Exhibit 10.2
CALIFORNIA REAL ESTATE INVESTMENT TRUST
1997 NON-EMPLOYEE TRUSTEE SHARE PLAN
CALIFORNIA REAL ESTATE INVESTMENT TRUST
1997 NON-EMPLOYEE TRUSTEE SHARE PLAN
ARTICLE 1. ESTABLISHMENT, PURPOSE AND DURATION
1.1 Establishment of the Plan. On May 23, 1997, the Board of Trustees
of California Real Estate Investment Trust, a California trust (the "Company")
adopted, subject to the approval of shareholders, an incentive share plan for
members of the Board of Trustees known as the "1997 Non-Employee Trustee Share
Plan" (hereinafter referred to as the "Plan"), which permits the grant of
Nonqualified Share Options, Share Appreciation Rights, Restricted Share,
Performance Units, Performance Shares and Share Units.
1.2 Purpose of the Plan. The Purpose of the Plan is to promote the
success of the Company by providing incentives to Trustees that will link their
personal interests to the long-term financial success of the Company and to
growth in shareholder value. The Plan is designed to provide flexibility to the
Company in its ability to motivate, attract, and retain the services of Trustees
upon whose judgment, interest and special effort the successful conduct of the
Company's operations is largely dependent.
1.3 Duration of the Plan. The Plan commences on the date on which
shareholders first approve the Plan, and shall remain in effect, subject to the
right of the Board of Trustees to terminate the Plan at any time pursuant to
Article 13 herein, until all Shares subject to it shall have been purchased or
acquired according to the provisions herein. However, in no event may an Award
be granted under the Plan on or after the tenth anniversary of the effective
date of the Plan.
ARTICLE 2. DEFINITIONS AND CONSTRUCTIONS
2.1 Definitions: Whenever used in the Plan, the following terms shall
have the meanings set forth below and, when the meaning is intended, the initial
letter of the word is capitalized:
(a) "Award" or "Awards" means, individually or collectively, a
grant under this Plan of Nonqualified Share Options, Share
Appreciation Rights, Restricted Shares, Performance Units,
Performance Shares, or Share Units.
(b) "Award Agreement" means the agreement required under
Article 3 evidencing an Award under this Plan.
(c) "Beneficial Owner" shall have the meaning ascribed to
such term in Rule 13d-3 of the General Rules and
Regulations under the Exchange Act.
(d) "Board" or "Board of Trustees" means the Board of Trustees
of the Company.
(e) "Change in Control" shall be deemed to have occurred if
the conditions set forth in any one of the following
paragraphs shall have been satisfied:
(i) any Person (other than Veqtor Finance
Company, LLC or its affiliates as that term
is defined under the rules and regulations
promulgated under the Exchange Act, a
trustee or other fiduciary holding
securities under an employee benefit plan of
the Company, or a corporation owned directly
or indirectly by the shareholders of the
Company in substantially the same
proportions as their ownership of Shares of
the Company), is or becomes the Beneficial
Owner, directly or indirectly, of 20% or
more of the Voting Securities of the
Company;
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(ii) the Board shall at any time consist of a
majority of individuals (the "New Majority")
who where elected or appointed Trustees of
the Company without the approval of a
majority of the Trustees either (A) in
office prior to the election or appointment
of the first of the Trustees comprising the
New Majority, or (B) appointed by or elected
with the approval of such Trustees; or
(iii) the shareholders of the Company approve (A)
a plan of complete liquidation of the
Company; or (B) an agreement for the sale or
disposition of all or substantially all the
Company's assets; or (C) a merger or
consolidation of the Company with any other
corporation, other than a merger or
consolidation which would result in the
Voting Securities of the Company outstanding
immediately prior thereto continuing to
represent (either by remaining outstanding
or by being converted into voting securities
of the surviving entity), at least 50% of
the combined voting power of the combined
voting power of the Company (or such
surviving entity) outstanding immediately
after such merger or consolidation.
However, in no event shall a Change in Control be deemed to
have occurred, with respect to a Participant, if the
Participant is part of a purchasing group which consummates
the Change in Control transaction. The Participant shall be
deemed "part of a purchasing group..." for purposes of the
preceding sentence if the Participant is an equity participant
or has agreed to become an equity participant in the
purchasing company or group (except for (i) passive ownership
of less than 5% of the Voting Securities of the purchasing
company or (ii) ownership of equity participation in the
purchasing company or group which is otherwise not deemed to
be significant, as determined prior to the Change in Control
by a majority of the nonemployee continuing members of the
Board).
(f) "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
(g) "Common Shares" means the class A common shares, par
value $1.00 per share, of beneficial interest in the
Company.
(h) "Company" means California Real Estate Investment
Trust, a California trust, or any successor thereto.
(i) "Election Form" means the form under which a
Participant elects to receive Shares granted under a
Share Unit Award upon the occurrence of certain events.
(j) "Exchange Act" means the Securities Exchange Actof
1934, as amended from time to time.
(k) "Fair Market Value" means the closing price of the
Shares on a securities exchange or, if not traded on an
exchange, the average of the highest price and lowest
price at which the Shares were traded as reported on
the Nasdaq National Market, on the relevant date, or on
the most recent date on which the Shares were traded
prior to such date.
(l) "Nonqualified Share Option" or "NQSO" means an option
to purchase Shares, which is not intended to satisfy
the requirements of Section 422 of the Code, granted
under Article 6 herein.
(m) "Option" or "Options" means a Nonqualified Share
Option.
(n) "Option Agreement" means an Award Agreement evidencing
an Option Award granted under Article 6 herein.
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(o) "Participant" means a Trustee who has been granted an
Award under the Plan.
(p) "Performance Share" means an Award, designated as a
performance share, granted to a Participant pursuant to
Article 9 herein.
(q) "Performance Unit" means an Award, designated as a
performance unit, granted to a Participant pursuant to
Article 9 herein.
(r) "Period of Restriction" means the period during which
the transfer of Restricted Shares is restricted, during
which the Participant is subject to a substantial risk
of forfeiture, pursuant to Article 8 herein.
(s) "Person" shall have the meaning ascribed to such term
in Section 3(a)(9) of the Exchange Act and used in
Sections 13(d) and 14(d) thereof; including a "group"
as defined in Section 13(d) thereof.
(t) "Plan" means this Non-Employee Trustee Share Plan of
the Company, as herein described and as hereafter from
time to time amended.
(u) "Pooling Transaction" means an acquisition of the
Company in a transaction which is intended to be
treated as a "pooling of interests" under generally
accepted accounting principles.
(v) "Restricted Shares" means an Award granted to a
Participant pursuant to Article 8 herein.
(w) "Restricted Share Agreement" means an Award Agreement
evidencing a Restricted Share Award granted under
Article 8 herein.
(x) "Share" or "Shares" means the Common Shares.
(y) "Share Unit" means a derivative interest in Shares
granted to a Participant pursuant to Article 9 herein
which is credited to a bookkeeping account and paid out
on a one-for-one basis in Shares.
(z) "Share Appreciation Right" or "SAR" means an Award,
designated as a share appreciation right, granted to a
Participant pursuant to Article 7 herein.
(aa) "Trustee" means a member of the Board.
(bb) "Voting Securities" means Shares or securities of any
class or classes of securities of the Company, the
holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the
Trustees.
2.2 Gender and Number. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine, the plural shall
include the singular, and the singular shall include the plural.
2.3 Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
ARTICLE 3. ADMINISTRATION
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3.1 Authority of Board. The Plan shall be administered by the full
Board of Trustees of the Company. Subject to the provisions of the Plan, the
Board shall have full power to construe and interpret the Plan; to establish,
amend or waive rules and regulations for its administration; to accelerate the
exercisability of any Award or the end of a performance period or the
termination of any Period of Restriction or any Award Agreement, or any other
instrument relating to an Award under the Plan; and (subject to the provisions
of Article 13 herein) to amend the terms and conditions of any outstanding
Option, Share Appreciation Right or other Award to the extent such terms and
conditions are within the discretion of the Board as provided in the Plan. Also
notwithstanding the foregoing, no action of the Board (other than pursuant to
Section 4.3 hereof or Section 9.6 hereof) may, without the consent of the person
or persons entitled to exercise any outstanding Option or Share Appreciation
Right or to receive payment of any other outstanding Award, adversely affect the
rights of such person or persons.
3.2 Selection of Participants. The Board shall have the authority to
grant Awards under the Plan, from time to time, to such Trustees as may be
selected by it.
3.3 Decisions Binding. All determinations and decisions made by the
Board pursuant to the provisions of the Plan and all related orders or
resolutions of the Board shall be final, conclusive and binding on all persons,
including the Company, its shareholders and Participants and their estates and
beneficiaries, and such determinations and decisions shall not be reviewable.
3.4 Delegation of Certain Responsibilities. The Board may, in its sole
discretion, delegate to the Chairman of the Board of the Company (or if there
shall be Co-Chairmen, individually or jointly to such Co-Chairmen) the
administration of the Plan under this Article 3; provided, however, that the
Board may not delegate its authority to correct errors, omissions or
inconsistencies in the Plan and the Board may not delegate its authority under
this Article 3 to grant Awards to Trustees. All authority delegated by the Board
under this Section 3.4 shall be exercised in accordance with the provisions of
the Plan and any guidelines for the exercise of such authority that may from
time to time be established by the Board.
3.5 Procedures of the Board. All Awards and other determinations of the
Board shall be made by not less than a majority of its members present at the
meeting (in person or otherwise) at which a quorum is present. A majority of the
entire Board shall constitute a quorum for the transaction of business. Any
action required or permitted to be taken at a meeting of the Board may be taken
without a meeting if a unanimous written consent, which sets forth the action,
is signed by each member of the Board and filed with the minutes for proceedings
of the Board.
3.6 Award Agreements. Each Award under the Plan shall be evidenced by
an Award Agreement which shall be signed by the Chairman of the Board (or by a
Co-chairman) on behalf of the Board and by the Participant, and shall contain
such terms and conditions as may be approved by the Board. Such terms and
conditions need not be the same in all cases.
3.7 Rule 16b-3 Requirements. Notwithstanding any other provision of the
Plan, the Board may impose such conditions on any Award (including, without
limitation, the right of the Board to limit the time of exercise to specified
periods) as may be required to satisfy the requirements of Rule 16b-3 (or any
successor rule), under the Exchange Act ("Rule 16b-3").
ARTICLE 4. STOCK SUBJECT TO THE PLAN
4.1 Number of Shares. The maximum number of Shares that may be made the
subject of Awards granted under the Plan is two million (2,000,000) reduced by
the number of Shares made the
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subject of Awards under the Company's 1997 Long-term Incentive Share Plan. Upon
a change in the capitalization or authorized Shares (as described in Section
4.3) the maximum number of Shares shall be adjusted in number and kind pursuant
to Section 4.3. The Company shall reserve for the purposes of the Plan, out of
its authorized but unissued shares or out of such numbers of Shares held in the
Company's treasury, or partly out of each, such number of Shares as shall be
determined by the Board. Upon the granting of an Award, the number of Shares
available under Section 4.1 for the granting of further Awards shall be reduced
as follows:
(a) In connection with the granting of an Award (other than
the granting of a Performance Unit denominated in dollars), the number of Shares
shall be reduced by the number of Shares in respect of which the Award is
granted or denominated.
(b) In connection with the granting of a Performance Unit
denominated in dollars, the number of Shares shall be reduced by an amount equal
to the quotient of (a) the dollar amount in which the Performance Unit is
denominated, divided by (b) the Fair Market Value of a Share on the date the
Performance Unit is granted.
4.2 Lapsed Awards. If any Award (other than Restricted Shares) granted
under this Plan terminates, expires, or lapses for any reason, any Shares
subject to such Award again shall be available for the grant of an Award under
the Plan, subject to Section 7.2 herein.
4.3 Adjustments in Authorized Shares. In the event of any merger,
reorganization, consolidation, recapitalization, separation, liquidation, share
dividend, split-up, share combination, or other change affecting the Company's
Common Shares, such adjustment shall be made in the number and class of Shares
which may be delivered under the Plan, and in the number and class of and/or
price of Shares subject to outstanding Options, Share Appreciation Rights,
Restricted Shares, Performance Shares, Performance Units and Share Units granted
under the Plan, as may be determined to be appropriate and equitable by the
Board, in its sole discretion, to prevent dilution or enlargement of rights; and
provided that the number of Shares subject to any Award shall always be a whole
number.
ARTICLE 5. ELIGIBILITY AND PARTICIPATION
5.1 Eligibility. Persons eligible to participate in this Plan include
all Trustees who are not and have not been at any time, within the preceding
three years, officers or employees of the Company or any of its Subsidiaries.
5.2 Actual Participation. Subject to the provisions of the Plan, the
Board may from time to time select those Trustees to whom Awards shall be
granted and determine the nature and amount of each Award. No Trustee shall have
any right to be granted an Award under this Plan even if previously granted an
Award.
ARTICLE 6. STOCK OPTIONS
6.1 Grant of Options. Subject to the terms and provisions of the Plan,
Options may be granted to Trustees at any time and from time to time as shall be
determined by the Board. The Board shall have the sole discretion, subject to
the requirements of the Plan, to determine the actual number of Shares subject
to Options granted to any Participant. Options granted under the Plan will be
NQSOs.
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6.2 Option Agreement. Each Option grant shall be evidenced by an Option
Agreement that shall specify the Option price, the duration of the Option, the
number of Shares to which the Option pertains, and such other provisions as the
Board shall determine.
6.3 Option Price. The purchase price per share of Shares covered by an
Option shall be determined by the Board.
6.4 Duration of Options. Each Option shall expire at such time as the
Board shall determine at the time of grant.
6.5 Exercise of Options. Subject to Section 3.7 herein, Options granted
under the Plan shall be exercisable at such times and be subject to such
restrictions and conditions as the Board shall in each instance approve, which
need not be the same for all Participants.
6.6 Payment. Options shall be exercised by the delivery of a written
notice to the Company setting forth the number of Shares with respect to which
the Option is to be exercised, accompanied by full payment for the Shares. The
Option price upon exercise of any Option shall be payable to the Company in full
either (a) in cash or its equivalent, (b) by tendering shares of previously
acquired Company Shares having a Fair Market Value at the time of exercise equal
to the total Option price, (c) by foregoing compensation under rules established
by the Board, or (d) by a combination of (a), (b), or (c). The proceeds from
such a payment shall be added to the general funds of the Company and shall be
used for general purposes. As soon as practicable, after receipt of written
notification and payment, the Company shall deliver to the Participant Share
certificates in an appropriate amount based upon the number of Options
exercised, issued in the Participant's name.
6.7 Restrictions on Share Transferability. The Board shall impose such
restrictions on any Shares acquired pursuant to the exercise of an Option under
the Plan as it may deem advisable, including, without limitation, restrictions
under applicable Federal securities law, under the requirements of any
securities exchange upon which such Shares are then listed and under any
applicable blue sky or state securities laws.
6.8 Termination of Service Due to Death, Disability, or Retirement. In
the event a Participant dies while serving as a Trustee, any of such
Participant's outstanding Options may be exercised at any time prior to the
expiration date of the Options or within one year after his death, whichever
period is shorter, but only to the extent that the Participant was entitled to
exercise the Options at the date of his termination of service, by such person
or persons as shall have acquired the Participant's rights under the Option
pursuant to Article 10 hereof or by will or by the laws of descent and
distribution. In the event a Participant is unable to serve as a Trustee by
reason of disability (as defined under the then established rules of the
Company), the Participant shall have the right to exercise outstanding Options
at any time prior to the expiration date of the Options or within one year after
his disability, whichever period is shorter, but only to the extent that the
Participant was entitled to exercise the Options on the date of his termination
of service. In the event a Participant retires from the Board, the Participant
shall have the right to exercise outstanding Options at any time prior to the
expiration date of the Options or within 90 days after his retirement, whichever
period is shorter, but only to the extent that the Participant was entitled to
exercise the Options on the date of his termination of service.
6.9 Termination of Service for Other Reasons. If a Participant ceases
service as a Trustee for any reason other than death, disability, retirement or
removal, the Participant shall have the right to exercise outstanding Options at
any time prior to the expiration date of the Options or within the 90 days
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after the date of his termination, whichever period is shorter, but only to the
extent that the Participant was entitled to exercise the Options at the date of
his termination of service. In its sole discretion, the Board may extend the 90
days to up to one year, but in no event beyond the expiration date of the
Option.
Notwithstanding anything contained herein, if a Trustee is
removed from service, all of the Participant's outstanding Options shall be
immediately forfeited back to the Company.
6.10 Limited Transferability of Options. No Option granted under the
Plan may be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, otherwise than by will or by the laws of descent and distribution
or as provided for by the Board. Further, all Options (except for Options on
which SARs were granted) granted to a Participant under the Plan, unless
transferable, shall be exercisable during his lifetime only by such Participant.
If the Option Agreement provides, an Option may be transferred by a Participant
to the Participants children, grandchildren, spouse, one or more trusts for the
benefit of such family members or a partnership in which such family members are
the only partners (collectively, "Permitted Family Members"); provided, however,
that the Participant may not receive any consideration for the transfer. The
holder of an Option transferred pursuant to this section shall be bound by the
same terms and conditions that governed the Option during the period that it was
held by the Participant.
ARTICLE 7. SHARE APPRECIATION RIGHTS
7.1 Grant of Share Appreciation Rights. Subject to the terms and
conditions of the Plan, Share Appreciation Rights may be granted to
Participants, at the discretion of the Board, in any of the following forms:
(a) In lieu of Options;
(b) In addition to Options;
(c) Independent of Options; or
(d) In any combination of (a), (b), or (c).
The Board shall have the sole discretion, subject to the requirements of the
Plan, to determine the actual number of Shares subject to SARs granted to any
Participant.
7.2 Exercise of SARs in Lieu of Options. SARs granted in lieu of
Options may be exercised for all or part of the Shares subject to the related
Option upon the surrender of the related Options representing the right to
purchase an equivalent number of Shares. The SAR may be exercised only with
respect to the Shares for which its related Option is then exercisable. Option
Shares with respect to which the SAR shall have been exercised may not be
subject again to an Award under the Plan.
7.3 Exercise of SARs in Addition to Options. SARs granted in addition
to Options shall be deemed to be exercised upon the exercise of the related
Options. The deemed exercise of SARs granted in addition to Options shall not
necessitate a reduction in the number of related Options.
7.4 Exercise of SARs Independent of Options. Subject to Section 3.7
herein and Section 7.5 herein, SARs granted independently of Options may be
exercised upon whatever terms and conditions the
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Board, in its sole discretion, imposes upon the SARs, including, but not limited
to, a corresponding proportional reduction in previously granted Options.
7.5 Payment of SAR Amount. Upon exercise of the SAR, the holder shall
be entitled to receive payment of an amount determined by multiplying:
(a) The difference between the Fair Market Value of a Share
on the date of exercise over the price fixed by the
Board at the date of grant (which price shall not be
less than 100% of the market price of a Share on the
date of grant) (the "Exercise Price"); by
(b) The number of Shares with respect to which the SAR is
exercised.
7.6 Form and Timing of Payment. Payment to a Participant, upon SAR
exercise, will be made in cash or Shares, at the discretion of the Board, within
ten calendar days of the exercise.
7.7 Term of SAR. The term of an SAR granted under the Plan shall not
exceed ten years.
7.8 Termination of Service. In the event a Participant ceases service
as a Trustee by reason of death, disability, retirement, removal or any other
reason, the exercisability of any outstanding SAR granted in lieu of or in
addition to an Option shall terminate in the same manner as its related Option
as specified under Sections 6.8 and 6.9 herein. The exercisability of any
outstanding SARs granted independent of Options also shall terminate in the
manner provided under Sections 6.8 and 6.9 hereof.
7.9 Nontransferability of SARs. No SAR granted under the Plan may be
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
otherwise than by will or by the laws of descent and distribution. Further, all
SARs granted to a Participant under the Plan shall be exercisable during his
lifetime only by such Participant.
ARTICLE 8. RESTRICTED SHARES
8.1 Grant of Restricted Shares. Subject to the terms and provisions of
the Plan, the Board, at any time and from time to time, may grant Restricted
Shares under the Plan to such Participants and in such amounts as it shall
determine.
8.2 Restricted Share Agreement. Each Restricted Share grant shall be
evidenced by a Restricted Share Agreement that shall specify the Period of
Restriction, or periods, the number of Shares of Restricted Share granted, and
such other provisions as the Board shall determine.
8.3 Transferability. Except as provided in this Article 8, the
Restricted Shares granted hereunder may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated until the termination of the
applicable Period of Restriction or for such period of time as shall be
established by the Board and as shall be specified in the Restricted Share
Agreement, or upon earlier satisfaction of other conditions (including any
Performance Goals as defined below) as specified by the Board in its sole
discretion and set forth in the Restricted Share Agreement. All rights with
respect to the Restricted Shares granted to a Participant under the Plan shall
be exercisable during his lifetime only by such Participant.
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8.4 Other Restrictions. The Board shall impose such other restrictions
on any Restricted Shares granted pursuant to the Plan as it may deem advisable
including, without limitation, restrictions under applicable Federal or state
securities laws, and the Board may legend certificates representing Restricted
Shares to give appropriate notice of such restrictions.
8.5 Certificate Legend. In addition to any legends placed on
certificates pursuant to Section 8.4 herein, each certificate representing
Restricted Shares granted pursuant to the Plan shall bear the following legend:
"The sale or other transfer of the shares represented by this
certificate, whether voluntary, involuntary, or by operation of law, is
subject to certain restrictions on transfer set forth in the
Non-Employee Trustees Share Plan of California Real Estate Investment
Trust, in the rules and administrative procedures adopted pursuant to
such Plan, and in a Restricted Share Agreement dated ___________. A
copy of the Plan, such rules and procedures, and such Restricted Share
Agreement may be obtained from the Secretary of California Real Estate
Investment Trust."
8.6 Removal of Restrictions. Except as otherwise provided in this
Article and subject to applicable securities laws and restrictions imposed
pursuant thereto, Restricted Shares shall become transferable by the Participant
after the last day of the Period of Restriction. Once the Shares are released
from the restrictions, the Participant shall be entitled to have the legend
required by Section 8.5 removed from his Share certificate.
8.7 Voting Rights. During the Period of Restriction, Participants
holding Restricted Shares granted hereunder may exercise full voting rights with
respect to those Shares.
8.8 Dividends and Other Distributions. During the Period of
Restriction, Participants holding Restricted Shares granted hereunder shall be
entitled to receive all dividends and other distributions paid with respect to
those Shares while they are so held. If any such dividends or distributions are
paid in Shares, the Shares shall be subject to the same restrictions on
transferability as the Restricted Shares with respect to which they were paid.
8.9 Termination of Service. In the event that a Participant ceases to
be a Trustee of the Company for any reason during the Period of Restriction,
then any Restricted Shares still subject to restrictions as of the date of such
termination shall automatically be forfeited and returned to the Company;
provided, however, that in the event that Participant ceases to be a Trustee for
any reason other than removal, the Board, in its sole discretion (subject to
Section 3.7 herein) may waive the automatic forfeiture of any and all Shares and
may add such new restrictions to such Restricted Shares as it deems appropriate.
ARTICLE 9. PERFORMANCE UNITS, PERFORMANCE SHARES AND SHARE UNITS
9.1 Grant of Performance Units, Performance Shares or Share Units.
Subject to the terms and provisions of the Plan, Performance Units, Performance
Shares or Share Units may be granted to Participants at any time and from time
to time as shall be determined by the Board. The Board shall have complete
discretion in determining the number of Performance Units, Performance Shares or
Share Units granted to each Participant.
9.2 Value of Performance Units and Performance Shares. The Board shall
set certain periods to be determined in advance by the Board (the "Performance
Periods"). Prior to each grant of
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Performance Units or Performance Shares, the Board shall establish an initial
value for each Performance Unit and an initial number of Shares for each
Performance Share granted to each Participant for that Performance Period. Prior
to each grant of Performance Units or Performance Shares, the Board also shall
set the Performance Goals (the "Performance Goals") that will be used to
determine the extent to which the Participant receives a payment of the value of
the Performance Units or number of Shares for the Performance Shares awarded for
such Performance Period. These goals will be based on the attainment by the
Company of certain objective or subjective performance measures, which may
include one or more of the following: total shareholder return, return on
equity, return on capital, earnings per share, market share, share price,
revenues, costs, net income, cash flow and retained earnings. Such Performance
Goals also may be based upon the attainment of specified levels of performance
of the Company under one or more of the measures described above relative to the
performance of other corporations. With respect to each such performance measure
utilized during a Performance Period, the Board shall assign percentages to
various levels of performance which shall be applied to determine the extent to
which the Participant shall receive a payout of the values of Performance Units
and number of Performance Shares awarded.
9.3 Payment of Performance Units and Performance Shares. After a
Performance Period has ended, the holder of a Performance Unit or Performance
Share shall be entitled to receive the value thereof as determined by the Board.
The Board shall make this determination by first determining the extent to which
the Performance Goals set pursuant to Section 9.2 have been met. It will then
determine the applicable percentage (which may exceed 100%) to be applied to,
and will apply such percentage to, the value of Performance Units or number of
Performance Shares to determine the payout to be received by the Participant.
9.4 Value of Share Units. Subject to the terms and provisions of the
Plan, Share Units may be granted to Participants at any time and from time to
time on such terms as shall be determined by the Board. The Board shall have
complete discretion in determining the number of Share Units granted to each
Participant. Share Units shall be payable in Shares upon the occurrence of
certain trigger events set forth on the Participant's Election Form in his or
her complete discretion (the "Trigger Events"). The terms and conditions of the
Trigger Events may vary by Share Unit Award, by Participant, or both. The
Election Form shall be filed with the Secretary of the Company prior to the date
on which any Share Unit Award is made. Such election will be irrevocable as to
any Share Unit Award made after delivery of the Election Form to the Company,
and it shall continue in effect until revoked, increased or decreased
prospectively by Participant prior to the grant of any future Share Unit Award
for which the change is effective.
9.5 Accounting for Share Units. A Participant's Share Unit Award shall
be credited by the Company to a bookkeeping account to reflect the Company's
liability to that Participant (the "Share Unit Account"). Each Share Unit is
credited as a Share equivalent on the date so credited. Additional share
equivalents may be added to the Share Unit Account equal to the amount of Shares
that could be purchased with dividends equal to that paid on one Share,
multiplied by the number of stock equivalents then existing in the Share Unit
Account, based on the Fair Market Value of the Shares on the date a dividend is
paid on the Share. Because the Trigger Events for each Share Unit Award may
differ, the Company shall establish a separate Share Unit Account for each
separate Share Unit Award. Upon the occurrence of particular Trigger Events, the
holder of a Share Unit Award shall be entitled to receive a number of Shares
which corresponds to the number of Share Units granted as part of the initial
Share Unit Award, as such amount may have been increased to reflect dividends
paid with respect thereto.
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9.6 Board Discretion to Adjust Awards. The Board shall have the
authority to modify, amend or adjust the terms and conditions of any Performance
Unit Award, Performance Share Award or Share Unit Award, at any time or from to
time, including but not limited to the Performance Goals.
9.7 Form of Payment. The value of a Performance Unit or Performance
Share may be paid in cash, Shares or a combination thereof as determined by the
Board. In the case of Share Units, payment shall be made in Shares. Payment may
be made in a lump sum or installments as prescribed by the Board. If any payment
is to be made on a deferred basis, the Board may provide for the payment of
dividend equivalents or interest during the deferral period.
9.8 Termination of Service Due to Death, Disability or Retirement. In
the case of death, disability or retirement (each of disability and retirement
as defined under the established rules of the Company), the holder of a
Performance Unit or Performance Share shall receive a prorated payment based on
the Participant's number of full months of service during the Performance
Period, further adjusted based on the achievement of the Performance Goals
during the entire Performance Period, as computed by the Board. Payment shall be
made at the time payments are made to Participants who did not terminate service
during the Performance Period. In the case of Share Units, all such Share Units
held to the extent vested on the date that the Participant ceases to be a
Trustee, will be paid as set forth in the Participant's Election Form.
9.9 Termination of Service for Other Reasons. In the event that a
Participant ceases to be a Trustee of the Company for any reason other than
death, disability or retirement, all Performance Units and Performance Shares
shall be forfeited. In the case of termination other than due to removal, all
Share Units held to the extent vested on the date that the Participant ceases to
be a Trustee, will be paid as set forth in the Participant's Election Form.
However, in the event of termination due to removal, all Share Units held will
be forfeited.
9.10 Nontransferability. No Performance Units, Performance Shares or
Share Units granted under the Plan may be sold, transferred, pledged, assigned,
or otherwise alienated or hypothecated, otherwise than by will or by the laws of
descent and distribution until the termination of the applicable Performance
Period or, in the case of Share Units, until payment. All rights with respect to
Performance Units, Performance Shares and Share Units granted to a Participant
under the Plan shall be exercisable during his lifetime only by such
Participant.
ARTICLE 10. BENEFICIARY DESIGNATION
Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively and
who may include a trustee under a will or living trust) to whom any benefit
under the Plan is to be paid in case of his death before he receives any or all
of such benefit. Each designation will revoke all prior designations by the same
Participant, shall be in a form prescribed by the Board, and will be effective
only when filed by the Participant in writing with the Board during his
lifetime. In the absence of any such designation or if all designated
beneficiaries predecease the Participant, benefits remaining unpaid at the
Participant's death shall be paid to the Participant's estate.
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ARTICLE 11. RIGHTS OF TRUSTEES
11.1 Trusteeship. Nothing in the Plan shall interfere with or limit in
any way the right of the Board of Trustees or shareholders under applicable law
to remove any Participant from the Board at any time, nor confer upon any
Participant any right to continue in the service of the Company.
11.2 Participation. No Trustee shall have a right to be selected as a
Participant, or, having been so selected, to be selected again as a Participant.
11.3 No Implied Rights; Rights on Termination of Service. Neither the
establishment of the Plan nor any amendment thereof shall be construed as giving
any Participant, beneficiary, or any other person any legal or equitable right
unless such right shall be specifically provided for in the Plan or conferred by
specific action of the Board in accordance with the terms and provisions of the
Plan. Except as expressly provided in this Plan, the Company shall not be
required or be liable to make any payment under the Plan.
11.4 No Right to Company Assets. Neither the Participant nor any other
person shall acquire, by reason of the Plan, any right in or title to any
assets, funds or property of the Company whatsoever including, without limiting
the generality of the foregoing, any specific funds, assets, or other property
which the Company, in its sole discretion, may set aside in anticipation of a
liability hereunder. Any benefits which become payable hereunder shall be paid
from the general assets of the Company. The Participant shall have only a
contractual right to the amounts, if any, payable hereunder unsecured by any
asset of the Company. Nothing contained in the Plan constitutes a guarantee by
the Company that the assets of the Company shall be sufficient to pay any
benefit to any person.
ARTICLE 12. CHANGE IN CONTROL
12.1 Share Based Awards. Notwithstanding any other provisions of the
Plan, in the event of a Change in Control, all Share based Awards granted under
this Plan shall immediately vest 100% in each Participant, including
Nonqualified Share Options, Share Appreciation Rights, Restricted Shares and
Share Units.
12.2 Performance Based Awards. Notwithstanding any other provision of
the Plan, in the event of a Change in Control, all performance based Awards
granted under this Plan shall be immediately paid out in cash, including
Performance Units and Performance Shares. The amount of the payout shall be
based on the higher of: (i) the extent, as determined by the Board, to which
Performance Goals, established for the Performance Period then in progress have
been met up through and including the effective date of the Change in Control or
(ii) 100% of the value on the date of grant of the Performance Units or number
of Performance Shares.
12.3 Pooling Transactions. Notwithstanding anything contained in the
Plan or any agreement to the contrary, in the event of a Change in Control which
is also intended to constitute a Pooling Transaction, the Committee shall take
such actions, if any, which are specifically recommended by an independent
accounting firm retained by the Company to the extent reasonably necessary in
order to assure that the Pooling Transaction will qualify as such, including but
not limited to (a) deferring the vesting, exercise, payment or settlement with
respect to any Award, (b) providing that the payment or settlement in respect of
any Award be made in the form of cash, Shares or securities of a successor or
acquired of the Company, or a combination of the foregoing and (c) providing for
the extension of the
12
term of any Award to the extent necessary to accommodate the foregoing, but not
beyond the maximum term permitted for any Award.
ARTICLE 13. AMENDMENT, MODIFICATION AND TERMINATION
13.1 Amendment, Modification and Termination. At any time and from time
to time, the Board may terminate, amend or modify the Plan, subject to the
approval of the shareholders of the Company if required by the Code, by the
insider trading rules of Section 16 of the Exchange Act, by any securities
exchange or system on which the Shares are then listed or reported, or by any
regulatory body having jurisdiction with respect hereto.
13.2 Awards Previously Granted. No termination, amendment or
modification of the Plan other than pursuant to Section 4.3 hereof shall in any
manner adversely affect any Award theretofore granted under the Plan, without
the written consent of the Participant.
ARTICLE 14. WITHHOLDING
Tax Withholding. The Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy Federal, state and local taxes (including the
Participant's FICA obligation) required by law to be withheld with respect to
any grant, exercise, or payment made under or as a result of this Plan.
ARTICLE 15. EFFECT OF CERTAIN TRANSACTIONS
Effect of Certain Transactions. Subject to Section 12, or as otherwise
provided in an agreement, in the event of (a) the liquidation or dissolution of
the Company or (b) a merger, consolidation or combination of the Company (a
"Transaction"), the Plan and the Awards issued hereunder shall continue in
effect in accordance with their respective terms except that following a
Transaction each Participant shall be entitled to receive in respect of each
Share subject to any outstanding Options or Awards, as the case may be, upon
exercise of any Option or payment or transfer in respect of any Award, the same
number and kind of Shares, securities, cash, property, or other consideration
that each holder of a Share was entitled to receive in the Transaction in
respect of a Share; provided, however, that such Shares, securities, cash,
property, or other consideration shall remain subject to all of the conditions,
restrictions and performance criteria which were applicable to the Options or
Awards prior to such Transaction.
ARTICLE 16. REQUIREMENTS OF LAW
16.1 Requirements of Law. The granting of Awards and the issuance of
Shares under this Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or securities
exchanges as may be required.
16.2 Governing Law. The Plan, and all agreements hereunder, shall be
construed in accordance with and governed by the laws of the State of New York.
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AMENDMENT NUMBER 1
TO
CALIFORNIA REAL ESTATE INVESTMENT TRUST
1997 NON-EMPLOYEE TRUSTEE SHARE PLAN
WHEREAS, an amended and restated declaration of trust of
Capital Trust, formerly California Real Estate Investment Trust (the "Company"),
was approved by the shareholders and executed by the trustees of the Company on
July 15, 1997, thereby effecting the change in trust name to "Capital Trust";
WHEREAS, the Company maintains the California Real Estate
Investment Trust 1997 Non-Employee Trustee Share Plan ("Plan"); and
WHEREAS, the Company desires to amend the Plan to reflect
therein the change in trust name;
NOW THEREFORE, the Plan is amended effective as of July 15,
1997 by the addition of the following provision:
All references to "California Real Estate Investment Trust" in
the Plan shall be to "Capital Trust."
IN WITNESS WHEREOF, the Company has caused this amendment to
be executed by its duly authorized officer this 15th day of July 1997.
CAPITAL TRUST
(formerly California Real Estate Investment)
By:/s/John R. Klopp
______________________________
John R. Klopp
Chief Executive Officer
612402.1