exercises by a Holder's heir or the
representative of a Holder's estate must be accompanied by evidence of
the authority of the heir or representative to so act, in form
reasonably satisfactory to the Company. Any partial exercise of Options
shall be made only in multiples of one hundred (100) shares of Common
Stock. Upon receipt by the Company of a Holder's Notice of Exercise,
the Option Price shall become immediately due and shall be payable in
full by cash or check payable to the Company's order. The date on which
the Company receives the Notice of Exercise and payment in full of the
Option Price shall be deemed the "Exercise Date."
(2) WRITTEN REPRESENTATIONS. If requested by the Committee,
the Notice of Exercise or another writing signed by the Holder or his
legal representative shall contain (i) a representation that the Common
Stock is being purchased for investment purposes only, (ii) an
agreement not to sell any Common Stock so purchased in any manner that
is in violation of the Securities Act of 1933, as amended (the "Act"),
(iii) any representations or agreements as may be necessary or
desirable, in the Committee's sole
discretion, to effect compliance with the Act and any other federal and
state securities laws and regulations, and (iv) any other assurances as may
be deemed advisable by the Committee.
(3) ISSUANCE OF CERTIFICATE. Upon proper exercise of an Option
and receipt of payment in full of the Option Price, a properly executed
certificate or certificates representing the Common Stock shall be delivered
to the Holder.
(e) NONTRANSFERABILITY OF OPTIONS. No Option granted under the
Non-Director Sub-plan shall be transferable other than by will or by the
laws of descent and distribution. During the lifetime of the Holder, an
Option is exercisable only by the Holder or the Holder's guardian or legal
representative. An Option shall not be assigned, transferred (except as
provided above), pledged or hypothecated in any way, shall not be assignable
by operation of law, and shall not be subject to execution, attachment or
similar process.
(f) NO SHAREHOLDER RIGHTS. A Holder shall have none of the rights
of a shareholder with respect to any shares covered by an Option until the
Holder has duly exercised the Option and paid the Option Price in full.
(g) TERMINATION OF RELATIONSHIP. Subject to subsections (1) and
(2) below, upon a Holder's Termination of Relationship (as defined), all
nonvested Options and all vested but unexercised Options held by the Holder
shall expire at the close of business on the 30th day after the date of the
Termination of Relationship.
(1) DEATH OF HOLDER. All Options granted to a Holder that are not
yet fully vested on the date of the Holder's death shall become fully vested
on that date. Those Options, along with all other vested but unexercised
Options held by the Holder, may then be exercised by the personal
representative of the Holder's estate or by the person or persons to whom
the Option is transferred pursuant to the Holder's will or in accordance
with the laws of descent or distribution. The exercise of the Options must
occur before the earlier of (i) the specified expiration date of the Options
or (ii) the first anniversary of the Holder's death. Upon the occurrence of
the earlier event, the Option shall terminate and cease to be exercisable.
(2) DISABILITY. All Options granted to a Holder that are not yet
fully vested on the date of the Holder's Total Disability (as defined) shall
become fully vested on that date. Those Options, along with all other
vested and unexercised Options held by the Holder, may then be exercised by
the Holder or Holder's legal representative. The exercise of the Options
must occur before the earlier of (i) the specified expiration date of the
Options or (ii) the first anniversary of the date of the Holder's Total
Disability. Upon the occurrence of the earlier event, the Options shall
terminate and cease to be exercisable. Total Disability shall be determined
by the Committee consistent with the definition found in Section 422(c)(6)
of the Code. The Committee's decision as to whether a Holder has
experienced Total Disability shall be final and binding.
6.4 CANCELLATION AND NEW GRANT OF OPTIONS. The Committee shall have
the authority to effect, at any time and from time to time, with the consent
of the affected Holders, the cancellation of any or all outstanding Options
under the Non-Director Sub-plan and to grant in substitution for those
Options new Options under the Non-Director Sub-plan covering the same or
different numbers of shares of Common Stock.
Section 7. ADJUSTMENTS
-----------------------
7.1 ADJUSTMENTS BY STOCK SPLIT, STOCK DIVIDEND, ETC. If any change is
made to the Common Stock issuable under the Non-Director Sub-plan (whether
by reason of merger, consolidation, reorganization, recapitalization, stock
dividend, stock split, reverse stock split, combination or exchange of
shares, or other similar change in the Company's capital structure), then,
unless the change results in the termination of all outstanding Options, the
Committee shall make appropriate adjustments to the number and/or class of
shares that may be issued or granted or issued on exercise of Options, all
to preserve, but not to increase, the benefits under the Options. In that
case, the numbers, rights and privileges of the following shall be increased
or decreased in like manner as if they had been issued and outstanding,
fully paid and nonassessable at the time of the occurrence: (A) the shares
of Common Stock with respect to which Options may be granted under the Non-
Director Sub-plan; (B) the maximum number of shares of Common Stock with
respect to which an eligible person may receive an Option under the Non-
Director Sub-plan; and (C) the shares of Common Stock then included in each
outstanding Option granted under the Non-Director Sub-plan.
7.2 OTHER CHANGES IN STOCK. If there is any change, other than as
specified in Section 7.1, in the number or kind of outstanding shares of
Common Stock or of any stock or other securities into which the Common Stock
shall be changed or for which it shall have been exchanged, and if the
Committee shall, in its discretion, determine that the change equitably
requires an adjustment in the number or kind of shares that are subject to
outstanding Options or that had been reserved for issuance pursuant to the
Non-Director Sub-plan but are not then subject to an Option, those
adjustments shall be made by the Committee and shall be effective for all
purposes of the Non-Director Sub-plan and each outstanding Option Agreement.
7.3 APPORTIONMENT OF PRICE. Upon any occurrence described in the
preceding Sections 7.1 and 7.2, the total Option Price under any then
outstanding Option shall remain unchanged but shall be apportioned ratably
over the increased number or changed kinds of securities or other property
subject to the Option.
7.4 RIGHTS TO SUBSCRIBE. If the Company shall at any time grant to
the holders of its Common Stock rights to subscribe pro rata for additional
shares of Common Stock or for any other securities of the Company or of any
other corporation, there shall be added to the number of shares then under
option to any Holder, the Common Stock or other securities for which the
Holder would have been entitled to subscribe if, immediately before the
grant, the Holder had exercised his entire Option, and the Option Price
shall be increased by the amount of the price that would have been payable
by the Holder for such Common Stock or other securities.
7.5 GENERAL ADJUSTMENT RULES. No adjustment or substitution provided
for in this Section 7 shall require the Company to sell a fractional share
under any Option Agreement. Any substitution or adjustment with respect to
an Option Agreement shall be limited by deleting any fractional share. In
the case of any such substitution or adjustment, the Option Price per share
in each Option Agreement shall be equitably adjusted by the Committee to
reflect the greater or lesser number of shares of Common Stock or other
securities into which the Common Stock subject to the Option may have been
changed.
7.6 DETERMINATION BY THE COMMITTEE. Adjustments under this Section 7
shall be made by the Committee, whose determination with regard to the
adjustments shall be final and binding. No fractional shares of Common
Stock shall be issued on account of any such adjustment.
Section 8. ACCELERATION AND TERMINATION OF OPTIONS
---------------------------------------------------
8.1 DISPOSAL OF ASSETS. If the Company (or its shareholders) enter
into an agreement to dispose of all or substantially all of the assets (or
of more than 50% of the outstanding capital stock) of the Company by means
of sale, merger, reorganization or liquidation, then (i) each outstanding
Option shall become exercisable during the fifteen (15) days immediately
before the scheduled consummation of the event, with respect to the full
number of shares of Common Stock, whether or not vested, that are eligible
for purchase under the Option. Any exercise of an Option during the fifteen
(15) day period shall be conditioned upon the consummation of the event and
shall be effective only immediately before the consummation of the event.
Upon consummation of any such event, all outstanding Options, whether or not
accelerated, shall terminate and cease to be exercisable, unless assumed or
replaced by the successor corporation or parent of the successor
corporation.
8.2 NO LIMITATION ON COMPANY'S RIGHTS. The grant of Options under
this Non-Director Sub-plan shall in no way affect the right of the Company
to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate, or to sell
or transfer all or any part of its business or assets.
Section 9. TERM OF NON-DIRECTOR SUB-PLAN
-----------------------------------------
Unless sooner terminated in accordance with Section 11 of the Non-Director
Sub-plan, the authority to grant Options under the Non-Director Sub-plan
shall terminate upon the earlier of (i) July 18, 2000 or (ii) the date on
which all shares available for issuance under the Non-Director Sub-plan
shall have been issued pursuant to the exercise of Options granted under the
Non-Director Sub-plan. If the date of termination is determined by (i)
above, then Options outstanding on that date shall continue to have force
and effect in accordance with the provision of the instruments evidencing
those Options.
Section 10. EMPLOYMENT
-----------------------
10.1 NO RIGHT TO CONTINUATION OF RELATIONSHIP. Nothing in the Non-
Director Sub-plan or in any Option shall confer upon any employee the right
to continue in the employment of the Company, or confer upon any Service
Provider employee the right to continue in the employment of the Service
Provider employer, or confer upon any Service Provider the right to continue
to provide services to the Company, or confer upon any director, the right
to continue as a director of the Company. Moreover, nothing in the Non-
Director Sub-plan or in any Option shall interfere with or restrict in any
way the rights of the Company to discharge any employee or to terminate the
service arrangement with any Service Provider at any time for any reason
whatsoever, with or without good cause, or shall interfere with or restrict
in any way the rights of the Company's shareholders to remove a director
pursuant to the provisions of the California General Corporation Law.
10.2 DISCRETION OF COMMITTEE. The Committee, in its discretion, shall
determine the effect of all matters and questions relating to a Termination
of Relationship, including without limitation the question of whether a
Termination of Relationship resulted from Total Disability, and all
questions of whether a particular leave of absence constitutes a Termination
of Relationship.
Section 11. AMENDMENT OF THE NON-DIRECTOR SUB-PLAN
---------------------------------------------------
11.1 AUTHORITY OF THE BOARD. Except as set forth in this Section, the
Board shall have complete and exclusive power and authority to terminate the
Non-Director Sub-plan or to amend or modify the Non-Director Sub-plan in any
or all respects whatsoever, including the right to amend and rescind rules
and regulations to relating to the Non-Director Sub-plan. Nevertheless, no
amendment or modification may adversely affect rights and obligations with
respect to Options then outstanding under the Non-Director Sub-plan.
11.2 AMENDMENTS FOR TAX PURPOSES. The Board retains the right (but
shall have no obligation) to amend or modify the terms and provisions of the
Non-Director Sub-plan and of the outstanding Options under the Non-Director
Sub-plan to the extent necessary to qualify any or all Options for such
favorable federal income tax treatment (including deferral of taxation upon
exercise) as may be afforded employee stock options under amendments to the
Code or other federal, state or local statutes or regulations that become
effective after the Effective Date of this Non-Director Sub-plan.
11.3 LIMITATIONS ON AUTHORITY OF THE BOARD. Notwithstanding the
provisions of Sections 11.1 and 11.2, the Board shall not, without the
approval of shareholders holding a majority of the Company's then
outstanding shares of Common Stock, increase the maximum number of shares
issuable under the Non-Director Sub-plan, except for permissible adjustments
under Sections 7 and 8, modify the requirements as to the classes of persons
eligible to be granted Options, or materially increase the benefits accruing
to Holders under the Non-Director Sub-plan. Nevertheless, if, in the
opinion of the Board, shareholder approval of the changes described in this
Section 11 is no longer needed pursuant to the rules and regulations of the
Securities and Exchange Commission or the New York Stock Exchange (or any
stock exchange on which the Common Stock is listed at the time the changes
are made), then shareholder approval of the changes described in this
Section 11.3 shall not be required.
Section 12. USE OF PROCEEDS
----------------------------
The proceeds received by the Company from the sale of shares of Common
Stock pursuant to Options granted under the Non-Director Sub-plan shall be
used for general corporate purposes.
Section 13. GENERAL PROVISIONS
-------------------------------
13.1 WITHHOLDING. With respect to any and all federal, state and local
income and employment tax withholding requirements applicable to the
exercise of Options under the Non-Director Sub-plan, Holders shall permit
the Company to withhold any sums required from any amounts otherwise owed to
the Holders and will be required promptly to reimburse the Company for
payments in excess of amounts otherwise owed.
13.2 EFFECTIVE DATE. The Non-Director Sub-plan shall become effective
as of August 31, 1992 and shall expire on July 18, 2000. No Options may be
granted under the Non-Director Sub-plan after July 18, 2000, but Options
granted on or before that date may be exercised according to the terms of
the applicable Option Agreement and shall continue to be governed by and
interpreted consistent with the terms of this Non-Director Sub-plan.
13.3 COMPLIANCE WITH OTHER LAWS AND REGULATIONS. The Non-Director Sub-
plan, the grant and exercise of Options under the Non-Director Sub-plan, and
the obligation of the Company to sell and deliver shares under the Options,
shall be subject to all applicable federal and state laws, rules and
regulations and to
any approvals by a government or regulatory agency that
may be required. The Company shall not be required to issue or deliver any
certificates for shares of Common Stock before (i) the listing of the shares
on any stock exchange on which the Common Stock may then be listed or (ii)
the completion of any registration or qualification of the shares under any
federal or state law, or any ruling or regulation of any governmental body
that the Company shall, in its sole discretion, determine to be necessary or
advisable.
13.4 SECTION HEADINGS. The section headings are included in this Non-
Director Sub-plan for convenience only and shall have no effect on the
interpretation of the Non-Director Sub-plan.
Adopted by the Board effective August 31, 1992.
STORAGE EQUITIES, INC.
STORAGE EQUITIES, INC.
1990 STOCK OPTION PLAN
II. OUTSIDE DIRECTOR STOCK OPTION SUB-PLAN
Section 1. THE OUTSIDE DIRECTOR SUB-PLAN
-----------------------------------------
1.1 PURPOSE OF THE OUTSIDE DIRECTOR SUB-PLAN. This Outside Director
Stock Option Sub-plan, a sub-plan of the 1990 Stock Option Plan (the
"Outside Director Sub-plan"), is intended to permit the grant of stock
options to non-employee directors of Storage Equities, Inc., a California
corporation (the "Company"). The underlying objectives that the Outside
Director Sub-plan seeks to accomplish are both to attract and retain on the
Company's Board of Directors persons of exceptional competence and to
provide a further incentive to serve as a director of the Company.
1.2 THE OPTIONS. The options granted under this Outside Director Sub-
plan (the "Options" or individually, the "Option") are options to purchase
shares of the Company's common stock, $.10 par value (the "Common Stock").
1.3 NONQUALIFIED OPTIONS. The Options granted under this Outside
Director Sub-plan are non-qualified options that will not be treated as
incentive stock options under Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"). Thus, upon exercise of an Option, each
holder of an Option (a "Holder"), will recognize taxable income equal to the
excess of the fair market value of the Common Stock received over the Option
Price.
Section 2. CERTAIN DEFINITIONS
-------------------------------
The following terms have the following meanings as used in this Outside
Director Sub-plan:
"Adviser" means Public Storage Advisers, Inc., a California
corporation, which acts as the adviser to the Company.
"Board" means the Company's Board of Directors.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means a committee of two or more employee directors
appointed by the Board.
"Common Stock" means shares of the Company's common stock, $.10 par
value.
"Effective Date" means the date on which the Outside Director Sub-plan
was adopted by the Board.
"Exercise Date" means the date on which the Company receives a Holder's
Notice of Exercise and payment in full of the Option Price.
"Fair Market Value" means the closing price of a share of Common Stock
as reported on the New York Stock Exchange (or other national securities
exchange on which the Common Stock is listed) on the date of grant. If no
closing price is reported, or if the Common Stock is not listed on a
national securities exchange
on the date of grant, then Fair Market Value shall mean the average of the
high and low sale prices (or if no sale prices are reported, the average of
the high and low bid prices) as reported by the principal regional stock
exchange, or, if not so reported, as reported by NASDAQ or a quotation
system of general circulation to brokers and dealers. If at any time shares
of Common Stock are not traded on an exchange or in the over-the-counter
market, Fair Market Value shall be the value determined by the Committee
taking into consideration those factors affecting or reflecting value that
they deem appropriate.
"Holder" means an Outside Director to whom an Option is granted.
"Non-Director Sub-plan" means the Company's Non-Director Stock Option
Sub-plan, a sub-plan of the Company's 1990 Stock Option Plan, which was
adopted by the Board effective August 31, 1992.
"Notice of Exercise" means the written notice of a Holder's exercise of
an Option, specifying the number of shares of Common Stock as to which the
Option is so exercised.
"Option" means an option to purchase Common Stock of the Company
granted under the Outside Director Sub-plan.
"Option Agreement" means a written agreement between the Company and a
Holder offering an Option and setting forth the terms and conditions of the
Option, in such form as the Committee may from time to time adopt.
"Option Price" means the price to be paid upon exercise of an Option.
"Outside Director" means a director of the Company who is not
affiliated with the Adviser.
"Prior Plan" means the Company's 1990 Stock Option Plan as then in
effect for options granted prior to August 31, 1992.
"Termination of Relationship" means the date on which the directorship
of the Holder is terminated for any reason, whether voluntary or
involuntary.
"Total Disability" of a person means the person's physical or mental
incapacity, through illness or other cause, to perform the majority of his
or her duties for a period exceeding 90 days, based upon a certificate of
incapacity by, in the discretion of the Committee, either the person's
regularly attending physician or a duly-licensed physician selected by the
Committee. In making the determination as to a person's total disability,
the Committee shall consider the definition found in Section 422(c)(6) of
the Code.
Section 3. ADMINISTRATION OF THE OUTSIDE DIRECTOR SUB-PLAN
3.1 THE COMMITTEE. The Outside Director Sub-plan shall be
administered by a committee composed of not fewer than two employee
directors who shall be appointed by and serve at the pleasure of the Board
(the "Committee").
3.2 GENERAL AUTHORITY OF THE COMMITTEE. Except as set forth in
Section 3.4, the Committee is authorized to adopt those rules and
regulations and to take those actions that it shall consider necessary or
advisable for the proper administration of the Outside Director Sub-plan and
to construe, interpret and administer the Outside Director Sub-plan and the
Options. Decisions of the Committee shall be final and
binding upon the Company, the Holders and all other persons. No member of
the Committee shall incur any liability by reason of any action or
determination made in good faith with respect to the Outside Director Sub-
plan, an Option or an Option Agreement.
3.3 SPECIFIC AUTHORITY OF THE COMMITTEE. Subject to the provisions of
the Outside Director Sub-plan set forth elsewhere and except as limited by
Section 3.4, the Committee shall have the authority, in its sole discretion,
to:
(a) Determine (subject to Sections 3.4 and 6.1) the terms of
Options granted under the Outside Director Sub-plan;
(b) Determine (subject to Sections 3.4 and 6.1) the number of
shares of Common Stock for which Options shall be granted and the times at
which Options shall be granted;
(c) Determine the Option Price of the shares of Common Stock
subject to each Option;
(d) Determine (subject to Sections 3.4 and 6) the time or times
when each Option shall become exercisable and the duration of the exercise
period; and
(e) Interpret the Outside Director Sub-plan and prescribe, amend
and rescind rules and regulations relating to it in accordance with Section
3.2.
3.4 LIMITATION ON AUTHORITY OF THE COMMITTEE. Notwithstanding
anything to the contrary in Sections 3.2 or 3.3 or elsewhere in this Outside
Director Sub-plan, the Committee shall have no authority, discretion or
power to alter any terms or conditions specified in Section 6 of the Outside
Director Sub-plan.
3.5 QUORUM. A majority of the Committee shall constitute a quorum.
The acts of a majority of the members present at any meeting at which a
quorum is present or participating by the means described in the last
sentence of this Section 3.5, or acts approved in writing by a majority of
the Committee, shall be the acts of the Committee. The Committee shall keep
minutes of its meetings. One or more members of the Committee may
participate in a meeting of the Committee by means of conference telephone
or similar communications equipment so long as each member participating in
the meeting can hear each other.
Section 4. ELIGIBILITY FOR GRANTS
----------------------------------
Outside Directors shall be eligible for and granted Options under this
Outside Director Sub-plan as set forth in Section 6. Directors who are not
Outside Directors shall not be eligible for and shall not be granted Options
under this Outside Director Sub-plan.
Section 5. STOCK SUBJECT TO THE OUTSIDE DIRECTOR SUB-PLAN
----------------------------------------------------------
The Common Stock to be issued pursuant to the Outside Director Sub-plan
shall be shares of authorized but unissued Common Stock of the Company or
authorized and issued shares of Common Stock that have been reacquired by
the Company. The Company shall not be required under any circumstances to
issue fractional shares pursuant to the Outside Director Sub-plan. If an
Option lapses or expires or if an Option is surrendered, terminated or
cancelled, in whole or in part, for any reason, without having been fully
vested or exercised, the shares of Common Stock that are no longer subject
to the Option shall be available for future Options under the Outside
Director Sub-plan. At all times during the life of any outstanding Options,
the Company shall retain as authorized and unissued shares or treasury
shares at least the number of shares of Common Stock from time to time
included in the outstanding Options, or shall otherwise assure itself of its
ability to perform its obligations under the Outside Director Sub-plan. The
total number of shares of Common Stock that may be purchased pursuant to (a)
Options granted under this Outside Director Sub-plan, and (b) options
granted (not including options granted that lapse, expire, or are
surrendered, terminated or cancelled, in whole or in part, for any reason,
without having been fully vested or exercised) to Outside Directors under
the Prior Plan, shall not exceed the lesser of (a) 200,000 or (b) 500,000
minus the sum of (x) the number of shares of Common Stock for which Options
have been granted (not including Options granted that lapse, expire or are
surrendered, terminated or cancelled, in whole or in part, for any reason,
without having been fully vested or exercised) under the Non-Director Sub-
plan, and (y) the number of shares of Common Stock for which options have
been granted (not including options granted that lapse, expire or are
surrendered, terminated or cancelled, in whole or in part, for any reason,
without having been fully vested or exercised) to participants other than
Outside Directors under the Prior Plan, except as that number of shares may
be adjusted from time to time after the Effective Date in accordance with
the provisions of Section 7 of this Outside Director Sub-plan.
Section 6. OPTIONS
-------------------
6.1 GRANT OF OPTIONS TO OUTSIDE DIRECTORS. Each person who is an
Outside Director of the Company on the Effective Date or who becomes an
Outside Director of the Company after the Effective Date shall be granted
Options to purchase Common Stock under the Outside Director Sub-plan as
described in this Section 6.1
(a) NEW OUTSIDE DIRECTORS. Each person who is first elected an
Outside Director of the Company after the Effective Date will be granted
prior to but effective as of the date of his or her election as an Outside
Director an Option to purchase up to 15,000 shares of Common Stock. The
number of shares subject to each such Option will be fixed by the Committee
before the date of the person's election as an Outside Director.
(b) FUTURE GRANTS. On the date of each annual meeting of
shareholders (after the adjournment of the annual meeting), each Outside
Director (if he continues to serve in such capacity) shall be granted an
Option to purchase up to 5,000 shares of Common Stock. If any Options are
granted to Outside Directors on any such date, each Outside Director shall
receive an Option to purchase an identical number of shares of Common Stock.
6.2 OPTION AGREEMENTS. Each Option granted under the Outside Director
Sub-plan shall be evidenced by a separate, written agreement between the
Company and the Outside Director to whom the Option is granted (the
"Holder") in such form as the Committee may from time to time adopt (the
"Option Agreement"). The Committee shall specify with respect to each
Option the date of grant, and the Option Agreement shall be dated as of that
date. If the Holder fails to accept the Option within one hundred twenty
(120) days from the date of grant, the grant shall be deemed withdrawn and
the Option shall be deemed terminated.
6.3 TERMS AND CONDITIONS OF OPTIONS. All Options shall be subject to
the following terms and conditions:
(a) OPTION PRICE. The Option Price of a share of Common Stock
covered by a an Option shall be fixed by the Committee and shall be equal to
100% of the Fair Market Value (as defined) of a share of
Common Stock on the date of grant. The Option Price shall not be less than
$0.10 per share of Common Stock.
(b) OPTION VESTING. Options shall vest in installments according
to the following schedule.
Years from Number of
Date of Grant Shares Vested
------------- -------------
Less than One Year 0
One Year but 33-1/3% of the total
Less than Two Years number of shares vested
Two Years but 66-2/3% of the total
Less than Three Years number of shares vested
Three Years or More 100% of the total
number of shares vested
(c) OPTION TERM. An Option may be exercised at any time during
the five-year period beginning on the date the Option first became
exercisable. An Option that has not been exercised shall expire on the
fifth anniversary of the date it vested. Thus, one-third of the Options
terminate six years from the date of grant, one-third of the Options
terminate seven years from the date of grant and one-third of the Options
terminate eight years from the date of grant. No Option shall be
exercisable after the eighth anniversary of the date of grant.
(d) EXERCISE OF OPTIONS. A Holder may exercise Options with
respect to all or a portion of the shares of Common Stock covered by Options
then subject to exercise, as follows:
(1) NOTICE OF EXERCISE. The Holder shall give
written notice of his exercise of an Option(the "Notice of Exercise")
to the Secretary of the Company, specifying the number of shares of Common
Stock as to which the Option is so exercised and providing the Holder's
correct mailing address. Exercises by a Holder's heir or the representative
of a Holder's estate must be accompanied by evidence of the authority of
the heir or representative to so act, in form reasonably satisfactory to
the Company. Any partial exercise of Options shall be made only in
multiples of one hundred (100) shares of Common Stock. Upon receipt by the
Company of a Holder's Notice of Exercise, the Option Price shall become
immediately due and shall be payable in full by cash or check payable to
the Company's order. The date on which the Company receives the Notice
of Exercise and payment in full of the Option Price shall be deemed
the "Exercise Date."
(2) WRITTEN REPRESENTATIONS. If requested by the
Committee, the Notice of Exercise or another writing signed by the Holder
or his legal representative shall contain (i) a representation that the
Common Stock is being purchased for investment purposes only, (ii) an
agreement not to sell any Common Stock so purchased in any manner that is
in violation of the Securities Act of 1933, as amended (the "Act"), (iii)
any representations or agreements as may be necessary or desirable, in the
Committee's sole discretion, to effect compliance with the Act and any
other federal and state securities laws and regulations, and (iv) any other
assurances as may be deemed advisable by the Committee.
(3) ISSUANCE OF CERTIFICATE. Upon proper exercise of an Option
and receipt of payment in full of the Option Price, a properly executed
certificate or certificates representing the Common Stock shall be delivered
to the Holder.
(e) NONTRANSFERABILITY OF OPTIONS. No Option granted under the
Outside Director Sub-plan shall be transferable other than by will or by the
laws of descent and distribution. During the lifetime of the Holder, an
Option is exercisable only by the Holder or the Holder's guardian or legal
representative. An Option shall not be assigned, transferred (except as
provided above), pledged or hypothecated in any way, shall not be assignable
by operation of law, and shall not be subject to execution, attachment or
similar process.
(f) NO SHAREHOLDER RIGHTS. A Holder shall have none of the rights
of a shareholder with respect to any shares covered by an Option until the
Holder has duly exercised the Option and paid the Option Price in full.
(g) TERMINATION OF RELATIONSHIP. Subject to subsections (1) and
(2) below, upon a Holder's Termination of Relationship (as defined), all
nonvested Options and all vested but unexercised Options held by the Holder
shall expire at the close of business on the 30th day after the date of the
Termination of Relationship.
(1) DEATH OF HOLDER. All Options granted to a Holder that are not
yet fully vested on the date of the Holder's death shall become fully vested
on that date. Those Options, along with all other vested but unexercised
Options held by the Holder, may then be exercised by the personal
representative of the Holder's estate or by the person or persons to whom
the Option is transferred pursuant to the Holder's will or in accordance
with the laws of descent or distribution. The exercise of the Options must
occur before the earlier of (i) the specified expiration date of the Options
or (ii) the first anniversary of the Holder's death. Upon the occurrence of
the earlier event, the Option shall terminate and cease to be exercisable.
(2) DISABILITY. All Options granted to a Holder that are not yet
fully vested on the date of the Holder's Total Disability (as defined) shall
become fully vested on that date. Those Options, along with all other
vested and unexercised Options held by the Holder, may then be exercised by
the Holder or Holder's legal representative. The exercise of the Options
must occur before the earlier of (i) the specified expiration date of the
Options or (ii) the first anniversary of the date of the Holder's Total
Disability. Upon the occurrence of the earlier event, the Options shall
terminate and cease to be exercisable. Total Disability shall be determined
by the Committee consistent with the definition found in Section 422(c)(6)
of the Code. The Committee's decision as to whether a Holder has
experienced Total Disability shall be final and binding.
6.4 CANCELLATION AND NEW GRANT OF OPTIONS. The Committee shall
have the authority to effect, at any time and from time to time, with the
consent of the affected Holders, the cancellation of any or all outstanding
Options under the Outside Director Sub-plan and to grant in substitution for
those Options new Options under the Outside Director Sub-plan covering the
same or different numbers of shares of Common Stock.
Section 7. ADJUSTMENTS
-----------------------
7.1 ADJUSTMENTS BY STOCK SPLIT, STOCK DIVIDEND, ETC. If any
change is made to the Common Stock issuable under the Outside Director Sub-
plan (whether by reason of merger, consolidation, reorganization,
recapitalization, stock dividend, stock split, reverse stock split,
combination or exchange of shares, or other similar change in the Company's
capital structure), then, unless the change results in the termination of
all outstanding Options, the Committee shall make appropriate adjustments to
the number and/or class of shares that may be issued or granted or issued on
exercise of Options, all to preserve, but not to increase, the benefits
under the Options. In that case, the numbers, rights and privileges of the
following shall be increased or decreased in like manner as if they had been
issued and outstanding, fully paid and nonassessable at the time of the
occurrence: (A) the shares of Common Stock with respect to which Options
may be granted under the Outside Director Sub-plan; (B) the maximum number
of shares of Common Stock with respect to which an Outside Director may
receive an Option under the Outside Director Sub-plan; and (C) the shares of
Common Stock then included in each outstanding Option granted under the
Outside Director Sub-plan.
7.2 OTHER CHANGES IN STOCK. If there is any change, other than
as specified in Section 7.1, in the number or kind of outstanding shares of
Common Stock or of any stock or other securities into which the Common Stock
shall be changed or for which it shall have been exchanged, and if the
Committee shall, in its discretion, determine that the change equitably
requires an adjustment in the number or kind of shares that are subject to
outstanding Options or that had been reserved for issuance pursuant to the
Outside Director Sub-plan but are not then subject to an Option, those
adjustments shall be made by the Committee and shall be effective for all
purposes of the Outside Director Sub-plan and each outstanding Option
Agreement.
7.3 APPORTIONMENT OF PRICE. Upon any occurrence described in the
preceding Sections 7.1 and 7.2, the total Option Price under any then
outstanding Option shall remain unchanged but shall be apportioned ratably
over the increased number or changed kinds of securities or other property
subject to the Option.
7.4 RIGHTS TO SUBSCRIBE. If the Company shall at any time grant
to the holders of its Common Stock rights to subscribe pro rata for
additional shares of Common Stock or for any other securities of the Company
or of any other corporation, there shall be added to the number of shares
then under option to any Holder, the Common Stock or other securities for
which the Holder would have been entitled to subscribe if, immediately
before the grant, the Holder had exercised his entire Option, and the Option
Price shall be increased by the amount of the price that would have been
payable by the Holder for such Common Stock or other securities.
7.5 GENERAL ADJUSTMENT RULES. No adjustment or substitution
provided for in this Section 7 shall require the Company to sell a
fractional share under any Option Agreement. Any substitution or
adjustment with respect to an Option Agreement shall be limited by deleting
any fractional share. In the case of any such substitution or adjustment,
the Option Price per share in each Option Agreement shall be equitably
adjusted by the Committee to reflect the greater or lesser number of shares
of Common Stock or other securities into which the Common Stock subject to
the Option may have been changed.
7.6 DETERMINATION BY THE COMMITTEE. Adjustments under this
Section 7 shall be made by the Committee, whose determination with regard to
the adjustments shall be final and binding. No fractional shares of Common
Stock shall be issued on account of any such adjustment.
Section 8. ACCELERATION AND TERMINATION OF OPTIONS
---------------------------------------------------
8.1 DISPOSAL OF ASSETS. If the Company (or its shareholders)
enter into an agreement to dispose of all or substantially all of the assets
(or of more than 50% of the outstanding capital stock) of the Company by
means of sale, merger, reorganization or liquidation, then (i) each
outstanding Option shall become exercisable during the fifteen (15) days
immediately before the scheduled consummation of the event, with respect to
the full number of shares of Common Stock, whether or not vested, that are
eligible for purchase under the Option. Any exercise of an Option during
the fifteen (15) day period shall be conditioned upon the consummation of
the event and shall be effective only immediately before the consummation of
the event. Upon consummation of any such event, all outstanding Options,
whether or not accelerated, shall terminate and cease to be exercisable,
unless assumed or replaced by the successor corporation or parent of the
successor corporation.
8.2 NO LIMITATION ON COMPANY'S RIGHTS. The grant of Options
under this Outside Director Sub-plan shall in no way affect the right of the
Company to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate, or to sell
or transfer all or any part of its business or assets.
Section 9. TERM OF OUTSIDE DIRECTOR SUB-PLAN
---------------------------------------------
Unless sooner terminated in accordance with Section 11 of the Outside
Director Sub-plan, the authority to grant Options under the Outside Director
Sub-plan shall terminate upon the earlier of (i) July 18, 2000 or (ii) the
date on which all shares available for issuance under the Outside Director
Sub-plan shall have been issued pursuant to the exercise of Options granted
under the Outside Director Sub-plan. If the date of termination is
determined by (i) above, then Options outstanding on that date shall
continue to have force and effect in accordance with the provision of the
instruments evidencing those Options.
Section 10. EMPLOYMENT
-----------------------
10.1 NO RIGHT TO CONTINUATION OF RELATIONSHIP. Nothing in the
Outside Director Sub-plan or in any Option shall confer upon any director,
including an Outside Director, the right to continue as a director of the
Company. Moreover, nothing in the Outside Director Sub-plan or in any
Option shall interfere with or restrict in any way the rights of the
Company's shareholders to remove a director pursuant to the provisions of
the California General Corporation Law.
10.2 DISCRETION OF COMMITTEE. The Committee, in its discretion,
shall determine the effect of all matters and questions relating to a
Termination of Relationship, including without limitation the question of
whether a Termination of Relationship resulted from Total Disability, and
all questions of whether a particular leave of absence constitutes a
Termination of Relationship.
Section 11. AMENDMENT OF THE OUTSIDE DIRECTOR SUB-PLAN
-------------------------------------------------------
11.1 AUTHORITY OF THE BOARD. Except as set forth in this Section,
the Board shall have complete and exclusive power and authority to terminate
the Outside Director Sub-plan or to amend or modify the Outside Director
Sub-plan in any or all respects whatsoever, including the right to amend and
rescind rules and regulations to relating to the Outside Director Sub-plan.
Nevertheless, no amendment or modification may adversely affect rights and
obligations with respect to Options then outstanding under the Outside
Director Sub-plan.
11.2 AMENDMENTS FOR TAX PURPOSES. The Board retains the right
(but shall have no obligation) to amend or modify the terms and provisions
of the Outside Director Sub-plan and of the outstanding Options under the
Outside Director Sub-plan to the extent necessary to qualify any or all
Options for such favorable federal income tax treatment (including deferral
of taxation upon exercise) as may be afforded employee stock options under
amendments to the Code or other federal, state or local statutes or
regulations that become effective after the Effective Date of this Outside
Director Sub-plan.
11.3 LIMITATIONS ON AUTHORITY OF THE BOARD. Notwithstanding the
provisions of Sections 11.1 and 11.2, the Board shall not, without the
approval of shareholders holding a majority of the Company's then
outstanding shares of Common Stock, increase the maximum number of shares
issuable under the Outside Director Sub-plan, except for permissible
adjustments under Sections 7 and 8, modify the requirements as to the
classes of persons eligible to be granted Options, or materially increase
the benefits accruing to Holders under the Outside Director Sub-plan.
Nevertheless, if, in the opinion of the Board, shareholder approval of the
changes described in this Section 11 is no longer needed pursuant to the
rules and regulations of the Securities and Exchange Commission or the New
York Stock Exchange (or any stock exchange on which the Common Stock is
listed at the time the changes are made), then shareholder approval of the
changes described in this Section 11.3 shall not be required.
Section 12. USE OF PROCEEDS
----------------------------
The proceeds received by the Company from the sale of shares of Common
Stock pursuant to Options granted under the Outside Director Sub-plan shall
be used for general corporate purposes.
Section 13. GENERAL PROVISIONS
-------------------------------
13.1 WITHHOLDING. With respect to any and all federal, state and
local income and employment tax withholding requirements applicable to the
exercise of Options under the Outside Director Sub-plan, Holders shall
permit the Company to withhold any sums required from any amounts otherwise
owed to the Holders and will be required promptly to reimburse the Company
for payments in excess of amounts otherwise owed.
13.2 EFFECTIVE DATE. The Outside Director Sub-plan shall become
effective as of August 31, 1992 and shall expire on July 18, 2000. No
Options may be granted under the Outside Director Sub-plan after July 18,
2000, but Options granted on or before that date may be exercised according
to the terms of the applicable Option Agreement and shall continue to be
governed by and interpreted consistent with the terms of this Outside
Director Sub-plan.
13.3 COMPLIANCE WITH OTHER LAWS AND REGULATIONS. The Outside
Director Sub-plan, the grant and exercise of Options under the Outside
Director Sub-plan, and the obligation of the Company to sell
and deliver shares under the Options, shall be subject to all applicable
federal and state laws, rules and regulations and to any approvals by a
government or regulatory agency that may be required. The Company shall not
be required to issue or deliver any certificates for shares of Common Stock
before (i) the listing of the shares on any stock exchange on which the
Common Stock may then be listed or (ii) the completion of any registration
or qualification of the shares under any federal or state law, or any ruling
or regulation of any governmental body that the Company shall, in its sole
discretion, determine to be necessary or advisable.
13.4 SECTION HEADINGS. The section headings are included in this
Outside Director Sub-plan for convenience only and shall have no effect on
the interpretation of the Outside Director Sub-plan.
Adopted by the Board effective August 31, 1992.
STORAGE EQUITIES, INC.