SCHEDULE 14 A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
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[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-2.
SOVRAN SELF STORAGE, INC.
_________________________________________________________________
(Name of Registrant as Specified In Its Charter)
_________________________________________________________________
(Name of Person(s) Filing Proxy Statement,
if other than Registrant))
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6(i)(4) and 0-12.
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SOVRAN SELF STORAGE, INC.
5166 Main Street
Williamsville, New York 14221
Dear Shareholder:
You are cordially invited to attend the 1999 Annual Meeting of
Shareholders on Tuesday, May 25, 1999 at 25050 Sperry Drive,
Westlake, Ohio 44145. The Annual Meeting will begin promptly at
11:00 a.m..
The enclosed Notice and Proxy Statement contain details
concerning the business to come before the meeting. In addition to
the election of six Directors to serve until the 2000 Annual
Meeting of Shareholders, Shareholders are being asked to consider
and act upon proposals to approve amendments to the Company's 1995
Award and Option Plan and 1995 Outside Directors' Stock Option
Plan, to approve the Deferred Compensation Plan for Directors and
to ratify the appointment of Ernst & Young LLP as independent
auditors of the Company for the 1999 fiscal year. The Board of
Directors of the Company recommends a vote "FOR" the foregoing
proposals.
The vote of every Shareholder is important. You may vote your
shares via the toll free telephone number, or via the Internet (see
instructions on the enclosed proxy card) or you may sign, date and
mail the accompanying proxy card and return it promptly in the
postage paid envelope provided. Please note that the telephone
number is available only for calls originating in the United States
or Canada. Please take the time to vote. As explained in the
proxy statement, you may withdraw your proxy at any time before it
is actually voted at the meeting.
If you plan to attend the meeting in person, please remember
to bring a form of personal identification with you and, if you are
acting as a proxy for another stockholder, please bring written
confirmation from the record owner that you are acting as a proxy.
If you will need special assistance at the meeting, please contact
Sovran Investor Relations at (716) 633-1850.
The Board of Directors and management look forward to greeting
those Shareholders who are able to attend the Annual Meeting.
Sincerely,
David L. Rogers
Secretary
April 20, 1999
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SOVRAN SELF STORAGE, INC.
5166 Main Street
Williamsville, New York 14221
_______________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
_______________
TO THE SHAREHOLDERS OF SOVRAN SELF STORAGE, INC.:
NOTICE IS HEREBY GIVEN THAT the Annual Meeting of Shareholders
of Sovran Self Storage, Inc. will be held at 25050 Sperry Drive,
Westlake, Ohio 44145, on Tuesday, May 25, 1999, at 11:00 a.m.
(E.D.T.), to consider and take action on the following:
1. The election of six Directors of the Company to hold
office until the next annual meeting of shareholders and until
their successors are elected and qualified.
2. An amendment to the Sovran Self Storage, Inc. 1995 Award
and Option Plan to increase the number of shares of Common Stock
available for grant thereunder.
3. An amendment to the Sovran Self Storage, Inc. 1995 Outside
Directors' Stock Option Plan to increase the number of shares of
Common Stock available for grant and to increase the amount of
initial and annual grants thereunder.
4. The Deferred Compensation Plan for Directors of Sovran
Self Storage, Inc.
5. The ratification of the appointment by the Board of
Directors of Ernst & Young LLP as independent accountants to audit
the accounts of the Company for the fiscal year ending December 31,
1999.
6. The transaction of such other business as may properly
come before the meeting or any adjournments thereof.
FURTHER NOTICE IS HEREBY GIVEN that the stock transfer books
of the Company will not be closed, but only Shareholders of record
at the close of business on March 25, 1999 will be entitled to
notice of the meeting and to vote at the meeting.
SHAREHOLDERS WHO WILL BE UNABLE TO ATTEND THE ANNUAL MEETING IN
PERSON MAY ATTEND THE MEETING BY PROXY. SUCH SHAREHOLDERS ARE
REQUESTED TO COMPLETE, DATE, SIGN AND RETURN THE PROXY CARD IN THE
ENVELOPE ENCLOSED OR TO VOTE THEIR PROXY BY TELEPHONE OR VIA THE
INTERNET AS DESCRIBED ON THE ENCLOSED PROXY CARD.
By Order of the Board of Directors,
David L. Rogers
Secretary
Buffalo, New York
April 20, 1999
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SOVRAN SELF STORAGE, INC.
5166 Main Street
Williamsville, New York 14221
_______________
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
_______________
This Proxy Statement and the enclosed form of proxy are
furnished in connection with the solicitation of proxies on behalf
of the Board of Directors of Sovran Self Storage, Inc. (the
"Company") for the Annual Meeting of Shareholders (the "Annual
Meeting") to be held on Tuesday, May 25, 1999 at 11:00 a.m. at
25050 Sperry Drive, Westlake, Ohio 44145, and at any adjournment
thereof, for the purposes set forth in the accompanying Notice of
Annual Meeting of Shareholders. Only Shareholders of record at
the close of business on March 25, 1999 are entitled to notice of
and to vote at the meeting. This Proxy Statement and the enclosed
form of proxy are first being mailed to Shareholders on or about
April 20, 1999.
Shareholders of record may vote by (i) attending the meeting,
(ii) using the toll-free telephone number shown on the proxy card,
(iii) voting via the Internet at the address shown on the proxy
card, or (iv) marking, dating, signing and returning the enclosed
proxy card. Returning your completed proxy will not prevent you
from voting in person at the meeting should you be present and wish
to do so. The proxy may be revoked at any time before it is voted
by delivering to the Secretary of the Company a written revocation
or a duly executed proxy (including a telephone or Internet vote)
bearing a later date, or by attending the Annual Meeting and voting
in person.
The entire cost of preparing, assembling and mailing the proxy
material will be borne by the Company. The Company will reimburse
brokerage firms, banks and other securities custodians for their
expenses in forwarding proxy materials to their principals.
Solicitations other than by mail may be made by officers or by
regular employees of the Company without additional compensation.
Only Shareholders of record at the close of business on
March 25, 1999, are entitled to notice of and to vote at the Annual
Meeting and at all adjournments thereof. At the close of business
on March 25, 1999, there were issued and outstanding 12,379,135
shares of Common Stock. Each share of Common Stock has one vote.
A majority of shares entitled to vote at the Annual Meeting will
constitute a quorum. If a share is represented for any purpose at
the meeting, it is deemed to be present for all other purposes.
Abstentions and shares held of record by a broker or its nominee
("Broker Shares") that are voted on any matter are included in
determining the number of votes present. Broker Shares that are
not voted on any matter at the Annual Meeting will not be included
in determining whether a quorum is present.
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The Company will provide Shareholders, without charge, a copy
of the Company's Annual Report on Form 10-K filed with the
Securities and Exchange Commission for the period ended
December 31, 1998, including the financial statements and schedules
thereto, on written request to David L. Rogers, Secretary of the
Company, at 5166 Main Street, Williamsville, New York 14221.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
To the best of the Company's knowledge, there are no
beneficial owners of 5% or more of the Company's Common Stock.
The following table sets forth for each current Director, each
nominee for Director and each of the executive officers named in
the Summary Compensation Table and for all Directors and executive
officers as a group, information concerning beneficial ownership of
the Company's Common Stock. Unless otherwise stated, to the best
of the Company's knowledge, each person has sole voting and
investment power with respect to the shares listed.
Number of Shares of
Common Stock
Beneficially Owned Percent of
Name and Address of as of March 25, 1999 Common Stock
Beneficial Owners (1) (2) Owned
Robert J. Attea(3)...... 184,480 1.49%
Kenneth F. Myszka(3).... 184,945 1.49%
Charles E. Lannon....... 177,850 1.44%
John E. Burns........... 20,000 *
Michael A. Elia......... 10,000 *
Anthony P.Gammie........ 22,932 *
David L. Rogers(3)...... 129,110 1.04%
Directors and Executive
Officers as a Group
(seven persons)......... 729,317 5.89%
* Represents beneficial ownership of less than 1% of issued and
outstanding Common Stock on March 25, 1999.
(1) The address for all owners is c/o Sovran Self Storage, Inc.,
5166 Main Street, Williamsville, New York 14221.
(2) Includes 42,720, 42,720, 41,250, 10,000, 10,000, 10,000 and
42,720 shares of Common Stock which may be acquired by Messrs.
Attea, Myszka, Lannon, Burns, Elia, Gammie and Rogers,
respectively, through the exercise, within sixty days, of
options granted under the 1995 Award and Option Plan and the
1995 Outside Directors' Stock Option Plan. The shares shown
in this footnote for each of Messrs. Attea, Myszka and Rogers
include 3,080 shares which may be acquired through the
exercise of options granted contingent upon Shareholder
approval of the amendment to the 1995 Award and Option Plan.
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(3) In each case, the figure shown includes 5,150 shares of
restricted stock which vest in 20% increments on May 12, 1999,
2000, 2001, 2002 and 2003.
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1. ELECTION OF DIRECTORS
It is intended that the proxies solicited by the Board of
Directors will, unless otherwise directed, be voted to elect the
nominees for Director named below. Assuming a quorum is present,
Directors are elected by a plurality of the affirmative votes cast;
accordingly, votes withheld and broker non-votes will have no
effect. The nominees proposed are all presently members of the
Board.
The nominees named herein will hold office until the next
succeeding Annual Meeting of Shareholders and until their
successors are duly elected and qualified. In the event any
nominee becomes unavailable and a vacancy exists, it is intended
that the persons named in the proxy may vote for a substitute who
will be recommended by the then remaining Directors. The Board of
Directors has no reason to believe that any of the nominees will be
unable to serve as Directors.
Title and Principal
Name Age Occupation
____ ___ ___________________
Robert J. Attea 57 Chairman of the Board and
Chief Executive Officer.
Mr. Attea has been
Director and Chairman of
the Board since the
completion of the Initial
Offering on June 25, 1995
and was re-appointed
Chief Executive Officer
in March 1997. From 1988
to 1995, Mr. Attea served
as President and Chief
Executive Officer of the
Company's predecessor.
From 1985 to 1988, he
served as Director of
Acquisitions and Vice
President of Property
Management.
Kenneth F. Myszka 50 President and Chief
Operating Officer.
Mr. Myszka has been
President and Director
since the completion of
the Initial Offering on
June 25, 1995.
Mr. Myszka was the Chief
Executive Officer of the
Company until March 1997
at which time he became
the Chief Operating
Officer. From 1982 to
1995, Mr. Myszka served
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as Senior Vice President
of the Company's
predecessor.
John E. Burns 52 Director since the
completion of the Initial
Offering on June 25,
1995. Since 1998,
Mr. Burns has been
Chairman of Sterling, a
Division of National City
Bank, which provides tax
and financial counseling
services to affluent
families. From 1980 to
1998 he was President and
founder of its
predecessor, Sterling
Ltd. Co.
Michael A. Elia 47 Director since the
completion of the Initial
Offering on June 25,
1995. Since 1984,
Mr. Elia has been
President, Chief
Executive Officer and a
director of Sevenson
Environmental Services,
Inc., an environmental
remediation contractor.
He is also President and
a director of Sevenson
International Services,
Inc. and a director of
Sevenson Industrial
Services, Inc.,
affiliates of Sevenson
Environmental Services,
Inc.
Anthony P. Gammie 64 Director since the
completion of the Initial
Offering on June 25,
1995. From 1985 through
1996, Mr. Gammie was
Chairman of the Board of
Bowater Incorporated.
During the past 5 years
he has served as a
director of Alumax, Inc.,
The Bank of New York and
The American Forest &
Paper Association. He is
currently a director of
Lipper/Leumi High Income
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Bond Fund, Inc. located
in Curacao, Netherlands
Antilles.
Charles E. Lannon 51 Director since the
completion of the Initial
Offering on June 25,
1995. Mr. Lannon was the
predecessor company's
Senior Vice President-
Marketing from 1982 to
1995. Mr. Lannon left
the employ of the Company
to become the Chief
Executive Officer of an
unrelated business owned
by Mr. Lannon and other
Company founders.
EXECUTIVE OFFICERS OF THE COMPANY
Name Age Title
____ ___ _____
Robert J. Attea 57 Chairman of the Board and
Chief Executive Officer
Kenneth F. Myszka 50 President and Chief
Operating Officer
David L. Rogers 43 Chief Financial Officer
and Secretary
David L. Rogers. From June 25, 1995 to the present, David L.
Rogers has served as the Company's Chief Financial Officer and
Secretary. From 1988 to 1995, Mr. Rogers served as the predecessor
company's Vice President of Finance.
MEETINGS OF THE BOARD OF DIRECTORS AND STANDING COMMITTEES.
The Board of Directors held six meetings during the fiscal
year ended December 31, 1998.
Audit Committee. The Audit Committee is composed of Messrs.
Burns, Elia, Gammie and Lannon. The Audit Committee recommends
independent accountants for selection by the Board of Directors,
reviews the results and scope of the audit and the services
provided by and the fees paid to the independent accountants,
reviews the adequacy of the Company's internal accounting controls
and reviews the charges under the Facilities Services Agreement.
See "Certain Transactions". The Audit Committee held one meeting
during the fiscal year ended December 31, 1998.
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Compensation Committee. The Compensation Committee is
composed of Messrs. Burns, Elia, Gammie, and Lannon and makes
decisions with respect to compensation of executive officers and
administers the Company's 1995 Award and Option Plan. The
Compensation Committee held two meetings during the fiscal year
ended December 31, 1998.
BOARD AND COMMITTEE ATTENDANCE
During the fiscal year ended December 31, 1998, all Directors
attended at least 75% of the meetings of the Board of Directors and
of the Committees of the Board on which they served.
COMPENSATION OF DIRECTORS
The Company pays its Directors who are not also officers of
the Company an annual fee of $12,500 in cash. Outside Directors
are also paid a meeting fee of $1,000 for each special meeting
attended. In addition, the Company will reimburse all Directors
for expenses incurred in attending meetings. Pursuant to the 1995
Outside Directors' Option Plan, each Director who is not an officer
or employee of the Company is granted, effective as of the
Director's initial election or appointment, a ten year option to
acquire 2,500 shares of Common Stock at the fair market value of
the Common Stock on the date of grant, and will, as of the close of
each annual shareholders' meeting thereafter, be granted a ten-
year option to acquire an additional 2,500 shares of Common Stock
at the fair market value of the Common Stock on the date of grant.
The initial options of 2,500 shares of Common Stock are exercisable
one year from the date of grant; the Directors' options awarded
annually thereafter vest immediately. The exercise price is
payable in cash or by delivery of shares of Common Stock owned by
the Director, or a combination of cash and shares. No Director
options were exercised during 1998. The 1995 Outside Directors'
Option Plan is proposed to be amended. (See page 13.)
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's Directors and officers, and persons who own more than
10% of a registered class of the Company's equity securities, to
file reports of ownership and changes in ownership with the
Securities and Exchange Commission (the "SEC") and the New York
Stock Exchange. Directors, officers and greater-than-10%
shareholders are required by SEC regulation to furnish the Company
with copies of all Section 16(a) reports they file. Based solely
on review of information furnished to the Company and reports filed
through the Company, the Company believes that all Section 16(a)
filing requirements applicable to its Directors who are also
officers, officers and greater-than-10% beneficial owners were
complied with during 1998. Mr. Lannon, a Director who is not also
an officer of the Company, by inadvertence filed a late report
covering two purchases of the Company's Common Stock made by his
wife.
The Board of Directors recommends a vote "FOR" the proposal to
elect management's nominees.
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EXECUTIVE COMPENSATION
Compensation Committee Report on Executive Compensation
The Compensation Committee consisted of Messrs. Burns, Elia,
Gammie and Lannon. No officer or employee participated in the
deliberations of the Company's Board of Directors concerning
executive officer compensation.
Decisions on compensation of the Company's executives are made
by the Compensation Committee of the Board. Each member of the
Compensation Committee is a non-employee director. All decisions
by the Compensation Committee relating to the compensation of the
Company's executive officers are reviewed by the full Board.
During 1997 and 1998, the Company engaged a compensation
consulting firm to review the Company's executive compensation
program, evaluate its competitiveness and make recommendations
which would enable the Company to motivate and retain top
executives with a view to maximizing Shareholder value. The
consulting firm focused on base salary, annual incentives and long-
term incentives and utilized published survey data and information
from a peer group of companies in the public storage REIT industry.
The Compensation Committee used the results of the consulting
firm's evaluation, as well as other relevant information, as the
basis for its decisions on executive compensation in 1998.
The Company's executive compensation policies are to provide
competitive levels of compensation that integrate pay with the
Company's performance goals, reward profitability, recognize
individual initiative and achievements, and assist the Company in
attracting and retaining qualified executives. In 1998, these
policies were carried out through the compensation components of
salary, incentive compensation, perquisites, and stock options. In
addition, the Committee treats the tax deductibility of executive
compensation as an important factor in its decision-making, since
the deductibility may affect the required REIT distributions.
A competitive salary structure is the most fundamental
component of executive compensation used by the Compensation
Committee to assist in attracting and retaining qualified
executives. Salaries for the executive officers for 1998 were
established based on these fundamentals.
The Company maintains an incentive compensation plan which
provides for the payment of cash bonuses to the executive officers
based upon the achievement of specified increases in the Company's
Funds from Operations per Common Share and other performance
criteria and upon such participant's base compensation as shown for
the named executive officers in the Summary Compensation Table, for
the year in which the increase occurred. The application of these
criteria resulted in the bonuses reflected in the Summary
Compensation Table.
Perquisites, which include an automobile allowance and
reimbursement of miscellaneous expenses, do not relate directly to
the Company's performance. Instead, these relatively inexpensive
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components of executive compensation are primarily viewed as
necessary to keep compensation levels competitive and to assist in
attracting and retaining qualified executives.
The Compensation Committee also believes that stock ownership
by management and employees serves as an incentive to enhance
shareholder value. Options were granted to executive officers in
1995 and 1998. Since 1995, the Company has awarded options to key
employees who are not executive officers.
The Compensation Committee's approach to establish Mr. Attea's
compensation does not differ from the approach to establish all
executive compensation and is in keeping with the policies
previously stated.
The Board of Directors did not modify or reject any action or
recommendation by the Compensation Committee in any material way.
Compensation Committee
JOHN E. BURNS
MICHAEL A. ELIA
ANTHONY P. GAMMIE
CHARLES E. LANNON
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SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation Awards
Compensation _________________________
__________________ Restricted Securities
Base Stock Underlying
Fiscal Salary Bonus Awards Options
Name and Principal Position Year ($) ($) ($)(1) (#)(2)
___________________________ ______ ______ ______ _________________________
Robert J. Attea............ 1998 $183,865 $35,000 $142,591 44,850
Chairman of the Board and 1997 131,250 0 0 0
Chief Executive Officer 1996 110,000 40,000 0 0
Kenneth F. Myszka.......... 1998 $183,865 $35,000 $142,591 44,850
President and Chief 1997 131,250 0 0 0
Operating Officer 1996 110,000 40,000 0 0
David L. Rogers............ 1998 $183,865 $35,000 $142,591 44,850
Chief Financial Officer 1997 131,250 0 0 0
and Secretary 1996 110,000 40,000 0 0
(1) The amounts represent the value of the restricted stock awards as of the date of grant.
As of December 31, 1998 Messrs. Attea, Myszka and Rogers each held 5,150 shares of
restricted stock with a value of $129,394. Dividends are paid to such persons on the
shares of restricted stock held by them.
(2) Of the amounts shown for each person, 15,400 are contingent upon Shareholder approval
of proposal 2. Amendment to the 1995 Award and Option Plan. (See page 9.)
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OPTIONS GRANTED IN LAST FISCAL YEAR
The following table contains information concerning the grant of stock options to the
named executive officers in fiscal 1998. The exercise price of all such options is equal to
the market value of Common Stock on the date of the grant.
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation
Individual Grants For Option Term (3)
__________________________________________________________________ _____________________
Number of % of Total
Securities Options
Underlying Granted to Exercise
Options Employees in Price Expiration
Name Granted (1)(2) Fiscal Year ($/Share) Date 5%($) 10%($)
____ ______________ ____________ _________ __________ _____ ______
Robert J. Attea 44,850 30.6% $27.6875 5/12/08 $780,951 $1,979,084
Kenneth F. Myszka 44,850 30.6% $27.6875 5/12/08 780,951 1,979,084
David L. Rogers 44,850 30.6% $27.6875 5/12/08 780,951 1,979,084
(1) All options shown are ten-year options and become exercisable at the rate of 20% per
year beginning on the first anniversary of the date of grant.
(2) Of the amounts shown for each person, 15,400 are contingent upon Shareholder approval
of the amendment to the 1995 Award and Option Plan.
(3) The dollar amounts shown are based on rates established by the Securities and Exchange
Commission and are not intended to forecast possible appreciation, if any, of the
Company's share price.
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FISCAL YEAR-END OPTION VALUES
Value of Unexercised
Number of Unexercised In-the-Money Options
Options at Year-End (#) at Year-End($)(2)
_______________________ ______________________________
Name Exercisable Unexercisable (1) Exercisable Unexercisable
____ ___________ _________________ ___________ _____________
Robert J. Attea 33,750 56,100 $71,719 $23,906
Kenneth F. Myszka 33,750 56,100 71,719 23,906
David L. Rogers 33,750 56,100 71,719 23,906
(1) Of the amounts shown for each person, 15,400 are contingent upon Shareholder approval
of the amendment to the 1995 Award and Option Plan.
(2) Based upon the closing price of the Company's Stock on the New York Exchange on
December 31, 1998 at $25.125.
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EMPLOYMENT AGREEMENTS
Concurrently with the Initial Offering, the Company entered
into employment agreements with Messrs. Attea, Myszka and Rogers
that require each of them to devote their full business time to the
Company. Each employment agreement has a three-year term with an
automatic extension each year for an additional year. The
employment agreements provide for certain severance payments in the
event of the executive's death or disability, his termination
without cause or his resignation with good reason. Each employment
agreement prohibits the executive, during employment and during the
two-year period following termination of employment, from engaging
in the self storage business.
CERTAIN TRANSACTIONS
The Company has a Facilities Services Agreement with several
businesses owned by the named executive officers and Mr. Lannon
whereby such businesses pay for the use of certain common
facilities in the Company's offices negotiated by the parties at
arms-length. Charges under the Facilities Services Agreement are
periodically reviewed by the Audit Committee of the Company's Board
of Directors.
Robert J. Attea is the brother of a partner of the law firm of
Phillips, Lytle, Hitchcock, Blaine & Huber LLP, which has
represented and is currently representing the Company.
CORPORATE PERFORMANCE GRAPH
The following chart and line-graph presentation compares (i)
the Company's shareholder return on an indexed basis since the
Initial Offering with (ii) the S&P Stock Index and (iii) the
National Association of Real Estate Investment Trusts Equity Index.
Performance Graph
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CUMULATIVE TOTAL SHAREHOLDER RETURN
SOVRAN SELF STORAGE, INC.
JUNE 25, 1995 - DECEMBER 31, 1998
June 25, December 31, December 31, December 31, December 31,
1995 1995 1996 1997 1998
________ ____________ ____________ ____________ ____________
S&P 500 100.00 114.38 140.65 187.58 241.18
NAREIT 100.00 109.08 147.51 177.39 146.34
SSS 100.00 117.68 150.04 167.07 140.09
- - assumes $100.00 invested on June 25, 1995.
- 16 -
2. AMENDMENT TO THE 1995 AWARD AND OPTION PLAN
The Board of Directors has approved, subject to Shareholder
approval, an amendment ("Amendment") to the Company's 1995 Award
and Option Plan (the "Employee Plan") to provide for an increase in
the number of shares of Common Stock authorized to be issued under
the Employee Plan by 500,000 (to a new maximum of 900,000). At the
present time only 2,250 shares remain available for grant under the
Employee Plan.
Under the Employee Plan, adopted by Shareholders in 1995, the
maximum number of shares of Common Stock ("Common Shares") that
shall be authorized for issuance under the Employee Plan is
400,000. On May 12, 1998, the Compensation Committee determined
that it was appropriate, in furtherance of the purposes of the
Employee Plan, to grant awards under the Employee Plan. However,
because the number of shares available under the Employee Plan at
that time was insufficient to cover all the awards, a portion of
the awards, as noted below, was made contingent upon Shareholder
approval of the Amendment. In view of the foregoing and the need
for additional Common Shares to cover awards that may be granted by
the Company in the future in accordance with its normal
compensation practices, the Board of Directors recommends the
approval of the Amendment.
The Employee Plan is designed to provide incentives to key
employees whose contributions are important to the continued
success of the Company, and to enhance its ability to attract and
retain highly qualified persons for the successful conduct of the
Company's business. The following summary of the principal
provisions of the Employee Plan is not intended to be complete and
reference should be made to the Employee Plan itself. The complete
text of the Employee Plan may be obtained from the Company upon
written request to the Secretary of the Company.
The Employee Plan is administered by the Compensation
Committee. No member of the Compensation Committee is eligible to
be selected to participate in the Employee Plan. All key employees
of the Company are eligible to be selected to participate in the
Employee Plan. Participants are selected by the Compensation
Committee.
The Employee Plan authorizes the Compensation Committee to
grant awards of stock options, including incentive stock options,
and shares that for purposes of Section 83 of the Internal Revenue
Code of 1986, as amended (the "Code"), are "restricted"
("Restricted Shares"). No awards may be granted after April 30,
2005. Subject to equitable adjustment, the total number of Common
Shares authorized for issuance under the Employee Plan, as proposed
to be amended, shall not exceed 900,000, including awards
previously made. Common Shares underlying any awards that are
forfeited, canceled or reacquired by the Company, or are otherwise
terminated (other than by exercise) are added back to the shares
available for issuance under the Employee Plan.
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The Compensation Committee may grant awards in the form of
stock options to purchase Common Shares. The Compensation
Committee will, with regard to each stock option, determine the
number of shares subject to the option, the manner and time of the
option's exercise, and the exercise price per share of Common
Shares subject to the option. In no event, however, may the
exercise price of a stock option be less than the fair market value
of the Common Shares on the date of the stock option's grant. Each
incentive stock option shall expire no later than the tenth
anniversary of its date of grant. Upon exercise, the exercise
price may, at the discretion of the Compensation Committee, be paid
by a participant in cash, Common Shares, a combination thereof, or
such other consideration as the Committee may deem appropriate.
In the event of a stock dividend, stock split or other change
in the Company's capital structure, the maximum number of Common
Shares authorized for issuance under the Employee Plan and the
number of Common Shares subject to outstanding options (together
with the respective exercise prices) will be appropriately
adjusted.
The Compensation Committee may grant Restricted Shares that
are contingent upon the attainment of performance goals or other
restrictions as the Compensation Committee may determine. During
the restriction period, the Restricted Shares may not be sold,
transferred, or otherwise encumbered and such shares are subject to
forfeiture if one or more conditions established by the
Compensation Committee are not satisfied. Subject to the
discretion of the Compensation Committee, the holder of Restricted
Shares will have all of the rights of a holder of Common Shares,
including the right to vote the shares and a right to receive any
cash distributions. The Compensation Committee has broad
discretion as to the specific terms and conditions of each award,
including applicable rights upon termination of employment.
Unless the Compensation Committee specifically determines
otherwise, no award shall be transferable except by will or the
laws of descent and distribution. The Employee Plan provides for
the forfeiture of unexercised awards in the event of termination of
employment for a reason other than death, disability, retirement,
or any approved reason, unless the award provides otherwise.
Forfeiture is also required if, in the opinion of the Compensation
Committee, the participant competes with the Company without its
written consent, or if he acts in a manner inimical to the
Company's best interests.
Upon grant of any award, the Compensation Committee may, by
way of an award notice or otherwise, establish such other terms and
conditions governing the grant of such award as are not
inconsistent with the Employee Plan. The Compensation Committee
may unilaterally amend any award if such amendment is not adverse
to the participant. The Company may deduct from any payment under
the Employee Plan the amount of any applicable income and
employment taxes, or may require the participant to pay such taxes
as a condition of making such payment. The Compensation Committee
may allow the participant to satisfy this obligation by authorizing
the Company to withhold from any payment of Common Shares due, or
by delivering to the Company, Common Shares with a fair market
value equal to the amount of the applicable taxes.
- 18 -
The Board may suspend or terminate the Employee Plan at any
time, and may also amend it from time to time, but may not, without
shareholder approval, adopt any amendment which would materially
increase the benefits accruing to participants, materially increase
the maximum number of shares which may be issued under the Employee
Plan, other than by reason of equitable adjustment, or materially
modify the Employee Plan's eligibility requirements.
In the event of a Change In Control (as defined in the
Employee Plan), a participant whose employment is terminated within
two years of the date of such event, for a reason other than death,
disability, Cause (as defined in the Employee Plan), voluntary
resignation for other than Good Reason (as defined in the Employee
Plan) or retirement, would be entitled to the following treatment
under the Employee Plan: (i) all of the terms and conditions in
effect on any of the participant's outstanding awards would
immediately lapse, (ii) all of the participant's outstanding awards
would automatically become 100% vested, (iii) all of the
participant's outstanding stock options would immediately be cashed
out on the basis of the Change In Control Price (as defined in the
Employee Plan). Such payments would be made as soon as possible,
but no later than the 90th day following such event. The Employee
Plan also provides that upon a Change In Ownership (as defined in
the Employee Plan) all participants, regardless of whether their
employment is terminated, would automatically receive the same
treatment afforded to a terminated participant under the Employee
Plan in the event of a Change In Control.
The following is a summary of the federal income tax aspects
of the Employee Plan, based on existing law and regulations, which
are subject to change. The application of state and local income
taxes and other federal taxes is not discussed.
Generally, a person who is granted an incentive stock option
is not required to recognize taxable income at the time of the
grant or at the time of exercise and the Company is not entitled to
a deduction at the time of grant or at the time of exercise of an
incentive stock option. Under certain circumstances, however, an
option holder may be subject to the alternative minimum tax with
respect to the exercise of his incentive stock options. Generally,
the gain realized but not recognized upon the exercise of an
incentive stock option (equal to the difference between the fair
market value of the Common Shares received upon exercise of the
incentive stock option and the purchase price paid for such Common
Shares) is included in the option holder's alternative minimum
taxable income and, depending upon the option holder's overall tax
situation, he or she may be required to pay alternative minimum tax
on such gain.
If an option holder does not dispose of the Common Shares
acquired pursuant to the exercise of an incentive stock option
before the later of two years from the date of grant of the option
and one year from the transfer of the Common Shares to him, any
gain or loss realized on a subsequent disposition of the Common
Shares will be treated as long-term capital gain or loss. Under
such circumstances, the Company will not be entitled to any
deduction for federal income tax purposes.
- 19 -
If an option holder disposes of the Common Shares received
upon the exercise of an incentive stock option either (1) within
one year of the transfer of the Common Shares to him or her or (2)
within two years after the incentive stock option was granted, the
option holder will generally recognize ordinary compensation income
equal to the lesser of (a) the excess of the fair market value of
the Common Shares on the date the incentive stock option was
exercised over the purchase price paid for the Common Shares upon
exercise and (b) the amount of gain realized on the sale. Any gain
realized in excess of the compensation income recognized, and any
loss realized, will be long-term or short-term capital gain or
loss, depending upon the length of the period the option holder
held the Common Shares. If an option holder is required to
recognize ordinary compensation income as a result of the
disposition of shares acquired on the exercise of an incentive
stock option, the Company, subject to general rules relating to the
reasonableness of the option holder's compensation and the
limitation under Section 162(m) of the Internal Revenue Code of
1986, as amended ("Code"), will be entitled to a deduction for the
same amount.
If an option holder exercises an incentive stock option by
transferring shares of the Company's Common Stock to the Company to
pay all or part of the purchase price, the option holder will not
recognize gain or loss with respect to the already owned shares
exchanged. The number of Common Shares of stock received upon
exercise of the incentive stock option equal to the number of
shares exchanged will have a basis and holding period equal to the
basis and holding period the option holder had in the shares
exchanged. The remaining Common Shares received will have a basis
equal to the cash paid, if any, on the exercise.
A person who is granted a non-qualified stock option does not
have taxable income at the time of grant, but does have taxable
income at the time of exercise equal to the difference between the
purchase price of the Common Shares and the fair market value of
the Common Shares on the date of exercise. Subject to general
rules relating to the reasonableness of an employee option holder's
compensation and the limitation under Section 162(m) of the Code,
the Company is entitled to a corresponding deduction for the same
amount.
If an option holder exercises a non-qualified stock option by
transferring shares of Company Common Stock to the Company to pay
all or part of the purchase price, the option holder will not
recognize gain or loss with respect to the already owned shares
exchanged. The number of Common Shares received upon exercise of
the non-qualified stock option equal to the number of shares
exchanged will have a basis and holding period equal to the basis
and holding period the option holder had in the shares exchanged.
The fair market value of the additional Common Shares received will
be includible in the option holder's income upon exercise and the
option holder's basis in such Common Shares will equal such value.
An employee who has been granted Restricted Shares will not be
required to recognize taxable income at the time of the grant, and
the Company will not be entitled to a deduction at the time of the
- 20 -
grant, assuming that the restrictions constitute a substantial risk
of forfeiture for federal income tax purposes and the employee does
not elect to recognize income at that time by making an election
pursuant to Section 83(b) of the Code. When such restrictions
lapse, the employee will recognize taxable income in an amount
equal to the excess of the fair market value of the Restricted
Shares at such time over the amount, if any, paid for such
Restricted Shares. Subject to general rules relating to the
reasonableness of the employee's compensation and the limitation
under Section 162(m) of the Code, the Company will be entitled to
a deduction for the same amount.
Section 162(m) of the Code generally limits to $1 million the
amount of compensation paid to certain "covered employees" of a
publicly held corporation (generally, the corporation's chief
executive officer and four most highly compensated executive
officers other than the chief executive officer) that can be
deducted by the corporation for the year. Certain performance-
based compensation, the material terms of which are disclosed to
the corporation's shareholders and approved by a majority vote of
the shareholders, is exempt from the $1 million limitation. Based
on regulations promulgated under Section 162(m), grants of options
to covered employees under the Employee Plan would appear to
qualify for the exemption from the $1 million limitation as
performance-based compensation.
As of December 31, 1998 three executive officers and
approximately 14 other officers and key employees were eligible to
participate in the Employee Plan. Because awards made under the
Employee Plan are at the discretion of the Compensation Committee,
it is not possible to determine what benefits eligible employees
will receive in the future. Grants of options under the Employee
Plan made during 1998 to the executive officers are shown under
"Options Granted in the Last Fiscal Year" above. Of the options
granted in 1998, options to purchase 15,400 Common Shares were
granted to each of Messrs. Attea, Myszka and Rogers contingent upon
Shareholder approval of the Amendment. No other options were
granted contingent upon Shareholder approval of the Amendment.
Grants of Restricted Shares during 1998 to the executive officers
are shown in the "Summary Compensation Table" above. During 1998
options to purchase a total of 134,550 Common Shares were granted
to executive officers and options to purchase a total of 12,000
Common Shares were granted to other officers and employees. Also
during 1998, 15,450 Restricted Shares with a total value of
$142,591 were granted to executive officers. As of March 25, 1999,
a total of 17,650 Restricted Shares have been granted under the
Employee Plan. As of that date, options to purchase a total of
452,550 Common Shares have been granted under the Employee Plan,
of which 30,000 have been exercised and 26,250 forfeited, leaving
a balance outstanding of 396,300. Based upon the closing price of
the Company's Common Stock at March 25, 1999 of $24.1875, the
market value of the Common Shares underlying outstanding options
(including those underlying options granted contingent upon
approval by Shareholders of the Amendment) was $9,585,506. The
market value of the 46,200 Common Shares underlying the options
granted contingent upon Shareholder approval of the Amendment was
$1,117,463.
- 21 -
Approval of the Amendment requires the affirmative vote of a
majority of the shares of the Company's Common Stock present and
entitled to vote at the Annual Meeting, provided that a majority of
the outstanding shares of the Company's Common Stock vote on the
proposal.
The Board of Directors recommends a vote "FOR" the proposal to
approve the amendment to increase the number of shares available
for issuance under the 1995 Award and Option Plan.
3. AMENDMENT TO THE 1995 OUTSIDE DIRECTORS' STOCK OPTION PLAN
The Board of Directors has approved, subject to Shareholder
approval, an amendment ("Amendment") to the Company's 1995 Outside
Directors' Stock Option Plan (the "Directors' Plan") to (i) provide
for an increase in the number of shares of Common Stock ("Common
Shares") authorized to be issued under the Directors' Plan from
50,000 to 100,000, and (ii) to increase the number of shares
covered by initial and annual grants to be made under the
Directors' Plan from 2,500 to 3,000.
Under the Directors' Plan, adopted by Shareholders in 1995,
the maximum number of Common Shares that may be issued under the
Directors' Plan is 50,000, subject to equitable adjustment. As of
December 31, 1998 10,000 Common Shares remained available under the
Directors' Plan. In view of the limited number of Common Shares
remaining available for the Directors' Plan, Shareholders are
requested to authorize additional Common Shares under the
Directors' Plan to cover anticipated awards to be granted by the
Company in the future in accordance with the provisions of the
Directors' Plan, as proposed to be amended.
The purpose of the Directors' Plan is to promote the long-term
financial success of the Company and thereby increase Shareholder
value by enabling the Company to attract and retain outstanding
outside Directors whose judgment, interest and special efforts are
essential to the conduct of the Company's operations. In 1998, the
Company engaged a compensation consulting firm to study its Board
of Director compensation program and to evaluate its
competitiveness. This evaluation included published surveys of
director compensation for comparably sized companies, as well as
data for a peer group of companies. Based on this evaluation, the
consulting firm recommended that the level of options granted under
the Directors' Plan be increased as provided for in the Amendment.
Following is a summary of the principal provisions of the
Directors' Plan, as proposed to be amended.
Under the Directors' Plan, each Director who is not an officer
or employee of the Company will be granted, effective as of the
Director's initial election or appointment to the Board, a ten-year
option to acquire 3,000 Common Shares at the fair market value of
a Common Shares on the date the option is granted, and will,
effective as of the close of each annual shareholders' meeting
thereafter, be granted a ten-year option to acquire an additional
3,000 Common Shares at the fair market value of a Common Share on
- 22 -
the date of grant. The initial options for 3,000 Common Shares are
exercisable one year from the date of grant; options awarded
annually thereafter vest immediately. No options may be
transferred other than by will or the laws of descent and
distribution. The exercise price of options granted under the
Directors' Plan may be paid in cash or, if permitted by the Board
of Directors or its authorized committee, by exchanging shares of
Common Stock owned by the optionee, or a combination of cash and
shares. The value of shares exchanged in full or partial payment
of the exercise price will be based on the fair market value of the
shares at the time the option is exercised. The Company may
facilitate the cashless exercise of options through customary
brokerage arrangements.
Under the Directors' Plan, options terminate and cease to be
exercisable on the date an outside Director ceases to serve as a
Director except that if a Director ceases to serve because of
death, disability or mandatory resignation due to age, the outside
Director, or his or her personal representative, may exercise any
outstanding options to the extent exercisable on the date of such
death, disability or resignation, during the one-year period
thereafter.
In the event of (i) the dissolution or liquidation of the
Company, (ii) a merger, reorganization or consolidation in which
the Company is acquired by another person or in which the Company
is not the survivor corporation, or (iii) the sale of all or
substantially all of the outstanding Common Stock or assets of the
Company to another entity, the Directors' Plan and outstanding
options will terminate unless provision is made for the assumption
of outstanding options or the substitution of new options for
outstanding options. In the event of such termination, any
unexercised portion of outstanding options which is vested and
exercisable at that time shall be exercisable for at least 15 days
prior to the date of such termination.
In the event of a stock dividend, stock split, merger,
consolidation or other change in the Company's capital structure,
the maximum number of Common Shares available for issuance under
the Directors' Plan and the number of Common Shares subject to
outstanding options (together with the respective exercise prices)
will be appropriately adjusted.
A Director does not have taxable income at the time options
are granted, but does have taxable income at the time of exercise
equal to the difference between the purchase price of the shares
and the fair market value of the shares on the date of exercise.
An equal amount may be claimed as a deduction by the Company.
If a Director exercises an option by transferring shares of
Company's Common Stock to the Company to pay all or part of the
purchase price, the Director will not recognize gain or loss with
respect to the already owned shares exchanged. The number of
Common Shares received upon exercise of the option equal to the
number of shares exchanged will have a basis and holding period
equal to the basis and holding period the option holder had in the
- 23 -
shares exchanged. The fair market value of the additional shares
received will be includible in the Director's income upon exercise
and the Director's basis in such shares will equal such value.
If the Amendment is approved by Shareholders, options to
purchase 3,000 shares of the Company's Common Stock will be granted
to each of Messrs. John E. Burns, Michael A. Elia, Anthony P.
Gammie and Charles E. Lannon following the Annual Meeting.
Approval of the Amendment requires the affirmative vote of a
majority of the shares of the Company's Common Stock present and
entitled to vote at the Annual Meeting, provided that a majority of
the outstanding shares of the Company's Common Stock vote on the
proposal.
The Board of Directors recommends a vote "FOR" the proposal to
approve the Amendment to the 1995 Outside Directors' Stock Option
Plan.
4. ADOPTION OF DEFERRED COMPENSATION PLAN FOR DIRECTORS OF
SOVRAN SELF STORAGE, INC.
The Board of Directors has adopted a resolution recommending
that Shareholders consider and approve a proposal to approve the
adoption of the Deferred Compensation Plan for Directors of Sovran
Self Storage, Inc. (the "Plan"). If approved by Shareholders, the
Plan will be effective May 25, 1999.
The Plan is intended to provide non-employee Directors the
opportunity to defer the receipt of their annual retainer fees and
fees for attendance at meetings of the Board of Directors and its
committees and to receive those deferred fees in the form of shares
of the Company's Common Stock. All non-employee Directors
(currently, four persons) will be eligible to participate in the
Plan. The maximum number of shares that may be issued under the
Plan is 20,000, subject to adjustment to reflect certain changes in
capitalization, such as stock splits, stock dividends or
recapitalizations. The full text of the Plan is included as
Appendix A to this Proxy Statement, and the following description
of the material terms of the Plan is qualified in its entirety by
reference to the full text of the Plan.
The Plan permits non-employee Directors to defer to a later
year receipt of all or a portion of their annual retainer and
meeting fees ("Compensation") which otherwise would be includible
in income for tax purposes in the year in which it would have been
paid. Under current tax laws, no income will be recognized by a
Director at the time of deferral. Upon payment, a Director will
recognize ordinary income in an amount equal to the sum of the fair
market value of the shares of Common Stock received and the cash
received for any fractional share. The Company will be entitled to
a deduction equal to the income recognized by the Director.
Under the Plan, non-employee Directors may defer all or part
of their Compensation otherwise payable in cash. Compensation
which is deferred will be credited to each Director's account under
the Plan ("Account") in the form of Units. The number of Units
- 24 -
credited will be determined by dividing the amount of Compensation
deferred by the closing price of the Company's Common Stock on the
New York Stock Exchange (the "Stock Price") on the immediately
preceding day. When cash dividends are paid on the Company's
Common Stock the Director's Account will be credited with a number
of Units determined by multiplying the number of Units in the
Account on the dividend record date by the per-share dividend
amount and then dividing the product by the Stock Price on the
dividend record date. In the case of stock dividends, the
Director's Account will be credited with a number of Units
determined by multiplying the number of Units in the Account by the
stock dividend declared.
All amounts credited to a Director's Account will be paid to
the Director in the form of shares of the Company's Common Stock,
the number of which shares will equal the number of Units credited
to the Director's Account. A Director may elect to receive the
shares in a lump sum on a date specified by the Director or in
quarterly or annual installments over a specified period and
commencing on a specified date. If a Director makes no election,
shares will be distributed in a lump sum within ten days of the
termination of the Director's services as a Director. In the event
of a Director's Disability (as defined in the Plan) or death, all
amounts credited to the Director's Account as of the date of
disability or death will be paid promptly in a lump sum to the
Director or to the beneficiary designated by the Director, or if
none, to the Director's estate.
If a Change In Control (as defined in the Plan) occurs and a
Director ceases to be a Director within two years thereafter, then
all amounts credited to the Director's Account as of such date of
termination will be paid promptly in a lump sum.
The Plan permits a Director, with the approval of the Board of
Directors, to withdraw, in the form of shares, amounts credited to
the Director's Account in the case of financial hardship in the
nature of an emergency. However, the amount withdrawn cannot
exceed the amount reasonably necessary to meet the financial
hardship.
Because the benefits under the Plan are dependent upon the
number of outside Directors who elect to participate in the Plan,
the portion of their Compensation that participating Directors
elect to defer and the market price of the Company's Common Stock
when deferred Compensation and dividends are credited to their
Accounts, it is not possible to predict what benefits will be
received under the Plan.
The Plan may be amended or terminated at any time by the Board
of Directors, but no amendment or termination shall affect amounts
previously credited to a Director's Account.
Approval of the Plan requires the affirmative vote of a
majority of the shares of Company's Common Stock present and
entitled to vote at the Annual Meeting, provided that a majority of
the outstanding shares of the Company's Common Stock vote on the
proposal.
- 25 -
The Board of Directors recommends a vote "FOR" the proposal to
adopt the Deferred Compensation Plan for Directors of Sovran Self
Storage, Inc.
5. APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The firm of Ernst & Young LLP, independent certified public
accountants, has audited the records of the Company since the
Initial Offering. The Board of Directors wishes to continue the
services of the firm for the fiscal year ending December 31, 1999,
and the Shareholders' ratification of such appointment is
requested. If the Shareholders do not ratify the selection of
Ernst & Young LLP by the affirmative vote of a majority of votes
cast at the Annual Meeting on this proposal, selection of
independent accountants will be reconsidered by the Board of
Directors.
Representatives of Ernst & Young LLP will attend the Annual
Meeting of Shareholders, will have the opportunity to make a
statement if they desire to do so and will be available to respond
to appropriate questions.
The Board of Directors recommends a vote "FOR" the proposal to
ratify the appointment of Ernst & Young LLP as the Company's
independent accountants.
PROPOSALS OF SHAREHOLDERS FOR 1999 ANNUAL MEETING
To be considered for inclusion in the proxy materials for the
2000 Annual Meeting of Shareholders, Shareholder proposals must be
received by the Secretary of the Company, 5166 Main Street,
Williamsville, New York 14221, no later than December 22, 1999.
The Company's By-Laws set forth the procedure to be followed
by a Shareholder who wishes to present a proposal at an Annual
Meeting (other than a proposal submitted for inclusion in the
Company's proxy materials). Only a Shareholder of record entitled
to vote at an Annual Meeting may present a proposal and must give
timely written notice thereof to the Secretary of the Company at
the address noted above. Generally, such notice must be received
by the Company not less than 75 days nor more than 180 days prior
to the anniversary date of the immediately preceding Annual
Meeting. However, if such meeting is called for a date more than
seven days prior to the anniversary date, then the notice must be
received not later than the close of business on (i) the 20th day
following the earlier of (a) the date on which notice of the date
of the meeting was mailed to Shareholders or (b) the date on which
the date of such meeting was publicly disclosed, or (ii) if the
date of notice or public disclosure occurs more than 75 days prior
to the scheduled date of the meeting, then the later of (a) the
20th day following the first to occur of such notice or public
disclosure or (b) the 75th day prior to the scheduled date of the
meeting.
- 26 -
OTHER MATTERS
At the time of the preparation of this Proxy Statement, the
Board of Directors of the Company did not contemplate or expect
that any business other than that pertaining to the subjects
referred to in this Proxy Statement would be brought up for action
at the meeting, but in the event that other business calling for a
Shareholders' vote does properly come before the meeting, the
Proxies will vote thereon according to their best judgment in the
interest of the Company.
By Order of the Board of Directors,
David L. Rogers
Secretary
April 20, 1999
- 27 -
APPENDIX A
DEFERRED COMPENSATION
PLAN FOR DIRECTORS
OF
SOVRAN SELF STORAGE, INC.
Effective May 25, 1999
PAGE
DEFERRED COMPENSATION PLAN FOR DIRECTORS
Effective May 25, 1999
1. Purpose and Eligibility
Sovran Self Storage, Inc. (the "Corporation") hereby
establishes the Deferred Compensation Plan for Directors (the
"Plan") the purpose of which is to provide Directors of the
Corporation who are not employees of the Corporation the
opportunity to defer to a future date the receipt of their annual
retainer fees and fees for attendance at Board and Committee
meetings ("Compensation"). Nothing contained in this Plan shall be
deemed to constitute an employment contract or agreement between
the Directors and the Corporation.
2. Election
A Director may at any time elect to defer receipt of all or a
portion of Compensation not yet earned. For 1999, an election
shall be made by May 25, 1999. For new Directors, an election for
the first year of service shall be made within fifteen (15) days of
becoming a Director. For each subsequent year, an election must be
made prior to the start of the year for which the election is to be
applicable. Such election shall be in writing, shall specify the
method of payment of deferred amounts in accordance with
Paragraph 5, and shall continue until amended or terminated by
written notice delivered to the Corporation. Such notice of
amendment or termination shall not affect previously deferred
Compensation.
3. Shares Subject to Plan
(a) Subject to adjustment as provided in subparagraph (b),
the number of shares of the Corporation's common stock (the
"Stock") reserved for issuance pursuant to Paragraph 5 of the Plan
is 20,000 shares. Stock issued under the Plan may consist, in
whole or in part, of authorized and unissued shares or treasury
shares.
(b) The number of shares of Stock reserved for issuance under
the Plan shall be appropriately adjusted to take into account any
changes in the number of outstanding shares of Stock resulting from
split-ups or combinations of shares or recapitalizations.
4. Maintenance of Deferred Account
(a) Compensation which is deferred shall be credited, in
accordance with each Director's election, to his or her account
("Account") as of the date on which current payment otherwise would
have been made (the "Payment Date") based on the value of the
Stock; the number of Units credited from time to time to each
Account shall be:
-- With Respect to Compensation Deferred: The number
obtained by dividing the amount of Compensation otherwise
payable on the Payment Date by 100% of the closing price
of the Stock on the New York Stock Exchange (such closing
price being the "Stock Price") on the immediately
preceding business day;
-- With Respect to Cash Dividends: The number obtained
by multiplying the number of Units in the Account by any
cash dividends declared by the Corporation on the Stock
and dividing the product by 100% of the Stock Price on
the related dividend record date; and
-- With Respect to Stock Dividends: The number
obtained by multiplying the number of Units in the
Account by the stock dividend declared.
(b) The number of Units credited to each Account shall be
appropriately adjusted to take into account any changes in the
number of outstanding shares of Stock resulting from split-ups or
combinations of shares or recapitalizations.
(c) The Plan is intended to constitute an "unfunded" plan for
deferred compensation. The establishment of or allocation to
Accounts shall not vest in any participant any right, title or
interest in or to any specific assets of the Corporation nor shall
the Corporation be required to purchase any Stock. However, in the
event the Corporation should purchase such Stock, it shall not be
required to exercise any option or right with respect to such
Stock, or if it wishes to exercise any option or right under such
Stock, it shall not be required to exercise such option or right in
any particular manner. With respect to the Corporation's
obligations under the Plan, the participant shall have no rights
that are greater than those of a general creditor of the
Corporation.
(d) Within forty-five (45) days after the end of a calendar
year, the Corporation shall provide each Director who is
participating in the Plan with a statement listing the balance of
such Director's Account as of the end of the year.
5. Payment of Deferred Amounts
(a) All amounts credited to an Account shall be paid to the
Director in shares of Stock (other than cash in lieu of fractional
shares) either:
(i) in a lump sum on a date specified by the Director on
his election form and in a number of shares equal to the
number of Units then credited to the Director's Account, or
(ii) in quarterly or annual installments over such period
and commencing at such time as the Director shall have
elected, on his or her election form, each installment being
equal to a number of shares equal to the number of Units then
credited to the Director's Account divided by the number of
installments remaining to be paid; or
A-2
(iii) in a lump sum within ten (10) business days of
the termination of the Director's service as a director if the
Director has not elected a different payment date on his
election form and in number of shares equal to the number of
Units then credited to the Director's Account.
(b) In the event of a Director's death or Disability (as
defined below), all amounts credited to his or her Account as of
his or her date of death or Disability shall be paid promptly in a
lump sum, in shares of Stock equal to the number of Units as of
such date, to the Beneficiary designated on the Director's election
form or, if none, to his estate. "Disability" means the inability,
due to illness or injury, to engage in any gainful occupation for
which the individual is suited by education, training or
experience, which condition continues for at least six (6) months.
(c) If a Change in Control occurs and the participant ceases
to be a Director (other than by reason of death, Disability,
retirement or Termination for Cause) within two years thereafter,
then upon the date of any such occurrence, all amounts credited to
the participant's Account as of such date shall be paid promptly in
a lump sum, in shares of Stock equal to the number of Units as of
such date, to the Director. A "Change in Control" shall occur if
(i) any person, including a "group" as defined in Section 13(d)(3)
of the Securities Exchange Act of 1934, shall become the beneficial
owner of shares of the Company with respect to which 20% or more of
the total number of votes for the election of the Board of
Directors of the Company may be cast; (ii) as a result of, or in
connection with, any cash tender offer, exchange offer, merger or
other business combination, sale of assets or contested election or
combination of the foregoing, the persons who were prior to the
institution thereof directors of the Company shall cease to
constitute a majority of the Board of Directors of the Company; and
(iii) stockholders of the Company shall approve an agreement
pursuant to which the Company will cease to be an independent
publicly owned corporation or for a sale or other disposition of
all or substantially all of the assets of the Company.
"Termination for Cause" means termination which is effected by
reason of fraud, deceit, or other gross misconduct by the Director
performed within the scope of his duties as Director.
(d) Upon approval of the Board of Directors, a Director
participating in the Plan may withdraw all or a portion of the
balance of Units in such Director's Account, in shares of Stock
equal to the number of Units withdrawn, in the case of financial
hardship in the nature of an emergency; provided however that the
amount of such withdrawal cannot exceed the amount reasonably
necessary to meet the financial hardship. The Board of Directors
shall have the sole discretion to determine the circumstances under
which such withdrawals are permitted.
6. Non-Assignment
(a) No right to receive payments under this Plan shall be
transferable or assignable by a Director except by will or in
accordance with the laws of descent and distribution. All amounts
of Compensation deferred under this Plan, all property and rights
A-3
which may be purchased by the Corporation with such amounts and all
income attributable to such amounts, property and rights shall
remain the sole property and rights of the Corporation (without
being restricted to the provision of benefits under this Plan)
subject only to the claims of the Corporation's general creditors.
(b) No modification of the time or manner of payment under
the Plan shall be authorized if and to the extent that such
authorization or the making of such modification would constitute
"constructive receipt" on the part of a participant of amounts
credited to his or her Account under the federal income tax laws.
7. Effective Date and Termination
This Plan shall be effective with respect to any compensation
earned by a Director on and after May 25, 1999 and may be amended
or terminated at any time by resolution of the Board, but no
amendment or termination shall affect amounts previously credited
to a Director's Account.
A-4
SOVRAN SELF STORAGE, INC.
SOLICITED BY THE BOARD OF DIRECTORS
for the Annual Meeting of Shareholders -- May 25, 1999
Robert J. Attea, Kenneth F. Myszka and David L. Rogers, and
each of them with full power of substitution, are hereby appointed
proxies to vote all shares (unless a lesser number is specified on
the other side) of the stock of Sovran Self Storage, Inc. that are
held of record by the undersigned on March 25, 1999 at the Annual
Meeting of Shareholders of Sovran Self Storage, Inc., to be held at
25050 Sperry Drive, Westlake, Ohio, on May 25, 1999 at 11: a.m.,
local time, and any adjournments thereof, with all powers the
undersigned would possess if personally present, for the election
of directors, on each of the other matters described in the Proxy
Statement and otherwise in their discretion.
The shares represented by this Proxy will be voted as directed
by the shareholders. If no direction is given, such shares will be
voted for Proposals 1, 2, 3, 4 and 5.
Please return this proxy card promptly using the enclosed
envelope.
(To be Signed on Reverse Side)
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Shareholders
SOVRAN SELF STORAGE, INC.
May 25, 1999
Please mark your
[ X ] votes as in this
example.
PLEASE MARK, SIGN, DATE & RETURN THIS PROXY IN THE ENCLOSED
ENVELOPE. THE PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE
COMPANY. The Directors recommend a vote FOR election of all
nominees and FOR proposals 2, 3, 4 and 5.
1. ELECTION OF DIRECTORS: Nominees:
Robert J. Attea
Kenneth F. Myszka
John E. Burns
Michael A. Elia
Anthony P. Gammie
Charles E. Lannon
[ ] FOR [ ] WITHHELD
For except vote withheld from the following nominee(s):
________________________________________
2. Approval of Amendment to the 1995 Award and Option Plan
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Approval of Amendment to the 1995 Outside Directors' Stock
Option Plan
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. Approval of Deferred Compensation Plan for Directors of Sovran
Self Storage, Inc.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. Ratify the appointment of Ernst & Young LLP as independent
auditors for fiscal year 1999
[ ] FOR [ ] AGAINST [ ] ABSTAIN
6. In their discretion, the proxies are authorized to vote upon
any other matters of business which may properly come before
the meeting, or, any adjournment(s) thereof
Change of Address/comments
on reverse side [ ]
I plan to attend the
meeting [ ]
I do not plan to attend
the meeting [ ]
SIGNATURE(S)_______________________________ Date_________________
NOTE: Please sign exactly as name appears hereon. Joint owners
should each sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full titles as
such. If a corporation, please sign in full by President or other
authorized officer. If partnership, please sign in partnership
name by authorized person.
SOVRAN SELF STORAGE, INC.
1995 OUTSIDE DIRECTORS' STOCK OPTION PLAN
SECTION 1.
PURPOSE
1.1 The purpose of the "SOVRAN SELF STORAGE, INC. 1995
OUTSIDE DIRECTORS' STOCK OPTION PLAN" (the "Plan") is to foster and
promote the long-term financial success of the Company and
materially increase stockholder value by enabling the Company to
attract and retain the services of outstanding Outside Directors
(as defined herein) whose judgment, interest, and special effort is
essential to the successful conduct of its operations.
SECTION 2.
DEFINITIONS
2.1 "Annual Award" means an Option for 2,500 shares of
Stock.
2.2 "Awards" means Annual Awards and Initial Awards.
2.3 "Board" means the Board of Directors of the Company.
2.4 "Company" means Sovran Self Storage, Inc., a
Maryland corporation, and any successor thereto.
2.5 "Disability" means total disability, which if the
Outside Director were an employee of the Company, would be treated
as a total disability under the terms of the Company's long-term
disability plan for employees, as in effect from time to time.
2.6 "Fair Market Value" on any date means the average of
the high and low sales prices of a share of Stock as reflected in
the report of consolidated trading of New York Stock Exchange-
listed securities (or, if the Stock is not then listed on the New
York Stock Exchange ("NYSE"), the principal public trading market
for such shares) for that date (or if no shares of Stock were
traded on the NYSE or such other principal public trading market on
that date, the next preceding date that shares of Stock were so
traded) published in the Midwest Edition of The Wall Street
Journal; provided, however, that if no shares of Stock have been
publicly traded for more than ten (10) days immediately preceding
such date, then the Fair Market Value of a share of Stock shall be
determined by the Board or its authorized Committee in such manner
as it may deem appropriate.
2.7 "Initial Award" means an Option for 2,500 shares of
Stock.
- 2 -
2.8 "Option" means the right to purchase Stock at a
stated price for a specified period of time. All Options granted
under the Plan shall be non-statutory options not entitled to
special tax treatment under Section 422 of the Internal Revenue
Code, as amended.
2.9 "Outside Director" means each person who, on the
date of an Initial Award or as of the close of the day on which an
Annual Award is granted, is a director of the Company and who, as
of such day, is not otherwise an officer or employee of the Company
or any of its subsidiaries.
2.10 "Stock" means the common stock of the Company,
$.01 par value per share.
SECTION 3.
ELIGIBILITY AND PARTICIPATION
Each Outside Director shall participate in the Plan.
SECTION 4.
STOCK SUBJECT TO PLAN
4.1 Number. The total number of shares of Stock subject
to Awards under the Plan may not exceed 50,000 shares, subject to
adjustment pursuant to Section 4.3. The shares to be delivered
under the Plan may consist, in whole or in part, of treasury Stock
or authorized but unissued Stock, not reserved for any other
purpose.
4.2 Canceled or Terminated Awards. Any shares of Stock
subject to an Option which for any reason is canceled or terminated
without the issuance of Stock shall again be available for Awards
under the Plan.
4.3 Adjustment in Capitalization. In the event of any
Stock dividend or Stock split, recapitalization (including, without
limitation, the payment of an extraordinary dividend), merger,
consolidation, combination, spin-off, distribution of assets to
stockholders, exchange of shares, or other similar corporate change
in which the Company survives the transaction, the aggregate number
of shares of Stock available for issuance hereunder or subject to
Options and the respective exercise prices of outstanding Options
shall be appropriately adjusted by the Board or its authorized
Committee, whose determination shall be conclusive; provided,
however, that any fractional shares resulting from any such
adjustment shall be disregarded.
- 3 -
SECTION 5.
STOCK OPTIONS
5.1 Grant of Options.
(a) Initial Awards. Effective on the later of the
date of the completion of the initial public offering of shares of
Stock or the date the Outside Director is first elected or
appointed to the Board, each Outside Director who has not
previously been granted an Initial Award shall be granted an
Initial Award.
(b) Annual Awards. Thereafter, effective as of the
close of each annual meeting of the stockholders of the Company,
each Outside Director shall be granted an Annual Award.
(c) Option Agreement. Each Option shall be
evidenced by an Option agreement that shall specify the exercise
price, the term of the Option, the number of shares of Stock to
which the Option pertains and such other matters, not inconsistent
herewith, as the Committee deems necessary or appropriate.
(d) Limitations. All grants of Options under the
Plan shall be subject to the availability of shares hereunder, and
no Option shall be granted under the Plan to the extent necessary
to prevent Outside Directors serving as the administrators of any
of the Company's other stock option or employee benefit plans from
failing to qualify as "disinterested persons" under Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended
("Rule 16b-3").
5.2 Option Price. Each Option granted pursuant to the
Plan shall have an exercise price equal to the Fair Market Value of
a share of Stock on the date the Option is granted.
5.3 Vesting and Exercise of Options.
(a) Initial Awards. Options granted pursuant to an
Initial Award under this Plan shall vest and become exercisable on
the first anniversary of the date of grant.
(b) Annual Awards. Options granted pursuant to an
Annual Award under this Plan shall be immediately vested and
exercisable on the date of grant.
(c) Exercise Period. Options shall terminate and
cease to be exercisable on the earlier of (i) the tenth anniversary
of the date of the Option's grant, or (ii) the date on which the
Outside Director to whom such Option was granted ceases for any
reason to serve as a director of the Company; provided, however,
that in the event an Outside Director ceases to serve as a director
of the Company by reason of the Outside
- 4 -
Director's Disability, death or mandatory resignation due to age,
the Outside Director, or his or her personal representative, may
exercise any outstanding Options not theretofore exercised, to the
extent exercisable on the date of such Disability, death or
resignation, during the one-year period following such Disability,
death or resignation.
5.4 Services as an Employee. Notwithstanding any other
provision of the Plan, if an Outside Director becomes an employee
of the Company or any of its subsidiaries (a "Former Outside
Director"), the Former Outside Director shall be treated as
continuing in service for purposes of this Plan, but shall not be
eligible to receive Annual Awards while an employee or for one full
year thereafter. If during this period of ineligibility the Former
Outside Director ceases to be an employee, the provisions of
Section 5.3(c) shall continue to be applicable.
5.5 Exercise. Options may be exercised, in whole or in
part and only to the extent then exercisable, by giving written
notice of exercise to the Company accompanied by full payment of
the Option price by one or more of the following methods of
payment:
(a) In cash, by certified or bank check or other
instrument acceptable to the Board or its authorized committee;
(b) In the form of shares of Stock that are not
then subject to restrictions under any Company plan, if permitted
by the Board or its authorized committee, in its discretion. Such
surrendered shares shall be valued at Fair Market Value on the date
of exercise; or
(c) By the Outside Director delivering to the
Company a properly executed exercise notice together with
irrevocable instructions to a broker to promptly deliver to the
Company cash or a check payable and acceptable to the Company to
pay the Option price; provided that in the event the Outside
Director chooses to pay the Option price as so provided, the
Outside Director and the broker shall comply with such procedures
and enter into such agreements of indemnity and other agreements as
the Company shall prescribe as a condition of such payment
procedure. Payment instruments will be received subject to
collection.
SECTION 6.
AMENDMENT, MODIFICATION, AND TERMINATION OF PLAN
The Plan shall be administered in accordance with
Rule 16b-3 by the Board or an authorized committee thereof (in
which case all references to the Board shall refer to such
committee while such committee administers this Plan), which shall
make any determination under or interpretation of any
- 5 -
provision of the Plan and any Option. Any of the foregoing actions
taken by the Board shall be final and conclusive. The Board may
terminate or suspend the Plan, and may amend and make such changes
in and additions to the Plan (and, with the consent of the
applicable Outside Director any outstanding Option) as it may deem
proper and in the best interest of the Company; provided, however,
that no such action shall adversely affect or impair any Options
theretofore granted under the Plan without the consent of the
applicable Outside Director; and provided further, however, that no
amendment (i) increasing the maximum number of shares of Stock
which may be issued under the Plan, except as provided in
Section 4.3, (ii) extending the term of the Plan or any Option,
(iii) changing the requirements as to eligibility for participation
in the Plan, or (iv) otherwise requiring approval of stockholders
under Rule 16b-3, shall be adopted without the approval of
stockholders. Notwithstanding anything to the contrary herein, the
Plan shall not be amended more than once in every six month period,
other than to comport with changes in the Internal Revenue Code,
the Employee Retirement Income Security Act, or the rules
thereunder.
SECTION 7.
EFFECT OF CERTAIN TRANSACTIONS
In the case of (a) the dissolution or liquidation of the
Company, (b) a merger, reorganization or consolidation in which the
Company is acquired by another person or in which the Company is
not the surviving corporation, or (c) the sale of all or
substantially all of the outstanding Stock or assets of the Company
to another entity, the Plan and Options issued hereunder shall
terminate on the effective date of such dissolution, liquidation,
merger, reorganization, consolidation or sale, unless provision is
made in such transaction for the assumption of Options theretofore
granted under the Plan or the substitution for such Options of a
new stock option of the successor corporation or a parent or
subsidiary thereof, with appropriate adjustment as to the number
and kind of shares and the per share exercise price, such as
provided in Section 4.3 of the Plan. In the event of any
transaction which will trigger such termination, the Company shall
give written notice thereof to the Outside Directors at least
twenty days prior to the effective date of such transaction or the
record date on which stockholders of the Company entitled to
participate in such transaction shall be determined, whichever
comes first. In the event of such termination, any unexercised
portion of outstanding Options, which is vested and exercisable at
that time, shall be exercisable for at least 15 days prior to the
date of such termination; provided, however, that in no event shall
any Option be exercisable after the applicable expiration date for
the Option.
- 6 -
SECTION 8.
MISCELLANEOUS PROVISIONS
8.1 Nontransferability of Awards. No Options may be
sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will or by the laws of descent and
distribution. All rights with respect to Options granted to an
Outside Director shall be exercisable during his lifetime only by
him.
8.2 Rights As A Stockholder. An Outside Director or a
transferee of an Option shall not have any rights as a stockholder
with respect to any shares of Stock issuable upon exercise of an
Option until the date of the receipt of payment by the Company. No
adjustments pursuant to Section 4.3 shall be made as to any Option
for dividends (ordinary or extraordinary, whether in cash,
securities or other property) or distributions or other rights for
which the record date is after such date.
8.3 No Guarantee of Membership. Nothing in the Plan
shall confer upon an Outside Director the right to remain a member
of the Board.
8.4 Requirements of Law. The granting of Options and
the issuance of shares of Stock upon the exercise of Options shall
be subject to all applicable laws, rules, and regulations, and to
such approvals by any governmental or self-regulatory or other
agencies as may be required.
8.5 Term of Plan. The Plan shall be effective upon its
approval by the stockholders of the Company. The Plan shall
continue in effect, unless sooner terminated or suspended pursuant
to Section 6, until the tenth anniversary of the date on which it
is approved by the stockholders of the Company, so long as the
total number of shares of Stock purchased under the Plan or subject
to outstanding Options does not exceed the number of shares of
Stock specified in Section 4.1, subject to adjustment pursuant to
Section 4.3. Notwithstanding the foregoing, each Option granted
under the Plan shall remain in effect until such Option has been
exercised or has terminated in accordance with its terms and the
terms of the Plan.
8.6 Separability. In case any provision of the Plan
shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
8.7 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.
SOVRAN SELF STORAGE, INC.
1995 AWARD AND OPTION PLAN
1. Purpose
The purposes of the Plan are to advance the
interests of the Company and its stockholders, by providing a long-
term incentive compensation program that will be an incentive to
the Key Employees of the Company and its Subsidiaries whose
contributions are important to the continued success of the Company
and its Subsidiaries, and by enhancing their ability to attract and
retain in their employ highly qualified persons for the successful
conduct of their businesses.
2. Definitions
2.1 "Acceleration Date" means (i) in the event of
a Change in Ownership, the date on which such change occurs, or
(ii) with respect to a Participant who is eligible for treatment
under paragraph 20 hereof on account of the termination of his
employment following a Change in Control, the date on which such
termination occurs.
2.2 "Award Notice" means a written notice from the
Company to a Participant that sets forth the terms and conditions
of Stock Options or Restricted Stock awarded to the Participant
under the Plan in addition to those established by this Plan and by
the Committee's exercise of its administrative powers.
2.3 "Board" means the Board of Directors of the
Company.
2.4 "Cause" means (i) the willful and continued
failure by a Key Employee to substantially perform his duties with
his employer after written warnings specifically identifying the
lack of substantial performance are delivered to him by his
employer, or (ii) the willful engaging by a Key Employee in conduct
which is materially and demonstrably injurious to the Company or a
Subsidiary.
2.5 "Change in Control" shall be deemed to have
occurred at such time as (i) after the effective date of the
Company's first registration statement on Form S-11, any "person"
within the meaning of Section 14(d) of the Exchange Act, other than
the Company, a Subsidiary, or any employee benefit plan or plans
sponsored by the Company or any Subsidiary, is or has become the
"beneficial owner", as defined in Rule 13d-3 under the Exchange
Act, directly or indirectly, of 20% or more of the combined voting
power of the outstanding securities of the Company ordinarily
having the right to vote at the election of directors, or
(ii) after the effective date of the Company's first registration
statement on Form S-11, approval by the stockholders of the Company
of (a) any consolidation or merger of the Company in which the
Company is not the continuing or surviving corporation or pursuant
to which shares of stock of the Company would be converted into
cash, securities or other property, other than a consolidation or
merger of the Company in
- 2 -
which the common stockholders of the Company immediately prior to
the consolidation or merger have substantially the same
proportionate ownership of common stock of the surviving
corporation immediately after the consolidation or merger as
immediately before, or (b) any consolidation or merger in which the
Company is the continuing or surviving corporation but in which the
common stockholders of the Company immediately prior to the
consolidation or merger do not hold at least a majority of the
outstanding common stock of the continuing or surviving corporation
(except where such holders of common stock hold at least a majority
of the common stock of the corporation which owns all of the common
stock of the Company), or (c) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions)
of all or substantially all the assets of the Company, or
(iii) individuals who constitute the Board on
May 1, 1995 (the "Incumbent Board") have ceased for any reason to
constitute at least a majority thereof, provided that any person
becoming a director subsequent to May 1, 1995 whose election, or
nomination for election by the Company's stockholders, was approved
by a vote of at least three-quarters (3/4) of the directors
comprising the Incumbent Board (either by specific vote or by
approval of the proxy statement of the Company in which such person
is named as nominee for director without objection to such
nomination) shall be, for purposes of this Plan, considered as
though such person were a member of the Incumbent Board.
2.6 "Change in Control Price" means, in respect of
a Change in Control, the highest closing price per share paid for
the purchase of Common Stock on the New York Stock Exchange
("NYSE") or, if the Common Stock is not then listed on the NYSE, on
the principal public trading market for the Common Stock during the
ninety (90) day period ending on the date the Change in Control
occurs, and in respect of a Change in Ownership, the highest
closing price per share paid for the purchase of Common Stock on
the NYSE or, if the Common Stock is not then listed on the NYSE, on
the principal public trading market for the Common Stock during the
ninety (90) day period ending on the date the Change in Ownership
occurs.
2.7 "Change in Ownership" means a change which
results directly or indirectly in the Company's Common Stock
ceasing to be actively traded on a national securities exchange or
the National Association of Securities Dealers Automated Quotation
System.
2.8 "Code" means the Internal Revenue Code of 1986,
as amended from time to time.
2.9 "Committee" means the Compensation Committee of
the Board, or such other committee designated by the Board,
authorized to administer the Plan. The Committee shall consist of
not less than three members, each of whom shall be "disinterested"
as defined by Rule 16b-3 under the Exchange Act as amended from
time to time.
- 3 -
2.10 "Common Stock" means the common stock, $.01 par
value, of the Company.
2.11 "Company" means Sovran Self Storage, Inc., a
Maryland corporation.
2.12 "Exchange Act" means the Securities Exchange
Act of 1934, as amended from time to time.
2.13 "Fair Market Value" on any date means the
average of the high and low sales prices of a share of Common Stock
as reflected in the report of consolidated trading of NYSE-listed
securities (or, if the Common Stock is not then listed on the NYSE,
the principal public trading market for such shares) for that date
(or if no shares of Common Stock were traded on the NYSE or such
other principal public trading market on that date, the next
preceding date that shares of Common Stock were so traded)
published in the Midwest Edition of The Wall Street Journal;
provided, however, that if no shares of Common Stock have been
publicly traded for more than ten (10) days immediately preceding
such date, then the Fair Market Value of a share of Common Stock
shall be determined by the Committee in such manner as it may deem
appropriate.
2.14 "Good Reason" means a good faith determination
made by a Participant that there has been any (i) material change
by the Company of the Participant's functions, duties or
responsibilities which change would cause the Participant's
position with the Company to become of less dignity,
responsibility, importance, prestige or scope, including, without
limitation, the assignment to the Participant of duties and
responsibilities inconsistent with his positions, (ii) assignment
or reassignment by the Company of the Participant without the
Participant's consent, to another place of employment more than 30
miles from the Participant's current place of employment, or
(iii) reduction in the Participant's total compensation in a
materially greater proportionate amount than other Key Employees
similarly situated; provided in each case that the Participant
shall specify the event relied upon for such determination by
written notice to the Board at any time within six months after the
occurrence of such event.
2.15 "Key Employee" means an officer or other key
employee of the Company or a Subsidiary as determined by the
Committee.
2.16 "Participant" means any individual to whom
Stock Options have been awarded by the Committee under this Plan.
2.17 "Plan" means the Sovran Self Storage, Inc. 1995
Award and Option Plan.
2.18 "Restricted Stock" means an award of shares of
Company Common Stock subject to restrictions, pursuant to
paragraph 9 hereof.
- 4 -
2.19 "Subsidiary" means a corporation or other
business entity in which the Company directly or indirectly has an
ownership interest of 50 percent or more.
3. Administration
The Plan shall be administered by the Committee.
The Committee shall have the authority to : (a) interpret the Plan;
(b) establish such rules and regulations as it deems necessary for
the proper administration of the Plan; (c) select Key Employees to
receive Stock Options and Restricted Stock under the Plan;
(d) determine and modify the form of Stock Options awarded under
the Plan, whether non-qualified or incentive stock options, the
number of Stock Options awarded to any Key Employee, and all the
terms and conditions of Stock Options awarded under the Plan,
including the time and conditions of exercise or vesting;
(e) determine and modify the number of shares of Restricted Stock
awarded to any Key Employee, and all the terms and conditions of
Restricted Stock awarded under the Plan, including the applicable
restrictions thereon and restriction period therefor; (f) grant
waivers of Plan terms and conditions, provided that such waivers
are not inconsistent with Section 16 of the Exchange Act and the
rules promulgated thereunder; (g) accelerate the vesting of any
Stock Option or lapse of restrictions on any shares of Restricted
Stock when any such action would be in the best interests of the
Company; and (h) take any and all other action it deems advisable
for the proper administration of the Plan. All determinations of
the Committee shall be made by a majority of its members, and its
determinations shall be final, binding and conclusive. The
Committee, in its discretion, may delegate its authority and duties
under the Plan to the Chief Executive Officer or to other senior
officers of the Company under such conditions as the Committee may
establish; provided, however, that to the extent required by
Section 16 and notwithstanding any other provision of the Plan or
an Award Notice only the Committee may select and award Stock
Options and Restricted Stock and render other decisions as to the
timing, pricing and amount of Stock Options and Restricted Stock to
Participants who are subject to Section 16 of the Exchange Act.
4. Eligibility
Any Key Employee is eligible to become a Participant
in the Plan.
5. Shares Available
The maximum number of shares of Common Stock which
shall be available for award of Stock Options (including incentive
stock options) and Restricted Stock under the Plan during its term
shall not exceed 400,000, the maximum number of shares of Common
Stock with respect to which Stock Options and Restricted Stock may
be granted to any individual Key Employee during any calendar year
shall not exceed 50,000 and the maximum
- 5 -
number of shares of Restricted Stock that may be issued under the
Plan during its term shall not exceed 50,000; all subject to
adjustment as provided in paragraph 12. Any shares of Common Stock
related to Stock Options or Restricted Stock which terminate by
expiration, forfeiture, cancellation or otherwise without the
issuance of such shares, are settled in cash in lieu of Common
Stock, shall be available again for award under the Plan. Further,
if and to the extent permitted in accordance with paragraph 8(d),
any shares of Common Stock are used by a Participant for the full
or partial payment to the Company of the purchase price of shares
of Common Stock upon exercise of a Stock Option, or for any
withholding taxes due as a result of such exercise, such shares
shall again be available for award under the Plan. The shares of
Common Stock available for issuance under the Plan may be
authorized and unissued shares or treasury shares.
6. Term
The Plan shall become effective as of May 1, 1995.
No Stock Options shall be exercisable or payable and no
restrictions on shares Restricted Stock shall lapse before approval
of the Plan has been obtained from the Company's stockholders.
Stock Options and Restricted Stock shall not be awarded pursuant to
the Plan after April 30, 2005.
7. Participation
The Committee shall select Participants, determine
the type of awards (Stock Options or Restricted Stock) to be
awarded, and establish in the related Award Notices the applicable
terms and conditions of the Stock Options and Restricted Stock in
addition to those set forth in this Plan and any administrative
rules issued by the Committee.
8. Stock Options
(a) General. Stock Options may be awarded to any
Key Employee. These Stock Options may be incentive stock options
within the meaning of Section 422 of the Code or non-qualified
stock options (i.e., stock options which are not incentive stock
options), or a combination of both.
(b) Terms and Conditions of Stock Options. A Stock
Option shall be exercisable in whole or in such installments and at
such times as may be determined by the Committee. The price at
which Common Stock may be purchased upon exercise of a Stock Option
shall be established by the Committee, but such price shall not be
less than the Fair Market Value of the Common Stock on the date of
the Stock Option's award. An Award Notice evidencing a Stock
Option may, in the discretion of the Committee, provide that a
Participant who pays the option price of a Stock Option by an
exchange of shares of Common Stock previously owned by the
Participant shall automatically be issued a new stock option to
purchase additional shares of Common Stock
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equal to the number of shares of Common Stock so exchanged. Such
new stock option shall have an option price equal to the Fair
Market Value of the Common Stock on the date such new stock option
is issued and shall be subject to such other terms and conditions
as the Committee deems appropriate.
(c) Restrictions Relating to Incentive Stock
Options. Stock Options awarded in the form of incentive stock
options shall, in addition to being subject to all applicable terms
and conditions established by the Committee, comply with Section
422 of the Code. Accordingly, the aggregate Fair Market Value
(determined at the time the option was awarded) of the Common Stock
with respect to which incentive stock options are exercisable for
the first time by a Participant during any calendar year (under
this Plan or any other plan of the Company or any of its
Subsidiaries) shall not exceed $100,000 (or such other limit as may
be required by the Code). Also, each incentive stock option shall
expire not later than ten years from its date of award. The number
of shares of Common Stock that shall be available for incentive
stock options awarded under the Plan is 400,000.
(d) Exercise of Stock Options. Upon exercise, the
option price of a Stock Option may be paid in cash, or, if
permitted by the Committee, in its sole discretion, shares of
Common Stock or a combination of cash and shares of Common Stock,
or such other consideration as the Committee may deem appropriate.
The Committee may establish appropriate methods for accepting
Common Stock as consideration for the exercise of a Stock Option,
and may impose such conditions as it deems appropriate on the use
of such Common Stock to exercise a Stock Option. If the Committee,
in its sole discretion, permits the use of shares of Common Stock
as consideration for the exercise of a Stock Option, such shares
shall be valued at Fair Market Value on the date of exercise. The
Committee, in its sole discretion, may establish procedures whereby
a Participant, to the extent permitted by and subject to the
requirements of Rule 16b-3 under the Exchange Act, Regulation T
issued by the Board of Governors of the Federal Reserve System
pursuant to the Exchange Act, federal income tax laws, and other
federal, state and local tax and securities laws, can exercise a
Stock Option or a portion thereof without making a direct payment
of the option price to the Company. If the Committee so elects to
establish such a cashless exercise program, the Committee shall
determine, in its sole discretion and from time to time, such
administrative procedures and policies as it deems appropriate.
Such procedures and policies shall be binding on any Participant
wishing to utilize the cashless exercise program.
9. Restricted Stock
(a) General. Shares of Restricted Stock may be
awarded to any Key Employee and shall be awarded in such amounts
and at such times during the term of the Plan as the Committee
shall determine.
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(b) Restrictions on Restricted Stock. Restricted
Stock shall be subject to such terms and conditions as the
Committee deems appropriate including, but not by way of
limitation, restrictions on transferability and continued
employment. The Committee may modify or accelerate the delivery of
shares of Restricted Stock under such circumstances as it deems
appropriate.
(c) Rights as Stockholders. During the period in
which any shares of Restricted Stock are subject to the
restrictions imposed under paragraph 9(b), the Committee may, in
its discretion, grant to the Participant to whom shares of
Restricted Stock have been awarded all or any of the rights of a
stockholder with respect to such shares, including, but not by way
of limitation, the right to vote such shares and to receive
dividends.
(d) Evidence of Restricted Stock Award. Any shares
of Restricted Stock granted under the Plan may be evidenced in such
manner as the Committee deems appropriate, including, without
limitation, book-entry registration or issuance of a stock
certificate or certificates.
10. Termination of Employment
Subject to paragraph 14, if a Participant's
employment with the Company or a Subsidiary terminates for a reason
other than death, disability, retirement or an approved reason, all
the Participant's unexercised Stock Options and shares of
Restricted Stock then subject to restrictions shall be canceled or
forfeited as the case may be, unless the Participant's Award Notice
provides otherwise. The Committee shall have the authority to
promulgate rules and regulations to (i) determine what events
constitute disability, retirement, or termination for an approved
reason for purposes of the Plan, and (ii) determine the treatment
of a Participant under the Plan in the event of his death,
disability, retirement, or termination for an approved reason.
11. Nonassignability
Except as otherwise provided by the Committee, in
its sole discretion, in the Award Notice, no Stock Option or share
of Restricted Stock awarded under the Plan shall be subject in any
manner to alienation, anticipation, sale, transfer (except by will
or the laws of descent and distribution), assignment, pledge, or
encumbrance and a Participant's Stock Options shall be exercisable
during the Participant's lifetime only by him.
12. Adjustment of Shares Available
(a) Changes in Stock. In the event of changes in
the Common Stock by reason of a Common Stock dividend or stock
split-up or combination, appropriate adjustment shall be made by
the Committee in the aggregate number of shares available under
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the Plan, the number of shares with respect to which Stock Options
and Restricted Stock may be granted to any individual Key Employee
during any calendar year, the number of shares of Restricted Stock
which may be granted under the Plan during its term and the number
of shares subject to outstanding Stock Options and Restricted
Stock, without, in the case of Stock Options, change in the
aggregate purchase price to be paid therefor. Such proper
adjustment as may be deemed equitable may be made by the Committee
in its discretion to give effect to any other change affecting the
Common Stock.
(b) Changes in Capitalization. In case of a merger
or consolidation of the Company with another corporation, a
reorganization of the Company, a reclassification of the Common
Stock of the Company, a spin-off of a significant asset, or other
changes in the capitalization of the Company, appropriate provision
shall be made for the protection and continuation of any
outstanding Stock Options and shares of Restricted Stock by either
(i) the substitution, on an equitable basis, of appropriate stock,
stock options or other securities or other consideration, including
cash, to which holders of Common Stock of the Company will be
entitled pursuant to such transaction or succession of
transactions, or (ii) by appropriate adjustment in the number of
shares issuable pursuant to the Plan, the number of shares covered
by outstanding Stock Options and Restricted Stock and the option
price of outstanding Stock Options, as deemed appropriate by the
Committee.
13. Tax Withholding
(a) Payment by Participant. Each Participant
shall, no later than the date as of which the Company or any
Subsidiary is required by law to withhold any Federal, state, or
local taxes of any kind with respect to amounts includable in the
Participant's gross income for Federal income tax purposes with
respect to any Stock Option or Restricted Stock awarded pursuant to
the Plan. The Company and its Subsidiaries shall, to the extent
permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to the Participant.
(b) Payment in Stock. A Participant may elect to
have such tax withholding obligation satisfied, in whole or in
part, by (i) authorizing the Company to withhold from shares of
Common Stock to be issued pursuant to the Plan a number of shares
with an aggregate Fair Market Value (as of the date the withholding
is effected) that would satisfy the withholding amount due, or
(ii) transferring to the Company shares of Common Stock owned by
the Participant with an aggregate Fair Market Value (as of the date
the withholding is effected) that would satisfy the withholding
amount due. With respect to any Participant who is subject to
Section 16 of the Exchange Act, the following additional
restrictions shall apply:
(A) the Company (1) shall have been subject to the
reporting requirements of Section 13(a) of the Exchange Act for
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at least a year prior to the election and shall have filed all
reports and statements required to be filed pursuant to that
Section for that year, and (2) shall have issued on a regular basis
public releases of quarterly and annual summary statements of sales
and earnings;
(B) the election to satisfy tax withholding
obligations relating to an award of Stock Options or Restricted
Stock in the manner permitted by this Section 13(b) shall be made
either (1) during the period beginning on the third business day
following the date of release of quarterly or annual summary
statements of sales and earnings of the Company and ending on the
twelfth business day following such date, or (2) at least six
months prior to the date as of which the receipt of such an award
first becomes a taxable event for Federal income tax purposes;
(C) such election shall be irrevocable;
(D) such election shall be subject to the consent
or disapproval of the Committee; and
(E) the Common Stock withheld to satisfy tax
withholding must pertain to an award of Stock Options or Restricted
Stock which has been held by the Participant for at least six
months from the date of grant of such award.
14. Noncompetition Provision
The Committee may provide in any Award Notice that
the Participant shall forfeit all his unexercised Stock Options and
shares of Restricted Stock if, (i) in the opinion of the Committee,
the Participant, without the written consent of the Company,
engages directly or indirectly in any manner or capacity as
principal, agent, partner, officer, director, employee, owner,
promoter, or otherwise, in any business or activity competitive
with the business conducted by the Company or any Subsidiary; or
(ii) the Participant performs any act or engages in any activity
which in the opinion of the Committee is inimical to the best
interests of the Company.
15. Dividends
If a Participant is granted shares of Restricted
Stock, the Committee may include in the Award Notice an entitlement
to receive dividends, subject to such terms and conditions as the
Committee may establish. Dividends shall be paid in such form and
manner (i.e., lump sum or installments), and at such time as the
Committee shall determine. All dividends which are not paid
currently may, at the Committee's discretion, accrue interest, be
reinvested into additional shares of Common Stock and paid to the
Participant if and when, and to the extent that, the restrictions
on the Restricted Stock lapse.
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16. Amendments of Awards
The Committee may at any time unilaterally amend the
Award Notice for any unexercised Stock Option or any share of
Restricted Stock then subject to restrictions to the extent it
deems appropriate; provided, however, that any such amendment which
is adverse to a Participant shall require the Participant's
consent.
17. Regulatory Approvals and Listings
Notwithstanding anything contained in this Plan to
the contrary, the Company shall have no obligation to issue or
deliver certificates of Common Stock upon the exercise of any Stock
Option or award of Restricted Stock prior to (a) the obtaining of
any approval from any governmental agency which the Company shall,
in its sole discretion, determine to be necessary or advisable,
(b) the admission of such shares to listing on the stock exchange
on which the Common Stock may be listed, and (c) the completion of
any registration or other qualification of said shares under any
state or federal law or ruling of any governmental body which the
Company shall, in its sole discretion, determine to be necessary or
advisable.
18. No Right to Continued Employment or Awards
Participation in the Plan shall not give any Key
Employee any right to remain in the employ of the Company or any
Subsidiary. The Company or, in the case of employment with a
Subsidiary, the Subsidiary, reserves the right to terminate any Key
Employee at any time. Further, the adoption of this Plan shall not
be deemed to give any person any right to be selected as a
Participant or to be awarded any Stock Options or shares of
Restricted Stock.
19. Amendment
The Board may suspend or terminate the Plan at any
time. In addition, the Board may, from time to time, amend the
Plan in any manner, but may not without stockholder approval adopt
any amendment which would (a) materially increase the benefits
accruing to Participants under the Plan, (b) materially increase
the number of shares of Common Stock which may be issued under the
Plan (except as specified in paragraph 12), or (c) materially
modify the requirements as to eligibility for participation in the
Plan.
20. Change in Control and Change in Ownership
(a) Background. All Participants shall be eligible
for the treatment afforded by this paragraph 20 if there is a
Change in Ownership or if their employment terminates within two
years following a Change in Control, unless the termination is due
to (i) death; (ii) disability entitling the Participant to
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benefits under his employer's long-term disability plan;
(iii) Cause; (iv) resignation by the Participant other than for
Good Reason; or (v) retirement entitling the Participant to
benefits under his employer's retirement plan.
(b) Vesting and Lapse of Restrictions. If a
Participant is eligible for treatment under this paragraph 20,
(i) all of the terms and conditions in effect on any unexercised
Stock Options and any restrictions on shares of Restricted Stock
shall immediately lapse as of the Acceleration Date; (ii) no other
terms or conditions shall be imposed upon any Stock Options or
shares of Restricted Stock on or after such date, and in no event
shall any Stock Option or share of Restricted Stock be forfeited on
or after such date; (iii) all of his unexercised Stock Options and
shares of Restricted Stock shall automatically become one hundred
percent (100%) vested immediately upon such date; and (iv) all of
his unexercised Stock Options and shares of Restricted Stock shall
be valued and cashed out on the basis of the Change in Control
Price.
(c) Payment. If a Participant is eligible for
treatment under this paragraph 20, whether or not he is still
employed by the Company or a Subsidiary, he shall be paid, in a
single lump-sum cash payment, as soon as practicable but in no
event later than 90 days after the Acceleration Date, for all his
outstanding Stock Options (including incentive stock options) and
shares of Restricted Stock.
(d) Section 16 of Exchange Act. Notwithstanding
anything contained in this paragraph 20 to the contrary, any
Participant who on the Acceleration Date holds any Stock Options or
shares of Restricted Stock that have not been outstanding for a
period of at least six months from their date of award and who on
the Acceleration Date is required to report under Section 16 of the
Exchange Act shall not be paid for his Stock Options or Restricted
Stock until the first day next following the end of such six-month
period.
(e) Miscellaneous. Upon a Change in Control or a
Change in Ownership, (i) the provisions of paragraphs 10, 14 and 16
hereof shall become null and void and of no force and effect
insofar as they apply to a Participant who has been terminated
under the conditions described in (a) above; and (ii) no action,
including, but not by way of limitation, the amendment, suspension
or termination of the Plan, shall be taken which would affect the
rights of any Participant or the operation of the Plan with respect
to any Stock Option or share of Restricted Stock to which the
Participant may have become entitled hereunder on or prior to the
date of the Change in Control or Change in Ownership or to which he
may become entitled as a result of such Change in Control or Change
in Ownership.
(f) Legal Fees. The Company shall pay all legal
fees and related expenses incurred by a Participant in seeking to
obtain or enforce any payment, benefit or right he may be
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entitled to under the Plan after a Change in Control or Change in
Ownership; provided, however, the Participant shall be required to
repay any such amounts to the Company to the extent a court of
competent jurisdiction issues a final and non-appealable order
setting forth the determination that the position taken by the
Participant was frivolous or advanced in bad faith.
21. No Right, Title or Interest in Company Assets
No Participant shall have any rights as a
stockholder as a result of participation in the Plan until the date
of issuance of a stock certificate in his name and, in the case of
Restricted Stock, such rights are granted to the Participant under
paragraphs 9(c) and 15 hereof. To the extent any person acquires
a right to receive payments from the Company under this Plan, such
rights shall be no greater than the rights of an unsecured creditor
of the Company.
22. 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.