EXHIBIT 10.14
CAMDEN PROPERTY TRUST
KEY EMPLOYEE SHARE OPTION PLAN (KEYSOP)TM
Preamble
Camden Property Trust (the "Employer") hereby establishes the Camden
Property Trust Key Employee Share Option Plan (the "Plan"), effective as of
the date specified herein.
The purpose of the Plan is to provide a vehicle for the payment of
compensation (either salary or bonuses) otherwise payable to the
participating key executives of the Employer, commensurate with their
contributions to the success of the Employer's activities, in a form that
will provide incentives and rewards for meritorious performance and
encourage the recipients' continuance as employees of the Employer.
ARTICLE I
Definitions
As used in this Plan, the following capitalized words and phrases have
the meanings indicated, unless the context requires a different meaning:
1.1 "Beneficiary" means the person or persons designated by a
Participant, or otherwise entitled, to exercise Options after a
Participant's death.
1.2 "Board of Trust Managers" or "Board" means the board of trust
managers of the Employer.
1.3 "Code" means the Internal Revenue Code of 1986, any amendments
thereto, and any regulations on rulings issued thereunder.
1.4 "Committee" means the committee appointed in accordance with
Section 5.1 to determine awards of Options and administer the Plan.
1.5 "Designated Property" means shares of regulated investment
companies or any other property (not including cash, cash equivalents, or
securities of the Employer) designated by the Committee as subject to
purchase through the exercise of an Option.
1.6 "Effective Date" means February 1, 1997
1.7 "Employee" means any individual who is employed by the Employer.
1.8 "Employer" means Camden Property Trust, and any successor thereto.
1.9 "ERISA" means the Employee Retirement Income Security Act of 1974,
any amendments thereto, and any regulations or rulings issued thereunder.
1.10 "Exercise Price" means the price that a Participant must pay in
order to exercise an Option.
1.11 "Grant Date" means, with respect to any Option, the date on which
an Option is awarded to the Participant.
1.12 "Option" means the right of a Participant, granted by the
Employer in accordance with the terms of this Plan, to purchase Designated
Property from the Employer at the Exercise Price established under Section
2.3.
1.13 "Option Agreement" means an agreement executed by the Employer
and by a Participant to whom Options have been awarded, acknowledging the
issuance of the Options and setting forth any terms that are not specified
in this Plan.
1.14 "Participant" means any individual who has received an award of
Options in accordance with Section 2.2 and whose Options have not been
completely exercised. After a Participant's death, his Beneficiary is
considered to be a Participant to the extent necessary to facilitate the
exercise of any Options that continue to be exercisable under the terms of
the Plan. In the event of a Participant's disability or other legal
incapacity, the Participant's legal representative is considered to be a
Participant to the extent necessary to facilitate the exercise of any
Options that are or become exercisable under the terms of the Plan.
1.15 "Plan" means the Camden Property Trust Key Employee Share Option
PlanTM, as set forth herein and as from time to time amended.
1.16 "Plan Year" means the operating year of the Plan, which ends on
January 31st.
1.17 "Termination of Employment" means a Participant's separation from
the service of the Employer (including all subsidiaries or other affiliates
of the Employer that participate in the Plan) by reason of his resignation,
retirement, discharge or death.
1.18 "Trust" means the trust that may be established pursuant to
Article VI to hold the Designated Property that is subject to purchase
through the exercise of an Option.
1.19 "Trust Agreement" means an agreement setting forth the terms of
the Trust established pursuant to Article VI.
1.20 "Trust Fund" means the Designated Property that is subject to an
option that is held in the Trust.
1.21 "Trustee" means the persons or institution acting as trustee of
the Trust.
1.22 Rules of construction
1.22.1 Governing law. The construction and operation of this Plan are
governed by the laws of the State of Texas.
1.22.2 Headings. The headings of Articles, Sections and Subsections
are for reference only and are not to be utilized in construing the Plan.
1.22.3 Gender. Unless clearly inappropriate, all pronouns of whatever
gender refer indifferently to persons or objects of any gender.
1.22.4 Singular and plural. Unless clearly inappropriate, singular
terms refer also to the plural number and vice versa.
1.22.5 Severability. To the extent any provision of this Plan is held
to be unenforceable, illegal or invalid under any current or future law,
such provision shall be fully separable and this Plan shall be construed
and enforced as if such illegal, invalid or unenforceable provision had
never comprised a part thereof, the remaining provisions of this Plan shall
remain in force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance therefrom. In lieu
of such illegal, invalid or unenforceable provision, there shall be added
automatically as part of this Plan, a legal, valid and enforceable
provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible, and the parties hereto request the court or
any arbitrator to whom disputes relating to the Plan are submitted to
reform the otherwise illegal, invalid or unenforceable provision in
accordance with this Section 1.22.5.
ARTICLE II
Award of Options
2.1 Eligibility for awards. Awards of Options may be made to any
Employee selected by the Committee from the executive officers and other
key employees who occupy senior managerial or professional positions and
who have the capacity of making a substantial contribution to the success
of the Employer. In making this selection and in determining the form and
amount of options the Committee shall consider any factors it deems
relevant, including the individual's functions, responsibilities, value of
services to the Employer and past and potential contributions to the
Employer's profitability and growth.
2.2 Procedure for awarding Options. The recipients of Options are
determined from time to time by the Committee. No Committee member may
take part in any way in determining the amount of any award of Options to
himself. Awards become effective upon the Grant Date. Awards may be made
at any time on or after the Effective Date and prior to the termination of
the Plan.
2.3 Selection of Designated Property and Establishment of Exercise
Price. When an Option is awarded, the Committee will specify the
Designated Property that may be purchased by exercise of the Option and
will fix the Exercise Price. If the Employer acquires Designated Property
specified by an Option Agreement in accordance with Section 2.5 hereunder,
such Designated Property must:
(a) not be subject to any security interest, whether or not
perfected, or to any option or contract under which any
other person may acquire any interest in it; and
(b) be readily tradable on an established market or consist
wholly of interests in property that is readily tradable on
an established market.
Unless otherwise specified in a particular Option Agreement, the Exercise
Price will equal twenty-five percent (25%) of the lesser of the fair market
value of the Designated Property on the Grant Date or the fair market value
on the date that the Option is exercised.
2.4 Effect of dividends and distributions with respect to Designated
Property. The Employer agrees, whenever any dividend is declared on those
shares, to reinvest all dividends and distributions with respect to
Designated Property in additional property of the same kind (or as nearly
the same kind as feasible, if property of the same kind is not available).
Any property acquired through investment or reinvestment will immediately
be subject to an Option in favor of the Participant on terms identical to
those set forth in the pertinent Option Agreement.
2.5 Held in Trust. Upon the grant of an Option, the Employer may
acquire the Designated Property and contribute it to the Trust as soon as
practicable after the Grant Date. At the time contributed to the Trust,
the Designated Property shall not be subject to any security interest,
whether or not perfected, or to any option or contract under which any
other person may acquire any interest in it, except as otherwise provided
in Section 6.2
2.6 Substitution of other property for Designated Property. At any
time after the grant of an Option, the Committee may, in its discretion,
after consultation with the Participant substitute other property of equal
value for Designated Property subject to that option.
ARTICLE III
Exercise of Options
3.1 Period for exercise of Options. Options may be exercised by a
Participant at any time during the period beginning six months after the
Grant Date and ending on the earliest of:
(a) one year after the Participant's termination of employment,
or
(b) twenty years after Grant Date.
If a Participant dies before all of his Options have been exercised, any
Options that remain outstanding may be exercised by his Beneficiary. The
right of a Participant or his Beneficiary to exercise any Option ceases at
the time specified in the Option Agreement or one (1) year after his date
of death, whichever is earlier.
3.2 Procedure for exercising Option. A Participant may exercise all
or a portion of an Option by giving written notice to the Committee and
either tendering payment of the applicable Exercise Price or requesting
that the Committee approve a net exercise in accordance with Section 3.3.
3.3 Net exercise of Option. At a Participant's request, the Committee
may, in its sole discretion, consent to the payment to the Participant, in
lieu of the exercise of an Option, of cash equal to the difference between
(a) the fair market value of the Designated Property subject to the Option
or portion of an Option that he proposes to exercise and (b) the applicable
Exercise Price.
3.4 Inalienability of Options. Except as otherwise provided in
Section 3.5, no Option granted under this Plan may be transferred, assigned
or alienated, except as provided herein, and no Option shall be subject to
execution, attachment or similar process. An Option may be exercised only
by the Participant to whom it was granted, by his Beneficiary after his
death, or the Participant's assignee pursuant to Section 3.5.
3.5 Permitted Transfers. A Participant may at any time prior to
death, assign all or any portion of an Option to:
(a) the Participant's spouse or lineal descendants,
(b) the trustee of a trust for the primary benefit of the
Participant's spouse lineal descendants,
(c) partnership of which the Participant's spouse and
lineal descendants are the only partners, or
(d) a tax exempt organization as described in Section 501(c)(3)of
the Code. Any such assignment will be permitted only if an
assignment is expressly permitted in the Option Agreement, or
approved in writing by the Committee, and the Participant
receives no consideration for the assignment. Any such
assignment will be evidenced by an appropriate written
document executed by the Participant, and delivered to the
Committee on or before the effective date of the assignment.
In the event of such assignment, the spouse, lineal
descendant, trustee, partnership or tax exempt organization
will be entitled to all of the rights of the Participant with
respect to the assigned portion of the Option, and such
portion of the Option, will continue to be subject to all of
the terms, conditions and restrictions applicable to the
Option, as set forth in the Plan and the Option Agreement.
3.6 Delivery of Designated Property. On the date of exercise, or as
soon as practicable thereafter (but in no event later than five business
days after the date of exercise), the Employer will deliver or cause to be
delivered the Designated Property then being purchased to the Participant
(the Participant's Beneficiary pursuant to Section 3.8, or the
Participant's assignee pursuant to Section 3.5). In the event that the
listing, registration or qualification of the Option or the Designated
Property on any securities exchange or under any state or federal law, or
the consent or approval of any governmental regulatory body, is necessary
as a condition of, or in connection with, the exercise of the Option, then
the Option will not be exercised in whole or in part until such listing,
registration, qualification, consent or approval has been effected or
obtained.
3.7 Tax Withholding. Whenever Designated Property is to be delivered
upon exercise of an Option under the Plan, the Employer will require as a
condition of such delivery (a) the cash payment by the Participant of an
amount sufficient to satisfy all federal, state and local tax withholding
requirements related thereto, (b) the withholding of such amount from any
Designated Property to be delivered to the Participant, (c) the withholding
of such amount from compensation otherwise due to the Participant, or (d)
any combination of the foregoing, at the election of the Participant with
the consent of the Employer. Such election will be made before the date on
which the amount of tax to be withheld is determined by the Employer, and
such election will be irrevocable. With the consent of the Employer, the
Participant may elect a greater amount of withholding, not to exceed the
estimated amount of the Participant's total tax liability with respect to
the delivery of Designated Property under the Plan. Such election will be
made at the same time and in the same manner as provided above.
3.8 Election of Beneficiary.
3.8.1 Designation or Change of Beneficiary by Participant. When
Options are first awarded to a Participant, the Committee will send him a
Beneficiary designation form, on which he may designate one or more
Beneficiaries and successor Beneficiaries. A Participant may change his
Beneficiary designation at any time by filing the prescribed form with the
Committee. The consent of the Participant's current Beneficiary is not
required for a change of Beneficiary, and no Beneficiary has any rights
under this Plan except as are provided by its terms. The rights of a
Beneficiary who predeceases the Participant who designated him immediately
terminate, unless the Participant has specified otherwise.
3.8.2 Beneficiary if no election is made. Unless a different
Beneficiary has been elected in accordance with Section 3.8.1, the
Beneficiary of any Participant who is lawfully married on the date of his
death is his surviving spouse. The Beneficiary of any other Participant
who dies without having designated a Beneficiary is his estate.
ARTICLE IV
Amendment or Termination of the Plan
4.1 Employer's right to amend or terminate Plan. The Board may, at
any time and from time to time, amend, in whole or in part, any of the
provisions of this Plan or may terminate it as a whole or with respect to
any Participant or group of Participants. Any such amendment is binding
upon all Participants and Beneficiaries, the Committee and all other
parties in interest.
4.2 When amendments take effect. A resolution amending or terminating
the Plan becomes effective as of the date specified therein.
4.3 Amendment of Options. An Option Agreement may be amended by the
Committee at any time if the Committee determines that an amendment is
necessary or advisable as a result of:
(a) any addition to or change in the Code or ERISA, a federal or
state securities law or any other law or regulation, which
occurs after the Grant Date and by its terms applies to the
Option,
(b) any substitutions of Designated Property held in trust
pursuant to Section 2.5,
(c) any Plan amendment or termination pursuant to Section 4.1,
provided that the amendment does not materially affect the
terms, conditions and restrictions applicable to the Option,
or
(d) any circumstances not specified in Paragraphs (a), (b), (c),
with the consent of the Participant.
ARTICLE V
Administration
5.1 The Committee. The Plan will be administered by a Committee
consisting of one or more persons appointed by the Board of Trust Managers.
The Committee will act by a majority of its members at the time in office
and may take action either by vote at a meeting or by consent in writing
without a meeting.
(a) The Board may remove any member of the Committee at any time,
with or without cause, and may fill any vacancy. If a
vacancy occurs, the remaining member or members of the
Committee will have full authority to act.
(b) Any member of the Committee may resign by written resignation
delivered to the Board. Any such resignation will become
effective upon its receipt by the Board or on such other date
as agreed to by the Board and the resigning member.
5.2 Powers of the Committee. In carrying out its duties with respect
to the general administration of the Plan, the Committee will have, in
addition to any other powers conferred by the Plan or by law, the following
powers:
(a) to determine eligibility to participate in the Plan and
eligibility to receive Options;
(b) to grant Options, and to determine the form, amount and
timing of such Options;
(c) to determine the terms and provisions of the Option
Agreements, and to modify such Option Agreements as provided
in Section 4.3;
(d) to substitute Designated Property held in Trust as provided
in Section 2.6;
(e) to maintain all records necessary for the administration of
the Plan;
(f) to prescribe, amend, and rescind rules for the administration
of the Plan to the extent not inconsistent with the terms
thereof;
(g) to appoint such individuals and subcommittees as it deems
desirable for the conduct of its affairs and the
administration of the Plan;
(h) to employ counsel, accountants and other consultants to aid
in exercising its powers and carrying out its duties under
the Plan; and
(i) to perform any other acts necessary and proper for the
conduct of its affairs and the administration of the Plan,
except those reserved by the Board.
5.3 Determinations by the Committee. The Committee will interpret and
construe the Plan and the Option Agreements, and its interpretations and
determinations will be conclusive and binding on all Participants,
Beneficiaries and any other persons claiming an interest under the Plan or
any Option Agreement.
5.4 Indemnification of the Committee. The Employer will indemnify and
hold harmless each member of the Committee against any and all expenses and
liabilities arising out of such member's action or failure to act in such
capacity, excepting only expenses and liabilities arising out of such
member's own willful misconduct or gross negligence.
(a) Expenses and liabilities against which a member of the
Committee is indemnified hereunder will include, without
limitation, the amount of any settlement or judgment, costs,
counsel fees and related charges reasonably incurred in
connection with a claim asserted or a proceeding brought
against him or the settlement thereof.
(b) This right of indemnification will be in addition to any
other rights to which any member of the Committee may be
entitled.
(c) The Employer may, at its own expense, settle any claim
asserted or proceeding brought against any member of the
Committee when such settlement appears to be in the best
interests of the Employer, with such member's consent which
will not be unreasonably withheld.
5.5 Expenses of the Committee. The members of the Committee will
serve without compensation for services as such. All expenses of the
Committee will be paid by the Employer.
ARTICLE VI
Trust Provisions
6.1 Establishment of the Trust. A trust may be established to hold
all Designated Property contributed by the Employer pursuant to Section
2.5. Except as otherwise provided in Section 6.2, and Section 12 of the
Trust Agreement, the Trust will be irrevocable and no portion of the Trust
Fund will be used for any purpose other than the delivery of Designated
Property pursuant to the exercise of an Option, and the payment of expenses
of the Plan and Trust.
6.2 Trust Status. The Trust is intended to be a grantor trust, within
the meaning of section 671 of the Code, of which the Employer is the
grantor, and this Plan is to be construed in accordance with that
intention. Notwithstanding any other provision of this Plan, the Trust
Fund will remain the property of the Employer and will be subject to the
claims of its creditors in the event of its bankruptcy or insolvency. No
Participant will have any priority claim on the Trust Fund or any security
interest or other right superior to the rights of a general creditor of the
Employer.
ARTICLE VII
Miscellaneous Provisions
7.1 No Rights of Shareholder. Neither the Participant, a Beneficiary
nor any assignee will be, or will have any of the rights and privileges of,
a stockholder with respect to any Designated Property purchasable or
issuable upon the exercise of an Option, prior to the date of exercise of
such Option.
7.2 No Right to Continued Employment. Nothing contained in the Plan
will be deemed to give any person the right to be retained in the employ of
the Employer, or to interfere with the right of the Employer to discharge
any person at any time without regard to the effect that such discharge
will have upon such person's rights or potential rights, if any, under the
Plan. The provisions of the Plan are in addition to, and not a limitation
on, any rights that a Participant may have against the Employer by reason
of any employment or other agreement with the Employer.
7.3 Notices. Unless otherwise specified in an Option Agreement, any
notice to be provided under the Plan to the Committee will be mailed (by
certified mail, postage prepaid) or delivered to the Committee in care of
the Employer at its executive offices, and any notice to the Participant
will be mailed (by certified mail, postage prepaid) or delivered to the
Participant at the current address shown on the payroll records of the
Employer. No notice will be binding on the Committee until received by the
Committee, and no notice will be binding on the Participant until received
by the Participant.
7.4 Coordination with Employment Agreement: To the extent any
provisions of this Plan conflict with the provisions of any employment
agreement entered into between the Employer and the Participant, the terms
of the employment agreement shall control. To the extent that any such
employment agreement provides for the automatic or accelerated vesting of
securities or derivative securities held by the Participant upon the
occurrence of a change of control, business combination or other enumerated
event, any Option Agreements shall likewise be deemed to be governed by
such provisions and shall likewise vest on the terms on the terms and
conditions set forth in such employment agreement.
IN WITNESS WHEREOF, Camden Property Trust has caused these presents to be
executed by its duly authorized officer by authority of its Board of Trust
Managers this 1st day of February, 1997.
CAMDEN PROPERTY TRUST
/s/
-------------------------
By: G. Steven Dawson
Senior Vice President and
Chief Financial Officer